EXHIBIT 2.1
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SALE AGREEMENT
by and among
SELLERS
and
PURCHASER
Dated as of July 9, 2003
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................. 1
1.1 Definitions................................................................................ 1
ARTICLE II SALE AND PURCHASE...................................................................... 7
2.1 The Sale................................................................................... 7
2.2 Excluded Assets............................................................................ 9
2.3 Assumed Liabilities........................................................................ 10
2.4 Excluded Liabilities....................................................................... 11
2.5 Shared Liabilities......................................................................... 12
ARTICLE III PURCHASE PRICE........................................................................ 12
3.1 Purchase Price - General................................................................... 12
3.2 Closing Purchase Price Adjustments......................................................... 13
3.3 Modernization Contracts.................................................................... 15
ARTICLE IV THE CLOSING............................................................................ 17
4.1 Time and Place of Closing.................................................................. 17
4.2 Deliveries by Sellers...................................................................... 17
4.3 Deliveries by Purchaser.................................................................... 18
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS............................................... 18
5.1 Organization; Qualification................................................................ 18
5.2 Authority Relative to this Agreement....................................................... 19
5.3 Consents and Approvals; No Violation....................................................... 19
5.4 Absence of Certain Changes or Events....................................................... 20
5.5 Labor Matters.............................................................................. 20
5.6 Employee Benefit Plans..................................................................... 20
5.7 Material Contracts and Arrangements........................................................ 22
5.8 Legal Proceedings, etc..................................................................... 22
5.9 Compliance with Law........................................................................ 22
5.10 Taxes..................................................................................... 23
5.11 Intellectual Property; Intangible Assets.................................................. 23
5.12 Brokers; Finders Fees..................................................................... 24
5.13 Financial Information..................................................................... 24
5.14 No Undisclosed Liabilities................................................................ 24
5.15 Title to Purchased Assets; Sufficiency of Assets.......................................... 24
5.16 Environmental............................................................................. 25
5.17 Real Property............................................................................. 25
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................ 26
6.1 Organization............................................................................... 26
6.2 Authority Relative to This Agreement....................................................... 26
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6.3 Consents and Approvals; No Violation....................................................... 26
6.4 Legal Proceedings, etc..................................................................... 27
6.5 Financial Capability....................................................................... 27
6.6 Brokers, Finders Fees...................................................................... 27
ARTICLE VII COVENANTS OF THE PARTIES.............................................................. 27
7.1 Conduct of Business Relating to the Purchased Assets....................................... 27
7.2 Access to Information...................................................................... 28
7.3 Expenses................................................................................... 29
7.4 Further Assurances......................................................................... 29
7.5 Public Statements.......................................................................... 29
7.6 Commercially Reasonable Efforts............................................................ 30
7.7 Tax Matters................................................................................ 30
7.8 Employees.................................................................................. 32
7.9 Risk of Loss............................................................................... 36
7.10 Transfers Not Effected as of Closing...................................................... 36
7.11 Agreement Not to Compete.................................................................. 38
7.12 No Other Bids............................................................................. 39
7.13 Federal Government Contracts.............................................................. 40
7.14 Trademark License......................................................................... 41
7.15 Partially Utilized Facilities; Subleases.................................................. 41
ARTICLE VIII CLOSING CONDITIONS................................................................... 41
8.1 Conditions to Obligations of the Parties................................................... 41
8.2 Conditions to Obligations of Purchaser..................................................... 42
8.3 Conditions to Obligations of Sellers....................................................... 43
ARTICLE IX SURVIVAL AND INDEMNIFICATION........................................................... 44
9.1 Survival................................................................................... 44
9.2 Indemnification............................................................................ 44
9.3 Defense of Claims.......................................................................... 45
9.4 Remedies Exclusive......................................................................... 47
9.5 Comprehensive Basket....................................................................... 48
ARTICLE X TERMINATION AND ABANDONMENT............................................................. 48
10.1 Termination............................................................................... 48
10.2 Procedure and Effect of Termination....................................................... 49
ARTICLE XI MISCELLANEOUS PROVISIONS............................................................... 49
11.1 Amendment and Modification................................................................ 49
11.2 Waiver of Compliance; Consents............................................................ 50
11.3 Notices................................................................................... 50
11.4 Assignment................................................................................ 51
11.5 Governing Law............................................................................. 51
11.6 Waiver of Jury Trial...................................................................... 51
11.7 Counterparts.............................................................................. 51
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11.8 Interpretation............................................................................ 51
11.9 Severability.............................................................................. 52
11.10 Entire Agreement......................................................................... 52
11.11 Bulk Sales or Transfer Laws.............................................................. 52
EXHIBITS
Exhibit A ▇▇▇▇ of Sale
Exhibit B Instrument of Assumption
Exhibit C Trademark License
Sellers Disclosure Schedule
Schedule 1.1(a) Sellers' Persons with Knowledge
1.1(b) Purchaser's Persons with Knowledge
2.1(m) Permits
2.1(o) Elevator Executive Agreements
2.1(p) Elevator Personnel Agreements
2.2(b) Excluded Marks
2.2(h) Partially Utilized Facilities
2.2(m) Other Assets
2.4(b) Legal Proceedings
3.2 Agreed Accounting Principles
3.2(b) Cash Change
3.3(a) Modernization Contracts
4.2(f) Interim Services Agreement
5.3 Consents and Approvals
5.4 Certain Changes or Events
5.5(b) Labor Unions
5.6 Seller Plans
5.7 Material Contracts
5.8 Governmental Authority
5.10 Compliance with Tax Law
5.13 Financial Information
5.14 Undisclosed Liabilities
5.15 Title to Purchased Assets
5.17 Real Property
7.1 Conduct of Business Relating to the Purchased Assets
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SALE AGREEMENT
SALE AGREEMENT, dated as of July 9, 2003 (this "Agreement"), by and
among ABM Industries Incorporated, a Delaware corporation ("ABM"), Amtech
Elevator Services, Inc., a California corporation ("AES") (ABM and AES each a
"Seller" and collectively, "Sellers") and ▇▇▇▇ Elevator Company, a New Jersey
corporation ("Purchaser").
WHEREAS, ABM through AES, its wholly owned subsidiary, owns and
operates a business segment which provides elevator and escalator maintenance,
installation, repair and modernization services;
WHEREAS, Purchaser desires to purchase from Sellers, and Sellers desire
to sell to Purchaser, substantially all of the assets of the Business (as
defined hereinafter) upon the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions
(a) As used in this Agreement, each of the following
terms shall have the following meanings:
(i) "ACM" means any asbestos containing
material.
(ii) "Adjusted Net Assets" means the Net Assets
computed based on the information contained in the Final Preceding Month End
Balance Sheet prepared in accordance with the Agreed Accounting Principles.
(iii) "Affiliate" shall have the meaning set forth
in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended.
(iv) "Agreed Accounting Principles" means those
accounting principles set forth on Schedule 3.2 of Sellers Disclosure Schedule
and used for the preparation of the Preceding Month End Balance Sheet. Such
schedule also sets forth the methodology used for the calculation of Adjusted
Net Assets and Target Net Assets, used in determining the adjustment to the
Closing Purchase Price described in Section 3.2.
(v) "Applicable Law" means any law, code,
regulation, rule, order, judgment or decree to which the Business, Sellers or
any of their Affiliates are subject.
(vi) "Balance Sheet" means the unaudited
divisional balance sheet of the Business as of April 30, 2003, which is attached
hereto as part of Schedule 5.13 of Sellers Disclosure Schedule.
(vii) "▇▇▇▇ of Sale" means the ▇▇▇▇ of Sale to be
delivered at the Closing with respect to the Purchased Assets substantially in
the form of Exhibit A hereto.
(viii) "Books and Records" means all books,
records, files, documents, financial records, bills, accounting records, tax
records, operating manuals, personnel records, customer and supplier lists and
files, including customer lists, preprinted materials, artwork, and other
similar items.
(ix) "Business" means the elevator and escalator
services business known as Amtech Elevator Services, including all of Sellers'
operations and activities relating to the maintenance, repair, installation and
modernization of elevators and escalators.
(x) "Business Day" means any day other than
Saturday, Sunday and any day which is a legal holiday or a day on which banking
institutions in the State of New York are authorized by law or other
governmental action to close.
(xi) "Cash Change" means the net cash transfers
between AES and ABM during the period from (a) the date of the Preceding Month
End Balance Sheet through (b) the Closing Date as determined in accordance with
the methodology illustrated on Schedule 3.2(b) of Sellers Disclosure Schedule.
The computation of Cash Change shall reflect (x) cash disbursements in respect
of Sellers' payment of (i) liabilities reflected on the Preceding Month End
Balance Sheet or (ii) Stub Period Operational Expenses, netted against (y) cash
receipts in respect of Sellers' collections on accounts receivable reflected on
the Preceding Month End Balance Sheet or otherwise arising during the period
between the date of the Preceding Month End Balance Sheet and the Closing Date.
(xii) "Code" means the United States Internal
Revenue Code of 1986, as amended, and Treasury regulations promulgated
thereunder.
(xiii) "Confidentiality Agreement" means the
Confidentiality Agreement, dated as of June 14, 2003, by and between ABM and
Purchaser.
(xiv) "Employee" means any employee of any Seller
as of the Closing Date (including employees who are not actively at work as of
the Closing Date on account of sickness, vacation, family medical leave, sick
leave or other normal course temporary absence (but excluding disability,
authorized leave of absence or other situations where the absence is either
long-term or indeterminate)) whose work or function is related primarily to the
operation of the Business.
(xv) "Encumbrances" means any mortgages, pledges,
liens (statutory or otherwise), security interests, easements, rights-of-way,
covenants, claims,
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conditional and installment sale agreements, restrictions or encumbrances and
charges of any kind or nature whatsoever (other than those related to this
Agreement).
(xvi) "Environmental Law" shall mean any federal,
state or local statute, ordinance, rule or regulation, any judicial or
administrative order or judgment, to the extent such order or judgment is
specifically applicable to the Purchased Assets or the Business, and any
provision or condition of any Permit or other operating authorization
specifically applicable to the Purchased Assets or the Business relating to the
protection of the environment or the public welfare from actual or potential
exposure to any actual or potential release, discharge, disposal or emission of
any Regulated Substance;
(xvii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations thereunder.
(xviii) "ERISA Affiliate" means each trade or
business (whether or not incorporated) that, together with any Seller, is
treated as a single employer under Sections 414(b), (c), (m) or (o) of Code.
(xix) "Exchange Act" means the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder.
(xx) "Governmental Authority" means a domestic or
foreign federal, state, municipal or local government, legislative, or
regulatory authority, agency or commission, including courts of competent
jurisdiction and arbitrators.
(xxi) "Head Office" means the head corporate
office of the Business located in Anaheim, California.
(xxii) "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder.
(xxiii) "Instrument of Assumption " means the
Instrument of Assumption to be delivered at the Closing with respect to the
Assumed Liabilities substantially in the form of Exhibit B hereto.
(xxiv) "Inventory" means the complete inventory of
goods in transit, work in progress, raw materials, spare parts, supplies,
materials and merchandise of the Business held for sale or to be consumed in the
performance of maintenance, installation, repair and modernization services.
(xxv) "Knowledge" means the actual knowledge,
after diligent inquiry or investigation, of (a) with respect to Sellers, the
individuals set forth of Schedule 1.1(a) of Sellers Disclosure Schedule and (b)
with respect to Purchaser, the individuals set forth on Schedule 1.1(b) of
Sellers Disclosure Schedule.
(xxvi) "Material Adverse Effect" means (a) any
change in or effect that is, individually or in the aggregate, materially
adverse to the business, operations or results of operations of the Business
taken as a whole, excluding any such
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change or effect resulting from or arising in connection with (A) changes in
conditions or circumstances generally affecting the industry in which the
Business operates or (B) the compliance with the terms and conditions of this
Agreement or (b) any material adverse effect on the ability of Sellers to
consummate the transactions contemplated by this Agreement.
(xxvii) "Net Assets" means the net assets of the
Business computed based on information contained in the Balance Sheet, the
Preceding Month End Balance Sheet or the Final Preceding Month End Balance
Sheet, as the case may be; provided that the calculation of Net Assets excludes
all Excluded Assets and Excluded Liabilities to the extent otherwise required by
U.S. GAAP to be reflected on a balance sheet of the Business (other than Other
Taxes which shall be included in such computation).
(xxviii) "Other Taxes" means all Taxes other than
income Taxes.
(xxix) "Permitted Encumbrances" means (A)
Encumbrances arising or incurred in the ordinary course of business that are not
material in amount or do not materially detract from the value of or materially
impair the use of the Purchased Assets, (B) Encumbrances for Taxes not yet due
and payable or the validity of which is being contested in good faith by
appropriate proceedings, (C) Encumbrances of carriers, warehousemen, mechanics
and material men and other like Encumbrances arising in the ordinary course of
business, and (D) Encumbrances which do not, individually or in the aggregate,
have a Material Adverse Effect; provided that for purposes of Section 2.1 clause
(D) hereof shall not apply.
(xxx) "Person" means an individual, a partnership,
a joint venture, a corporation, a limited liability company, a limited liability
partnership, a trust, an unincorporated organization or a Governmental Authority
or any department or agency thereof.
(xxxi) "Regulated Substance" means petroleum or
petroleum products and any other material, substance or waste that is identified
and regulated by any federal, state or local statute, ordinance, rule or
regulation intended to protect the environment or public health.
(xxxii) "Sellers Disclosure Schedule" means the
disclosure schedule attached to this Agreement and delivered by Sellers to
Purchaser pursuant to the terms of this Agreement.
(xxxiii) "Stub Period Operational Expenses" means all
expenses of the Business other than for Excluded Liabilities (except for this
purpose, Other Taxes) incurred in the ordinary course of business by the
Business (including, but not limited to, all trade obligations and expenses for
payroll, vacation, bonuses and commissions, and contributions to the Seller
Plans) between the date of the Preceding Month End Balance Sheet and the Closing
Date, but excluding any amounts owed to ABM or an Affiliate of ABM other than
(i) in respect of insurance premiums for general liability and workers
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compensation (which shall be calculated at a rate of no more than twenty
thousand dollars ($20,000) per calendar day) and (ii) information management and
related services provided to AES by ABM that continue under the Interim Services
Agreement (which shall be calculated at the rates negotiated in the Interim
Services Agreement), which shall be included.
(xxxiv) "Target Net Assets" means $19,969,906, which
is the Net Assets as of April 30, 2003 as shown on Schedule 3.2 of the Sellers
Disclosure Schedule which was calculated from the Balance Sheet prepared in
accordance with the Agreed Accounting Principles on such Schedule 3.2 of Sellers
Disclosure Schedule
(xxxv) "Tax" means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty or addition
thereto, whether disputed or not.
(xxxvi) "Tax Return" means any return, report,
information return or other document (including any amendment thereto, and any
schedule or attachment thereto and related or supporting information) supplied
or required to be supplied to any authority with respect to Taxes.
(xxxvii) "WARN Act" means the Federal Worker
Adjustment Retraining and Notification Act of 1988, and the rules and
regulations thereunder.
(b) Each of the following terms has the meaning
specified in the Section set forth opposite such term:
Term Section
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ABM Preamble
ABM Transaction 7.12
Adjustment Statements 3.2(b)
Agreement Preamble
Allocation Schedule 7.7(c
AES Preamble
Ancillary Documents 5.2
Assumed Contracts 2.1(a)
Assumed Leases 2.1(b)
Assumed Liabilities 2.3
Buyer Competitive Business 7.11(a)
Cash Change Amount 3.2(b)
Cash Change Schedule 3.2(b)
Closing 4.1
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Term Section
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Closing Date 4.1
Closing Purchase Price 3.1
Comprehensive Basket 9.5
Consent Period 7.10(c)
Elevator Executive Agreements 2.1(o)
Elevator Personnel Agreements 2.1(p)
Excluded Assets 2.2
Excluded Marks 2.2(b)
Excluded Liabilities 2.4
Excluded Records 2.1(g)
Federal Government Contract 2.2(l)
Final Preceding Month End Balance Sheet 3.2(c)
Incurred Costs 3.3(a)
Indemnifiable Losses 9.2(a)
Indemnifying Party 9.2(c)
Indemnitee 9.2(c)
Interim Services Agreement 4.2(f)
Labor Unions 5.5(b)
Material Maintenance Contracts 5.7
Material Modernization Contracts 5.7
Material Contracts 5.7
Modernization Contracts 3.3(a)
Modernization Losses 3.3(a)
Modernization Losses Statement 3.3(c)
Multiemployer Plan 5.6(d)
NEI Multiemployer Plan 7.8(e)
Net Asset Adjustment Statements 3.2(a)
Neutral Accountant 3.2(c)
Partially Utilized Facilities 2.1(g)
Partially Utilized Facility Leases 2.2(h)
Performance Bonds 2.1(n)
Permits 5.9
▇▇▇▇▇ Cash 2.1(i)
Preceding Month End Balance Sheet 3.2(a)
Purchased Assets 2.1
Purchaser Preamble
Purchaser Group 9.2(a)
Purchaser Plans 7.8(b)
Reimbursable Liabilities 2.3(a)
Requested Required Consents 7.10(c)
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Term Section
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Required Consents 7.10(b)
Seller Preamble
Seller Group 9.2(b)
Seller Plans 5.6(a)
Sellers Savings Plans 7.8(d)
Target Business 7.11(a)
Tax Information 7.7(a)
Termination Date 10.1(b)
Third Party Claim 9.3(a)
Transferred Employees 7.8(b)
Transfer Taxes 7.7(b)
U.S. GAAP 5.13
ARTICLE II
SALE AND PURCHASE
2.1 The Sale
Upon the terms and subject to the satisfaction of the conditions
contained in this Agreement, at the Closing, Sellers agree to sell, assign,
convey, transfer and deliver to Purchaser and Purchaser agrees to purchase,
acquire and accept from Sellers, free and clear of all Encumbrances (other than
Permitted Encumbrances) all of Sellers' right, title and interest in and to all
of the business, properties, assets, goodwill and rights of Sellers primarily
related to the Business of whatever kind or nature, tangible or intangible,
other than the Excluded Assets (collectively, the "Purchased Assets"),
including, without limitation:
(a) all of Sellers' service, repair, maintenance,
installation and modernization contracts and agreements of the Business,
including any amendments and supplements, modifications or side letters thereto
and any other agreements related to work performed by Sellers in connection with
the Business whether or not such contracts or agreements are valid or expired by
their terms (collectively, the "Assumed Contracts");
(b) the leasehold interests, including any prepaid rent,
security deposits and options to renew or purchase in connection therewith, of
Sellers in real property primarily relating to the Business (the "Assumed
Leases");
(c) the furniture, equipment, machinery, supplies,
vehicles, tools, personal property, fixtures and other tangible property owned,
used, leased or licensed by Sellers and primarily relating to the Business;
(d) all vehicle and equipment leases of the Business;
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(e) all accounts receivable of the Business as of the
date of the Final Preceding Month End Balance Sheet and all accounts receivable
of the Business arising between the date of the Preceding Month End Balance
Sheet and the Closing Date;
(f) the Inventory of the Business;
(g) the Books and Records of the Business residing at the
branches, the Head Office and in the locations occupied by the Business at the
facilities partially utilized by the Business listed on Schedule 2.2(h) of
Sellers Disclosure Schedule (the "Partially Utilized Facilities"), except for
all (i) personnel and related human resources records with respect to employees
of the Business as of the Closing Date, including Employees and former employees
and (ii) payroll and sales and use Tax records ((i) and (ii), the "Excluded
Records");
(h) the operating manuals of the Business;
(i) all ▇▇▇▇▇ cash of the Business maintained at the
branches, the Head Office and the Partially Utilized Facilities, in any event
not to exceed twelve thousand dollars ($12,000) in the aggregate for all such
facilities (the "▇▇▇▇▇ Cash");
(j) the know-how (including all material documentation
relating thereto in existence as of the Closing Date) and, to the extent
existing, the trade secrets, technology and inventions, related to the Business;
(k) to the extent existing, the patents (including all
reissues, divisions, continuations and extensions of such patents), patent
applications, trade names, trademarks, service marks, trademark or service ▇▇▇▇
registrations and registration applications, product designations, product and
service goodwill, trade dress, copyrights, license rights, computer software,
specifications, data, logos, slogans, and designs together with all
registrations and applications relating primarily to the Business, except for
the Excluded Marks;
(l) all rights under warranties, representations and
guarantees made by suppliers, manufacturers or contractors in connection with
the operation of the Business or affecting any of the Purchased Assets;
(m) all Permits relating primarily to the Business as set
forth on Schedule 2.1(m) of Sellers Disclosure Schedule;
(n) to the extent assignable, all right, title and
interest in and under fidelity, performance and surety bonds of the Business,
including those relating to specific jobs of the Business involving
sub-contractors performing work for the Business (the "Performance Bonds");
(o) the employment agreements listed on Schedule 2.1(o)
of Sellers Disclosure Schedule (the "Elevator Executive Agreements");
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(p) the employment agreements listed on Schedule 2.1(p)
of Sellers Disclosure Schedule, except for the SERP arrangement described
thereon (the "Elevator Personnel Agreements");
(q) all goodwill relating to the Business;
(r) all post office boxes, telephone numbers, answering
service numbers, Internet sites and the domain name ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
and other communication codes, numbers or devices used in connection with the
Business; and
(s) any other assets primarily used by Sellers in the
Business on the Closing Date that are not specifically listed above or
identified as Excluded Assets.
2.2 Excluded Assets
Purchaser shall not acquire pursuant to this Agreement, the Purchased
Assets shall not include and Sellers shall retain the following (collectively,
the "Excluded Assets"):
(a) all cash, bank deposits in transit and cash
equivalents of the Business, except for ▇▇▇▇▇ Cash;
(b) the trade names, trademarks, service marks and
designs listed on Schedule 2.2(b) of the Sellers Disclosure Schedule, together
with all registrations and applications related thereto and any goodwill
associated with such marks or any substantially similar trade names, trademarks,
service marks, designs or logos (the "Excluded Marks");
(c) the Excluded Records;
(d) all insurance policies covering the Business or the
Purchased Assets;
(e) all rights to insurance proceeds arising with respect
to the conduct of the Business prior to the Closing Date or regarding the
Purchased Assets;
(f) all refunds and credits relating to Taxes paid by
Sellers (and Sellers' Affiliates) or Taxes in connection with the conduct of the
Business prior to the Closing whether such refund is received as a payment or a
credit against future taxes payable;
(g) all property and assets of Sellers (and Sellers'
Affiliates) that are not used primarily in the operation of the Business;
(h) the leasehold interests, including any prepaid rent,
security deposits and options to renew or purchase in connection therewith, of
Sellers with respect to the Partially Utilized Facilities (the "Partially
Utilized Facility Leases") as set forth on Schedule 2.2(h) of Sellers Disclosure
Schedule;
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(i) the minute and record books, corporate seal, stock
records and organizational documents of Sellers;
(j) all rights under any retirement, profit sharing or
other employee benefit plan of Sellers;
(k) all loans, employment, commission or similar
contracts (other than the Elevator Executive Agreements and the Elevator
Personnel Agreements), and life insurance maintained by Sellers;
(l) until such time as amendments and novations are
obtained thereto in accordance with Section 7.13, all contracts by and between
Sellers and the United States federal government related to the Business (the
"Federal Government Contracts"); and
(m) any other assets that are specifically identified and
described on Schedule 2.2(m) of Sellers Disclosure Schedule.
2.3 Assumed Liabilities
Except as provided in Section 2.4 hereof, Purchaser agrees, effective
at the Closing Date, to assume, pay, perform and discharge, when due:
(a) (i) trade accounts payable and (ii) an amount equal to
the accrued expenses for payroll, vacation, bonuses and commissions, and
contributions to the Sellers Plans and Other Taxes (the "Reimbursable
Liabilities") to the extent and in the amounts reflected on the Final Preceding
Month End Balance Sheet;
(b) all obligations or liabilities, including performance
obligations, under the Assumed Contracts, Assumed Leases, vehicle and equipment
leases, Elevator Executive Agreements and Elevator Personnel Agreements (and all
other contracts and agreements of the Business entered into in the ordinary
course of business and consistent with past practices) incurred in the ordinary
course of business and consistent with past practices prior to the Closing Date
or relating to the period after the Closing Date (excluding liability for
material breach or material non-performance under the Assumed Contracts or
Assumed Leases occurring prior to the Closing Date, provided that Sellers shall
retain such liability for material breach or material non-performance under the
Assumed Contracts and Assumed Leases in the event and to the extent that the
Purchaser shall have notified Sellers of any such breach or non-performance
within one year of the Closing Date);
(c) all obligations under all vehicle and equipment
leases of the Business;
(d) all obligations under Performance Bonds issued by
Sellers on behalf of the Business, to the extent assignable;
(e) trade accounts payable of the Business arising during
the
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period between the date of the Preceding Month End Balance Sheet and the Closing
Date and an amount equal to the Stub Period Operational Expenses (other than the
trade accounts payable);
(f) all obligations under the 2003 bonus plan of the
Business to the extent arising in the ordinary course of Business (the "2003
Bonus Plan"); and
(g) subject to Section 2.5 hereof, all other liabilities
of the Business arising out of the operation of the Business after the Closing
Date.
The foregoing obligations, liabilities and commitments, and no others, shall be
hereinafter referred to as the "Assumed Liabilities".
2.4 Excluded Liabilities
Purchaser shall not assume and shall not be obligated to pay, perform
or otherwise discharge any liabilities and obligations of Sellers not expressly
assumed pursuant to this Agreement, including without limitation (collectively,
the "Excluded Liabilities"):
(a) all interest bearing liabilities in respect of money
borrowed by the Business as of the Closing Date;
(b) subject to Section 2.5, all liabilities in respect of
causes of action, claims, suits or proceedings of or involving third parties
against Sellers relating to the Business or the Purchased Assets arising out of
incidents or events occurring on or prior to the Closing Date, including all
insurance (workers compensation and general liability) claims with an incident
date on or prior to the Closing Date and all other claims as set forth on
Schedule 2.4(b) of Sellers Disclosure Schedule;
(c) all liabilities for material breach or material
non-performance under the Assumed Contracts or Assumed Leases occurring prior to
the Closing Date, provided that Sellers shall retain such liability for material
breach or material non-performance under the Assumed Contracts and Assumed
Leases only in the event and to the extent that Purchaser shall have notified
Sellers of any such breach or non-performance within one year of the Closing
Date;
(d) any liabilities or obligations of Sellers in respect
of any Excluded Assets or other assets of Sellers which are not Purchased
Assets, whether or not such liabilities or obligations arise before or after the
Closing Date;
(e) any liabilities or obligations with respect to Taxes
attributable to Sellers, the Business, or the Purchased Assets for taxable
periods, or any portion thereof, ending on or before the Closing Date;
(f) any liabilities or obligations of ABM or AES for the
unpaid Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any
similar
11
provision of state, local, or foreign law or regulation), as a transferee or
successor, by contract, or otherwise;
(g) any liabilities or obligations of Sellers pursuant
to employment or similar agreements with any Employee (including the SERP
arrangement described on Schedule 2.1(p) of Sellers Disclosure Schedule in
connection with one Elevator Personnel Agreement) or independent contractor
under the Seller Plans or any stay bonus or similar arrangement entered into or
created as a result of this transaction, unless specifically assumed (it being
understood and agreed by the parties that the Elevator Executive Agreements, the
Elevator Personnel Agreements and, to the extent obligations thereunder arise
in the ordinary course of Business, the 2003 Bonus Plan are being assumed by
Purchaser hereunder) pursuant to this Agreement;
(h) subject to Section 2.5 hereof, any liabilities
arising out of incidents or events occurring prior to the Closing Date for
(1) any violation of Environmental Laws with respect to the operations of the
Business prior to or as of the Closing Date, (2) actions or incidents occurring
prior to the Closing Date that could form the basis for a claim of liability
under Environmental Law, including, without limitation, the release or disposal
of Regulated Substances by or in connection with the Business or (3) the use,
procurement, manufacture or sale of ACM in products manufactured, sold,
installed or serviced in connection with the Business on or prior to the Closing
Date; and
(i) any obligations or liabilities arising from or
related to discontinued, sold or abandoned businesses, or commercial operations,
including any elevator and escalator manufacturing business.
2.5 Shared Liabilities.
With respect to certain liabilities of the Business relating to causes
of action, claims, suits or proceedings of or involving third parties concerning
Environmental Law or ACM which arise from incidents or events occurring over a
period of time beginning before the Closing Date and ending after the Closing
Date, such liabilities shall be allocated to the parties in an equitable manner
taking into account the relative fault of each of the parties as determined by a
trier of fact as well as the relative proportions of time such incidents or
events occurred before and after the Closing Date.
ARTICLE III
PURCHASE PRICE
3.1 Purchase Price - General
In consideration of the sale, conveyance, assignment and transfer of
the Purchased Assets, at the Closing, Purchaser shall pay to ABM, on behalf of
Sellers, an amount equal to one hundred twelve million dollars ($112,000,000)
(the "Closing Purchase Price") . The Closing Purchase Price shall be paid at the
Closing in immediately available funds by wire transfer to accounts which will
be designated at least two days prior to the Closing Date by ABM on behalf of
Sellers. The Closing Purchase
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Price payable by Purchaser at the Closing will be subject to future adjustment
as provided in Sections 3.2 and 3.3.
3.2 Closing Purchase Price Adjustments.
(a) Net Asset Adjustment; Preparation of the Preceding
Month End Balance Sheet. As soon as reasonably practicable but not later than
sixty (60) days after the Closing Date, Purchaser shall prepare and deliver to
Sellers (i) an unaudited balance sheet of the Business as of the end of the
month ending immediately preceding the Closing Date (the "Preceding Month End
Balance Sheet"), and (ii) the calculation of the Adjusted Net Assets, based upon
the Preceding Month End Balance Sheet and the Agreed Accounting Principles as
set forth on Schedule 3.2 of Sellers Disclosure Schedule ((i) and (ii) together,
the "Net Asset Adjustment Statements"). The Preceding Month End Balance Sheet
shall be prepared on a basis consistent with the preparation of the Balance
Sheet, including the Agreed Accounting Principles and, as specified thereby,
U.S. GAAP to the extent applicable. The calculation of Adjusted Net Assets shall
be prepared on a basis consistent with the calculation of the Target Net Assets
which shall be calculated from the Balance Sheet prepared in accordance with the
Agreed Accounting Principles.
(b) Stub Period Cash Adjustment; Preparation of Cash
Change Schedule. As soon as reasonably practicable but not later than sixty (60)
days after the Closing Date, Purchaser shall also deliver to Seller a schedule
(the "Cash Change Schedule"), substantially in the form set forth on Schedule
3.2(b) of Sellers Disclosure Schedule, which shall set forth the Cash Change in
the Business (the absolute value of such amount, the "Cash Change Amount").
Purchaser shall prepare the Cash Change Schedule in good faith and in accordance
with past practices of AES and the Business. The Net Asset Adjustment Statements
and the Cash Change Schedule shall be collectively known herein as the
"Adjustment Statements". The parties understand and agree that the mechanism of
the Cash Change adjustment is intended to reimburse Sellers with respect to
Sellers' payment of Reimbursable Liabilities and Stub Period Operational
Expenses to the extent Sellers pay any such amounts during the period from the
date of the Preceding Month End Balance Sheet through and including the Closing
Date. If any such Reimbursable Liabilities and Stub Period Operational Expenses
are not reflected as paid by Sellers on the Cash Change Schedule, Purchaser
shall pay such amounts to the Sellers, if and when such liabilities are paid by
Sellers following the Closing Date, pursuant to the mechanics set forth in the
Interim Services Agreement, as provided in Section 3.2(f) hereof.
(c) Review of Adjustment Statements. After delivery to it
of the applicable Adjustment Statement(s), Sellers (and their representatives)
shall be afforded the opportunity to review the work papers, schedules and other
supporting papers relating to the preparation of the Adjustment Statements and
to consult with Purchaser and its representatives, if necessary, regarding the
methods used in the preparation thereof. Within thirty (30) days after Sellers'
receipt of the applicable Adjustment Statements Sellers shall either inform the
other in writing that the applicable Adjustment Statement is acceptable or
object to such Adjustment Statement in writing setting forth a specific
description of the objections and specifying in reasonable detail the nature and
extent of
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such disagreement. Sellers shall not give a notice of disagreement unless the
aggregate amount in dispute exceeds fifty thousand dollars ($50,000). The
failure of Sellers to deliver written objections to Purchaser within thirty (30)
days after receipt of the applicable Adjustment Statement shall be deemed
acceptance of such Adjustment Statement. If Sellers objects to the Adjustment
Statement and if Purchaser does not agree with such objections (it being agreed
that the failure of Purchaser to deliver written notice to Sellers of
Purchaser's disagreement with Sellers objections within fifteen (15) days of
receipt of such objections shall be deemed acceptance by Purchaser failing to
deliver notice), or such objections are not resolved on a mutually agreeable
basis within thirty (30) days after the Purchaser's receipt of such objections,
any disagreement between the parties regarding the same shall be resolved by
Deloitte & Touche LLP or if Deloitte & Touche LLP is not available to serve,
then an alternative unaffiliated accounting firm to be selected by the parties
(the "Neutral Accountant"). The decision of the Neutral Accountant shall be (i)
made within thirty (30) days of the submission of the dispute based solely on
the presentations by Purchaser and Sellers, (ii) in accordance with this
Agreement and (iii) final and binding upon the parties. Upon the agreement of
the parties or the decision of the Neutral Accountant or Seller's failure to
deliver a written objection to Purchaser within the thirty (30) day period after
receipt of the applicable Adjustment Statement provided above, the Preceding
Month End Balance Sheet (as adjusted, if necessary) shall be deemed the Final
Preceding Month End Balance Sheet (the "Final Preceding Month End Balance
Sheet") and the determination of the Adjusted Net Assets shall be deemed final
or the Cash Change Schedule and the determination of the Cash Change shall be
deemed final, as the case may be. Each party shall bear the fees, costs and
expenses of its own accountants and shall share equally the fees, costs and
expenses of the Neutral Accountant.
(d) Adjustment to the Closing Purchase Price; Payment.
Upon final determination in accordance with the procedures set forth in Section
3.2(c) of (A) the Final Preceding Month End Balance Sheet and the Adjusted Net
Assets and (B) the Cash Change Amount, a net payment, reflecting an adjustment
to the Closing Purchase Price, shall be made by one party to the other according
to the following rules:
(i) if the Adjusted Net Assets exceed the Target
Net Assets, the amount of such excess shall be payable by Purchaser to Sellers,
or
(ii) if the Adjusted Net Assets are less than the
Target Net Assets, the amount of any deficiency shall be payable by Sellers to
Purchaser; and
(iii) if the Cash Change is a net cash outflow (as
reflected on the Cash Change Schedule), the Cash Change Amount shall be payable
by Purchaser to Sellers, or
(iv) if the Cash Change is a net cash inflow (as
reflected on the Cash Change Schedule), the Cash Change Amount shall be payable
by Sellers to Purchaser.
Any adjustment to the Closing Purchase Price required under this Section 3.2(d)
in
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respect of such net payment shall be made by wire transfer of immediately
available funds within ten (10) days after the date that the final determination
with respect to both of (A) the Adjusted Net Assets and (B) Cash Change Amount
in accordance with Section 3.2(c), together with interest thereon from the
Closing Date to the date of payment calculated at the prime rate in effect on
the Closing Date as reported in the Wall Street Journal.
(e) Notwithstanding the foregoing, if the Closing occurs
on the last Business day of a month, there shall be no adjustment to the Closing
Purchase Price made in respect of the Cash Change, and all references to the
Cash Change, the Cash Change Amount, the Stub Period Operational Expenses and
the Cash Change Schedule (other than in this Section 3.2(e)) shall not apply. In
such event, the only adjustment to the Purchase Price shall be based upon the
difference between the Target Net Assets and the Adjusted Net Assets.
(f) Reimbursement for Final Preceding Month End Balance
Sheet liabilities and Stub Period Operational Expenses. To the extent Sellers
pay, following the Closing Date, any amounts in respect of (i) Reimbursable
Liabilities or (ii) Stub Period Operational Expenses, Purchaser shall, at
Sellers' request, promptly reimburse Sellers with respect thereto in accordance
with the mechanics agreed upon in the Interim Services Agreement; provided that
Purchaser shall not be obligated to reimburse Sellers with respect to such
payments prior to the final determination of the Final Preceding Month End
Balance Sheet and the Cash Change Schedule. Following the final determination of
the Final Preceding Month End Balance Sheet and the Cash Change Schedule,
Purchaser may, within a period of 15 days thereafter (with respect to requests
for reimbursement made prior to such final determination) or 15 days following
Sellers' request for reimbursement (with respect to requests for reimbursement
made by Sellers to Purchaser after the final determination of the Final
Preceding Month End Balance Sheet and the Cash Change Schedule) object to such
reimbursement in writing to Sellers setting forth a specific description of the
objections and specifying in reasonable detail the nature of the disagreement.
The failure of Purchaser to deliver a written objection to Sellers within the
applicable 15 day period shall be deemed agreement by Purchaser with respect to
such amount requested, and Purchaser shall promptly reimburse Sellers with
respect thereto. If Purchaser objects within the applicable 15 day period and
the disagreement cannot be resolved by mutual agreement within 15 additional
days following Sellers' receipt of such objection, the disagreement shall be
resolved by a Neutral Accountant. The decision of the Neutral Accountant with
respect to any amount requested by Sellers for reimbursement in accordance with
the foregoing provisions shall be (i) made within thirty (30) days of the
submission of the dispute based solely on the presentations by Purchaser and
Sellers, (ii) in accordance with this Agreement and (iii) final and binding upon
the parties.
3.3 Modernization Contracts
(a) In the event that Purchaser in the course of
completing all Assumed Contracts relating to modernization projects (the
"Modernization Contracts") incurs costs with respect to such Modernization
Contracts, which together with the costs
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incurred by the Business prior to the Closing Date with respect to such
Modernization Contracts (such costs together, the "Incurred Costs"), are in
excess of the total sales prices of all such Modernization Contracts in the
aggregate (such excess, the "Modernization Losses"), Purchaser shall be
permitted to recover the amount of such Modernization Losses from Sellers;
provided that for purposes of determining costs incurred for any particular
Modernization Contract the Agreed Accounting Principles shall govern and an
overhead allocation calculated in accordance with the Agreed Accounting
Principles shall be included. Notwithstanding the foregoing, and subject to
Section 9.5, in no event will Purchaser be able to collect any Modernization
Losses unless and until the total amount of Modernization Losses exceeds
$1,000,000 (but only in the amount of such excess). Schedule 3.3(a) of Sellers
Disclosure Schedule sets forth a list of the AES's portfolio of Modernization
Contracts as of May, 31 2003, and Sellers shall update such schedule as of the
Closing for new Modernization Contracts obtained between May 31, 2003 and the
Closing Date.
(b) Following the Closing Date, Purchaser shall inform
Seller on a consistent quarterly basis as to (i) whether or not Modernization
Losses then exist and (ii) whether any particular Modernization Contract that is
a Material Contract has either (a) resulted in incurred costs in respect of such
contract in excess of the sales price under such contract or (b) in Purchaser's
reasonable judgment, based on past experience and generally accepted industry
practices, is likely to begin resulting in costs that, together with previously
incurred costs in respect of such contract, will exceed the sales price under
such contract.
(c) As soon as reasonably practicable but not later than
sixty (60) days after the completion of all Modernization Contracts included on
Schedule 3.3(a) of Sellers Disclosure Schedule (as updated), Purchaser shall
prepare and deliver to Sellers a statement (the "Modernization Losses
Statement") setting forth the Modernization Losses and a table including the
sales price and incurred costs for each such Modernization Contract listed on
Schedule 3.3(a) of Sellers Disclosure Schedule. Sellers shall have a right to
inspect Purchaser's records with respect to incurred costs and payments received
if recovery for any Modernization Losses applies in accordance with Section
3.3(a).
(d) After delivery to Sellers of the Modernization Losses
Statement, Sellers (and their representatives) shall be afforded the opportunity
to review the work papers, schedules and other supporting papers relating to the
Modernization Losses Statement delivered by the Purchaser and to consult with
the Purchaser and its representatives, if necessary, regarding the methods used
in the preparation thereof. Within thirty (30) days after Sellers receipt of the
Modernization Losses Statement, Sellers shall either inform the Purchaser in
writing that the Modernization Losses Statement is acceptable or object to the
Modernization Losses Statement in writing setting forth a specific description
of the objections and specifying in reasonable detail the nature and extent of
such disagreement. Such disagreement and final resolution of the amount of
Modernization Losses shall be determined consistent with the procedures
described in Section 3.2(c) above.
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(e) Purchaser shall use commercially reasonable efforts to
perform and complete the Modernization Contracts in accordance with the terms
and conditions of such contracts, generally accepted industry practices and
otherwise in good faith and consistent with the past practices of the Business
and Purchaser with respect to Modernization Contracts.
ARTICLE IV
THE CLOSING
4.1 Time and Place of Closing
Upon the terms and subject to the satisfaction of the conditions contained in
this Agreement, the closing of the transactions contemplated by this Agreement
(the "Closing") will take place at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M. (local
time) on the third Business Day following the date on which all of the
conditions to each party's obligations in Article VIII hereunder have been
satisfied or waived (other than the conditions that by their terms shall be or
must necessarily be tested or satisfied at the Closing); or at such other place
or time as the parties may agree. The date and time at which the Closing
actually occurs is hereinafter referred to as the "Closing Date." The Closing
shall be considered effective as of 11:59 P.M. (local time) on the Closing Date.
4.2 Deliveries by Sellers
At the Closing, Sellers shall deliver the following to Purchaser:
(a) The ▇▇▇▇ of Sale, duly executed by Sellers;
(b) Executed consents, applications or other documents to
transfer the Assumed Contracts, Assumed Leases and the Permits as disclosed on
Schedule 5.7 of Sellers Disclosure Schedule;
(c) The certificate contemplated by Section 8.2(c);
(d) All such other instruments of assignment or conveyance
as shall, in the reasonable opinion of Purchaser and its counsel, be necessary
to transfer to Purchaser the Purchased Assets in accordance with this Agreement
and, where necessary or desirable, in recordable form;
(e) A certification of non-foreign status in a form which
complies with Section 1445 of the Code and the regulations thereunder;
(f) An Interim Services Agreement among Sellers and
Purchaser providing for the services identified on Schedule 4.2(f) of Sellers
Disclosure Schedule for a period of up to six months on terms not higher than
presently allocated to the Business (the "Interim Services Agreement");
17
(g) Such other agreements, documents, instruments and
writings as are required to be delivered by Sellers at or prior to the Closing
Date pursuant to this Agreement or as may otherwise be required to transfer the
Purchased Assets to Purchaser in connection herewith;
(h) The License Agreement described in Section 7.14, which
shall be executed by the parties thereto simultaneous with the Closing;
(i) A written legal opinion of the general counsel of ABM,
dated as of the Closing Date, with respect to the matters set forth in Sections
5.1 and 5.2; and
(j) Subleases with respect to the Partially Utilized
Facilities as described in Section 7.15, which shall be executed by the parties
simultaneous with the Closing.
4.3 Deliveries by Purchaser
At the Closing, Purchaser shall deliver the following to Sellers:
(a) The Closing Purchase Price by wire transfer of
immediately available funds to ABM;
(b) The certificate contemplated by Sections 8.3(c);
(c) The Instrument of Assumption, duly executed by
Purchaser;
(d) Any other instruments or writings, as shall, in the
reasonable opinion of Sellers and their counsel, be necessary for Purchaser to
be legally bound to fulfill its obligations under Section 2.3 hereof; and
(e) Such other agreements, documents, instruments and
writings as are required to be delivered by Purchaser at or prior to the Closing
Date pursuant to this Agreement or otherwise required in connection herewith.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as set forth in Sellers Disclosure Schedule prepared by
Sellers and delivered to Purchaser simultaneously with the execution hereof,
each Seller, jointly and severally, hereby represents and warrants to Purchaser
the following:
5.1 Organization; Qualification
Each Seller is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization. Each Seller has all requisite corporate power and authority to
own, lease, and operate the Purchased Assets and to carry on the Business as it
is now being conducted by such Seller. Each Seller is duly qualified to do
business and is in good standing under the laws of each state
18
or other jurisdiction in which either the ownership or use of the properties of
the Business owned or used by it requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect.
5.2 Authority Relative to this Agreement
Each Seller has full corporate power and authority to execute and
deliver this Agreement and all other agreements and documents contemplated
hereby to be delivered by such party (as to any party hereto, the "Ancillary
Documents") and to consummate the transactions contemplated hereby and by the
Ancillary Documents. The execution and delivery of this Agreement and the
Ancillary Documents and the consummation of the transactions contemplated hereby
and by the Ancillary Documents have been duly and validly authorized and
approved by all requisite corporate action and no other corporate proceedings on
the part of any Seller is necessary to authorize this Agreement, the Ancillary
Documents, or to consummate the transactions contemplated hereby and by the
Ancillary Documents. This Agreement has been duly executed and delivered by each
Seller and at the Closing each Seller will have executed and delivered its
respective Ancillary Documents. Assuming due authorization, execution and
delivery by Purchaser of this Agreement and the Ancillary Documents, this
Agreement constitutes, and, upon their execution and delivery the Ancillary
Documents will constitute, valid and binding obligations of each Seller,
enforceable against each Seller in accordance with their respective terms.
5.3 Consents and Approvals; No Violation
Except as set forth on Schedule 5.3 of Sellers Disclosure Schedule,
the execution and delivery of this Agreement and the Ancillary Documents by each
Seller, the consummation by each Seller of the transactions contemplated by this
Agreement or the compliance of each Seller with the provisions of this Agreement
will not (a) conflict with or result in any breach of any provision of the
articles of organization or by-laws of such Seller or result in the creation of
any Encumbrance (other than any Permitted Encumbrance) upon any of the Purchased
Assets pursuant to any mortgage, indenture, lease agreement or other instrument
to which either Seller is a party, (b) require any consent, approval, waiver,
filing with or notification to, any Governmental Authority, except (i) where the
failure to obtain such consent, approval, or waiver, or to make such filing or
notification, would not have a Material Adverse Effect or (ii) for those
requirements which become applicable to such Seller as a result of the specific
regulatory status of Purchaser (or any of its Affiliates) or as a result of any
other facts that specifically relate to the business or activities in which
Purchaser (or any of its Affiliates) are or propose to be engaged; (c) result in
a violation or breach of or default (or give rise to any right of termination,
cancellation or acceleration) under, or require any consent under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which such Seller is a party or
by which such Seller, or any of the Purchased Assets may be bound, except for
such instances where requisite waivers or consents have been obtained or which,
in the aggregate, would not have a Material Adverse Effect; or (d) violate any
order, writ,
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injunction, decree, statute, rule or regulation applicable to such Seller, or
any of the Purchased Assets, except for violations that would not have a
Material Adverse Effect.
5.4 Absence of Certain Changes or Events
Except as otherwise contemplated by this Agreement or as set forth
on Schedule 5.4 of Sellers Disclosure Schedule, since April 30, 2003 Sellers
have conducted the Business in the ordinary course consistent with past
practices and there has not been (a) any Material Adverse Effect; (b) any
damage, destruction or casualty loss, whether covered by insurance or not, which
had a Material Adverse Effect; and (c) any entry into any agreement, commitment
or transaction (including, without limitation, any borrowing or capital
financing) by Sellers, which is material to the business or operations of the
Purchased Assets, except agreements, commitments or transactions in the ordinary
course of business or as contemplated herein.
5.5 Labor Matters
(a) Except for such matters as do not have a Material
Adverse Effect, with respect to employees of Sellers who perform services
relating to the Business: (i) Sellers are in compliance with all Applicable Laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours; (ii) there is no labor strike, slowdown or
stoppage actually pending or to the Sellers' Knowledge threatened against or
affecting Sellers; and (iii) Sellers have not received notice that any
representation petition respecting the Employees has been filed with the
National Labor Relations Board.
(b) Schedule 5.5(b) of Sellers Disclosure Schedule lists all
collective bargaining agreements with any labor organization, union group or
association ("Labor Unions") directly relating to the Business and to which
Sellers are a party as of the date hereof.
5.6 Employee Benefit Plans
(a) Schedule 5.6 of Sellers Disclosure Schedule contains a
true and complete list of each deferred compensation, bonus or other incentive
compensation plan, program, agreement or arrangement; each severance or
termination pay, medical, surgical, hospitalization, life insurance and other
"welfare" plan, fund or program (within the meaning of Section 3(1) of ERISA);
each profit-sharing, stock bonus or other "pension" plan, fund or program
(within the meaning of Section 3(2) of ERISA); each employment, termination or
severance agreement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or
contributed to or required to be contributed to by any Seller or any ERISA
Affiliate or to which any Seller or any ERISA Affiliate is a party, whether
written or oral, for the benefit of any Employee or any director or independent
contractor of any Seller whose services are related primarily to the operation
of the Business as of the date hereof (the "Seller Plans").
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(b) Seller Plans have at all times complied with all
Applicable Laws, including, without limitation, the Code and ERISA and except as
provided in Section 7.8 hereof, Purchaser shall have no liability with respect
to Seller Plans. Sellers Savings Plans (as defined in Section 7.8(d)) have been
determined by the Internal Revenue Service to be qualified under Section 401(a)
of the Code and each trust related thereto has been determined to be exempt from
tax pursuant to Section 501(a) of the Code. Sellers have made all employee and
employer contributions required to be made to Sellers Savings Plans as of the
Closing Date. To the extent Sellers have not made all such contributions, the
liability for such contributions shall be properly and fully reflected on the
Final Preceding Month End Balance Sheet and on the Business' financial records
as of the Closing Date.
(c) Neither any Seller nor any ERISA Affiliate maintains or
contributes to, nor has any Seller or any ERISA Affiliate ever maintained or
contributed to, any plan subject to Title IV or Section 302 of ERISA with
respect to any Employee, other than a Multiemployer Plan (as defined in Section
5.6(d)).
(d) Schedule 5.6 of Sellers Disclosure Schedule identifies
each Seller Plan which is a "multiemployer plan" within the meaning of Section
3(37) of ERISA ("Multiemployer Plan"). With respect to each Multiemployer Plan
and, except as set forth on Schedule 5.6 Sellers Disclosure Schedule, (A)
neither any Seller nor any ERISA Affiliate has withdrawn, partially withdrawn,
or received any notice of any claim or demand for withdrawal liability or
partial withdrawal liability; (B) neither any Seller nor any ERISA Affiliate has
received any notice that such Multiemployer Plan is in reorganization, that
increased contributions may be required to avoid a reduction in plan benefits or
the imposition of any excise tax, or that any such plan is or may become
insolvent; (C) neither any Seller nor any ERISA Affiliate has failed to make any
required contributions, (D) to the Seller's Knowledge such Multiemployer Plan is
not a party to any pending merger or asset or liability transfer, (E) to the
Seller's Knowledge there are no PBGC (defined below) proceedings against or
affecting such Multiemployer Plan; and (F) neither any Seller nor any ERISA
Affiliate has any withdrawal liability by reason of a sale of assets pursuant to
Section 4204 of ERISA.
(e) The consummation of the transactions contemplated by
this Agreement will not, either alone or in combination with another event, (i)
entitle any current or former employee or officer of the Business to severance
pay, unemployment compensation or any other payment, except as expressly
provided in this Agreement, or (ii) accelerate the time of payment or vesting,
or increase the amount of compensation due any such employee or officer.
(f) Purchaser shall have no liability (i) under the
Consolidated Omnibus Budget Reconciliation Act of 1985 with respect to any
employee of Sellers who has a qualifying event under COBRA before the Closing
Date or (ii) with respect to any post-employment benefits provided by any Seller
or any ERISA Affiliate to their employees, former employees or retirees.
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(g) There are no pending, threatened or anticipated claims
by or on behalf of any Seller Plan (other than a Multiemployer Plan), by any
employee or beneficiary covered under any such Seller Plan, or otherwise
involving any such Seller Plan (other than routine claims for benefits).
5.7 Material Contracts and Arrangements
Schedule 5.7 of Sellers Disclosure Schedule sets forth (a)(i) the
100 highest revenue generating contracts in the month of June 2003 in accordance
with the accounting practices of Sellers, for maintenance services and related
service extras provided by the Sellers related to the Business (the "Material
Maintenance Contracts") and (ii) the 20 Modernization Contracts with, to
Sellers' Knowledge as of the date hereof, the greatest amount of unearned
revenue in respect of modernization services as of May 31, 2003 as calculated in
accordance with the accounting practices of Sellers (the "Material Modernization
Contracts"), (b) all joint venture or partnership agreements primarily related
to the Business to which Sellers are a party and (c) all agreements restricting
the right of Sellers or the Business to compete with third parties
(collectively, the "Material Contracts"). As of the date hereof, Sellers are not
in material breach of any of their obligations under the Material Contracts and
no event has occurred which constitutes or, with the lapse of time, the giving
of notice, or both, would constitute, such a material breach or a material
violation or material default by Sellers thereunder.
5.8 Legal Proceedings, etc.
There are no claims, actions, or proceedings pending or to Sellers'
Knowledge, investigation pending or, to Sellers' Knowledge threatened against
Sellers, relating to the Business or the Purchased Assets before any
Governmental Authority, which, if adversely determined, would have a Material
Adverse Effect. Schedule 2.4(b) of Sellers Disclosure Schedule sets forth all
actions, claims, suits or proceedings of or involving third parties relating to
the Business which have been brought or filed as of May 31, 2003. Except as set
forth on Schedule 5.8 of Sellers Disclosure Schedule, Sellers are not subject to
any outstanding judgment, rule, order, writ, injunction or decree of any
Governmental Authority relating to the Business and the Purchased Assets which
has a Material Adverse Effect.
5.9 Compliance with Law
The Business is not being and has not been conducted in material
violation of any material Applicable Law or any order, writ, injunction or
decree of any court or Governmental Authority. The Business has all material
permits, certifications, licenses, approvals, orders, consents and other
authorizations of any Governmental Authority necessary to conduct its business
as currently conducted (collectively, the "Permits"). The Business is not in
material violation of the terms of any Permit. Except as would not have,
individually or in the aggregate, a Material Adverse Effect, all elevator and
escalator units that are the subject of Assumed Contracts have been maintained
in accordance with (i) the material terms and conditions of the applicable
Assumed Contracts, (ii) Sellers' policies and procedures with respect to the
Business and (iii)
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generally accepted industry standards prevailing as of the date hereof and no
written notice of a material violation of a material Applicable Law has been
received with respect to the condition of any such elevator unit as of the date
hereof.
5.10 Taxes
(a) Except as set forth on Schedule 5.10(a) of Sellers Disclosure
Schedule, to the extent that under Applicable Laws the failure of this
representation to be true or correct could result in an Encumbrance upon or
claim against the Purchased Assets or in a claim against Purchaser as transferee
or owner of the Purchased Assets: (i) Sellers have filed or have caused to be
filed on a timely basis all Tax Returns that are or were required to be filed
with respect to the Purchased Assets and the operation of the Business; (ii) all
such Tax Returns were correct in all material respects and accurately reflect in
all material respects all liability for Taxes for the periods covered thereby;
and (iii) all Taxes due and payable by Sellers with respect to the Purchased
Assets and the operation of the Business shown in such Tax Returns have been
paid; and (iv) there are no Encumbrances for Taxes upon the Purchased Assets
except for Permitted Encumbrances.
(b) Except as set forth on Schedule 5.10(b) of Sellers Disclosure
Schedule, to the extent that under Applicable Laws the failure of this
representation to be true or correct could result in an Encumbrance upon or
claim against the Purchased Assets or in a claim against Purchaser as transferee
or owner of the Purchased Assets: AES and, with respect to the Business, ABM and
any Affiliate of ABM, have complied in all material respects with all Applicable
Laws relating to the withholding and payment of Taxes and have, within the time
and the manner prescribed by law, withheld and paid to the proper taxing
authorities all amounts required to be so withheld and paid under Applicable
Laws.
5.11 Intellectual Property; Intangible Assets
Sellers have and will assign, or, as of the Closing, will have and
will assign, such ownership of, or such rights by license or other agreement to
use, all of the intellectual property and the intangible assets owned by Sellers
as are necessary to permit the Business to conduct its business as currently
conducted. Sellers do not license from a third party any intellectual property
or intangible assets that are material to the Business. Except as would not have
a Material Adverse Effect, (i) to Seller's Knowledge, the conduct of the
Business as currently conducted does not infringe upon the proprietary rights of
any third party Person and (ii) there are no present or, to Sellers' Knowledge,
threatened infringements relating to the intellectual property and the
intangible assets owned by Sellers by any third party Person. There are no
pending or, to Sellers' Knowledge, threatened proceedings or litigation or other
adverse claims by any Person against the use by the Business of any intellectual
property or any intangible assets except as would not have a Material Adverse
Effect.
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5.12 Brokers; Finders Fees
There is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of Sellers or the
Business who is entitled to any fee or commission from Sellers in connection
with the transactions contemplated by this Agreement.
5.13 Financial Information
The financial information of the Business heretofore provided to
Purchaser and set forth on Schedule 5.13 of Sellers Disclosure Schedule,
including the unaudited balance sheet and income statements of AES as of October
31, 2002, the Balance Sheet and the divisional statements of earnings and cash
flows of the Business for the six month period ended April 30, 2003, present
fairly, in all material respects, the financial position and the results of
operations and cash flows of the Business as of the dates and for the periods
presented in conformity with U.S. generally accepted accounting principles
("U.S. GAAP") (except as indicated on Schedule 5.13 of Sellers Disclosure
Schedule), subject, in the case of the Balance Sheet, to normal end of period
adjustments, none of which, individually or in the aggregate, will be material.
5.14 No Undisclosed Liabilities
Except as set forth on Schedule 5.14 of Sellers Disclosure Schedule
or except for the Excluded Liabilities, Sellers have no debts, liabilities or
obligations with respect to the Business of any nature whatsoever (whether
absolute, accrued, contingent or otherwise) except (i) liabilities which are
reflected or reserved against on the Balance Sheet, (ii) liabilities incurred in
the ordinary course of business and consistent with past practice since the date
of the Balance Sheet and (iii) liabilities which in the aggregate would not have
a Material Adverse Effect.
5.15 Title to Purchased Assets; Sufficiency of Assets
Except as disclosed on Schedule 5.15 of Sellers Disclosure Schedule,
Sellers have good title to, or, with respect to leasehold interests, a valid
leasehold interest in the Purchased Assets and the Assumed Leases, as the case
may be, free and clear of all Encumbrances, except for Permitted Encumbrances
and such imperfections of title, liens, covenants, restrictions and easements
that would not, individually or in the aggregate, materially detract from the
value of the properties or assets subject thereto and do not interfere with the
present and continued use of such property or assets or the operation of the
Business. Sellers have the power and right to sell, assign, transfer and deliver
to Purchaser the Purchased Assets and the Assumed Leases, except with respect to
such items that would not, individually or in the aggregate, materially detract
from the value of the properties or assets subject thereto and do not interfere
with the present and continued use of such property or assets or the operation
of the Business. The Ancillary Documents, ▇▇▇▇ of Sale, Instrument of
Assumption, and any other deeds, endorsements, assignments and other instruments
to be executed and delivered to Purchaser by Sellers at the Closing, will be
valid and binding obligations of Sellers enforceable in accordance
24
with their terms. The Purchased Assets (taken together with the Interim Services
Agreement) are sufficient to conduct the Business as it is presently conducted
by Sellers.
5.16 Environmental
(a) The Purchased Assets and Business are and have been in
material compliance with all applicable Environmental Laws, except where such
non-compliance would not be reasonably expected to have a Material Adverse
Effect;
(b) Sellers have obtained and are in compliance with all Permits
required under applicable Environmental Laws, except for the failure to have
obtained such Permits, or be in compliance with such laws, as would not be
reasonably expected to have a Material Adverse Effect and there are no actions
pending, or to Sellers' Knowledge threatened, to revoke, suspend, modify or
limit any such Permit;
(c) To Sellers' Knowledge there are no claims, actions,
proceedings, or investigations pending, or threatened, against Sellers relating
to the Purchased Assets or the Business arising under any Environmental Law
except for such claims, actions, proceedings or investigations that have been
fully resolved with no future liability or obligation on the part of the
Business or that are not reasonably likely to result in a Material Adverse
Effect;
(d) To Sellers' Knowledge, no releases of Regulated Substances
have occurred at any of the Purchased Assets or in connection with the operation
of the Business which are likely to result in imposition of liability for
cleanup, personal injury, property damage or natural resource damage that would
reasonably be expected to have a Material Adverse Effect;
(e) Sellers have not received any written notice from any person
or Governmental Authority that Sellers may be potentially liable under any
Environmental Law for response actions or natural resource damages at any
location arising out of conditions at the Purchased Assets or relating to past
or current operations of the Business except with respect to such matters that
have been fully resolved with no future liability or obligation on the part of
the Business or that are not reasonably likely to result in a Material Adverse
Effect; and
(f) The representations and warrants set forth in this Section
5.16 are the Sellers' sole and exclusive representations and warranties with
respect to environmental matters.
5.17 Real Property
Sellers do not own any real property primarily relating to the
Business. Sellers are the lessees of all the leasehold estates purported to be
granted by the leases shown on Schedule 5.17 of Sellers Disclosure Schedule, and
Sellers are in possession of the premises purported to be leased under such
leases.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
6.1 Organization
Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Purchaser has heretofore delivered
to Sellers complete and correct copies of its Certificate of Incorporation and
By-Laws (or other similar governing documents), as currently in effect.
6.2 Authority Relative to This Agreement
Purchaser has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
required corporation action of Purchaser and no other corporate proceedings on
the part of Purchaser or any Affiliates of Purchaser are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Purchaser, and assuming due
authorization, execution and delivery by Sellers, constitutes a valid and
binding agreement of Purchaser, enforceable against Purchaser in accordance with
its terms.
6.3 Consents and Approvals; No Violation
None of the execution and delivery of this Agreement by Purchaser,
the consummation by Purchaser of the transactions contemplated by this Agreement
or the compliance of Purchaser with the provisions of this Agreement will (i)
conflict with or result in any breach of any provision of the organizational
documents of Purchaser; (ii) other than any filing and approval required by the
HSR Act, require any consent, approval, waiver or filing with or notification to
any Governmental Authority; (iii) result in a violation or breach of or default
(or give rise to any right of termination, cancellation or acceleration) under,
or require any consent under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, agreement, lease or other instrument or
obligation to which Purchaser or any of its Affiliates are a party or by which
any of its respective assets may be bound; or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Purchaser, or any
of its assets, except in the case of (iii) or (iv) for violations which would
not individually or in the aggregate reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated hereby.
26
6.4 Legal Proceedings, etc.
There are no claims, actions or proceedings pending or to
Purchaser's Knowledge investigations pending or threatened against Purchaser
before any Governmental Authority, which, if adversely determined, could prevent
or materially delay the consummation of the transactions contemplated hereby.
Purchaser is not subject to any outstanding judgment, rule, order, writ,
injunction or decree of any Governmental Authority that could prevent or
materially delay the consummation of the transactions contemplated hereby.
6.5 Financial Capability
On and after the date hereof, Purchaser has, and will have, cash on
hand sufficient to pay the Closing Purchase Price and to perform the obligations
of Purchaser under this Agreement.
6.6 Brokers, Finders Fees
There is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of Purchaser who is
entitled to any fee or commission from Purchaser in connection with the
transactions contemplated by this Agreement.
ARTICLE VII
COVENANTS OF THE PARTIES
7.1 Conduct of Business Relating to the Purchased Assets
Except as otherwise contemplated hereby, during the period from the
date of this Agreement to the Closing Date, Sellers will operate and maintain
the Purchased Assets in the usual, regular and ordinary course of business and
in substantially the same manner as they did prior to the date of this
Agreement. Sellers shall use all reasonable efforts to (i) preserve intact the
Business, (ii) keep available the services of its present officers and employees
and (iii) preserve its relationships with customers, suppliers and others having
business dealings with Sellers. Without limiting the generality of the
foregoing, and, except as otherwise expressly provided in this Agreement and
except as set forth on Schedule 7.1 of Sellers Disclosure Schedule, prior to the
Closing Date, without the prior written consent of Purchaser, which will not be
unreasonably withheld or delayed, Sellers shall not with respect to the
Purchased Assets or the Business:
(a) create, incur or assume debt that will remain an
obligation of Purchaser following the Closing other than trade payables and
other applicable operational liabilities incurred in the ordinary course of
business;
(b) increase the compensation of the Employees or benefits
due the Employees under the Seller Plans, except for such increases in
compensation or benefits as are contractually required or granted in the
ordinary course of the Business in accordance with its past practice; provided
that Seller may make, prior to the Closing
27
Date, any payment with respect to any such prohibited increase in compensation
of any Employee it so elects and in its sole discretion;
(c) sell, transfer, or otherwise dispose of, or agree to
sell, transfer or otherwise dispose of, any material assets constituting the
Purchased Assets, other than sales, transfers or disposals of, or enter into
agreements to sell, transfer or otherwise dispose of, Inventory in the ordinary
course of business in accordance with past practice;
(d) enter into any material agreement that would constitute
an Assumed Contract, other than agreements made in the ordinary course of
business in accordance with past practice;
(e) amend or unilaterally terminate any material Assumed
Contract, other than in the ordinary course of business in accordance with past
practice; or
(f) permit to be incurred any Encumbrance on any assets of
the Business other than Permitted Encumbrances.
7.2 Access to Information
(a) From the date hereof through the Closing Date, upon
reasonable notice by Purchaser and during regular business hours, Sellers shall
give Purchaser and its authorized representatives (i) reasonable access to the
properties, contracts and Books and Records related primarily to the Business
and the Purchased Assets and (ii) reasonable access to employees and agents of
AES; provided however that any such access shall be in such manner as not to
materially interfere with the operation of the Business. Notwithstanding the
foregoing, Sellers need not disclose to Purchaser or any representative of
Purchaser any information which, in the opinion of Sellers' counsel, would
violate Applicable Law, result in a waiver of attorney-client privilege or
similar privilege or result in a breach of any contract to which any Seller is a
party.
(b) From the date hereof through the Closing Date, Purchaser
will hold, and will cause its officers, directors, employees, representatives,
consultants and advisors to hold, in confidence, all documents and information
furnished to Purchaser and Purchaser's officers, directors, employees,
representatives, consultants and advisors by or on behalf of Sellers in
connection with this Agreement and the transactions contemplated hereby,
provided that nothing herein shall be deemed to alter or amend the
Confidentiality Agreement, which remains in full force and effect in accordance
with its terms.
(c) Following the Closing Date, (A) Sellers and their
representatives shall have reasonable access to any of the Books and Records
transferred to Purchaser hereunder to the extent that such access may reasonably
be required by Sellers in connection with matters relating to or affected by the
operation of the Business or the Purchased Assets prior to the Closing Date, and
(B) Purchaser and its representatives shall have reasonable access to the
Excluded Records, and to the extent
28
reasonably required by Purchaser in good faith, other limited Books and Records
retained by Sellers primarily related to the Business (but excluding, in any
case, the portion of Excluded Records pertaining to personnel records of former
employees of the Business) to the extent such access may reasonably by required
by Purchaser in connection with matters relating to or affected by the operation
of the Business or the Purchased Assets after the Closing Date. Such access
shall be afforded by Purchaser and Sellers to the other party upon receipt of
reasonable advance notice and during normal business hours. The party requesting
such access shall be responsible for any costs or expenses incurred by it
pursuant to this Section 7.2(c).
(d) If (i) Purchaser shall desire to dispose of any Books
and Records transferred to Purchaser hereunder or (ii) Seller shall desire to
dispose of the Excluded Records (other than the Excluded Records pertaining to
personnel records of former employees of the Business) or, to the extent
Purchaser has requested access pursuant to Section 7.2(c), other limited Books
and Records retained by Sellers primarily related to the Business, within five
(5) years following the Closing Date, such party shall, prior to such
disposition, give the other party a reasonable opportunity at the other party's
expense, to segregate and remove such Books and Records as the other party may
select.
7.3 Expenses
Except to the extent specifically provided herein, whether or not
the transactions contemplated hereby are consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be borne by the party incurring such costs and expenses.
7.4 Further Assurances
Subject to the terms and conditions of this Agreement, each of the
parties hereto will use all commercially reasonable efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under Applicable Laws and regulations to consummate the
transactions contemplated by this Agreement and make effective the sale of the
Purchased Assets pursuant to this Agreement. From time to time after the date
hereof, without further consideration, Sellers will, at their own expense,
execute and deliver such documents to Purchaser as Purchaser may reasonably
request in order more effectively to vest in Purchaser good title to the
Purchased Assets. From time to time after the date hereof, Purchaser will, at
its own expense, execute and deliver such documents to Sellers as Sellers may
reasonably request in order to more effectively consummate the sale of the
Purchased Assets pursuant to this Agreement.
7.5 Public Statements
The parties shall consult with each other prior to issuing any
public announcement, statement or other disclosure with respect to this
Agreement or the transactions contemplated hereby and shall not issue any such
public announcement, statement or other disclosure prior to such consultation;
provided that nothing herein shall
29
require any approval by the other party and the length of any such consultation
shall be in the sole discretion of the party issuing such public announcement.
7.6 Commercially Reasonable Efforts
(a) The Purchaser and Sellers shall act in good faith and
use their respective reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated hereby
as soon as practicable. Without limiting the foregoing, the Purchaser and
Sellers shall use their reasonable best efforts to (i) obtain all consents,
approvals, waivers, licenses, permits, authorizations, registrations,
qualifications or other permissions or actions by, and give all necessary
notices to, and make all filings with and applications and submissions to, any
Governmental Authority or Persons necessary in connection with the consummation
of the transactions contemplated hereby as soon as reasonably practicable; (ii)
provide all relevant information as may be necessary or reasonably requested in
connection with any of the foregoing; and (iii) avoid the entry of, or have
vacated or terminated, any injunction, decree, order, or judgment that would
restrain, prevent, or delay the consummation of the transactions contemplated
hereby, including but not limited to defending through litigation on the merits
any claim asserted in any court by any person so as to enable the consummation
of such transactions to occur as expeditiously as possible, including, with
respect to the Purchaser, the taking by the Purchaser of all such actions, as
may be required in order to avoid the entry of, or to effect the dissolution of,
any injunction, temporary restraining order, or other order in any suit or
proceeding, which would otherwise have the effect of preventing or materially
delaying the Closing.
(b) The Purchaser and Sellers shall keep each other
reasonably informed as to the status of matters relating to the completion of
the transactions contemplated hereby, including promptly furnishing the other
with copies of notices or other communications received by any of them or by any
of their respective Affiliates, from any Person or any Governmental Authority
with respect to the transactions contemplated hereby.
(c) Notwithstanding the above or any other provision of this
Agreement, the Purchaser shall not be required to take any action that would
reasonably be expected to impair the benefits to Purchaser of the transaction
contemplated by this Agreement in a materially adverse manner.
7.7 Tax Matters
(a) Purchaser and Sellers agree to furnish or cause to be
furnished to each other, promptly upon request, any information and assistance
relating to the Business or the Purchased Assets as may be reasonably requested
by the other party in connection with the filing of any Tax Return, the
preparation for any audit or other examination by any Governmental Authority,
the mailing or filing of any notice and the prosecution or defense of any claim,
suit or proceeding relating to any Tax Return or any other matter related to
Taxes with respect to the Business and the Purchased Assets.
30
Purchaser and Sellers shall cooperate with each other in the conduct of any
audit or other proceeding related to Taxes involving the Business or the
Purchased Assets whether prior to or after the Closing. Purchaser further agrees
to (i) retain within its possession any other information regarding Taxes
relating to the Business or the Purchased Assets for any taxable period or
portion thereof ending on or before the Closing (the "Tax Information") until
the date that is six years after the Closing Date, (ii) maintain the Tax
Information in such manner so as to enable Sellers to have prompt and complete
access thereto; provided, however, that Sellers must bear all costs incurred in
accessing such Tax Information, and (iii) not destroy any Tax Information
without first offering such information to Sellers.
(b) Notwithstanding any other provision of this Agreement,
Sellers and Purchaser shall cooperate in the preparation, execution and filing
of all Tax Returns regarding any Transfer Taxes that become payable in
connection with the purchase of the Purchased Assets contemplated by this
Agreement. For purposes of this Agreement, "Transfer Taxes" shall mean all
transfer, documenting, stamp or registration Taxes applicable to the purchase of
the Purchased Assets contemplated hereby. All such Transfer Taxes shall be paid
when due one-half (1/2) by Sellers and one-half (1/2) by Purchaser, and Sellers
shall, at their own expense, file, to the extent required by Applicable Law, all
necessary Tax Returns with respect to all such Transfer Taxes, and, if required
by Applicable Law, Purchaser shall join in the execution of any such Tax
Returns; provided, however, that prior to filing any Tax Return relating to
Transfer Taxes Sellers shall provide to Purchaser for its review and comment a
copy of any such Tax Return at least fifteen (15) days prior to the date such
Tax Return is filed or required to be filed and Sellers shall amend such Tax
Return as reasonably requested by Purchaser (provided Purchaser's comments are
received at least five (5) days prior to the due date, without extensions, for
filing the relevant Tax Return). If governing law does not allow Sellers, but
requires Purchaser, to file a Tax Return with respect to a Transfer Tax for
which Sellers and Purchaser are liable under this Agreement, Purchaser shall
prepare such Tax Return, present such Tax Return to Sellers for review and
comment at least fifteen (15) days prior to the date such Tax Return is filed or
required to be filed and Purchaser shall amend such Tax Return as reasonably
requested by Sellers (provided Sellers comments are received at least five (5)
days prior to the due date, without extensions, for filing the relevant Tax
Return). Sellers shall join in the execution of any such Tax Returns if required
by Applicable Law.
(c) Purchaser shall prepare a schedule that allocates the
Closing Purchase Price and Assumed Liabilities consistent with Section 1060 of
the Code and the Treasury Regulations thereunder (the "Allocation Schedule")
within 60 days of this Agreement but in no event less than 30 days prior to the
Closing and submit it to Sellers. Sellers may dispute the Allocation Schedule;
provided, however, that if Sellers fail to notify Purchaser in writing of the
disputed amount, and the basis of such dispute, within ten (10) days of receipt
of the Allocation Schedule, the Allocation Schedule shall be incorporated herein
as if part of this Agreement. If Sellers timely notify Purchaser of any such
dispute, Sellers and Purchaser shall cooperate and use their commercially
reasonable efforts in reaching a mutually satisfactory agreement regarding the
Allocation Schedule. If Sellers and Purchaser are unable to reach a mutually
satisfactory agreement regarding
31
the Allocation Schedule, then Sellers and Purchaser shall submit in writing any
matters in dispute to the Neutral Accountant, which Neutral Accountant will
resolve the dispute in a fair and equitable manner within thirty (30) days after
Purchaser and Sellers have presented their arguments to the Neutral Accountant,
which decision shall be final, conclusive and binding on Purchaser and Sellers.
Purchaser and Sellers each agree to file Internal Revenue Service Form 8594 and
all Tax Returns in accordance with such agreed allocation unless otherwise
required by Applicable Law. Each of Purchaser and Sellers shall report the
transactions contemplated by this Agreement for Tax purposes in a manner
consistent with the allocation determined pursuant to this Section 7.7(e). Each
of Purchaser and Sellers agree to provide the other promptly with any other
information required to complete Form 8594. Each of Purchaser and Sellers shall
notify and provide the other with reasonable assistance in the event of an
examination, audit or other proceeding regarding the agreed upon allocation of
the Closing Purchase Price.
(d) Sellers agree that Purchaser is not assuming liability
for Other Taxes but only agreeing to reimburse Sellers at Sellers request with
respect to Sellers' payment following the Closing of any Other Taxes reflected
on the Preceding Month End Balance Sheet or incurred by the Business in the
ordinary course of business between the date of the Preceding Month End Balance
Sheet and the Closing Date; it being understood by the parties that the
obligation to file returns with respect to and pay, any such Taxes shall be
retained by Seller in accordance with the provisions of 2.4(e).
7.8 Employees
(a) As of the Closing, Purchaser will negotiate in good
faith for a collective bargaining agreement with the International Union of
Elevator Constructors covering the Transferred Employees and shall execute any
documents needed to effectuate such agreement.
(b) (i) Promptly following the date hereof, Purchaser shall
offer, or cause to be offered, employment to all Employees effective as of the
Closing Date. For a period of at least one year following the Closing Date,
Purchaser shall cause each such Employee who accepts and commences employment
with Purchaser or an Affiliate of Purchaser as of the Closing (the "Transferred
Employees"), to the extent that such Transferred Employee remains employed
during such period, to be provided with salary, wages, and employee benefit
arrangements that shall be at least substantially equivalent, on an aggregate
basis, to the compensation and benefits provided by Purchaser to its similarly
situated employees; provided that the foregoing provision shall not apply to any
Transferred Employees party to Elevator Executive Agreements, Elevator Personnel
Agreements or subject to a collective bargaining agreement. Purchaser shall
cause the Transferred Employees to be given credit for all service with Sellers
or any Affiliate of Sellers prior to the Closing for purposes of eligibility and
vesting (but not for purposes of benefit accrual) under any employee benefit
plans or arrangements of Purchaser or any Affiliate of Purchaser in which such
Transferred Employees participate after the Closing ("Purchaser Plans"), to the
same extent that such service was recognized by Sellers or any Affiliate of
Sellers immediately prior to the Closing under any comparable programs or
arrangements of Sellers or any Affiliate of Seller (except to the extent that
such
32
crediting would result in duplication of benefits). Without limiting the
generality of the foregoing, all vacation, sickness, holiday and personal days
accrued by the Transferred Employees prior to the Closing shall be honored by
Purchaser to the extent that accruals for such liabilities are fully and
properly reflected on the Final Preceding Month End Balance Sheet or to the
extent such liabilities are properly accrued in accordance with past practice
between the date of the Final Preceding Month End Balance Sheet and the Closing
Date. To the extent commercially reasonable, all limitations as to preexisting
conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Transferred Employees shall be waived by
Purchaser. To the extent commercially reasonable, Transferred Employees shall
also be given credit for any deductible or co-payment amounts paid in respect of
Purchaser Plan year in which the Closing occurs, to the extent that, following
the Closing, they participate in any Purchaser Plan during such plan year for
which deductibles or co-payments are required and to the extent permitted by the
relevant Purchaser Plan.
(ii) With respect to any employee of any Seller whose
work or function is related primarily to the operation of the Business, and who
is, as of the Closing Date, on authorized leave of absence (including, but not
limited to, employees on disability), Purchaser shall offer employment to any
such employee in the event such employee returns to active employment within six
months of the Closing Date and such employee shall then be deemed to be a
Transferred Employee. Any represented employee shall be reemployed in accordance
with the terms of the applicable collective bargaining agreement.
(c) Purchaser shall assume and be solely responsible for,
and shall indemnify Sellers and defend and hold Sellers harmless against, any
and all claims, losses, damages, expenses, obligations and liabilities
(including costs of collection, attorney's fees and other costs of defense)
incurred by Sellers or any Affiliate of Sellers arising from or relating to (i)
the termination of employment (A) of any Employee following the date of this
Agreement, which termination is at the request of Purchaser or one of its
Affiliates, or (B) by Purchaser of any Transferred Employee as of or after the
Closing Date and (ii) the hiring, employment or discharge of any Transferred
Employee. Purchaser shall assume and be solely responsible for, and shall
indemnify Sellers and defend and hold Sellers harmless against, any and all
claims, losses, damages, expenses, obligations and liabilities (including costs
of collection, attorney's fees and other costs of defense) incurred by Sellers
or any Affiliate of Sellers in connection with any suit or claim or violation
brought against Sellers under the WARN Act or any similar state, local or
foreign law which arise, in whole or in part, from actions taken by Purchaser
following the Closing. Sellers shall assume and be solely responsible for and
shall indemnify Purchaser, and hold Purchaser harmless against any and all
claims, attorneys fees and other costs of defense incurred by Purchaser or any
Affiliate of Purchaser arising from or related to the hiring, employment,
benefit plan participation, or discharge of any employee of any Seller who is
not a Transferred Employee.
(d) Effective as of the Closing Date, Transferred Employees
shall no longer actively participate in Sellers' 401(k) plans (the "Sellers
Savings Plans"). Purchaser shall designate a tax-qualified defined contribution
plan of Purchaser or one of
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its Affiliates (such plan(s), the "Purchaser's Savings Plan") that either (i)
currently provides for the receipt from Transferred Employees of "eligible
rollover distributions" (as such term is defined under Section 402 of the Code)
or (ii) shall be amended as soon as practicable following the Closing Date to
provide for the receipt from the Transferred Employees of eligible rollover
distributions. As soon as practicable following the Closing Date, Purchaser
shall provide Seller with such documents and other information as Seller shall
reasonably request to assure itself that Purchaser's Savings Plan provides for
the receipt of eligible rollover distributions and (y) Seller shall provide
Purchaser with such documents and other information as Purchaser shall
reasonably request to assure itself that the accounts of the Transferred
Employees would be eligible rollover distributions. Each Transferred Employee
who is a participant in Sellers Savings Plans shall be given the opportunity to
receive a distribution of his or her account balance and shall be given the
opportunity to elect to "roll over" such account balance to Purchaser's Savings
Plan, subject to and in accordance with the provisions of such plan(s) and
Applicable Law. Sellers shall provide Purchaser with copies of such personnel
and other records of Sellers pertaining to the Transferred Employees and such
records of any agent or representative of Sellers pertaining to the Transferred
Employees and such records of any agent or representative of Sellers, in each
case pertaining to Sellers Savings Plans and as Purchaser may reasonably request
in order to administer and manage the accounts and assets rolled over to
Purchaser's Savings Plan.
(e) With respect to the National Elevator Industries Pension
Fund (the "NEI Multiemployer Plan"), after the Closing, if the amount of
potential withdrawal liability of Sellers with respect to the NEI Plan as of the
Closing Date is greater than zero:
(i) Purchaser will be obligated to make contributions to the NEI
Multiemployer Plan with respect to those Transferred Employees for whom Sellers
had an obligation to contribute to the NEI Multiemployer Plan prior to the
Closing Date. Purchaser shall be obligated to make such contributions in
accordance with any collective bargaining agreement relating thereto and shall
contribute to the NEI Multiemployer Plan with respect to such operations for
substantially the same number of contribution base units for which Sellers had
an obligation to contribute to such plan with respect to employees employed by
Sellers in the Business prior to the Closing Date.
(ii) Purchaser hereby represents to Sellers that, for purposes of
complying with Section 4204 of ERISA, no surety bond will be required of
Purchaser in order for Sellers to be exempt from any partial withdrawal
liability. Purchaser represents that it is exempt from the surety bond
requirement in accordance with PBGC Regulation Section 4204.13. In addition, the
transaction contemplated herein may be an exempt de minimis transaction within
the meaning of PBGC Regulation Section 4204.12. If, within the five-year period
following the Closing Date, Purchaser no longer qualifies for any relevant
exemption under Section 4204 of ERISA, it will post a surety bond or take such
other action reasonably acceptable to Sellers to prevent the sale of the
Business from being deemed a partial withdrawal from any Multiemployer Plan.
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(iii) If Purchaser withdraws from the Multiemployer Plan in a complete
withdrawal or a partial withdrawal with respect to the Transferred Employees who
are covered by a collective bargaining agreement within the period referred to
in the preceding subsection (ii), Purchaser will be primarily liable and Sellers
agree to be secondarily liable for any withdrawal liability Sellers would have
had at the Closing Date to such Multiemployer Plan, but for the application of
section 4204 of ERISA, if the withdrawal liability of Purchaser with respect to
such Multiemployer Plan is not paid. Purchaser shall indemnify Sellers for any
liability it incurs pursuant to this Section 7.8(e)(iii).
(iv) Purchaser agrees that any action on its part that causes withdrawal
liability (either partial or complete) during the period referred to in
subsection (ii) hereof shall be for valid business reasons only. In the event of
a subsequent sale of the assets of the Business by Purchaser during such period,
Purchaser agrees to comply with the provisions of section 4204(a)(1) of ERISA.
(v) If all, or substantially all, of Sellers' assets are distributed, or
if Sellers are liquidated before the end of the first five plan years beginning
after Closing, then, except as may otherwise be required by law, Sellers shall
provide a bond, an amount in escrow or such other security as may be permitted
under section 4204(a)(1)(B) of ERISA or regulations thereunder, equal to the
present value of the withdrawal liability Sellers would have had but for the
application of section 4204 of ERISA, which bond, amount in escrow or other
security may be applied toward the satisfaction of Sellers' secondary liability
described in subsection (iii) hereof.
(vi) Purchaser agrees to provide Sellers with reasonable advance notice
of any action or event which could result in the imposition of withdrawal
liability contemplated by this Section 7.8(e), and in any event Purchaser shall
immediately furnish Sellers with a copy of any notice of withdrawal liability it
may receive with respect to the Multiemployer Plan, together with all the
pertinent details. In the event that any such withdrawal liability shall be
assessed against Purchaser, Purchaser further agrees to provide Sellers with
reasonable advance notice of any intention on the part of Purchaser not to make
full payment of any withdrawal liability when the same shall become due.
(vii) Notwithstanding any other provision of this Agreement, Purchaser
shall have no obligation to indemnify Sellers for any losses or expenses
(including without limitation reasonable attorney's fees and expenses) which
Sellers may incur as a result of a determination that the requirements of
Section 4204 of ERISA are not met (provided that such determination does not
result from Purchaser's failure to comply with its obligations hereunder); (ii)
Seller shall indemnify Purchaser for any losses or expense (including without
limitation reasonable attorneys' fees and expenses) which Purchaser may incur as
a result of a determination that the requirements of Section 4204 of ERISA are
not met (provided that such determination does not result from Purchaser's
failure to comply with its obligations hereunder); and (iii) Purchaser shall
indemnify Sellers for any losses or expense (including without limitation, any
assessed withdrawal liability, reasonable attorneys' fees and expenses) which
Sellers may incur as a result of a
35
determination that the requirements of Section 4204 of ERISA are not met
(provided that such determination results from Purchaser's failure to comply
with its obligations hereunder).
7.9 Risk of Loss
(a) From the date hereof through the Closing Date, risk of
loss or damage to the Purchased Assets shall be borne by Sellers.
(b) If, before the Closing Date, all or any portion of the
Purchased Assets are (i) taken by eminent domain, (ii) the subject of a pending
or (to Sellers' Knowledge) contemplated taking which has not been consummated,
or (iii) damaged or destroyed by fire or other casualty, Sellers shall notify
Purchaser promptly in writing of such fact.
(c) If such taking, damage or destruction would not have a
Material Adverse Effect, Purchaser and Sellers shall negotiate in good faith to
settle the loss resulting from such taking, damage or destruction (including,
without limitation, by making a fair and equitable adjustment to the Closing
Purchase Price) and, upon such settlement, consummate the transaction
contemplated by this Agreement pursuant to the terms of this Agreement. If no
such settlement is reached within sixty (60) days after Sellers have notified
Purchaser of such taking, damage or destruction, then, upon the written request
of either Purchaser or Sellers, the Neutral Accountant shall resolve any
disagreement. The Neutral Accountant shall determine the loss resulting from
such taking, damage or destruction as promptly as practicable (but in any event
within sixty (60) days following the date on which such dispute is referred to
the Neutral Accountant), based solely on written submissions made to the Neutral
Accountant by Purchaser and Sellers to the Neutral Accountant within fifteen
(15) days following the Neutral Accountant's selection and such other
information or submissions as may be requested by the Neutral Accountant
thereafter. Purchaser on the one hand and Sellers on the other shall share
equally the fees and expenses of the Neutral Accountant. The determination of
the Neutral Accountant shall be final, conclusive and binding on Purchaser and
Sellers, and the Neutral Accountant's determination of the loss resulting from
such taking, damage or destruction shall then be deducted from the Closing
Purchase Price.
7.10 Transfers Not Effected as of Closing
(a) Nothing herein shall be deemed to require the
conveyance, assignment or transfer of any Assumed Contract or Assumed Lease that
by its terms or by operation of law cannot be freely conveyed, assigned,
transferred or assumed. To the extent the parties hereto have been unable to
obtain any Person's consent or approval required for the transfer of any Assumed
Contract or Assumed Lease and to the extent not otherwise prohibited by the
terms of any Assumed Contract or Assumed Lease, Sellers shall continue to be
bound by the terms of such applicable Assumed Contract or Assumed Lease and
Purchaser shall pay, perform and discharge fully all of the obligations of
Sellers or any of their respective Affiliates thereunder from and after the
Closing; provided however that such applicable Assumed Contract shall be an
Assumed
36
Contract for the purposes of Assumed Liabilities pursuant to Section 2.3 hereof.
Sellers shall, without consideration therefore, pay, assign and remit to
Purchaser promptly all monies, rights and other consideration received in
respect of such performance. Subject to Section 7.10(b), if Purchaser determines
to seek consent to assign any Assumed Contract or Assumed Lease, Seller shall
use commercially reasonable efforts to cooperate with Purchaser in obtaining
such consent (provided that neither Purchaser nor Sellers shall be required to
pay any consideration to the third party from whom such consent is sought) and
the parties hereto shall continue to use their commercially reasonable efforts
to obtain any such sought and unobtained consents or approvals at the earliest
practicable date. If and when any such consents or approvals shall be obtained,
Sellers shall promptly assign their rights and obligations thereunder to
Purchaser without payment of consideration and Purchaser shall, without the
payment of any consideration therefore, assume such rights and obligations,
deemed to be effective as of the Closing Date; provided that if Purchaser
subcontracts performance of any Assumed Contract in accordance with its terms
Purchaser shall be obligated to pay, perform and discharge all of the
obligations of the Sellers thereunder effective as of the Closing Date. The
parties shall execute such good and sufficient instruments as may be necessary
to evidence such assignment and assumption.
(b) Following the date hereof, Purchaser shall use
reasonable commercial efforts to cooperate with Sellers with respect to
obtaining any consent to assignment required under Assumed Contracts. Within a
reasonable period of time following the date hereof, Sellers shall deliver to
Purchaser a schedule setting forth a list of Material Maintenance Contacts
requiring consent to assignment (the "Required Consents"). At or immediately
prior to Closing, Sellers shall deliver to Purchaser (i) an updated Schedule 5.7
of Sellers Disclosure Schedule which shall include new maintenance contracts of
the Business entered into after the date hereof with monthly revenue in excess
of seven thousand five hundred dollars ($7,500) (it being agreed that (A)
Schedule 5.7 of Sellers Disclosure Schedule, as updated, shall have deleted
contract-for-contract a corresponding number of contracts with the lowest
monthly revenue on such Schedule 5.7 of Sellers Disclosure Schedule prior to
such update and (B) that the contents of such updated schedule shall be deemed
to meet the description set forth in Section 5.7(a)(i)), (ii) a list of Required
Consents with respect to such updated Schedule 5.7 of Sellers Disclosure
Schedule and (iii) the status with respect to obtaining such Required Consents
described in clause (ii) hereof. The parties agree that all references to
Required Consents set forth in Section 7.10(c) shall be only in respect of the
Required Consents on the updated Schedule 5.7 of Sellers Disclosure Schedule
delivered in accordance with the provisions hereof.
(c) Notwithstanding the provisions of Section 7.10(a),
Sellers shall have ninety (90) calendar days from the Closing Date (the "Consent
Period") in which to obtain any Required Consent requested by Purchaser (the
"Requested Required Consents"); provided that Purchaser shall use commercially
reasonable efforts to cooperate with Sellers in obtaining such Requested
Required Consents; provided further that neither Purchaser nor Sellers shall be
obligated hereunder to pay any consideration to the third party for any such
Requested Required Consent. If any such Requested Required Consents are obtained
and delivered to Purchaser within the Consent Period and
37
the Closing has occurred, the assignment of the Material Maintenance Contracts
to which such consents relate shall be made promptly and deemed to be effective,
and Purchaser shall be deemed to have assumed the obligations and liabilities
thereunder, as of the Closing Date. If any such Requested Required Consents are
not obtained within the Consent Period, Purchaser shall be entitled to recover
from Sellers an amount equal to twelve (12) months' maintenance and service
revenues attributable to such contract (calculated by annualizing the
maintenance and service revenue attributable to such contract for the month of
June 2003); provided that Purchaser shall not be entitled to collect any amount
in respect of any Material Maintenance Contract for which consent is not
obtained within the Consent Period if (i) by the terms of any such contract,
such contract is expired or expires in accordance with its terms within the
Consent Period, as set forth on Schedule 5.7 of Sellers Disclosure Schedule
(such applicable contracts are marked with an asterisk (*) thereon), (ii) the
customer under any such Material Maintenance Contract for whom a Requested
Required Consent applies shall have continued to receive and pay for elevator
maintenance services under the terms of such contract for the monthly period
following the end of the Consent Period and such customer shall not have
provided written notification of termination of such Material Maintenance
Contract during the Consent Period, (iii) Purchaser is able to subcontract the
performance of the applicable Material Maintenance Contract from Sellers in
accordance with its terms or (iv) after the Consent Period, Purchaser informs
Sellers that Sellers should continue to use all reasonable efforts to obtain the
Requested Required Consent; provided that, subject to the provisions of Section
9.5 hereof, Seller shall only be required to pay Purchaser in respect of
qualifying unobtained Requested Required Consents hereunder after the aggregate
of all lost monthly maintenance and service revenue with respect to such
Material Maintenance Contracts for which consents were not obtained exceeds five
hundred thousand dollars ($500,000) (and then only in the amount of such
excess).
(d) With respect to any Performance Bonds issued by ABM in
respect of the Business that are not otherwise assignable without consent to
Purchaser hereunder as of the Closing, Purchaser covenants to promptly replace
any such Performance Bonds with equivalent performance and surety bonds of
Purchaser or an Affiliate thereof in accordance with the terms of any applicable
Assumed Contracts and (ii) use commercially reasonable efforts to obtain a
release of ABM with respect thereto.
7.11 Agreement Not to Compete
(a) Sellers understand that Purchaser shall be entitled to
protect and preserve the going concern value of the Business to the extent
permitted by law and that Purchaser would not have entered into this Agreement
absent the provisions of this Section 7.11 and, therefore, Sellers agree that
for a period of five (5) years following the Effective Time such Person will
not, directly or indirectly own, manage, control or participate in the
ownership, management or control of or be related or otherwise affiliated in any
manner with, any business similar to that engaged in by the Business (a "Buyer
Competitive Business"); provided, however, that nothing in this Section 7.11
shall prohibit Sellers, or their Affiliates, from owning up to 5% of the
outstanding voting securities of any publicly traded entity; provided, further,
that nothing in this Section 7.11
38
shall prohibit Sellers, or their Affiliates, from acquiring a Buyer Competitive
Business as part of an acquisition (by joint venture, merger or other) of the
assets of, or the majority of voting interest in, another Person (a "Target
Business") if the worldwide sales from the Buyer Competitive Business are not in
excess of 30% of the worldwide sales of the Target Business in the most recent
fiscal year of the Target Business preceding such acquisition. In the event the
Sellers, or their Affiliates, acquire a Buyer Competitive Business pursuant to
the second proviso in the preceding sentence, Sellers shall divest such Buyer
Competitive Business by way of auction or other competitive bidding process,
negotiation, sale or such other manner or divestiture as the Sellers shall deem
appropriate and shall use commercially reasonable efforts to do so within a
period of six (6) months from the date of such acquisition. For a period of two
(2) years following the Closing Date, Sellers and their Affiliates shall not
solicit any Employees of the Business or otherwise affirmatively and
intentionally induce any Employee of the Business to leave such employ for
purposes of accepting a position with Sellers; provided that the preceding
non-solicitation obligation of Sellers and their Affiliates shall not apply to
administrative or clerical Employees of the Business. Sellers and Purchaser
intend that the covenants contained in this Section be construed as a series of
separate covenants and Sellers acknowledge that the limitations as to time,
geographic area and scope of activity set forth above are reasonable and do not
impose a greater restraint than is necessary to protect the goodwill and the
Business to be acquired by Purchaser under this Agreement.
(b) Notwithstanding any other provision of this Agreement,
it is understood by the parties hereto and agreed that the remedy of indemnity
payments pursuant to Section 9.2 and other remedies at law would be inadequate
in the case of any breach of the covenants contained in Section 7.11(a), and
each party hereto agrees that the other party shall be entitled to equitable
relief, including the remedy of specific performance, with respect to any breach
or attempted breach of such covenants. If, in any judicial proceeding, a court
refuses to enforce any of the separate covenants contained in Section 7.11(a),
the unenforceable covenant will be considered eliminated from this Section 7.11
for the purpose of those proceedings to the extent necessary to permit the
remaining separate covenants to be enforced.
(c) Nothing contained herein to the contrary shall prohibit
ABM (or any of its Affiliates) from being acquired, through sale, merger or
related transaction, by any entity which qualifies as, owns or operates or is
affiliated with, a Buyer Competitive Business. Purchaser agrees that neither any
such acquiror nor any of its Affiliates (including ABM after such acquisition)
will be bound by the terms of Section 7.11(a).
7.12 No Other Bids
Sellers agree that they shall not, and shall not permit any of their
Affiliates, or any officers, directors, employees, agents or representatives of
any of the foregoing to, directly or indirectly, solicit or initiate (including
by way of furnishing any non-public information concerning the Business or AES)
inquiries or proposals, or participate in any discussions or negotiations or
enter into any agreement with any Person with respect to such inquiries or
proposals, concerning an acquisition of all or any substantial portion of AES,
the Business or the Purchased Assets, except for the
39
transactions with Purchaser contemplated by this Agreement, and Sellers shall
immediately advise Purchaser of any such inquiry or proposal, including the
terms thereof and the identity of the Person making such inquiry or proposal.
Notwithstanding anything to the contrary contained in this Section 7.12, ABM
shall in no way by the terms of this Section 7.12 be restricted from soliciting
or initiating inquiries or proposals, participating in any discussions or
negotiations or entering into any agreement, with respect to a sale, merger,
consolidation, recapitalization, liquidation or other business combination
involving ABM, or the sale of all or substantially all the assets thereof (an
"ABM Transaction"), and ABM shall have no obligations with respect to the
notification of Purchaser with respect to any inquiry or proposal regarding an
ABM Transaction.
7.13 Federal Government Contracts.
(a) With respect to the Federal Government Contracts listed
on Schedule 7.13 of the Sellers Disclosure Schedule, promptly following the date
hereof Purchaser shall provide in good faith proposed amendments to the Federal
Government Contracts that are reasonably required to allow the proper assignment
or transfer of such Federal Government Contracts to Purchaser pursuant to
Applicable Law. Sellers shall use commercially reasonable efforts to obtain any
such amendments or novations to any Federal Government Contracts and Purchaser
shall use its commercially reasonable efforts to cooperate with Seller in
obtaining any such amendments or novations.
(b) Until such time as amendments and novations with respect
to each Federal Government Contract have been executed by all parties and
delivered, Sellers shall continue to perform under the terms of each Federal
Government Contract for Sellers' account. Sellers shall perform under each
Federal Government Contract using labor temporarily hired from the Purchaser.
Purchaser shall be compensated for such temporary use of its employees at the
applicable direct labor cost, plus the applicable indirect labor rate, plus
material costs. Sellers shall pay Purchaser for such costs no later than thirty
days following its receipt of Purchaser's invoice.
(c) Following the execution and delivery of satisfactory
amendments and novations to each Federal Government Contract, title to such
amended and novated Federal Government Contracts shall be deemed to be
transferred to Purchaser. Thereafter, Purchaser shall undertake performance of
each Federal Government Contract so amended and novated for its own account, and
Purchaser shall be entitled to any profit under such Federal Government
Contracts.
(d) In the event that any Federal Government Contract is not
amended or novated such as to allow the proper assignment or transfer of such
Federal Government Contracts to Purchaser pursuant to Applicable Law, Sellers
and Purchaser shall cooperate and use their collective efforts to sell any such
Federal Government Contract to a third-party elevator modernization and
maintenance company. The proceeds from the sale of any such Federal Government
Contract shall belong exclusively to the Purchaser.
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7.14 Trademark License.
At Closing Seller shall grant Purchaser an exclusive, irrevocable
and fully-paid license to use the Excluded Marks in connection with the
corporate name of AES in the operation and conduct of the Business on
substantially the terms set forth in Exhibit C hereto (Form of Trademark
License).
7.15 Partially Utilized Facilities; Subleases.
(a) At the Closing Purchaser shall enter into subleases with
Sellers' Affiliates in respect of the Partially Utilized Facilities providing
(A) for (i) a lease term through December 31, 2003 and (ii) monthly rental
payments to Sellers calculated, based on the total rent currently payable under
the master lease for the location of the applicable Partially Utilized
Facilities Lease, pro-rata for the current square footage occupied by the
Business at such Partially Utilized Facility as of the date hereof and (B) that
ninety days following Closing Purchaser shall inform ABM whether Purchaser
intends to continue to occupy the relevant Partially Utilized Facility following
the end of the sub-lease term on similar terms and conditions.
(b) With respect to any guarantees by ABM of Assumed Leases,
Purchaser shall promptly following Closing replace such guarantees with suitable
equivalent guarantees, if required, of Purchaser or an Affiliate thereof
pursuant to such Assumed Leases and use commercially reasonable efforts to
promptly obtain a release of ABM with respect to all such guarantees.
ARTICLE VIII
CLOSING CONDITIONS
8.1 Conditions to Obligations of the Parties
The respective obligations of each party to effect the transactions
contemplated hereby shall be subject to the fulfillment at or prior to the
Closing Date of the following conditions:
(a) The waiting period under the HSR Act (and any extensions
thereof) applicable to the consummation of the transactions contemplated hereby
shall have expired or been terminated.
(b) No preliminary or permanent injunction or other order or
decree by any Governmental Authority which prevents the consummation of the
transactions contemplated hereby shall have been issued and remain in effect
(each party agreeing to use its commercially reasonable efforts to have any such
injunction, order or decree lifted) and no statute, rule or regulation shall
have been enacted by any Governmental Authority which prohibits the consummation
of the transactions contemplated hereby.
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8.2 Conditions to Obligations of Purchaser
The obligation of Purchaser to effect the transactions contemplated
by this Agreement shall be subject to the fulfillment at or prior to the Closing
Date of the following additional conditions:
(a) Each Seller shall have performed and complied with in
all material respects the covenants and agreements contained in this Agreement
that are required to be performed and complied with by it on or prior to the
Closing Date;
(b) All of the representations or warranties of each Seller
set forth in this Agreement that are qualified by materiality or Material
Adverse Effect shall be true and correct and the representations and warranties
of each Seller set forth in the Agreement that are not so qualified shall be
true and correct in all material respects, in each case, as of the date of this
Agreement and as of the Closing Date (except to the extent such representations
and warranties speak as of a specific date or as of the date hereof, in which
case such representations and warranties shall be true and correct or true and
correct in all material respects, as the case may be, as of such specific date
or as of the date hereof, respectively);
(c) Purchaser shall have received a certificate from an
authorized officer of each Seller, dated the Closing Date, to the effect that,
to the best of such officer's Knowledge, the conditions set forth in Sections
8.2(a) and (b) have been satisfied.
(d) (i) if the Test Date is within sixty (60) days of the
date hereof, the Earlier Cancellation Threshold shall not have been exceeded or
(ii) if the Test Date is later than sixty (60) days of the date hereof, the
Later Cancellation Threshold shall not have been exceeded. For purposes hereof:
"Contracts" mean elevator and escalator maintenance contracts of the
Business;
"Earlier Cancellation Threshold" means $6.3 million in Qualifying
Lost Annual Maintenance Revenue;
"Later Cancellation Threshold" means $12.6 million in Qualifying
Lost Annual Maintenance Revenue;
"Qualifying Lost Annual Maintenance Revenue" means the lost annual
maintenance revenue from customers of the Business that have cancelled or
terminated their Contracts as a result of the execution and announcement of this
Agreement; provided that (1) lost annual revenue under Material Maintenance
Contracts listed on Schedule 5.7 of Sellers Disclosure Schedules that expire or
terminate in accordance with their terms following the date of this Agreement
(with such applicable contracts marked with an asterisk (*) thereon) shall be
excluded and (2) lost annual revenue from customers of the Business that become
customers of Purchaser for maintenance services
42
shall be excluded; and provided further that Sellers shall receive credit for
new customers signed to maintenance contracts with a term of one year or more
after the date hereof such that revenues from any contract cancellations or
terminations shall be offset dollar-for-dollar by such new business (annualizing
the first full month's revenue for any such new business).
"Test Date" means the date when all other conditions to Closing set
forth in Section VIII are satisfied or fulfilled;
(e) Sellers shall have made the deliveries to Purchaser
required to be delivered by Sellers pursuant to Section 4.2.
8.3 Conditions to Obligations of Sellers
The obligations of Sellers to effect the transactions contemplated
by this Agreement shall be subject to the fulfillment at or prior to the Closing
Date of the following additional conditions:
(a) Purchaser shall have performed and complied in all
material respects with the covenants and agreements contained in this Agreement
that are required to be performed and complied with by it on or prior to the
Closing Date;
(b) All of the representations or warranties of Purchaser
set forth in the Agreement that are qualified by materiality or Material Adverse
Effect shall be true and correct, and the representations and warranties of
Purchaser set forth in the Agreement that are not so qualified shall be true and
correct in all material respects, in each case, as of the date of this Agreement
and as of the Closing Date (except to the extent such representations and
warranties speak as of a specific date or as of the date hereof, in which case
such representations and warranties shall be true and correct or true and
correct in all material respects, as the case may be, as of such specific date
or as of the date hereof, respectively); and
(c) Sellers shall have received a certificate from an
authorized officer of Purchaser, dated the Closing Date, to the effect that, to
the best of such officer's Knowledge, the conditions relating to Purchaser and
set forth in Sections 8.3(a) and (b) have been satisfied.
(d) Purchaser shall have made the deliveries to Sellers
required to be delivered by Sellers pursuant to Section 4.3.
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ARTICLE IX
SURVIVAL AND INDEMNIFICATION
9.1 Survival
All representations and warranties made by the parties hereto
pursuant to this Agreement shall survive the Closing (a) in the case of the
representations and warranties contained in Section 5.2 relating to authority,
without limitation and (b) in the case of any other representation and warranty
in this Agreement for a period of eighteen (18) months after the Closing Date.
All representations and warranties, except Section 5.2, shall terminate and be
of no further force or effect following the eighteen month anniversary of the
Closing Date, and no claims shall thereafter be brought thereunder. The
covenants and agreements of the parties hereto contained herein shall survive in
accordance with their respective terms.
9.2 Indemnification
(a) Sellers will indemnify, defend and hold harmless the
Purchaser from and against any and all claims, demands or suits, losses,
liabilities, damages, obligations, payments, costs and expenses (including,
without limitation, the costs and expenses of any and all actions, suits,
proceedings, assessments, judgments, settlements and compromises relating
thereto and reasonable attorneys' fees and reasonable disbursements in
connection therewith) (collectively, "Indemnifiable Losses"), asserted against
or suffered by Purchaser and each of their respective officers, directors,
employees, agents, successors and assigns (collectively, the "Purchaser Group")
relating to, resulting from or arising out of (i) any breach of any warranty or
the inaccuracy of any representation of Sellers contained in this Agreement,
(ii) any breach by Sellers of any covenant in this Agreement or any failure of
Sellers to perform any of its obligations contained in this Agreement, (iii) the
Excluded Liabilities or (iv) claims under Sections 3.3 or 7.10(c); provided,
however, that, subject to provisions of Section 9.5, Sellers shall be required
to indemnify, defend and hold harmless under clause (i) of this Section 9.2(a)
with respect to Indemnifiable Losses incurred by the Purchaser Group only to the
extent that the aggregate amount of such Indemnifiable Losses exceed one million
dollars ($1,000,000) (and then only in the amount of such excess), and provided
further, that the aggregate liability of Sellers under clause (i) this Section
9.2(a) shall not exceed fifty percent (50%) of the Closing Purchase Price. For
purposes of this Article IX, in determining whether there has been a breach of
any representation or warranty contained in Article V of this Agreement or the
amount of any Indemnifiable Losses resulting from any such breach, (i) such
representation and warranties (other than Section 5.4(a)) shall be read without
regard to any "Material Adverse Effect" qualifier contained therein; provided
that in the first sentence of Section 5.8 the phrase "which, if adversely
determined, would have a Material Adverse Effect" shall be replaced with the
phrase "except as set forth in Schedule 2.4(b) of Sellers Disclosure Schedule"
(ii) the word "material" (in lower case) shall be disregarded in (1) the second
sentence of Section 5.7, (2) the second and third sentences of Section 5.9; and
(iii) the word "materially" shall be disregarded in the first and second
sentence of Section 5.15.
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(b) The Purchaser will, jointly and severally, indemnify,
defend and hold harmless Sellers from and against any and all Indemnifiable
Losses asserted against or suffered by Sellers and each of its respective
officers, directors, employees, agents, successors and assigns (collectively,
the "Seller Group") relating to, resulting from or arising out of (i) any breach
of any warranty or the inaccuracy of any representation of the Purchaser
contained in this Agreement, it being understood that for purposes of this
9.2(b) in determining whether there has been a breach of any representation or
warranty contained in Article VI of this Agreement or the amount of any losses
resulting from any such breach, the word "materially" in the first and second
sentence of Section 6.4 shall be disregarded, (ii) any breach by Purchaser of
any covenant in this Agreement or any failure of Purchaser to perform any of
their obligations contained in this Agreement or (iii) the Assumed Liabilities;
provided, however, that, subject to the provisions of Section 9.5, the Purchaser
shall be required to indemnify, defend and hold harmless under clause (i) of
this Section 9.2(b) with respect to Indemnifiable Losses incurred by the Seller
Group only to the extent that the aggregate amount of such Indemnifiable Losses
exceed one million dollars ($1,000,000) (and then only in the amount of such
excess), and provided further, that the aggregate liability of the Purchaser
under clause (i) of this Section 9.2(b) shall not exceed fifty percent (50%) of
the Closing Purchase Price.
(c) Either the party required to provide indemnification
under this Agreement (the "Indemnifying Party") or the party entitled to receive
indemnification under this Agreement (the "Indemnitee") may assert any offset or
similar right in respect of its obligations under this Section 9.2 based upon
any actual breach of any covenant or agreement contained in this Agreement.
(d) Any Indemnitee having a claim under these
indemnification provisions shall make a good faith effort to recover all losses,
damages, costs and expenses from third party insurers of such Indemnitee under
applicable insurance policies so as to reduce the amount of any Indemnifiable
Loss hereunder. The amount of any Indemnifiable Loss shall be reduced to the
extent that Indemnitee receives any insurance proceeds with respect to an
Indemnifiable Loss from a third party (non-captive) insurer (net of one year's
increase in premiums payable to such third party insurer). For purposes of this
Agreement, payments made by a third party insurer administering claims under a
fronting policy or any self-insurance program shall not be considered payments
by a third party (non-captive) insurer. The expiration, termination or
extinguishment of any covenant, agreement, representation or warranty shall not
affect the parties' obligations under this Section 9.2 if the Indemnitee
provided the Indemnifying Party with notice of the claim or event for which
indemnification is sought prior to such expiration, termination or
extinguishment.
9.3 Defense of Claims
(a) If any Indemnitee receives notice of the assertion of
any claim or of the commencement of any claim, action, or proceeding made or
brought by any Person who is not a party to this Agreement or any affiliate of a
party to this Agreement (a "Third Party Claim") with respect to which
indemnification is to be sought
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from an Indemnifying Party, the Indemnitee will give such Indemnifying Party
reasonably prompt written notice thereof. Such notice shall describe the nature
of the Third Party Claim in reasonable detail and will indicate the estimated
amount, if practicable, of the Indemnifiable Loss that has been or may be
sustained by the Indemnitee. The Indemnifying Party will have the right to
participate in or, by giving written notice to the Indemnitee, to elect to
assume the defense of any Third Party Claim at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel, and the Indemnitee will
cooperate in good faith in such defense at such Indemnitee's own expense.
(b) If within ten (10) calendar days after an Indemnitee
provides written notice to the Indemnifying Party of any Third Party Claim the
Indemnitee receives written notice from the Indemnifying Party that such
Indemnifying Party has elected to assume the defense of such Third Party Claim
as provided in the last sentence of Section 9.3(a), the Indemnifying Party will
not be liable for any legal expenses subsequently incurred by the Indemnitee in
connection with the defense thereof; provided, however, that if the Indemnifying
Party fails to take reasonable steps necessary to defend diligently such Third
Party Claim within twenty (20) calendar days (unless waiting twenty (20)
calendar days would prejudice the Indemnitee's rights) after receiving notice
from the Indemnitee that the Indemnitee believes the Indemnifying Party has
failed to take such steps, the Indemnitee may assume its own defense, and the
Indemnifying Party will be liable for all reasonable expenses thereof. The
Indemnifying Party shall permit the Indemnitee to participate in such defense or
settlement through counsel chosen by the Indemnitee, with the fees and expenses
of such counsel borne by the Indemnitee unless under applicable standards of
professional conduct a conflict may exist between the Indemnifying Party and the
Indemnitee in which event the fees and expenses of such counsel shall be borne
by the Indemnifying Party. Without the prior written consent of the Indemnitee,
the Indemnifying Party will not enter into any settlement of any Third Party
Claim which would lead to liability or create any financial or other obligation
on the part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder. If a firm offer is made to settle a Third Party Claim
without leading to liability or the creation of a financial or other obligation
on the part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder and the Indemnifying Party desires to accept and agree
to such offer, the Indemnifying Party will give written notice to the Indemnitee
to that effect. If the Indemnitee fails to consent to such firm offer within ten
(10) calendar days after its receipt of such notice, the Indemnitee may continue
to contest or defend such Third Party Claim and, in such event, the maximum
liability of the Indemnifying Party as to such Third Party Claim will be the
amount of such settlement offer, plus reasonable costs and expenses paid or
incurred by the Indemnitee up to the date of such notice.
(c) If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an indemnity payment in respect thereof, is reduced
by recovery, settlement or otherwise under or pursuant to any third party (non
captive) insurance coverage, or pursuant to any claim, recovery, settlement or
payment by or against any other entity, the amount of such reduction, less any
costs, expenses or premiums incurred in connection therewith (together with
interest thereon from the date
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of payment thereof at the prime rate as of the Closing Date), will promptly be
repaid by the Indemnitee to the Indemnifying Party. Upon making any indemnity
payment, the Indemnifying Party will, to the extent of such indemnity payment,
be subrogated to all rights of the Indemnitee against any third party
(non-captive) insurer in respect of the Indemnifiable Loss to which the
indemnity payment relates; provided, however, that (i) for purposes of this
Agreement, payments made by a third party insurer administering claims under a
fronting policy or any self-insurance program shall not be considered payments
by a third party (non-captive) insurer, (ii) the Indemnifying Party will then be
in compliance with its obligations under this Agreement in respect of such
Indemnifiable Loss and (iii) until the Indemnitee recovers full payment of its
Indemnifiable Loss, any and all claims of the Indemnifying Party against any
such third party (non-captive) insurer on account of said indemnity payment is
hereby made expressly subordinated and subjected in right of payment to the
Indemnitee's rights against such third party. Without limiting the generality or
effect of any other provision hereof, each such Indemnitee and Indemnifying
Party will duly execute upon request all instruments reasonably necessary to
evidence and perfect the above-described subrogation and subordination rights.
Nothing in this Section 9.3(d) shall be construed to require any party hereto to
obtain or maintain any insurance coverage.
(d) A failure to give timely notice as provided in this
Section 9.3 will not affect the rights or obligations of any party hereunder
except if, and only to the extent that, as a result of such failure, the party
which was entitled to receive such notice was actually prejudiced as a result of
such failure.
9.4 Remedies Exclusive
Except for intentional fraud and for injunctive relief to enforce
the Purchaser's or Sellers' rights under this Agreement, if the Closing occurs,
the remedies set forth in this Article IX will constitute the sole and exclusive
remedy for breaches of this Agreement (including any covenant, obligation,
representation or warranty contained in this Agreement or in any certificate
delivered pursuant to this Agreement) or otherwise in respect of the sale of the
Purchased Assets contemplated hereby. Each of the Purchaser and Sellers waive
any provision of law to the extent that it would limit or restrict the
agreements contained in this Article IX. Notwithstanding anything to the
contrary set forth in this Agreement, the parties agree that the sole and
exclusive remedy of Purchaser (i) with respect to the profitability of any
Modernization Contract shall be the post-closing adjustment set forth in Section
3.3 and (ii) with respect to the loss of customers or the cancellation or
termination of any Assumed Contract or other customer contract, including as a
result of the failure to obtain consent to assignment of any Material
Maintenance Contract, shall be the right provided pursuant to the condition to
closing set forth in Section 8.2(d) and the post closing adjustment set forth in
Section 7.10(c); provided that, with respect to (ii), the indemnification rights
set forth in 9.2(a) shall also apply in the event that (A) such customer loss or
contract cancellation or termination arose from material breach or material
non-performance of such contract prior to the Closing Date and (B) Seller shall
have retained liability for such material breach or material non-performance in
accordance with the provisions of Section 2.4(c).
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9.5 Comprehensive Basket.
Notwithstanding anything to the contrary contained in this
Agreement, the basket provisions contained in Sections 3.3 ($1,000,000, with
respect to Modernization Losses), 7.10 ($500,000, with respect to qualifying
unobtained Requested Required Consents) and 9.2(a) ($1,000,000, with respect to
Indemnifiable Losses) shall not apply at such time as the losses or related
items otherwise aggregating under all such provisions for purposes of reaching
the basket thresholds contained therein exceed one million two hundred and fifty
thousand ($1,250,000) (the "Comprehensive Basket"); provided that Purchaser
shall only be permitted to collect for any losses (or related items) aggregating
under all such provisions in the amount of the excess of the Comprehensive
Basket. For avoidance or doubt and for purposes of illustration: in the event
that Seller would otherwise be required to indemnify and pay Purchaser in
respect of Indemnifiable Losses but for the basket contained in 9.2(a), if the
sum of (x) Modernization Losses (as determined under Section 3.3), (y) revenue
losses in respect of qualifying unobtained Requested Required Consents (as
calculated under Section 7.10) and (z) such Indemnifiable Losses total more than
$1,250,000 in the aggregate, Purchaser shall be entitled to payments from Seller
in respect of such Indemnifiable Losses notwithstanding the basket contained in
Section 9.2(a) (but only to the extent of the excess of such total above the
Comprehensive Basket).
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Termination
(a) This Agreement may be terminated at any time prior to
Closing Date, by mutual written consent of Purchaser and Sellers.
(b) This Agreement may be terminated by Sellers or by
Purchaser if (i) the transactions contemplated hereby shall not have been
consummated on or before December 31, 2003 (the "Termination Date"); provided
that the right to terminate this Agreement under this Section 10.1(b) shall not
be available to either such party if such party's failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing Date to occur on or before such date.
(c) This Agreement may be terminated by Sellers or by
Purchaser if (i) any Governmental Authority, the consent or approval of which is
a condition to the obligations of Sellers and Purchaser to consummate the
transactions contemplated hereby, shall have determined not to grant its consent
or approval and all appeals of such determination shall have been taken and have
been unsuccessful, or (ii) any Governmental Authority shall have issued a
statute, rule, regulation, order, judgment or decree or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby and such statute, rule, regulation, order, judgment or
decree or other action shall have become final and nonappealable; provided,
however, that all parties hereto shall have used their commercially reasonable
efforts to remove such restraint, enjoinment or prohibition.
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(d) This Agreement may be terminated by Purchaser, if there
has been a material violation or breach by Sellers of any agreement, covenant,
representation or warranty contained in this Agreement which has rendered the
satisfaction of any condition to the obligations of Purchaser set forth in
Sections 8.2(a) or (b) hereof impossible, such violation or breach has not been
waived by Purchaser, and the violation or breach has not been cured within
thirty (30) days following Purchaser's written notice of the violation or
breach; provided, however, that if such breach cannot reasonably be cured within
thirty (30) days and Sellers have commenced and are diligently proceeding to
cure such breach, this Agreement may not be terminated pursuant to this
subsection (d).
(e) This Agreement may be terminated by Sellers, if there
has been a material violation or breach by Purchaser of any agreement, covenant,
representation or warranty contained in this Agreement which has rendered the
satisfaction of any condition to the obligations of Sellers set forth in
Sections 8.3(a) or (b) hereof impossible, such violation or breach has not been
waived by Sellers, or the violation or breach has not been cured within thirty
(30) days following either Sellers' written notice of the violation or breach;
provided, however, that if such breach cannot reasonably be cured within thirty
(30) days and Purchaser has commenced and is diligently proceeding to cure such
breach, this Agreement may not be terminated pursuant to this subsection (e).
10.2 Procedure and Effect of Termination
In the event of termination of this Agreement and abandonment of the
transactions contemplated hereby by either or both of the parties pursuant to
Section 10.1, written notice thereof shall forthwith be given by the terminating
party to the other party and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, and all obligations of the parties
hereunder will terminate without liability of any party to the other party
(except for any liability of any party then in material breach of this
Agreement); provided that the provisions of Sections 7.3 and 7.5 of this
Agreement and the Confidentiality Agreement will survive the termination and
remain in full force and effect thereafter). If this Agreement is terminated as
provided herein, all filings, applications and other submissions made pursuant
to this Agreement, to the extent practicable, shall be withdrawn from the agency
or other person to which they were made.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Amendment and Modification
This Agreement may be amended, modified or supplemented only by a
written mutual agreement executed and delivered by each of the Sellers and
Purchaser.
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11.2 Waiver of Compliance; Consents
Except as otherwise provided in this Agreement, any failure of any
of the parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
11.3 Notices
All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by facsimile transmission,
telexed or mailed by overnight courier or registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice;
provided that notices of a change of address shall be effective only upon
receipt thereof):
(a) If to Sellers:
ABM Industries Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Purchaser:
▇▇▇▇ Elevator Company
World Headquarters
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
with copies to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
50
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Building
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
11.4 Assignment
This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other party, nor is this Agreement
intended to confer upon any other Person except the parties hereto any rights or
remedies hereunder.
11.5 Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York (regardless of the laws that might otherwise
govern under applicable New York principles of conflicts of law) as to all
matters, including but not limited to matters of validity, construction, effect,
performance and remedies, and Sellers and Purchaser hereby agree to irrevocably
and unconditionally submit to the exclusive jurisdiction of any State or Federal
court sitting in New York County over any suit, action or proceeding arising out
of or relating to this Agreement. If requested by Sellers, Purchaser will
consent to appointing an agent for service of process in New York County.
11.6 Waiver of Jury Trial
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.7 Counterparts
This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
11.8 Interpretation
The Article and Section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or interpretation of this
Agreement. Definitions in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. All references herein to
Articles, Sections and Exhibits shall be deemed to be references to Articles and
Sections of, and Exhibits to, this Agreement unless the context shall
51
otherwise require. All Exhibits attached hereto shall be deemed incorporated
herein as if set forth in full herein and, unless otherwise defined therein, all
terms used in any Exhibit shall have the meanings ascribed to such terms in this
Agreement. The words "hereof," "hereinafter," "herein" and "hereunder" and words
of similar import, when used in this Agreement, shall refer to this Agreement as
a whole and not to any particular provision of this Agreement. Unless otherwise
expressly provided herein, any statute referred to herein means such statute as
may from time to time be amended, modified or supplemented. Any payments
required by this Agreement shall be in U.S. Dollars.
11.9 Severability
If for any reason any term or provision of this Agreement is held to
be invalid or unenforceable, all other valid terms and provisions hereof shall
remain in full force and effect, and all of the terms and provisions of this
Agreement shall be deemed to be severable in nature. If for any reason any term
or provision containing a restriction set forth herein is held to cover an area
or to be for a length of time which is unreasonable, or in any other way is
construed to be too broad or to any extent invalid, such term or provision shall
not be determined to be null, void and of no effect, but to the extent the same
is or would be valid or enforceable under Applicable Law, any court of competent
jurisdiction shall construe and interpret or reform this Agreement to provide
for a restriction having the maximum enforceable area, time period and other
provisions (not greater than those contained herein) as shall be valid and
enforceable under Applicable Laws.
11.10 Entire Agreement
This Agreement (including the Exhibits and Schedules referred to
herein) and the Confidentiality Agreement embody the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein or therein. This Agreement supersedes all prior writings,
discussions and understandings between the parties with respect to such
transactions other than the Confidentiality Agreement.
11.11 Bulk Sales or Transfer Laws
Each party hereto waives compliance by Purchaser and Sellers with
the provisions of the bulk sales or similar laws of all applicable
jurisdictions.
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IN WITNESS WHEREOF, Sellers and Purchaser have caused this agreement
to be signed by their respective duly authorized officers as of the date first
above written.
ABM INDUSTRIES INCORPORATED
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By:__________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
AMTECH ELEVATOR SERVICES
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By:__________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive
Officer
▇▇▇▇ ELEVATOR COMPANY
/s/ ▇▇▇ ▇▇▇▇▇▇▇
By:__________________________
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: President
53