PURCHASE AND SALE OF ASSETS AGREEMENT
THIS
PURCHASE AND SALE OF ASSETS AGREEMENT
(the
“Agreement”) is executed and delivered as of April __, 2008, among Market &
Research Corp. (f/k/a Cable & Co Worldwide, Inc.), a Delaware corporation
(“Buyer”) having its principal place of business in Connecticut; and Precision
Opinion, Inc., a Nevada Corporation (“Seller”) having its principal place of
business in Nevada; and ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇, being
all of the shareholders of Seller (the “Shareholders”).
RECITALS
A. Seller
operates a market research and opinion polling business based in Las Vegas,
Nevada (the “Business”).
B. Buyer
desires to purchase and acquire substantially all of Seller’s assets, properties
and contractual rights used in connection with the Business, and Seller desires
to sell such assets, properties and contractual rights to Buyer.
C. The
Shareholders own all of the issued and outstanding shares of Seller’s capital
stock.
D. Buyer
is
not willing to enter into this Agreement without the representations, warranties
and agreements of the Shareholders set forth in this Agreement.
E. The
Shareholders desire that Seller sell such assets, properties and contractual
rights to Buyer and, to induce Buyer to enter into this Agreement, are willing
to make the representations, warranties and agreements set forth in this
Agreement.
Accordingly,
for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
ARTICLE
1
DEFINITIONS
1.1 Certain
Defined Terms.
Capitalized terms shall have the meanings assigned to them in Exhibit
A.
ARTICLE
2
DESCRIPTION
OF ASSETS
2.1 Description
of Assets.
Upon
the terms and subject to the conditions set forth in this Agreement, and subject
to the exclusions set forth in Section 2.2, Seller shall, on the Closing Date,
sell to Buyer the following assets, properties and contractual rights (the
“Assets”), free and clear of all Encumbrances:
2.1.1 the
Equipment, including that listed on Schedule
2.1.2;
2.1.2 the
Customer Contracts, and, if any, the Employee Contracts. A complete and accurate
list of the Customer Contracts and the Employee Contracts is set forth on
Schedule
2.1.4;
2.1.3 the
Intellectual Property Rights, which specifically include the name Precision
Opinion;
2.1.4 all
of
the goodwill of the Business;
2.1.5 the
Office Equipment, including that listed on Schedule
2.1.8;
2.1.6 the
Systems, as the same are described on Schedule
2.1.9;
2.1.7 all
of
the Restrictive Agreements that benefit Seller or the Business;
2.1.8 all
manufacturer’s or other warranties relating to the Assets;
2.1.9 the
telephone and facsimile number(s) used in the operation of the Business;
and
2.1.10 all
of
the other assets, properties and contractual rights used or for use in the
Business and owned or leased by Seller, including assignment to Buyer of
Seller’s Real Estate Lease.
2.2 Excluded
Assets.
There
shall be excluded from the Assets the following which are not being sold to
Buyer pursuant to this Agreement (the “Excluded Assets”): (a) cash and cash
equivalents, except as provided in Section 3.3; (b) the corporate records and
corporate seal of Seller; and (c) all contracts and contract rights and
obligations of Seller (whether oral or in writing) other than the Customer
Contracts, the Employee Contracts, the Real Estate Lease, the Restrictive
Agreements that benefit Seller or the Business and the manufacturers’ or other
warranties relating to the Assets.
2.3 Non-Assignment
of Certain Assets.
Notwithstanding anything to the contrary in this Agreement, to the extent that
the assignment of any Customer Contract, Employee Contract, Real Estate Lease
or
Restrictive Agreement shall require the Consent of any Person not a party to
this Agreement, neither this Agreement nor any action taken pursuant to it
shall
constitute an assignment or an attempt to assign the same if such assignment
or
attempted assignment would constitute a breach thereof or result in the loss
or
diminution thereof.
ARTICLE
3
PURCHASE
PRICE
3.1 Purchase
Price.
Subject
to adjustment pursuant to the terms of this Agreement, Buyer shall pay to Seller
for the Assets the sum of Five Hundred Sixty-Eight Thousand Three Hundred and
Ten Dollars ($568,310) (the “Initial Payment”), plus the amount (if any)
required by Section 3.1.2, plus the Earn Out Amount as defined below, and pay
the balance then due from Buyer to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, P.C. (the “Purchase Price”),
all payable as follows:
2
3.1.1 the
Initial Payment at the Closing;
3.1.2 such
additional amount, if any, equal to additional loans to the Seller, made by
the
Shareholders, or any one of them, plus accrued interest on any such loans at
the
rate of eight percent (8%) per annum, on terms previously and mutually agreed
to
in writing or by email correspondence by ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ between
the
date of this Agreement and Closing.
3.2 Earn
Out. Within
thirty days after December 31, 2009 Buyer shall pay to Seller an additional
amount (the “Earn Out Amount”) equal to five times the EBITDA of the Precision
Opinion division of Buyer for the calendar year 2009 less the Initial Payment
and the amount of any loans made pursuant to Section 3.1.2 hereof. The Earn
Out
Amount shall be paid one-half in cash and one-half in common shares Buyer’s
stock, valued at the average of the bid price for the first ten business days
in
January 2010. For purposes of calculating EBITDA, the following shall apply:
"EBITDA"
for the
Earn Out Amount shall mean earnings before interest, taxes, depreciation and
amortization of the Precision Opinion division of Buyer (the “Division”).
Earnings shall be the net earnings of the Division, meaning gross revenue of
the
Division less
all
direct expenses of the Division, except that no compensation for ▇▇▇▇▇ ▇▇▇▇▇▇
in
excess of $175,000 per year plus his three percent (3%) of gross sales override
of the Division shall be included as a direct expense. Expenses shall include
all direct expenses incurred by the Division, but shall not include any indirect
expenses such as parent company overhead, allocations of parent company expenses
for human resource management, senior management or other similar non-direct
costs.
3.3 Allocation
of Purchase Price.
The
Purchase Price shall be allocated among the Assets by Buyer, with the consent
of
Seller (which consent shall not be unreasonably withheld), based upon the fair
market value of the Assets in accordance with Section 1060 of the Code. Each
of
the parties agrees to report the Transactions for Tax purposes in accordance
with such allocation of the Purchase Price.
ARTICLE
4
CLOSING
4.1 Time
and Place of Closing.
Unless
otherwise agreed to by the parties, the Transactions shall be closed immediately
after the completion, satisfaction or waiver of each of the conditions to
closing set forth in Articles 10 and 11 (the “Closing”), at the offices of
▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The
assignment of the Leased Real Property shall be consummated simultaneously
at
Closing.
4.2 Deliveries
by Seller and the Shareholders.
At the
Closing, Seller and the Shareholders shall deliver to Buyer, all duly
executed:
4.2.1 the
▇▇▇▇
of Sale in the form of Exhibit
C,
together with vehicle titles duly endorsed for transfer and such other separate
instruments of sale, transfer or assignment as Buyer reasonably
requests;
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4.2.2 certified
copies of resolutions of the directors of Seller and of the Shareholders
authorizing the execution of this Agreement, the sale of the Assets to Buyer,
and the consummation of the Transactions, along with an incumbency certificate
of Seller, in substantially the form of Exhibit
D;
4.2.3 an
opinion of counsel for Seller and the Shareholders in substantially the form
of
Exhibit
E;
4.2.4 an
employment agreement for ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ in a form to be determined by ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇ and Buyer (the “Employment Agreement”);
4.2.5 a
closing
certificate in the form of Exhibit
G
signed
by a duly authorized officer of Seller and by each of the
Shareholders;
4.2.6 all
original, executed Consents;
4.2.7 subject
to Section 4.7, an Assignment, Assumption and Consent to the Real Estate
Land;
4.2.8 a
sworn
affidavit in the form of Exhibit
H
stating,
under penalty of perjury, that Seller is not a “foreign person” as defined under
the Code or other appropriate evidence that Buyer is not required to withhold
Taxes under Section 1445(a) of the Code;
4.2.9 copies
of
all documents evidencing the loan arrangement between Seller and Bank of the
West; and
4.2.10 such
other documents or instruments as Buyer may reasonably request.
4.3 Deliveries
by Buyer.
At the
Closing, Buyer shall deliver to Seller, all duly executed (where
applicable):
4.3.1 the
portion of the Purchase Price set forth in Sections 3.1.1 and 3.1.2, as adjusted
pursuant to Sections 3.4 and 3.5;
4.3.2 a
closing
certificate in the form of Exhibit
I
signed
by a duly authorized officer of Buyer; and
4.3.3 such
other documents or instruments as Seller and the Shareholders may reasonably
request.
4.8 Prorations
and Charges.
With
respect to Leased Real Property, the parties shall prorate rent, insurance
costs, real estate Taxes, operating costs (e.g., CAMs) and any other amounts
due
under the applicable Real Estate Lease as of the Closing Date. If any prorated
amounts are not known as of the Closing Date, adjustments shall be made post
Closing at such time as they are known to the parties.
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ARTICLE
5
CERTAIN
COVENANTS
5.1 Further
Assurance.
From
time to time on and after the Closing and without further consideration, the
parties to this Agreement shall each deliver or cause to be delivered to any
other party, at such times and places as shall reasonably be requested, such
additional instruments as any of the others may reasonably request for the
purpose of carrying out this Agreement and the Transactions. Seller agrees,
and
the Shareholders agree to cause Seller, without further consideration, to
cooperate with Buyer and to use their reasonable efforts to have the officers
and employees of Seller cooperate on and after the Closing Date in furnishing
to
Buyer information, evidence, testimony, and other assistance in connection
with
obtaining all necessary permits and approvals and in connection with any
actions, proceedings, arrangements or disputes of any nature with respect to
matters pertaining to all periods before the Closing Date.
5.2 Transition.
Neither
Seller nor any Shareholder shall take any action that is designed or intended
to
have the effect of (a) discouraging any customer or business associate of Seller
from maintaining the same business relationships with Buyer after the Closing
that such customer or business associate maintained with Seller before the
Closing or (b) interfering with Buyer’s operation of the Business after the
Closing. Seller and the Shareholders shall refer all customer inquiries relating
to the Business to Buyer from and after the Closing. Further, Seller and the
Shareholders agree that for a period of 90 days following the Closing Date,
they
will, without additional consideration, assist Buyer with the orderly transition
of the operations of the Business from Seller to Buyer.
5.3 Name
Change.
On the
Closing Date or within 30 days thereafter, Seller shall file, and Shareholders
shall cause Seller to file, with the appropriate Governmental Authorities in
the
state of Seller’s incorporation and in other states where Seller is qualified to
transact business as a foreign corporation or other foreign entity such
documents as may be necessary, and shall take such additional action as may
be
necessary, to change Seller’s name to a name not including the word(s)
“Precision Opinion.” In addition, from and after the Closing Date, Seller shall
not, and Shareholders shall cause Seller not to, use any of the Intellectual
Property Rights.
5.4 Additional
Assets.
If
additional assets or rights forming a part of, used in or intended to be used
in, or necessary in the conduct of, the Business, other than Excluded Assets,
are identified post-Closing as not having been adequately transferred to Buyer,
Seller shall promptly transfer and assign to Buyer such assets or rights without
additional consideration.
5.5 Right
of Repurchase. In
the
event that Buyer fails to pay Seller the Earn Amount as and when due, Seller
shall have the right to repurchase the Assets for the sum of One Hundred Dollars
($100.00). In the event Seller exercises its rights hereunder, Seller shall
also
assume the leasehold obligations for the Precision Opinion Division, and the
employment agreement between ▇▇▇▇▇ ▇▇▇▇▇▇ and the Buyer shall terminate. Seller
shall give notice to Buyer no later than February 7, 2010 of its intent to
exercise this right of repurchase and upon tender of the One Hundred Dollars,
Buyer shall deliver to Seller a ▇▇▇▇ of Sale conveying title to the Assets
to
Buyer, free and clear of all liens and claims (other than those liens and claims
that existed or arose prior to the Closing). Further, any non-competition
agreements between Seller, Shareholders and Buyer shall immediately terminate
and have no further force and effect.
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ARTICLE
6
REPRESENTATIONS
AND WARRANTIES
OF
SELLER AND THE SHAREHOLDERS
Seller
and the Shareholders, jointly and severally, represent and warrant to Buyer
that
the statements contained in this Article 6, except as set forth in the
Disclosure Schedules: (a) are correct and complete as of the date of this
Agreement; and (b) will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of
this Agreement throughout this Article 6). The mere listing (or inclusion of
a
copy) of a document or other item shall not be deemed adequate to disclose
an
exception to a representation or warranty made in this Agreement unless (a)
the
representation or warranty has to do with the existence of the document or
other
item itself or (b) the Disclosure Schedule identifies the exception with
particularity (such as with a cross-reference to a section in a disclosed
agreement) and summarizes the relevant facts in reasonable detail.
Wherever
a representation or warranty in this Agreement is qualified as having been
made
“to the best of Seller’s knowledge,” such phrase shall mean the knowledge of the
Shareholders, Seller and the officers, directors and employees of Seller
responsible for the operation of the Business or the Assets, after reasonable
inquiry.
6.1 Organization;
Authority; Name.
6.1.1 Seller
is
a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation and is duly authorized, qualified and
licensed under all applicable Laws to carry on its business in the places and
in
the manner as presently conducted, except for where the failure to be so
authorized, qualified or licensed would not have a Material Adverse
Effect.
6.1.2 Seller
and each Shareholder have the full legal right, power and authority to enter
into this Agreement and to consummate the Transactions. On or before the
Closing, all corporate action of Seller and the Shareholders necessary to
approve the Transactions shall have been taken.
6.2 Stock
Ownership; Binding Effect.
The
Shareholders own all of the issued and outstanding shares of Seller’s capital
stock and no Person other than the Shareholders has any right to vote such
shares. Seller and each Shareholder have duly executed and delivered this
Agreement, and (assuming due authorization, execution and delivery by Buyer)
this Agreement constitutes a legal, valid and binding obligation of Seller
and
each Shareholder enforceable against each of them in accordance with its
terms.
6.3 No
Conflict.
The
execution, delivery and performance of this Agreement by Seller and the
Shareholders and the consummation of the Transactions do not and will not:
(a)
violate, conflict with or result in the breach of any provision of Seller’s
Articles of Incorporation or Bylaws; (b) conflict with or violate any Law or
Governmental Order applicable to the Assets, the Business, Seller, the
Shareholders or any of their respective assets, properties or businesses; or
(c)
except as set forth in Schedule
6.3(c),
conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time would become a default) under,
require any Consent under, or give to any other Person any rights of
termination, amendment, acceleration, suspension, revocation or cancellation
of,
or result in the creation of any Encumbrance on the Assets or the properties
of
Seller pursuant to any note, bond, mortgage, indenture, contract, agreement,
lease, sublease, license, permit, authorization, franchise or other instrument
or arrangement to which Seller or any Shareholder is a party or by which any
of
the Assets are bound or affected.
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6.4 Governmental
Consents and Approvals.
Except
for ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act approval, if applicable, and except as set forth
in
Schedule
6.4,
the
execution, delivery and performance of this Agreement by Seller and the
Shareholders do not and will not require any Consent or action by, filing with
or notification to, any Governmental Authority.
6.5 Financial
Information; Books and Records.
Complete and accurate copies of the balance sheets of Seller at the Closing
and
the related statements of income and retained earnings and cash flows of Seller
for the years then ended, together with all related notes and schedules thereto,
and of the unaudited balance sheet of Seller dated as of the Closing (the
“Financial Statement Date”) and the related statements of income and retained
earnings and cash flows of Seller for the prior month to Closing then ended,
together with all related notes and schedules thereto (collectively, the
“Financial Statements”), are included in Schedule
6.5.
The
Financial Statements: (a) were prepared in accordance with Seller’s books of
account and other financial records; (b) present fairly Seller’s financial
condition and results of operations and cash flows as of the dates thereof
or
for the periods covered thereby, subject in the case of the unaudited Financial
Statements to normal recurring year-end adjustments (the effect of which will
not, individually or in the aggregate, have a Material Adverse Effect); and
(c)
have been prepared in accordance with generally accepted accounting principles
consistently applied, except, in the case of the unaudited Financial Statements,
for the lack of explanatory footnote disclosures.
6.6 Inventories.
There
are no Inventories.
6.7
Intellectual Property Rights.
6.7.1 Schedule
6.7.1
sets
forth: (a) all Intellectual Property Rights and all pending registrations and
applications therefor, that Seller owns, uses or licenses or in which Seller
has
any interest, indicating which are owned and which are licensed; (b) all
contracts, agreements or other arrangements under which Seller has granted,
or
is obligated to grant, rights to others to use, reproduce, market or exploit
any
Intellectual Property Rights; and (c) all names, assumed or otherwise, under
which Seller has ever conducted the Business. No Intellectual Property Rights,
other than those set forth in Schedule
6.7.1,
are
necessary for the conduct of the Business.
6.7.2 Seller
is
not infringing upon or otherwise acting adversely to the right or, to the best
of Seller’s knowledge, claimed right, of any Person under or with respect to any
Intellectual Property Rights, nor has Seller or any Shareholder received written
notice of any such claim. Seller is not (a) obligated pursuant to any contract
to make any payments by way of royalties, fees or otherwise with respect to
any
Intellectual Property Rights, or (b) a licensor in respect of any Intellectual
Property Rights. All licensing agreements pursuant to which Seller is a licensee
of any Intellectual Property Rights are valid and binding on Seller and, to
the
best of Seller’s knowledge, the other parties thereto, in accordance with their
respective terms and are in full force and effect, and (a) no breach or default
by Seller or event which, with notice or lapse of time, could constitute a
breach or default by Seller, exists with respect thereto, (b) no party thereto
has given notice or asserted to Seller that Seller is in breach or default
thereunder, and (c) to the best of Seller’s knowledge, no other party thereto is
in breach or default thereunder.
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6.7.3 To
the
best of Seller’s knowledge, no third party is infringing on any of the
Intellectual Property Rights used in the conduct of the Business.
6.7.4 Seller
is
not in any way making any unlawful or wrongful use of any confidential
information, customer lists or trade secrets of any third party, including
any
former employer of any present or past employee of Seller.
6.8 Tangible
Personal Property.
6.8.1 Schedule
2.1.2
is a
complete and accurate list of all Equipment. Schedule
2.1.8
is a
complete and accurate list of all Office Equipment. Schedule
2.1.9
is a
complete and accurate list of the Systems, and the Systems contain an accurate
and complete list of all customers of Seller. The Assets constituting tangible
personal property are in good and serviceable condition and repair (subject
to
normal wear and tear). Seller has not, nor, to the best of Seller’s knowledge,
has anyone else, made any modifications to any of the Assets that would void
or
invalidate any manufacturer’s warranty or cause the Assets not to be in
compliance with any Law.
6.8.2 Seller
either owns all of the Assets constituting tangible personal property or leases
them under an agreement indicated on Schedule
6.8.2.
Neither
Seller nor any Shareholder has: (a) received any notice of cancellation or
termination under such lease and no lessor has any right of termination or
cancellation under such lease except in connection with a default of Seller
thereunder; or (b) received any notice of a breach or default under such lease,
which breach or default has not been cured. Neither Seller nor any Shareholder
nor, to the best of Seller’s knowledge, any other party to such lease, is in
breach or default in any material respect, and no event has occurred that,
with
notice or lapse of time would constitute such a breach or default or permit
termination, modification or acceleration under such lease.
6.9 Contracts.
6.9.1 Schedule
2.1.4
is a
complete and accurate list of the Customer Contracts and Employee Contracts
as
of the date of this Agreement, complete and accurate copies of which are
attached to Schedule
2.1.4.
The
Customer Contracts include all of Seller’s customers to whom Seller is providing
services as of the Closing Date. Seller has billed all of its customers
accurately and timely and in accordance with the Customer Contracts. All
Customer Contracts and Employee Contracts are in full force and effect and
are
valid, binding and enforceable against the respective parties thereto in
accordance with their respective terms, and Seller is not in default in, nor
has
there occurred an event or condition (other than Seller’s execution and delivery
of or performance under this Agreement) which, with the passage of time or
the
giving of notice, would constitute a default with regard to the payment or
performance of any obligation under any Customer Contract or Employee Contract.
Seller has not received any notice that any person intends or desires to amend
or terminate any Customer Contract or Employee Contract.
8
6.9.2 There
is
no contract, agreement or other arrangement granting any Person any preferential
right to purchase any of the Assets.
6.9.3 Except
as
set forth on Schedule
6.9.3,
no
Customer Contract or any other contract, agreement or other arrangement between
Seller and any of Seller’s customers or any third party, requires the Consent of
any Person for such Customer Contract or other contract or agreement to be
assigned to Buyer under this Agreement.
6.10 Insurance
Policies.
Attached as Schedule
6.10
are
complete and accurate copies as of the date of this Agreement of all insurance
policies carried by Seller and an accurate list of all insurance loss runs
and
workers’ compensation claims in Seller’s possession for up to the past three
policy years, and a complete and accurate copy of Seller’s most recent filing
with the state agency responsible for administering, handling or overseeing
unemployment claims. All insurance policies are in full force and effect and
shall remain in full force and effect through the Closing Date. Seller’s
insurance has never been canceled and Seller has not been denied coverage within
the last three years.
6.11 Employees;
Employee Benefits.
Schedule
6.11
is a
complete and accurate list of all employees of Seller, their date of hire and
their rate of compensation as of the date of this Agreement (including a
breakdown of the portion thereof attributable to salary, bonus and other
compensation, respectively). Except as set forth on Schedule
6.11,
each of
Seller’s employees is an employee at will and will be terminated by Seller on
the Closing Date. Seller shall be responsible for all severance and other
employment related payments accrued as of the Closing Date.
6.12 Labor
Matters.
No
collective bargaining or other labor union contracts apply to Seller’s
employees. There never has been, nor is there pending or to the best of Seller’s
knowledge threatened, a labor dispute, strike or work stoppage against Seller.
To the best of Seller’s knowledge, neither Seller nor any Shareholder, nor any
of their respective representatives or employees, has committed any unfair
labor
practices in connection with the operation of Seller.
6.13 Compliance
with Law.
Seller
has always conducted and continues to conduct the Business in accordance with
all Laws, Permits and Governmental Orders (including Environmental Laws, zoning
and land use restrictions, and Laws relating to the employment of labor)
applicable to Seller, the Assets or the Business. Seller is not in material
violation of any such Law, Permit or Governmental Order. Schedule
6.13
identifies each Governmental Order applicable to Seller, the Assets or the
Business, and no such Governmental Order has or has had a Material Adverse
Effect. Neither Seller nor any Shareholder has received any citation or notice
that Seller or any of its current or former officers, directors, shareholders
or
employees is under investigation or other form of review relating to the Assets
or the Business with respect to any applicable Law.
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6.14 Taxes.
Seller
and the Shareholders have duly filed, or will duly file in a timely manner,
with
the relevant Tax authorities all returns with respect to Taxes relating to
Seller, including estimated Tax returns and other information returns and
reports which they are required to file, and each such document is complete,
accurate and in accordance with all requirements of applicable Law. Seller
and
the Shareholders have paid and discharged all Taxes shown as due on all Tax
returns and have paid all other Taxes as are due, other than such Taxes as
are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with generally
accepted accounting principles. All Taxes required to be withheld, collected
or
deposited by Seller have been timely withheld, collected or deposited and,
to
the extent required, have been paid to the relevant Tax authority. Neither
the
IRS nor any other taxing authority or agency, domestic or foreign, is now
asserting or, to the best of Seller’s knowledge, threatening to assert against
Seller or the Shareholders any deficiency or claim for additional Taxes or
interest thereon or penalties in connection therewith. Seller has not granted
any waiver of any statute of limitations with respect to, or any extension
of a
period for the assessment of, any Tax. There are no Tax liens on any of the
Assets or the Business. Attached as Schedule
6.14
is a
completed Form W-9 for Seller.
6.15
Litigation.
Except
as set forth on Schedule
6.15,
no
Action is pending or, to the best of Seller’s knowledge, threatened, against
Seller or the Shareholders relating to the Assets or the Business, at law or
in
equity. Neither Seller nor any Shareholder has received notice of any of the
above, and, to the best of Seller’s knowledge, no facts or circumstances exist
which would give rise to any of the foregoing. Also listed on Schedule
6.15
are all
instances where Seller or the Shareholders are the plaintiff, or complaining
or
moving party, in any way related to the Assets or the Business.
6.16 Absence
of Price Renegotiation Contracts.
Except
as stated in Schedule
6.16,
Seller
is not a party to any governmental contracts related to the Assets or the
Business that are subject to price redetermination or
renegotiation.
6.17 Conduct
of Seller’s Business.
Since
the Financial Statement Date, except for the execution and delivery of this
Agreement or as disclosed on Schedule
6.17,
the
Business has been conducted in all material respects in the ordinary course
and
consistent with past practice, and there has not been any:
6.17.1 work
interruption, labor grievance or unfair labor practice claim filed or, to the
best of Seller’s knowledge, threatened;
6.17.2 sale
or
transfer of, or any agreement to sell or transfer, any of the Assets or any
plan, agreement or arrangement granting any preferential right to purchase
or
acquire any interest in any of the Assets, or requiring Consent of any party
to
the transfer and assignment of any of the Assets, or any loss or damage to
the
Assets;
6.17.3 waiver
of
any material rights or claims of Seller related to the Assets;
6.17.4 material
breach, amendment or termination of any Customer Contract;
10
6.17.5 transaction
by Seller outside the ordinary course of its business and related to the Assets
or the Business;
6.17.6 increase
in the compensation of any employee of Seller;
6.17.7 any
other
material occurrence, event, incident, action or failure to act outside the
ordinary course of business of Seller; or
6.17.8 any
action by Seller, the Shareholders, or any employee, officer or agent of Seller
or the Shareholders committing to do any of the foregoing.
6.18 Permits;
Hazardous Materials; Disposal Sites.
6.18.1 Seller
currently holds all Permits, necessary for the current use, occupancy and
operation of each asset and property of Seller and the conduct of the Business,
and all such Permits are in full force and effect. Neither Seller nor any
Shareholder has received any notice from any Governmental Authority revoking,
canceling, rescinding, materially modifying or refusing to renew any
Permit.
6.19 Except
for waste materials included in residential or commercial waste that have in
all
respects been Handled in compliance with all applicable Laws (including
applicable Environmental Laws relating to the permissible types and quantities
of such waste materials), and except as disclosed on Schedule
6.18.2,
Seller
has never Handled any Hazardous Materials. Except as disclosed on Schedule
6.18.2,
there
have been no Releases into the Environment or onto or under the Land or any
other real property now or in the past owned, leased or used by Seller of any
Hazardous Materials. No Encumbrance with respect to Environmental Liability
has
been imposed against Seller or any of the Assets under any Environmental Law
or
other applicable Law, and no facts or circumstances exist which would give
rise
to the same.
6.20 Noncompete
Agreements.
Schedule
6.21
is a
complete and accurate list of all Restrictive Agreements as of the date of
this
Agreement, complete and accurate copies of which are attached as Schedule
6.21.
None of
the Restrictive Agreements have been modified, altered, terminated or otherwise
amended. The Transactions do not violate any of the terms and provisions of
the
Restrictive Agreements.
6.21 Real
Property.
6.21.1 The
Seller owns no Real Property:
6.21.2 Schedule
6.21.2 sets forth a complete and accurate street address and legal description
of the Leased Real Property and, except as described therein, Seller does not
lease any real property. Seller has good and marketable leasehold title to
the
Leased Real Property. Seller has delivered to Buyer complete and accurate copies
of all Real Estate Leases. With respect to each of the Real Estate
Leases:
6.21.2.1 such
Real
Estate Lease is legal, valid, binding, enforceable and in full force and effect,
and represents the entire agreement between the respective lessor and lessee
with respect to such property;
11
6.21.2.2 neither
Seller nor any Shareholder has: (a) received any notice of cancellation or
termination under such Real Estate Lease and no lessor has any right of
termination or cancellation under such Real Estate Lease except in connection
with a default of Seller thereunder, or (b) received any notice of a breach
or
default under such Real Estate Lease, which breach or default has not been
cured;
6.21.2.3 neither
Seller nor any Shareholder nor, to the best of Seller’s knowledge, any other
party to such Real Estate Lease, is in breach or default in any material
respect, and, to the best of Seller’s knowledge, no event has occurred that,
with notice or lapse of time would constitute such a breach or default or permit
termination, modification or acceleration under such Real Estate Lease;
and
6.21.2.4 Seller
has the full right to exercise any renewal options contained in such lease
on
the terms and conditions therein and upon due exercise would be entitled to
enjoy the use of each Leased Real Property for the full term of such renewal
options.
6.21.2.5 There
are
no unrecorded contracts, leases, easements or other agreements, or claim of
any
third party, affecting the use, title, occupancy or development of the Land,
and
no person, firm or entity has any right of first refusal, option or other right
to acquire all or any part of the Land.
6.21.2.6 All
labor
and materials used in the construction or preparation of improvements on the
Leasehold Premises have been paid for and there are no disputes with regard
thereto. There are no unpaid or deferred betterment assessments or similar
charges or obligations with respect to which Seller is liable under the Real
Estate Leases.
6.21.3 Seller
presently enjoys peaceful and quiet possession of its Leasehold
Premises.
6.21.4 Except
for landlords’ rights in connection with the Leased Real Property, no party
except Seller has a present or future right to possession of all or any part
of
the Leasehold Premises.
6.21.5 Seller
is
not a “foreign person” as the term is defined in Section 1445 of the
Code.
6.22 Reliance
on Advisors.
Seller
and the Shareholders have relied on their own advisors for all legal,
accounting, tax or other advice whatsoever in connection with this Agreement
and
the Transactions.
6.23 Representation
Concerning Totality of Assets.
Except
as disclosed in Schedule
6.24,
Seller
has good and marketable title to the Assets, or, in the case of leased or
subleased Assets, valid and subsisting leasehold interests in all such Assets,
free and clear of all Encumbrances other than Permitted Encumbrances. The Assets
constitute all the assets and rights forming a part of, used in, intended to
be
used in, or necessary in the conduct of, the Business.
12
6.24 Complete
Disclosure.
This
Agreement, the Disclosure Schedules, and all other documents and written
information furnished to Buyer and its representatives by Seller, the
Shareholders or their respective representatives, taken as a whole, do not
and
will not include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading. If Seller
or any Shareholder becomes aware of any fact or circumstance that would change
a
representation or warranty of Seller or the Shareholders in this Agreement
or
any other statement made or document provided to Buyer, the party with such
knowledge shall promptly give notice of such fact or circumstance to Buyer.
None
of (a) such notification, (b) any pre-closing investigation by Buyer of Seller,
the Assets or the Business, or (c) the Closing, shall relieve Seller or the
Shareholders of their indemnification or other obligations under this
Agreement.
ARTICLE
7
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
represents and warrants that the statements contained in this Article 7: (a)
are
correct and complete as of the date of this Agreement; and (b) will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Article 7).
7.1 Organization;
Authority.
Buyer
is a corporation duly organized, validly existing and in good standing under
the
laws of the state of its incorporation, and is duly authorized, qualified and
licensed under all applicable Laws to carry on its business in the places and
in
the manner presently conducted, except for where the failure to be so
authorized, qualified or licensed would not have a Material Adverse Effect.
Buyer has the full legal right, power and authority to enter into this Agreement
and to consummate the Transactions. On or before the Closing, all corporate
action of Buyer necessary to approve the Transactions shall have been
taken.
7.2 No
Conflict.
The
execution, delivery and performance of this Agreement by Buyer and the
consummation of the Transactions do not and will not violate, conflict with,
or
result in a breach of any provision of Buyer’s Articles of Incorporation or
Bylaws.
7.3 Governmental
Consents and Approvals.
Except
for ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act approval, if applicable, the execution, delivery
and
performance of this Agreement by Buyer do not and will not require any Consent
or other action by, filing with, or notification to, any Governmental
Authority.
7.4 Binding
Agreement.
Buyer
has duly executed and delivered this Agreement, and (assuming due authorization,
execution and delivery by Seller and the Shareholders) this Agreement
constitutes a legal, valid and binding obligation of Buyer enforceable against
Buyer in accordance with its terms.
13
ARTICLE
8
COVENANTS
OF SELLER AND THE SHAREHOLDERS BEFORE CLOSING
8.1 Access
to Records.
Between
the date of this Agreement and the Closing Date, Seller shall: (a) at reasonable
times and upon reasonable notice, grant Buyer and its representatives access
to
all of the offices of Seller, and the books and records of Seller, and (b)
furnish Buyer with such additional financial and operating data and other
information as to the Assets and the Business as Buyer may reasonably request.
Seller and the Shareholders will cooperate with Buyer and its representatives
in
the preparation of any documents or other material that may be required by
any
Governmental Authority.
8.2 Activities
of Seller Before Closing.
Until
the Closing, Seller shall and the Shareholders shall cause Seller
to:
8.2.1 Continue
to the operate the Business in the ordinary course and maintain the Assets
in
good working order and condition, ordinary wear and tear excepted;
8.2.2 perform
all of its obligations under the Real Estate Leases, Permits, Customer
Contracts, Employee Contracts, and its debt instruments;
8.2.3 keep
in
full force and effect present insurance policies, bonds, letters of credit
or
other insurance coverage with reputable insurers and issuers;
8.2.4 use
its
best efforts to preserve intact the Assets and to keep available the services
of
its officers and employees and maintain good relationships with suppliers,
customers and others having business relationships with Seller;
8.2.5 maintain
compliance with all applicable Laws;
8.2.6 cooperate
with Buyer to promptly prepare the necessary documents so that the Transactions
may be closed before the date set forth in Section 14.3;
8.2.7 provide
all reasonable assistance to Buyer to provide for an orderly transfer of the
Assets from Seller to Buyer; and
8.2.8 not
change its Tax status.
8.3 Prohibited
Activities Before Closing.
Until
the Closing, Seller shall not:
8.3.1 permit
any new Encumbrance upon any Asset;
8.3.2 breach,
amend or terminate any Real Estate Lease, Permit, Customer Contract or Employee
Contract in any material manner or fail to maintain the Business, the Assets
or
the quality of customer service consistent with past practice;
8.3.3 enter
into any transaction outside the ordinary course of the Business of Seller
or
otherwise prohibited under this Agreement; or
14
8.3.4 allow
any
other action or omission, or series of actions or omissions, that would cause
a
representation or warranty of Seller and the Shareholders made in Section 6.17
to be untrue on the Closing Date.
8.4 Standstill
Agreement.
Unless
and until this Agreement is terminated pursuant to Article 14 without the
Closing having taken place, Seller and the Shareholders shall not, directly
or
indirectly, solicit offers for the Assets, for the capital stock of Seller
or
for a merger or consolidation involving Seller, or respond to inquiries from,
share information with, negotiate with or in any way facilitate inquiries or
offers from, third parties who express or who have expressed an interest in
acquiring Seller or the Business by merger, consolidation or other combination
or by acquiring any of the capital stock or material Assets of Seller. The
Shareholders shall not vote their stock in favor of any such transaction. Seller
and the Shareholders shall notify Buyer immediately if any Person makes any
proposal, offer, inquiry or contact with respect to any of the
foregoing.
ARTICLE
9
ADDITIONAL
AGREEMENTS OF PARTIES
9.1 Public
Announcements.
Except
to the extent that the parties consent in writing otherwise, (a) the parties
shall keep the existence and terms of this Agreement confidential, and, (b)
no
party shall make, or cause to be made, any press release or public announcement
in respect of this Agreement or the Transactions or otherwise communicate with
any media. Notwithstanding the preceding sentence, however, Buyer or an
Affiliate of Buyer may make such disclosure (on Form 8-K, by press release
or
otherwise) regarding the terms of this Agreement and the Transactions as it
deems necessary to comply with applicable securities laws or the rules and
regulations of the Securities and Exchange Commission, including a press release
following the execution of this Agreement.
9.2 Representations
and Warranties.
Through
the Closing Date, each of the parties shall refrain from taking any action
that
would render any of its representations or warranties in this Agreement
inaccurate as of the Closing Date.
ARTICLE
10
CONDITIONS
PRECEDENT TO OBLIGATIONS
OF
SELLER AND THE SHAREHOLDERS
The
obligations of Seller and the Shareholders under this Agreement are subject
to
the completion, satisfaction, or at their option, waiver, on or before the
Closing Date, of the following conditions:
10.1 Representations
and Warranties.
The
representations and warranties of Buyer contained in this Agreement shall be
accurate on and as of the Closing Date.
10.2 Covenants.
Buyer
shall have duly complied with or performed each of the covenants of this
Agreement to be complied with or performed by Buyer on or before the Closing
Date.
15
10.3 No
Adverse Proceeding.
No
Action before a Governmental Authority shall have been instituted or threatened
to restrain or prohibit any of the Transactions.
10.4 Closing
Deliveries.
Buyer
shall have timely delivered (if required to be delivered before the Closing)
or
shall be prepared to deliver the items set forth in Section 4.3.
ARTICLE
11
CONDITIONS
PRECEDENT TO OBLIGATIONS OF BUYER
The
obligations of Buyer under this Agreement are subject to the completion,
satisfaction or, at its option, waiver, on or before the Closing Date, of the
following conditions:
11.1 Representations
and Warranties.
The
representations and warranties of Seller and the Shareholders contained in
this
Agreement shall be accurate on and as of the Closing Date.
11.2 Covenants.
Seller
and the Shareholders shall have duly complied with or performed each of the
terms, covenants and conditions of this Agreement to be complied with or
performed by Seller and the Shareholders on or before the Closing
Date.
11.3 Delivery
of Disclosure Schedules.
Seller
and the Shareholders shall have delivered to Buyer complete and final Disclosure
Schedules at least 10 business days before the Closing and Buyer shall have
determined such Disclosure Schedules to be acceptable to it in its sole
discretion.
11.4 No
Adverse Proceeding.
No
Action shall have been instituted or threatened to restrain or prohibit any
of
the Transactions. No Governmental Authority shall have taken any other action
or
made any request of Buyer as a result of which Buyer deems it inadvisable to
proceed with the Transactions.
11.5 Corporate
Approval.
Buyer’s
Board of Directors shall have approved the Transactions.
11.6 No
Adverse Change or Material Adverse Effect.
No
material and adverse change in the results of operations, financial condition
or
business of Seller shall have occurred since the Financial Statement Date.
Seller shall not have suffered any loss or damage to any of the Assets since
the
Financial Statement Date, which loss or damage would result in a Material
Adverse Effect or would materially impair Buyer’s ability to operate the
Business after the Closing Date.
11.7 Transferability
of Permits.
Buyer
shall have determined, in its sole discretion, that as a result of the
Transactions, all of the Permits required for the operation of the Business
have
been transferred to Buyer or can be so transferred without public hearing or
other regulatory re-approval process.
11.8 Due
Diligence Review.
Buyer
must have received results satisfactory to it, in its sole discretion, from
its
due diligence review of Seller, the Business and the Assets.
16
11.9 Consents.
All
necessary notices to, Consents of and filings with any Governmental Authority
relating to the consummation of the Transactions to be made or obtained by
Seller shall have been made and obtained by Seller, and Buyer shall have
determined, in its sole discretion, that Buyer has received all the Consents
it
deems necessary under any Customer Contract, Employee Contract or Permit
requiring consent to assignment.
11.10 Closing
Deliveries.
Seller
and the Shareholders shall have timely delivered (if required to be delivered
before the Closing) or shall be prepared to deliver the items set forth in
Section 4.2.
11.11 Governmental
Approvals.
Seller
and Buyer shall have received all governmental approvals deemed necessary by
Buyer, in its sole discretion, to proceed with the Transactions, including,
if
applicable, under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
11.12 General.
All
actions taken by Seller and the Shareholders in connection with the consummation
of the Transactions and all certificates, opinions and other documents required
to effect the Transactions shall be reasonably satisfactory in form and
substance to Buyer.
ARTICLE
12
NON-ASSUMPTION
OF LIABILITIES
12.1 Non-Assumption
of Liabilities.
Except
as explicitly set forth in Section 12.2, Buyer shall not, by the execution
and
performance of this Agreement or otherwise (including under theories of
successor liability), assume, become responsible for or incur any Liability
of
any nature of Seller or any Shareholder or any other Person, including any
Liability arising out of or relating to: (a) any occurrence or circumstance
(whether known or unknown) which occurs or exists on or before the Closing
Date
and which constitutes, or which by the lapse of time or giving notice would
constitute, a breach or default under any lease, contract, or other instrument
or agreement (whether written or oral) including the Permits and the Customer
Contracts; (b) injury to or death of any person or damage to or destruction
of
any property, whether based on negligence, breach of warranty, or any other
theory; (c) violation of the requirements of any applicable Law or Governmental
Authority or of the rights of any third Person, including any requirements
relating to the reporting and payment of Taxes; (d) the Handling or Release
of
Hazardous Materials; (e) any Liabilities under any agreement or arrangement
between Seller and the employees of Seller or any labor or collective bargaining
unit representing any such employees; (f) any Plan; (g) any severance pay
obligation of Seller or of any Plan or any other fringe benefit program
maintained or sponsored by Seller or to which Seller contributes or any
contributions, benefits or Liabilities therefor or any Liability for the
withdrawal or partial withdrawal from or termination of any such Plan or program
by Seller; (h) any obligations related to any of the Excluded Assets; (i) any
Liabilities of Seller or any Shareholder not specifically assumed by Buyer
under
Section 12.2. Seller and the Shareholders agree that they shall pay and
discharge all such Liabilities as and when they become due and
payable.
12.2 Assumption
of Obligations.
Buyer
agrees to assume all of Seller’s obligations under the Customer Contracts,
Employee Contracts, Permits and Real Estate Leases to the extent, but only
to
the extent, that such obligations first mature and are required to be performed
after the Closing Date.
17
ARTICLE
13
INDEMNIFICATION
13.1 Survival
of Representations, Warranties and Covenants.
All of
the representations, warranties and covenants in this Agreement and the
obligations of the parties with respect thereto shall survive the Closing for
two (2) years after the Closing Date; provided, however, that (a) the
representations and warranties in Sections 6.14 and 6.18 and the related
indemnification obligations shall survive until the expiration of the applicable
statute of limitations, and (b) the representations, warranties and covenants
in
Sections 12.1 and 12.2 and the related indemnification obligations shall survive
indefinitely.]
13.2 Indemnification
by Seller and the Shareholders.
Seller
and the Shareholders agree that they will each, jointly and severally,
indemnify, defend (as to third party claims only), protect and hold harmless
Buyer, its partners, officers, directors, divisions, subdivisions, Affiliates,
shareholders, agents, employees, successors and assigns at all times from and
after the Closing Date from and against all Losses that arise as a result of
or
incident to: (a) occurrences before the Closing Date; (b) any breach of,
misrepresentation in, untruth in or inaccuracy in the representations and
warranties by Seller or the Shareholders set forth in this Agreement or in
the
Disclosure Schedules or in any other document delivered pursuant to this
Agreement; (c) nonfulfillment or nonperformance of any agreement, covenant
or
condition on the part of Seller or any Shareholder made in this Agreement or
in
any other document delivered pursuant to this Agreement, including the
Noncompetition Agreement; (d) any of the matters set forth in Section 12.1;
or
(e) any claim by a third party that, if true, would mean that a condition for
indemnification set forth in subsections (a) through (d) of this Section 13.2
had been satisfied.
13.3 Indemnification
by Buyer.
Buyer
agrees that it will indemnify, defend (as to third party claims only), protect
and hold harmless Seller, the Shareholders and their respective partners,
officers, directors, divisions, subdivisions, Affiliates, shareholders, agents,
employees, successors and assigns at all times from and after the Closing Date
from and against all Losses that arise as a result of or incident to: (a) any
breach of, misrepresentation in, untruth in or inaccuracy in the representations
and warranties by Buyer set forth in this Agreement; (b) nonfulfillment or
nonperformance of any agreement, covenant or condition on the part of Buyer
made
in this Agreement; and (c) any claim by a third party that, if true, would
mean
that a condition for indemnification set forth in subsections (a) or (b) of
this
Section 13.3 had been satisfied.
13.4 Indemnification
Procedure Between Buyer and Seller and the Shareholders.
Upon
the occurrence of any claim for which indemnification is believed to be due
under this Agreement, the Indemnified Party shall provide Claim Notice to the
Indemnifying Party. The Claim Notice shall state in general terms the
circumstances giving rise to the claim, specify the amount of the claim (or
an
estimate thereof), and make a request for any payment then believed due. A
Claim
Notice shall be conclusive against the Indemnifying Party in all respects 20
days after receipt by the Indemnifying Party unless, within such period, the
Indemnifying Party sends the Indemnified Party a Dispute Notice. Any Dispute
Notice shall describe the basis for such objection and the amount of the claim
that the Indemnifying Party does not believe should be subject to
indemnification. Upon receipt of any Dispute Notice, the Indemnified Party
and
the Indemnifying Party shall use reasonable efforts to cooperate and arrive
at a
mutually acceptable resolution of the dispute within the next 30 days. If a
resolution is not reached within the 30-day period, either party may commence
the dispute resolution procedures set forth in Article 16. If it is finally
determined (through either agreement of the parties, arbitration or final
judgment of a court of competent jurisdiction) that all or a portion of the
claim amount is owed to the Indemnified Party, the Indemnifying Party shall,
within 10 days of such determination, pay the Indemnified Party such amount
owed, together with interest from the date of the Claim Notice until the date
of
actual payment at the Applicable Rate.
18
13.5 Indemnification
Procedure with Respect to Third Party Claims.
13.5.1 If
any
third party shall notify an Indemnified Party pursuant to this Agreement with
respect to a Third Party Claim, or if an Indemnified Party otherwise becomes
aware of any matter that may give rise to such a claim or wishes to make such
a
claim (whether or not related to a Third Party Claim), then the Indemnified
Party shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from
any
obligation under this Agreement unless, and then solely to the extent that, the
Indemnifying Party is thereby prejudiced.
13.5.2 Any
Indemnifying Party will have the right to defend the Indemnified Party against
a
Third Party Claim with counsel of its choice satisfactory to the Indemnified
Party so long as: (a) the Indemnifying Party notifies the Indemnified Party
in
writing within a reasonable time after the Indemnified Party has given notice
of
the Third Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Losses the Indemnified Party may
suffer that arise as a result of or incident to the Third Party Claim; (b)
the
Indemnifying Party provides the Indemnified Party with evidence acceptable
to
the Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Third Party Claim and fulfill its
indemnification obligations under this Agreement; (c) the Third Party Claim
involves only monetary damages and does not seek an injunction or equitable
relief or involve the possibility of criminal penalties; (d) settlement of
or
adverse judgment with respect to the Third Party Claim is not, in the good
faith
judgment of the Indemnified Party, likely to establish a precedential custom
or
practice adverse to the continuing business interests of the Indemnified Party,
and (e) the Indemnifying Party conducts the defense of the Third Party Claim
actively and diligently.
13.5.3 So
long
as the Indemnifying Party is conducting the defense of the Third Party Claim
in
accordance with Section 13.5.2, (a) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the defense of the
Third Party Claim, (b) the Indemnified Party will not consent to the entry
of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party (which will not
be
unreasonably withheld), and (c) the Indemnifying Party will not consent to
the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (which
will not be unreasonably withheld).
19
13.5.4 If
or to
the extent that any of the conditions set forth in Section 13.5.2 is or becomes
unsatisfied: (a) the Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with respect to, the Third
Party Claim and any matter it may deem appropriate in its sole discretion and
the Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith (but will keep the Indemnifying
Party
reasonably informed regarding the progress and anticipated cost thereof); (b)
the Indemnifying Party will reimburse the Indemnified Party promptly and
periodically for the cost of defending against the Third Party Claim (including
attorneys’ fees and expenses); (c) the Indemnifying Party will remain
responsible for any Losses the Indemnified Party may suffer that arise as a
result of or incident to the Third Party Claim to the fullest extent provided
in
this Article 13; and (d) the Indemnifying Party shall be deemed to have waived
any claim that its indemnification obligations should be reduced because of
the
manner in which counsel for the Indemnified Party handled the Third Party
Claim.
13.6 Determination
of Losses.
The
parties shall take into account the time value of money (using the Applicable
Rate as the discount rate) in determining Losses for purposes of this Article
13.
13.7 Other
Indemnification Provisions.
The
indemnification provisions in this Article 13 are in addition to any statutory,
equitable or common law remedy any party may have for breach of any
representation, warranty or covenant. Any payments made to an Indemnified Party
pursuant to this Article 13 shall be treated as an adjustment to the Purchase
Price.
13.8 Limitation
on Liability.
The
indemnification obligations set forth in this Article 13 shall apply only after
the aggregate amount of such obligations exceeds $25,000, at which time the
indemnification obligations shall be effective as to all Losses, including
the
initial $25,000. In addition, the indemnification obligations set forth in
this
Article 13 shall be limited to an aggregate amount not to exceed the Purchase
Price. However, the foregoing threshold and cap shall not apply to fraudulent
misrepresentations or to indemnification obligations of Seller and the
Shareholders relating to breaches of the representations and warranties in
Section 6.1, 6.2, 6.3, 6.14, 6.16, 6.18, 6.19 or 6.20 or to indemnification
pursuant to Section 13.2(d), for which in each case Buyer shall be entitled
to
indemnification for the full dollar amount of the Loss.
ARTICLE
14
TERMINATION
OF AGREEMENT
14.1 Termination
by Buyer.
Buyer,
by notice in the manner provided in Section 17.6 on or before the Closing Date,
may terminate this Agreement if any of the conditions set forth in Article
11
shall not have been satisfied or in the event of a breach by Seller or any
Shareholder in the observance or in the due and timely performance of any of
the
agreements or conditions contained in this Agreement on their part to be
performed, and such breach shall not have been cured within 15 days after notice
to Seller.
20
14.2 Termination
by Seller.
Seller,
by notice in the manner provided in Section 17.6 on or before the Closing Date,
may terminate this Agreement in the event of a breach by Buyer in the observance
or in the due and timely performance of any of the covenants, agreements or
conditions contained in this Agreement on its part to be performed, and such
breach shall not have been cured within 15 days after notice to
Buyer.
14.3 Termination
for Failure to Close.
Either
Buyer or Seller, by notice in the manner provided in Section 17.6, may terminate
this Agreement if the Closing has not occurred on or before June 30, 2008;
provided, however, that no party in default under this Agreement shall have
the
right to terminate pursuant to this Section 14.3.
14.4 Effect
of Termination.
Termination of this Agreement pursuant to this Article 14 shall not in any
way
terminate, limit or restrict the rights and remedies of any party against any
other party which has breached this Agreement before termination.
ARTICLE
15
NONDISCLOSURE
OF CONFIDENTIAL INFORMATION
15.1 Nondisclosure
by Seller and the Shareholders.
Seller
and the Shareholders acknowledge that they have had and may in the future have
access to Confidential Information, that will as of the Closing be valuable,
special and unique assets of Buyer. Seller and the Shareholders agree, at all
times from and after the Closing, to, and shall cause their Affiliates,
officers, directors, employees and agents to: (a) treat and hold as confidential
(and not disclose or provide access to any Person or to use) any Confidential
Information; (b) if Seller, any Shareholder or any such Affiliate, officer,
director, employee or agent becomes legally compelled to disclose any such
Confidential Information, provide Buyer with prompt written notice of such
requirement so that Buyer may seek a protective order or other remedy; and
(c)
promptly furnish (prior to, at, or as soon as practicable after the Closing)
to
Buyer any and all copies (in whatever form or medium) of all such Confidential
Information then in the possession of Seller, any Shareholder or any such
Affiliate, officer, director, employee or agent and destroy any additional
copies then in their possession of such information and of analyses,
compilations, studies or other documents prepared, in whole or in part, on
the
basis thereof. This Section 15.1, however, shall not apply to: (i) any
information that, at the time of disclosure, is available publicly and was
not
disclosed in breach of this Agreement by Seller, any Shareholder, or any of
their Affiliates, officers, directors, employees or agents; or (ii) any
information which is or relates to an Excluded Asset or relates to the
liabilities retained by Seller under this Agreement. Seller and the Shareholders
acknowledge and agree that Buyer’s remedies at Law for any breach or threatened
breach of this Section 15.1 are inadequate, and that in addition to such
remedies, Buyer shall be entitled to equitable relief, including injunctive
relief and specific performance, in the event of any such breach or threatened
breach without the need to demonstrate that monetary damages are
inadequate.
15.2 Nondisclosure
by Buyer.
Buyer
acknowledges that it has had and prior to the Closing Date, will have access
to
certain Confidential Information. Buyer agrees, at all times from and prior
to
the Closing Date, to, and shall cause its Affiliates, officers, directors,
employees and agents to: (a) treat and hold as confidential (and not disclose
or
provide access to any Person to or use) any Confidential Information; and (b)
if
Buyer or any such Affiliate, officer, director, employee or agent becomes
legally compelled to disclose any such Confidential Information, provide Seller
with prompt written notice of such requirement so that Seller may seek a
protective order or other remedy. This Section 15.2, however, shall not apply
to
any information that, at the time of disclosure, is available publicly and
was
not disclosed in breach of this Agreement by Buyer or any of its Affiliates,
officers, directors, employees or agents. Buyer acknowledges and agrees that
Seller’s remedies at Law for any breach or threatened breach of this Section
15.2 are inadequate, and that in addition to such remedies, Seller shall be
entitled to equitable relief, including injunctive relief and specific
performance, in the event of any such breach or threatened breach without the
need to demonstrate that monetary damages are inadequate.
21
15.3 Equitable
Relief for Violations.
The
parties agree that if any of them violates, or threatens to violate, the
Restrictive Covenants, the non-violating party shall be entitled to an
accounting and repayment of all profits, compensation, commissions,
remuneration, or benefits that the violating party, directly or indirectly,
realized or may realize as the result of, arising out of, or in connection
with
any such violation or threatened violation. The parties acknowledge and agree
that if any party breaches any of the Restrictive Covenants, such breach would
cause irreparable harm to the non-violating party and, in the event of such
breach, the non-violating party shall be entitled, in addition to monetary
damages and to any other remedies available to the non-violating party under
this Agreement and at law, to equitable relief, including injunctive relief,
and
the payment by the violating party of all costs incurred by the non-violating
party in enforcing the Restrictive Covenants, including reasonable attorneys’
fees.
ARTICLE
16
DISPUTE
RESOLUTION
16.1 General.
The
parties agree that any disputes arising out of or related in any way to this
Agreement, including a breach of this Agreement, shall, subject to the mediation
provision set forth below, be filed exclusively in the state or federal courts
in ▇▇▇▇▇ County, Nevada. The parties consent and agree to the jurisdiction
of
the Nevada courts. Neither party will argue or contend that it is not subject
to
the jurisdiction of the Nevada courts or that venue in ▇▇▇▇▇ County, Nevada,
is
improper. The parties agree to waive any right to a trial by jury in any such
dispute and that the matter will be tried solely to the court. The parties
understand that they are giving up valuable legal rights under this provision,
including the right to trial by jury, and that they voluntarily and knowingly
waive those rights.
16.2 Mediation.
If a
dispute arises out of or relates to this Agreement, the relationships that
result from this Agreement, the breach of this Agreement or the validity or
application of any of the provisions of this Article 16, and, if the dispute
cannot be settled through negotiation, the parties agree to submit the dispute
to mediation prior to commencing litigation. The parties will attempt in good
faith to agree on a neutral mediator to resolve the dispute. The mediation
will
follow the procedures set forth in the American Arbitration Association
Commercial Mediation Rules. If the parties cannot agree on a mediator within
20
days after mediation has been demanded, they will submit the dispute for
mediation to be administered by the American Arbitration Association under
the
Commercial Mediation Rules before resorting to litigation. Neither party may
commence or pursue litigation until this non-binding mediation has been
conducted and concluded. The parties agree that, upon initiating mediation,
they
will agree with the mediator on a time at least five days before the mediation
to submit and exchange with one another detailed position papers. The position
papers shall include a factual recitation of the dispute, each party’s position
on the facts and the law, the party’s assessment of the likely outcome and
its/their position on settlement. Each party will bear its own expenses incurred
(including attorneys’ fees) in connection with the mediation, and will equally
share the mediator’s fees and expenses.
22
16.3 Litigation.
If the
parties are unable to resolve their dispute by mediation, after the unsuccessful
conclusion of any such mediation, either party may pursue the remedies available
to it at law or equity; provided, that any such proceeding shall be subject
to
all of the terms of this Article 16, including jurisdiction, choice-of-law,
venue and waiver of jury trial. Notwithstanding the foregoing, as of January
1,
2010, any controversy or claim arising out of or relating to this Agreement
shall be governed by the laws of the State of Connecticut without giving effect
to the principles of conflicts of Laws, and each party to this Agreement, on
behalf of itself and its successors in interest and assigns, hereby submits
to
the exclusive jurisdiction of the federal and state courts located in the County
of Fairfield, State of Connecticut, in connection with any dispute related
to
this Agreement or any of the matters contemplated hereby at such
time.
16.4 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Nevada, without giving effect to any choice or conflict
of
law provision or rule (whether of the State of Nevada or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than
the
State of Nevada.
16.5 Statute
of Limitations.
The
statute of limitations governing any claim between the parties shall be tolled
from the date of the Dispute Notice until the conclusion of the mediation
required by Section 16.2.
16.6 Attorneys’
Fees.
Should
any litigation be commenced under this Agreement, the successful party in such
litigation shall be entitled to recover, in addition to such other relief as
the
court may award, its reasonable attorneys’ fees, expert witness fees, litigation
related expenses, and court or other costs incurred in such litigation or
proceeding. For purposes of this clause, the term “successful party” means the
net winner of the dispute, taking into account the claims pursued, the claims
on
which the pursuing party was successful, the amount of money sought, the amount
of money awarded, and offsets or counterclaims pursued (successfully or
unsuccessfully) by the other party. If a written settlement offer is rejected
and the judgment or award finally obtained is equal to or more favorable to
the
offeror than an offer made in writing to settle, the offeror is deemed to be
the
successful party from the date of the offer forward.
ARTICLE
17
GENERAL
PROVISIONS
17.1 Assignment.
This
Agreement may not be assigned (except by operation of Law) or otherwise
transferred without the express written consent of Seller and Buyer (which
may
be granted or withheld in the sole and absolute discretion of Seller and Buyer);
provided, however, that Buyer may assign this Agreement to an Affiliate of
Buyer
or any successor of Buyer to the Business without the consent of
Seller.
23
17.2 Binding
Effect; No Third Party Beneficiaries.
This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and their permitted assigns. Nothing in this Agreement is intended to
or
shall confer upon any other Person, including any employee or former employee
of
Seller, any legal or equitable right, benefit or remedy of any nature
whatsoever, including any rights of employment for any specified
period.
17.3 Amendment.
This
Agreement may not be amended except by a written instrument executed by each
party to this Agreement.
17.4 Entire
Agreement.
This
Agreement (together with the other agreements contemplated by this Agreement)
is
the final, complete and exclusive statement of the agreement among the parties
with relation to the subject matter of this Agreement. There are no oral
representations, understandings or agreements covering the same subject matter
as this Agreement. This Agreement supersedes and cannot be varied, contradicted
or supplemented by evidence of, any prior or contemporaneous discussions,
correspondence, or oral or written agreements or arrangements of any
kind.
17.5 Counterparts.
This
Agreement may be executed in two or more original or facsimile counterparts,
each of which shall be deemed an original and all of which together shall
constitute but one and the same instrument.
17.6 Notices.
All
notices or other communications required or permitted under this Agreement
shall
be in writing and may be given by depositing the same in the United States
mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, by overnight courier, or by delivering
the same in person to such party, addressed as follows:
If
to
Seller or the ▇▇. ▇▇▇▇▇▇, addressed to them at:
|
▇▇▇▇▇
▇▇▇▇▇▇
|
|
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
Fax:
|
If
to the
other Shareholders, addressed to them at:
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
and
a
copy to:
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
24
If
to
Buyer, addressed to it at:
Market
& Research Corp.
▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇▇▇
& ▇▇▇▇ LLP
▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Notice
shall be deemed given and effective the day personally delivered, the day sent
by overnight courier, subject to signature verification, and the day of deposit
in the U.S. mail of a writing addressed and sent as provided above. Any party
may change the address for notice by notifying the other parties of such change
in accordance with this Section.
17.7 Waiver.
At any
time before the Closing, Buyer may (a) extend the time for the performance
of
any of the obligations or other acts of Seller or the Shareholders, (b) waive
any inaccuracies in the representations and warranties of Seller or the
Shareholders contained in this Agreement or in any document delivered by Seller
or the Shareholders pursuant hereto, or (c) waive compliance with any of the
agreements or conditions of Seller or the Shareholders contained in this
Agreement. At any time before the Closing, Seller and the Shareholders may
(a)
extend the time of performance of any of the obligations or other acts of Buyer,
(b) waive any inaccuracies in the representations and warranties of Buyer
contained in this Agreement or in any document delivered by Buyer pursuant
hereto, or (c) waive compliance with any of the agreements or conditions of
Buyer contained in this Agreement. No delay of or omission in the exercise
of
any right, power or remedy accruing to any party as a result of any breach
or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in
any
such breach or default, or of or in any similar breach or default occurring
later. No waiver of any single breach or default shall be deemed a waiver of
any
other breach or default occurring before or after that waiver.
17.8 Severability.
If any
provision of this Agreement shall be invalid, illegal or unenforceable, it
shall, to the extent possible, be modified in such manner as to be valid, legal
and enforceable but so as most nearly to retain the intent of the parties.
If
such modification is not possible, such provision shall be severed from this
Agreement. In either case the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
25
17.9 Construction.
The
headings in this Agreement are inserted for convenience only, and shall not
constitute a part of this Agreement or be used to construe or interpret any
of
its provisions. The parties have participated jointly in negotiating and
drafting this Agreement. If a question of interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties, and no presumption
or
burden of proof shall arise favoring or disfavoring any party by virtue of
the
authorship of any provision of this Agreement. Any reference to any statute
shall be deemed to refer to the statute, as amended, and to all rules and
regulations promulgated thereunder, as amended, unless the context requires
otherwise. The word “include” or “including” means include or including, without
limitation. The representations, warranties and covenants in this Agreement
shall have independent significance. Accordingly, if any party has breached
any
representation, warranty or covenant contained in this Agreement in any respect,
the fact that there exists another representation, warranty or covenant relating
to the same subject matter (regardless of the relative levels of specificity)
that the party has not breached shall not detract from or mitigate the fact
the
party is in breach of the first representation, warranty or
covenant.
17.10 Expenses
of Transaction.
Whether
or not the Transactions are consummated: (a) Buyer will pay the fees, expenses
and disbursements of Buyer and its representatives incurred in connection with
this Agreement; and (b) Seller will pay the fees, expenses and disbursements
of
Seller, the Shareholders and their respective representatives incurred in
connection with this Agreement. Seller shall pay all such fees, expenses and
disbursements before the Closing so that the Assets will not be charged with
or
diminished thereby.
17.11 No
Brokers.
Seller
and the Shareholders represent and warrant to Buyer and Buyer represents to
Seller and the Shareholders that the warranting party has had no dealings with
any broker, agent or other Person so as to entitle such Person to a commission
or fee in connection with the Transactions. If for any reason a commission
or
fee becomes or is claimed to be due with respect to dealings by Buyer, Buyer
shall indemnify and hold harmless Seller and the Shareholders from all Losses
relating to such claim. If for any reason a commission or fee becomes or is
claimed to be due with respect to dealings by Seller or any Shareholder, Seller
and the Shareholders, jointly and severally, shall indemnify and hold harmless
Buyer from all Losses relating to such claim.
17.12 Time
of the Essence.
Time is
of the essence of this Agreement.
[SIGNATURES
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26
IN
WITNESS WHEREOF, Seller, the Shareholders and Buyer have caused this Agreement
to be executed as of the date first written above by their respective duly
authorized officers.
|
BUYER:
|
|
|
Market
& Research Corp.
|
|
|
By:
|
|
|
Name:
|
|
|
Its:
|
|
|
SELLER:
|
|
|
Precision
Opinion, Inc.,
|
|
|
By:
|
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇
|
|
Its:
|
President
|
|
SHAREHOLDERS:
|
|
|
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
|
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
|
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▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
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27
INDEX
OF EXHIBITS AND SCHEDULES
|
Exhibit
A
|
Definitions
|
|
Exhibit
B
|
Allocation
of Purchase Price
|
|
Exhibit
C
|
General
Conveyance, Assignment and ▇▇▇▇ of Sale
|
|
Exhibit
D
|
Seller’s
Secretary’s Certificate and Unanimous Written Consent in Lieu of a Meeting
of the Board of Directors and Shareholders of Seller
|
|
Exhibit
E
|
Form
of Opinion of Seller’s/Shareholders’ Counsel
|
|
Exhibit
F
|
Form
of Covenant Not to Compete Agreement
|
|
Exhibit
G
|
Form
of Seller’s and Shareholders’ Closing Certificate
|
|
Exhibit
H
|
Non-Foreign
Affidavit
|
|
Exhibit
I
|
Form
of Buyer’s Closing Certificate
|
|
Exhibit
J
|
Survey
Requirements
|
|
Schedule
2.1.1
|
Permits
|
|
Schedule
2.1.2
|
Equipment
|
|
Schedule
2.1.3
|
Customer
Contracts and Employee Contracts
|
|
Schedule
2.1.8
|
Office
Equipment
|
|
Schedule
2.1.9
|
Systems
|
|
Schedule
3.5
|
Accounts
Receivable as of the Closing Date
|
|
Schedule
6.3(c)
|
Consents
and Defaults
|
|
Schedule
6.4
|
Governmental
Consents
|
|
Schedule
6.5
|
Financial
Statements
|
|
Schedule
6.7.1
|
Intellectual
Property Rights
|
|
Schedule
6.8.2
|
Tangible
Personal Property Leases
|
|
Schedule
6.9.3
|
Consents
|
|
Schedule
6.10
|
Insurance
and Workers’ Compensation
|
|
Schedule
6.11
|
Employees
|
|
Schedule
6.13
|
Governmental
Orders
|
|
Schedule
6.14
|
W-9
Form
|
|
Schedule
6.15
|
Litigation
|
|
Schedule
6.16
|
Price
Redetermination Contracts
|
|
Schedule
6.17
|
Ordinary
Course of Business
|
|
Schedule 6.18.1
|
Permits
Requiring Consents
|
|
Schedule
6.21
|
Restrictive
Agreements
|
|
Schedule
6.22.2
|
Leased
Real Property
|
28
EXHIBIT
A
“Accounts
Receivable”
means
all contracts, receivables, notes and other amounts receivable from customers
arising from the operation of the Business before the Closing Date, whether
or
not in the ordinary course and whether or not billed before the Closing Date,
together with any unpaid financing charges accrued thereon.
“Action”
means
any claim, action, suit, formal or informal arbitration or mediation, inquiry,
proceeding or investigation by or before any Governmental Authority or private
authority.
“Affiliate”
means,
with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by,
or is
under common control with, such specified Person.
“Agreement”
means
this Purchase and Sale of Assets Agreement among Buyer, Seller and the
Shareholders (including the Exhibits and the Disclosure Schedules), and all
amendments to this Agreement made in accordance with Section 17.3.
“Applicable
Rate”
means
an annual rate equal to the prime rate then generally in effect on the date
of
payment as set forth in The
Wall Street Journal.
“Assets”
has
the
meaning specified in Section 2.1.
“Assignment,
Assumption and Consent to Leased Land”
means
an assignment of all of Seller’s rights, title and interest under the Real
Estate Lease(s) for the Land upon the same terms and conditions without any
changes thereto, containing the consent of the landlord, if required, and
appropriate estoppel language if possible.
“Bankruptcy
Code”
means
Title 11 of the United States Code.
“▇▇▇▇
of Sale”
means
a
General Conveyance, Assignment and ▇▇▇▇ of Sale.
“Business”
has
the
meaning specified in Recital A.
“Buyer”
has
the
meaning specified in the introductory paragraph of the Agreement.
“CERCLA”
means
the Comprehensive Environmental Response, Compensation and Liability Act of
1980.
“CERCLIS”
means
the Comprehensive Environmental Response, Compensation and Liability Information
System, as updated through the date of this Agreement and the Closing
Date.
“Claim
Notice”
means
a
notice of claim for indemnification pursuant to Article 13.
“Closing”
has
the
meaning specified in Section 4.1.
“Closing
Date”
means
the date on which the Closing occurs.
A-1
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Confidential
Information”
means
confidential information of Seller and the Business, including customer and
supplier lists, operation policies and methods, pricing and cost policies,
marketing plans, and other confidential information.
“Consents”
means
those authorizations, consents, waivers, orders, approvals and clearances of
Governmental Authorities and officials and other Persons which are necessary
for
the sale and transfer to Buyer of the Assets or the consummation of the
Transactions (including the continuation of Customer Contracts) where the
approval of any other Person may be required.
“Customer
Contracts”
means
all contractual rights of Seller with Seller’s customers (whether oral or in
writing) relating to the operation of the Business, including all service
agreements, customer contracts and routes.
“Debt
Payment Limit”
has
the
meaning specified in Section 3.1.4.
“Disclosure
Schedules”
means
the Disclosure Schedules that shall be prepared by Seller and the Shareholders
and delivered to Buyer and attached to the Agreement.
“Dispute
Notice”
means
a
notice disputing the propriety or amount of a Claim Notice.
“DOJ”
means
the Antitrust Division of the United States Department of Justice.
“Employee
Contracts”
means
all collective bargaining agreements with any union and all employment
agreements entered into by Seller.
“Encumbrance”
means
any security interest, pledge, mortgage, deed of trust, lien (including
Environmental and Tax liens), charge, judgment, encumbrance, adverse claim,
claim arising under Section 506(c) of the Bankruptcy Code, preferential
arrangement, fraudulent transfer or other avoidance claim or restriction of
any
kind, including any restriction on the use, voting, transfer, receipt of income
or other exercise of any attributes of ownership, and any lien, interest,
restriction or limitation arising from or relating to personal or other property
tax, sales and transaction privilege, claim of successor liability for any
alleged unpaid sales or other tax, and any other lien or assessment of any
Governmental Authority, whether or not allowable, recorded or
contingent.
“Environment”
or
“Environmental”
means
matters relating to surface waters, groundwaters, soil, subsurface strata and
ambient air.
“Environmental
Law(s)”
means
any Law and any judicial or administrative interpretation thereof, including
any
judicial or administrative order, consent decree or judgment, relating to the
Environment, health, safety or Hazardous Materials, including CERCLA; the
Resource Conservation and Recovery Act; the Hazardous Materials Transportation
Act; the Clean Water Act; the Toxic Substances Control Act; the Clean Air Act;
the Safe Drinking Water Act; the Atomic Energy Act; the Federal Insecticide,
Fungicide and Rodenticide Act; and the Federal Food, Drug and Cosmetic Act;
and
the state or local equivalents of these laws.
A-2
“Environmental
Permits”
means
all Permits and identification numbers required under any applicable
Environmental Law.
“Equipment”
means
all containers and other pieces of equipment used or for use in the Business
and
owned or leased by Seller.
“ERISA”
means
the Employee Retirement Income Security Act of 1974.
“Excluded
Assets”
has
the
meaning specified in Section 2.2.
“FCC”
means
the United States Federal Communications Commission.
“Financial
Statements”
and
“Financial
Statement Date”
have
the meanings specified in Section 6.5.
“FTC”
means
the United States Federal Trade Commission.
“Governmental
Authority”
means
the FTC or the DOJ or any other United States federal, state or local or any
foreign government, governmental, regulatory or administrative authority, agency
or commission or any court, tribunal, or judicial or arbitral body.
“Governmental
Order”
means
any order, writ, judgment, injunction, decree, stipulation, determination or
award entered by or with any Governmental Authority.
“Handled”
means
owned, leased, had an interest in, collected, generated, transported, stored,
handled, recycled, reclaimed, processed, disposed of, or contracted for the
disposal of.
“▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act”
means
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended.
“Hazardous
Materials”
means:
(a) petroleum and petroleum products, radioactive materials, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contain polychlorinated biphenyls, and
radon gas; or (b) any other chemicals, materials or substances defined as or
included in the definition of “hazardous materials,” “hazardous wastes,”
“hazardous substances,” “extremely hazardous wastes,” “restricted hazardous
wastes,” “toxic substances,” “toxic wastes,” “toxic pollutants,” “contaminants,”
“pollutants,” “infectious wastes,” “medical wastes,” “radioactive wastes,”
“sewage sludges” or words of similar import under any applicable
Law.
“include”
or
“including”
has
the
meaning specified in Section 17.9.
“Indemnified
Party”
means
a
party seeking indemnification pursuant to Article 13.
“Indemnifying
Party”
means
a
party from whom indemnification is sought pursuant to Article 13.
“Initial
Payment”
shall
have the meaning set forth in Section 3.1.
A-3
“Intellectual
Property Rights”
means
all the right, title and interest of Seller and the Shareholders in, to and
under all trademarks, trade names, service marks, copyrights, patents,
inventions, designs, industrial designs, trade secrets, royalties, secret
processes, formulae, and all applications, registrations, renewals and other
rights relating to the foregoing (whether or not any registration or filing
has
been made with respect thereto).
“Inventory”
means
all parts, tires, supplies and accessories of every kind, nature and description
used or for use in the Business and owned by Seller on the Closing
Date.
“IRS”
means
the Internal Revenue Service of the United States.
“Law”
means
any federal, state, local or foreign statute, law, ordinance, regulation, rule,
code, Governmental Order, requirement or rule of common law, including any
Environmental Law.
“Leased
Real Property”
means
all of Seller’s leasehold interest in and to the real property leased by Seller,
as tenant, and improvements thereon that are the subject of any Real Estate
Lease.
“Leasehold
Premises” is the office space leased by Buyer pursuant to its Real Estate
Lease.
“Liabilities”
means
all debts, liabilities and obligations, whether legal or equitable, accrued
or
fixed, absolute or contingent, matured or unmatured, determined or determinable,
foreseen or unforeseen, ordinary or extraordinary, patent or latent, including
those arising under any Law (including any Environmental Law) or Action and
those arising under any contract, agreement, arrangement, commitment or
undertaking.
“Losses”
means
Liabilities, claims, damages, Actions, demands, assessments, adjustments,
penalties, losses, costs and expenses whatsoever (including court costs,
reasonable attorneys’ fees and expenses of investigation), whether equitable or
legal, matured or contingent, known or unknown, foreseen or unforeseen, ordinary
or extraordinary, patent or latent.
“Material
Adverse Effect”
means
any circumstance, change in, or effect on, the Assets or the Business that,
individually or in the aggregate with any other circumstances, changes in,
or
effects thereon: (i) is or could reasonably be expected to be materially adverse
to the Assets or to the business, financial condition, assets or Liabilities
(including contingent Liabilities), customer or supplier relationships,
prospects, value, results of operations or the condition (financial or
otherwise) of the Business; or (ii) could reasonably be expected to materially
adversely affect the ability of Buyer to use the Assets or operate the Business
in the manner in which they are currently used or operated by
Seller.
“Noncompetition
Agreement”
has
the
meaning specified in Section 4.2.5.
“Office
Equipment”
means
all pieces of office equipment and furniture used or for use in the Business
and
owned or leased by Seller.
A-4
“Owned
Real Property”
means
the real property owned by Seller, including all credits, buildings, fixtures,
personalty and improvements located thereon, easements, interests, rights,
tenements, hereditaments, and appurtenances held by Seller that in any way
benefit the Land or the improvements thereon or related to the Business, all
mineral, water, and irrigation rights, and Seller’s interests in any roadway
adjoining the Land and any rights or interests that may accrue to the benefit
of
Seller or the Land as a result of the abandonment thereof.
“Permits”
means
all permits, licenses, franchises, consents and approvals of every kind
necessary to operate the Business.
“Permitted
Encumbrances”
means
the following: (a) zoning ordinances and regulations that do not, in Buyer’s
sole judgment, adversely affect Buyer’s use of the Owned Real Property for its
current uses after the Closing; (b) real estate Taxes and assessments, both
general and special, which are a lien but are not yet due and payable at the
Closing Date; and (c) easements, Encumbrances, covenants, conditions,
reservations and restrictions of record, if any, as have been approved in
writing by Buyer before the Closing Date.
“Person”
means
any individual, partnership, firm, corporation, limited liability company,
association, trust, unincorporated organization, Governmental Authority or
other
entity.
“Plan”
means:
(i) any employee benefit plan, employee welfare benefit plan, employee benefit
pension plan, multi-employer plan or multiple-employer welfare arrangement
(within the meaning of Section 3 of ERISA) and all bonus, stock option, stock
purchase, restricted stock, incentive, deferred compensation, retiree medical,
dental or life insurance, supplemental retirement, severance or other benefit
plans, programs or arrangements, and all employment, termination, severance,
“golden parachute” or other contracts or agreements, formal or informal, legally
binding or not, with respect to which Seller is a party, with respect to which
Seller has or could have any obligation (whether primary or secondary) or which
are maintained, contributed to or sponsored by Seller or any member of its
controlled group of organizations within the meaning of Section 414 of the
Code
for the benefit of any current or former employee, officer or director of
Seller; and (ii) each employee benefit plan for which Seller could incur
Liability under Section 4069 of ERISA if such plan were terminated, or under
Section 4212(c) of ERISA, or in respect of which Seller remains secondarily
liable under Section 4204 of ERISA.
“Purchase
Price”
has
the
meaning specified in Section 3.1.
“Real
Estate Lease(s)”
means
all leases and subleases for Leased Real Property.
“Release”
means
disposing, discharging, injecting, spilling, leaking, leaching, dumping,
emitting, escaping, emptying, seeping, placing or otherwise releasing into,
upon
or under any land, water or air or otherwise entering into the
Environment.
“Restrictive
Agreements”
mean
any noncompetition or nonsolicitation agreements related to the Business,
regardless of whether such agreements restrict or benefit Seller or the
Business.
“Restrictive
Covenants”
means
the covenants set forth in Article 15.
“Revenue
Shortfall”
has
the
meaning specified in Section 6.19.
A-5
“Seller”
has
the
meaning specified in the introductory paragraph of the Agreement.
“Seller
Debt”
means
all indebtedness and other Liabilities of Seller for borrowed money, including
the current and long-term portions of bank debt, mortgages, shareholder loans
or
notes payable, other notes or loans payable, any amounts due to Buyer or its
Affiliates, and remaining payments on capitalized and non-capitalized leases.
“Seller Debt” includes any and all amounts necessary to retire such indebtedness
and Liabilities, including principal or scheduled payments, interest or finance
charges, and other fees or payments necessary to retire the indebtedness at
closing.
“Shareholders”
has
the
meaning specified in the introductory paragraph of the Agreement.
“Systems”
means
all manual and automated computer, billing and accounting systems and components
thereof, including all transferable software and transferable programs used
or
for use in the Business.
“Tax”
or
“Taxes”
means
any and all taxes, fees, levies, duties, tariffs, imposts, and other charges
of
any kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any Governmental
Authority or taxing authority, including: taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, minimum, alternative minimum, estimated, sales, use, capital stock,
payroll, employment, social security, workers’ compensation, unemployment
compensation, or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value added, or gains taxes; license,
registration and documentation fees; and customs duties, tariffs, and similar
charges.
“Third
Party Claim”
means
any claim by a third party that may give rise to a claim for indemnification
against any Indemnifying Party.
“to
the
best of Seller’s knowledge”
has
the
meaning specified in Article 6.
“Transactions”
means
the transactions contemplated by this Agreement.
A-6
EXHIBIT
B
ALLOCATION
OF PURCHASE PRICE
B-1
EXHIBIT
C
GENERAL
CONVEYANCE, ASSIGNMENT AND ▇▇▇▇ OF SALE
Effective
as of ________, ________________, a(n) ________ ________ (“Grantor”), for good
and valuable consideration and pursuant to that Purchase and Sale of Assets
Agreement dated as of ________ (the “Purchase Agreement”), among Market &
Research Corp., (“Grantee”), Grantor, and _____________, the sole shareholders
of Grantor, hereby sells, assigns, transfers, conveys and delivers to Grantee
all of Grantor’s right, title and interest in all of the Assets (except for the
Excluded Assets).
TO
HAVE
AND TO HOLD all such Assets unto Grantee and its successors and assigns to
and
for its or their use forever.
Grantor
shall execute and deliver, at the request of Grantee, such further instruments
of transfer, and shall take or cause to be taken such other or further actions,
as shall reasonably be requested for purposes of carrying out the
Transactions.
This
General Conveyance, Assignment and ▇▇▇▇ of Sale is delivered pursuant to Section
4.2.1 of the Purchase Agreement and shall be construed consistently with the
Purchase Agreement. Capitalized terms used in this instrument shall have the
meanings given them in the Purchase Agreement.
IN
WITNESS WHEREOF, Grantor has executed and delivered this General Conveyance,
Assignment and ▇▇▇▇ of Sale effective as of the date first above
written.
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Grantor:
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By:
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Name:
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Its:
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C-1
EXHIBIT
D
SELLER’S
SECRETARY’S CERTIFICATE
The
undersigned, being the duly elected, qualified and acting Secretary of
____________________, a ________ corporation (the “Corporation”), certifies
that:
1. Attached
as Exhibit
A
is a
true and correct copy of resolutions adopted by the Corporation and its
shareholders relating to the Purchase and Sale of Assets Agreement (the
“Agreement”) among the Corporation, the Corporation’s shareholders, and
____________________, a ________ ________, and the transactions contemplated
thereby. Such resolutions have not been amended or rescinded, and are in full
force and effect on the date of this Certificate.
2. The
persons whose names and signatures appear below are duly authorized by the
Corporation to execute all documents and agreements contemplated by the
Agreement, and the signatures set forth opposite each person’s name is such
person’s own genuine signature:
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Name
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Title
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Signature
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IN
WITNESS WHEREOF, the undersigned has executed this Certificate this ___ day
of
________, ____.
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,
Secretary
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D-1
EXHIBIT
A
___________________________,
INC.
UNANIMOUS
WRITTEN CONSENT IN LIEU OF A MEETING
OF
THE BOARD OF DIRECTORS AND SHAREHOLDERS
Pursuant
to §§ ________ [insert
sections relating to unanimous written consent of board and shareholders under
applicable state corporate law]
of the
___________________ [insert
name of applicable state corporate law],
the
undersigned, being all of the members of the Board of Directors (the “Board”)
and all of the shareholders (the “Shareholders”) of ____________________, a
________ corporation (the “Corporation”), adopt by this unanimous written
consent the following resolutions with the same force and effect as if they
were
unanimously adopted at a duly convened meeting of the Board and a duly convened
meeting of the Shareholders:
I. RECITALS
WHEREAS,
the
Corporation desires to sell certain of its assets pursuant to the Purchase
and
Sale of Assets Agreement (the “Agreement”) among the Corporation,
______________, a ________ ________, and the Shareholders; and
WHEREAS,
the
Corporation, through its Board and Shareholders, desires to approve, authorize
and direct certain actions to be taken relating to the Agreement and the
transactions contemplated thereby.
II. APPROVAL
OF AGREEMENT
NOW,
THEREFORE, BE IT RESOLVED,
that the
Board adopts and approves, and recommends to the Shareholders the adoption
and
approval of, the transactions contemplated by the Agreement and the terms and
provisions of the Agreement in the form presented to the Board, believing that
the terms thereof are fair to and in the best interest of the Corporation and
the Shareholders; and
FURTHER
RESOLVED,
that the
Shareholders adopt and approve the transactions contemplated by the Agreement
and the terms and provisions of the Agreement in the form presented to the
Shareholders, believing that the terms thereof are fair to and in the best
interest of the Corporation and the Shareholders; and
FURTHER
RESOLVED,
that the
President, any Vice President, and the Secretary of the Corporation, and each
of
them acting alone (each an “Authorized Officer”), are authorized and directed to
execute and deliver in the name and on behalf of the Corporation, and to cause
the Corporation to perform its obligations under, the Agreement and such other
agreements and documents as are contemplated thereby, with such changes therein
and additions thereto as any Authorized Officer may approve or deem to be
necessary, appropriate or advisable, the execution thereof by such officer
to be
conclusive evidence of the approval by him or her of such changes and additions,
and to perform all other acts that may be necessary in connection
therewith.
D-2
III. MISCELLANEOUS
MATTERS
NOW,
THEREFORE, BE IT RESOLVED,
that all
actions previously taken on behalf of the Corporation by any officer or director
of the Corporation in connection with any of the foregoing matters are ratified
and confirmed in all particulars as the acts of the Corporation;
and
FURTHER
RESOLVED,
that the
Board and Shareholders unanimously adopt and approve any and all additional
resolutions necessary or desirable to implement and effect the transactions
contemplated by the Agreement or by the foregoing resolutions, such resolutions
to be in a form and content prepared and filed by any Authorized Officer with
these resolutions; and
FURTHER
RESOLVED,
that the
Authorized Officers, and each of them acting alone, are authorized and directed,
in the name and on behalf of the Corporation, to take all actions, including
seeking all requisite consents and approvals, if any, from third parties or
under applicable law, that any of them considers necessary, appropriate or
advisable to effectuate each of the foregoing resolutions and to carry out
the
purposes thereof or otherwise to effectuate any transactions contemplated by
the
Agreement, the taking of any such action or the execution of any such agreement,
instrument or document by such officer conclusively to evidence the due
authorization thereof by the Corporation; and
FURTHER
RESOLVED,
that the
Authorized Officers, and each of them acting alone, are authorized and directed,
in the name and on behalf of the Corporation, to take or cause to be taken
any
and all further actions and to execute and deliver, or cause to be executed
and
delivered, all such further agreements and such further documents, certificates,
applications, notices, and undertakings, and to incur all such fees and
expenses, as in their judgment shall be necessary, appropriate or advisable
to
carry into effect the purpose and intent of the foregoing resolutions; and
FURTHER
RESOLVED,
that
these resolutions may be executed in counterparts; and
FURTHER
RESOLVED,
that in
furtherance of the foregoing resolutions, the Corporation’s Secretary or
Assistant Secretary is authorized to join in the execution of, attest to and/or
affix the Corporation’s seal to, any document, agreement, certificate or
instrument executed by any Authorized Officer.
Dated
________, ____.
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DIRECTORS:
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SHAREHOLDERS:
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D-3
EXHIBIT
E
FORM
OF OPINION OF SELLER’S/SHAREHOLDERS’ COUNSEL
Market
& Research Corp.
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Re:
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Acquisition
of Assets of Precision Opinion, Inc. (“Seller”), by Market & Research
Corp (“Buyer”)
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Ladies
and Gentlemen:
We
have
acted as counsel to Seller in connection with the Transactions, as set forth
in
the Purchase and Sale of Assets Agreement among Buyer, Seller and the
Shareholders executed as of ________ (the “Agreement”). You have requested our
opinion with respect to the matters set forth herein pursuant to Section 4.2.4
of the Agreement. As used herein, the term “Agreement” means the Agreement and
all exhibits and schedules thereto. Unless otherwise defined herein or unless
the context otherwise requires, all capitalized terms used herein shall have
the
meanings set forth in the Agreement.
For
purposes of this opinion, we have examined such questions of law and fact as
we
have deemed necessary or appropriate and have examined originals, certified
copies or copies otherwise identified as true copies of the
following:
(a) The
Agreement;
(b) The
Articles of Incorporation and the Bylaws of Seller;
(c) A
Certificate of Good Standing with respect to Seller from the _______________
dated ________; and
(d) Certified
resolutions of the Board of Directors and Shareholders of Seller adopted on
________.
[Also
list other documents, if any, reviewed.]
In
addition, we have examined such other records, agreements, documents and other
instruments of Seller and the Shareholders and such certificates or comparable
documents of public officials and of officers and representatives of Seller
and
the Shareholders as we deemed necessary or appropriate for purposes of rendering
the opinions set forth below. As to the various questions of fact material
to
our opinions, we have relied upon the representations and warranties of Seller
and the Shareholders contained in the Agreement and in various officer’s
certificates, and other representations, warranties and statements made by
representatives of Seller and the Shareholders, all of which representations,
warranties and statements we have assumed to be true and correct in all respects
as of the date hereof.
E-1
We
have
further assumed: (i) the genuineness and authenticity of all documents examined
by us and all signatures thereon not witnessed by us and the conformity to
originals of all copies of all documents examined by us; (ii) that the
execution, delivery and acceptance of the Agreement and all documents,
contracts, agreements, certificates and other materials (collectively, the
“Agreements”) in connection with the Transactions have been duly authorized by
all action, corporate or otherwise, necessary by the parties to those Agreements
other than Seller and the Shareholders (those other parties collectively
referred to as the “Other Parties”); (iii) the legal capacity of all natural
persons executing the Agreements; (iv) that the Other Parties have obtained
all
necessary consents, authorizations, approvals, permits or certificates
(governmental and otherwise) which are required as a condition to the execution
and delivery of the Agreements by the Other Parties and to the consummation
by
the Other Parties of the Transactions; (v) that the Agreements constitute legal,
valid and binding obligations of the Other Parties under the laws of all
applicable jurisdictions; (vi) that the Agreements accurately describe and
contain the mutual understanding of the parties, and that there are no oral
or
written statements or agreements that modify, amend or vary, or purport to
modify, amend or vary, any of the terms thereof; (vii) that the Other Parties
will act in a commercially reasonable manner and in accordance with all legal
requirements in enforcing their rights under the Agreements; (viii) that the
laws of the State of Nevada chosen by the parties to govern the Agreement will
govern such agreement and that the result of the application of Nevada law
will
not be contrary to a fundamental policy of the law of any other state with
which
the parties may have contact in connection with the transactions contemplated
thereby; and (ix) that the laws of the State of Nevada are identical in all
respects to the laws of the State of ________. Except with respect to item
(ix)
above, we are not aware of any matter that would make us believe that any of
the
assumptions set forth above is invalid.
We
are
qualified to practice law in the State of Nevada. We express no opinion as
to,
and for the purposes of the opinions set forth herein, we have conducted no
investigation of, and do not purport to be experts on, any laws other than
the
laws of the State of Nevada and the federal laws of the United States. With
respect to such laws, our opinions are as to what the law is or, in
circumstances where the status of the law is unclear, what the law might
reasonably be expected to be as of the date hereof. This opinion is rendered
as
of the date hereof, and we undertake no obligation to update this opinion should
this opinion no longer remain accurate by change in factual circumstances,
law,
judicial decision or otherwise.
Based
on
the foregoing, and subject to the assumptions, limitations, qualifications
and
exceptions set forth herein, we are of the opinion that, except as disclosed
in
the Disclosure Schedules:
1. Seller
is
a corporation duly incorporated, validly existing and in good standing under
the
laws of the State of Nevada. Seller has the corporate power and authority to
own, operate or lease the properties and assets it now owns or operates and
to
carry on the Business as it is conducted as of the date hereof.
2. Seller
has the corporate power and authority to execute and deliver the Agreement
and
to consummate the Transactions.
E-2
3. The
execution and delivery of the Agreement and the consummation of the Transactions
have been duly and validly authorized by all necessary corporate and shareholder
action on the part of Seller. The Agreement has been duly and validly executed
and delivered by Seller and (assuming due authorization, execution and delivery
by Buyer) constitutes the legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms, except to the extent
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or conveyance or other similar laws now or
hereafter in effect relating to the enforcement of creditors’ rights, and (ii)
the effect of general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law).
4. The
Agreement has been duly and validly executed and delivered by each Shareholder
and (assuming due authorization, execution and delivery by Buyer) constitutes
the legal, valid and binding obligation of such Shareholder enforceable against
such Shareholder in accordance with its terms, except to the extent
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or conveyance or other similar laws now or
hereafter in effect relating to the enforcement of creditors’ rights, and (ii)
the effect of general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law).
5. The
execution, delivery and performance of the Agreement and the consummation of
the
Transactions by Seller and the Shareholders do not and will not:
(a) conflict
with or result in a breach or violation of Seller’s Articles of Incorporation or
Bylaws;
(b) to
our
knowledge, conflict with, result in any material breach of, constitute a
material default (or event which with the giving of notice or lapse of time
would become a default) under, require any consent or approval under, or give
to
any other Person any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, any note, bond, mortgage, indenture, contract,
agreement, lease, sublease, license, permit, authorization, franchise or other
instrument or arrangement to which Seller or any Shareholder is a party or
by
which any of their respective assets or properties are bound or
affected;
(c) to
our
knowledge, require any consent, approval, authorization, waiver, clearance
or
other order of, action by, filing with or notification to, any Governmental
Authority; or
(d) to
our
knowledge, result in the creation or imposition of any Encumbrance on any of
the
Assets pursuant to: (i) any Law to which Seller or any Shareholder or any of
their respective properties are subject; (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, sublease, license, permit, authorization,
franchise or other instrument or arrangement to which Seller or any Shareholder
is a party or by which any of its assets or properties are bound or affected;
or
(iii) otherwise.
6. To
our
knowledge, there are no Actions by or against Seller or any Shareholder (or
by
or against any affiliate thereof and relating to the Business), or affecting
any
of the Assets, pending or threatened.
E-3
7. The
instruments delivered by Seller to Buyer at the Closing conveying the Assets
to
Buyer are in form sufficient to transfer title to the Assets to
Buyer.
We
are
expressing no opinion as to any matter other than those expressly set forth
in
the numbered paragraphs above.
This
opinion is being furnished only to you and is solely for your benefit. Except
with our prior written consent, this opinion may not be relied upon by, filed
with or furnished to, quoted in any manner to, or delivered to, any person
or
entity or referred to in any financial statement, report or related document.
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Very
truly yours,
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E-4
EXHIBIT
F
COVENANT
NOT TO COMPETE AGREEMENT1
THIS
COVENANT NOT TO COMPETE AGREEMENT
(the
“Agreement”) is made and entered into as of ________, by and among
_______________, a ________ ________ (the “Company”); __________ and _________
(“Shareholders”); and _______________, a ________ ________ (“Buyer”).
RECITALS
A. The
Company, Shareholders and Buyer are parties to that certain Purchase and Sale
of
Assets Agreement, dated ________, ____ (the “Purchase Agreement”), which
provides for the sale of certain of the assets used in the market research
and
opinion polling business conducted by the Company (the “Business”) based Las
Vegas, Nevada and providing services to customers throughout the United States
of America (the “Service Area”).
B. To
induce
Buyer to enter into the Purchase Agreement, the Company and Shareholders
(“Sellers”) have agreed to forego certain rights to compete with Buyer and its
affiliates (“Affiliates”), on the terms and subject to the conditions set forth
in this Agreement.
ACCORDINGLY,
for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. Noncompete
Definitions.
For
purposes of this Agreement, the terms listed below shall have the following
meanings:
(a) “Area”
means the Service Area of the Business.
(b) “Customers”
means individuals, partnerships, firms, corporations, limited liability
companies, associations, trusts, unincorporated organizations, governmental
entities or other entities (“Persons”) (i) to which any Seller has provided
waste services or (ii) that any Seller has solicited with respect to the
provision of waste services.
(c) “Time
Period” means the period beginning as of the date of this Agreement and ending
five years thereafter; provided, however, that if a court of competent
jurisdiction determines that such period is unenforceable, Time Period shall
mean the period beginning as of the date of this Agreement and ending four
years
thereafter; provided, however, that if a court of competent jurisdiction
determines that such period is unenforceable, Time Period shall mean the period
beginning as of the date of this Agreement and ending three years thereafter;
provided, however, that if a court of competent jurisdiction determines that
such period is unenforceable, Time Period shall mean the period beginning as
of
the date of this Agreement and ending two years thereafter; provided, however,
that if a court of competent jurisdiction determines that such period is
unenforceable, Time Period shall mean the period beginning as of the date of
this Agreement and ending one year thereafter, or such other period as the
court
shall determine to be reasonable. The Time Period shall be extended by the
number of days in any period in which any of Sellers is deemed to be in default
or breach of this Agreement.
1
This
form will be used for all parties to noncompetition
agreements.
F-1
2. Payment.
As full
consideration for Sellers entering into this Agreement, Buyer shall pay to
Sellers concurrently with the execution of this Agreement, as part of the
Purchase Price under the Purchase Agreement, the aggregate sum of $______,
which
sum shall be allocated among Sellers as Sellers agree; provided, however, that
Sellers shall allocate such sum in a manner such that each receives good and
valuable consideration for entering into this Agreement.
3. Covenants.
Sellers
jointly and severally covenant and agree that, during the Time Period, they
shall not, directly or indirectly, individually or as a stockholder, partner,
member, financier, agent, employee, representative or consultant for or
otherwise on behalf of or in conjunction with any Person:
(a) Noncompetition.
Engage
or have any interest, direct or indirect, in any business in competition with
the Business, as the Business is constituted at the Closing Date (whether or
not
the Business is subsequently carried on by Buyer, its Affiliates or by any
successor or subsequent purchaser of the Business), within the Area; provided,
however, that this shall not preclude any Seller from owning less than 1% of
the
securities of any publicly traded entity;
(b) Nonsolicitation
of Customers.
Solicit
or assist in the solicitation of any Customers in the Area for any business
of a
nature that directly or indirectly competes with the Business; or
(c) Nonsolicitation
of Employees.
Hire,
employ, solicit, or otherwise encourage or entice to leave their employment
with
Buyer or its Affiliates, any of Buyer’s or its Affiliates’
employees.
4. Enforceability.
Sellers
jointly and severally represent and warrant to and covenant with Buyer as
follows:
(a) The
covenants in this Agreement are reasonably necessary for the protection of
the
interests of Buyer and its Affiliates, are reasonable as to duration, scope
and
territory, and are not unreasonably restrictive of Sellers.
(b) If
any
Seller breaches any covenants set forth in this Agreement, such breach would
cause irreparable harm to Buyer and its Affiliates and, in the event of such
breach, Buyer and its Affiliates shall be entitled, in addition to monetary
damages and to any other remedies available to Buyer and its Affiliates under
this Agreement and at law, to equitable relief, including injunctive relief,
and
the payment by Sellers of all costs incurred by Buyer and its Affiliates in
enforcing the provisions of this Agreement, including reasonable attorneys’
fees.
(c) Notwithstanding
subsection (a), should any court of competent jurisdiction determine that any
covenants in this Agreement are unreasonable as to duration, scope, or
territory, the covenants shall be enforceable as provided in this Agreement
with
respect to the maximum duration, scope and territory as the court determines
to
be reasonable.
F-2
5. Assignment;
Binding Effect; Amendment.
This
Agreement and the rights of the parties under it may not be assigned (except
by
operation of law and except that they may be assigned by Buyer to an affiliate
of Buyer or to any successor of Buyer to the Business without the consent of
Sellers) and shall be binding upon and shall inure to the benefit of the
parties. In addition, this Agreement shall inure to the benefit of Buyer’s
Affiliates. This Agreement constitutes a valid and binding agreement of the
parties enforceable in accordance with its terms and may be modified or amended
only by a written instrument executed by each party.
6. Entire
Agreement.
This
Agreement is the final, complete and exclusive statement of the agreement among
the parties with relation to the subject matter of this Agreement. There are
no
oral representations, understandings or agreements covering the same subject
matter as this Agreement. This Agreement supersedes, and cannot be varied,
contradicted or supplemented by evidence of, any prior or contemporaneous
discussions, correspondence, or oral or written agreements or arrangements
of
any kind.
7. Counterparts.
This
Agreement may be executed in two or more original or facsimile counterparts,
each of which shall be deemed an original and all of which together shall
constitute but one and the same instrument.
8. Notices.
All
notices or other communications required or permitted under this Agreement
shall
be in writing and may be given by depositing the same in United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, by overnight courier, or by delivering
the same in person to such party, addressed as follows:
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If
to Sellers, addressed to them at:
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If
to Buyer, addressed to it at:
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Attn:
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with
a
copy to:
and
a
copy to:
Notice
shall be deemed given and effective the day personally delivered, the day sent
by overnight courier, subject to signature verification, and the day of deposit
in the U.S. mail of a writing addressed and sent as provided above. Any party
may change the address for notice by notifying the other parties of such change
in accordance with this Section.
F-3
9. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Nevada, without giving effect to any choice or conflict
of
law provision or rule (whether of the State of Nevada or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than
the
State of Nevada.
10. Jurisdiction;
Venue; Forum; Waiver of Jury Trial.
Any
legal action arising under or in connection with this Agreement or any other
instrument, document or agreement executed or delivered in connection with
this
Agreement, or in any way connected with or related or incidental to the dealings
of the parties with respect to this Agreement or such other instrument, document
or agreement or the Transactions (“Dispute”) shall be brought exclusively in the
▇▇▇▇▇ County, Nevada District Court or in the United States District Court
for
the Southern District of Nevada. By execution and delivery of this Agreement,
with respect to Disputes each of the parties knowingly, voluntarily and
irrevocably: (a) consents, for itself and in respect of its property, to the
exclusive jurisdiction of these courts; (b) waives any immunity or objection,
including any objection to personal jurisdiction or the laying of venue or
based
on the grounds of forum non conveniens, which it may have from or to the
bringing of the Dispute in such jurisdiction; (c) waives any personal service
of
any summons, complaint or other process that may be made by any other means
permitted by the State of Nevada; (d) waives any right to trial by jury; (e)
agrees that any such Dispute shall be decided by court trial without a jury;
and
(f) agrees that any party to this Agreement may file an original counterpart
or
a copy of this Section 10 with any court as written evidence of the consents,
waivers and agreements of the parties set forth in this Section 10.
11. No
Waiver.
No
delay of or omission in the exercise of any right, power or remedy accruing
to
any party as a result of any breach or default by any other party under this
Agreement shall impair any such right, power or remedy, nor shall it be
construed as a waiver of or acquiescence in any such breach or default, or
of or
in any similar breach or default occurring later. No waiver of any single breach
or default shall be deemed a waiver of any other breach or default occurring
before or after that waiver.
12. Severability.
In case
any provision of this Agreement shall be invalid, illegal or unenforceable,
it
shall, to the extent possible, be modified in such manner as to be valid, legal
and enforceable but so as most nearly to retain the intent of the parties.
If
such modification is not possible, such provision shall be severed from this
Agreement. In either case the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
13. Construction.
The
headings in this Agreement are inserted for convenience only, and shall not
constitute a part of this Agreement or be used to construe or interpret any
of
its provisions. The parties have participated jointly in the negotiation and
drafting of this Agreement. If a question of interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party
by
virtue of the authorship of any provision of this Agreement. The word “include”
or “including” means include or including, without limitation.
F-4
14. Attorneys’
Fees.
If any
legal action or any other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any provision of this Agreement, the
prevailing party or parties shall be entitled to recover reasonable attorneys’
fees and other costs incurred in that action or proceeding, in addition to
any
other relief to which it or they may be entitled.
15. Review
by Counsel.
Sellers
acknowledge and agree that they have had the opportunity to review this
Agreement with legal counsel of their choosing.
[SIGNATURES
ON FOLLOWING PAGE]
F-5
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first written above.
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F-6
EXHIBIT
G
SELLER’S
AND THE SHAREHOLDERS’ CLOSING CERTIFICATE
The
undersigned hereby certify, pursuant to Section 4.2.6 of the Purchase and Sale
of Assets Agreement dated as of ________ (the “Agreement”), among
_______________, a(n) ________ ________; ______________, a ________ ________
(“Seller”); and ________ and ________, the sole shareholders of Seller (the
“Shareholders”) that:
(a) Seller
and the Shareholders have performed in all material respects their agreements
and covenants contained in the Agreement required to be performed at or before
the Closing.
(b) The
representations and warranties of Seller and the Shareholders set forth in
the
Agreement were and are true and correct (i) on and as of the date of the
Agreement, and (ii) on and as of the Closing Date, with the same effect as
though such representations and warranties had been made on and as of the
Closing Date.
Capitalized
terms used in this Certificate but not otherwise defined herein shall have
the
meanings assigned to them in the Agreement.
IN
WITNESS WHEREOF, the undersigned have executed this Certificate on this ___
day
of ________, ____.
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Seller:
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By:
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Title:
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Shareholders:
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▇-▇
▇▇▇▇▇▇▇
▇
▇▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
OF
_____________ )
)
ss.
COUNTY
OF
___________ )
The
undersigned, as _______________ of _______________, a(n) ________________
(“Transferor”), after being duly sworn upon his oath deposes and says
that:
Section
1445 of the Internal Revenue Code provides that a transferee of a U.S. real
property interest must withhold tax if the transferor is a foreign person.
For
federal tax purposes (including Section 1445), the owner of a disregarded entity
(which has legal title to a U.S. real property interest under local law) will
be
the transferor of the property and not the disregarded entity. To inform
____________________ (“Transferee”), that withholding of tax is not required
upon the disposition of a U.S. real property interest by Transferor, the
undersigned hereby certifies on behalf of Transferor as follows:
1. Transferor
is not a non-resident alien, foreign corporation, foreign partnership, foreign
trust, foreign estate, or other foreign person within the meaning of §1445 and
§7701 of the Internal Revenue Code and the treasury regulations promulgated
thereunder;
2. Transferor
is not a disregarded entity as defined in Treasury Regulation Section
1.1445-2(b)(2)(iii);
3. Transferor’s
U.S. taxpayer identification number is: __________; and
4. Transferor’s
business address is: ______________________________________.
Transferor
understands that Transferee may disclose this certification to the Internal
Revenue Service and that any false statement contained herein could be punished
by fine, imprisonment, or both.
Under
penalties of perjury Transferor declares that it has examined this Affidavit
and
to the best of its knowledge and belief this certification is true, correct
and
complete. The undersigned agent declares that he or she has the authority to
sign this document on behalf of Transferor.
___________________,
a(n)
________ ________
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By:
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Name:
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Its:
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H-1
STATE OF _____________)
)
ss.
County
of
______________ )
The
foregoing instrument was acknowledged before me this ___ day of ____________,
2004, by_______________, the ___________________ of _____________________,
a
________________, on behalf thereof.
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Notary
Public
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My
Commission Expires:
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H-2
EXHIBIT
I
BUYER’S
CLOSING CERTIFICATE
The
undersigned hereby certifies, pursuant to Section 4.3.2 of the Purchase and
Sale
of Assets Agreement dated as of ________ (the “Agreement”), among
_______________, a(n) ________ ________ (“Buyer”); ______________, a ________
________; and ________ and ________, the sole shareholders of Seller that:
(a) Buyer
has
performed in all material respects its agreements and covenants contained in
the
Agreement required to be performed at or before the Closing.
(b) The
representations and warranties of Buyer set forth in the Agreement were and
are
true and correct (i) on and as of the date of the Agreement, and (ii) on and
as
of the Closing Date, with the same effect as though such representations and
warranties had been made on and as of the Closing Date.
Capitalized
terms used in this Certificate but not otherwise defined herein shall have
the
meanings assigned to them in the Agreement.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate on this ___
day
of ________, ____.
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Buyer:
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J-1
Schedule
2.1.1—Permits
Describe
all Environmental Permits, FCC licenses (e.g., FCC radio licenses or call signs)
and Permits (including the type of Permit, issuing agency, Permit number,
expiration date and any special terms) necessary to operate the
Business.
S-1
Schedule
2.1.2—Equipment
Describe
all equipment used or for use in the Business and owned or leased by Seller.
S-2
Schedule
2.1.4—Customer Contracts
List
all contractual rights of Seller with Seller’s customers (whether oral or in
writing) relating to the operation of the Business, including all service
agreements, customer accounts and routes (the “Customer Contracts”), and, if
any, all collective bargaining agreements with any union and all employment
agreements entered into by Seller (the “Employee Contracts”). Attach a true and
complete copy of all Customer Contracts and Employee
Contracts.
S-3
Schedule
2.1.8—Office Equipment
Describe
all office equipment and furniture used or for use in the Business and owned
or
leased by Seller.
S-4
Schedule
2.1.9—Systems
Describe
all manual and automated computer, billing and accounting systems and components
thereof, including all transferable software and transferable programs used
or
for use in the Business.
S-5
Schedule
3.5—Accounts Receivable
List
the Accounts Receivable as of the Closing Date, including an aging of all
accounts and notes receivable showing amounts due in 30-day aging
categories.
S-6
Schedule
6.3(c)—Consents and Defaults
Describe
if the execution, delivery and performance of this Agreement by Seller and
the
Shareholders and the consummation of the transactions contemplated by it
conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time would become a default) under,
require any Consent under, or give to any other Person any rights of
termination, amendment, acceleration, suspension, revocation or cancellation
of,
or result in the creation of any Encumbrance on the Assets or the properties
of
Seller pursuant to any note, bond, mortgage, indenture, contract, agreement,
lease, sublease, license, permit, authorization, franchise or other instrument
or arrangement to which Seller or any Shareholder is a party or by which any
of
the Assets are bound or affected.
S-7
Schedule
6.4—Governmental Consents
Describe
if the execution, delivery and performance of this Agreement by Seller and
the
Shareholders require any Consent or action by, filing with or notification
to,
any Governmental Authority (other than ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
approval).
S-8
Schedule
6.5—Financial Statements
Attach
complete and accurate copies of the balance sheets of Seller at ______ and
the
related statements of income and retained earnings and cash flows of Seller
for
the years then ended, together with all related notes and schedules thereto,
and
of the unaudited balance sheet of Seller dated _____________ and the related
statements of income and retained earnings and cash flows of Seller for the
______ months then ended, together with all related notes and schedules
thereto.
S-9
Schedule
6.7.1—Intellectual Property Rights
Set
forth: (a) all Intellectual Property Rights and all pending registrations and
applications therefor, owned by, used by or licensed to Seller or in which
Seller has any interest, indicating which are owned and which are licensed;
(b)
all contracts, agreements or other arrangements under which Seller has granted,
or is obligated to grant, rights to others to use, reproduce, market or exploit
any Intellectual Property Rights; and (c) all names, assumed or otherwise,
under
which Seller has ever conducted the Business.
S-10
Schedule
6.8.2—Tangible Personal Property Leases
Indicate
any lease agreements with respect to Assets constituting tangible personal
property and attach copies of the same.
S-11
Schedule
6.9.3—Consents
Set
forth all Consents of any customer, third party or Governmental Authority
required for any Customer Contract or other contract or agreement to be acquired
by or assigned to Buyer under this Agreement.
S-12
Schedule
6.10—Insurance and Workers’ Compensation
Attach
complete and accurate copies as of the date of the Agreement of all insurance
policies carried by Seller, an accurate list of all insurance loss runs and
workers’ compensation claims in Seller’s possession for up to the past three
policy years, and a complete and accurate copy of Seller’s most recent filing
with the state agency responsible for administering, handling or overseeing
unemployment claims.
S-13
Schedule
6.11—Employees
Attach
a complete and accurate list of all employees of Seller, their date of hire
and
their rate of compensation as of the date of the Agreement (including a
breakdown of the portion thereof attributable to salary, bonus and other
compensation, respectively).
Identify
each of Seller’s employees who is not an employee at will or who will not be
terminated by Seller on the Closing Date.
S-14
Schedule
6.13—Governmental Orders
Identify
each Governmental Order applicable to Seller, the Assets or the Business.
S-15
Schedule
6.14—W-9 Forms
Attached
are completed W-9 Forms for Seller and each party to a Noncompetition
Agreement.
S-16
Schedule
6.15—Litigation
Set
forth any Action pending or, to the best of Seller’s knowledge, threatened,
against Seller or the Shareholders relating to the Assets or the Business,
at
law or in equity, before any Governmental Authority or private
authority.
List
all instances where Seller or the Shareholders are the plaintiff, or complaining
or moving party, in any way related to the Assets or the
Business.
S-17
Schedule
6.16—Price Redetermination Contracts
Set
forth any governmental contracts to which Seller is a party which are related
to
the Assets or the Business and which are subject to price redetermination or
renegotiation.
S-18
Schedule
6.17—Ordinary Course of Business
Describe
all instances since the Financial Statement Date (except for the execution
and
delivery of the Agreement) in which the Business has not been conducted in
all
material respects in the ordinary course and consistent with past practice.
In
addition, list any of the following that have occurred since such
date:
(1) work
interruption, labor grievance or unfair labor practice claim
filed;
(2) sale
or transfer of, or any agreement to sell or transfer, any of the Assets or
any
plan, agreement or arrangement granting any preferential right to purchase
or
acquire any interest in any of the Assets, or requiring Consent of any party
to
the transfer and assignment of any of the Assets;
(3) waiver
of any material rights or claims of Seller related to the
Assets;
(4) material
breach, amendment or termination of any Customer Contract;
(5) transaction
by Seller outside the ordinary course of its business and related to the Assets
or the Business;
(6) increase
in the compensation of any employee of Seller;
(7) any
other material occurrence, event, incident, action or failure to act outside
the
ordinary course of business of Seller; or
(8) any
action by Seller, the Shareholders, or any employee, officer or agent of Seller
or the Shareholders committing to do any of the
foregoing.
S-19
Schedule
6.18.1—Permits Requiring Consents
Identify
all Permits that will require the Consent of any Governmental Authority to
consummate the Transactions.
S-20
Schedule
6.18.2—Environmental
Disclose
if Seller has ever owned, leased, had an interest in, collected, generated,
transported, stored, handled, recycled, reclaimed, processed, disposed of,
or
contracted for the disposal of any of the following (“Hazardous Materials”): (a)
petroleum and petroleum products, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation, transformers
or other equipment that contain polychlorinated biphenyls, and radon gas; (b)
any other chemicals, materials or substances defined as or included in the
definition of “hazardous materials,” “hazardous wastes,” “hazardous substances,”
“extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,”
“toxic wastes,” “toxic pollutants,” “contaminants,” “pollutants,” “infectious
wastes,” “medical wastes,” “radioactive wastes,” “sewage sludges” or words of
similar import under any applicable Environmental Law.
Disclose
if there has been any disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying, seeping, placing or otherwise
releasing into, upon or under any land, water or air or otherwise entering
into
the Environment by Seller of any Hazardous Materials.
Disclose
if any portion of the Land or any other real property now or in the past owned,
leased or used by Seller is listed on the CERCLA list or the National Priorities
List of Hazardous Waste Sites or any other similar list maintained by any
Governmental Authority, or if Seller or any Shareholder: (a) is listed as a
potentially responsible party with respect to the Assets or as a result of
the
operation of the Assets under any Environmental Law or other applicable Law;
(b)
has received a notice of such listing; or (c) has knowledge of any facts or
circumstances which could give rise to such a listing.
S-21
Schedule
6.21—Restrictive Agreements
Set
forth all noncompetition or nonsolicitation agreements related to the Business,
regardless of whether such agreements restrict or benefit Seller or the
Business, and attach complete and accurate copies of the
same.
S-22
Schedule
6.22.2—Leased Real Property
Provide
a complete and accurate street address and legal description of all Leased
Real
Property and attach copies of all Leases.
S-23
Schedule
6.24—Title to and Sufficiency of Assets
Disclose
any instance in which Seller does not have good and marketable title to any
of
the Assets, or, in the case of leased or subleased Assets, valid and subsisting
leasehold interests in any of such Assets, free and clear of all Encumbrances
other than Permitted Encumbrances.
S-24