PURCHASE AND SALE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇▇ TECHNOLOGIES, INC.,
▇▇▇▇▇▇▇▇ ACQUISITION CORP.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INDUSTRIES, INC.
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ INDUSTRIES OF MINNESOTA, INC.
AND
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ INDUSTRIES OF GEORGIA, INC.
Dated as of June 30, 1997
TABLE OF CONTENTS
1. The Stock Purchase..............................................................................1
1.01 Consummation of the Stock Purchase. .........................................1
1.02 Excluded Assets...............................................................1
1.03 Purchase Price and Payment....................................................2
1.04 The Closing...................................................................2
1.05 Post-Closing Adjustment.......................................................2
1.06 Accounts Receivable...........................................................2
2. Representations of Sellers......................................................................3
2.01 Organization..................................................................3
2.02 Capitalization................................................................3
2.03 Authorization.................................................................3
2.04 Financial Data................................................................4
2.05 Absence of Undisclosed Liabilities............................................4
2.06 Litigation....................................................................5
2.07 Insurance.....................................................................5
2.08 Leases; Real Estate...........................................................5
2.09 Title to Assets...............................................................6
2.10 Inventory. ..................................................................6
2.11 Accounts Receivable...........................................................7
2.12 Tax Matters...................................................................7
2.13 Books and Records.............................................................8
2.14 Contracts and Commitments.....................................................8
2.15 Compliance with Agreements and Laws..........................................10
2.16 Employee Relations...........................................................10
2.17 Absence of Certain Changes or Events.........................................11
2.18 Customers....................................................................12
2.19 Suppliers....................................................................13
2.20 Prepayments and Deposits.....................................................13
2.21 Indebtedness to and from Officers, Directors
and Stockholders............................................................13
2.22 Banking Facilities...........................................................13
2.23 Powers of Attorney and Suretyships...........................................13
2.24 Regulatory Approvals.........................................................14
2.25 Disclosure...................................................................14
2.26 Disposal Sites Used..........................................................14
2.27 Employee Benefit Plans.......................................................14
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3. Representations of ▇▇▇▇▇▇▇▇...........................................................15
3.01 Organization and Authority...................................................15
3.02 Authorization................................................................15
3.03 Regulatory Approvals.........................................................16
3.04 Financial Statements.........................................................16
3.05 Disclosure...................................................................16
4. Access to Information; Public Announcements; Consents..........................................17
4.01 Access to Management, Properties and Records. ..............................17
4.02 Confidentiality..............................................................17
4.03 Public Announcements.........................................................18
4.04 Consents.....................................................................18
5. Pre-Closing Covenants of Sellers...............................................................18
5.01 Conduct of Business. ......................................................18
5.02 Absence of Material Changes..................................................18
5.03 Communications with Customers and Suppliers..................................20
5.04 Compliance with Laws.........................................................20
5.05 Continuing Obligation to Inform..............................................20
5.06 Exclusive Dealing............................................................20
5.07 Reports, Taxes...............................................................21
6. Conditions to Obligations of ▇▇▇▇▇▇▇▇..........................................................21
6.01 Continued Truth of Representations and Warranties of
Sellers; Compliance with Covenants and Obligations...........................21
6.02 Performance by BFI...........................................................21
6.03 Corporate Proceedings........................................................21
6.04 Governmental Approvals.......................................................21
6.05 Consent of Third Parties.....................................................21
6.06 Adverse Proceedings. .......................................................22
6.07 Opinions of Counsel. .......................................................22
6.08 Update.......................................................................22
6.09 Non-Competition Agreement....................................................22
6.10 Resignations. ..............................................................22
6.11 Indebtedness.................................................................22
6.12 Ford Heights Option..........................................................22
6.13 Permit Side Letter...........................................................22
6.14 Closing Deliveries...........................................................22
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7. Conditions to Obligations of Sellers...........................................................23
7.01 Continued Truth of Representations and Warranties
of GMTI and GAC; Compliance with Covenants
and Obligations..............................................................23
7.02 Corporate/Stockholder Proceedings............................................23
7.03 Governmental Approvals.......................................................23
7.04 Consents of Third Parties....................................................24
7.05 Adverse Proceedings..........................................................24
7.06 Opinion of Counsel...........................................................24
7.07 Closing Deliveries. ........................................................24
7.08 Security Interest............................................................24
7.09 Ford Heights Option..........................................................25
7.10 Guaranty.....................................................................25
8. Indemnification................................................................................25
8.01 By ▇▇▇▇▇▇▇▇..................................................................25
8.02 By Sellers...................................................................25
8.03 Claims for Indemnification...................................................26
8.04 Defense by the Indemnifying Party............................................27
8.05 Payment of Indemnification Obligation........................................27
8.06 Survival of Representations; Claims for Indemnification......................28
8.07 Claims.......................................................................28
9. Dispute Resolution.............................................................................28
9.01 General......................................................................28
9.02 Consent of the Parties.......................................................28
9.03 Arbitration..................................................................28
10. Termination of Agreement.......................................................................29
10.01 Termination by Lapse of Time.................................................29
10.02 Termination by Agreement of the Parties. ...................................29
10.03 Termination by Reason of Breach..............................................29
11. Post Closing...................................................................................30
11.01 BFI Name and Logos...........................................................30
11.02 Access to Records and Properties; Assistance.................................30
11.03 Waiver of Applicable Waiting Periods.........................................30
11.04 Severance....................................................................30
11.05 Termination of Benefit Plan Coverage.........................................31
11.06 Financial Assurance..........................................................31
11.07 Tax and Allocation Matters...................................................31
11.08 Ford Heights Cages...........................................................31
12. Brokers........................................................................................31
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12.01 For BFI......................................................................31
12.02 For ▇▇▇▇▇▇▇▇.................................................................31
13. Notices........................................................................................32
14. Successors and Assigns.........................................................................33
15. Entire Agreement; Amendments; Attachments......................................................33
16. Severability...................................................................................33
17. Investigation of the Parties...................................................................33
18. Expenses.......................................................................................34
19. Governing Law..................................................................................34
20. Section Headings...............................................................................34
21. Counterparts...................................................................................34
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made this 30th
day of June, 1997 by and among ▇▇▇▇▇▇▇▇ Technologies, Inc., a Delaware
corporation with its principal place of business at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("GMTI"), ▇▇▇▇▇▇▇▇ Acquisition Corp., a Delaware
corporation with its principal place of business at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("GAC" and, together with GMTI, "▇▇▇▇▇▇▇▇"),
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industries, Inc., a Delaware corporation with its principal
place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("BFI"),
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Industries of Minnesota, Inc., a Minnesota corporation ("BFIM")
and ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Industries of Georgia, Inc., a Georgia corporation ("BFIG").
BFI, BFIM and BFIG are referred to herein, collectively, as the "Sellers."
Preliminary Statement
WHEREAS, GAC desires to purchase and BFIM desires to sell all of the
issued and outstanding stock of BFI Tire Recyclers of Minnesota, Inc., a
Minnesota corporation, ("BTM") and BFIG desires to sell all of the issued and
outstanding stock of BFI Tire Recyclers of Georgia, Inc., a Georgia corporation
("BTG");
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. The Stock Purchase
1.01 Consummation of the Stock Purchase. At the closing (as
hereinafter defined), the date thereof being referred to herein as the "Closing
Date", BFIM and BFIG, respectively shall deliver to GAC certificates
representing all of the issued and outstanding shares of capital stock of BTM
and BTG (the "Stock") owned by each of them. Such certificates shall be duly
endorsed in blank for transfer or with stock powers attached and duly executed
in blank, together with all such other documents as may be required to effect a
valid transfer to GAC of all the Stock.
1.02 Excluded Assets. As of the Closing Date neither of BTM or
BTG (collectively, the "Facilities" and each, individually, a "Facility") shall
have any ownership or possessory interests in, (i) the use of the name
"▇▇▇▇▇▇▇▇-▇▇▇▇▇▇" or any name similar or related thereto, (ii) any trade marks
or other intellectual property of BFI, including any rights to personal computer
or mainframe software which arise solely by virtue of BTM's and BTG's
affiliation with Sellers (including without limitation all BFI corporate
software systems) but excluding all other rights to personal computer or
mainframe software, (iii) cash, or (iv) any claims for property damage, personal
injury, business interruption or other losses suffered as a result of a fire
occuring on or about December 5, 1993 at BTG's premises in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
1.03 Purchase Price and Payment. The purchase price (the
"Purchase Price") for the Stock shall be a sum equal to (a) Three Million Five
Hundred Thousand Dollars ($3,600,000) plus (b) an amount equal to Final Working
Capital (as hereafter defined). The Purchase Price shall be paid as follows:
(i) the sum of $650,000 has previously been
paid to BFI and BFI hereby acknowledges the receipt thereof; and
(ii) the sum of $2,950,000 plus the
Estimated Working Capital (as hereafter defined) will be paid at the closing by
delivery to BFI of a promissory note of GAC payable to the order of BFI (the
"Note"), said Note to be substantially in the form attached hereto as Exhibit A.
1.04 The Closing. The Closing shall take place at the offices
of ▇▇▇▇▇▇▇▇ & Worcester LLP, One Post Office Square, at 9:00 a.m. Eastern
Daylight Savings Time, on June 27, 1997, or at such other place, time or date as
may be mutually agreed upon in writing by the parties hereto.
1.05 Post-Closing Adjustment.
(a) On the Closing Date, BFI shall provide ▇▇▇▇▇▇▇▇
(1) an estimate ("Estimated Working Capital"), as of the Closing Date, of the
sum of (i) all Accounts Receivable, (ii) the book value of the spare parts and
any other inventory of the Facilities ("Inventory") and (iii) all deposits and
prepaid items of the Facilities and (2) a schedule of the items included in the
Estimated Working Capital;
(b) Within forty-five (45) days after the Closing
Date, BFI shall deliver to ▇▇▇▇▇▇▇▇ a final schedule and calculation ("Final
Working Capital") of all Accounts Receivable and Inventory as of the Closing
Date; and
(c) Within ten (10) days thereafter, Sellers shall
deliver to ▇▇▇▇▇▇▇▇ immediately available funds in the amount by which the Final
Working Capital is less than the Estimated Working Capital or ▇▇▇▇▇▇▇▇ shall
deliver to BFI a second promissory note in substantially the form of the Note
attached hereto as Exhibit A in the amount by which the Final Working Capital
exceeds the Estimated Working Capital.
1.06 Accounts Receivable. As used herein, "Accounts
Receivable" shall mean the sum of:
(a) all accounts receivable of the Facilities,
excluding amounts due the Facilities by GMTI and excluding any portion of such
accounts receivable due solely on account of services for which the Facilities
will provide services after the Closing, discounted by seven percent (7%); plus
(b) accounts receivable due BTG by GMTI.
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2. Representations of Sellers
The Sellers represent and warrant to GAC and GMTI that:
2.01 Organization. BFI, BFIM, BFIG, BTM and BTG are
corporations duly organized, validly existing and in good standing under the
laws of the States of Delaware, Minnesota, Georgia, Minnesota and Georgia,
respectively, and have all requisite corporate power and authority to own or
lease its respective properties, to carry on their respective businesses as now
being conducted, to execute and deliver this Agreement and the agreements
contemplated herein , and to consummate the transactions contemplated hereby and
thereby. Each of BTM and BTG is duly qualified to do business and in good
standing in all jurisdictions in which its ownership of property or the
character of its business requires such qualification except where failure to be
so qualified or to be in such good standing would not have a material adverse
effect on the business, properties or finances of the BTM and BTG, taken as a
whole. A true and complete list of such jurisdictions is set forth in Schedule
2.01. Certified copies of the Certificate of Incorporation and By-laws of BTM
and BTG, as amended to date, have been previously delivered to ▇▇▇▇▇▇▇▇, are
complete and correct, and no amendments have been made thereto or have been
authorized since the date thereof.
2.02 Capitalization.
On the date hereof, the authorized capital stock (hereinafter the
"Capital Stock"), the number of shares of each class that are issued and
outstanding (including treasury shares), and the number of shares of each class
that are reserved for issuance with respect to BTM and BTG shall be as set forth
on Schedule 2.02 hereto. All such issued and outstanding shares of Capital Stock
have been and on the Closing Date will be duly and validly issued and are, or
will be on such date, fully paid and non-assessable. Except as set forth in
Schedule 2.02 attached hereto, there are not outstanding (i) any options,
warrants or other rights to purchase any Capital Stock; (ii) any securities
convertible into or exchangeable for shares of such stock; or (iii) any other
commitments of any kind for the issuance of additional shares of Capital Stock
or options, warrants or other securities of the Facilities. On the Closing Date,
there will not be outstanding (i) any options, warrants or other rights to
purchase any Capital Stock; (ii) any securities convertible into or exchangeable
for shares of such stock; or (iii) any other commitments of any kind for the
issuance of additional shares of capital stock or options, warrants or other
securities of BTM and BTG.
2.03 Authorization. The execution and delivery by the Sellers
of this Agreement and the agreements provided for herein, and the consummation
by the Sellers of all transactions contemplated hereunder and thereunder by the
Sellers, have been duly authorized by all requisite shareholder, director and
other corporate action. This Agreement has been duly executed by the Sellers.
This Agreement and all other agreements and written obligations entered into and
undertaken in connection with the Stock Purchase and all other transactions
contemplated hereby to which the Sellers are parties constitute the valid and
legally binding obligations of the Sellers enforceable against them in
accordance with their respective terms, except as enforcement may be limited by
applicable equitable principles or by bankruptcy, insolvency, reorganization,
moratorium or similar laws effecting creditors' rights generally, and
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by the exercise of judicial discretion. The execution, delivery and performance
by the Sellers of this Agreement and the agreements provided for herein, and the
consummation by the Sellers of the Stock Purchase and all other transactions
contemplated hereby and thereby, will not, with or without the giving of notice
or the passage of time or both, (a) violate the provisions of any law, rule or
regulation applicable to the Sellers or the Facilities; (b) violate the
provisions of the respective Certificates of Incorporation or By-laws of the
Sellers or the Facilities; or (c) violate any judgment, decree, order or award
of any court, governmental body or arbitrator by which the Sellers or the
Facilities or any of their assets or properties are bound; or (d) conflict with
or result in the breach or termination of any term or provision of, or
constitute a default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the properties or assets of the
Facilities pursuant to, any indenture, mortgage, deed of trust or other
agreement or instrument to which any of the Sellers are parties or by which the
BTM or BTG or their assets is or may be bound. Schedule 2.03 attached hereto
sets forth a true, correct and complete list of all consents and approvals of
third parties that are required in connection with the consummation by the
Sellers of the Stock Purchase and the performance by the Sellers of their
obligations under this Agreement. Notwithstanding the foregoing or any
provisions of this Agreement to the contrary, Sellers make no representation or
warranty, and expressly disclaim any representation or warranty, with respect to
whether the consent of any government entity or third party is required with
respect to any Permit in connection with the continued operations of the
Facilities after consummation of the transactions contemplated by this
Agreement.
2.04 Financial Data.
Attached hereto as Schedule 2.04 is certain financial information
("Financial Data") provided previously by BFI to ▇▇▇▇▇▇▇▇ with respect to each
Facility. Such Financial Data is true, complete and accurate in all material
respects and was prepared in accordance with generally accepted accounting
principles (except for the absence of footnote disclosure and for other
differences from generally accepted accounting principles described on Schedule
2.04) applied on a consistent basis, and the Financial Data fairly represents
the financial information set forth therein, in accordance with generally
accepted accounting principles for the periods indicated and has been compiled
consistent with past practice from the internal accounting records of the
respective Facilities without audit. The Financial Data does not constitute any
warranty with respect to future results of operations of any of the Facilities.
The internal accounting records of the Facilities from which such Financial Data
has been compiled has been maintained on a consistent basis in all material
respects by Sellers. The date of Financial Data is referred to herein as a
"Financial Data Date."
2.05 Absence of Undisclosed Liabilities. Except as and to the
extent (a) reflected and reserved against in the Current Balance Sheet, (b) set
forth on Schedule 2.05 attached hereto, or (c) incurred in the ordinary course
of business after the date of the Current Balance Sheet and not material in
amount, either individually or in the aggregate, to the best of Sellers'
knowledge, each of the Facilities has no liability or obligation, secured or
unsecured, whether accrued, absolute, contingent, unasserted or otherwise, which
is material to the condition (financial or otherwise) of the assets, properties,
business or prospects of the Facilities. For purposes of this Subsection 2.05,
"material" means, with regard to any specific liability or
4
obligation, any amount in excess of $25,000 and with regard to all such
liabilities and obligations in the aggregate, any amount in excess of $50,000.
2.06 Litigation. Except as set forth on Schedule 2.06 attached
hereto (a) there is no action, suit or proceeding to which any of the Facilities
is a party pending or, to the best knowledge of the Sellers, threatened before
any court or governmental agency, authority, body or arbitrator; (b) none of the
Facilities has not been permanently or temporarily enjoined by any order,
judgment or decree of any court or any governmental agency, authority or body
from engaging in or continuing any conduct or practice in connection with the
business, assets, or properties of the Facilities; and (c) there is not in
existence on the date hereof any order, judgment or decree of any court,
tribunal or agency enjoining or requiring any of the Facilities to take any
action of any kind with respect to its business, assets or properties.
2.07 Insurance. Schedule 2.07 attached hereto sets forth a
true, correct and complete list of all fire, theft, casualty, general liability,
workers compensation, business interruption, product liability, automobile and
other insurance policies maintained by each Facility and of all life insurance
policies maintained by each Facility on the lives of any of its employees,
specifying the type of coverage, the amount of coverage, the premium, the
insurer and the expiration date of each such policy (collectively, the
"Insurance Policies"). True, correct and complete copies of all Insurance
Policies have been previously delivered by the Sellers to ▇▇▇▇▇▇▇▇. The
Insurance Policies are in full force and effect. All premiums due on the
Insurance Policies or renewals thereof have been paid through the Closing Date,
and there is no default by any of the Facilities under the Insurance Policies
nor any default by any other party to the Insurance Policies that is known by
any of the Facilities. To the best of Sellers' knowledge, there are no
outstanding recommendations by any issuer of the Insurance Policies or by any
Board of Fire Underwriters or other similar body exercising similar functions or
by any governmental authority exercising similar functions which requires or
recommends any changes in the conduct of the business of, or any repairs or
other work to be done on or with respect to any of the properties or assets of,
the Facilities.
2.08 Leases; Real Estate.
(a) Schedule 2.08 attached hereto sets forth a true,
correct and complete list as of the date hereof of all leases of real property
to which each of BTM or BTG is a party (collectively, the "Leases"). True,
correct and complete copies of all Leases and all amendments, modifications and
supplemental agreements thereto have previously been delivered by the Sellers to
▇▇▇▇▇▇▇▇. The Leases are in full force and effect, are, to the best of Sellers'
actual knowledge, binding and enforceable against each of the parties thereto in
accordance with their respective terms, except as may be limited by the laws of
bankruptcy and general principals of equity and, except as set forth on Schedule
2.08, have not been modified or amended since the date of delivery to ▇▇▇▇▇▇▇▇.
Sellers, BTM and BTG have not received any written notice from any party to any
Lease claiming that a Facility is in default thereunder and that such default
remains uncured. Except as set forth on Schedule 2.08, there has not occurred
any event which would constitute a material breach of or material default in the
performance of any covenant, agreement or condition contained in any Lease by
Sellers, BTM or BTG, nor has there occurred any event which with the passage of
time or the giving of notice or both would constitute such a
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material breach or material default by Sellers, BTM or BTG. None of the
Facilities is obligated to pay any leasing or brokerage commission (which is not
disclosed on Schedule 2.08 attached hereto) relating to any Lease and, except as
set forth on Schedule 2.08, currently has no obligation to pay any leasing or
brokerage commission upon the renewal of any Lease. Except as set forth on
Schedule 2.08, no obligations relating to construction, alteration or other
leasehold improvement work with respect to any of the Leases remains
outstanding.
(b) Except as shown on Schedule 2.08, there are no
actual or currently existing potential material environmental hazards on real
property (the "Properties") at any time owned, leased or operated by any of the
Facilities.
2.09 Title to Assets.
(a) Each of the Facilities has good and marketable
title to all of its properties and assets, real, personal and mixed, including
those reflected in the Financial Data Date, free and clear of any security
interests, mortgages, pledges, liens, encumbrances, restrictions, or charges,
except for (i) those described on Schedule 2.09(a) attached hereto and made part
hereof, (ii) liens shown on the Current Balance Sheet or the Notes thereto as
securing specified liabilities set forth therein, with respect to which no
material default exists (except for defaults cured prior to the declaration of
default thereon), and (iii) minor imperfections of title and encumbrances, if
any, which are not substantial in character, amount, or extent, do not detract
from the value of the properties subject thereto, or interfere with the use of
the properties for the purposes for which they are presently used, or otherwise
impair the Facilities' operations, and have arisen only in the ordinary course
of business
(b) Schedule 2.09(b) contains a true and complete
list and legal description of each parcel of real property owned by the
Facilities and a general description of each building situated thereon. The
Seller has heretofore furnished to ▇▇▇▇▇▇▇▇ true and complete copies of all
deeds, other instruments of title and policies of title insurance indicating and
describing the ownership of such real property, as well as copies of any surveys
or environmental reports relating thereto.
2.10 Inventory. Schedule 2.10 attached hereto sets forth a
true, correct and complete list of the Inventory as of the date hereof. The
Inventory consists of items of a quality and quantity which are usable or
saleable in the ordinary course of the business conducted by the Facilities. The
value of all items of obsolete materials and of materials of below standard
quality have been written down to realizable market value and the values at
which such inventory is carried reflect the normal inventory valuation policy of
the Facilities of stating inventory at the lower of cost or market value on a
first in first out (FIFO) basis in accordance with GAAP.
2.11 Accounts Receivable. Schedule 2.11 attached hereto sets
forth a true, correct and complete list of the accounts receivable of the
Facilities as of a date not more than five business days prior to the Closing
Date (the "Accounts Receivable"), including the aging thereof. All Accounts
Receivable arose out of the sales of inventory or services in the ordinary
course of business.
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2.12 Tax Matters. The Facilities are not subject to any
federal, state, local or foreign tax liablity of any kind whatsoever for any
periods prior to the Closing or any assessment, interest, penalty or deficiency
relating thereto. There are no tax liens (other than for ad-valorem and similar
taxes which are not past due) or taxes on any of the assets of the Facilities.
2.13 Books and Records. The general ledgers and books of
account of each Facility, and all other books and records of each Facility are
in all material respects complete and correct and have been maintained in
accordance with good business practice and in accordance with all applicable
procedures required by laws and regulations.
2.14 Contracts and Commitments.
(a) Schedule 2.14 attached hereto contains a true,
complete and correct list of all written, and a description of all oral,
contracts and agreements of the types listed below (collectively, the
"Contracts"):
(i) all loan agreements, indentures,
mortgages and guaranties to which a Facility is a party or by which a Facility
or any of its property is bound;
(ii) all pledges, conditional sale or title
retention agreements, security agreements, obligations relating to equipment,
personal property leases and lease purchase agreements to which a Facility is a
party or by which a Facility or any of its property is bound;
(iii) all contracts, agreements, commitments
and purchase orders to which a Facility is a party or by which a Facility or any
of its property is bound and which (A) involve payments or receipts by a
facility of more than $25,000 in the case of any single contract, agreement,
commitment or purchase order under which full performance (including payment)
has not been rendered by all parties thereto or (B) which may materially
adversely affect the condition (financial or otherwise) or the properties,
assets, business or prospects of each Facility;
(iv) all collective bargaining agreements,
employment and consulting agreements, executive compensation plans, bonus plans,
deferred compensation agreements, pension plans, retirement plans, employee
stock option or stock purchase plans and group life, health and accident
insurance and other employee benefit plans, agreements, arrangements or
commitments to which a Facility is a party or by which a Facility or any of its
property is bound;
(v) all agency, distributor, sales
representative, franchise or similar agreements to which a Facility is a party
or by which a Facility or any of its property is bound;
(vi) all contracts or agreements between a
Facility and any affiliate thereof (as such term is defined in the Securities
Act of 1933, as amended, and the rules
7
and regulations promulgated thereunder) (each, an "Affiliate"), including, but
not limited to, any of BFI, BFIM, BFIG or their Affiliates;
(vii) all leases for personal property,
whether operating, capital or otherwise, under which a Facility is lessor or
lessee;
(viii) all contracts or agreements relating
to past disposal of waste by each Facility (whether or not hazardous);
(ix) all contracts, agreements or other
arrangements imposing a non-competition or non-solicitation obligation on a
Facility;
(x) all confidentiality or proprietary
information agreements with respect to the confidential information of a
Facility or any third party to which a Facility is a party in any capacity; and
(xi) any other material agreements or
contracts entered into by a Facility.
(b) Except as set forth on Schedule 2.14:
(i) each Contract is a valid and binding
agreement of the respective Facility, enforceable against such Facility in
accordance with its terms, and Sellers do not have any knowledge that any
Contract is not a valid and binding agreement of the other parties thereto;
(ii) Each Facility has fulfilled all
material obligations required pursuant to the Contracts to have been performed
by each Facility on its part prior to the date hereof, and Sellers have no
reason to believe that each Facility will not be able to fulfill, when due, all
of its obligations under all material Contracts which remain to be performed
after the date hereof;
(iii) No Facility is in breach of or in
default under any material Contract, and no event has occurred which with the
passage of time or giving of notice or both would constitute such a default,
result in a loss of rights under the Contracts or result in the creation of any
lien, charge or encumbrance, thereunder or pursuant thereto;
(iv) to the best knowledge of Sellers, there
is no existing breach or default by any other party to any material Contract,
and no event has occurred which with the passage of time or giving of notice or
both would constitute a default by such other party, result in a loss of rights
or result in the creation of any lien, charge or encumbrance thereunder or
pursuant thereto;
(v) there are not and, since March 31, 1997
have not been, any claims of a non-routine nature by customers of any Facility
under any warranties, whether express or implied;
8
(vi) No Facility is restricted by any
Contract from carrying on its business anywhere in the world; and
(c) Except as set forth on Schedules 2.04 or 2.14,
the continuation, validity and effectiveness of each Contract will not be
affected by the Stock Purchase or other transaction contemplated hereby.
(d) True, correct and complete copies of all
Contracts have previously been delivered by Sellers to ▇▇▇▇▇▇▇▇.
(e) For purposes of this Section 2.14 and elsewhere
in this Agreement, the term "material Contract" means any contract which has a
value, either in terms of products to be sold, services to be performed or
otherwise, in excess of $25,000.
2.15 Compliance with Agreements and Laws. Each Facility has
all requisite licenses, permits and certificates, including environmental,
health and safety permits, from federal, state and local authorities necessary
to conduct its business and own and operate its assets (collectively, the
"Permits"), except where a failure to hold a Permit does not have a material
adverse effect on an Facility. Schedule 2.15 attached hereto sets forth a true,
correct and complete list of all such Permits, copies of which have previously
been delivered by Sellers to ▇▇▇▇▇▇▇▇. To the best knowledge of Sellers, there
is no material violation by any Facility of any law, regulation or ordinance
(including, without limitation, laws, regulations or ordinances relating to
building, zoning, environmental, disposal of hazardous substances, land use, air
pollution or similar matters) applicable to it or its properties.
2.16 Employee Relations.
(a) To the best knowledge of Sellers, each of the
Facilities is in material compliance with all federal, state and municipal laws
respecting employment and employment practices, terms and conditions of
employment, and wages and hours, and is not engaged in any unfair labor
practice, and there are no arrears in the payment of wages or social security
taxes (other than amounts accrued in the regular and ordinary course of business
since the last regular payment of such wages and taxes).
(b) Except as set forth on Schedule 2.16 attached
hereto:
(i) none of the employees of each of the
Facilities is represented by any labor union;
(ii) there is no unfair labor practice
complaint against any of the Facilities pending before the National Labor
Relations Board or any state or local agency;
(iii) there is no pending labor strike or
other material labor trouble affecting any of the Facilities (including, without
limitation, any organizational drive);
9
(iv) there is no material labor grievance
pending against any of the Facilities;
(v) there is no pending representation
question respecting the employees of any of the Facilities;
(vi) there are no pending arbitration
proceedings arising out of or under any collective bargaining agreement to which
any of the Facilities is a party, or any basis for which a claim may be made
under any collective bargaining agreement to which any of the Facilities is a
party; and
(vii) None of the Facilities has any
continuing obligation for health, life, medical insurance or other similar
fringe benefits to any former employee thereof;
(c) Sellers have previously delivered a true, correct
and complete list of the current payroll of each of the Facilities, including
the job title and salary or wage rates of each employee, showing separately for
each such person who received an annual salary in excess of $25,000 the amounts
paid or payable as salary and bonus payments for the fiscal year ended September
30, 1996.
(d) For purposes of this Subsection 2.16, the term
"employee" shall be construed to include sales agents and other independent
contractors who spend a majority of their working time on the business of any of
the Facilities.
2.17 Absence of Certain Changes or Events.
(a) Except as set forth on Schedule 2.17 attached
hereto, since the Financial Data Dates relating to each Facility, the respective
Facility has not entered into any transaction which is not in the usual and
ordinary course of business without limiting the generality of the foregoing,
has not:
(i) incurred any obligation or liability for
borrowed money;
(ii) discharged or satisfied any lien or
encumbrance or paid any obligation or liability other than current liabilities
reflected in the Current Balance Sheet;
(iii) mortgaged, pledged or subjected to
lien, charge or other encumbrance any of its properties or assets;
(iv) sold or purchased, assigned or
transferred any of its tangible assets or cancelled any debts or claims, except
for inventory sold and raw materials and supplies purchased in the ordinary
course of business;
(v) made any material amendment to or
termination of any material Contract or done any act or omitted to do any act
which would cause the breach of any material Contract;
10
(vi) suffered any losses of personal or real
property, whether insured or uninsured, and whether or not in the control of a
Facility in excess of $25,000 in the aggregate, or waived any rights of any
value;
(vii) authorized any declaration or payment
of dividends or distributions or paid any such dividends or distributions, or
authorized any transfer of assets of any kind whatsoever to the Sellers or any
other party with respect to any shares of capital stock;
(viii) received notice of any litigation,
warranty claim or products liability claim;
(ix) engaged any new employee for a salary
in excess of $25,000 per annum:
(x) made, or committed to make, any material
changes in the compensation payable to any officer, director, employee or agent
of a Facility, or any bonus payment or similar arrangements made to or with any
of such officers, directors, employees or agents;
(xi) made any material alteration in the
manner of keeping the books, accounts or records of a Facility, or in the
accounting practices therein reflected, including, without limitation, any
changes in the method of calculating reserves for doubtful accounts or sales
returns; or (xii) suffered any material adverse change in the results of
operations, condition (financial or otherwise), assets, liabilities (whether
absolute, accrued, contingent or otherwise) or business of a Facility.
(b) Sellers have no knowledge of any existing or
threatened occurrence, event or development which, as far as can now be
reasonably foreseen, is likely to have a material adverse effect on the
business, properties, assets, condition (financial or otherwise) or prospects of
the Facilities; provided, however that no representation or warranty is made
with respect to general business, economic or technological conditions or
developments which may affect any Facility.
2.18 Customers. Schedule 2.18 attached hereto sets forth a
true, correct and complete list of the names and addresses of each customer of
each Facility which accounted for more than 5% of the revenues of each Facility
(a) in the fiscal year ended September 30, 1996 and (b) for the first six months
of the fiscal year ending September 30, 1997. Except as set forth on Schedule
2.18 attached hereto, none of Sellers or Facilities have received notification
that any of Facilities' customers intends to discontinue its relationship with a
Facility.
2.19 Suppliers. Schedule 2.19 attached hereto sets forth a
true, correct and complete list of the names and addresses of each of the
suppliers of each Facility which accounted for a dollar volume of purchases by
each facility in excess of $25,000 for (x) the fiscal year ended September 30,
1996 and (y) the first six months of the fiscal year ending September
11
30, 1997. Except as set forth on Schedule 2.19 attached hereto, no Facility is
more than 60 days past due in any trade accounts payable or other payments owing
to any supplier to a Facility.
2.20 Prepayments and Deposits. Schedule 2.20 attached hereto
sets forth all customers of the Facilities from whom prepayments and deposits
have been received by each Facility as of the date hereof, for products to be
shipped, or services to be performed, after the Closing Date.
2.21 Indebtedness to and from Officers, Directors and
Stockholders. Except as set forth on Schedule 2.21 attached hereto, neither BTM
or BTG is indebted, directly or indirectly, to any person who is an officer,
director or stockholder of BTM or BTG or any Affiliate thereof or any such
person in any amount whatsoever other than for salaries for services rendered or
reimbursable business expenses, all of which have been reflected on the books
and records of BTM or BTG previously delivered to ▇▇▇▇▇▇▇▇, and no such officer,
director, stockholder or Affiliate is indebted to BTM or BTG except for advances
made to employees of BTM or BTG in the ordinary course of business to meet
reimbursable business expenses anticipated to be incurred by such obligor.
2.22 Banking Facilities. Schedule 2.22 attached hereto sets
forth a true, correct and complete list of:
(a) each bank, savings and loan or similar financial
institution in which any of the Facilities has an account or safety deposit box
and the numbers of the accounts or safety deposit boxes maintained by any of the
Facilities thereat; and
(b) the names of all persons authorized to draw on
each such account or to have access to any such safety deposit box facility,
together with a description of the authority (and conditions thereof, if any) of
each such person with respect thereto.
2.23 Powers of Attorney and Suretyships. Except as set forth
on Schedule 2.23 attached hereto, each of BTM and BTG has no general or special
powers of attorney outstanding (whether as grantor or grantee thereof), nor does
it have any obligation or liability (whether actual, accrued, accruing,
continent or otherwise) as guarantor, surety, co-signer, endorser, co-maker,
indemnitor or otherwise in respect of the obligation of any person, corporation,
joint venture, association, organization or other entity, except as endorser or
maker of checks or letters of credit, respectively, endorsed or made in the
ordinary course of business.
2.24 Regulatory Approvals. All consents, approvals,
authorizations or other requirements prescribed by any law, rule or regulation
which must be obtained or satisfied by the Facilities and which are necessary
for the execution and delivery by the Sellers of this Agreement or any documents
to be executed and delivered by the Sellers in connection herewith are set forth
on Schedule 2.24 attached hereto and have been, or prior to the Closing Date
will be, obtained and satisfied. Notwithstanding the foregoing or any provisions
of this Agreement to the contrary, Sellers make no representation or warranty,
and expressly disclaim any representation or warranty, with respect to whether
the consent of any government entity or third
12
party is required with respect to any Permit in connection with the continued
operations of the Facilities after consummation of the transactions contemplated
by this Agreement.
2.25 Disclosure. The information concerning the Facilities set
forth in this Agreement, the Exhibits and Schedules attached hereto and any
document, statement or certificate furnished or to be furnished to ▇▇▇▇▇▇▇▇
pursuant hereto or in connection herewith, does not and on the Closing Date will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated herein or therein or necessary to make the statements
and facts contained herein or therein, in light of the circumstances in which
they are made, not false and misleading. Copies of all documents heretofore or
hereafter delivered or made available to ▇▇▇▇▇▇▇▇ pursuant to this Agreement
were or will be complete and accurate copies of such documents.
2.26 Disposal Sites Used. Schedule 2.26 lists the name and
address of all solid waste landfills or transfer stations to which (i) to the
best of Sellers' knowledge, the Facilities (excluding any companies or
businesses acquired by the Facilities) transported material amounts of municipal
solid waste in connection with the operation of its business, or (ii) any
company or business acquired by the Facilities has transported material amounts
of municipal solid waste to the extent any such company or business has provided
records of any such transportation to the Sellers, BTM or BTG. Schedule 2.26
also states whether any listed facility is, to the best of Sellers' knowledge,
currently being remediated or currently scheduled to undergo remediation under
the Comprehensive Environmental Response, Compensation and Liability Act or
comparable state law.
2.27 Employee Benefit Plans. Schedule 2.27 sets forth a
complete list of all pension, profit sharing, retirement, deferred compensation,
welfare, insurance, disability, bonus, vacation pay, severance pay and similar
plans, programs or arrangements, including without limitation all employee
benefit plans, as defined in Section 3 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), (the "Plans") maintained by the
Facilities. None of the Facilities maintain or contribute to any "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA, and none of the Facilities have
incurred any material liability under Sections 4062, 4063 or 4201 of ERISA. Each
Plan maintained by a Facility which is intended to be qualified under either
Section 401(a) or 501(c)(9) of the Internal Revenue Code of 1986, as amended
(the "Code"), is so qualified. Each Plan has been administered in all material
respects in accordance with the terms of such Plan and the provisions of any and
all statutes, orders or governmental rules or regulations, including without
limitation ERISA and the Code, and to the knowledge of the Sellers nothing has
been done or omitted to be done with respect to any Plan that would result in
any material liability on the part of the Facility under Title I of ERISA or
Section 4975 of the Code. All reports required to be filed with respect to all
Plans, including without limitation annual reports on Form 5500, have been
timely filed except where the failure to so file would not have a material
adverse effect on the business, properties or finances of the Facilities. No
"reportable event" as defined at Section 4043 of ERISA, other than any such
event for which the thirty-day notice period has been waived, has occurred with
respect to any pension plan subject to Title IV of ERISA. With respect to all
pension plans subject to Title IV of ERISA, such plans have no unfunded benefit
liabilities, all contributions to such plans under the minimum funding
requirements of Section 412 of the Code have been made and all premium
13
payments to the Pension Benefit Guaranty Corporation with respect to such plans
have been made. All claims for welfare benefits incurred by employees on or
before the Closing Date are or will be fully covered by third-party insurance
policies or programs. Except for continuation of health coverage to the extent
required under Section 4980B of the Code or as otherwise set forth in this
Agreement, there are no obligations under any welfare plan providing benefits
after termination of employment.
3. Representations of ▇▇▇▇▇▇▇▇
GMTI and GAC, jointly and severally, represent and warrant to BFI as
follows:
3.01 Organization and Authority. GMTI and GAC are each
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware, and have all requisite corporate power and
authority to own their respective properties, to carry on their respective
businesses as now being conducted, to execute and deliver this Agreement and the
agreements contemplated herein, and to consummate the transactions contemplated
hereby and thereby. GMTI is duly qualified to do business and in good standing
in all jurisdictions in which its ownership of property or the character of its
business requires such qualification, except where failure to be so qualified or
to be in such good standing would have a material adverse effect on the
business, properties or finances of GMTI, taken as a whole. Certified copies of
the Certificates of Incorporation and Bylaws of GMTI and GAC, as amended to
date, have been previously delivered to BFI, are complete and correct, and no
amendments have been made thereto or have been authorized since the date
thereof. GAC has conducted no business or operations prior to the date hereof
except in connection with the transactions contemplated by this Agreement.
3.02 Authorization. The execution and delivery of this
Agreement by GMTI and GAC, and the agreements provided for herein, and the
consummation by GMTI and GAC of all transactions contemplated hereby, have been
duly authorized by all requisite corporate action. This Agreement has been duly
executed by GMTI and GAC. This Agreement and all such other agreements and
written obligations entered into and undertaken in connection with the
transactions contemplated hereby constitute the valid and legally binding
obligations of GMTI and GAC, enforceable against GMTI and GAC respectively, in
accordance with their respective terms, except as enforcement may be limited by
applicable equitable principles or by bankruptcy, insolvency, reorganization,
moratorium or similar laws effecting creditors' rights generally, and by the
exercise of judicial discretion. The execution, delivery and performance of this
Agreement and the agreements provided for herein, and the consummation by GMTI
and GAC of the transactions contemplated hereby and thereby, will not, with or
without the giving of notice or the passage of time or both, (a) violate the
provisions of any law, rule or regulation applicable to GMTI or GAC; (b) violate
the provisions of GMTI's or GAC's Certificate of Incorporation or By-laws; (c)
violate any judgment, decree, order or award of any court, governmental body or
arbitrator by which GMTI or any of its assets or properties are bound or (d)
conflict with or result in the breach or termination of any term or provision
of, or constitute a default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the properties or assets of
GMTI and GAC pursuant to, any indenture, mortgage, deed of trust or other
agreement or instrument to which GMTI or GAC is a party or by
14
which GMTI or GAC or their respective assets is or may be bound. Schedule 3.02
attached hereto sets forth a true, correct and complete list of all consents and
approvals of third parties that are required in connection with the consummation
by GMTI or GAC of the Stock Purchase and the performance by GMTI and GAC of
their respective obligations under this Agreement.
3.03 Regulatory Approvals. All consents, approvals,
authorizations and other requirements prescribed by any law, rule or regulation
which must be obtained or satisfied by GMTI, GAC or GCI and which are necessary
for the consummation of the transactions contemplated by this Agreement have
been, or will be prior to the Closing Date, obtained and satisfied.
3.04 Financial Statements.
(a) GMTI has previously delivered to BFI (i) its
audited balance sheet as of May 31, 1996 and the related statements of income,
stockholders' equity, cash flow and supplementary schedules of GMTI for the
fiscal year then ended, (collectively, "▇▇▇▇▇▇▇▇ 1996 Financial Statements") and
(ii) its unaudited February 28, 1997 balance sheet and the related statements of
income, stockholders' equity, cash flow and supplementary schedules for the
nine-month period then ended, (collectively, the "▇▇▇▇▇▇▇▇ Current Financial
Statements"). The ▇▇▇▇▇▇▇▇ 1996 Financial Statements and the ▇▇▇▇▇▇▇▇ Current
Financial Statements (collectively, the "▇▇▇▇▇▇▇▇ Financial Statements") have
been prepared in accordance with GAAP applied consistently with past practice,
subject to normal year-end adjustments and the absence of footnotes, and are
accompanied by a certificate of the Chief Financial Officer of GMTI to the
effect that the ▇▇▇▇▇▇▇▇ Current Financial Statements were prepared in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes and other related information required by GAAP.
(b) The ▇▇▇▇▇▇▇▇ Financial Statements fairly present
in all material respects, as of their respective dates, the financial condition,
retained earnings, assets and liabilities of GMTI and the results of operations
of GMTI's business for the periods indicated.
3.05 Disclosure. The information concerning ▇▇▇▇▇▇▇▇ set forth
in this Agreement, the Exhibits and Schedules attached hereto and any document,
statement or certificate furnished or to be furnished to the Sellers pursuant
hereto or in connection herewith, does not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated herein or therein or necessary to make the statements and facts contained
herein or therein, in light of the circumstances in which they are made, not
false and misleading. Copies of all documents heretofore or hereafter delivered
or made available to the Sellers pursuant to this Agreement were or will be
complete and accurate copies of such documents.
4. Access to Information; Public Announcements; Consents
4.01 Access to Management, Properties and Records. From the
date of this Agreement until the Closing Date, the Sellers shall afford the
officers, attorneys, accountants and other authorized representatives of
▇▇▇▇▇▇▇▇ free and full access upon reasonable advance
15
notice and during normal business hours to all management personnel, offices,
properties, books and records of the Facilities, so that ▇▇▇▇▇▇▇▇ may have full
opportunity to make such investigation as it shall desire to make of the
management, business, properties and affairs of the Facilities, and ▇▇▇▇▇▇▇▇
shall be permitted to make abstracts from, or copies of, all such books and
records. The Sellers shall furnish to ▇▇▇▇▇▇▇▇ and/or authorized representatives
designated by ▇▇▇▇▇▇▇▇ such financial and operating data and other information
as to the business of the Facilities as ▇▇▇▇▇▇▇▇ shall reasonably request.
4.02 Confidentiality.
(a) The Sellers have furnished and will continue to
furnish ▇▇▇▇▇▇▇▇ with certain information which is non-public, confidential or
proprietary in nature. All information furnished to ▇▇▇▇▇▇▇▇, its directors,
officers, employees, agents or representatives, including, without limitation,
attorneys, accountants, consultants, potential lenders, investors and financial
advisors (collectively, "Representatives") by the Sellers or any of their
representatives, and all analyses, compilations, data, studies or other
documents prepared by ▇▇▇▇▇▇▇▇ or its representatives containing or based in
whole or in part on any such furnished information or reflecting ▇▇▇▇▇▇▇▇'▇
review of, or interest in, BFI and the Facilities is hereinafter referred to as
"BFI Information." "BFI Information" shall not include any information publicly
available through no fault of Sellers. ▇▇▇▇▇▇▇▇ hereby agrees to use the BFI
Information solely in connection with the consummation of the transactions
contemplated by this Agreement and to transmit the BFI Information only to those
employees and representatives of ▇▇▇▇▇▇▇▇ who need to know the BFI Information,
except as may otherwise be required by operation of applicable law. If the
Closing does not occur, the BFI Information, and all copies thereof will be
returned by ▇▇▇▇▇▇▇▇, its directors, officers, and employees (but not its other
representatives), without retaining any copies thereof, to Sellers.
(b) ▇▇▇▇▇▇▇▇ has furnished and will continue to
furnish the Sellers with certain information which is non-public, confidential
or proprietary in nature. All information furnished to the Sellers, their
directors, officers, employees, agents or representatives, including, without
limitation, attorneys, accountants, consultants, potential lenders, investors
and financial advisors (collectively, "Representatives") by ▇▇▇▇▇▇▇▇ or any of
its representatives, and all analyses, compilations, data, studies or other
documents prepared by the Sellers or their representatives containing or based
in whole or in part on any such furnished information or reflecting BFI's review
of, or interest in, ▇▇▇▇▇▇▇▇ is hereinafter referred to as "▇▇▇▇▇▇▇▇
Information." "▇▇▇▇▇▇▇▇ Information" shall not include any information publicly
available through no fault of the Sellers. Sellers hereby agree to use the
▇▇▇▇▇▇▇▇ Information solely in connection with the consummation of the
transactions contemplated by this Agreement and to transmit the ▇▇▇▇▇▇▇▇
Information only to those representatives of Sellers who need to know the
▇▇▇▇▇▇▇▇ Information, except as may otherwise be required by operation of
applicable law. If the Closing does not occur, the ▇▇▇▇▇▇▇▇ Information, and all
copies thereof will be returned by Sellers, their directors, officers, and
employees (but not its other representatives), without retaining any copies
thereof, to ▇▇▇▇▇▇▇▇.
16
4.03 Public Announcements. The parties agree that prior to the
Closing Date any and all public pronouncements or other public communications
concerning this Agreement, and the timing, manner and content of such
disclosures, shall be subject to the mutual agreement of BFI and ▇▇▇▇▇▇▇▇.
4.04 Consents. Sellers and ▇▇▇▇▇▇▇▇ shall each use their
respective commercially reasonable efforts, to be deemed to not include the
renegotiation of any Permit terms or the financial terms of any Contract or
Lease, in obtaining any requisite governmental or third party consents or
authorizations to the consummation of the respective transactions contemplated
by this Agreement.
5. Pre-Closing Covenants of Sellers
From and after the date hereof and until the Closing Date:
5.01 Conduct of Business. Sellers shall carry on the business
of the Facilities diligently and substantially in the same manner as heretofore
and shall not make or institute any materially new methods of manufacture,
purchase, sale, shipment or delivery, lease, management, accounting or
operation, and shall not ship or deliver any quantity of products in excess of
normal shipment or delivery levels, except as agreed to in writing by GMTI,
which agreement shall not be unreasonably withheld. All of the property of the
Facilities shall be used, operated, repaired and maintained in a normal business
manner consistent with past practice.
5.02 Absence of Material Changes. Without the prior written
consent of ▇▇▇▇▇▇▇▇, which agreement shall not be unreasonably withheld, Sellers
shall not cause or permit any of the Facilities to:
(a) take any action to amend their Articles of
Incorporation or By- Laws;
(b) issue any stock, bonds or other corporate
securities or grant any option or issue any warrant to purchase or subscribe for
any of such securities or issue any securities convertible into such securities;
(c) incur any obligation or liability (absolute or
contingent), except current liabilities incurred and obligations under contracts
entered into in the ordinary course of business;
(d) declare or make any payment or distribution to
the stockholders of the Facilities with respect to its stock or purchase or
redeem any shares of its capital stock;
(e) mortgage, pledge, or subject to any lien, charge
or any other encumbrance any of its assets or properties;
(f) sell, assign, or transfer any of its assets,
except for inventory sold in the ordinary course of business, at a normal profit
margin;
17
(g) cancel any debts or claims, except in the
ordinary course of business;
(h) merge or consolidate with or into any corporation
or other entity;
(i) make, accrue or become liable for any bonus,
profit sharing or incentive payment, except for accruals under existing plans
and agreements, if any, or increase the rate of compensation payable or to
become payable by it to any of its officers, directors or employees except in
the ordinary course of business;
(j) make any election or give any consent under the
Code or the tax statutes of any state or other jurisdiction or make any
termination, revocation or cancellation of any such election or any consent or
compromise or settle any claim for past or present tax due;
(k) waive any rights of material value;
(l) modify, amend, alter or terminate any executory
contract of material value or which is material in amount;
(m) take or permit any act or omission constituting a
breach or default under any material contract or agreement by which it or its
properties are bound;
(n) fail to use reasonable commercials efforts to (i)
preserve the possession and control of its assets, (ii) retain its present
officers and key employees, (iii) preserve the relationships of consumers,
suppliers and others having business relations with it, and (iv) preserve the
business existing on the date hereof until the Closing Date;
(o) fail to operate its business and maintain its
books, accounts and records in the customary manner and in the ordinary and
regular course of business and maintain in good repair their business premises,
fixtures, machinery, furniture and equipment;
(p) enter into any lease, contract, agreement or
understanding, other than those entered into in the ordinary course of business
calling for payments which in the aggregate do not exceed $25,000 for each such
lease, contract, agreement or understanding;
(q) engage any new employee for a salary in excess of
$25,000 per annum;
(r) materially alter the terms, status or funding
condition of any Employee Plan; or
(s) commit or agree to do any of the foregoing in the
future.
18
5.03 Communications with Customers and Suppliers.
(a) Unless instructed otherwise by ▇▇▇▇▇▇▇▇ in
writing, the Facilities will continue to accept customer orders in the ordinary
course of business and consistent with past practice for all products offered by
the Facilities but expected to be shipped after the Closing Date.
(b) the Facilities and ▇▇▇▇▇▇▇▇ will cooperate in
communications with suppliers and customers to accomplish the Stock Purchase on
the Closing Date.
5.04 Compliance with Laws. The Facilities will comply in all
material respects with all laws and regulations which are applicable to them or
to the conduct of their business and will perform and comply in all material
respects with all Contracts.
5.05 Continuing Obligation to Inform. From the date hereof
through and including the Closing Date, the Sellers will deliver or cause to be
delivered to ▇▇▇▇▇▇▇▇ supplemental information concerning events subsequent to
the date hereof which would render any statement, representation or warranty in
this Agreement or any information contained in any Schedule attached hereto
inaccurate, misleading or incomplete in any material respect; provided, that
except as specified in Subsection 6.08 hereof, none of such supplemental
information shall constitute an amendment of any statement, representation or
warranty in this Agreement or any Schedule, Exhibit or document furnished
pursuant hereto.
5.06 Exclusive Dealing. Sellers will not from the date hereof
through the Closing Date, directly or indirectly, through any officer, director,
agent or otherwise, (a) solicit, initiate or encourage submission of proposals
or offers from any person relating to an acquisition or purchase of all or a
material portion of the assets of or an equity interest in the Facilities or any
merger, consolidation or business combination with the Facilities, (b)
participate in any discussions or negotiations regarding, or furnish to any
other person, any non-public information with respect to or otherwise cooperate
in any way with, or assist or participate in, facilitate or encourage, any
effort or attempt by any other person to do or seek any of the foregoing, or (c)
withdraw their intention to sell the Facilities. Sellers agree to promptly
notify ▇▇▇▇▇▇▇▇ of any such proposal or offer, or any inquiry or contact with
respect thereto received by Sellers.
5.07 Reports, Taxes. Sellers will duly and timely file all
reports or returns required to be filed with federal, state, local and foreign
authorities and will promptly pay all federal, state, local and foreign taxes,
assessments and governmental charges levied or assessed upon them or any of
their properties (unless contesting such in good faith and adequate provision
has been made therefor).
6. Conditions to Obligations of ▇▇▇▇▇▇▇▇
The obligations of ▇▇▇▇▇▇▇▇ under this Agreement are subject to the
fulfillment, at the Closing Date, of the following conditions precedent, each of
which may be waived in writing in the sole discretion of ▇▇▇▇▇▇▇▇:
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6.01 Continued Truth of Representations and Warranties of
Sellers; Compliance with Covenants and Obligations. The representations and
warranties of the Sellers shall be true in all material respects on and as of
the Closing Date as though such representations and warranties were made on and
as of such date, except for any changes permitted by the terms hereof or
consented to in writing by ▇▇▇▇▇▇▇▇. Sellers shall have performed and complied
in all material respects with all terms, conditions, covenants, obligations,
agreements and restrictions required by this Agreement to be performed or
complied with by each of them prior to or at the Closing Date.
6.02 Performance by BFI. At the Closing, the Sellers shall
have delivered to ▇▇▇▇▇▇▇▇ certificates signed by a duly authorized officer of
each of them, respectively, as to its compliance with Subsection 6.01 hereof.
6.03 Corporate Proceedings. All corporate, and other
proceedings required to be taken on the part of the Sellers to authorize and
carry out this Agreement shall have been taken.
6.04 Governmental Approvals. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent, authorization
or approval of which is necessary under any applicable law, rule, order or
regulation for the consummation of the Stock Purchase, and the consummation of
the transactions contemplated by this Agreement and the operation of the
business of the Facilities by ▇▇▇▇▇▇▇▇ shall have consented to, authorized,
permitted or approved such transactions.
6.05 Consent of Third Parties. Sellers shall have received all
requisite consents and approvals of all third parties whose consent or approval
is required in order for Sellers to consummate the transactions contemplated by
this Agreement, including without limitation, those set forth on Schedule 2.04
attached hereto.
6.06 Adverse Proceedings. No action or proceeding by or before
any court or other governmental body shall have been instituted or threatened by
any governmental body or person whatsoever which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this Agreement or which
might affect the right of ▇▇▇▇▇▇▇▇ to own or operate the business of the
Facilities after the Closing.
6.07 Opinions of Counsel. ▇▇▇▇▇▇▇▇ shall have received the
opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, counsel to the Sellers, dated as of the Closing
Date, in substantially the form attached hereto as Exhibit B.
6.08 Update. Sellers shall have provided ▇▇▇▇▇▇▇▇ with a true,
correct and complete list and amount, as of the last business day immediately
preceding the Closing Date, of the Contracts.
6.09 Non-Competition Agreement. On or prior to the Closing
Date, ▇▇▇▇▇▇▇▇, on the one hand and Sellers, on the other hand, shall have
entered into a non-compete agreement, in substantially the form attached hereto
as Exhibit C, providing in general
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for Sellers and their Affiliates not to engage in the business of the Facilities
in the area set forth in the agreement for a period of three (3) years after the
Closing Date.
6.10 Resignations. Sellers shall have, on or prior to the
Closing Date, delivered to ▇▇▇▇▇▇▇▇ resignations from the officers and directors
of the Facilities set forth on Schedule 6.10 attached hereto.
6.11 Indebtedness. BFI will eliminate all of the fixed
liabilities of BTM and BTG (including trade payables, tax obligations, accrued
expenses and intercompany payables) existing as of the Closing Date except for
outstanding obligations not yet due under the curb and gutter capital
improvement assessment to which BTM is subject .
6.12 Ford Heights Option. BFI shall have, on or prior to the
Closing Date, caused to be executed and delivered to GMTI an exclusive Option
Agreement relating to BFI's Ford Heights, Illinois facility in substantially the
form of Exhibit D attached hereto.
6.13 Permit Side Letter. Sellers shall have, on or prior to
the Closing Date, delivered to ▇▇▇▇▇▇▇▇ a Permit Side Letter in substantially
the form of Exhibit E attached hereto.
6.14 Closing Deliveries. ▇▇▇▇▇▇▇▇ shall have received at or
prior to the Closing such documents, instruments or certificates as ▇▇▇▇▇▇▇▇ may
reasonably request including, without limitation:
(a) such certificates of Sellers' officers and such
other documents evidencing satisfaction of the conditions specified in this
Section 6 as ▇▇▇▇▇▇▇▇ shall reasonably request;
(b) certificates of the Secretary of State of the
States of Delaware, Minnesota and Georgia, as applicable, as to the legal
existence and good standing (including tax) of BFIM, BFIG, BTM and BTG;
(c) certificates of the Secretaries of the Sellers
attesting to the incumbency of the Sellers' officers, the authenticity of the
resolutions authorizing the transactions contemplated by this Agreement and the
authenticity and continuing validity of the charter documents delivered pursuant
to Subsection 2.01;
(d) where required by each of the applicable Leases,
estoppel certificates from each lessor from whom Sellers or Facilities leases
real or personal property consenting to the Stock Purchase and the other
transactions contemplated hereby, and representing that there are no outstanding
claims against Sellers or Facilities under such Leases;
(e) such other documents, instruments or certificates
as may be reasonably requested by ▇▇▇▇▇▇▇▇ or its counsel.
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7. Conditions to Obligations of Sellers
The obligations of the Sellers under this Agreement are subject to the
fulfillment, at the Closing Date, of the following conditions precedent, each of
which may be waived in writing by the Sellers:
7.01 Continued Truth of Representations and Warranties of GMTI
and GAC; Compliance with Covenants and Obligations. The representations and
warranties of GMTI and GAC in this Agreement shall be true in all material
respects on and as of the Closing Date as though such representations and
warranties were made on and as of such date, except for any changes consented to
in writing by the Sellers. GMTI and GAC shall have performed and complied in all
material respects with all terms, conditions, covenants, obligations, agreements
and restrictions required by this Agreement to be performed or complied with by
it prior to or at the Closing Date.
7.02 Corporate/Stockholder Proceedings. All corporate,
stockholder and other proceedings required to be taken on the part of GMTI and
GAC to authorize the Stock Purchase and carry out this Agreement shall have been
taken.
7.03 Governmental Approvals. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent, authorization
or approval of which is necessary under any applicable law, rule, order or
regulation for the consummation of the Stock Purchase, and the consummation of
the transactions contemplated by this Agreement shall have consented to,
authorized, permitted or approved such transactions.
7.04 Consents of Third Parties. GMTI and GAC shall have
received all requisite consents and approvals of all third parties whose consent
or approval is required in order for GMTI and GAC to consummate the transactions
contemplated by this Agreement.
7.05 Adverse Proceedings. No action or proceeding by or before
any court or other governmental body shall have been instituted or threatened by
any governmental body or person whatsoever which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this Agreement or which
might affect the right of the Sellers to transfer the Stock.
7.06 Opinion of Counsel. Sellers shall have received an
opinion of ▇▇▇▇▇▇▇▇ & Worcester LLP, counsel to ▇▇▇▇▇▇▇▇, dated as of the
Closing Date, in substantially the form attached hereto as Exhibit F.
7.07 Closing Deliveries. Sellers shall have received at or
prior to the Closing such documents, instruments or certificates as Sellers may
reasonably request, including, without limitation:
(a) such certificates of each of GMTI's and GAC's
Chief Executive Officer and such other documents evidencing satisfaction of the
conditions specified in this Section 7;
22
(b) certificates of the Secretary of State of the
State of Delaware as to the legal existence and good standing of GMTI and GAC;
and
(c) certificates of the Secretaries of GMTI and GAC
attesting to the incumbency of the officers of GMTI and GAC, respectively, the
authenticity of the resolutions authorizing the transactions contemplated by
this Agreement, and the authenticity and continuing validity of the charter
documents delivered pursuant to Subsection 3.01.
(d) such other documents, instrument or certificates
as may be reasonably requested by Seller or its counsel.
7.08 Security Interest. GAC shall have executed and delivered
to BFI a Pledge Agreement substantially in the form of Exhibit G hereto and
shall have granted BFI a security interest in the Stock pursuant to such Pledge
Agreement. BTM and BTG each shall have executed and delivered to BFI a Security
Agreement substantially in the form of Exhibit H hereto and each shall have
granted BFI a security interest in all of their assets pursuant to such Security
Agreements.
7.09 Guaranty. GMTI shall have executed and delivered to BFI a
Guaranty substantially in the form of Exhibit I hereto.
8. Indemnification
8.01 By ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ hereby covenants and agrees that it
will indemnify and hold harmless Sellers, their Affiliates and each of their
respective officers, directors and employees from and against all claims,
damages, losses, liabilities, costs and expenses (including, without limitation,
settlement costs and any legal, accounting or other expenses for investigating
or defending any actions or threatened actions) (collectively, "Losses") in
connection with each and all of the following:
(a) any misrepresentation or breach of any
representation or warranty made by GMTI or GAC in this Agreement;
(b) any breach of any covenant, agreement or
obligation of GMTI or GAC contained in this Agreement or any other agreement,
instrument or document contemplated by this Agreement; and
(c) any misrepresentation contained in any statement,
certificate or schedule furnished by GMTI or GAC pursuant to this Agreement or
in connection with the transactions contemplated by this Agreement.
(d) ▇▇▇▇▇▇▇▇'▇, or any of their Affiliates'
operation, at the Facilities following the Closing Date.
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8.02 By Sellers. Sellers covenant and agree that they will
indemnify and hold harmless ▇▇▇▇▇▇▇▇, their Affiliates, and each of their
respective officers, directors and employees, from and against all Losses in
connection with each and all of the following:
(a) any misrepresentation or breach of any
representation or warranty made by Sellers in this Agreement;
(b) any breach of any covenant, agreement or
obligation of Sellers contained in this Agreement or any other agreement,
instrument or document contemplated by this Agreement;
(c) any misrepresentation contained in any statement,
certificate or schedule furnished by Sellers pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement;
(d) the Facilities' businesses or operations on or
prior to the Closing Date;
(e) any and all liabilities of the Facilities related
to any borrowed money indebtedness of the Facilities in excess of the
indebtedness described in Section 6.11 hereof existing as of the Closing Date.
(f) any tax liabilities or obligations of the
Facilities relating to any period prior to the Closing Date;
(g) any claims against, or liabilities or obligations
of, the Facilities by or to officers, directors, or affiliates relating to the
Facilities' business or operation prior to the Closing Date;
(h) any welfare benefits not fully covered by
third-party insurance policies or programs relating to claims incurred by
present or former employees of the Facilities on or before the Closing Date.
8.03 Claims for Indemnification. Whenever any claim shall
arise for indemnification under this Section 8, ▇▇▇▇▇▇▇▇ on the one hand or
Sellers, on the other hand, as the case may be (the party or parties seeking
such indemnification, the "Indemnified Party"), shall promptly notify the other
party or parties hereto (the "Indemnifying Party") in writing (the
"Indemnification Notice") of the claim and, when known, the facts constituting
the basis for such claim (including all relevant documentation). In the event of
any such claim for indemnification hereunder resulting from or in connection
with any claim or legal proceedings by a third party (a "Third Party Claim"),
the Indemnification Notice shall specify, if known, the amount or an estimate of
the amount of the liability arising therefrom. In the event that any claim for
indemnification involves a matter other than a Third Party Claim, the
Indemnifying Party shall have sixty (60) days from receipt of the
Indemnification Notice to object to such claim by delivery of a written notice
of such objection to the Indemnified Party specifying in reasonable detail the
basis for such objection. Failure to timely to so object shall constitute a
final and
24
binding acceptance of the Claim for Indemnification by the Indemnifying Party
and the claim shall be paid in accordance with Section 8.05 hereof. If an
objection is timely interposed by the Indemnifying Party and the dispute is not
resolved within twenty (20) business days from the date (such period is
hereinafter referred to as the "Negotiation Period") the Indemnified Party
receives such objection, such dispute shall be resolved by arbitration in
accordance with the provisions of Section 9 hereof. The Indemnified Party shall
not settle or compromise any claim by a third party for which it is entitled to
indemnification hereunder without the prior written consent, which shall not be
unreasonably withheld or delayed, of the Indemnifying Party; provided, however,
that if suit shall have been instituted against the Indemnified Party and the
Indemnifying Party shall not have taken control of such suit within ten (10)
days after notification thereof, the Indemnified Party shall have the right to
settle or compromise such claim upon giving notice to the Indemnifying Party as
provided in Subsection 8.04.
8.04 Defense by the Indemnifying Party.
(a) In connection with any claim which may give rise
to indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a person other than the Indemnified Party, the Indemnifying Party,
at his sole cost and expense may, upon written notice to the Indemnified Party,
assume the defense of any such claim or legal proceeding if the Indemnifying
Party acknowledges to the Indemnified Party in writing the obligation of the
Indemnifying Party to indemnify the Indemnified Party with respect to all
elements of such claim. If the Indemnifying Party assumes the defense of any
such claim or legal proceeding, the Indemnifying Party shall select counsel
reasonably acceptable to the Indemnified Party to conduct the defense of such
claims or legal proceedings and at the sole cost and expense of the Indemnifying
Party shall take all steps necessary in the defense or settlement thereof. The
Indemnifying Party shall not consent to a settlement of, or the entry of any
judgment arising from, any such claim or legal proceeding, without the prior
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed). The Indemnified Party shall be entitled to
participate in (but not control) the defense of any such action, with its own
counsel and at its own expense. If the Indemnifying Party does not assume the
defense of any such claim or litigation resulting therefrom within ten (10) days
after the date such claim is made: (a) the Indemnified Party may defend against
such claim or litigation in such manner as it may deem appropriate, including,
but not limited to, settling such claim or litigation, after giving notice of
the same to the Indemnifying Party, on such terms as the Indemnified Party may
deem appropriate, and (b) the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with its counsel
and at its own expense. If the Indemnifying Party thereafter seeks to question
the manner in which the Indemnified Party defended such third party claim or the
amount or nature of any such settlement, the Indemnifying Party shall have the
burden to prove by a preponderance of the evidence that the Indemnified Party
did not defend or settle such third party claim in a reasonably prudent manner.
(b) The Indemnifying Party and Indemnified Party
shall cooperate with each other in all reasonable respects in connection with
the defense of any Third Party Claim, including making available records
relating to such claim and furnishing employees of the Indemnified Party as may
be reasonably necessary for the preparation of the defense of any such Third
Party Claim or for testimony as witnesses in any proceeding relating to such
claim.
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8.05 Payment of Indemnification Obligation. Notwithstanding
anything to the contrary in this Section 8 or elsewhere in this Agreement,
neither Indemnified Party shall be entitled to receive, and neither Indemnifying
Party shall be obligated to pay, (i) any amounts under this Section 8 unless and
until the aggregate amount of all claims for indemnification by an Indemnified
Party under this Section 8 exceeds five percent (5%) of the amount paid by
▇▇▇▇▇▇▇▇ to BFI (the "Floor") or (ii) any amounts in excess of the Purchase
Price, except that any claims by ▇▇▇▇▇▇▇▇ for Losses resulting from a breach of
Section 2.12 hereof ("Tax Claims") shall not be subject to the limits set forth
in this sentence. The parties hereto agree that (i) once the aggregate amount of
claims, exclusive of Tax Claims, by any Indemnified Party exceeds the Floor, the
Indemnified Party shall be entitled to indemnity only for the amount of such
claims in excess of the Floor and (ii) the Indemnified Party shall be entitled
to indemnity for the entire amount of any Tax Claims.
8.06 Right of Offset. ▇▇▇▇▇▇▇▇ may offset any amounts owing to
BFI under Section 1.03 hereof by the amount of any Losses described in Section
8.02 hereof.
8.07 Survival of Representations; Claims for Indemnification.
Except as specifically and expressly otherwise provided herein, all
representations, warranties and covenants made by Sellers and ▇▇▇▇▇▇▇▇ in this
Agreement, or in any instrument or document furnished in connection with this
Agreement or the transactions contemplated hereby, shall survive the Closing and
any investigation at any time made by or on behalf of the Indemnified Party
until three years from the Closing (the "Expiration Date"). All such
representations, warranties and covenants shall expire on the Expiration Date,
except for claims, if any, (a) properly asserted in writing prior to such
Expiration Date identified as a claim for indemnification pursuant to this
Section 8, or (b) which are based upon fraud of Sellers or ▇▇▇▇▇▇▇▇, which shall
survive until finally resolved and satisfied in full.
8.08 Claims. Any claim by any party to this Agreement for any
breach of the representations, warranties, and covenants set forth in this
Agreement shall be subject to the limitations prescribed by this Article 8.
9. Dispute Resolution
9.01 General. In the event that any dispute should arise
between the parties hereto with respect to any matter covered by this Agreement,
the parties hereto shall resolve such dispute in accordance with the procedures
set forth in this Section 9.
9.02 Consent of the Parties. In the event of any dispute
between the parties with respect to any matter covered by this Agreement, the
parties shall first use their best efforts to resolve such dispute among
themselves. If the parties are unable to resolve the dispute within 30 calendar
days after the commencement of efforts to resolve the dispute, the dispute will
be submitted to arbitration in accordance with Subsection 9.03 hereof.
26
9.03 Arbitration.
(a) Either ▇▇▇▇▇▇▇▇, on the one hand, or Sellers, on
the other hand, may submit any matter referred to in Subsection 9.02 hereof to
arbitration by notifying the other party hereto, in writing, of such dispute.
Within 10 days after receipt of such notice, ▇▇▇▇▇▇▇▇ and Sellers shall
designate in writing one arbitrator to resolve the dispute; provided, that if
the parties hereto cannot agree on an arbitrator within such 10-day period, the
arbitrator shall be selected by the American Arbitration Association. The
arbitrator so designated shall not be an employee, consultant, contractor,
officer, director or stockholder of any party hereto or any affiliate of any
party to this Agreement.
(b) Within 15 days after the designation of the
arbitrator, the arbitrator, ▇▇▇▇▇▇▇▇ and Sellers shall meet, at which time
▇▇▇▇▇▇▇▇ and Sellers shall be required to set forth in writing all disputed
issues and a proposed ruling on each such issue.
(c) The arbitrator shall set a date for a hearing(s),
which shall be no later than 30 days after the submission of written proposals
pursuant to paragraph (b) above, to discuss each of the issues identified by
▇▇▇▇▇▇▇▇, as the case may be, and Sellers. Each such party shall have the right
to be represented by counsel. The arbitration shall be governed by the rules of
the American Arbitration Association; provided, that the arbitrator shall have
sole discretion with regard to the admissibility of evidence.
(d) The arbitrator shall use his or her best efforts
to rule on each disputed issue within 30 days after the completion of the
hearings described in paragraph (c) above. The determination of the arbitrator
as to the resolution of any dispute shall be binding and conclusive upon all
parties hereto. All rulings of the arbitrator shall be in writing and shall be
delivered to the parties hereto and the Escrow Agents.
(e) The prevailing party in any arbitration shall be
entitled to an award of reasonable attorneys' fees incurred in connection with
the arbitration. The non-prevailing party shall pay such fees, together with the
fees of the arbitrator and the costs and expenses of the arbitration.
(f) Any arbitration pursuant to this Subsection 9.03
shall be conducted in Boston, Massachusetts. Any arbitration award may be
entered in and enforced by any court having jurisdiction thereover and the
parties hereby consent and commit themselves to the jurisdiction of the courts
of the Commonwealth of Massachusetts for purposes of the enforcement of any
arbitration award.
10. Termination of Agreement
10.01 Termination by Lapse of Time. This Agreement shall
terminate at 5:00 p.m., Boston Time, on July 18, 1997, if the transactions
contemplated hereby have not been consummated, unless such date is extended by
the written consent of BFI and ▇▇▇▇▇▇▇▇.
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10.02 Termination by Agreement of the Parties. This Agreement
may be terminated by the mutual written agreement of the parties hereto. In the
event of such termination by agreement, ▇▇▇▇▇▇▇▇ shall have no further
obligation or liability to Sellers under this Agreement, and Sellers shall have
no further obligation or liability to ▇▇▇▇▇▇▇▇ under this Agreement.
10.03 Termination by Reason of Breach. This Agreement may be
terminated by BFI, if at any time prior to the Closing there shall occur a
material breach of any of the representations, warranties or covenants of
▇▇▇▇▇▇▇▇ or the failure by ▇▇▇▇▇▇▇▇ to perform in all material respects any
condition or obligation hereunder, and may be terminated by ▇▇▇▇▇▇▇▇, if at any
time prior to the Closing there shall occur a material breach of any of the
representations, warranties or covenants of the Sellers or the failure of the
Sellers to perform in all material respects any condition or obligation
hereunder. If the Agreement is terminated due to a material breach by the
Sellers, then all sums paid to date by ▇▇▇▇▇▇▇▇ to the Sellers shall be returned
to ▇▇▇▇▇▇▇▇ by BFI within ten (10) days of the breach. If the Agreement is
terminated due to a material breach by ▇▇▇▇▇▇▇▇, then all sums paid to date by
▇▇▇▇▇▇▇▇ to BFI shall be retained by BFI as liquidated damages and said sums
shall be the Seller's sole and exclusive remedy against ▇▇▇▇▇▇▇▇ hereunder.
11. Post Closing.
11.01 BFI Name and Logos. As soon as practicable (but in any
event within ninety (90) days) after the Closing Date, ▇▇▇▇▇▇▇▇, at its expense,
shall (i) remove all BFI names and logos from all assets of the Facilities and
(ii) take all steps necessary to remove the "BFI" from the corporate names of
BTM and BTG. Nothing in this Agreement shall constitute a license or
authorization for ▇▇▇▇▇▇▇▇ to use in any manner any name, logo or ▇▇▇▇ owned by
or licensed to BFI and its affiliates.
11.02 Access to Records and Properties; Assistance. For a
period of seven (7) years following the Closing, ▇▇▇▇▇▇▇▇ will afford to BFI
reasonable access to the financial and tax records of the BTM and BTG as well as
the properties related to the Facilities' business to (i) complete any financial
statements or audits thereof or tax returns, (ii) defend any tax disputes or
claims or responds to any requests in connection with any tax audits, (iii)
comply with any legal request or order, (iv) defend any disputes, claims,
prosecution or litigation or (v) for any other reasonable purpose. For a period
of thirty (30) days following the Closing Date, ▇▇▇▇▇▇▇▇ shall make available
those Hired Employees (defined below) accounting and other office personnel for
purposes of assisting BFI in bringing the Facilities' monthly accounting records
to a close.
11.03 Waiver of Applicable Waiting Periods. ▇▇▇▇▇▇▇▇ shall
waive the waiting periods for the benefit plans of ▇▇▇▇▇▇▇▇, including without
limitation medical, dental, disability, vacation and pension plans, with respect
to any employees (such employees "Hired Employees') of any of the Facilities
employed by ▇▇▇▇▇▇▇▇ at or following the Closing Date; provided that such waiver
is permitted under such plans. Any such employees shall be eligible for coverage
in accordance with, and subject to, the other provisions of such plans. ▇▇▇▇▇▇▇▇
shall further apply such respective employees' years of service with any BFI
affiliate for
28
purposes of calculating benefits under all of ▇▇▇▇▇▇▇▇'▇ benefit plans; provided
that such application is permitted under such plans.
11.04 Severance. If any Hired Employee shall cease to be
employed by ▇▇▇▇▇▇▇▇ or any of their respective affiliates, other than
terminated for "cause", within the first 90 days after the Closing Date, then
Sellers shall be responsible for any and all severance payments and other
termination benefits to which such Hired Employee would have been entitled under
BFI's employee benefit and severance plans in effect prior to the Closing Date.
11.05 Termination of Benefit Plan Coverage. Sellers will
terminate the Facilities' participation in all employee benefit plans of Sellers
or their affiliates on the Closing Dates.
11.06 Financial Assurance. On or before sixty (60) days
following the Closing Date, ▇▇▇▇▇▇▇▇ shall submit such instruments of financial
assurance required by the respective regulatory agencies to effect the full and
effective release of those instruments of financial assurance on file or in
place by BFI, BFIM, BFIG, or any of their respective Affiliates (excluding BTM
and BTG) relating to the Facilities.
11.07 Tax and Allocation Matters. BFI and GMTI agree to make
(and cause their respective affiliates to make) all necessary filings and
elections under Section 338(h)(10) of the Internal Revenue Code with respect to
the sale of the Stock. BFI will file the completed IRS form 8023 on behalf of
the parties and BFI will provide a copy to GMTI. BFI and GMTI (i) agree to
allocate the Purchase Price among the assets of BTM and BTG in accordance with
Schedule 11.07, (ii) will have provided their respective taxpayer identification
numbers on Schedule 11.07, (iii) will file IRS Forms 8594 and any other required
modifications thereto or other tax reporting forms consistently with the agreed
allocation, (iv) will not file any return with a tax authority or take a
position in any proceeding before any taxing authority that is inconsistent with
such allocation, and (v) upon notice of the allocation being disputed by any
taxing authority, will promptly notify the other party of such dispute and the
resolution thereof. BFI, at its expense, will prepare and file all federal and
state tax returns for BTM and BTG for the current period up to the Closing Date.
GMTI, at its expense, will prepare and file all federal and state tax returns
for BTM and BTG for periods after the Closing Date.
11.08 Ford Heights Cages. For so long as the Option Agreement
relating to the Ford Heights facility is in effect, Sellers and their affiliates
shall continue to permit the use, without charge, by BTM and BTG of the tire
cages located thereat in the manner currently used.
12. Brokers
12.01 For BFI. BFI represents and warrants that no person,
firm or corporation has acted in the capacity of broker or finder on its behalf
to bring about the negotiation of this Agreement. BFI agrees to indemnify and
hold harmless ▇▇▇▇▇▇▇▇ against any claims or liabilities asserted against it by
any person acting or claiming to act as a broker for BFI.
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12.02 For ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ represents and warrants that no
person, firm or corporation has acted in the capacity of broker or finder on its
behalf to bring about the negotiation of this Agreement. ▇▇▇▇▇▇▇▇ agrees to
indemnify and hold harmless BFI against any claims or liabilities asserted
against any of them by any person acting or claiming to act as a broker or
finder on behalf of ▇▇▇▇▇▇▇▇.
13. Notices
Any notices or other communications required or permitted hereunder
shall be sufficiently given if delivered personally or sent by telex, federal
express, registered or certified mail, postage prepaid, addressed as follows or
to such other address of which the parties may have given notice:
To ▇▇▇▇▇▇▇▇ or GAC:
▇▇▇▇▇▇▇▇ Technologies, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To BFI:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industries, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
Telephone:
Telecopy:
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With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industries, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇, ▇▇., Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally, or (b) three
business days after being sent, if sent by registered or certified mail, postage
prepaid and properly addressed as set forth above.
14. Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that
▇▇▇▇▇▇▇▇, on the one hand, and Sellers, on the other hand, may not assign their
respective obligations hereunder without the prior written consent of the other
party; provided, however, that ▇▇▇▇▇▇▇▇ may assign this Agreement, and its
rights and obligations hereunder, to a subsidiary or affiliate of ▇▇▇▇▇▇▇▇. Any
assignment in contravention of this provision shall be void.
15. Entire Agreement; Amendments; Attachments
(a) This Agreement, all Schedules and Exhibits
hereto, and all agreements and instruments to be delivered by the parties
pursuant hereto represent the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof and supersede all prior
oral and written and all contemporaneous oral negotiations, commitments and
understandings between such parties. GMTI and BFI, by the consent of their
respective presidents, may amend or modify this Agreement, in such manner as may
be agreed upon, by a written instrument executed by GMTI and BFI.
(b) If the provisions of any Schedule or Exhibit to
this Agreement are inconsistent with the provisions of this Agreement, the
provisions of the Agreement shall prevail. The Exhibits and Schedules attached
hereto or to be attached hereafter are hereby incorporated as integral parts of
this Agreement.
16. Severability
Any provision of this Agreement which is invalid, illegal or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability, without affecting in any way
the remaining provisions hereof in such jurisdiction or rendering that or any
other provision of this Agreement invalid, illegal or unenforceable in any other
jurisdiction.
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17. Investigation of the Parties
All representations and warranties contained herein which are made to the
best knowledge of a party shall require that such party make reasonable
investigation and inquiry with respect thereto to ascertain the correctness and
validity thereof.
18. Expenses
Except as otherwise expressly provided herein, ▇▇▇▇▇▇▇▇, on the one hand,
the Sellers, on the other hand, will pay all fees and expenses (including,
without limitation, legal and accounting fees and expenses) incurred by them in
connection with the transactions contemplated hereby (collectively, "Transaction
Expenses"). In no event will any of the fees or expenses incurred in connection
with this transaction by BFI, including, without limitation, the fees and
expenses of counsel to BFI, be billed to or paid by the Facilities.
19. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
20. Section Headings
The section headings are for the convenience of the parties and in no way
alter, modify, amend, limit, or restrict the contractual obligations of the
parties.
21. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which shall be one and the same
document.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as an instrument under seal on and as of the date first above written.
(Corporate Seal) ▇▇▇▇▇▇▇▇ TECHNOLOGIES, INC.
ATTEST:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Executive officer
(Corporate Seal) ▇▇▇▇▇▇▇▇ ACQUISITION CORP.
ATTEST:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Executive Officer
(Corporate Seal) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INDUSTRIES, INC.
ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary Vice President
(Corporate Seal) ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ INDUSTRIES OF
MINNESOTA, INC.
ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary Vice President
(Corporate Seal) ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ INDUSTRIES OF
GEORGIA, INC.
ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary Vice President
33