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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement, dated as of March 31, 1997,
is among Granite Financial Acquisition Corp. I, a Delaware
corporation ("Buyer"); Global Finance & Leasing, Inc., a Michigan
corporation ("Seller") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇").
Recitals
A. Seller is engaged in the business of equipment leasing (the
"Business").
▇. ▇▇▇▇▇▇ is the owner of all the issued and outstanding common
stock of Seller.
C. Upon and subject to the terms and conditions set forth
herein, Buyer desires to buy and Seller desires to sell and
transfer all of the assets and business of Seller, and Buyer is
willing to assume certain specified liabilities and obligations
of Seller, all as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants of the parties hereto, it is hereby agreed as
follows:
1. Definitions
1.1 Definitions. The following terms when used in this
Agreement shall have the following meanings:
"Acquisition Proposal" shall mean any proposal for the
acquisition of, or merger or other business combination involving
Seller or the sale of any controlling equity interest in, or the
Business or substantially all the assets of, Seller, other than
the Contemplated Transactions.
"Action" shall mean any action, suit, proceeding,
investigation or arbitration.
"Affiliate" shall mean, with respect to any person, at the
time in question any other person controlling, controlled by or
under common control with such person.
"Agreement" shall mean this Asset Purchase Agreement,
including the exhibits and schedules hereto, as amended,
supplemented or otherwise modified from time to time.
The term "audit" or "audited" when used in regard to
financial statements shall mean an examination of the financial
statements by a firm of independent certified public accountants
in accordance with generally accepted auditing standards for the
purpose of expressing an opinion thereon.
"Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking
institutions in the City of Denver, are authorized or obligated
by law or executive order to close.
"Certificate of Incorporation" shall mean, in the case of
any corporation, the certificate of incorporation, articles of
incorporation or charter of a corporation, howsoever denominated
under the laws of the jurisdiction of its incorporation.
"Claims" shall mean any actions, suits, claims,
counterclaims or legal, administrative or arbitral proceedings or
investigations of any kind.
"Closing" shall mean the closing of the sale and purchase of
the Purchased Assets and Business of Seller, as contemplated by
this Agreement.
"Contract" shall mean any contract, agreement, indenture,
note, bond, lease, conditional sale contract, mortgage, license,
franchise, instrument, commitment or other binding arrangement,
whether written or oral.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Contemplated Transactions" means the transactions
contemplated by this Agreement or any other Contract to be
entered into in connection herewith.
"Control" (including the terms "controlling , controlled by"
and "under common control with") shall mean the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a person whether through the
ownership of voting securities or otherwise.
"Employee Benefit Plan" shall mean any qualified or non-
qualified deferred compensation plan or arrangement that Seller
maintains or to which Seller contributes or which Seller has ever
maintained or contributed for the benefit of any director,
officer or employee of Seller, including but not limited to
employee benefit plans (as defined in Section 3(3) of ERISA).
"Environmental Laws" shall mean, without limitation, all
environmental statutes enacted by Governmental Bodies, and any
executive orders, ordinances, rules or regulations promulgated
under the foregoing, and state tort laws and common law.
"Environmental Matters" shall mean any matter arising out
of, relating to or resulting from pollution, contamination,
protection of the environment or human health and safety, or
other related matters, including any matters relating to the
spill, pumping, injection, disposal, dumping, leaching,
migration, emission, discharge or threatened release of Hazardous
Materials into the indoor or outdoor environment, including
without limitation, the movement of Hazardous Materials through
or in air, soil, surface water, ground water or property or the
manufacture, process, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials.
"Equipment Leases" shall mean those equipment lease
agreements between Seller, as lessor, and the lessee thereof,
that are owned or serviced by Seller as of the Closing.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1976, as amended.
"Federal" shall mean of or pertaining to the government of
the United States.
"Financial Statements" shall mean the audited financial
statements of Seller consisting of a balance sheet, statements of
income and supporting schedules as at and for the (i) years ended
December 31, 1995 and 1996 and (ii) the interim period from
January 1, 1997 through February 28, 1997, complete copies of
which have been delivered to Buyer.
"GAAP" shall mean generally accepted accounting principles
in effect on the date hereof as set forth in the opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by
a significant segment of the accounting profession of the United
States.
"Governmental Body" shall mean any government or political
subdivision thereof whether federal, state or local, or any
agency or instrumentality of any such government or political
subdivision or any court or arbitrator.
"Hazardous Materials" shall mean any pollutants,
contaminants, hazardous or toxic substances, materials,
constituents or chemicals (including, without limitation,
petroleum or any by-products or fractions thereof, any form of
natural gas, asbestos and asbestos-containing materials,
polychlorinated biphenyls ("PCBs") and PCB-containing equipment,
radon and other radioactive elements, infectious, carcinogenic,
mutagenic, or etiologic agents, pesticides, defoliants,
explosives, flammables, corrosives and urea formaldehyde) that
are regulated by any Environmental Laws.
"IRS" shall mean the Internal Revenue Service.
The term "knowledge" with respect to (a) any individual
shall mean actual knowledge and (b) any entity shall mean the
actual knowledge of the directors, executive officers or managers
of such entity; and "knows" has a correlative meaning.
"Laws" shall mean any federal, state or local law, statute,
code, ordinance, rule, regulation or other requirement.
"Liability" shall mean any direct or indirect indebtedness,
liability, assessment, claim, loss, damage, deficiency,
obligation or responsibility, fixed or unfixed, ▇▇▇▇▇▇ or
inchoate, liquidated or unliquidated, secured or unsecured,
accrued, absolute, actual or potential, contingent or otherwise
(including any liability under any guaranties, letters of credit,
performance credits or with respect to insurance loss accruals).
"Lien" shall mean, with respect to any asset, any mortgage,
lien (including mechanics, warehousemen, laborers and landlords
liens), claim, pledge, charge, security interest, preemptive
right, right of first refusal, option, judgment, title defect, or
encumbrance of any kind in respect of or affecting such asset.
"Material Adverse Effect" shall mean an effect which is
either (i) materially adverse to the Permits, properties,
prospects, business, condition (financial or otherwise), assets,
liabilities, or results of operations of the Purchased Assets or
the Business or (ii) adverse to the ability of Seller or ▇▇▇▇▇▇
to consummate any of the Contemplated Transactions.
"Order" shall mean any order, judgment, injunction, decree,
consent or writ.
"Permit" shall mean any license, franchise, permit,
certificate of occupancy, authorization or approval.
"person" shall mean and includes any natural person,
corporation, partnership, limited liability company, firm, joint
venture, association, joint-stock company, trust, business trust,
unincorporated organization or other entity.
"Purchased Assets" shall mean all the properties, rights,
interests and assets, real, personal or mixed, tangible or
intangible to be sold, assigned, conveyed, demised or otherwise
transferred to Buyer pursuant to the terms hereof.
"Representatives" of a person shall mean the directors,
officers, employees, accountants, lawyers, advisers and agents of
such person.
"Subject Equipment" means the equipment owned by Seller that
is subject to an Equipment Lease and all warranties and
guarantees, if any, express or implied, existing for the benefit
of Seller with respect to the Subject Equipment.
"Subsidiary" of any person shall mean any entity of which
securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other
persons performing similar functions are owned directly or
indirectly through one or more intermediaries, or both, by such
person.
"Tax" (including, with correlative meaning, the terms
"Taxes" and "Taxable") shall mean (i) any net income, gross
income, gross receipts, sales, use, ad valorem, transfer,
transfer gains, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, rent, recording,
occupation, premium, real or personal property, intangibles,
environmental or windfall profits tax, alternative or add-on
minimum tax, customs duty or other tax, fee, duty, levy, impost,
assessment or charge of any kind whatsoever (including but not
limited to taxes assessed to real property and sewer rents
relating thereto), together with any interest and any penalty,
addition to tax or additional amount imposed by any Governmental
Body (domestic or foreign) (a "Tax Authority") responsible for
the imposition of any such tax, with respect to Seller, the
Business or the Purchased Assets (or the transfer thereof); (ii)
any Liability for the payment of any amount of the type described
in the immediately preceding clause (i) as a result of Seller's
being a member of an affiliated or combined group with any other
corporation at any time on or prior to the Closing Date and (iii)
any Liability of Seller for the payment of any amounts of the
type described in the immediately preceding clause (i) as a
result of a contractual obligation to indemnify any other person.
"Tax Returns" shall mean any report, return, statement, or
other information required to be supplied to a Taxing Authority
in connection with Taxes.
The following terms are defined in the following sections of
this Agreement:
Term Section
Assumed Contracts 2.1
Assumed Liabilities 2.3(a)
Benefit Arrangements 5.13(a)
Business Recital
Closing 3.1
Closing Date 3.1
Employment Contract 4.2(g)(viii)
Equipment 2.1(g)
Holdback 3.2
Retained Liabilities 2.5(6)
Financial Information 5.4(a)
Governmental Authorizations 5.11
Intellectual Property 2.1(p)
Purchase Price 3.2(c)
Leases 5.6(a)(ii)
LINC 3.2(a)
Seller Required Consents 5.3
Supplies 2.1(h)
1.2 Interpretation. Unless the context otherwise
requires, the terms defined in Section 1.1 shall be applicable to
both the singular and plural forms of any of the terms defined
herein. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. The use of the
neuter gender herein shall be deemed to include the masculine and
feminine genders wherever necessary or appropriate, the use of
the masculine gender shall be deemed to include the neuter and
feminine genders and the use of the feminine gender shall be
deemed to include the neuter and masculine genders wherever
necessary
or appropriate.
2. Purchase and Sale of Assets; Assumption of Certain
Liabilities
2.1 Transfer of Assets. On the basis of the
representations, warranties, covenants and agreements and subject
to the satisfaction (or waiver by the party whose obligations
hereunder are subject to such satisfaction) of the conditions set
forth in this Agreement, on the Closing Date, Seller shall sell,
convey, assign, transfer and deliver to Buyer, and Buyer shall
purchase and acquire from Seller, all of the assets, rights,
properties, Claims, Contracts and business of Seller at the
Closing Date of every kind, nature, character and description,
tangible and intangible, personal or mixed, wherever located,
free and clear of all Liens, including, without limitation, the
following:
(a) All cash and cash equivalents;
(b) All accounts and notes receivable;
(c) All Equipment Leases and Subject Equipment;
(d) All applications, credit files, purchase orders and
other agreements and documents for pending lease
applications:
(e) All Contracts referred to in Sections 5.6(a) (i), (ii)
and (iii) (the "Assumed Contracts");
(f) The leasehold interests in real property leased by
Seller, as lessee;
(g) All equipment, furniture, furnishings, fixtures,
machinery, vehicles, telephones, computer systems and hardware
and other tangible personal property of Seller, excluding the
Subject Equipment (collectively, the "Equipment") and all
warranties and guarantees, if any, express or implied, existing
for the benefit of Seller with respect to the Equipment;
(h) All supplies on hand, in transit or on order as of the
opening of business on the Closing Date, including, without
limitation, stationery, forms, labels, directories and
promotional materials collectively, (the "Supplies");
(i) All management information systems; employee and asset
records; and Customer names, Customer, subscriber and vendor
lists; catalogs, research material, technical information,
technology, and quality control data (whether manual or
computerized);
(j) All business plans, sales promotion and selling
literature, promotional and advertising materials, market
research reports and competitor information;
(k) All Permits issued by any Governmental Body or other
third party;
(l) All security (including cash) deposited with third
parties, including, without limitation, the Holdback held by
LINC;
(m) All goodwill and going concern value;
(n) All prepaid expenses as of the opening of business on
the Closing Date;
(o) All Claims against other parties;
(p) All trademarks, trade names, corporate names, service
marks, logos, designs, know-how, trade and business secrets,
photographs, artwork, licenses, copyrights, patents, computer
software programs and licenses and electronic data processing
software and other similar tangible or intangible property
including, without limitation, the name Global Finance & Leasing,
together with any derivative of the foregoing and the goodwill
associated therewith (collectively, "Intellectual Property"); and
(q) All of the Seller's right, title and interest in and to
the telephone and telecopier numbers currently assigned to Seller
for business purposes. Attached as Schedule 2.1 is a listing of
all telephone and telecopier numbers assigned to Seller which are
being transferred to Buyer.
2.2 Instruments of Conveyance and Transfer. (a) On the
Closing Date, Seller shall (i) deliver or cause to be delivered
to Buyer such bills of sale, endorsements, consents, assignments,
and other good and sufficient instruments of conveyance and
assignment, all in recordable form, where applicable, as shall be
effective to vest in Buyer all right, title and interest of
Seller in and to the Purchased Assets, and (ii) transfer to Buyer
originals of all Equipment Leases, Contracts, books, lists,
records, files, certificates, Permits, plans and specifications
and other data of Seller, including, without limitation, computer
tapes and computer-generated records relating to Seller's
Business or the Purchased Assets. All materials referred to in
subsection (ii) shall be delivered to Buyer in the form and order
in which they are maintained by Seller.
(b) From time to time after the Closing Date, Seller,
▇▇▇▇▇▇ and any Affiliate thereof shall execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered,
such other instruments of conveyance, assignment, transfer and
delivery (all documents to be prepared by Buyer) and will take or
cause to be taken such other actions as Buyer may reasonably
request in order more effectively to sell, convey, assign,
transfer, and deliver to Buyer any of the Purchased Assets, or to
enable Buyer to protect, exercise and enjoy all rights and
benefits of Seller with respect thereto, and as otherwise may be
appropriate to carry out the Contemplated Transactions.
2.3 Assumed Liabilities. (a) On the basis of the
representations, warranties, covenants and agreements and subject
to the satisfaction of the conditions set forth in this
Agreement, on the Closing Date, Buyer shall assume and agree to
pay, perform, fulfill and discharge the Liabilities of Seller
recorded on the balance sheet of Seller as of Closing (the
"Closing Balance Sheet"), but only to the extent of the amount of
such Liabilities reflected on the Closing Balance Sheet. Seller
shall prepare and provide Buyer with a copy of Seller's Closing
Balance Sheet at or prior to the Closing. The liabilities and
obligations assumed by Buyer in accordance with this Section 2.3
are sometimes hereinafter referred to as the "Assumed
Liabilities."
(b) Seller and ▇▇▇▇▇▇ will take such reasonable action as
may be appropriate to obtain the consent of the appropriate party
or parties so that Buyer will be permitted to assume the Assumed
Liabilities on terms no less favorable than currently exist.
(c) Except for the Assumed Liabilities, Buyer is not
assuming and shall not have any Liability to pay any of the other
Liabilities of Seller of any nature whatsoever, known or unknown,
fixed or contingent relating to Seller or the Purchased Assets,
or to any of them. Without derogating from the generality of the
forgoing, Buyer specifically is not assuming: (i) any Tax
Liabilities of Seller accruing either before or after the Closing
Date, (ii) any Liability of Seller to any of its employees or on
account of compensation or benefits due or to become due to such
employees or on account of any payments, benefits or rights to
which any of such employees are or may be entitled under any
Contract or Law (including, without limitation, any arising out
of or by reason of the Contemplated Transactions and all pension
plans, profit sharing plans and other plans or Contracts
relating to major medical, health, disability, life insurance and
other related benefits which are or have been maintained by
Seller), or (iii) any Liabilities incurred by Seller or ▇▇▇▇▇▇ in
connection with the negotiation and closing of the Contemplated
Transactions, it being understood that Seller is and shall remain
responsible for any and all Liabilities not being assumed by
Buyer hereunder.
Such obligations and liabilities of Seller not being assumed
by Buyer are referred to herein collectively as the "Retained
Liabilities." Seller agrees to perform, fulfill and discharge,
when due, all of the Retained Liabilities. Seller and ▇▇▇▇▇▇
shall take any and all action which may be necessary to prevent
any person from having recourse against any of the Purchased
Assets or against Buyer as transferee thereof with respect to any
Retained Liabilities and shall indemnify Buyer and hold it
harmless therefrom.
(d) At its sole discretion, Buyer may pay any Retained
Liabilities not assumed by it pursuant to this Agreement, if such
Liability is not otherwise being contested in good faith by
Seller and may deduct the amount paid or incurred in connection
with any such Liability from any payment due Seller or ▇▇▇▇▇▇
hereunder or any other Contract contemplated hereby.
3. Closing: Purchase Price
3.1 Closing Date. On and subject to the conditions herein
set forth, the closing with respect to the transactions provided
for in this Agreement (the "Closing") shall take place on April
1, 1997, or at such other time and place as shall be agreed upon
by the parties thereto. Notwithstanding the time and date of the
delivery of this Agreement and the other documents contemplated
hereby, the transactions provided for in this Agreement shall be
deemed to have been consummated and shall be fully effective as
of the close of business on March 31, 1997 (the "Closing Date").
3.2 Purchase Price. (a) Initial Payment. At the
Closing, Buyer shall pay Seller an amount of cash equal to
$1,884,000, which represents the total purchase price of
$2,800,000 less $916,000 of the "Holdback", as hereafter defined,
held by Newcourt LINC Financial, Inc., and any of its affiliates,
subsidiaries, parent, predecessors, and successors (collectively,
"LINC") as of the Closing Date (the "Initial Payment"). Holdback
means the cash due Global and held by LINC as collateral or
security for Global's obligations arising out of any and all
transactions between Global and LINC.
(b) Contingent Payment. A contingent payment equal to the
amount of Holdback paid by LINC to Granite subsequent to closing,
but, in no event, exceeding the amount of the Holdback deducted
from the total purchase price under 3.2 (a) above. The parties
recognize that the Holdback received from LINC may be in the form
of cash or lease contracts. As Holdback is received from LICN,
the parties shall divide such Holdback between them as follows:
55.9% to Seller (determined by dividing the amount of Holdback
deducted under 3.2(a) above of $916,000 by the total amount of
the Holdback as of the Closing Date of $1,639,449.98) and 44.1%
to Buyer. Once Seller has received a total of $916,000 under
this Section 3.2(b), all remaining Holdback, if any, received
from LINC shall be paid to Buyer.
(c) Allocation of Price. The amounts payable to Seller
in accordance with the provisions of Section 3.2(a) and (b)
(collectively, the "Purchase Price") shall be allocated in the
manner set forth in Schedule 3.2(c) hereto. Buyer and Seller
agree to act in accordance with such allocations in all Tax
Returns, reports and filings and complete and timely file Form
8594 pursuant to applicable Treasury Regulations.
(d) Method of Payment. All payments due hereunder from
Buyer to Seller or from Seller to Buyer shall be made by means of
a cashiers check or certified check of the party making the
payment or by means of a wire transfer of immediately available
funds in accordance with written directions given by the
receiving party at least one Business Day prior to the date of
transfer.
4. Conditions Precedent
4.1 Conditions Precedent to Obligations of Parties. The
respective obligations of the parties hereto to consummate the
Contemplated Transactions shall be subject to the satisfaction at
or prior to the Closing Date of the following conditions:
(a) No Injunction. No provision of any applicable Law and
no judgment, injunction, order or decree shall prohibit the
consummation of the Contemplated Transactions.
(b) No Proceedings or Litigation. No Action before any
court or any Governmental Body instituted by any person shall
have been commenced or pending against Buyer, Seller or ▇▇▇▇▇▇
or any of their respective Affiliates, associates, officers or
directors which Action shall have a reasonable likelihood of
success and which Action seeks to restrain, prevent, change or
delay in any material respect the Contemplated Transactions or
seeks to challenge any of the terms or provisions of this
Agreement or seeks material damages in connection with any of
such transactions or seeks to restrain or prevent the ownership
and operations by Buyer after the Closing Date of the Purchased
Assets and Business of Seller.
4.2 Conditions Precedent to Obligations of Buyer. The
obligations of Buyer to consummate the Contemplated Transactions
are subject to the satisfaction (or waiver by Buyer) at or prior
to the Closing Date of each of the following conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Seller and ▇▇▇▇▇▇ contained
herein or in any certificate, instrument or other document
delivered to Buyer pursuant hereto shall be true and correct in
all material respects on and as of the Closing Date, with the
same force and effect as though such representations and
warranties had been made on and as of the Closing Date, except to
the extent that any such representation and warranty is made as
of a specified date, in which case such representation and
warranty shall have been true and correct as of such date.
(b) Performance of Obligations. Seller and ▇▇▇▇▇▇ shall
have performed all obligations and agreements, and complied with
all covenants and conditions, contained in this Agreement to be
performed or complied with at or prior to the Closing Date.
(c) Absence of Certain Changes. Since December 31, 1996,
there shall not have been any change in the condition (financial
or other), results of operations, assets, business or prospects
of the Business of Seller or any Action or Claim filed, or to the
knowledge of Seller or ▇▇▇▇▇▇ threatened, against or affecting
Seller, which has or could have a Material Adverse Effect, except
as otherwise disclosed in any Schedule hereto.
(d) Employees. Seller shall have released from
employment all employees of the Business that Buyer wishes to
employ and Buyer shall have entered into employment agreements
with certain of such employees upon terms acceptable to Buyer.
(e) Lien Search. Buyer shall have received satisfactory
results of Lien searches with respect to the Purchased Assets.
(f) Consents. etc. All Permits, consents, approvals, and
orders of Governmental Bodies and other third parties necessary
for the consummation of the Contemplated Transactions shall have
been obtained.
(g) Deliveries. There shall have been delivered to Buyer
the following:
(i) one or more duly executed original bills of sale
and assignments, in form and substance satisfactory to Buyer, and
all applications therefor, and such other instruments as are
necessary or desirable to effect the transfers, conveyances and
assignments to Buyer of the Purchased Assets, and a set of the
keys to all premises of Seller and to all locks located therein.
(ii) A certificate, dated the Closing Date, of the
Chief Financial Officer of Seller and ▇▇▇▇▇▇ confirming the
matters set forth in Sections 4.2(a), (b) and (c).
(iii) A certificate, dated the Closing Date, of the
Secretary or Assistant Secretary of Seller certifying, among
other things, that attached or appended to such certificate (A)
is a true and correct copy of the Certificate of Incorporation of
Seller, and all amendments, if any, thereto as of the date
hereof; (B) is a true and correct copy of the By-laws of Seller
as of the date hereof; (C) is a true copy of all corporate
actions taken by Seller and its shareholders, including
resolutions of its Board of Directors and shareholders,
authorizing the execution, delivery and performance of this
Agreement and each other document to be delivered by Seller
pursuant hereto and the Contemplated Transactions; (D) are the
names and signatures of Seller's duly elected and appointed
officers who
are authorized to execute and deliver this Agreement and any
certificate, document or other instrument in connection herewith.
(iv) A good standing certificate of Seller.
(v) Copies of all Seller Required Consents.
(vi) Evidence of possession and control of the
Purchased Assets of Seller (including all corporate books, bank
accounts, records and documents).
(vii) A signed opinion(s) of Seller's and ▇▇▇▇▇▇'▇
counsel, dated the Closing Date, addressed to Buyer,
substantially in the form of opinion annexed as Exhibit A hereto.
(viii) A original of the Employment/Non-Compete
Agreement, duly executed by ▇▇▇▇▇▇, in the form attached hereto
as Exhibit B (the "Employment Contract").
(h) Actions and Proceedings. All corporate actions,
proceedings, instruments and documents of Seller and its
Affiliates required to carry out the Contemplated Transactions or
incidental thereto and all other related legal matters shall be
reasonably satisfactory to counsel for Buyer, and such counsel
shall have been furnished with such certified copies of such
corporate actions and proceedings and such other instruments and
documents as it shall have reasonably requested.
(i) Minimum Net Worth. Seller's balance sheet as of
closing shall reflect a net worth (total assets less total
liabilities) of at least $300,000.
(j) Seller shall have fully reserved on both of its balance
sheets dated December 31, 1996, and closing, for the entire
amount of the Holdback through increases to its loss reserve.
4.3 Conditions Precedent to the Obligations of Seller.
The obligations of Seller and ▇▇▇▇▇▇ to consummate the
Contemplated Transactions are subject to the satisfaction (or
waiver by Seller or ▇▇▇▇▇▇) at or prior to the Closing Date of
each of the following conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Buyer contained herein or in
any certificate, instrument or other document delivered to Seller
or ▇▇▇▇▇▇ pursuant hereto shall be true and correct in all
material respects on and as of the Closing Date, with the same
force and effect as though such representations and warranties
had been made on and as of the Closing Date, except to the extent
that any such representation and warranty is made as of a
specified date, in which case such representation and warranty
shall have been true and correct as of such date.
(b) Performance of Obligations. Buyer shall have
performed all obligations and agreements, and complied with all
covenants and conditions, contained in this Agreement to be
performed or complied with by it prior to the Closing Date in all
material respects.
(c) Deliveries. There shall have been delivered to
Seller the following:
(i) One or more duly executed original assumption
agreements, in form and substance satisfactory to Seller,
pursuant to which Buyer shall assume the Assumed Liabilities.
(ii) A certificate, dated the Closing Date, of the
President of Buyer confirming the matters set forth in Sections
4.3(a) and (b).
(iii) A certificate, dated the Closing Date, of the
Secretary or Assistant Secretary of Buyer certifying, among other
things, that attached or appended to such certificate (A) is a
true and correct copy of the Certificate of Incorporation of
Buyer, and all amendments, if any, thereto as of the date
thereof; (B) is a true and correct copy of its By-laws as of the
date thereof; (C) is a true copy of all corporate actions taken
by it, including resolutions of its Board of Directors,
authorizing the execution, delivery and performance of this
Agreement, and each other document to be delivered by Buyer
pursuant hereto; and (D) are the names and signatures of its duly
elected or appointed officers who are authorized to execute and
deliver this Agreement and any certificate, document or other
instrument in connection herewith.
(iv) A good standing certificate of Buyer.
(v) A signed opinion(s) of Buyer's counsel, dated the
Closing Date, addressed to Seller, substantially in the form of
opinion annexed as Exhibit C hereto.
(vi) A original of the
Employment/Non-Compete
Agreement, duly executed by
Buyer, in the form attached
hereto as Exhibit B.
(d) Actions and Proceedings. All corporate actions,
proceedings, instruments and documents of Buyer required to carry
out the Contemplated Transactions or incidental thereto and all
other related legal matters shall be reasonably satisfactory to
counsel for Seller, and such counsel shall have been furnished
with such certified copies of such corporate actions and
proceedings and such other instruments and documents as it shall
have reasonably requested.
5. Representations and Warranties of Seller and ▇▇▇▇▇▇.
Seller and ▇▇▇▇▇▇ jointly and severally represent and warrant to
Buyer as follows:
5.1 Due Organization; Power; Good Standing. Seller is an
entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and has the
requisite power and authority to own, lease and operate its
properties and assets and to conduct its business as now
conducted by it. Seller has all requisite power and authority
to enter into this Agreement and any other agreement contemplated
hereby and to perform its obligations hereunder and thereunder.
Except as reflected in Schedule 5.1, Seller is duly authorized,
qualified or licensed to do business as a foreign corporation,
and is in good standing, in each of the jurisdictions in which
its right, title or interest in or to any of the assets held by
it, or the conduct of its business, requires such authorization,
qualification or licensing, except where the failure to so
qualify or to be in good standing could not have a Material
Adverse Effect.
5.2 Authorization and Validity. The execution, delivery
and performance by Seller of this Agreement and any other
agreements contemplated hereby and the consummation by it of the
Contemplated Transactions have been duly authorized by ▇▇▇▇▇▇ and
the Board of Directors and shareholders of Seller. No other
corporate action is necessary for the authorization, execution,
delivery and performance by Seller of this Agreement and any
other agreements contemplated hereby and the consummating by
Seller of the Contemplated Transactions. This Agreement has been
duly executed and delivered by each of Seller and ▇▇▇▇▇▇ and
constitutes a valid and legally binding obligation of each of
Seller and ▇▇▇▇▇▇ enforceable against them in accordance with its
terms.
5.3 No Governmental Approvals or Notices Required; No
Conflict. The execution, delivery and performance of this
Agreement and any other agreements contemplated hereby by Seller
and ▇▇▇▇▇▇ and the consummation by Seller and ▇▇▇▇▇▇ of the
Contemplated Transactions (a) if the consents set forth in
Schedule 5.3 hereto (the "Seller Required Consents") are
obtained, will not violate (with or without the giving of notice
or the lapse of time or both), or require any consent, approval,
filing or notice under, any provision of any Law, court or
administrative order, writ, judgment or decree applicable to
Seller or any of its assets or properties, and (b) will not (with
or without the giving of notice or the lapse of time or both) (i)
violate or conflict with, or result in the breach, suspension or
termination of any provision of, or constitute a default under,
or result in the
acceleration of the performance of the obligations of Seller
under, or (ii) result in the creation of any Lien upon all or any
portion of the properties, assets (including the Purchased
Assets) or business of Seller pursuant to the charter or by-laws
of Seller, or any Contract, Permit or instrument to which the
Seller is a party or by which the Seller or any of its
properties, assets (including the Purchased Assets) or the
Business is bound.
5.4 Financial Information; Liabilities. (a) The
Financial Statements of Seller, the Closing Balance Sheet and all
other financial and other information provided by Seller to
Buyer, including, but not limited to, information on revenue,
operating expenses and lease delinquencies and losses
(collectively with the Financial Statements and the Closing
Balance Sheet, the "Financial Information"), are true, complete,
and correct and, subject to the immediately succeeding sentence,
present fairly and accurately the financial condition of Seller
and the results of Seller's operations for the periods reflected
in such Financial Information. Except as otherwise specifically
indicated in the Financial Information or on Schedule 5.4(a)
hereto, all such Financial Information has been prepared in
accordance with GAAP applied consistently throughout the periods
involved.
(b) Seller has no Liability for Taxes, or any long-term
lease or unusual forward or long-term commitment for which Buyer
will have any liability after Closing other than the Assumed
Liabilities.
(c) Attached as Schedule 5.4(c) hereto is a list of all
creditors of Seller as of the end of the month preceding the date
of this Agreement. Such list has been prepared, signed, sworn to
(or affirmed) in accordance with the provisions of, and contains
the information set forth in, Section 6-104 of the Uniform
Commercial Code.
(d) Except as set forth on Schedule 5.4(d): (i) As at the
date of the Financial Statements, Seller did not have any
Liabilities that were not fully and adequately reflected or
reserved against on the balance sheet contained in, or in the
notes to, the Financial Statements; (ii) Seller has not, except
in the ordinary course of business consistent with past practice,
incurred any Liabilities since the date of the most recent
balance sheet included in Financial Statements; and (iii) neither
Seller nor ▇▇▇▇▇▇ has any knowledge of any circumstance,
condition, event or arrangement that they reasonably anticipate
would hereafter give rise to any Liabilities of Seller or any
successor to its business except Liabilities arising in the
ordinary course of business consistent with past practice.
5.5 Title and Condition of Properties: Absence of Liens.
(i) Seller is the sole, true and lawful owner of the Purchased
Assets and has, and Buyer on the Closing Date will receive, good
and marketable title to all the Purchased Assets, which will at
the time of Closing be free and clear of all Liens, except for
those Liens recorded or reflected on the Financial Statements or
the Schedules hereto. Neither the Seller nor the Business is
party to any contract that will interfere in any material respect
with, or impose a material burden on, the continuing ownership,
operation or use of the Purchased Assets or any portion thereof
by Buyer. Seller does not, directly or indirectly, own any real
property.
(ii) Seller has no knowledge of any material defect in
the normal operating condition and repair of the Equipment and
the Subject Equipment.
(iii) Except as disclosed on Schedule 5.5(iii),
payments due from lessees under all of the Equipment Leases are
current and there are no other defaults existing thereunder.
(iv) Except as disclosed on Schedule 5.5(iv), to the
knowledge of Seller and ▇▇▇▇▇▇: (A) neither the Business nor the
Real Property is in violation in any material respect of any
building, zoning, health, occupational safety or other Law or any
Order or Permit in respect of such Real Property, improvements,
structures and buildings located therein or thereat; (B) no
person, other than Seller, has any right to occupy or possess any
of the Real Property or any such structures or buildings thereat;
(C) all tenant improvements or other work required to be
performed by or on the part of Seller under any Lease has been
completed substantially in accordance with the provisions of such
Lease; and (D) no notice has been received by Seller from any
insurer or any Governmental Body recommending or requiring any
work to be performed on or with respect to the Real Property.
5.6 Contracts. (a) (i) Schedule 5.61(a)(i) contains a
complete and correct list of all Contracts (other than real
property Leases and Equipment Leases).
(ii) Schedule 5.6(a)(ii) contains a complete and correct
list of all written leases ("Leases") of real property ("Real
Property") under which Seller is a lessee. Schedule 5.6(a)(ii)
also sets forth the date of each Lease and any amendments thereto
and assignments thereof, the term thereof, (including any renewal
options), options to purchase, rights of first refusal and the
aggregate monthly rental payable thereunder.
(iii) Schedule 5.6(a)(iii) contains a complete and
correct list of all Equipment Leases owned or serviced by Seller
along with a detailed aging of all such Equipment Leases.
(b) True and complete copies of all Assumed Contracts
(including all amendments thereto and waivers in respect thereof)
referred to in Section 5.6(a)(i), (ii) and (iii) or in the
Schedules thereto have been delivered to Buyer. There are no
Contracts binding, affecting or otherwise pertaining to the
Purchased Assets, except for this Agreement, the Assumed
Contracts, Equipment Leases, Leases and Liens listed in the
Schedules to this Agreement. To the knowledge of Seller and
▇▇▇▇▇▇ all such Assumed Contracts, Equipment Leases, Leases and
other arrangements referred to in such Schedules are in full
force and effect and are valid and enforceable in accordance with
their respective terms and, except as disclosed in such
Schedules, no consent or approval of any person is required
thereunder by virtue of the Contemplated Transactions. Seller
has paid or accrued all amounts due under all such Contracts and
has satisfied or provided for all of its liabilities and
obligations through the date hereof.
(c) Each Lease is with an unrelated third-party lessor.
Except for the consents required to consummate the Contemplated
Transactions, none of the rights of the lessee under any of the
Leases will be impaired by the consummation of the Contemplated
Transactions and all of the rights under such Leases assumed by
Buyer pursuant to this Agreement will inure to and be enforceable
by Buyer. As of the Closing Date, all rentals and other monies
due for such leased location shall be paid in full. Seller and
▇▇▇▇▇▇ represent and warrant that the Business operated by Seller
is at the following leased location:
Global Finance & Leasing, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(d) Except as disclosed in Schedule 5.6(d), to the
knowledge of Seller and ▇▇▇▇▇▇: (i) the Assumed Contracts
(including the Leases and Equipment Leases) are valid,
subsisting, in full force and effect and binding upon Seller and
the other parties thereto in accordance with their respective
terms; (ii) neither Seller nor any other party thereto is in
default (or alleged default) of any such Contract, nor does any
condition exist that with notice or the lapse of time or both
would constitute a default (or give rise to a termination right)
thereunder; (iii) none of the parties to any such Contract
intends to terminate or materially alter the provisions thereof;
(iv) since December 31, 1996, Seller has not waived any material
right under any such Contract, materially amended any such
Contract or terminated or failed to renew (or received notice of
termination or failure to renew with respect to) any such
Contract; and (v) Seller has paid or accrued all amounts due
under all such Contracts and has satisfied or provided for all of
its Liabilities through the date hereof.
5.7 Legal Proceedings. Except as described in Schedule
5.7, there is no Action to which Seller is a party pending or, to
the knowledge of Seller and ▇▇▇▇▇▇, threatened against it or
relating to the Purchased Assets or the Business of Seller or the
Contemplated Transactions. Neither Seller nor ▇▇▇▇▇▇ is in
violation of any term of any judgment, writ, decree, injunction
or order entered by any court or Governmental Body and
outstanding against Seller or ▇▇▇▇▇▇ with respect to any of its
assets or properties. To the knowledge of Seller and ▇▇▇▇▇▇,
except as described in Schedule 5.7, there are no facts which
could provide a basis for any such Action. There are no
judgments of record against Seller or any judgment Lien on the
Purchased Assets, nor any petition in bankruptcy or an insolvency
proceeding involved by or against it, nor has it made any general
assignment for the benefit of creditors.
5.8 Insurance. Schedule 5.8 is a list of Seller's
insurance maintained on its properties and assets (including the
Purchased Assets) and with respect to its employees,
representatives and Business. All policies of insurance are in
full force and effect and all premiums currently due and owing
have been paid. There is no Claim by Seller pending under any of
such policies as to which coverage has been questioned, denied or
disputed by the underwriters of such policies. Such policies of
insurance are of the type and in amounts customarily carried by
persons conducting a business similar to that of Seller. Seller
does not know of any threatened termination of, or premium
increase
with respect to, any of such policies. True and complete copies
of all such policies have been delivered to Buyer.
5.9 Labor. (a)(i) To Seller's and ▇▇▇▇▇▇'▇ knowledge,
Seller is in compliance in all material respects with all
applicable Laws relating to employment practices, terms and
conditions of employment and wages and hours; (ii) there are no
controversies pending or, to the knowledge of Seller and ▇▇▇▇▇▇,
threatened between Seller and any of their respective employees,
prospective employees, former employees, retirees or labor unions
or other collective bargaining representatives representing their
employees; (iii) no unfair labor practice complaints have been
filed against Seller and Seller has not received any notice
reflecting an intention or a threat to file any such complaint;
(iv) there is no labor strike, dispute, slow-down or stoppage
pending or, to the knowledge of Seller
and ▇▇▇▇▇▇, threatened against Seller; (v) no representation
petition is pending with the National Labor Relations Board (or
any other labor relations board) in respect of Seller; (vi)
Seller has paid in full to all of its employees all wages,
salaries, commissions, bonuses, benefits and other compensation
due to such employees; (vii) Seller has not closed any facility,
effectuated any layoffs of employees or implemented any early
retirement or separation program within the past three years, nor
has Seller planned or announced any such action or program for
the future; (viii) no promises of benefit improvements under the
Employee Benefit Programs have been made by Seller or any
affiliate thereof to any employee of Seller; and (ix) there are
no collective bargaining agreements or agreements with any labor
organization which Seller or its Affiliates have entered into on
behalf of any employees of Seller, nor, to the knowledge of
Seller and ▇▇▇▇▇▇, are there any ongoing efforts to organize any
union representation.
(b) Schedule 5.9(b) sets forth (i) the name, total
compensation, date of hire and current salary for each current
employee of Seller, (ii) the name and total direct compensation
of each consultant, agent or other representative of Seller whose
current or committed annual rate of compensation (including
bonuses and commissions) exceeds $25,000, (iii) all wage and
salary increases, bonuses and increases in any other direct
compensation received by or accrued to such persons since
December 31, 1996, (iv) any payments or commitments to pay any
severance or termination pay to any such persons or to any other
person, and (v) any accrual for, or any commitment or agreement
by Seller to pay, such increases, bonuses or pay.
(c) All employees are "employees-at- will" of Seller and
Buyer shall be free to hire any such employees after the Closing.
5.10 Intellectual Property. (a) Schedule 5.10 contains a
complete and correct list of (i) all trademarks and service
marks, trademark and service ▇▇▇▇ registrations and applications,
trade names and corporate names, (ii) patents, patent
applications and all other patent rights, copyrights, copyright
registrations and applications owned by Seller and (iii) all
material non-governmental licenses or sublicenses granted by or
to Seller and other covenants or Contracts to which Seller is a
party, which relate in whole or in part to any items of the
categories mentioned above or to any other material proprietary
rights, trade secrets ideas or know-how owned or licensed by
Seller.
(b) Seller has, and will transfer to Buyer on the Closing
Date, good and marketable title to all the Intellectual Property,
free and clear of all Liens. To the best knowledge of Seller and
▇▇▇▇▇▇, after due inquiry, no claims have been asserted to the
effect that the use of the Intellectual Property by Seller
infringes on any Intellectual Property of any other person. To
the knowledge of Seller and ▇▇▇▇▇▇, the use of the Intellectual
Property by Seller does not infringe on the rights of any person.
Seller owns all material Intellectual Property used in Seller's
business as presently conducted. To Seller's knowledge no third
party is using any Intellectual Property which is confusing with
or similar to any of Seller's Intellectual Property.
5.11 Governmental Authorizations. Schedule 5.11 lists all
Permits, variances, waivers, consents and other authorizations
of, by or from Governmental Bodies ("Governmental
Authorizations") related to the Purchased Assets or the use
thereof, or to the knowledge of Seller required in connection
with the valid assignment and transfer of the Purchased Assets
pursuant hereto or the use of the Purchased Assets by Buyer after
the Closing Date. The Governmental Authorizations constitute all
Permits required in connection with the ownership, operation or
use of the Purchased Assets. In all material respects, Seller
has owned, operated and used the Purchased Assets in accordance
with the conditions and provisions of such Governmental
Authorizations. The Governmental Authorizations are in full
force and effect, Seller is in compliance with all obligations
thereunder or imposed thereby, and no Actions are pending or, to
Seller's or ▇▇▇▇▇▇'▇ knowledge, threatened, which might result in
any modification, revocation, termination or suspension of any
Governmental Authorization. Each of the Governmental
Authorizations will either (i) continue in full force and effect
and inure to the benefit of Buyer without any action by any
person, or (ii) comparable replacement or substitute Governmental
Authorizations will be obtained by Buyer at little or no cost in
the ordinary course after application by Buyer therefore.
5.12 Compliance with Law and Requirements. Seller has
conducted its business in compliance in all material respects
with all applicable Laws, rights of concession, licenses,
know-how or other proprietary rights of others, the failure to
comply with which could individually or in the aggregate have a
Material Adverse Effect. Seller is not in violation of any Order
of any Governmental Body affecting its property, business or the
Purchased Assets, the effect of which, individually or in the
aggregate, could have a Material Adverse Effect.
5.13 Employee Benefit Programs. (a) Except asset forth
in Schedule 5.13, neither Seller nor any Affiliate of Seller
maintains or has ever maintained and/or contributed to any
Employee Benefit Plan or other employee benefit plan or
arrangement of any kind whatsoever (such employee benefit plans
or arrangements hereinafter collectively called the "Benefit
Arrangements").
(b) Each Benefit Arrangement has been maintained and
administered at all times substantially in compliance with all
applicable Laws including, without limitation, ERISA and the
Code. All employer contributions required to be made under the
Benefit Arrangements have been fully and timely paid.
(c) No Action involving the Benefit Arrangements has
occurred, is pending or, to the knowledge of Seller and ▇▇▇▇▇▇,
is threatened.
5.14 Certain Fees. Except for ▇▇▇▇▇ ▇▇▇▇▇▇▇, neither
▇▇▇▇▇▇, Seller, nor any of its officers, directors or employees
or its Affiliates has employed any broker or finder or incurred
any other liability for any brokerage fees, commissions or
finders' fees in connection with the Contemplated Transactions.
Buyer and Seller shall each pay one half of ▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ fees;
provided, however, that the total amount of such fees shall not
exceed $50,000.
5.15 Absence of Certain Changes or Events. Except as
reflected in the Financial Information or Schedule 5.15, since
December 31, 1996, there has not been (i) any material adverse
change in the assets or in the condition (financial or other),
results of operations, prospects or business of Seller, (ii) any
material damage, destruction or loss relating to the business or
assets of Seller, whether or not insured, (iii) except as
disclosed on any Schedule hereto, any Liability created or
incurred which Buyer will assume under Section 2.5 hereof, (iv)
any Lien created on any Purchased Asset (v) except in the
ordinary course of business, any increase in, or commitment or
plan adopted to increase, the wages, salaries, compensation,
pension or other benefits or payments to employees, (vi) any
material capital expenditures or commitment to make any such
expenditures with respect to the Purchased Assets or as to which
Buyer will become obligated after the Closing pursuant to this
Agreement, (vii) any condemnation Actions commenced with respect
to any Purchased Asset or notice received by Seller as to the
proposed commencement of any such Actions, (viii) any rights of
substantial value waived with respect to the Purchased Assets or
the Business of Seller, (ix) any sale or transfer of any
Purchased Assets other than dispositions in the ordinary course
of business, (x) any termination or failure to renew, or the
receipt of any written threat to terminate or not renew any
material Contract or (xi) a Material Adverse Effect or any event
or events that individually or in the aggregate could result in a
Material Adverse Effect. Since December 31, 1996, other than
acts relating to the Contemplated Transactions, and except as
otherwise disclosed herein, the Business of Seller has been
conducted in all significant respects only in the ordinary
course, consistent with past practice.
5.16 Equipment Vendors. Schedule 5.16 lists for the 12
months ended December 31, 1996, the __ largest vendors that refer
lease applicants and sell Subject Equipment to Seller. The
relationships of Seller with such vendors are reasonable
commercial working relationships and: (i) no vendor has refused
to provide credit, or has suspended the provision of credit, to
Seller as a result of the failure or delay in payment of amounts
due to such vendors; (ii) all amounts owing to such vendors, if
not in dispute, have been paid in accordance with their
respective terms; (iii) no person within the last twelve months
has threatened in writing to cancel, or otherwise terminate, the
relationship of such person with Seller, and (iv) no person
during the last twelve months has decreased materially or, to
Seller's knowledge, threatened to decrease or limit materially,
its relationship with Seller or intends to decrease or limit
materially its referrals of lease applicants to Seller.
5.17 Environmental Matters. Neither Seller nor any of its
Affiliates has in the past violated and is not now in violation
of any Environmental Laws in connection with the ownership or
operation of any of its assets (including the Purchased Assets)
and the conduct of the Business of Seller. Seller has not
received any notice from any Governmental Body, and does not have
knowledge of any governmental inquiry, with respect to any actual
or alleged violation of any Environmental Laws with respect to
the Purchased Assets or the Business of Seller and there is not
pending or, to the knowledge of Seller and ▇▇▇▇▇▇, threatened any
Action against Seller relating to any violation or threatened
violation of any Environmental Law. There has been no storage,
disposal or treatment of solid wastes or hazardous wastes on,
under or at any real property used by Seller while Seller has
been in possession of such real property and, to Seller's
knowledge, prior to Seller's possession. There has been no
release, including any spill, discharge, leak, emission,
injection, escape or dumping, of any kind onto any real property
used by Seller or into the environment surrounding any such real
property, of any Hazardous Materials, other than those releases
permissible under applicable Laws or allowable under applicable
Permits while Seller has been in possession of such real property
and, to Seller's and ▇▇▇▇▇▇' knowledge, prior to Seller's
possession. Neither Seller nor, to the knowledge of Seller and
▇▇▇▇▇▇, any other person has discovered any occurrence or
condition on any real property adjoining or in the vicinity of
any real property used by Seller that could cause such real
property or any part thereof to be subject to any restrictions on
the ownership, occupancy, transferability or use of such real
property under any Environmental Law.
5.18 Entire business. On the Closing Date, Seller will
transfer to Buyer all of the Purchased Assets used by Seller in
Seller's Business and such Purchased Assets are sufficient to
enable Buyer to carry on the Business.
5.19 Tax Matters. Except as disclosed on Schedule 5.19,
all Tax Returns required to be filed by Seller (or its
predecessors) on or before the Closing Date have been or shall be
timely filed and all Taxes which are due or which may be claimed
to be due have been or shall be paid. All Taxes of Seller
attributable to periods ending on or before the Closing Date
which are not yet due have been adequately provided for and
remain the sole responsibility of Seller and/or ▇▇▇▇▇▇. As of
the time of filing, the Tax Returns correctly reflected (and, as
to any Tax Returns not filed as of the date hereof will correctly
reflect) the facts regarding the income, business, assets,
operations, activities and status of Seller. There are no Tax
Liens upon any property of Seller except for Liens for current
Taxes not yet due and payable. All amounts required to be
withheld by Seller from employees for income Taxes, social
security and other payroll Taxes have been collected and
withheld, and either paid to the respective Governmental Bodies,
set aside in accounts for such purpose, or have been or will be
accrued, reserved against and entered upon the books and records
of Seller. Except for sales Taxes which result from the
consummation of the Contemplated Transactions, Seller has
collected and remitted to the appropriate Tax Authority all sales
and use or similar Taxes required to have been collected on or
prior to the Closing Date and has been furnished properly
completed exemption certificates for all exempt transactions.
Seller has maintained and has in its possession all records,
supporting documents and exemption certificates required by
applicable sales Tax statutes and regulations to be retained in
connection with the collection and remittance of sales and use
Taxes for all periods up to and including the Closing Date.
Seller (or any of its predecessors) is not a party to or has
received any notice with respect to any proposed or pending
Action by any Governmental Body for assessment or collection of
Taxes, or is party to any dispute or threatened dispute and no
such claim for assessment or collection of Taxes has been made
upon Seller. Seller is not a "foreign person" within the meaning
of section 1445 of the Code, and Seller will furnish Buyer with
an affidavit that satisfies the requirements of section 1445 (b)
(2) of the Code. Seller is not and has never been a member of or
included in any consolidated, combined or unitary group for
purposes of filing Tax Returns or paying Taxes at any time.
Seller has no Liability for Taxes of any other person under
Treasury Regulation section 1.1502-6 (or any similar provision of
state or foreign law), or as a transferee of such person, or
under any other provision of law or tax sharing, tax indemnity or
similar Contract.
5.20 Capital Stock; No Subsidiaries. ▇▇▇▇▇▇ owns 100% of
the issued and outstanding common stock of the Seller. Except
for GFL & S, Inc., Seller does not have any equity interest in
any other person.
5.21 Prohibited Payments. Neither Seller nor any of its
officers, directors, employees or agents has offered, paid or
agreed to pay any illegal payment or other illegal consideration
to customers, suppliers, purchasing agents or other customers'
representatives, or engaged in any other illegal reciprocal
practice in respect of sales made or to be made by Seller.
5.22 Affiliate Transactions. Except as set forth on
Schedule 5.22, Seller is not party to any arrangements with any
Affiliate of Seller or ▇▇▇▇▇▇ or any employee of Seller the
absence of which could have a Material Adverse Effect. Schedule
5.22 lists all transactions through the date of this Agreement
(or which were entered prior to such date but continue in effect
to the date thereof) entered into by Seller with any Affiliate of
any of the following: ▇▇▇▇▇▇, Seller, or any directors, officers
or employees of Seller.
5.23 Disclosure. This Agreement, together with all other
documents and instruments to be executed and/or delivered by
Seller or ▇▇▇▇▇▇ in connection herewith, does not and will not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements contained herein
and therein not misleading. There is no fact (other than facts
relating to general economic, social or political conditions or
other facts not specifically relating to the Purchased Assets or
the Business) known to Seller or ▇▇▇▇▇▇ which materially
adversely affects or in the future may, materially adversely
affect the Purchased Assets or the ownership, operation, or use
thereof by Buyer which has not been set forth herein.
6. Representations and Warranties of Buyer. Buyer
represents and warrants to Seller and ▇▇▇▇▇▇ as follows:
6.1 Due Organization; Good Standing and Power. Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Buyer has all requisite
corporate and other power and authority to enter into this
Agreement and any other agreement contemplated hereby and to
perform its obligations hereunder and thereunder.
6.2 Authorization and Validity. The execution, delivery
and performance by Buyer of this Agreement and any other document
contemplated hereby and the consummation by Buyer of the
Contemplated Transactions have been duly authorized by its Board
of Directors. No other corporate or stockholder action is
necessary for the authorization, execution, delivery and
performance by Buyer of this Agreement and any other agreements
contemplated hereby and the consummation by Buyer of the
Contemplated Transactions. This agreement has been duly executed
and delivered by Buyer and constitutes a valid and legally
binding obligation of Buyer, enforceable against Buyer in
accordance with its terms.
6.3 Governmental Approvals: No Conflict. The execution,
delivery and performance of this Agreement and any other
agreements contemplated hereby by Buyer and the consummation by
it of the Contemplated Transactions (i) will not violate (with or
without the giving of notice or the lapse of time or both), or
require any consent, approval, filing or notice under any
provision of any Law, court or administrative order, writ,
judgment or decree applicable to Buyer or its assets or
properties, except for such violations the occurrence of which,
and such consents, approvals, filings or notices the failure of
which to obtain or make, could not, either individually or in the
aggregate, have a material adverse effect on Buyer's ability to
perform its obligations hereunder, and (ii) will
not (with or without the giving of notice or the lapse of time or
both) violate or conflict with, or result in the breach,
suspension or termination of any provision of, or constitute a
default under, or result in the acceleration of the performance
of the obligations of Buyer, under, or in the creation of any
Lien pursuant to the charter or by-laws of Buyer or any Contract
to which Buyer is a party or by which Buyer or any of its assets
or properties is bound, except for such violations, conflicts,
breaches, suspensions, terminations, defaults, accelerations or
Liens which could not have a material adverse effect on Buyer's
ability to perform its obligations hereunder.
6.4 Certain Fees. Except for ▇▇▇▇▇ ▇▇▇▇▇▇▇, neither Buyer
nor any of its officers, directors or employees on behalf of
Buyer, has employed any broker or finder or incurred any other
liability for any brokerage fees, commissions or finders' fees in
connection with the Contemplated Transactions. As provided under
Section 5.14, Buyer and Seller shall each pay one half of ▇▇▇▇▇
▇▇▇▇▇▇▇'▇ fees; provided, however, that the total amount of such
fees shall not exceed $50,000.
6.5 Litigation. There is no Action to which Buyer is a
party pending or, to the knowledge of Buyer, threatened against
it or relating to the business of Buyer or the Contemplated
Transactions. Buyer is not in violation of any term of any
judgment, writ, decree, injunction or order entered by any court
or Governmental Body and outstanding against Buyer with respect
to any of its assets or properties. To the knowledge of Buyer,
there are no facts which could provide a basis for any such
Action. There are no judgments of record against Buyer, nor any
petition in bankruptcy or an insolvency proceeding involved by or
against it, nor has it made any general assignment for the
benefit of creditors.
6.6 Compliance with Law and Requirements. Buyer has
conducted its business in compliance in all material respects
with all applicable Laws, rights of concession, licenses,
know-how or other proprietary rights of others, the failure to
comply with which could individually or in the aggregate have a
Material Adverse Effect on Buyer or its business. Buyer is not
in violation of any Order of any Governmental Body affecting its
property, business or the assets, the effect of which,
individually or in the aggregate, could have a Material Adverse
Effect.
6.7 Environmental Matters. Neither Buyer nor any of its
Affiliates has in the past violated and is not now in violation
of any Environmental Laws in connection with the ownership or
operation of any of its assets and the conduct of the business of
Buyer. Buyer has not received any notice from any Governmental
Body, and does not have knowledge of any governmental inquiry,
with respect to any actual or alleged violation of any
Environmental Laws with respect to the business of Buyer and
there is not pending or, to the knowledge of Buyer, threatened
any Action against Buyer relating to any violation or threatened
violation of any Environmental Law. There has been no storage,
disposal or treatment of solid wastes or hazardous wastes on,
under or at any real property used by Buyer while Buyer has been
in possession of such real property and, to Buyer's knowledge,
prior to Buyer's possession. There has been no release,
including any spill, discharge, leak, emission, injection, escape
or dumping, of any kind onto any real property used by Buyer or
into the environment surrounding any such real property, of any
Hazardous Materials, other than those releases permissible under
applicable Laws or allowable under applicable Permits while Buyer
has been in possession of such real property and, to Buyer's
knowledge, prior to Buyer's possession. Neither Buyer nor, to
the knowledge of Buyer, any other person has discovered any
occurrence or condition on any real property adjoining or in the
vicinity of any real property used by Buyer that could cause such
real property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use
of such real property under any Environmental Law.
6.8 Assumption of Purchased Assets. On the Closing Date,
Buyer will accept and assume from Seller all of the Purchased
Assets used in Seller's Business; provided, however, that Buyer
is only assuming those liabilities of Seller recorded on the
Closing Balance Sheet.
7. Covenants and Agreements.
7.1 Access to Information. Seller agrees to (a) give or
cause to be given to Buyer and its Representatives and potential
financing sources such access, during normal business hours, on
reasonable advance written notice, to the offices, properties,
books and records of Seller as Buyer may from time to time
reasonably request and (b) furnish or cause to be furnished to
Buyer such financial and operating data and other information
with respect to the business and properties (including the
Purchased Assets) of Seller, as Buyer may from time to time
reasonably request. Buyer and its Representatives and potential
sources of financing shall have access, in consultation with
Seller, to such Representatives of Seller as Buyer may reasonably
request. ▇▇▇▇▇▇ shall, and shall cause Seller and its
Representatives to, cooperate fully with Buyer's investigation.
7.2 Conduct of the Business. Seller and ▇▇▇▇▇▇ jointly and
severally agree that, except as required by this Agreement or
otherwise consented to in writing by Buyer, during the period
commencing on the date of this Agreement and ending on the
Closing Date, Seller shall:
(a) operate its business only in the usual, regular and
ordinary manner, on a basis consistent with past practice and, to
the extent consistent with such operation, use its reasonable
efforts to preserve its present business organization intact,
keep available the services of its present employees and preserve
its present business relationships;
(b) maintain its books, accounts and records relating to
its business in the usual, regular and ordinary manner, on a
basis consistent with past practice, comply with and perform in
all material respects all Laws and contractual and other
obligations applicable to it or its business;
(c) except for Equipment Leases entered into in the
ordinary course of business, not enter into any Contract which is
not terminable by the parties upon 30 days notice or less or
which involves aggregate consideration in excess of $1,000.00;
(d) not (i) dispose of or abandon any of the Purchased
Assets, other than in the ordinary course of business, consistent
with past practice, (ii) enter into, change, waive or otherwise
modify any Contract, other than in the ordinary course of
business consistent with past practice, (iii) enter into or
engage in any transaction with any Affiliate other than to
continue existing business relationships with Affiliates;
(e) not change any material accounting principle and Seller
shall maintain its books, accounts, and records in conformity
with past practices;
(f) not authorize or make any capital expenditures
involving the payment or Liability of $5,000 or more in the
aggregate; or
(g) authorize any of, or commit or agree to take any of,
the foregoing actions.
7.3 Further Actions. Subject to the terms and conditions
hereof, Seller and Buyer agree to use 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 to consummate and make
effective the Contemplated Transactions, including using its
reasonable efforts (without payment of money, commencement of an
Action or the assumption of any material obligation): (i) to
obtain at the earliest practicable date prior to the Closing Date
(pursuant to instruments reasonably satisfactory to Buyer in form
and substance) all Permits and consents, approvals,
authorizations, qualifications and orders of Governmental Bodies
and other third parties to Contracts with Seller as are necessary
for the consummation of the Contemplated Transactions; (ii) to
effect all necessary registrations and filings; (iii) to furnish
to each other such information and assistance as reasonably may
be requested in connection with the foregoing; and (iv) to assist
Buyer in obtaining prior to the Closing Date all Governmental
Authorizations as are necessary in order to enable Buyer to
conduct the business of Seller in the ordinary course as of and
from the opening of business on the Closing Date. To the extent
that any consent or approval is not obtained with respect to any
Contract as contemplated above, this Agreement shall not
constitute an assignment or an attempted assignment thereof. In
each such case, without prejudicing or limiting Buyer's rights
under other Sections of this Agreement, Seller agrees to
cooperate with Buyer in any reasonable arrangement designed to
provide for Buyer the benefits under any such Contract, including
enforcement at the cost and for the account of Buyer of any and
all rights of Seller against the other party or otherwise. If
and to the extent that such arrangement cannot be made, Buyer
shall not have any Liability with respect to any such Contract.
7.4 Notification. Seller shall promptly notify Buyer and
keep it advised of (i) any Action instituted or threatened in
writing against Seller which could, if adversely determined, have
a Material Adverse Effect; (ii) any material damage or
destruction of any of the Purchased Assets; (iii) any material
adverse change in the condition (financial or other), results of
operations, assets, business or prospects of Seller, including
the Purchased Assets and the Business; (iv) any termination of an
employee relationship with Seller; (v) any notice from any
Governmental Body in connection with the Contemplated
Transactions; and (vi) any event, condition or circumstance that
would constitute a violation or breach of any representation,
warranty or covenant contained herein.
7.5 No Inconsistent Action. The parties hereto shall not
take any action inconsistent with their obligations under this
Agreement or which could materially hinder or delay the
consummation of the Contemplated Transactions. None of the
parties hereto shall take or omit to take any action that could
result in any of their respective representations and warranties
not being true in all material respects as of the Closing Date.
7.6 Seller Employees. Seller shall not interfere with the
efforts of Buyer to hire those employees of Seller whom Buyer
wishes to employ after the Closing. Seller covenants and agrees
that it will not be a party to any action or activity which would
deprive Buyer of the services of the foregoing employees of
Seller. Buyer shall have no obligation and by this Agreement
does not assume any obligation to any employee of Seller, except
as may specifically be negotiated by such employee and Buyer.
Nothing herein shall be deemed to constitute Buyer a successor
employer to Seller. Seller shall remain solely responsible for
all wages, sick leave, vacation pay or other benefits which may
be due to such employees prior to the Closing.
7.7 Change of Names. At the Closing, Seller shall, and
▇▇▇▇▇▇ shall cause Seller to, relinquish any and all rights any
of them may have in and to the trade name "Global Finance &
Leasing" and any other trade name, trademark or service ▇▇▇▇ used
by them or any of their affiliates and convey to Buyer any and
all such rights. Promptly following the Closing (and, in any
event, within fifteen (15) business days following the Closing
Date) Seller shall, and ▇▇▇▇▇▇ shall cause Seller to, take such
action as necessary to change the name of Seller so that such
name will not resemble the trade name "Global Finance & Leasing".
Immediately after the Closing Date, Seller shall discontinue
using and deliver to Buyer any assets in its possession
including, without limitation, stationery, business cards and
literature, bearing the trade name "Global Finance & Leasing."
7.8 Negotiations with Others. From and after the date
hereof unless and until this Agreement shall have terminated in
accordance with its terms, ▇▇▇▇▇▇ will not, and will not permit
Seller, or any officer, director, employee or other
representative of Seller to, directly or indirectly (a) solicit,
engage in discussions or engage in negotiations with any person
(other than Buyer or any of its Affiliates) with respect to an
Acquisition Proposal; (b) provide information to any person
(other than Buyer or any of its Affiliates) in connection with an
Acquisition Proposal; or (c) enter into any transaction with any
person (other than Buyer or any of its Affiliates) with respect
to an Acquisition Proposal. If any of ▇▇▇▇▇▇, Seller, or any of
their Representatives receives any offer or proposal to enter
into discussions or negotiations relating to any of the above,
Seller will immediately notify Buyer in writing as to the
identity of the offeror or the party making any such proposal and
the specific terms of such offer or proposal.
7.9 Bulk Sales Law. The parties agree to waive
compliance with the provisions of the Bulk Sales Law of any
jurisdiction.
7.10 Public Announcements. Upon execution of this
Agreement, Buyer may issue a news release or other public
announcement regarding the Contemplated Transactions. No other
public announcements will be made by Seller or ▇▇▇▇▇▇ without the
prior written consent of Buyer.
7.11 Expenses. Subject to Section 7.12, whether or not the
Contemplated Transactions are completed, each of the parties
hereto shall pay the fees and expenses incurred by it in
connection with the negotiation, preparation, execution and
performance of this Agreement, including, without limitation,
attorneys' and accountants' fees. The foregoing shall not affect
the legal right, if any, that any party hereto may have to
recover expenses from any other party that breaches its
obligations hereunder.
7.12 Transfer Taxes and Recording Expenses. Seller shall
bear and pay any and all sales, motor vehicle or transfer Taxes
and recording expenses, if any, required to be paid in connection
with the transfer of the Purchased Assets (including any
interest, charge or penalty with respect thereto).
7.13 Books and Records. From and after the Closing, Buyer
and Seller, at the expense of the requesting party, shall make
available to each other (including the right to make copies) any
and all books and records of or relating to Seller reasonably
requested in connection with (a) any matter for which
indemnification is claimed; (b) any inquiry or investigation by
any Governmental Body; or (c) any Action. Buyer and Seller shall
retain, or cause to be retained, for as long as any taxable year
in the Tax period (including partial periods) that ends on or
prior to the Closing Date, including but not limited to any short
taxable year required under Section 1.1502-76 of the Treasury
regulations, shall remain open for assessment of Taxes, any
material records or information which may be relevant to any such
Tax returns or audits or other examinations by any Tax Authority
relating to the Company, and shall not dispose of any such Tax
returns, books or records relating to
the Company during such period.
7.15 Confidentiality. (a) Buyer, on the one hand, and
▇▇▇▇▇▇ and Seller, on the other hand, each shall hold in strict
confidence, and shall use its best efforts to cause all its
Representatives to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or by other
requirements of Law, including disclosure required by applicable
securities laws, all confidential or proprietary information
concerning Seller (in the case of Buyer) and Buyer (in the case
of the Seller) which is created or obtained prior to, on or after
the dates hereof in connection with the Contemplated
Transactions, and Buyer and Seller each shall not use or disclose
to others, or permit the use of or disclosure of, any such
information created or obtained except (i) to its officers,
directors, employees, Representatives and lending institutions
who need to know such information in connection with this
Agreement, and (ii) to the extent that such information can be
shown to have been (A) previously known by Buyer or Seller, as
the case may be, or (B) in the public domain through no fault of
Buyer or Seller, as the case may be, or any of their respective
Representatives.
(b) If the Contemplated Transactions are consummated,
Seller and ▇▇▇▇▇▇ shall each hold in strict confidence, and shall
use its best efforts to cause all its Representatives to hold in
strict confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of Law, all
information concerning the Business and Seller and ▇▇▇▇▇▇ each
shall not use or disclose to others, or permit the use of or
disclosure of any such information except to the extent that such
information can be shown to have been in the public domain
through no fault of Seller or ▇▇▇▇▇▇ or any of their respective
Representatives.
8. Termination
8.1 General. This Agreement may be terminated and the
Contemplated Transactions abandoned (a) by mutual consent of
Buyer and Seller, (b) by Buyer, if there has been breach of
Seller's or ▇▇▇▇▇▇' covenants and agreements hereunder or if the
conditions contained in Sections 4.1 and 4.2 cannot be fulfilled
on or before the Closing Date, as extended by agreement of the
parties, (c) by Seller, if there has been a breach of Buyer's
covenants and agreements hereunder or if the conditions contained
in Sections 4.1 and 4.3 cannot be fulfilled on or before the
Closing Date, as extended by agreement of the parties, or (d) by
any party by notice to the other parties in the event that the
Closing, as extended by agreement of the parties, shall not have
occurred on or before April 11, 1997; provided however, that if
the Closing shall not have occurred on or before April 11, 1997,
due to the act or omission of one of the parties, that party may
not terminate the Agreement, except that no party shall be deemed
to have willfully taken action or to have willfully omitted to
take action for purposes hereof by reason of such party's failure
or refusal to (i) pay money to any third parties, (ii) commence
litigation, (iii) assume any other material obligation not
otherwise required to be assumed by this Agreement or (iv) agree
with any Governmental Body or any other person that such party
will divest or hold separate any assets as a condition of
completing any of the Contemplated Transactions.
8.2 No Liabilities in Event of Termination. In the event of
any termination of the Agreement pursuant to Section 8.1, this
Agreement shall forthwith become null and void and of no further
force or effect and there shall be no Liability on the part of
Buyer, Seller or ▇▇▇▇▇▇, except under Sections 7.11, 7.15, 8.3
and 9 of this Agreement which shall remain in full force and
effect, and except that termination shall not preclude any party
from suing any other party for breach of this Agreement.
8.3 Non-Solicitation. All parties further agree that for
one (1) year following the termination of this Agreement pursuant
to Section 8.1, that they will not solicit for employment or hire
any employees of any other party to this Agreement.
9. Indemnification
9.1 Survival of Representations. The representations,
warranties, covenants and agreements contained in this Agreement,
and in any agreements, certificates or other instruments
delivered pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigations made by or on behalf
of any party, but subject to all express limitations and other
provisions contained in this Agreement. Such representations and
warranties shall survive the Closing hereunder: (a) for the
applicable statute of limitations period with respect to matters
covered by Section 5.19; and (b) for three (3) years with respect
to all other matters.
9.2 Seller and ▇▇▇▇▇▇ Indemnity. Seller and ▇▇▇▇▇▇,
jointly and severally agree to indemnify and hold harmless Buyer
and its Affiliates against and in respect of (i) all Liabilities
of Seller or any of its Affiliates not assumed by Buyer pursuant
to this Agreement or under any other agreement executed and
delivered by the parties in furtherance of the transactions
described herein; (ii) any Claim, cost, loss, Liability or damage
incurred or sustained by Buyer or its Affiliates as a result of
any misrepresentation or breach of warranty by Seller or ▇▇▇▇▇▇
or a breach by Seller or ▇▇▇▇▇▇ of any covenant or other
agreement contained herein or under any other agreement executed
and delivered by the parties in furtherance of the transactions
described herein; (iii) Liabilities for sales, use, income and
other Taxes arising at any time out of the operation of the
Business of Seller and its Affiliates prior to the opening of
business on the Closing Date; (iv) any Claim, cost, loss,
Liability or damage incurred or sustained by Buyer or its
Affiliates as a result of the operation of the Business of Seller
and its Affiliates prior to the opening of business on the
Closing Date, except to the extent specifically assumed by Buyer
pursuant to this Agreement and (v) all Claims, liabilities,
losses, costs and expenses incurred by Buyer (in excess of the
Holdback) arising out of or in connection with all transactions
between Seller and LINC, including, without limitation,
repurchases of leases by Buyer from LINC due to a payment default
by lessee within the first three payments after being purchased
by LINC or a default by Seller of its other representations,
warranties or covenants in favor of LINC. Seller and ▇▇▇▇▇▇
jointly and severally agree to indemnify and hold harmless Buyer
and its Affiliates against and in respect of all reasonable costs
and expenses (including reasonable attorneys' fees and
disbursements) incurred by Buyer or its Affiliates in connection
with any Action, demand, assessment or judgment incident to any
of the matters indemnified against in this Section 9.2. Buyer
shall not assert a claim for indemnification from Seller or
▇▇▇▇▇▇ under this Section 9.2 unless and until the aggregate
amount of Buyer's claims exceeds $250,000, at which time this
sentence shall be of no further force and effect and Buyer shall
be entitled to fully assert all such existing claims.
9.3 Buyer Indemnity. Buyer agrees to indemnify and hold
harmless Seller, ▇▇▇▇▇▇ and their respective Affiliates against
and in respect of (i) any Claim, cost, loss, Liability or damage
incurred or sustained by Seller, ▇▇▇▇▇▇ or any of their
respective Affiliates as a result of the failure by Buyer to
assume and discharge the Assumed Liabilities; (ii) any Claim,
cost, loss, Liability or damage incurred or sustained by Seller,
▇▇▇▇▇▇ or any of their respective Affiliates as a result of any
misrepresentation or breach of warranty by Buyer or a breach by
Buyer of any covenant or other agreement contained herein or
under any other agreement executed and delivered by the parties
in furtherance of the transactions described herein; (iii)
Liabilities for sales, use, income and other Taxes accruing and
incurred as result of the operation of the Business subsequent to
the Closing; and (iv) any Claim, cost, loss, Liability or damage
incurred or sustained by Seller, ▇▇▇▇▇▇ or any of their
respective Affiliates as a result of the operation of the
Business by Buyer following the opening of business on the
Closing Date. Buyer agrees to indemnify and hold harmless
Seller, ▇▇▇▇▇▇ and their respective Affiliates against and in
respect of all reasonable costs and expenses (including
reasonable attorneys' fees and disbursements) incurred by such
parties in connection with any Action, demand, assessment or
judgment incident to any of the matters indemnified against in
this Section 9.3.
9.4 Procedures for Indemnification. Promptly after
receipt by an indemnified party under this Section 9 of notice of
any Claim, the commencement of any Action, or the discovery of
any facts or circumstances which could reasonably result in, if
not attended to, a Claim or commencement of any Action, the
indemnified party shall, if a Claim in respect thereof is to be
or may be made against the indemnifying party under this Section
9, notify the indemnifying party in writing of the Claim, the
commencement of that Action or state of facts of circumstances;
provided that, the failure to notify the indemnifying party shall
not relieve it from any Liability which it may have to the
indemnified party, except to the extent it is actually prejudiced
as a result of such delay. If any such Claim shall be brought
against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be
entitled to participate at its cost and expense jointly with the
indemnified party in the indemnified party's defense, settlement
or other disposition of any such Claim. With respect to any such
Claim relating solely to the payment of money damages and which
will not result in the indemnified party's becoming subject to
injunctive or other relief or otherwise materially adversely
affect the business of the indemnified party in any manner, and
as to which the indemnifying party shall have acknowledged in
writing the obligation to indemnify the
indemnified party hereunder, the indemnifying party shall have
the sole right to defend, settle or otherwise dispose of such
claim on such terms as the indemnifying party, in its sole
discretion, shall deem appropriate; provided, however that the
indemnifying party shall obtain the written consent of the
indemnified party, which shall not be unreasonably withheld,
prior to ceasing to defend, settling or otherwise disposing of
any such claim if as a result thereof the indemnified party would
become subject to injunctive or other equitable relief or the
business of the indemnified party would be materially adversely
affected in any manner; and provided, further, that if the
indemnified party has elected to be represented by separate
counsel pursuant to the proviso to the following sentence, such
settlement or compromise shall be effected only with the consent
of the indemnified party, which consent shall not be unreasonably
withheld. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other
expenses subsequently incurred by the indemnified party in
connection with the defense thereof. The indemnified party shall
have the right to employ counsel to represent it if, in the
indemnified party's reasonable judgment, it is advisable for the
indemnified party to be represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall
be paid by the indemnified party. The parties each agree to
render to the other parties such assistance as may reasonably be
requested in order to insure the proper and adequate defense of
any such claim or proceeding.
9.5 Additional Agreements. (a) The parties agree that
Buyer shall be permitted to offset against any payments due
Seller or ▇▇▇▇▇▇ under this Agreement or under any other
agreement contemplated herein (except for the Employment
Contract, against which no offset shall be made) the amount of
any indemnification payments required to be made by Seller or
▇▇▇▇▇▇ pursuant to this Section 9, provided, however, that if it
is subsequently determined that any such offset was not proper,
Buyer shall pay to the person against whom such offset was made,
in addition to the amount of such offset, interest thereon at the
rate of 2% in excess of the Buyer's cost of borrowing at such
time from the date such payment should have been paid to Seller
or ▇▇▇▇▇▇.
(b) The parties agree that any indemnification payments
made pursuant to this Agreement shall be treated for tax purposes
as an adjustment to the Purchase Price, unless otherwise required
by applicable Law.
10. Miscellaneous
10.1 Notices. All notices, requests, demands and other
communications which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been
duly given if delivered personally, telecopied or sent by
nationally recognized overnight carrier, or mailed by certified
mail, postage prepaid, return receipt requested, as follows:
(a) If to Seller or ▇▇▇▇▇▇, to:
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to Buyer:
Granite Financial Acquisition Corp. I
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as any party shall have specified by
notice in writing to the other parties. All such notices,
requests, demands and communications shall be deemed to have been
received on the date of personal delivery or on the first
Business Day after dispatch by an overnight carrier or on the
third Business Day after mailing by certified mail, return
receipt requested.
10.2 Entire Agreement. This Agreement (including the
Exhibits and Schedules thereto) constitutes the entire agreement
between the parties hereto and supersedes all prior agreements
and understandings, oral and written, between the parties hereto
with respect to the subject matter thereof.
10.3 Binding Effect; Benefit. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their
respective successors and assigns. Nothing in this Agreement,
expressed or implied, is intended to confer on any person other
than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
10.4 Assignability. Except as set forth in Section 10.12,
this Agreement shall not be assignable, in whole or in part, by
any party hereto without the prior written consent of the other
parties thereto.
10.5 No Third Party Beneficiaries. Nothing herein expressed
or implied shall confer upon any of the employees of Seller any
rights or remedies, including, without limitation, any right to
employment, or continued employment for any specified period, of
any nature or kind under or by reason of this Agreement.
10.6 Amendment; Waiver. This Agreement may be amended,
supplemented or otherwise modified only by a written instrument
executed by the parties thereto. No waiver by any party of any
of the provisions hereof shall be effective unless explicitly set
forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to
this Agreement, including without limitation, any investigation
by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any
representations, warranties, covenants, or agreements contained
herein, or in any documents delivered or to be delivered pursuant
to this Agreement or in connection with the Closing hereunder.
The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
10.7 Severability. If any provision of this Agreement shall
be declared by any court of competent jurisdiction to be illegal,
void, or unenforceable, all other provisions of this Agreement
shall not be affected and shall remain in full force and effect.
10.8 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original and all of which together shall be deemed to be one and
the same instrument.
10.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Colorado
without regard to conflicts of laws principles thereof.
10.10 Attorneys' Fees. In the event of any litigation
concerning any controversy, Claim or dispute between the parties
hereto, arising out of or relating to this Agreement or the
breach hereof, or the interpretation hereof, the prevailing party
shall be entitled to recover from the losing party reasonable
expenses, attorneys' fees and costs incurred therein or in the
enforcement or collection of any judgment or award rendered
therein. The "prevailing party" means the party determined by
the court to have most nearly prevailed, even if such party did
not prevail in all matters, not necessarily the one in whose
favor a judgment is rendered.
10.11 Exhibits. All Exhibits and Schedules attached
hereto are hereby incorporated by reference into, and made a part
of, this Agreement. The disclosure contained in any one Schedule
to this Agreement, if by its description in such Schedule is
clearly applicable to other sections of this Agreement, will also
be deemed to have been made with respect to such other sections
even if such disclosure is not repeated in any other Schedules.
10.12 Designated Buyer. It is understood and agreed
between the parties that Buyer may cause one or more Affiliates
or other entities designated by it (the "Designated Buyer") to
carry out all or part of the Contemplated Transactions to be
carried out by Buyer; provided, that Buyer nevertheless shall
remain liable for all of its obligations and those of any
Designated Buyer hereunder.
10.13 Arbitration. Each party hereby agrees to submit
to binding arbitration in Denver, Colorado, all disputes or
controversies arising out of or in conjunction with this
Agreement in accordance with the commercial arbitration rules of
the American Arbitration Association then in effect. The
prevailing party in any such arbitration shall be entitled to an
award of reasonable attorneys fees, costs and disbursements,
including reimbursement for costs of witness' travel and
subsistence incurred as a result of such arbitration. Judgment
upon any arbitration award rendered
may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Asset Purchase Agreement as of the date first
above written.
Granite Financial Acquisition Corp.
I
By:
___________________________________
Title:
__________________________________
Global Finance & Leasing, Inc.
By:
___________________________________
Title:
__________________________________
___________________________________
_____
▇▇▇▇▇▇ ▇▇▇▇▇▇, individually
