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EXHIBIT 10.50
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STOCK PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇ EQUIPMENT CENTER, INC.
L AND H LEASING COMPANY
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
AND
CRESCENT OPERATING, INC.
JULY 31, 1998
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TABLE OF CONTENTS
Page
ARTICLE I -- TERMS OF THE TRANSACTION......................................1
1.1 Agreement to Sell and to Purchase Shares....................1
1.2 Purchase Price and Payment..................................1
1.3 Adjustment of Purchase Price................................2
ARTICLE II -- CLOSING, CLOSING DATE AND EFFECTIVE DATE.....................2
2.1 Closing and Closing Date....................................2
2.2 Effective Date..............................................3
ARTICLE III -- REPRESENTATIONS
AND WARRANTIES OF SELLERS AND THE COMPANIES.......................3
3.1 Corporate Organization......................................3
3.2 Qualification...............................................3
3.3 Charter and Code of Regulations.............................3
3.4 Capitalization of each Company..............................3
3.5 Authority Relative to This Agreement........................4
3.6 Noncontravention............................................4
3.7 Governmental Approvals......................................5
3.8 No Subsidiaries.............................................5
3.9 Shares ....................................................5
3.10 Financial Statements........................................5
3.11 Absence of Undisclosed Liabilities..........................6
3.12 Absence of Certain Changes..................................6
3.13 Tax Matters.................................................7
3.14 Compliance With Laws........................................7
3.15 Legal Proceedings...........................................7
3.16 Title to Properties.........................................8
3.17 Sufficiency and Condition of Properties.....................8
3.18 Real Property...............................................8
3.19 Tangible Personal Property..................................9
3.20 Leased Property............................................10
3.21 Inventory..................................................10
3.22 Receivables................................................10
3.23 Intellectual Property......................................11
3.24 Permits ...................................................11
3.25 Agreements.................................................11
3.26 ERISA ...................................................12
3.27 Environmental Matters......................................13
3.28 Labor Relations............................................14
3.29 Employees..................................................15
3.30 Insider Interests..........................................15
3.31 Insurance..................................................15
3.32 Financial Requirements.....................................16
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3.33 Bank Accounts and Powers of Attorney......................16
3.34 Books and Records.........................................16
3.35 Illegal Payments..........................................16
3.36 Offerings of Securities...................................16
3.37 Investment Intent.........................................17
3.38 Brokerage Fees............................................17
3.39 Disclosure................................................17
3.40 Representations and Warranties on Closing Date............17
ARTICLE IV -- REPRESENTATIONS
AND WARRANTIES OF BUYER.........................................17
4.1 Corporate Organization.....................................18
4.2 Authority Relative to This Agreement.......................18
4.3 Noncontravention...........................................18
4.4 Governmental Approvals.....................................18
4.5 Brokerage Fees.............................................18
4.6 Representations and Warranties on Closing Date.............19
ARTICLE V -- CONDUCT OF COMPANIES PENDING CLOSING........................19
5.1 Conduct and Preservation of Business.......................19
5.2 Restrictions on Certain Actions............................19
ARTICLE VI -- ADDITIONAL AGREEMENTS......................................21
6.1 Access to Information......................................21
6.2 Third Party Consents.......................................21
6.3 Employment and Non-competition Agreement...................21
6.4 Title Insurance and Surveys................................21
6.5 Uncollected Receivables....................................22
6.6 Public Announcements.......................................23
6.7 Notice of Litigation.......................................23
6.8 Notification of Certain Matters............................23
6.9 Fees and Expenses..........................................23
6.10 Transfer Taxes.............................................23
6.11 Survival of Covenants......................................23
ARTICLE VII -- CONDITIONS TO
OBLIGATIONS OF SELLERS..........................................24
7.1 Representations and Warranties True........................24
7.2 Covenants and Agreements Performed.........................24
7.3 Legal Proceedings..........................................24
7.4 Other Documents............................................24
ARTICLE VIII -- CONDITIONS TO
OBLIGATIONS OF BUYER............................................24
8.1 Representations and Warranties True........................25
8.2 Covenants and Agreements Performed.........................25
8.3 Certificate................................................25
8.4 Opinion of Counsel.........................................25
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8.5 Legal Proceedings...........................................25
8.6 Consents ...................................................25
8.7 No Material Adverse Change..................................25
8.8 Employment Agreement........................................25
8.9 Title Insurance.............................................25
8.10 Due Diligence...............................................25
8.11 Other Documents.............................................25
ARTICLE IX -- TERMINATION, AMENDMENT AND WAIVER............................26
9.1 Termination.................................................26
9.2 Effect of Termination.......................................27
9.3 Amendment...................................................27
9.4 Waiver ...................................................27
9.5 Remedies Not Exclusive......................................27
ARTICLE X -- SURVIVAL OF
REPRESENTATIONS; INDEMNIFICATION..................................28
10.1 Survival....................................................28
10.2 Indemnification by Sellers..................................28
10.3 Indemnification by Buyer....................................28
10.4 Procedure for Indemnification...............................28
ARTICLE XI -- MISCELLANEOUS................................................29
11.1 Notices ....................................................29
11.2 Entire Agreement............................................29
11.3 Binding Effect; Assignment; No Third Party Benefit..........29
11.4 Severability................................................30
11.5 GOVERNING LAW...............................................30
11.6 Further Assurances..........................................30
11.7 Descriptive Headings........................................30
11.8 Gender ....................................................30
11.9 References..................................................30
11.10 Counterparts................................................30
11.11 Injunctive Relief...........................................31
11.12 Jurisdiction and Venue......................................31
ARTICLE XII -- DEFINITIONS.................................................31
12.1 Certain Defined Terms.......................................31
12.2 Certain Additional Defined Terms............................33
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of July 31 ,
1998, is made by and among ▇▇▇▇▇▇ Equipment Center, Inc., an Ohio corporation
("HEC"), L and H Leasing Company, an Ohio corporation ("L&H") (L&H and HEC being
referred to herein individually as a "Company" and collectively as the
"Companies"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, individually and as trustee ("▇▇▇▇▇▇"), ▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇., an individual ("▇. ▇▇▇▇▇▇"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, individually an
as trustee ("▇. ▇▇▇▇▇▇"), (▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇ and ▇. ▇▇▇▇▇▇ being referred to
herein individually as a "Seller" and collectively as "Sellers"), and Crescent
Operating, Inc., a Delaware corporation ("Buyer").
WHEREAS, Sellers own in the aggregate all the issued and outstanding
shares of common stock, no par value per share, of HEC (the "HEC Shares"); and
WHEREAS, Sellers own in the aggregate all the issued and outstanding
shares of common stock, no par value per share, of L&H (the "L&H Shares," and
together with the "HEC Shares," the "Shares"); and
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase
from Sellers, the Shares; and
WHEREAS, each Company desires to join in the execution of this
Agreement for the purpose of evidencing its consent to the consummation of the
foregoing transaction and for the purpose of making certain representations and
warranties to, and covenants and agreements with, Buyer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Companies, Sellers, and Buyer hereby agree as follows:
ARTICLE I -- TERMS OF THE TRANSACTION
1.1 Agreement to Sell and to Purchase Shares. At the Closing, and on
the terms and subject to the conditions set forth in this Agreement, each Seller
shall sell and deliver to Buyer, and Buyer shall purchase and accept from each
Seller, the number of Shares set forth opposite the name of such Seller on Annex
I.
1.2 Purchase Price and Payment. In consideration of the sale of the
Shares to Buyer, and subject to adjustment pursuant to Section 1.3 below, Buyer
shall pay to Sellers at the Closing the aggregate purchase price of Three
Million Eight Hundred Sixty-One Thousand Nine Hundred Twenty-Seven and No/100
Dollars ($3,861,927.00) (the "Purchase Price"). Buyer shall pay the Purchase
Price (a) by paying to Sellers Two Million Seven Hundred Three Thousand Three
Hundred Forty-Nine and No/100 Dollars ($2,703,349.00) in immediately available
funds by confirmed wire transfer to a bank account to be designated by such
Seller (such designation to occur no later than the three (3) business day prior
to the Closing Date) (such cash portion of the Purchase Price, the "Cash Portion
of the Purchase Price"), and (b) the remaining amount of the Purchase Price
shall be paid by Buyer's delivery to Sellers of Buyer's promissory notes (the
"Buyer Notes") in an aggregate principal amount equal to One Million One Hundred
Fifty-Eight Thousand Five Hundred Seventy-Eight and No/100 Dollars
($1,158,578.00), which notes will be in the form of Exhibit 1.2 attached
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hereto. The Purchase Price shall be allocated and paid among Sellers in
accordance with the percentages set forth on Annex I attached hereto.
1.3 Adjustment of Purchase Price.
(a) The Purchase Price will be adjusted (either up or down) based on
the aggregate net change in the asset and liability accounts of each Company set
forth on Schedule 1.3(a) hereto (the aggregate balance of such accounts, the
"Net Worth of the Companies") as of the Effective Date, as compared to the Net
Worth of the Companies as shown on Schedule 1.3(a). If, upon completion of the
procedures set forth in Section 1.3(b) below, it is finally determined that (i)
the Net Worth of the Companies as of the Effective Date is greater than the Net
Worth of the Companies as shown on Schedule 1.3(a), then the Purchase Price
shall be increased by the amount of such difference in cash, and Buyer shall pay
to Sellers the amount of such difference within ten (10) days after such final
determination, or (ii) the Net Worth of the Companies as of the Effective Date
is less than the Net Worth of the Companies as shown on Schedule 1.3(a), then
the Purchase Price shall be decreased by the amount of such difference, and
Sellers shall pay to Buyer the amount of such difference in cash within ten (10)
days after such final determination. All payments to or by Sellers required by
this Section 1.3 shall be made on a pro rata basis, paid to or by Sellers based
on the percentages set forth on Annex I attached hereto.
(b) Within sixty (60) days after the Closing, Buyer will prepare and
deliver to ▇▇▇▇▇▇ a statement of the Net Worth of the Companies as of the close
of business on the Effective Date (the "Closing Statement"), which statement
shall be prepared in accordance with GAAP and the instructions provided in
Schedule 1.3(b) hereto. If, within thirty (30) days following delivery of the
Closing Statement to ▇▇▇▇▇▇, ▇▇▇▇▇▇ has not given Buyer notice of its objection
to the Closing Statement (such notice must contain a detailed statement of the
basis of ▇▇▇▇▇▇'▇ objection), then the Net Worth of the Companies reflected in
the Closing Statement will be used in computing the adjustment to the Purchase
Price. If ▇▇▇▇▇▇ gives Buyer such notice of objection and the parties are unable
to resolve the subject of such objection within fifteen (15) days after such
notice, then the issues in dispute will be submitted to Coopers & ▇▇▇▇▇▇▇, LLP,
certified public accounts (the "Accountants"), for resolution with instructions
to the Accountants to resolve such dispute within forty-five (45) days. If
issues in dispute are submitted to the Accountants for resolution (i) each party
will furnish to the Accountants such work papers and other documents and
information relating to the disputed issues as the Accountants may request and
are available to that party; (ii) the determination by the Accountants, as set
forth in a notice delivered to both parties by the Accountants, will be binding
and conclusive on the parties; and (iii) Buyer and ▇▇▇▇▇▇ will each bear 50% of
the fees and expenses of the Accountants for such determination. The final
determination of the Net Worth of the Companies as of the close of business on
the Effective Date shall occur on the earliest of (A) thirty (30) days after
delivery of the Closing Statement to ▇▇▇▇▇▇ without objection, (B) written
agreement of ▇▇▇▇▇▇ and Buyer to the Closing Statement or any modification
thereof, or (C) written determination by the Accountants.
ARTICLE II -- CLOSING, CLOSING DATE AND EFFECTIVE DATE
2.1 Closing and Closing Date. The closing of the transactions
contemplated hereby (the "Closing") shall take place (i) at the offices of
▇▇▇▇▇▇▇▇ & Knight, P.C., in Dallas, Texas, at 9:00 a.m., local time, on July 31,
1998, or (ii) at such other time or place or on such other date as the
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parties hereto shall agree. The date on which the Closing is required to take
place is herein referred to as the "Closing Date."
2.2 Effective Date. Notwithstanding the date this Agreement is executed
or the formal closing referenced above, the effective date of the transfer of
the Shares shall be June 30, 1998 (the "Effective Date").
ARTICLE III -- REPRESENTATIONS
AND WARRANTIES OF SELLERS AND THE COMPANIES
Sellers and the Companies jointly and severally represent and warrant
to Buyer that:
3.1 Corporate Organization. Each Company is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
corporate authority to own, lease, and operate its properties and to carry on
its business as now being conducted. No actions or proceedings to dissolve any
Company are pending.
3.2 Qualification. Each Company is duly qualified or licensed to do
business and is in good standing in each of the jurisdictions set forth on
Schedule 3.2, which are all the jurisdictions in which it owns, leases, or
operates property or in which such qualification or licensing is required for
the conduct of its business.
3.3 Charter and Code of Regulations. Each Company has made available to
Buyer accurate and complete copies of (i) the Articles of Incorporation and Code
of Regulations of each Company (certified by the Secretary of State of such
Company's jurisdiction of incorporation and the secretary or an assistant
secretary of such Company, respectively) as currently in effect, (ii) the stock
records of each Company and (iii) the minutes of all meetings of each Company's
Board of Directors, any committees of such Board, and each Company's
shareholders (and all consents in lieu of such meetings). Such records, minutes
and consents accurately reflect the stock ownership of each Company and all
actions taken by each Company's Board, any committees of such Board, and each
Company's shareholders. No Company is in violation of any provision of its
Articles of Incorporation or Code of Regulations.
3.4 Capitalization of each Company. The authorized capital stock of the
HEC consists of 850 shares of Common Stock, no par value per share, of which 128
shares are issued and outstanding and 542 shares are held in HEC's treasury. The
authorized capital stock of the L&H consists of 500 shares of Common Stock,
$100.00 par value per share, of which 20 shares are outstanding and no shares
are held in the L&H's treasury. All outstanding shares of capital stock of each
Company have been validly issued and are fully paid and nonassessable, and no
shares of capital stock of any Company are subject to, nor have any been issued
in violation of, preemptive or similar rights. All issuances, sales, and
repurchases by each Company of shares of its capital stock have been effected in
compliance with all Applicable Laws, including without limitation applicable
federal and state securities laws. The Shares constitute (and at the Closing
will constitute) all the outstanding shares of capital stock of each Company.
Except as set forth above in this Section, there are (and as of the Closing Date
there will be) outstanding (i) no shares of capital stock or other voting
securities of any Company, (ii) no securities of any Company convertible into or
exchangeable for shares of capital stock or other voting securities of any
Company, (iii) no options or other rights to acquire from any
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Company, and no obligation of any Company to issue or sell, any shares of
capital stock or other voting securities of any Company or any securities of any
Company convertible into or exchangeable for such capital stock or voting
securities and (iv) no equity equivalents, interests in the ownership or
earnings, or other similar rights of or with respect to any Company. There are
(and as of the Closing Date there will be) no outstanding obligations of any
Company to repurchase, redeem or otherwise acquire any of the foregoing shares,
securities, options, warrants, equity equivalents, interests or rights.
3.5 Authority Relative to This Agreement.
(a) Each Company has full corporate power and corporate authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by each Company of
this Agreement, and the consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action of each
Company. This Agreement has been duly executed and delivered by each Company and
constitutes, and each other agreement, instrument or document executed or to be
executed by each Company in connection with the transactions contemplated hereby
has been, or when executed will be, duly executed and delivered by each Company
and constitutes, or when executed and delivered will constitute, a valid and
legally binding obligation of each Company, enforceable against each Company in
accordance with their respective terms, except that such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights generally and (ii) equitable principals
which may limit the availability of certain equitable remedies (such as specific
performance) in certain instances.
(b) Each Seller has full legal right, power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
Seller and constitutes, and each other agreement, instrument or document
executed or to be executed by a Seller in connection with the transactions
contemplated hereby has been, or when executed will be, duly executed and
delivered by such Seller and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of such Seller, enforceable
against such Seller in accordance with their respective terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally and (ii) equitable principals which may limit the availability of
certain equitable remedies (such as specific performance) in certain instances.
3.6 Noncontravention.
(a) Except as disclosed on Schedule 3.6, the execution, delivery and
performance by Sellers and the Companies of this Agreement and the consummation
by them of the transactions contemplated hereby do not and will not (i) conflict
with or result in a violation of any provision of the charter or code of
regulations of any Company, (ii) conflict with or result in a violation of any
provision of, or constitute (with or without the giving of notice or the passage
of time or both) a default under, or give rise (with or without the giving of
notice or the passage of time or both) to any right of termination, cancellation
or acceleration under, any bond, debenture, note, mortgage, indenture, lease,
contract, agreement or other instrument or obligation to which any Company is a
party or by which any Company or any of its properties may be bound, (iii)
result in the creation or
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imposition of any Encumbrance upon the properties of any Company or (iv)
assuming compliance with the matters referred to in Section 3.7, violate any
Applicable Law binding upon any Company.
(b) The execution, delivery and performance by each Seller of this
Agreement and the consummation by each Seller of the transactions contemplated
hereby do not and will not (i) conflict with or result in a violation of any
provision of, or constitute (with or without the giving of notice or the passage
of time or both) a default under, or give rise (with or without the giving of
notice or the passage of time or both) to any right of termination, cancellation
or acceleration under, any contract, agreement, instrument or obligation to
which such Seller is a party or by which such Seller or any of such Seller's
properties may be bound, (ii) result in the creation or imposition of any
Encumbrance upon the properties of such Seller or (iii) assuming compliance with
the matters referred to in Section 3.7, violate any Applicable Law binding upon
such Seller.
3.7 Governmental Approvals. No consent, approval, order or
authorization of, or declaration, filing, or registration with, any Governmental
Entity is required to be obtained or made by any Seller or any Company in
connection with the execution, delivery, or performance by Sellers and the
Companies of this Agreement or the consummation by them of the transactions
contemplated hereby.
3.8 No Subsidiaries. No Company has any subsidiaries. In addition, no
Company owns, directly or indirectly, any capital stock or other securities of
any corporation or have any direct or indirect equity or ownership interest in
any other person.
3.9 Shares. Each Seller is (and at the Closing will be) the record and
beneficial owner of, and upon consummation of the transactions contemplated
hereby Buyer will acquire good, valid, and marketable title to, the number of
Shares set forth opposite the name of such Seller on Annex I, free and clear of
all Encumbrances, other than (i) those that may arise by virtue of any actions
taken by or on behalf of Buyer or its affiliates or (ii) restrictions on
transfer that may be imposed by federal or state securities laws.
3.10 Financial Statements.
(a) HEC has delivered to Buyer accurate and complete copies of (i)
HEC's audited balance sheet as of November 30, 1997 and the related audited
operating statement, statement of retained earnings and statement of cash flows
for the year then ended, and the notes and schedules thereto, together with the
unqualified report thereon of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CPA, independent certified
public accountant (the "HEC Audited Financial Statements") and (ii) HEC's
unaudited balance sheet as of June 30, 1998 (the "HEC Latest Balance Sheet"),
and the related unaudited operating statement, statement of retained earnings
and statement of cash flows for the seven-month period then ended (the "HEC
Unaudited Financial Statements"), certified by HEC's president (collectively,
the "HEC Financial Statements"). The HEC Financial Statements (i) represent
actual bona fide transactions, (ii) have been prepared from the books and
records of HEC in conformity with generally accepted accounting principles
applied on a basis consistent with preceding years throughout the periods
involved, except that the HEC Unaudited Financial Statements are not accompanied
by notes or other textual disclosure required by generally accepted accounting
principles and (iii) accurately, completely and fairly present HEC's financial
position as of the respective dates thereof and its results of operations and
cash flows for the periods then ended. The operating statements included in the
HEC Financial Statements do not contain any items of special or nonrecurring
income, and
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the balance sheets included in the HEC Financial Statements do not reflect any
write-up or revaluation increasing the book value of any assets, nor have there
been any transactions since November 30, 1997 giving rise to special or
nonrecurring income or any such write-up or revaluation.
(b) L&H has delivered to Buyer accurate and complete copies of (i)
L&H's audited balance sheet as of October 31, 1997 and the related audited
operating statement, statement of retained earnings and statement of cash flows
for the year then ended, and the notes and schedules thereto, together with the
unqualified report thereon of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CPA, independent certified
public accountant (the "L&H Audited Financial Statements") and (ii) L&H's
unaudited balance sheet as of June 30, 1998 (the "L&H Latest Balance Sheet"),
and the related unaudited operating statement, statement of retained earnings
and statement of cash flows for the eight-month period then ended (the "L&H
Unaudited Financial Statements"), certified by L&H's president (collectively,
the "L&H Financial Statements"). The L&H Financial Statements (i) represent
actual bona fide transactions, (ii) have been prepared from the books and
records of L&H in conformity with generally accepted accounting principles
applied on a basis consistent with preceding years throughout the periods
involved, except that the L&H Unaudited Financial Statements are not accompanied
by notes or other textual disclosure required by generally accepted accounting
principles and (iii) accurately, completely and fairly present L&H's financial
position as of the respective dates thereof and its results of operations and
cash flows for the periods then ended. The operating statements included in the
L&H Financial Statements do not contain any items of special or nonrecurring
income, and the balance sheets included in the L&H Financial Statements do not
reflect any write-up or revaluation increasing the book value of any assets, nor
have there been any transactions since October 31, 1997 giving rise to special
or nonrecurring income or any such write-up or revaluation.
3.11 Absence of Undisclosed Liabilities. No Company has any liabilities
or obligations (whether accrued, absolute, contingent, unliquidated or
otherwise, whether or not known to any Company, and whether due or to become
due), except (i) liabilities reflected on each of the HEC Latest Balance Sheet
and the L&H Latest Balance Sheet, (ii) liabilities described in the notes
accompanying the HEC Audited Financial Statements and the L&H Audited Financial
Statements, (iii) liabilities which have arisen since the date of the HEC Latest
Balance Sheet and the L&H Latest Balance Sheet in the ordinary course of
business (none of which is a material liability for breach of contract, breach
of warranty, tort, or infringement), (iv) liabilities arising under executory
contracts entered into in the ordinary course of business (none of which is a
liability for breach of contract) or (v) liabilities specifically set forth on
Schedule 3.11.
3.12 Absence of Certain Changes. Except as disclosed on Schedule 3.12,
since November 30, 1997 for HEC and October 31, 1997 for L&H, (i) there has not
been any material adverse change in, or any event or condition that might
reasonably be expected to result in any material adverse change in, the
business, assets, results of operations, condition (financial or otherwise) or
prospects of such Companies; (ii) the business of each of HEC and L&H has been
conducted only in the ordinary course consistent with past practice; (iii)
neither HEC nor L&H has incurred any material liability, engaged in any material
transaction or entered into any material agreement outside the ordinary course
of business consistent with past practice; (iv) neither HEC nor L&H has suffered
any material loss, damage, destruction or other casualty to any of its assets
(whether or not covered by insurance); and (v) neither HEC nor L&H has taken any
of the actions set forth in Section 5.2 except as permitted thereunder.
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3.13 Tax Matters. Except as disclosed on Schedule 3.13:
(a) each Company has (and as of the Closing Date will have) duly filed
all federal, state, local and foreign Tax Returns required to be filed by or
with respect to it with the IRS or other applicable Taxing authority, and no
extensions with respect to such Tax Returns have (or as of the Closing Date will
have) been requested or granted;
(b) each Company has (and as of the Closing Date will have) paid, or
adequately reserved against in the Financial Statements, all Taxes due, or
claimed by any taxing authority to be due, from or with respect to it, except
Taxes that are being contested in good faith by appropriate legal proceedings
and for which adequate reserves have been set aside as disclosed on Schedule
3.13;
(c) there has been no issue raised or adjustment proposed (and none is
pending) by the IRS or any other taxing authority in connection with any of the
Tax Returns;
(d) each Company has (and as of the Closing Date will have) made all
deposits required with respect to Taxes;
(e) the federal income Tax Returns of each Company have not been
audited by the IRS during the previous ten taxable years;
(f) no waiver or extension of any statute of limitations as to any
federal, state, local or foreign Tax matter has been given by or requested from
any Company; and
(g) no Company has filed a consent under Section 341(f) of the Code.
3.14 Compliance With Laws. Each Company has complied with all
Applicable Laws (including without limitation Applicable Laws relating to
securities, properties, business products, manufacturing processes, advertising
and sales practices, employment practices terms and conditions of employment,
wages and hours, safety, occupational safety, health, environmental protection,
product safety and civil rights). Neither Sellers nor the Companies have
received any written notice, which has not been dismissed or otherwise disposed
of, that each Company has not so complied. No Company is charged or, to the best
knowledge of Sellers and each Company, threatened with, or, to the best
knowledge of Sellers and each Company, under investigation with respect to, any
violation of any Applicable Law relating to any aspect of the business of any
Company.
3.15 Legal Proceedings. Except as disclosed on Schedule 3.15, there are
no Proceedings pending or, to the best knowledge of Sellers and each Company,
threatened against or involving any Company (or any of its directors or officers
in connection with the business or affairs of any Company) or any properties or
rights of the. Except as disclosed on Schedule 3.15, any and all potential
liability of each Company under such Proceedings is adequately covered (except
for standard deductible amounts) by the existing insurance maintained by each
Company described in Section 3.33. No judgment, order, writ, injunction or
decree of any Governmental Entity has been issued or entered against any Company
which continues to be in effect. There are no Proceedings pending or, to the
best knowledge of Sellers and each Company, threatened seeking to restrain,
prohibit, or obtain damages or other relief in connection with this Agreement or
the transactions contemplated hereby.
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3.16 Title to Properties. Each Company has good, marketable and (in the
case of real property) insurable title to all properties (real, personal and
mixed, tangible and intangible) it owns or purports to own, including without
limitation the properties reflected in its books and records and in the HEC
Latest Balance Sheet and the L&H Latest Balance Sheet, other than those disposed
of after the date of such balance sheet in the ordinary course of business
consistent with past practice, free and clear of all Encumbrances, except (a) as
disclosed on Schedule 3.16, (b) as set forth in the HEC Latest Balance Sheet and
the L&H Latest Balance Sheet as securing specific liabilities, (c) liens for
Taxes not yet due and payable or the validity of which is being contested in
good faith by appropriate legal proceedings and for which adequate reserves have
been set aside, (d) statutory liens (including materialmen's, mechanic's,
repairmen's, landlord's, and other similar liens) arising in connection with the
ordinary course of business securing payments not yet due and payable or, if due
and payable, the validity of which is being contested in good faith by
appropriate legal proceedings and for which adequate reserves have been set
aside and (e) such imperfections or irregularities of title, if any, as (A) are
not substantial in character, amount or extent and do not materially detract
from the value of the property subject thereto, (B) do not materially interfere
with either the present or intended use of such property and (C) do not,
individually or in the aggregate, materially interfere with the conduct of each
Company's normal operations.
3.17 Sufficiency and Condition of Properties. The properties owned,
leased or used by each Company are in good operating condition and repair
(ordinary wear and tear excepted), are suitable for the purposes used, and are
adequate and sufficient for the normal operation of each Company's business.
Such properties and their uses conform to all Applicable Laws, and Sellers and
the Companies have not received any notice to the contrary. All such tangible
properties are in each Company's possession or under its control.
3.18 Real Property.
(a) Set forth on Schedule 3.18 is a list, by street address and (in the
case of owned real property) deed reference, of all real property owned or
leased by any Company (for purposes of this Section, the "Real Property"), a
list of all rights-of-way, easements and other Encumbrances of any kind to which
the Real Property is subject, a brief description of the principal facilities
and structures (if any) located thereon, and, with respect to leased Real
Property, a brief description of the applicable leases and the material terms
thereof. There are no persons (other than the Companies) in possession of any
portion of the Real Property as lessees, tenants at sufferance or trespassers,
nor does any person (other than the Companies) have a lease, tenancy or other
right of occupancy or use of any portion of the Real Property. The Real Property
has full and free access to and from public highways, streets and roads, and
Sellers and the Companies have no knowledge of any pending or threatened
Proceeding or any other fact or condition which would limit or result in the
termination of such access. There exists no Proceeding or court order, or
building code provision, deed restriction, or restrictive covenant (recorded or
otherwise), or other private or public limitation, which might in any way impede
or adversely affect the continued use of the Real Property by any Company in the
manner it is currently used.
(b) All buildings, improvements, and fixtures situated on the Real
Property conform to all Applicable Laws. All the Real Property is zoned for the
various purposes for which such Real Property is being used, and there exists no
pending or, to the best knowledge of Sellers and each Company, threatened
Proceeding which might adversely affect the validity of such zoning.
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(c) The Real Property is connected to and serviced by water, sewage
disposal, gas, telephone and electric facilities which are adequate for the
current use of the Real Property and, to the best knowledge of Sellers and each
Company, are in compliance with all Applicable Laws. All public utilities
required for the operation of the Real Property enter the Real Property through
adjoining public streets or, if they pass through adjoining private land, do so
in accordance with valid public easements, and all utility lines and mains
located on the Real Property have been properly dedicated to, and are serviced
and maintained by, the appropriate public or quasi-public entity.
(d) The buildings, improvements and fixtures situated on the Real
Property are in good condition and repair (excepting ordinary wear and tear and
minor maintenance and repair problems which would normally be associated with
such assets when used in connection with the operation of each Company's
business), free of any latent or patent structural defects.
(e) Neither the whole nor any part of the Real Property is subject to
any pending Proceeding for condemnation or other taking by any Governmental
Entity, and, to the best knowledge of Sellers and each Company, no such
condemnation or other taking is contemplated or threatened.
(f) There are no unpaid charges, debts, liabilities, claims or
obligations arising from the construction, occupancy, ownership, use or
operation of the Real Property, or the buildings, improvements or fixtures
situated thereon, or the business operated thereon, which could give rise to any
mechanic's or materialmen's or other statutory lien against the Real Property,
or the buildings, improvements or fixtures situated thereon, or any part
thereof, or for which any Company will be responsible.
(g) The Real Property is not within any area determined by the
Department of Housing and Urban Development to be flood prone under the Federal
Flood Disaster Protection Act of 1973.
(h) Each Company has delivered to Buyer, accurate and complete copies
of all title insurance policies, title reports, other title documents, surveys,
certificates of occupancy and Permits in the possession of each Company relating
to the Real Property or the buildings, improvements or fixtures situated
thereon.
(i) No Seller is a "foreign person" within the meaning of Sections 1445
and 7701 of the Code.
3.19 Tangible Personal Property. Set forth on Schedule 3.19 is a list,
as of April 30, 1998, of all furniture, equipment, machinery, materials, motor
vehicles, rolling stock, apparatus, tools, implements, appliances and other
tangible personal property (other than spare parts, supplies and inventory)
owned, leased or used by each Company, except for items having a value
individually of less than $1,000 which do not, in the aggregate, have a value
exceeding $10,000. All tangible personal property owned, leased or used by each
Company is in good operating condition and repair (ordinary wear and tear
excepted), is suitable for the purposes used, and is adequate and sufficient for
the normal operation of each Company's business. The motor vehicles and rolling
stock owned or leased by each Company are utilized solely for the transportation
by each Company, for its own account and not for the account of others, of
inventories, supplies and other items relating to the operation of each
Company's business, and such activities do not require the obtainment of any
Permit.
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3.20 Leased Property. Each Company has good and valid leasehold
interests in all properties held by it under lease. The lessee under each such
lease and its predecessor under each such lease, if any, has been in peaceable
possession (or remedied any claims relating thereto) of the property covered
thereby since the commencement of the original term of such lease. No waiver,
indulgence, or postponement of the lessee's obligations under any such lease has
been granted by the lessor or of the lessor's obligations thereunder by the
lessee. The lessee under each such lease is not in breach of or in default under
such lease, nor has any event occurred which (with or without the giving of
notice or the passage of time or both) would constitute a default by the lessee
under such lease, and the lessee has not received any notice from, or given any
notice to, the lessor indicating that the lessee or the lessor is in breach of
or in default under such lease. To the best knowledge of Sellers and each
Company, none of the lessors under such leases is in breach thereof or in
default thereunder. The lessee under each such lease has full right and power to
occupy or possess, as the case may be, all the property covered by such lease.
3.21 Inventory. All inventory (including raw materials,
work-in-progress, and finished goods) and related supplies reflected on the HEC
Latest Balance Sheet and the L&H Latest Balance Sheet or thereafter acquired and
not disposed of in the ordinary course of business is in good condition and is
merchantable, or suitable and usable for the production or completion of
merchantable products, for sale in each Company's ordinary course of business as
first quality goods at normal ▇▇▇▇-ups. None of such items is obsolete,
discontinued, returned, damaged, overage, or of below standard quality or
merchantability, except for items that have been written down to realizable
market value or for which adequate reserves have been provided in the Latest
Balance Sheet. Each item of inventory reflected on the HEC Latest Balance Sheet
and the L&H Balance Sheet or in each Company's books and records is so reflected
on the basis of a complete physical count and is valued at the lower of cost, on
a first-in, first-out basis, or market in accordance with generally accepted
accounting principles consistently applied. The present quantities of all
inventories of each Company are sufficient to serve adequately its customers in
the ordinary course. Finished goods in such inventories conform to the
applicable specifications of each Company, including all applicable warranties,
whether express or implied, given in connection with the sales of such goods and
under Applicable Laws, and are free from defects in design, workmanship, and
material. Each Company also maintains sufficient inventories of spare and
replacement parts to meet any repair and replacement obligations in the ordinary
course, under applicable warranties or otherwise.
3.22 Receivables. All receivables (including accounts and notes
receivable, employee advances, and accrued interest receivables) of each Company
as reflected on the HEC Latest Balance Sheet and the L&H Latest Balance Sheet or
arising since the date thereof are valid obligations of the respective makers
thereof, have arisen in the ordinary course of business for goods or services
delivered or rendered, are not subject to any valid defenses, counterclaims or
set offs, and are collectible in full at their recorded amounts in the ordinary
course of business without resort to litigation, net of all cash discounts and
doubtful accounts as reflected on the HEC Latest Balance Sheet and the L&H
Latest Balance Sheet (in the case of receivables so reflected) or on the books
of each Company (in the case of receivables arising since the date thereof). The
allowances for doubtful accounts reflected on the HEC Latest Balance Sheet and
the L&H Latest Balance Sheet and on the books of each Company were determined in
accordance with generally accepted accounting principles and were and are
reasonable in light of historical data and other relevant information.
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3.23 Intellectual Property.
(a) Set forth on Schedule 3.23 is a list of all Intellectual Property
owned by each Company or which it is licensed to use. Schedule 3.23 specifies,
as applicable: (i) the nature of such Intellectual Property; (ii) the owner of
such Intellectual Property; (iii) the jurisdictions by or in which such
Intellectual Property is recognized without regard to registration or has been
issued or registered or in which an application for such issuance or
registration has been filed, including the respective registration or
application numbers; and (iv) all material licenses, sublicenses, and other
agreements to which any Company is a party and pursuant to which any person is
authorized to use such Intellectual Property, including the identity of all
parties thereto, a description of the nature and subject matter thereof, the
applicable royalty, and the term thereof.
(b) The listed Intellectual Property constitutes all Intellectual
Property necessary for the conduct of each Company's business on a basis
consistent with past practice for at least the past five years. Each Company has
good and marketable title to or is validly licensed to use all such Intellectual
Property. Each item of such Intellectual Property is in full force and effect,
each Company is in compliance with all its obligations with respect thereto,
and, to the best knowledge of Sellers and each Company, no event has occurred
which permits, or upon the giving of notice or the passage of time or otherwise
would permit, revocation or termination of any thereof. There are no Proceedings
pending or, to the best knowledge of Sellers and each Company, threatened
against any Company asserting that the use by any Company of any of such
Intellectual Property infringes the rights of any other person or seeking
revocation, termination, or concurrent use of any of such Intellectual Property,
and there is, to the best knowledge of Sellers and each Company, no basis for
any such Proceeding. To the best knowledge of Sellers and each Company, none of
such Intellectual Property is being infringed upon by any other person. None of
such Intellectual Property is subject to any outstanding judgment, order, writ,
injunction, or decree of any Governmental Entity, or any agreement, arrangement,
or understanding, written or oral, restricting the scope or use thereof. To the
best knowledge of Sellers and each Company, the conduct of each Company's
business at any time prior to the Closing Date did not, and the conduct of such
business on a basis consistent with past practice as of the Closing Date will
not, infringe upon or otherwise misappropriate any Intellectual Property of any
other person.
3.24 Permits. Set forth on Schedule 3.24 is a list of all Permits held
by each Company, which are all the Permits necessary or required for the conduct
of the business of each Company as currently conducted. Each of such Permits is
in full force and effect, each Company is in compliance with all its obligations
with respect thereto, and, to the best knowledge of Sellers and each Company, no
event has occurred which permits, or with or without the giving of notice or the
passage of time or both would permit, the revocation or termination of any
thereof. Except as disclosed on Schedule 3.24, no notice has been issued by any
Governmental Entity and no Proceeding is pending or, to the best knowledge of
Sellers and each Company, threatened with respect to any alleged failure by any
Company to have any Permit.
3.25 Agreements.
(a) All agreements, arrangements and understandings of any nature
(written or oral, formal or informal) (collectively, for purposes of this
Section 3.25, "agreements") to which any Company is a party or by which any
Company or any of its properties is otherwise bound, regardless of amount
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or subject matter, that are material to the business, assets, results of
operations, condition (financial or otherwise) or prospects of any Company are
listed on Schedule 3.25.
(b) Each Company has delivered to Buyer accurate and complete copies of
the agreements listed on Schedule 3.25. Each of such agreements is a valid and
binding agreement of the parties thereto enforceable against them in accordance
with its terms. Except as set forth in Schedule 3.6, no breach or default exists
with respect to any of such agreements, and no event has occurred which, after
the giving of notice or the passage of time or otherwise, will result in any
such breach or default.
3.26 ERISA.
(a) Set forth on Schedule 3.26 is a list identifying each "employee
benefit plan," as defined in Section 3(3) of ERISA, (i) which is subject to any
provision of ERISA, (ii) which is maintained, administered or contributed to by
any Company or any affiliate of any Company and (iii) which covers any employee
or former employee of any Company or any affiliate of any Company or under which
any Company or any affiliate of any Company has any liability. Each Company has
delivered to Buyer accurate and complete copies of such plans (and, if
applicable, the related trust agreements) and all amendments thereto and written
interpretations thereof, together with (i) the three most recent annual reports
(Form 5500 including, if applicable, Schedule B thereto) prepared in connection
with any such plan and (ii) the most recent actuarial valuation report prepared
in connection with any such plan. Such plans are referred to in this Section
3.26 as the "Employee Plans." For purposes of this Section 3.26 only, an
"affiliate" of any person means any other person which, together with such
person, would be treated as a single employer under Section 414 of the Code. The
only Employee Plans which individually or collectively would constitute an
"employee pension benefit plan" as defined in Section 3(2) of ERISA are
identified as such on Schedule 3.26.
(b) Except as otherwise identified on Schedule 3.26, (i) no Employee
Plan constitutes a "multiemployer plan," as defined in Section 3(37) of ERISA
(for purposes of this Section 3.26, a "Multiemployer Plan"), (ii) no Employee
Plan is maintained in connection with any trust described in Section 501(c)(9)
of the Code, (iii) no Employee Plan is subject to Title IV of ERISA or to the
minimum funding standards of ERISA and the Code and (iv) during the past five
(5) years, neither any Company nor any of its affiliates have made or been
required to make contributions to any Multiemployer Plan. There are no
accumulated funding deficiencies as defined in Section 412 of the Code (whether
or not waived) with respect to any Employee Plan. The fair market value of the
assets held with respect to each Employee Plan which is an employee pension
benefit plan, as defined in Section 3(2) of ERISA, exceeds the actuarially
determined present value of all benefit liabilities accrued under such Employee
Plan (whether or not vested) determined using reasonable actuarial assumptions.
Neither any Company nor any affiliate of any Company has incurred any liability
under Title IV of ERISA arising in connection with the termination of, or
complete or partial withdrawal from, any plan covered or previously covered by
Title IV of ERISA. Each Company and all of the affiliates of each Company have
paid and discharged promptly when due all liabilities and obligations arising
under ERISA or the Code of a character which if unpaid or unperformed might
result in the imposition of a lien against any of the assets of any Company.
Nothing done or omitted to be done and no transaction or holding of any asset
under or in connection with any Employee Plan has or will make any Company or
any director or officer of any Company subject to any liability under Title I of
ERISA or liable for any Tax pursuant to Section 4975 of the Code. There are no
threatened or pending claims by or on behalf of the Employee Plans, or by any
participant therein,
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alleging a breach or breaches of fiduciary duties or violations of Applicable
Laws which could result in liability on the part of any Company, its officers or
directors, or such Employee Plans, under ERISA or any other Applicable Law and
there is no basis for any such claim.
(c) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified since the date of
its adoption, and each trust forming a part thereof is exempt from Tax pursuant
to Section 501(a) of the Code. Set forth on Schedule 3.26 is a list of the most
recent IRS determination letters with respect to any such Plans, accurate and
complete copies of which letters have been delivered to Buyer. Each Employee
Plan has been maintained in compliance with its terms and with the requirements
prescribed by all Applicable Laws, including but not limited to ERISA and the
Code, which are applicable to such Plans.
(d) To the extent not listed on Schedule 3.25, there is set forth on
Schedule 3.26 a list of each employment, severance or other similar contract,
arrangement or policy and each plan or arrangement (written or oral) providing
for insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits, deferred compensation, profit-sharing, bonuses,
stock options, stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or benefits which (i) is
not an Employee Plan, (ii) is entered into, maintained or contributed to, as the
case may be, by any Company or any affiliate of any Company and (iii) covers any
employee or former employee of any Company or any affiliate of any Company or
under which any Company or any affiliate of any Company has any liability. Such
contracts, plans and arrangements as are described in the preceding sentence are
referred to for purposes of this Section 3.26 as the "Benefit Arrangements."
Each Benefit Arrangement has been maintained in substantial compliance with its
terms and with the requirements prescribed by Applicable Laws.
(e) Neither any Company nor any affiliate of any Company has performed
any act or failed to perform any act, and there is no contract, agreement, plan,
or arrangement covering any employee or former employee of any Company or any
affiliate of any Company, that, individually or collectively, could give rise to
the payment of any amount that would not be deductible pursuant to the terms of
Section 162(a)(1) or 280G of the Code or Section 162(i)(2) of the Code prior to
its amendment by the Technical and Miscellaneous Revenue Act of 1988, or could
give rise to any penalty or excise Tax pursuant to Section 4980B or 4999 of the
Code.
(f) Except as disclosed on Schedule 3.26, there has been no amendment,
written interpretation or announcement (whether or not written) by any Company
or any affiliate of any Company of or relating to, or change in employee
participation or coverage under, any Employee Plan or Benefit Arrangement which
would increase materially the expense of maintaining such Employee Plan or
Benefit Arrangement above the level of the expense incurred in respect thereof
(i) for HEC, for the fiscal year ended November 30, 1997 and (ii) for L&H, for
the fiscal year ended October 31, 1997.
3.27 Environmental Matters.
(a) Except as specifically disclosed in the Phase I and Phase II
Environmental Site Assessments issued by Law Engineering and Environmental
Services, Inc. dated May 14, 1998 and June 19, 1998, respectively (collectively,
the "Environmental Report"), neither any Company nor any property owned or
leased by any Company (for purposes of this Section, the "Property") is in
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violation of, or subject to any pending or, to the best knowledge of Sellers and
each Company, threatened Proceeding under, or subject to any remedial
obligations under, any Applicable Laws pertaining to health, safety, the
environment, Hazardous Substances, or Solid Wastes (such Applicable Laws as they
now exist or are hereafter enacted and/or amended are collectively, for purposes
of this Section 3.27, called "Applicable Environmental Laws"), including without
limitation the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 (as amended, for purposes of this Section, called "CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act
of 1980, the Solid Waste Disposal Act Amendments of 1980, and the Hazardous and
Solid Waste Amendments of 1984 (as amended, for purposes of this Section 3.27,
called "RCRA"), and other applicable federal or state environmental conservation
or protection laws. Except as specifically disclosed in the Environmental
Report, no asbestos, material containing asbestos that is or may become friable,
or material containing asbestos deemed hazardous by Applicable Laws, has been
installed in any Property. Neither any Company nor any Seller has any obligation
to give notice of or disclose any of the matters, circumstances, conditions or
practices referred to in the Environmental Report, or otherwise, to any
Governmental Entity under any Applicable Environmental Laws. The representations
and warranties set forth in the preceding sentences of this Section 3.27 would
continue to be true and correct following disclosure to the applicable
Governmental Entities of all relevant facts, conditions and circumstances, if
any, pertaining to the Property.
(b) Neither Company has obtained and is not required to obtain any
Permits to construct, occupy, operate or use any buildings, improvements,
fixtures, equipment or other tangible property forming a part of the Property by
reason of any Applicable Environmental Laws. Each Company undertook, at the time
of acquisition of the Property, all appropriate inquiry into the previous
ownership and uses of the Property consistent with good commercial or customary
practice. Each Company has taken all steps necessary to determine and has
determined that no Hazardous Substances or Solid Wastes have been Disposed of or
otherwise Released on or to the Property.
(c) The terms "Hazardous Substance" and "Release" shall have the
meanings specified in CERCLA, and the terms "Solid Waste" and "Disposal" (or
"Disposed") shall have the meanings specified in RCRA; provided that in the
event either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment; and provided further, that to the extent the laws of the
jurisdiction in which the Property is located establish a meaning for "Hazardous
Substance," "Release," "Solid Waste" or "Disposal" (or "Disposed") which is
broader than that specified in either CERCLA or RCRA, such broader meaning shall
apply.
3.28 Labor Relations.
(a) Except as disclosed on Schedule 3.28, (i) there are no collective
bargaining agreements or other similar agreements, arrangements or
understandings, written or oral, with employees as a group to or by which any
Company is a party or is bound; (ii) no employees of any Company are represented
by any labor organization, collective bargaining representative or group of
employees; (iii) no labor organization, collective bargaining representative or
group of employees claims to represent a majority of the employees of any
Company in an appropriate unit of any Company; (iv) no Company has been involved
with any representational campaign by any union or other organization or group
seeking to become the collective bargaining representative of any of its
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employees or been subject to or, to the best knowledge of Sellers and each
Company, threatened with any strike or other concerted labor activity or
dispute; and (v) no Company is obligated to bargain collectively with respect to
wages, hours, and other terms and conditions of employment with any recognized
or certified labor organization, collective bargaining representative, or group
of employees.
(b) Each Company is in compliance with all Applicable Laws pertaining
to employment and employment practices and wages, hours, and other terms and
conditions of employment in respect of its employees and is not engaged in any
unfair labor practices or unlawful employment practices. There is no pending or,
to the best knowledge of Sellers and each Company, threatened Proceeding by or
before, and no Company is subject to any judgment, order, writ, injunction or
decree of or inquiry from, the National Labor Relations Board, the Equal
Employment Opportunity Commission, the Department of Labor, or any other
Governmental Entity in connection with any current, former or prospective
employee of any Company.
(c) Sellers and each Company believe that relations with the employees
of each Company are satisfactory.
3.29 Employees. Set forth on Schedule 3.29 is a list of (a) all
directors and officers of each Company and (b) the name, social security number,
and dates of employment by each Company of each employee, agent and consultant
of each Company as of May 30, 1998, together with the total amounts of salary,
bonuses and other compensation paid or payable by each Company to each such
person for the current fiscal year and the immediately preceding fiscal year.
The consummation of the transactions contemplated by this Agreement will not
result in the incurring of any severance pay obligations to any person employed
by any Company. No Seller and no affiliate of any Seller has entered into any
type of employment or consulting agreement, written or oral, with any employee
of any Company, nor has any Seller or any affiliate of any Seller engaged in
discussions with any such employee relating thereto.
3.30 Insider Interests. Except as disclosed on Schedule 3.30, no
shareholder, director, officer or employee of any Company or any associate of
any such shareholder, director, officer or employee is presently, directly or
indirectly, a party to any transaction with any Company, including without
limitation any agreement, arrangement or understanding, written or oral,
providing for the employment of, furnishing of services by, rental of real or
personal property from, or otherwise requiring payments to any such shareholder,
director, officer, employee or associate. To the best knowledge of Sellers and
each Company, no shareholder, director, officer or employee of any Company, any
associate of any such shareholder, director, officer or employee owns, directly
or indirectly, any interest in, or serves as a director, officer or employee of,
any customer, supplier or competitor of any Company. For purposes of this
Section 3.30 only, an "associate" of any shareholder, director, officer or
employee means any member of the immediate family of such shareholder, director,
officer or employee or any corporation, partnership, trust or other entity in
which such shareholder, director, officer or employee has a substantial
ownership or beneficial interest (other than an interest in a public corporation
which does not exceed three percent of its outstanding securities) or is a
director, officer, partner or trustee or person holding a similar position.
3.31 Insurance. Set forth on Schedule 3.31 is a list of all policies of
fire, liability, casualty, life and other insurance owned or held by each
Company. Such policies are in full force and effect, are sufficient to satisfy
all requirements of Applicable Laws and any agreements, arrangements or
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understandings to which any Company is a party, and provide adequate insurance
coverage for the assets and operations of each Company. No event has occurred
nor does any fact or condition exist which would render any of such policies
void or voidable or subject any of such policies to cancellation or termination.
Each Company has given timely notice to the appropriate insurance carrier of all
pending or threatened claims against it that are insured. Schedule 3.31 also
lists all pending and threatened insured claims that are not listed on Schedule
3.15.
3.32 Financial Requirements. Set forth on Schedule 3.32 is a list and
brief description of all bonds, deposits, financial assurance requirements and
insurance coverage required to be submitted to Governmental Entities for the
continued ownership and operation of the business and assets of each Company.
3.33 Bank Accounts and Powers of Attorney. Set forth on Schedule 3.33
are (i) the name and address of each bank or other financial institution in
which each Company has an account or a safe deposit box, the account and safe
deposit box numbers thereof, and the names of all persons authorized to draw
thereon or to have access thereto, (ii) the names of all persons authorized to
borrow funds on behalf of each Company and the names of all entities from which
they are authorized to borrow funds and (iii) the names of all persons, if any,
holding powers of attorney from any Company.
3.34 Books and Records. All the books and records of each Company,
including all personnel files, employee data, and other materials relating to
employees, are substantially complete and correct, have been maintained in
accordance with good business practice and all Applicable Laws, and, in the case
of the books of account, have been prepared and maintained in accordance with
generally accepted accounting principles consistently applied. Such books and
records accurately and fairly reflect, in reasonable detail, all transactions,
assets and liabilities of each Company.
3.35 Illegal Payments. To the best knowledge of Sellers and each
Company, none of Sellers or any Company or any director, officer, employee or
agent of any Seller or any Company has, directly or indirectly, paid or
delivered any fee, commission or other sum of money or item of property however
characterized to any broker, finder, agent, government official or other person,
in the United States or any other country, in any manner related to the business
or operations of any Company, which such Seller or any Company or any such
director, officer, employee or agent knows or has reason to believe to have been
illegal under any Applicable Law.
3.36 Offerings of Securities. All securities which have been offered or
sold by each Company have been registered pursuant to the Securities Act and
applicable state securities laws or were offered and sold pursuant to valid
exemptions therefrom. No registration statement, prospectus, private offering
memorandum or other information furnished (whether in writing or orally) to any
offeree or purchaser of such securities, at the time such registration statement
became effective (in the case of a registered offering) or at the time of
delivery of such registration statement, prospectus, private offering
memorandum, or other information, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. To the extent that any
such securities were registered under the Securities Act, the applicable
registration statements and prospectuses filed with the Securities and Exchange
Commission pursuant to the Securities Act, at the time each such registration
statement became
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effective, and at all times when delivery of a prospectus was required pursuant
to the Securities Act, complied in all material respects with the requirements
of the Securities Act and the rules and regulations thereunder.
3.37 Investment Intent. Each Seller is acquiring the Buyer Notes for
its own account for investment and not with a view to, or for sale or other
disposition in connection with, any distribution of all or any part thereof,
except (i) in an offering covered by a registration statement filed with the
Securities and Exchange Commission under the Securities Act covering the Buyer
Notes or (ii) pursuant to an applicable exemption under the Securities Act. In
acquiring the Buyer Notes, no Seller is offering or selling, and will not offer
or sell, for Buyer in connection with any distribution of the Buyer, and Seller
does not have a participation and will not participate in any such undertaking
or in any underwriting of such an undertaking except in compliance with
applicable federal and state securities laws.
3.38 Brokerage Fees. Neither Sellers nor any of their affiliates has
retained any financial advisor, broker, agent, or finder or paid or agreed to
pay any financial advisor, broker, agent, or finder on account of this Agreement
or any transaction contemplated hereby. Sellers jointly and severally shall
indemnify and hold harmless Buyer from and against any and all losses, claims,
damages, and liabilities (including legal and other expenses reasonably incurred
in connection with investigating or defending any claims or actions) with
respect to any finder's fee, brokerage commission, or similar payment in
connection with any transaction contemplated hereby asserted by any person on
the basis of any act or statement made or alleged to have been made by any
Seller or any of such Seller's affiliates.
3.39 Disclosure. No representation or warranty made by Sellers or any
Company in this Agreement, and no statement of any Seller or any Company
contained in any document, certificate, or other writing furnished or to be
furnished by Sellers or any Company pursuant hereto or in connection herewith,
contains or will contain, at the time of delivery, any untrue statement of a
material fact or omits or will omit, at the time of delivery, to state any
material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they are made, not misleading. Sellers
and the Companies know of no matter (other than matters of a general economic
character not relating solely to any Company in any specific manner) which has
not been disclosed to Buyer pursuant to this Agreement which materially and
adversely affects, or will materially and adversely affect, the business,
assets, results of operations, condition (financial or otherwise), or prospects
of any Company or the ability of Sellers to consummate the transactions
contemplated hereby.
3.40 Representations and Warranties on Closing Date. The
representations and warranties made in this Article III will be true and correct
on and as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing Date,
except that any such representations and warranties which expressly relate only
to an earlier date shall be true and correct on the Closing Date as of such
earlier date.
ARTICLE IV -- REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers and the Companies that:
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4.1 Corporate Organization. Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and corporate authority to
own, lease, and operate its properties and to carry on its business as now being
conducted.
4.2 Authority Relative to This Agreement. Buyer has full corporate
power and corporate authority to execute, deliver, and perform this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery,
and performance by Buyer of this Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action of Buyer. This Agreement has been duly executed and delivered
by Buyer and constitutes, and each other agreement, instrument, or document
executed or to be executed by Buyer in connection with the transactions
contemplated hereby has been, or when executed will be, duly executed and
delivered by Buyer and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of Buyer, enforceable against
Buyer in accordance with their respective terms, except that such enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting creditors' rights generally and (ii)
equitable principles which may limit the availability of certain equitable
remedies (such as specific performance) in certain instances.
4.3 Noncontravention. The execution, delivery, and performance by Buyer
of this Agreement and the consummation by it of the transactions contemplated
hereby do not and will not (i) conflict with or result in a violation of any
provision of the charter or bylaws of Buyer, (ii) conflict with or result in a
violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a default under, or give rise (with or
without the giving of notice or the passage of time or both) to any right of
termination, cancellation, or acceleration under, any bond, debenture, note,
mortgage, indenture, lease, contract, agreement, or other instrument or
obligation to which Buyer is a party or by which Buyer or any of its properties
may be bound, (iii) result in the creation or imposition of any Encumbrance upon
the properties of Buyer, or (iv) assuming compliance with the matters referred
to in Section 4.4, violate any Applicable Law binding upon Buyer.
4.4 Governmental Approvals. No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any Governmental
Entity is required to be obtained or made by Buyer in connection with the
execution, delivery, or performance by Buyer of this Agreement or the
consummation by it of the transactions contemplated hereby, other than (i)
compliance with any applicable requirements of the Securities Act; (ii)
compliance with any applicable requirements of the Exchange Act; (iii)
compliance with any applicable state securities laws; and (iv) filings with
Governmental Entities to occur in the ordinary course following the consummation
of the transactions contemplated hereby.
4.5 Brokerage Fees. Neither Buyer nor any of its affiliates has
retained any financial advisor, broker, agent, or finder or paid or agreed to
pay any financial advisor, broker, agent, or finder on account of this Agreement
or any transaction contemplated hereby. Buyer shall indemnify and hold harmless
Sellers from and against any and all losses, claims, damages, and liabilities
(including legal and other expenses reasonably incurred in connection with
investigating or defending any claims or actions) with respect to any finder's
fee, brokerage commission, or similar payment in connection with any transaction
contemplated hereby asserted by any person on the basis of any act or statement
made or alleged to have been made by Buyer or any of its affiliates.
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4.6 Representations and Warranties on Closing Date. The representations
and warranties made in this Article IV will be true and correct on and as of the
Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date, except that any such
representations and warranties which expressly relate only to an earlier date
shall be true and correct on the Closing Date as of such earlier date.
ARTICLE V -- CONDUCT OF COMPANIES PENDING CLOSING
Sellers and the Companies hereby jointly and severally covenant and
agree with Buyer as follows:
5.1 Conduct and Preservation of Business. Except as contemplated by
this Agreement, during the period from the date hereof to the Closing, each
Company (i) shall conduct its operations according to its ordinary course of
business consistent with past practice and in compliance with all Applicable
Laws; (ii) shall use its reasonable best efforts to preserve, maintain, and
protect its properties; and (iii) shall use its reasonable best efforts to
preserve intact its business organization, to keep available the services of its
officers and employees, and to maintain existing relationships with licensors,
licensees, suppliers, contractors, distributors, customers, and others having
business relationships with it.
5.2 Restrictions on Certain Actions. Without limiting the generality of
the foregoing, and except as otherwise expressly provided in this Agreement,
prior to the Closing, no Company shall, without the prior written consent of
Buyer:
(a) amend its charter or bylaws;
(b) (i) issue, sell, or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase,
or otherwise) any shares of its capital stock of any class or any other
securities or equity equivalents; or (ii) amend in any respect any of the terms
of any such securities outstanding as of the date hereof;
(c) (i) split, combine, or reclassify any shares of its capital stock;
(ii) declare, set aside, or pay any dividend or other distribution (whether in
cash, stock, or property or any combination thereof) in respect of its capital
stock; (iii) repurchase, redeem, or otherwise acquire any of its securities; or
(iv) adopt a plan of complete or partial liquidation or resolutions providing
for or authorizing a liquidation, dissolution, merger, consolidation,
restructuring, recapitalization, or other reorganization of any Company;
(d) (i) except in the ordinary course of business consistent with past
practice, create, incur, guarantee, or assume any indebtedness for borrowed
money or otherwise become liable or responsible for the obligations of any other
person; (ii) make any loans, advances, or capital contributions to, or
investments in, any other person; (iii) pledge or otherwise encumber shares of
capital stock of any Company; or (iv) except in the ordinary course of business
consistent with past practice, mortgage or pledge any of its assets, tangible or
intangible, or create or suffer to exist any lien thereupon;
(e) (i) enter into, adopt, or (except as may be required by law) amend
or terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right,
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restricted stock, performance unit, stock equivalent, stock purchase, pension,
retirement, deferred compensation, employment, severance, or other employee
benefit agreement, trust, plan, fund, or other arrangement for the benefit or
welfare of any director, officer, or employee; (ii) except for normal increases
in the ordinary course of business consistent with past practice that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to any Company, increase in any manner the compensation or fringe
benefits of any director, officer, or employee; or (iii) pay to any director,
officer, or employee any benefit not required by any employee benefit agreement,
trust, plan, fund, or other arrangement as in effect on the date hereof;
(f) acquire, sell, lease, transfer, or otherwise dispose of, directly
or indirectly, any assets outside the ordinary course of business consistent
with past practice or any assets that in the aggregate are material to any
Company;
(g) acquire (by merger, consolidation, or acquisition of stock or
assets or otherwise) any corporation, partnership, or other business
organization or division thereof;
(h) make any capital expenditure or expenditures which, individually,
is in excess of $25,000 or, in the aggregate, are in excess of $250,000;
(i) make any Tax election or settle or compromise any federal, state,
local, or foreign Tax liability;
(j) pay, discharge, or satisfy any claims, liabilities or obligations
(whether accrued, absolute, contingent, unliquidated, or otherwise, and whether
asserted or unasserted), other than the payment, discharge, or satisfaction in
the ordinary course of business consistent with past practice, or in accordance
with their terms, of liabilities reflected or reserved against in the HEC Latest
Balance Sheet and the L&H Latest Balance Sheet or incurred since October 31,
1997 in the ordinary course of business consistent with past practice; provided,
however, that in no event shall any Company repay any long-term indebtedness
except to the extent required by the terms thereof;
(k) enter into any lease, contract, agreement, commitment, arrangement,
or transaction outside the ordinary course of business consistent with past
practice;
(l) amend, modify, or change any existing lease, contract, or
agreement, other than in the ordinary course of business consistent with past
practice;
(m) waive, release, grant, or transfer any rights of value, other than
in the ordinary course of business consistent with past practice;
(n) lay off any of its employees;
(o) change any of its banking or safe deposit arrangements;
(p) change any of the accounting principles or practices used by it,
except for any change required by reason of a concurrent change in generally
accepted accounting principles and notice of which is given in writing by each
Company to Buyer;
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(q) take any action which would or might make any of the
representations or warranties of Sellers or any Company contained in this
Agreement untrue or inaccurate as of any time from the date of this Agreement to
the Closing or would or might result in any of the conditions set forth in this
Agreement not being satisfied; or
(r) authorize or propose, or agree in writing or otherwise to take, any
of the actions described in this Section.
ARTICLE VI -- ADDITIONAL AGREEMENTS
6.1 Access to Information. Between the date hereof and the Closing,
Sellers and the Companies (i) shall give Buyer and its authorized
representatives reasonable access to all employees, all plants, offices,
warehouses, and other facilities, and all books and records, including work
papers and other materials prepared by each Company's independent public
accountants, of each Company, (ii) shall permit Buyer and its authorized
representatives to make such inspections as they may reasonably require, and
(iii) shall cause each Company's officers to furnish Buyer and its authorized
representatives with such financial and operating data and other information
with respect to each Company as Buyer may from time to time reasonably request;
provided, however, that no investigation pursuant to this Section shall affect
any representation or warranty of Sellers or any Company contained in this
Agreement or in any agreement, instrument, or document delivered pursuant hereto
or in connection herewith; and provided further that Sellers and the Companies
shall have the right to have a representative present at all times.
6.2 Third Party Consents. Each Seller and each Company shall use its
reasonable best efforts to obtain all consents, approvals, orders,
authorizations, and waivers of, and to effect all declarations, filings, and
registrations with, all third parties (including Governmental Entities) that are
necessary, required, or deemed by Buyer to be desirable to enable Sellers to
transfer the Shares to Buyer as contemplated by this Agreement and to otherwise
consummate the transactions contemplated hereby. All costs and expenses of
obtaining or effecting any and all of the consents, approvals, orders,
authorizations, waivers, declarations, filings, and registrations referred to in
this Section shall be borne by Sellers.
6.3 Employment and Non-competition Agreement. ▇▇▇▇▇▇ and HEC shall
enter into an employment and non-competition agreement (the "Employment
Agreement") at (and subject to the occurrence of) the Closing pursuant to which
HEC shall agree to employ ▇▇▇▇▇▇ as a Branch Manager of HEC for the period and
on the terms set forth therein. The Employment Agreement shall be in
substantially the form set forth as Exhibit 6.3.
6.4 Title Insurance and Surveys.
(a) Sellers shall obtain and furnish to Buyer at the Closing an owner's
policy of title insurance ("Title Insurance") from or one or more other title
insurance companies reasonably acceptable to Buyer (the "Title Company")
relating to each parcel of owned or leased Real Property (as defined in Section
3.19) described on Schedule 6.4, which Title Insurance shall insure at regular
rates, in an amount reasonably determined sufficient by Buyer (or as otherwise
required by Applicable Laws), each Company's title to such Real Property, free
and clear of all Encumbrances except for the Encumbrances described on Schedule
6.4 (the "Permitted Encumbrances"), and providing by way of appropriate
endorsements and supplemental coverages, insurance which is
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available under the title insurance regulations of the State of Ohio for other
estates, rights, privileges, and risks which may be ancillary or appurtenant to
or affect or burden such Real Property or which may be necessary or convenient
for its use, enjoyment, or protection, including without limitation affirmative
coverage of all material rights-of-way, easements, access rights, and other
servient estates and against all restrictions, restrictive covenants, and
dominant estates, including affirmative coverage against loss of use or
reversion in the event of a violation of restrictions, restrictive covenants, or
easements if available.
(b) Sellers shall obtain and furnish to Buyer a commitment for Title
Insurance from the Title Company with respect to each parcel of owned or leased
Real Property described on Schedule 6.4 ("Title Binders") showing fee or
leasehold title to such Real Property in each Company, as appropriate, and
committing to issue the Title Insurance with respect to such Real Property, such
Title Binders to show all Encumbrances with respect to such Real Property, and
shall also deliver to Buyer legible copies of all documents referred to as
exceptions to title in the Title Binders.
(c) Sellers shall deliver to Buyer currently dated surveys (the
"Surveys") of each parcel of owned or leased Real Property described on Schedule
6.4, each of which Surveys shall be prepared by a licensed professional engineer
or surveyor acceptable to Buyer and to the Title Company. The Surveys (including
specifically the certificate of the engineer or surveyor forming a part thereof)
shall be in form and substance acceptable to Buyer and to the Title Company and
shall locate all existing improvements, easements and rights-of-way (which shall
show applicable recording data where possible), encroachments, conflicts, and
protrusions affecting the Real Property, and water, sewer, gas, and electric
lines and the size and capacity thereof, shall set forth the outside perimeters
of the Real Property, shall contain a metes and bounds description of the Real
Property, and shall set forth the acres included within the Real Property. The
Surveys shall contain a statement on the face thereof certifying that no part of
the Real Property lies within a flood plain or flood prone area or a flood way
of any body of water. The Surveys shall also show the zoning classifications of
the Real Property under local zoning ordinances, and with the Surveys Sellers
shall deliver to Buyer copies of the provisions of the local zoning ordinances
which govern the use of property so classified.
(d) Sellers shall deliver or make available to Buyer all maps, surveys,
drawings, and plot plans in the possession of Sellers depicting the Real
Property or any portion thereof.
(e) The cost of obtaining Title Binders, Title Insurance, and Surveys
shall be borne by Sellers.
6.5 Uncollected Receivables. If, on or prior to November 30, 1998, each
Company has been unable to collect the account receivables owned by it as of
Closing Date hereunder in full, subject to the allowance for doubtful accounts
as reflected on the HEC Latest Balance Sheet and the L&H Latest Balance Sheet,
Buyer shall have the option to cause each Company to sell and, upon exercise of
such option, ▇▇▇▇▇▇ shall have the obligation to buy, such uncollected
receivables, for cash, at the aggregate face value thereof less an amount equal
to the allowance for doubtful accounts as reflected on the HEC Latest Balance
Sheet and the L&H Latest Balance Sheet. ▇▇▇▇▇▇ shall be obligated to consummate
such repurchase within ten (10) days after written notice from Buyer of Buyer's
election to require such repurchase. Notwithstanding any to the contrary in the
foregoing, this provision shall only apply to open accounts as of the Closing
Date, and ▇▇▇▇▇▇ shall only be required to repurchase those uncollected
receivables that are not collateralized.
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6.6 Public Announcements. Except as may be required by Applicable Law
or the NASDAQ National Market System Marketplace Rules, neither Buyer, on the
one hand, nor Sellers and the Companies, on the other, shall issue any press
release or otherwise make any public statement with respect to this Agreement or
the transactions contemplated hereby without the prior written consent of the
other party.
6.7 Notice of Litigation. Until the Closing, (i) Buyer, upon learning
of the same, shall promptly notify Sellers of any Proceeding which is commenced
or threatened against Buyer and which affects this Agreement or the transactions
contemplated hereby and (ii) Sellers and the Companies, upon learning of the
same, shall promptly notify Buyer of any Proceeding which is commenced or
threatened against any Seller or any Company and which affects this Agreement or
the transactions contemplated hereby and any Proceeding which is commenced or
threatened against any Seller or any Company and which would have been listed on
Schedule 3.15 if such Proceeding had arisen prior to the date hereof.
6.8 Notification of Certain Matters. Sellers and the Companies shall
give prompt notice to Buyer of (i) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in Article III to be untrue or inaccurate
at or prior to the Closing and (ii) any failure of any Seller or any Company to
comply with or satisfy any covenant, condition, or agreement to be complied with
or satisfied by such person hereunder. Buyer shall give prompt notice to Sellers
of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any representation or warranty
contained in Article IV to be untrue or inaccurate at or prior to the Closing
and (ii) any failure of Buyer to comply with or satisfy any covenant, condition,
or agreement to be complied with or satisfied by such person hereunder. The
delivery of any notice pursuant to this Section shall not be deemed to (i)
modify the representations or warranties hereunder of the party delivering such
notice, (ii) modify the conditions set forth in Articles VII and VIII, or (iii)
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
6.9 Fees and Expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses, including fees and expenses of counsel,
financial advisors, and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such fee or expense, whether or not the Closing shall have occurred.
6.10 Transfer Taxes. All sales and transfer Taxes and fees (including
all real estate transfer and closing Taxes and recording fees, if any) incurred
in connection with this Agreement and the transactions contemplated hereby shall
be borne by Sellers, and Sellers shall file all necessary documentation with
respect to, and make all payments of, such Taxes and fees on a timely basis.
6.11 Survival of Covenants. Except for any covenant or agreement which
by its terms expressly terminates as of a specific date, the covenants and
agreements of the parties hereto contained in this Agreement shall survive the
Closing without contractual limitation, subject to the provisions of Section
10.1.
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ARTICLE VII -- CONDITIONS TO
OBLIGATIONS OF SELLERS
The obligations of the Sellers to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment on or prior
to the Closing Date of each of the following conditions:
7.1 Representations and Warranties True. All the representations and
warranties of Buyer contained in this Agreement, and in any agreement,
instrument, or document delivered pursuant hereto or in connection herewith on
or prior to the Closing Date, shall be true and correct on and as of the Closing
Date as if made on and as of such date, except as affected by transactions
contemplated or permitted by this Agreement and except to the extent that any
such representation or warranty is made as of a specified date, in which case
such representation or warranty shall have been true and correct as of such
specified date.
7.2 Covenants and Agreements Performed. Buyer shall have performed and
complied with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
7.3 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending or threatened seeking to restrain, prohibit, or obtain damages or other
relief in connection with this Agreement or the consummation of the transactions
contemplated hereby.
7.4 Other Documents. Sellers shall have received the certificates,
instruments, and documents listed below:
(a) The Cash Portion of the Purchase Price to be delivered to each
Seller pursuant to Section 1.2.
(b) The Buyer Notes to be delivered to each Seller pursuant to Section
1.2, registered in the name of such Seller and duly executed by Buyer.
(c) Such other certificates, instruments, and documents as may be
reasonably requested by Sellers prior to the Closing Date to carry out the
intent and purposes of this Agreement.
7.5 Release of Sellers and Payment of Notes. Sellers must have been
released from any personal guarantees or liability under any of the promissory
notes granted by the Companies, or any other financing arrangements entered into
by the Companies, within 30 days after the Closing Date. In connection with
certain shareholder loans to HEC and L&H currently outstanding, listed in
Schedule 7.5 attached hereto, Buyer shall pay the notes payable to ▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ in full within thirty (30) days after the Closing Date.
ARTICLE VIII -- CONDITIONS TO
OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment on or prior to the Closing
Date of each of the following conditions:
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8.1 Representations and Warranties True. All the representations and
warranties of Sellers and the Companies contained in this Agreement, and in any
agreement, instrument, or document delivered pursuant hereto or in connection
herewith on or prior to the Closing Date, shall be true and correct on and as of
the Closing Date as if made on and as of such date, except as affected by
transactions contemplated or permitted by this Agreement and except to the
extent that any such representation or warranty is made as of a specified date,
in which case such representation or warranty shall have been true and correct
as of such specified date.
8.2 Covenants and Agreements Performed. Sellers and each Company shall
have performed and complied with all covenants and agreements required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date.
8.3 Certificate. Buyer shall have received a certificate executed by
each Seller and on behalf of each Company by the president and the vice
president-finance of each Company, dated the Closing Date, representing and
certifying, in such detail as Buyer may reasonably request, that the conditions
set forth in this Article VIII have been fulfilled and that Sellers and the
Companies are not in breach of any provision of this Agreement.
8.4 Opinion of Counsel. Buyer shall have received an opinion of
Gooding, Huffman, ▇▇▇▇▇ & ▇▇▇▇▇▇, legal counsel to Sellers and the Companies,
dated the Closing Date, with respect to the matters as may be reasonably
requested by Buyer.
8.5 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending or threatened seeking to restrain, prohibit, or obtain damages or other
relief in connection with this Agreement or the consummation of the transactions
contemplated hereby.
8.6 Consents. Except as disclosed on Schedule 3.6, all consents and
approvals of third parties (including Governmental Entities) required to be
obtained by or on the part of the parties hereto or otherwise necessary for the
consummation of the transactions contemplated hereby shall have been obtained,
and all thereof shall be in full force and effect at the time of Closing.
8.7 No Material Adverse Change. Since April 30, 1998, there shall not
have been any material adverse change in the business, assets, results of
operations, condition (financial or otherwise), or prospects of any Company.
8.8 Employment Agreement. ▇▇▇▇▇▇ shall have entered into the Employment
Agreement.
8.9 Title Insurance. Buyer shall have received the Title Insurance
described in Section 6.4.
8.10 Due Diligence. The due diligence conducted by Buyer and its
representatives in connection with the proposed transactions contemplated hereby
shall not have caused Buyer or its representatives to become aware of any facts
relating to the business, assets, results of operations, condition (financial or
otherwise), or prospects of any Company which, in the good faith judgment of
Buyer, make it inadvisable for Buyer to proceed with the consummation of the
transactions contemplated hereby.
8.11 Other Documents. Buyer shall have received the certificates,
instruments, and documents listed below:
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(a) The stock certificates representing the Shares duly endorsed in
blank, or accompanied by stock powers duly executed in blank, and otherwise in
form acceptable to Buyer for transfer on the books of each Company.
(b) The minute books, stock records, and corporate seal of each
Company, certified as complete and correct as of the Closing Date by the
secretary or an assistant secretary of each Company.
(c) All of each Company's books and records, including without
limitation minute books, corporate charter, bylaws, stock records, bank account
records, accounting records, computer records, and all contracts with third
parties.
(d) The written resignation from the Board of Directors of each Company
of each member of such Board, such resignation to be effective concurrently with
the Closing on the Closing Date.
(e) The written resignation as an officer of each Company of each of
▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇ and ▇. ▇▇▇▇▇▇, such resignation to be effective concurrently
with the Closing on the Closing Date.
(f) A copy of the resolutions of the Board of Directors of each Company
authorizing the execution, delivery, and performance by each Company of this
Agreement, certified by the secretary or an assistant secretary of each Company.
(g) Certificates from the Secretary of State of Ohio, each dated not
more than ten (10) days prior to the Closing Date, as to the legal existence and
good standing, respectively, of each Company under the laws of such state.
(h) Lien search reports, each dated not more than ten (10) days prior
to the Closing Date, showing that no financing statements or other liens (or
notices with respect to liens) naming each Company as debtor are on file in the
Uniform Commercial Code or other relevant records of the office of the Secretary
of State of Ohio and or the county clerk's office of Van ▇▇▇▇ County.
(i) Such other certificates, instruments, and documents as may be
reasonably requested by Buyer prior to the Closing Date to carry out the intent
and purposes of this Agreement.
ARTICLE IX -- TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing in the following
manner:
(a) by mutual written consent of Sellers and Buyer; or
(b) by either Sellers or Buyer, if:
(i) the Closing shall not have occurred on or before July
31, 1998, unless such failure to close shall be due to a breach of this
Agreement by the party seeking to terminate this Agreement pursuant to
this clause (i); or
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(ii) there shall be any statute, rule, or regulation that
makes consummation of the transactions contemplated hereby illegal or
otherwise prohibited or a Governmental Entity shall have issued an
order, decree, or ruling or taken any other action permanently
restraining, enjoining, or otherwise prohibiting the consummation of
the transactions contemplated hereby, and such order, decree, ruling,
or other action shall have become final and nonappealable; or
(c) by Sellers, if (i) any of the representations and warranties of
Buyer contained in this Agreement shall not be true and correct, when made or at
any time prior to the Closing as if made at and as of such time, or (ii) Buyer
shall have failed to fulfill any of its obligations under this Agreement, and,
in the case of each of clauses (i) and (ii), such misrepresentation, breach of
warranty, or failure (provided it can be cured) has not been cured within thirty
(30) days of actual knowledge thereof by Buyer; or
(d) by Buyer, if (i) any of the representations and warranties of
Sellers or any Company contained in this Agreement shall not be true and
correct, when made or at any time prior to the Closing as if made at and as of
such time, or (ii) Sellers or any Company shall have failed to fulfill any of
their obligations under this Agreement, and, in the case of each of clauses (i)
and (ii), such misrepresentation, breach of warranty, or failure (provided it
can be cured) has not been cured within thirty (30) days of actual knowledge
thereof by Sellers.
9.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.1 by Sellers, on the one hand, or Buyer, on the
other, written notice thereof shall forthwith be given to the other party
specifying the provision hereof pursuant to which such termination is made, and
this Agreement shall become void and have no effect, except that the agreements
contained in this Section 9.2 and in Section 6.6 shall survive the termination
hereof. Nothing contained in this Section 9.2 shall relieve any party from
liability for damages as a result of any breach of this Agreement.
9.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed by or on behalf of all the parties hereto.
9.4 Waiver. Each of Sellers and the Companies, on the one hand, and
Buyer, on the other, may (i) waive any inaccuracies in the representations and
warranties of the other contained herein or in any document, certificate, or
writing delivered pursuant hereto or (ii) waive compliance by the other with any
of the other's agreements or fulfillment of any conditions to its own
obligations contained herein. Any agreement on the part of a party hereto to any
such waiver shall be valid only if set forth in an instrument in writing signed
by or on behalf of such party. No failure or delay by a party hereto in
exercising any right, power, or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege.
9.5 Remedies Not Exclusive. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
The rights and remedies of any party based upon, arising out of, or otherwise in
respect of any inaccuracy in or breach of any representation, warranty,
covenant, or agreement contained in this Agreement shall in no way be limited by
the fact that the act, omission, occurrence, or other state of facts upon which
any claim of any such inaccuracy or breach is based may also be the subject
matter of any other representation,
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warranty, covenant, or agreement contained in this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
ARTICLE X -- SURVIVAL OF
REPRESENTATIONS; INDEMNIFICATION
10.1 Survival. The representations and warranties of the parties hereto
contained in this Agreement or in any certificate, instrument or document
delivered pursuant hereto and the related indemnification provisions shall
survive the Closing and for the four (4) year period thereafter, regardless of
any investigation made by or on behalf of any party Date; provided, however,
that (i) the representations and warranties of the Sellers and the Companies in
Section 3.27 and the related indemnification agreements of Sellers contained in
Section 10.2(i) below, and (ii) the indemnification agreements of Sellers
contained in Section 10.2(ii) below shall survive the Closing and for the ten
(10) year period thereafter.
10.2 Indemnification by Sellers. Subject to the terms and conditions of
this Article X, Sellers jointly and severally shall indemnify, defend, and hold
harmless Buyer, the subsidiaries and parent corporations of Buyer (including,
after the Closing, the Companies), each director and officer of Buyer or any of
its subsidiaries or parent corporations, and each affiliate thereof, and their
respective heirs, legal representatives, successors and assigns (collectively,
the "Buyer Group"), from and against any and all claims, actions, causes of
action, demands, assessments, losses, damages, liabilities, judgments,
settlements, penalties, costs, and expenses (including reasonable attorneys'
fees and expenses), of any nature whatsoever, whether actual or consequential
(collectively, "Damages"), asserted against, resulting to, imposed upon, or
incurred by any member of the Buyer Group, directly or indirectly, by reason of
or resulting from (i) any breach by Sellers of any of their representations,
warranties, covenants, or agreements contained in this Agreement or in any
certificate, instrument, or document delivered pursuant hereto, and (ii) any of
the matters, circumstances, conditions or practices set forth in the
Environmental Report.
10.3 Indemnification by Buyer. Subject to the terms and conditions of
this Article X, Buyer shall indemnify, defend, and hold harmless each Seller,
the subsidiaries and parent corporations, if any, of such Seller, each director
and officer, if any, of such Seller or any of its subsidiaries or parent
corporations, and each affiliate thereof, and their respective heirs, legal
representatives, successors, and assigns (collectively, the "Seller Group"),
from and against any and all Damages asserted against, resulting to, imposed
upon, or incurred by any member of the Seller Group, directly or indirectly, by
reason of or resulting from any breach by Buyer of any of its representations,
warranties, covenants, or agreements contained in this Agreement or in any
certificate, instrument, or document delivered pursuant hereto.
10.4 Procedure for Indemnification. Promptly after receipt by an
indemnified party under Section 10.2 or 10.3 of notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under such Section, give written notice to
the indemnifying party of the commencement thereof, but the failure so to notify
the indemnifying party shall not relieve it of any liability that it may have to
any indemnified party except to the extent the indemnifying party demonstrates
that the defense of such action is prejudiced thereby. In case any such action
shall be brought against an indemnified party and it shall give written notice
to the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it may wish, to
assume the defense thereof
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with counsel reasonably satisfactory to such indemnified party. If the
indemnifying party elects to assume the defense of such action, the indemnified
party shall have the right to employ separate counsel at its own expense and to
participate in the defense thereof. If the indemnifying party elects not to
assume (or fails to assume) the defense of such action, the indemnified party
shall be entitled to assume the defense of such action with counsel of its own
choice, at the expense of the indemnifying party. If the action is asserted
against both the indemnifying party and the indemnified party and there is a
conflict of interests which renders it inappropriate for the same counsel to
represent both the indemnifying party and the indemnified party, the
indemnifying party shall be responsible for paying for separate counsel for the
indemnified party; provided, however, that if there is more than one indemnified
party, the indemnifying party shall not be responsible for paying for more than
one separate firm of attorneys to represent the indemnified parties, regardless
of the number of indemnified parties. If the indemnifying party elects to assume
the defense of such action, (a) no compromise or settlement thereof may be
effected by the indemnifying party without the indemnified party's written
consent (which shall not be unreasonably withheld) unless the sole relief
provided is monetary damages that are paid in full by the indemnifying party and
(b) the indemnifying party shall have no liability with respect to any
compromise or settlement thereof effected without its written consent (which
shall not be unreasonably withheld).
ARTICLE XI -- MISCELLANEOUS
11.1 Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by any party hereto shall be
in writing and shall be deemed to have been duly given or made if delivered
personally, or transmitted by first class registered or certified mail, postage
prepaid, return receipt requested, or sent by prepaid overnight delivery
service, or sent by cable, telegram, telefax, or telex, to the parties at the
following addresses (or at such other addresses as shall be specified by the
parties by like notice):
If to Buyer: ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telefax: 817.339.1001
If to Sellers: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telefax: 419.238.3040
11.2 Entire Agreement. This Agreement, together with the Schedules,
Exhibits, Annexes, and other writings referred to herein or delivered pursuant
hereto, constitutes the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
11.3 Binding Effect; Assignment; No Third Party Benefit. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
Except as otherwise expressly provided in this Agreement, neither this Agreement
nor any of the rights, interests, or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties, except that Buyer may
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assign to any wholly-owned subsidiary of Buyer any of Buyer's rights, interests,
or obligations hereunder, upon notice to the other party or parties, provided
that no such assignment shall relieve Buyer of its obligations hereunder. Except
as provided in Article X, nothing in this Agreement, express or implied, is
intended to or shall confer upon any person other than the parties hereto, and
their respective heirs, legal representatives, successors, and permitted
assigns, any rights, benefits, or remedies of any nature whatsoever under or by
reason of this Agreement.
11.4 Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by Applicable Law.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
11.6 Further Assurances. From time to time following the Closing, at
the request of any party hereto and without further consideration, the other
party or parties hereto shall execute and deliver to such requesting party such
instruments and documents and take such other action (but without incurring any
material financial obligation) as such requesting party may reasonably request
in order to consummate more fully and effectively the transactions contemplated
hereby.
11.7 Descriptive Headings. The descriptive headings herein are inserted
for convenience of reference only, do not constitute a part of this Agreement,
and shall not affect in any manner the meaning or interpretation of this
Agreement.
11.8 Gender. Pronouns in masculine, feminine, and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.
11.9 References. All references in this Agreement to Articles,
Sections, and other subdivisions refer to the Articles, Sections, and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement", "herein", "hereof", "hereby", "hereunder", and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Whenever the words "include",
"includes", and "including" are used in this Agreement, such words shall be
deemed to be followed by the words "without limitation". Each reference herein
to a Schedule, Exhibit, or Annex refers to the item identified separately in
writing by the parties hereto as the described Schedule, Exhibit, or Annex to
this Agreement. All Schedules, Exhibits, and Annexes are hereby incorporated in
and made a part of this Agreement as if set forth in full herein.
11.10 Counterparts. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same agreement. Each counterpart
may consist of a number of copies hereof each signed by less than all, but
together signed by all, the parties hereto.
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11.11 Injunctive Relief. The parties hereto acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement, and shall be entitled to enforce specifically the provisions of this
Agreement, in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which the parties may be
entitled under this Agreement or at law or in equity.
11.12 Jurisdiction and Venue. In respect of any action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, each of the parties hereto consents to the jurisdiction and venue of any
federal or state court located within Tarrant County, Texas, waives personal
service of any and all process upon it, consents that all such service of
process may be made by first class registered or certified mail, postage
prepaid, return receipt requested, directed to it at the address specified in
Section 11.1, agrees that service so made shall be deemed to be completed upon
actual receipt thereof, and waives any objection to jurisdiction or venue of,
and waives any motion to transfer venue from, any of the aforesaid courts.
ARTICLE XII -- DEFINITIONS
12.1 Certain Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it below:
"affiliate" has the meaning specified in Rule 12b-2
promulgated under the Exchange Act.
"affiliate" means, with respect to any person, any other
person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control
with, such person.
"Affiliated Group" has the meaning set forth in Section
1504 of the Code.
"Applicable Law" means any statute, law, rule, or
regulation or any judgment, order, writ, injunction, or decree of any
Governmental Entity to which a specified person or property is subject.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Encumbrances" means liens, charges, pledges, options,
mortgages, deeds of trust, security interests, claims, restrictions
(whether on voting, sale, transfer, disposition, or otherwise),
easements, and other encumbrances of every type and description,
whether imposed by law, agreement, understanding, or otherwise.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
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"Governmental Entity" means any court or tribunal in any
jurisdiction (domestic or foreign) or any public, governmental, or
regulatory body, agency, department, commission, board, bureau, or
other authority or instrumentality (domestic or foreign).
"Intellectual Property" means patents, trademarks,
service marks, trade names, copyrights, trade secrets, know-how,
inventions, and similar rights, and all registrations, applications,
licenses, and rights with respect to any of the foregoing.
"IRS" means the Internal Revenue Service.
"Partnership Subsidiary" means any Subsidiary that is a
general or limited partnership or joint venture.
"Permits" means licenses, permits, franchises, consents,
approvals, and other authorizations of or from Governmental Entities.
"person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, enterprise,
unincorporated organization, or Governmental Entity.
"Proceedings" means all proceedings, actions, claims,
suits, investigations, and inquiries by or before any arbitrator or
Governmental Entity.
"reasonable best efforts" means a party's reasonable best
efforts in accordance with reasonable commercial practice and without
the incurrence of unreasonable expense.
"Securities Act" means the Securities Act of 1933, as
amended.
"Taxes" means any income Taxes or similar assessments or
any sales, excise, occupation, use, ad valorem, property, production,
severance, transportation, employment, payroll, franchise, or other Tax
imposed by any United States federal, state, or local (or any foreign
or provincial) Taxing authority, including any interest, penalties, or
additions attributable thereto.
"Tax Return" means any return or report, including any
related or supporting information, with respect to Taxes.
"to the best knowledge of Sellers and each Company" (or
similar references to Sellers and each Company's knowledge) means the
knowledge of or receipt of notice (oral or written) by any of Sellers
or each Company's executive officers, as such knowledge has been
obtained in the normal conduct of the business of each Company or in
connection with the preparation of the Schedules to this Agreement and
the furnishing of information to Buyer as contemplated by this
Agreement, after having made a reasonable investigation of the accuracy
of the representations and warranties made by Sellers and any Company
in this Agreement or in any document, certificate, or other writing
furnished by Sellers or any Company to Buyer pursuant hereto or in
connection herewith.
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"Transaction Costs" means investment banking, legal,
accounting, and other fees or costs not deductible for federal income
Tax purposes but incurred as a result of the transactions contemplated
by this Agreement.
"Treasury Regulations" means one or more treasury
regulations promulgated under the Code by the Treasury Department of
the United States.
12.2 Certain Additional Defined Terms. In addition to such terms as are
defined in the opening paragraph of and the recitals to this Agreement and in
Section 12.1, the following terms are used in this Agreement as defined in the
Sections set forth opposite such terms:
Defined Term Section Reference
------------ -----------------
Accountants 1.3(b)
agreements 3.25(a)
Applicable Environmental Laws 3.27(a)
associate 3.30
Audited Financial Statements 3.10(a)
Benefit Arrangements 3.26(d)
Buyer Group 10.2
Buyer Notes 1.2
CERCLA 3.27(a)
Closing 2.1
Closing Date 2.1
Closing Statement 1.3(b)
Damages 10.2
Disposal 3.27(c)
Employee Plans 3.26(a)
Employment Agreement 6.3
Environmental Report 3.27
Hazardous Substance 3.27(c)
HEC Audited Financial Statements 3.10
HEC Financial Statements 3.10
HEC Latest Balance Sheet 3.10
HEC Unaudited Financial Statements 3.10
L&H Audited Financial Statements 3.10
L&H Financial Statements 3.10
L&H Latest Balance Sheet 3.10
L&H Unaudited Financial Statements 3.10
Multiemployer Plan 3.26(b)
Net Worth of the Companies 1.3(a)
Permitted Encumbrances 6.4(a)
Property 3.27(a)
Purchase Price 1.2
RCRA 3.27(a)
Real Property 3.18(a)
Release 3.27(c)
Seller Group 10.3
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Shares Page 1, Para. 3
Solid Waste 3.27(c)
Surveys 6.4(c)
Title Binders 6.4(b)
Title Company 6.4(a)
Title Insurance 6.4(a)
[Signature page to follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
L and H Leasing Company
By: -------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇▇▇▇ Equipment Center, Inc.
By: -------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, individually and as trustee
-----------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., individually and as trustee
CRESCENT OPERATING, INC.
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
-----------------------------------------
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SCHEDULE 1.3(b)
None.
1