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STOCK PURCHASE AGREEMENT
BY AND AMONG
BTG, INC.,
A VIRGINIA CORPORATION,
RESEARCH PLANNING, INC.
A DELAWARE CORPORATION,
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
MARCH 30, 2001
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TABLE OF CONTENTS
Page
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1. DEFINITIONS...................................................................1
2. SALE AND PURCHASE OF SHARES...................................................1
2.01 Sale and Purchase of Shares............................................1
2.02 Purchase Price.........................................................2
2.03 Satisfaction of Indebtedness...........................................2
3. ADDITIONAL UNDERTAKINGS AND COVENANTS.........................................2
3.01 Consents and Approvals.................................................2
3.02 Access; Investigations by Buyer........................................3
3.03 Operation of Business of the Company...................................5
3.04 No Inconsistent Negotiations...........................................7
3.05 Public Announcements...................................................7
3.06 Employees..............................................................7
3.07 Subsequent Events......................................................8
3.08 Access to Records......................................................8
3.09 Maintenance of Plans...................................................8
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS............9
4.01 Organization and Standing..............................................9
4.02 Subsidiaries...........................................................9
4.03 Articles of Incorporation and Bylaws...................................9
4.04 Capitalization.........................................................9
4.05 Directors, Officers and Employees......................................10
4.06 Financial Statements...................................................10
4.07 No Liabilities.........................................................11
4.08 Accounts Receivable....................................................11
4.09 Taxes..................................................................11
4.10 Conduct of Business; Absence of Material Adverse Change................14
4.11 Real Property..........................................................15
4.12 Assets.................................................................15
4.13 Insurance..............................................................15
4.14 Intellectual Property..................................................16
4.15 Debt Instruments.......................................................16
4.16 Leases.................................................................16
4.17 Other Agreements.......................................................17
4.18 Books and Records......................................................19
4.19 Litigation; Disputes...................................................20
4.20 Labor Relations........................................................20
4.21 Pension and Benefit Plans..............................................21
4.22 Environmental..........................................................24
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4.23 Transactions with Related Parties......................................25
4.24 Restrictions and Consents..............................................25
4.25 Authorization..........................................................26
4.26 Absence of Violation...................................................26
4.27 Copies of Documents....................................................27
4.28 Binding Obligation.....................................................27
4.29 Disclosure.............................................................27
5. REPRESENTATIONS AND WARRANTIES of the STOCKHOLDERS............................27
5.01 Title to Capital Stock.................................................28
5.02 Authority and Capacity.................................................28
5.03 Absence of Violation...................................................28
5.04 Restrictions and Consents..............................................28
5.05 Binding Obligation.....................................................29
5.06 Transfer of Title......................................................29
6. REPRESENTATIONS AND WARRANTIES OF BUYER.......................................29
6.01 Organization and Standing..............................................29
6.02 Authorization..........................................................29
6.03 Binding Obligation.....................................................30
6.04 No Registration Under the Securities Act...............................30
6.05 Acquisition for Investment.............................................30
6.06 Evaluation of Merits and Risks of Investment...........................31
6.07 Disclosure.............................................................31
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDERS.......31
7.01 Representations and Warranties.........................................31
7.02 Performance............................................................31
7.03 Buyer's Certificate....................................................32
7.04 Documents at Closing...................................................32
7.05 Consulting Agreement...................................................32
7.06 Legal Opinion..........................................................32
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER..................................32
8.01 Representations and Warranties.........................................32
8.02 Performance............................................................33
8.03 Absence of Adverse Changes.............................................33
8.04 Legal Proceedings......................................................33
8.05 Officer's Certificate..................................................33
8.06 Stockholders' Certificate..............................................33
8.07 Subordination Agreement................................................34
8.08 Documents at Closing...................................................34
8.09 Consents...............................................................34
8.10 Resignation of Directors...............................................34
8.11 Consulting Agreement...................................................34
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8.12 Legal Opinion..........................................................34
8.13 Minimum Net Assets.....................................................35
8.14 Noncompetition Agreements..............................................35
8.15 Termination of Stockholders' Agreement.................................35
9. CLOSING.......................................................................35
9.01 Closing of Sale and Purchase...........................................35
9.02 Deliveries by the Stockholders.........................................36
9.03 Deliveries by the Company..............................................36
9.04 Deliveries by Buyer....................................................37
10. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES........................37
10.01 Survival of Representations............................................37
10.02 Agreement of Stockholders to Indemnify.................................38
10.03 Agreement of Buyer to Indemnify........................................39
10.04 Conditions of Indemnification..........................................40
10.05 No Recourse Against the Company........................................41
10.06 Specific Performance...................................................41
10.07 Remedies Cumulative....................................................42
11. TAX MATTERS...................................................................42
11.01 Section 338(h)(10) Election............................................42
11.02 Allocation of Purchase Price...........................................42
11.03 S Corporation Status...................................................43
11.04 Tax Returns and Payments...............................................43
11.05 Cooperation on Tax Matters.............................................44
11.06 Certain Taxes..........................................................45
11.07 Tax Audits.............................................................45
12. TERMINATION...................................................................46
12.01 Termination............................................................46
12.02 Effect of Termination..................................................47
13. MISCELLANEOUS.................................................................47
13.01 Additional Actions and Documents.......................................47
13.02 Brokers................................................................47
13.03 Expenses...............................................................48
13.04 Assignment.............................................................48
13.05 Entire Agreement; Amendment............................................48
13.06 Waiver.................................................................49
13.07 Consent to Jurisdiction................................................49
13.08 Severability...........................................................49
13.09 Governing Law..........................................................50
13.10 Notices................................................................50
13.11 Headings...............................................................52
13.12 Execution in Counterparts..............................................52
13.13 Limitation on Benefits.................................................52
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13.14 Binding Effect.........................................................53
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EXHIBITS
EXHIBIT A - Capitalization
EXHIBIT B - Definitions
EXHIBIT C - Form of Promissory Notes
EXHIBIT D - Form of Subordination Agreement
EXHIBIT E - Form of Consulting Agreement
EXHIBIT F -Form of Legal Opinion of Winston & ▇▇▇▇▇▇
EXHIBIT G - Forms of Noncompetition Agreements
EXHIBIT H - Form of Legal Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Purchase Agreement") is
entered into as of March 30, 2001, among BTG, INC., a Virginia corporation
("Buyer"), RESEARCH PLANNING, INC., a Delaware corporation (the "Company"),
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (each a
"Stockholder", and collectively, the "Stockholders").
WHEREAS, the Stockholders own all of the issued and outstanding
shares of capital stock of the Company as set forth on Exhibit A hereto
(collectively, the "Shares"); and
WHEREAS, the Stockholders desire to sell and Buyer desires to
purchase, all of the Shares at the price and upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
1. DEFINITIONS
For all purposes of this Purchase Agreement, certain capitalized terms
specified in Exhibit B shall have the meanings in this Purchase Agreement as are
ascribed to them in Exhibit B, except as otherwise expressly provided in this
Purchase Agreement.
2. SALE AND PURCHASE OF SHARES
2.01 SALE AND PURCHASE OF SHARES
On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions hereof, each
Stockholder agrees to sell to Buyer, and Buyer agrees to purchase from such
Stockholder, all of the Shares owned by such Stockholder for the purchase price
specified in Section 2.02.
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2.02 PURCHASE PRICE
The aggregate purchase price for all of the Shares shall be Nine
Million Dollars ($9,000,000) (the "Purchase Price"). The Purchase Price shall be
paid to the Stockholders in the form of subordinated promissory notes made
payable to each Stockholder (the "Promissory Notes"), executed and delivered by
Buyer at Closing. The Promissory Notes shall be in the form of Exhibit C
attached hereto. The Stockholders acknowledge and agree that the Promissory
Notes shall be subject to the terms and conditions of a subordination agreement
(the "Subordination Agreement") to be executed and delivered at Closing in
substantially the same form as Exhibit D hereto. The principal amount of the
Promissory Note issuable to each Stockholder is set forth opposite such
Stockholder's name on Exhibit A hereto.
2.03 SATISFACTION OF INDEBTEDNESS
At Closing, Buyer shall, subject to the terms and conditions of
this Purchase Agreement, pay the amounts outstanding under the Credit Agreement
as stated in and in accordance with the payoff letter delivered pursuant to
Section 9.03(i) hereof.
3. ADDITIONAL UNDERTAKINGS AND COVENANTS
3.01 CONSENTS AND APPROVALS
(a) Subject to Section 3.01(c) hereof, Buyer, the Company and
the Stockholders shall use their respective reasonable best efforts to take all
measures reasonably necessary or advisable to secure such consents,
authorizations and approvals of governmental authorities and of private persons
or entities with respect to the transactions contemplated by this Purchase
Agreement, and the performance of all other obligations of such parties
hereunder, as may be required by any applicable Laws or by any Agreement to
which Buyer, the Company or the Stockholders is a party or by which Buyer, the
Company or the Stockholders is bound.
(b) Subject to Section 3.01(c) hereof, Buyer, the Company and
the Stockholders shall (i) cooperate in the filing of all forms, notifications,
reports and information, if any, required pursuant to applicable statutes,
rules, regulations or orders of any governmental authority in connection with
the transactions contemplated by this Purchase Agreement and (ii) use their
respective reasonable best efforts to cause any applicable waiting periods
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thereunder to expire and any objections to the transactions contemplated hereby
to be withdrawn before the Closing.
(c) Notwithstanding anything to the contrary contained in this
Purchase Agreement, prior to the Closing none of the parties hereto shall,
without the prior written consent of Buyer, seek to novate any of the Company's
Government Contracts. The parties hereto acknowledge and agree that, unless
otherwise agreed in writing by Buyer and the Company, no novations under the
Company's Government Contracts shall be conditions precedent to the obligations
of any party hereto to consummate the transactions hereunder. The parties hereto
further acknowledge and agree that the Company is required under the terms of
certain of the Government Contracts to which it is a party to notify the
applicable governmental authorities that the Company has entered into this
Purchase Agreement. The parties hereto shall cooperate with each other in
providing such notices and each such notice shall be in a form mutually
acceptable to the Company and Buyer. In addition, promptly following the
execution and delivery of this Purchase Agreement, the Company and the
Stockholders shall provide all required notifications to the applicable
governmental agencies under the Restricted Contracts of the entering into of
this Purchase Agreement, and request that the contracting parties and
administrative contracting officers under the Restricted Contracts obtain from
the Small Business Administration (the "SBA") waivers to permit the Restricted
Contracts to continue to be performed from and after the Closing Date. Such
notifications and requests to obtain waivers shall be subject to the approval of
Buyer, which approval shall not be unreasonably withheld. From and after the
Closing Date, the Stockholders shall take such actions and execute such
documents as Buyer may reasonably request in connection with any novations,
notifications or waivers that Buyer may elect to pursue under the Company's
Government Contracts.
3.02 ACCESS; INVESTIGATIONS BY BUYER
(a) At all times through the Closing Date, the Company shall,
upon reasonable prior notice and during normal business hours, provide to
representatives of Buyer access to the offices, books, Agreements, records
(including, without limitation, tax returns and correspondence with
accountants), officers, directors and employees of the Company (provided such
access shall not cause any unreasonable disruption in the conduct of the
Company's business), and will furnish representatives of Buyer such financial
and operating data and other information with respect to the business and Assets
of the Company as Buyer may reasonably request, including, without
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limitation, Agreements with clients, customers, vendors, lessors, licensors and
suppliers of the Company. Buyer agrees at all times through the Closing Date to
(i) keep confidential all such information that is identified by the Company as
being of a confidential nature, (ii) not use such confidential information on
its own behalf, except in connection with the transactions contemplated hereby,
or on behalf of any other person, firm or entity, and (iii) not disclose such
confidential information to any third party (other than to Buyer's counsel,
accountants and other consultants in connection with the transactions
contemplated hereby) without the Company's advance written authorization;
provided, however, that Buyer shall have no such obligations with respect to
confidential information that (A) was lawfully obtained by it not subject to
restrictions of confidentiality; (B) is a matter of public knowledge; or (C) has
been or is hereafter publicly disclosed other than by or through Buyer. In the
event this Purchase Agreement is terminated, Buyer will return to the Company or
destroy, as the Company may direct, all documents, workpapers and other
materials furnished to Buyer relating to the transactions contemplated
hereunder, whether obtained before or after the execution of this Purchase
Agreement. Nothing in this Section 3.02(a) shall limit Buyer's obligations under
the Confidentiality Agreement.
(b) The Company and the Stockholders hereby acknowledge that
each of them has obtained and may continue to obtain knowledge of and access to
confidential and valuable business information relating to Buyer not generally
known by or available to the general public, including, without limitation,
information to which the Stockholders obtains access pursuant to Section 3.08
hereof. The Company and the Stockholders each agree at all times through the
Closing Date and for a period of five (5) years thereafter, to (i) keep
confidential all such information, (ii) not use such confidential information on
its own behalf, except in connection with the transactions contemplated hereby,
or on behalf of any other person, firm or entity, and (iii) not disclose such
confidential information to any third party (other than to the Company's
counsel, accountants and other consultants in connection with the transactions
contemplated hereby) without Buyer's advance written authorization; provided,
however, that the Company and the Stockholders shall have no such obligations
with respect to confidential information that (A) was lawfully obtained by it
not subject to restrictions of confidentiality; (B) is a matter of public
knowledge; or (C) has been or is hereafter publicly disclosed other than by or
through the Company. In the event this Purchase Agreement is terminated, the
Company and the Stockholders will return to Buyer or destroy, as Buyer may
direct, all documents, workpapers and other materials furnished to such parties
relating to the transactions contemplated hereunder, whether obtained before or
after the execution of this Purchase Agreement.
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Nothing contained in this Section 3.02(b) shall limit the obligations of the
Company and the Stockholders under the Confidentiality Agreement.
3.03 OPERATION OF BUSINESS OF THE COMPANY
(a) At all times through the Closing Date, the Company shall use
its reasonable best efforts to (i) preserve its business organization and its
present relationships with customers, suppliers, consultants, employees and any
other persons having business relations with the Company in the Ordinary Course
of Business; and (ii) maintain all of its Assets in good operating condition and
repair (normal wear and tear excepted) in the Ordinary Course of Business.
(b) Except as set forth in the Disclosure Schedule, at all times
through the Closing Date, the Company shall conduct its business substantially
in the manner heretofore conducted and only in the Ordinary Course of Business
and shall not, without the prior written consent of Buyer: (i) issue any capital
stock, bonds or other corporate securities or debt instruments, grant any
options, warrants or other rights calling for the issuance thereof, or borrow
any funds; (ii) declare, set aside or pay any dividends or distributions of any
Assets, except for the payment of the Stockholders' Transaction Expenses
permitted to be paid by the Company pursuant to Section 13.03 of this Purchase
Agreement; (iii) directly or indirectly redeem, purchase or otherwise acquire
any of its capital stock, any securities convertible into capital stock, or any
other securities; (iv) effect a split, reclassification or other change in or of
any of its capital stock; (v) amend its certificate of incorporation or bylaws;
(vi) grant any increase in the compensation or benefits payable, or to become
payable, by the Company to any of its directors, officers, employees or
consultants, or make any accrual or arrangement for or payment of bonuses or
special compensation of any kind to any director, officer or employee; (vii)
directly or indirectly guarantee or agree to guarantee the obligations of
others; (viii) enter into or make or permit any amendment to the terms or
conditions of any of the loans under the Credit Agreement, or enter into or make
or permit any amendment or termination of any other Agreement which the Company
or the Stockholders reasonably believes is likely to have a Material Adverse
Effect; (ix) mortgage, pledge or subject to any Encumbrance any of its Assets;
(x) cancel any indebtedness owing to the Company or any claims which the Company
may possess (other than the resolution of claims under any Agreement in the
Ordinary Course of Business which would not have a Material Adverse Effect), or
waive any rights of substantial value; (xi) sell, assign or transfer any
Intellectual Property; (xii) sell, exchange, transfer or otherwise dispose of
any interest in any Asset
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(other than in the Ordinary Course of Business); (xiii) violate any Laws which
have or could reasonably be expected to have a Material Adverse Effect; (xiv)
commit any act or omit to do any act, or engage in any activity or transaction
or incur any obligation (by conduct or otherwise), which the Company or the
Stockholders reasonably expects to have a Material Adverse Effect; or (xv) make
any loan or advance to any stockholder, officer or director of the Company or to
any other person, except for the payment of the Stockholders' Transaction
Expenses permitted to be paid by the Company pursuant to Section 13.03 of this
Purchase Agreement. Prior to the Closing Date, the Company and the Stockholders
on behalf of the Company (i) will not do or agree to do any of the things listed
in clauses (b) through (s) of Section 4.10 and (ii) will maintain all insurance,
which shall meet the requirements of Section 4.13.
(c) The Company shall notify Buyer promptly of any material
adverse change in the business, operations, prospects, condition (financial or
otherwise), Assets or liabilities of the Company, including, without limitation,
information (including, without limitation, copies of all Documents relating
thereto) concerning all claims instituted, threatened or asserted against or
affecting the Company or its business or Assets at law or in equity, before or
by any court or governmental authority.
(d) The Company shall keep proper books of record and account in
which true and complete entries will be made of all transactions in accordance
with generally accepted accounting principles applied on a basis consistent with
prior periods, and shall supply to Buyer such Documents (financial or otherwise)
with respect thereto as Buyer shall reasonably request.
(e) The Company shall inform and discuss with Buyer on a regular
and ongoing basis the management of the business and Assets of the Company,
including, without limitation, (i) any significant new Agreements or
transactions proposed to be entered into, (ii) persons proposed to be employed
or terminated by the Company outside of the Ordinary Course of Business, and
(iii) any other significant developments relating to the business or Assets of
the Company; provided, however, that Buyer shall have no express or implied
power, authority or responsibility with respect to the Company or its business,
Assets or Agreements. Without limiting the foregoing, the Company shall not
enter into any agreement, understanding, commitment or other arrangement
(whether written or oral) with any Affiliate or any officer, director, employee
or agent thereof after the date hereof without the prior written consent of
Buyer.
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3.04 NO INCONSISTENT NEGOTIATIONS
Neither the Company nor the Stockholders shall, nor shall any of
them authorize or knowingly permit any director, officer, employee or other
agent of the Company, directly or indirectly, to (i) take any action to solicit,
initiate or encourage the submission of a Proposal; (ii) participate in any
negotiations regarding, or furnish to any other person, entity or group any
nonpublic information with respect to, a Proposal, or (iii) otherwise cooperate
in any way with, or assist or participate in, facilitate, or encourage, any
effort or attempt by any other person, entity or group to make a Proposal to the
Stockholders or the Company.
In addition, the Company and the Stockholders shall use
reasonable efforts to cause any financial advisor engaged by the Company or the
Stockholders for any purpose within the past twelve (12) months to refrain from
taking any of the actions referred to in clause (i) or (ii) of the immediately
preceding sentence. The Company and the Stockholders shall immediately cease any
existing discussions or negotiations with any parties (other than Buyer)
conducted heretofore with respect to any of the foregoing. The Company or the
Stockholders shall notify Buyer promptly if any Proposal, or any inquiry or
contact with any person with respect thereto, is made and shall, in any such
notice to Buyer, indicate in reasonable detail the identity of the offeror and
the terms and conditions of the Proposal, including the proposed financing for
such Proposal if contained therein. The Company and the Stockholders shall
respond to any such Proposal only to the extent consistent with their
obligations under this Purchase Agreement.
3.05 PUBLIC ANNOUNCEMENTS
The Stockholders on the one hand, and Buyer on the other hand,
agree that neither they nor the Company will issue any press release or
otherwise make any public statements concerning this Agreement or the
transactions contemplated hereby at any time prior to the Closing Date without
the prior written consent of Buyer or the Stockholders, as the case may be,
except to the extent that any such disclosure is required by Buyer under
applicable Law.
3.06 EMPLOYEES
The Company shall use its reasonable best efforts to encourage
the current employees of the Company to continue their employment with the
Company following the Closing Date; provided, however, that the Company
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shall not be deemed to guarantee the continued employment of any of its
employees.
3.07 SUBSEQUENT EVENTS
The Company and the Stockholders shall notify Buyer promptly in
writing of the occurrence of any event, or the failure of any event to occur,
prior to the Closing that results in a material omission from, or material
breach of, any of the covenants, representations or warranties made by or on
behalf of the Company or the Stockholders in this Purchase Agreement or the
Disclosure Schedule. Prior to the Closing, the Company and the Stockholders
promptly will supplement or amend the Disclosure Schedule delivered pursuant
hereto with respect to any material matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such Disclosure Schedule or which is necessary to
correct any information in such Disclosure Schedule which has been rendered
materially inaccurate thereby.
3.08 ACCESS TO RECORDS
For a period five (5) years after the Closing Date, Buyer shall,
upon reasonable prior notice and during normal business hours, provide to the
Stockholders access to the financial and accounting books and records of the
Company for periods prior to the Closing Date and which are in the Company's
possession as of Closing, solely for purposes of assisting the Stockholders in
connection with any tax audit or other governmental investigation of the
Stockholders relating to the business of the Company for the period prior to
Closing or for purposes of defending or investigating any Losses for which
indemnification is sought by Buyer pursuant to Section 10.02 hereof; provided,
however, such access shall not cause any unreasonable disruption in the conduct
of Buyer's business. Buyer shall not dispose of such books and records during
the five (5) year period after the Closing Date.
3.09 MAINTENANCE OF PLANS
During the period from the Closing Date through December 31,
2001, Buyer shall either maintain each of the Company's current pension and
benefit plans (as more particularly described on Schedule 4.21), or, in the
alternative, provide substantially similar plans to the Company's employees.
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4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS
The Company and the Stockholders jointly and severally represent
and warrant to Buyer as follows:
4.01 ORGANIZATION AND STANDING
The Company is a corporation duly organized and validly existing
under the laws of the State of Delaware, and has the corporate power and
authority to own, operate and lease its Assets, to carry on its business as
currently conducted, to execute and deliver this Purchase Agreement and to carry
out the transactions contemplated hereby. The Company is duly qualified to
conduct business as a foreign corporation and is in good standing in the states,
countries and territories listed on the Disclosure Schedule. The Company is not
qualified to conduct business in any other jurisdiction. There is no state,
country or territory wherein the absence of licensing or qualification as a
foreign corporation would have a Material Adverse Effect.
4.02 SUBSIDIARIES
The Company has no Subsidiaries and, except as set forth in the
Disclosure Schedule or the Audited Financial Statements, no equity investment or
other interest in, nor has the Company made advances or loans to, any
corporation, association, partnership, joint venture or other entity.
4.03 ARTICLES OF INCORPORATION AND BYLAWS
The Company has furnished to Buyer a true and complete copy of
the certificate of incorporation of the Company, as currently in effect,
certified as of a recent date by the Secretary of State of the State of
Delaware, and a true and complete copy of the bylaws of the Company, as
currently in effect, certified by the Company's corporate secretary. Such
certified copies are attached as exhibits to, and part of, the Disclosure
Schedule.
4.04 CAPITALIZATION
(a) The authorized capital stock of the Company consists of one
hundred thousand (100,000) shares of common stock, with no par value, of which
sixty-three thousand seven hundred fifty (63,750) shares are duly authorized and
validly issued and outstanding, fully paid and non-assessable and not subject to
preemptive rights. All of the issued and outstanding shares
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of capital stock of the Company are beneficially and of record owned by the
Stockholders, free and clear of all Encumbrances, except such restrictions on
the transfer of such shares as may be applicable under federal and state
securities laws. The Shares constitute all of the issued and outstanding shares
of capital stock of the Company as of the Closing Date.
(b) No shares of capital stock of the Company have been reserved
for any purpose. There are no outstanding securities convertible into or
exchangeable for capital stock of the Company and no outstanding options, rights
(preemptive or otherwise), or warrants to purchase or to subscribe for any
shares of such stock or other securities of the Company. Except as set forth in
the Disclosure Schedule, there are no outstanding Agreements affecting or
relating to the voting, issuance, purchase, redemption, repurchase or transfer
of the Company's capital stock or any other securities of the Company.
4.05 DIRECTORS, OFFICERS AND EMPLOYEES
The Disclosure Schedule lists all current directors, officers
and employees of the Company, showing each such person's name, position, and
annual remuneration, bonuses (except bonuses no portion of which is accrued and
payable for the current fiscal year) and fringe benefits for the current fiscal
year and the most recently completed fiscal year.
4.06 FINANCIAL STATEMENTS
The Company has prepared and furnished to Buyer (a) the audited
balance sheet of the Company as of the Balance Sheet Date, and the audited
statements of income, stockholder's equity and cash flows for the twelve (12)
month period ended as of the Balance Sheet Date (such audited financial
statements, including the notes thereto, collectively, the "Audited Financial
Statements"), together with the accompanying report thereon of McGladrey &
▇▇▇▇▇▇, LLP dated March 9, 2001; and (b) the unaudited balance sheet of the
Company as of March 16, 2001, and the unaudited statement of income for the
twelve (12) week period then ended (such unaudited statements, collectively, the
"Unaudited Financial Statements"; together with the Audited Financial
Statements, the "Financial Statements"). All of the Financial Statements,
including, without limitation, the notes thereto: (i) have been prepared from
the books and records of the Company, (ii) present fairly the financial position
of the Company as of the respective dates and the results of operations and cash
flows for the respective periods indicated, and (iii) have been prepared in
accordance with generally accepted accounting principles applied on a basis
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consistent with prior accounting periods (subject to normal audit adjustments in
the case of unaudited statements). The Disclosure Schedule sets forth all
changes in accounting methods (for financial accounting purposes) at any time
made, agreed to, requested or required with respect to the Company for any of
the periods covered by the Financial Statements.
4.07 NO LIABILITIES
Except as reflected in the Financial Statements (or disclosed in
the associated footnotes to the Audited Financial Statements) or as described in
the Disclosure Schedule, there exist no material liabilities (whether contingent
or absolute, matured or unmatured, known or unknown) of the Company. Except as
described in the Disclosure Schedule or the Unaudited Financial Statements,
since the Balance Sheet Date, the Company has not incurred any liabilities
(whether contingent or absolute, matured or unmatured, known or unknown) other
than in the Ordinary Course of Business.
4.08 ACCOUNTS RECEIVABLE
Except as set forth in the Disclosure Schedule, the accounts
receivable of the Company shown on the balance sheets included in the Financial
Statements, or thereafter acquired by the Company, have arisen only from bona
fide transactions in the Ordinary Course of Business. Neither the Company nor
the Stockholders has any knowledge of any facts or circumstances generally
(other than general economic conditions) which would result in any material
increase in the uncollectability of such accounts receivable in excess of the
reserves therefor set forth in the Financial Statements.
4.09 TAXES
(a) Except as set forth in the Disclosure Schedule, the Company
has (or, in the case of returns becoming due after the date hereof and on or
before the Closing Date, will have prior to the Closing Date) duly filed all the
Company Tax Returns required to be filed by the Company on or before the Closing
Date with respect to all applicable Taxes, and no penalties or other charges are
or will become due with respect to any of the Company Tax Returns as the result
of the late filing thereof. All of the Company Tax Returns are (or, in the case
of returns becoming due after the date hereof and on or before the Closing Date,
will be) true and complete in all material respects. Except as set forth in the
Disclosure Schedule, the Company has paid all Taxes due or claimed to be due by
any taxing authority (whether or not shown on any
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Company Tax Return). No claim has ever been made by an authority in a
jurisdiction where the Company does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no Security Interests on any
of the assets of the Company that arose in connection with any failure (or
alleged failure) to pay any Tax.
(b) The Company has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party.
(c) There is no action, suit, proceeding, audit, investigation
or claim pending or, to the knowledge of the Company or the Stockholders,
threatened in respect of any Taxes for which the Company is or may become
liable, nor has any deficiency or claim for any such Taxes been proposed,
asserted or, to the knowledge of the Company or the Stockholders, threatened.
Except as set forth in the Disclosure Schedule, the Company has not consented to
any waivers or extensions of any statute of limitations with respect to any
taxable year of the Company. Except as set forth in the Disclosure Schedule,
there is no Agreement, waiver or consent providing for an extension of time with
respect to the assessment or collection of any Taxes against the Company, and no
power of attorney granted by the Company with respect to any tax matters is
currently in force.
(d) The Company has furnished to Buyer true and complete copies
of all the Company Tax Returns for the past five (5) years and all written
communications relating to any such Company Tax Returns or to any deficiency or
claim proposed and/or asserted, irrespective of the outcome of such matter, but
only to the extent such items relate to tax years (i) which are subject to an
audit, investigation, examination or other proceeding, or (ii) with respect to
which the statute of limitations has not expired.
(e) The Disclosure Schedule sets forth (i) all federal tax
elections that currently are in effect with respect to the Company, and (ii) all
elections for purposes of foreign, state or local Taxes and all consents or
Agreements for purposes of federal, foreign, state or local Taxes in each case
that reasonably could be expected to have a material effect on the Company or
any of its Assets or operations after the Closing. The Disclosure Schedule sets
forth all changes in accounting methods for Tax purposes at any time made,
agreed to, requested or required with respect to the Company within the past
five (5) years.
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(f) The Company (i) is not and within the past five (5) years
has not been a partner in a partnership or an owner of an interest in an entity
treated as a partnership for federal income tax purposes; (ii) has not executed
or filed with the Internal Revenue Service any consent to have the provisions of
Section 341(f) of the Code apply to it; (iii) is not subject to Section 999 of
the Code; (iv) is not a passive foreign investment company as defined in Section
1296(a) of the Code; and (v) is not a party to an Agreement relating to the
sharing, allocation or payment of, or indemnity for, Taxes.
(g) Except as set forth in the Disclosure Schedule, the unpaid
Taxes of the Company (i) did not, as of the date of the Unaudited Financial
Statements, exceed the reserve for Tax liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the face of the balance sheet in the Unaudited Financial
Statements (rather than any notes thereto) and (ii) do not exceed that reserve
as adjusted for the passage of time through the Closing Date in accordance with
past custom and practice of the Company in filing Tax Returns.
(h) The Company (and any predecessor of the Company) has timely
filed a valid election to be treated as an S corporation in accordance with the
provisions of Code Sections 1361 and 1362, effective for its tax year beginning
February 27, 1989, and at all times subsequent thereto, the Company qualified
and continues to qualify as an S corporation for all years and periods
thereafter including the Closing Date.
(i) The Company has no "qualified subchapter S subsidiaries"
within the meaning of Section 1361(b)(3)(B) of the Code.
(j) The Company will not be liable for any Tax under Code
Section 1374 or any similar provision of state or local law in connection with
the deemed sale of the Company's assets caused by the Section 338(h)(10)
Election. The Company has not in the past ten (10) years (i) acquired assets
from another corporation in a transaction in which the Company's Tax basis for
the acquired assets was determined, in whole or in part, by reference to the Tax
basis of the acquired assets (or any other property) in the hands of the
transferor or (ii) acquired the stock of any corporation which is a qualified
subchapter S subsidiary.
(k) The Disclosure Schedule sets forth all state and local
jurisdictions in which the Company is required to file Company Tax Returns, and
indicates with respect to each state whether or not the Company is a
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validly electing S Corporation within the meaning of Code Sections 1361 and 1362
in such state.
4.10 CONDUCT OF BUSINESS; ABSENCE OF MATERIAL ADVERSE CHANGE
Other than as set forth in the Disclosure Schedule, since the
Balance Sheet Date, there has been no material adverse change, and no change
except in the Ordinary Course of Business, in the business, operations,
condition (financial or otherwise), Assets or liabilities of the Company. Except
as set forth in the Disclosure Schedule, since the Balance Sheet Date, the
Company has conducted its business substantially in the manner heretofore
conducted and only in the Ordinary Course of Business, and the Company has not
(a) incurred a significant loss of, or significant injury to, any Assets of the
Company as the result of any fire, explosion, flood, windstorm, earthquake,
labor trouble, riot, accident, act of God or public enemy or armed forces, or
other casualty; (b) issued any capital stock, bonds or other corporate
securities or debt instruments, granted any options, warrants or other rights
calling for the issuance thereof, or borrowed any funds; (c) incurred, or become
subject to, any obligation or liability (absolute or contingent, matured or
unmatured, known or unknown), except current liabilities incurred in the
Ordinary Course of Business; (d) discharged or satisfied any Encumbrance or paid
any obligation or liability (absolute or contingent, matured or unmatured, known
or unknown) other than current liabilities shown in the balance sheets included
in the Financial Statements, and current liabilities incurred since the Balance
Sheet Date in the Ordinary Course of Business; (e) declared or made payment of,
or set aside for payment, any dividends or distributions of any Assets, or
purchased, redeemed or otherwise acquired any of its capital stock, any
securities convertible into capital stock, or any other securities; (f)
mortgaged, pledged or subjected to any Encumbrance any of its Assets; (g) sold,
exchanged, transferred or otherwise disposed of any of its Assets, or canceled
any debts or claims, except in each case in the Ordinary Course of Business; (h)
written down the value of any Assets or written off as uncollectible any notes
or accounts receivable, except write-downs and write-offs in the Ordinary Course
of Business, none of which had or would have a Material Adverse Effect; (i)
entered into any transactions other than in the Ordinary Course of Business; (j)
increased the rate of compensation or benefits payable, or to become payable, by
it to any of its directors, officers, employees or consultants; (k) made or
permitted any amendment or termination of any Agreement to which it is a party
which would have a Material Adverse Effect; (l) through negotiation or otherwise
made any commitment or incurred any liability to any labor organization; (m)
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind to any director, officer or
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employee; (n) directly or indirectly paid any severance or termination pay to
any officer or employee in excess of two (2) months' salary; (o) made capital
expenditures, or entered into commitments therefor, aggregating more than Fifty
Thousand Dollars ($50,000); (p) made any change in any method of accounting or
accounting practice; (q) entered into any transaction of the type described in
Section 4.23; (r) made any charitable contributions or pledges; or (s) made an
Agreement to do any of the foregoing.
4.11 REAL PROPERTY
The Disclosure Schedule lists and sets forth a description of
all the Real Property. Such Real Property constitutes all Real Property which is
necessary for the Company to conduct its business as presently conducted and is
suitable and adequate for the uses for which it is currently devoted. The
Company does not hold any fee simple interest in any Real Property.
4.12 ASSETS
Except as set forth in the Disclosure Schedule, the Company has
good, valid and marketable title to all of its Assets, including, without
limitation, all Assets reflected in the balance sheets included in the Financial
Statements and all Assets purchased by the Company since the Balance Sheet Date
(except for Assets reflected in such balance sheets or acquired since the
Balance Sheet Date which have been sold or otherwise disposed of in the Ordinary
Course of Business), free and clear of all Encumbrances. All personal property
of the Company material to the conduct of its business is in good operating
condition and repair (reasonable wear and tear excepted) and is suitable and
adequate for the uses for which it is intended or is being used.
4.13 INSURANCE
The Disclosure Schedule lists all policies of title, Asset,
fire, hazard, casualty, liability, life, worker's compensation and other forms
of insurance of any kind owned or held by the Company. All such policies: (a)
are with insurance companies financially sound and reputable; (b) are in full
force and effect; (c) are sufficient for compliance in all material respects by
the Company with all requirements of Law and of all Agreements to which the
Company is a party; (d) are valid and outstanding policies enforceable against
the insurer; (e) insure against risks of the kind customarily insured against
and in amounts customarily carried by companies similarly situated and by
companies engaged in similar businesses and owning similar properties and
provide adequate insurance coverage for the business and Assets of the
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Company and (f) provide that they will remain in full force and effect through
the respective dates set forth in the Disclosure Schedule.
4.14 INTELLECTUAL PROPERTY
The Disclosure Schedule lists all Intellectual Property and
applications therefor owned or licensed by or registered in the name of the
Company. Except as otherwise specifically stated in the Disclosure Schedule, the
Company owns all of the Intellectual Property listed in the Disclosure Schedule
purported to be owned by the Company, pays no royalty to anyone with respect to
any Intellectual Property and, to the knowledge of the Company and the
Stockholders, has the right to bring action for the infringement of such
Intellectual Property purported to be owned by the Company. The Company owns or
possesses adequate rights to use all Intellectual Property necessary to the
conduct of the present business of the Company. Neither the Company nor the
Stockholders has any knowledge, and has not received any notice to the effect,
that any product the Company sells or that any service the Company renders, or
that the marketing or use by the Company or another of any such product or
service, may or is claimed to infringe any Intellectual Property or legally
protectable right of another.
4.15 DEBT INSTRUMENTS
The Disclosure Schedule sets forth all mortgages, indentures,
notes, guarantees and other Agreements for or relating to borrowed money
(including, without limitation, conditional sales agreements and capital leases)
to which the Company is a party or which have been assumed by the Company or to
which any Assets of the Company are subject. The Company has performed all the
material obligations required to be performed by it to date and is not in
default in any material respect under any of the foregoing, and, to the
Company's and the Stockholders' knowledge, there has not occurred any event
which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute such a default. As of the
Closing Date, all amounts outstanding under the Credit Agreement will be
prepayable in full, without premium or penalty, in accordance with its terms.
4.16 LEASES
The Disclosure Schedule lists all leases and other Agreements
under which the Company is lessee or lessor of any Asset, or holds, manages or
operates any Asset owned by any third party, or under which any Asset owned by
the Company is held, operated or managed by a third party. Each
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such lease and other Agreement is in full force and effect and constitutes a
legal, valid and binding obligation of, and is legally enforceable against, the
Company and, to the knowledge of the Company and the Stockholders, the other
parties thereto. All governmental approvals required under applicable Laws to
have been obtained by the Company with respect to such leases and other
Agreements, if any, have been obtained, all filings or registrations required
under applicable Laws to have been made by the Company therefor, if any, have
been made, and, to the knowledge of the Company and the Stockholders, there have
been no threatened cancellations thereof and are no outstanding material
disputes thereunder. The Company has in all material respects performed all
obligations thereunder required to be performed by the Company to date. The
Company is not and, to the knowledge of the Company and the Stockholders, no
other party is in default in any material respect under any of the foregoing,
and, except as set forth in the Disclosure Schedule, there has not, to the
knowledge of the Company or the Stockholders, occurred any event which (whether
with or without notice, lapse of time or the happening or occurrence of any
other event) would constitute such a default. All of the Assets subject to such
leases are in good operating condition and repair, normal wear and tear
excepted.
4.17 OTHER AGREEMENTS
(a) The Disclosure Schedule lists all Agreements to which the
Company is a party or by which the Company is bound at the date hereof. Each
such Agreement is in full force and effect and constitutes a legal, valid and
binding obligation of, and is legally enforceable against, the Company and, to
the knowledge of the Company and the Stockholders, the other parties thereto.
All governmental approvals required under applicable Laws to have been obtained
by the Company with respect to such Agreements, if any, have been obtained, all
filings or registrations required under applicable Laws to have been made by the
Company therefor, if any, have been made, and, to the knowledge of the Company
and the Stockholders, there have been no threatened cancellations thereof and
there are no outstanding material disputes thereunder known to the Company or
the Stockholders. The Company has in all material respects performed all the
obligations thereunder required to be performed by the Company to date. The
Company is not and, to the knowledge of the Company and the Stockholders, no
other party is in default in any material respect under any of the Agreements
described in the Disclosure Schedule, and there has not, to the knowledge of the
Company or the Stockholders, occurred any event which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute such a default.
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(b) Except as specified in the Disclosure Schedule, the Company
is not a party to any oral or written (i) Agreement for the employment of any
officer, employee, consultant, independent contractor or advisor; (ii) license
agreement or distributor, dealer, manufacturer's representative, sales agency,
advertising, property management or brokerage agreement; (iii) Agreement with
any labor organization or other collective bargaining unit; (iv) Agreement for
the future purchase of materials, supplies, services, merchandise or equipment
involving payments of more than Twenty-Five Thousand Dollars ($25,000) over its
remaining term (including, without limitation, periods covered by any option to
renew by either party); (v) Agreement for the purchase, sale or lease of any
real estate; (vi) profit-sharing, bonus, incentive compensation, deferred
compensation, stock option, severance pay, stock purchase, employee benefit,
insurance, hospitalization, pension, retirement or other similar plan or
Agreement; (vii) Agreement for the purchase, sale or lease of any of its Assets
other than in the Ordinary Course of Business or the grant of any preferential
rights to purchase any of its Assets or rights; (viii) except for the Government
Contracts, Agreement which contains any provisions requiring the Company to
indemnify any other party thereto; (ix) joint venture agreement or other
Agreement involving the sharing of profits; (x) outstanding loan to any person
or entity or receivable due from the Stockholders or any Affiliate of the
Company; (xi) Agreement (including, without limitation, Agreements not to
compete and exclusivity Agreements) that imposes any restriction on any business
operations of the Company which, either individually or in the aggregate, would
have a Material Adverse Effect; or (xii) Government Contract.
(c) Except as set forth in the Disclosure Schedule, the Company
has never been debarred or suspended from contracting (as a prime contractor or
subcontractor at any tier) for or bidding on any Government Contract or, at any
time during the past ten (10) years, had a Government Contract canceled or
terminated, in whole or in part, by reason of a default or alleged default on
the part of the Company. The Company is not currently debarred or suspended from
(nor has it received written notice that it is under investigation with respect
to a possible debarment or suspension from) bidding on or entering into any
Government Contract. Except as set forth in the Disclosure Schedule, with
respect to any Government Contract in effect as of the date of this Agreement,
the Company has not received written notice (i) that any such Government
Contract may be or will be terminated for convenience or by reason of a default
or alleged default by the Company, (ii) that funding for any such Government
Contract or governmental program involving the Company will be eliminated or
substantially reduced or suspended, (iii) requiring or resulting in loss of use
or substantial impairment or interference of use by the
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Company of any facilities owned by a governmental authority, or (iv) that any
relevant budget authority or contract authority has been exceeded with respect
to any such Government Contract to which the Company is a party. The Company
does not anticipate incurring any cost overrun with respect to any Government
Contract to which it is a party that is reasonably likely to have a Material
Adverse Effect.
(d) Final audits of all of the Government Contracts of the
Company with the United States of America and its departments, commissions,
agencies and instrumentalities have been completed by the Defense Contract Audit
Agency for all fiscal years of the Company through and including its fiscal year
ended December 25, 1998. No issue has been raised in any such audit or in any
pending audit covering subsequent years that could reasonably be expected to
result in (i) the suspension or debarment of the Company from bidding on or
entering into any Government Contract, (ii) the termination for default of any
Government Contract to which the Company is a party or under which the Company
is providing goods or services, or (iii) except as reserved for in the Audited
Financial Statements, any assertion or claim of material liability against the
Company for an equitable adjustment, price reduction, liquidated damages or
monetary penalty, or damages under the terms of such Government Contract or
based on a default or alleged default by the Company or other malfeasance or
alleged malfeasance by the Company arising out of or relating to the performance
or failure to perform by the Company thereunder.
(e) The Disclosure Schedule specifically identifies any and all
Government Contracts as to which final payment has not yet been made that were
awarded to the Company in reliance on its status as a small business, small
disadvantaged business, or under the Small Business Administration's Section
8(a) program (collectively, the "Restricted Contracts"). With respect to the
Restricted Contracts, all certifications concerning size, socio-economic, or
8(a) status were correct at the time submitted and the Company retained its
eligibility for the contract through contract award and execution of any
contract option periods.
4.18 BOOKS AND RECORDS
Except as set forth in the Disclosure Schedule, the books of
account, stock records, minute books and other records of the Company are true
and complete in all material respects, and the matters contained therein are
appropriately and accurately reflected in the Financial Statements to the extent
required to be reflected therein under generally accepted accounting principles
consistently applied.
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4.19 LITIGATION; DISPUTES
(a) Except as set forth in the Disclosure Schedule, there are no
actions, suits, claims, arbitrations, proceedings or investigations pending, or,
to the knowledge of the Company and the Stockholders, threatened against,
affecting or involving the Company or its business or Assets, or the
transactions contemplated by this Purchase Agreement, at Law or in equity or
admiralty, or before or by any court, arbitrator or governmental authority,
domestic or foreign. The Company is not operating under, subject to or in
default with respect to any order, award, writ, injunction, decree or judgment
of any court, arbitrator or governmental authority.
(b) Except as set forth in the Disclosure Schedule, the Company
is not currently involved in and, to the knowledge of the Company and the
Stockholders, there are no threatened disputes with any of its current or former
employees, agents, brokers, distributors, vendors, customers, business
consultants, franchisees, franchisors, representatives or independent
contractors which, if adversely determined, would have a Material Adverse
Effect.
4.20 LABOR RELATIONS
There are no strikes, work stoppages, grievance proceedings,
union organization efforts or other material controversies pending, or, to the
Company's and the Stockholders' knowledge, threatened between the Company and
(i) any current or former employees of the Company or (ii) any union or other
collective bargaining unit representing such employees. Except as set forth in
the Disclosure Schedule, the Company has complied with and is in compliance in
all material respects with all Laws relating to employment or the workplace,
including, without limitation, provisions relating to wages, hours, collective
bargaining, safety and health, work authorization, equal employment opportunity,
immigration, withholding, unemployment compensation, worker's compensation,
employee privacy and right to know. Except as set forth in the Disclosure
Schedule, there are no collective bargaining agreements or employment agreements
between the Company and any of its employees not terminable at will. The
consummation of the transactions contemplated hereby will not cause Buyer or the
Company to incur or suffer any liability relating to, or obligation to pay,
severance, termination or other payments to any person or entity.
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4.21 PENSION AND BENEFIT PLANS
(a) Except as set forth in the Disclosure Schedule, the Company
(i) does not maintain and has not during the past five (5) years maintained any
Plan or Other Arrangement, (ii) is not and has not during the past five (5)
years been a party to any Plan or Other Arrangement and (iii) has no obligations
under any Plan or Other Arrangement.
(b) The Company has furnished to Buyer true and complete copies
of each of the following Documents: (i) the Documents setting forth the terms of
each Plan; (ii) all related trust agreements or annuity agreements (and any
other funding Document) for each Plan; (iii) for the three most recent plan
years, all annual reports (Form 5500 series) on each Plan that have been filed
with any governmental agency; (iv) the current summary plan description and
subsequent summaries of material modifications for each Title I Plan; (v) all
DOL opinions on any Plan and all correspondence relating to the request for and
receipt of each opinion; (vi) all Internal Revenue Service rulings, opinions or
technical advice relating to any Plan and all correspondence relating to the
request for and receipt of each ruling, opinion or technical advice; and (vii)
all Agreements with service providers or fiduciaries for providing services on
behalf of any Plan. For each Other Arrangement, the Company has furnished to
Buyer true and complete copies of each policy, Agreement or other Document
setting forth or explaining the terms of the Other Arrangement, all related
trust agreements or other funding Documents (including, without limitation,
insurance contracts, certificates of deposit, money market accounts, etc.),
other submissions with any governmental agency within the last five (5) years,
and all Agreements with service providers or fiduciaries for providing services
on behalf of any material Other Arrangement.
(c) No Plan is a Multiemployer Plan, an ESOP, a Defined Benefit
Plan or a funded Welfare Plan.
(d) The Company has made all contributions and other payments
required by and required to have been paid under the terms of each Plan and
Other Arrangement and have taken no action (including, without limitation,
actions required by Law) relating to any Plan or Other Arrangement that will
increase any obligation of Buyer or the Company under any Plan or Other
Arrangement other than increases in employee compensation in the Ordinary Course
of Business.
(e) The Disclosure Schedule sets forth a list of all Qualified
Plans. All Qualified Plans and any related trust agreements or annuity
agreements (or any other funding Document) comply and have complied with
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ERISA, the Code (including, without limitation, the requirements for Tax
qualification described in Section 401 thereof), and all other Laws. The trusts
established under such Qualified Plans are exempt from federal income taxes
under Section 501(a) of the Code. Except for the Qualified Plans identified in
the Disclosure Schedule with respect to which the remedial amendment period
under Code Section 401(b) within which to request a favorable determination
letter has not yet expired, the Company has received determination letters
issued by the Internal Revenue Service with respect to each Qualified Plan, and
the Company has furnished to Buyer true and complete copies of all such
determination letters and all correspondence relating to the applications
therefor. All statements made by or on behalf of the Company to the Internal
Revenue Service in connection with applications for determinations with respect
to each Qualified Plan were true and complete in all material respects when made
and continue to be true and complete in all material respects, except that
demographic data and composition of controlled group may have changed. Nothing
has occurred since the date of the most recent applicable determination letter
that would adversely affect the tax-qualified status of any Qualified Plan.
(f) The Company has complied in all material respects with all
applicable provisions of the Code, ERISA, the National Labor Relations Act,
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Fair Labor Standards Act, the Securities Act, the Exchange Act, and all
other Laws pertaining to the Plans, Other Arrangements and other employee or
employment related benefits, and all premiums and assessments relating to all
Plans or Other Arrangements. The Company has no liability for any delinquent
contributions within the meaning of Section 515 of ERISA (including, without
limitation, related attorneys' fees, costs, liquidated damages and interest) or
for any arrearages of wages. The Company has no pending unfair labor practice
charges, contract grievances under any collective bargaining agreement, other
administrative charges, claims, grievances or lawsuits before any court,
governmental agency, regulatory body, or arbiter arising under any Law governing
any Plan, and, to the knowledge of the Company and the Stockholders, there exist
no facts that could give rise to such a claim.
(g) The Disclosure Schedule describes all transactions in which
the Company or any of the Plans has engaged in violation of Section 406(a) or
406(b) of ERISA for which no exemption exists under Section 408 of ERISA and all
"prohibited transactions" (as such term is defined in Section 4975(c)(1) of the
Code), for which no exemption exists under Section 4975(c)(2) or 4975(d) of the
Code. The Company has furnished to Buyer true and complete copies of each
request for a prohibited transaction exemption and each exemption
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obtained in response to such request. All such requests were true and complete
when made and continue to be true and complete.
(h) The Disclosure Schedule identifies any Plan that was an
employee pension benefit plan under Section 3(2) of ERISA that has terminated
since 1993. The Company has furnished to Buyer true and complete copies of all
government filings, representative employee communications, board minutes and
all other Documents relating to each Plan termination.
(i) No Plan or Other Arrangement, individually or collectively,
provides for any payment by the Company to any employee or independent
contractor that is not deductible under Section 162(m) or 404 of the Code or
that is an "excess parachute payment" pursuant to Section 280G of the Code.
(j) The Company has not filed, and has had no obligation to
file, any Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans)
on any Plan for which the liability would be material. The Company has no
liability for Taxes required to be reported on Form 5330.
(k) Except as required under Code Section 4980B(f) of the Code,
no Plan promises or provides post-retirement medical, life insurance or other
benefits due now or in the future to current, former or retired employees of the
Company.
(l) All Welfare Plans and the related trusts that are subject to
Section 4980B(f) of the Code and Sections 601 through 607 of ERISA comply with
and have been administered in compliance with the health care
continuation-coverage requirements for tax-favored status under Section 4980B(f)
of the Code (formerly Section 162(k) of the Code), Sections 601 through 607 of
ERISA, and all proposed or final Treasury regulations under Section 162 of the
Code explaining those requirements.
(m) The Company has (i) filed or caused to be filed all returns
and reports on the Plans that they are required to file and (ii) paid or made
adequate provision for all fees, interest, penalties, assessments or
deficiencies that have become due pursuant to those returns or reports or
pursuant to any assessment or adjustment that has been made relating to those
returns or reports. All other fees, interest, penalties and assessments that are
payable by or for the Company have been timely reported, fully paid and
discharged. There are no unpaid fees, penalties, interest or assessments due
from the Company or from any other person that are or could become a lien on any
Asset of the Company or could otherwise adversely affect the business or
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Assets of the Company. The Company has collected or withheld all amounts that
are required to be collected or withheld by them to discharge their obligations,
and all of those amounts have been paid to the appropriate governmental agencies
or set aside in appropriate accounts for future payment when due.
4.22 ENVIRONMENTAL
(a) The Company has complied and is in compliance with, and the
Company's use of the Real Property and all improvements thereon are in
compliance with, all Environmental Laws, except for any noncompliance which has
not had, and would not reasonably be expected to have, a Material Adverse
Effect.
(b) There are no pending or, to the Company's or the
Stockholders' knowledge, threatened actions, suits, claims, legal proceedings or
other proceedings based on, and neither the Company nor the Stockholders has
directly or indirectly received any notice of any complaint, order, directive,
citation, notice of responsibility, notice of potential responsibility, or
information request from any governmental authority or any other person or
entity or knows any fact(s) which the Company or the Stockholders reasonably
believes form(s) the basis for any such actions or notices arising out of or
attributable to: (i) the current or past presence, Release or threatened Release
at or from any part of the Real Property related to the Company's operations;
(ii) the off-site disposal or treatment of Hazardous Materials originating on or
from the Real Property with respect to the business or Assets of the Company;
(iii) any facility operations, procedures or designs of the Company which do not
conform to requirements of the Environmental Laws; or (iv) any violation of
Environmental Laws at any part of the Real Property or arising from the
Company's activities (or, to the knowledge of the Company and the Stockholders,
the activities of the Company's predecessors in title) involving Hazardous
Materials.
(c) The Company has been duly issued, and currently has and will
maintain through the Closing Date, all permits, licenses, certificates and
approvals required to be obtained by the Company under any Environmental Law. A
true and complete list of such permits, licenses, certificates and approvals,
all of which are valid and in full force and effect, is set out in the
Disclosure Schedule. Except in accordance with such permits, licenses,
certificates and approvals, there has been no release of material regulated by
such permits, licenses, certificates or approvals.
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(d) To the knowledge of the Company and the Stockholders, the
Real Property contains no underground treatment or storage tanks, or underground
piping associated with such tanks, used currently or in the past for the
management of Hazardous Materials. No portion of the Real Property is being or,
to the knowledge of the Company and the Stockholders, has been, used as a dump
or landfill, or consists of or contains filled in lands or wetlands.
(e) The Company has furnished to Buyer accurate and complete
copies of any environmental reports, assessments or other records, if any,
relating to the environmental condition of the Real Property of which the
Company or the Stockholders is in possession.
(f) The Company will promptly furnish to Buyer written notice of
any Release or of any actions or notices described in Section 4.22(b).
(g) To the knowledge of the Company and the Stockholders,
neither PCBs nor asbestos-containing materials are present on or in the Real
Property.
4.23 TRANSACTIONS WITH RELATED PARTIES
Except as set forth in the Disclosure Schedule, neither any
present or former officer, director, stockholder or person known by the Company
or the Stockholders to be an Affiliate of the Company, nor any person known by
the Company or the Stockholders to be an Affiliate of any such person, is
currently a party to any transaction or Agreement with the Company, including,
without limitation, any Agreement providing for the employment of, furnishing of
services by, rental of Assets from or to, or otherwise requiring payments to,
any such officer, director, stockholder or Affiliate.
4.24 RESTRICTIONS AND CONSENTS
Except as set forth in the Disclosure Schedule, there are no
Agreements, Laws or other restrictions to which the Company is a party or
subject that would prevent or restrict the execution, delivery or performance of
this Purchase Agreement by the Company or result in any penalty, forfeiture,
Agreement termination, or restriction on business operations of the Company as a
result of the execution, delivery or performance of this Purchase Agreement by
the Company. The Disclosure Schedule lists all such Agreements and Laws that
require the consent or acquiescence of any person or entity not party to this
Purchase Agreement with respect to any aspect of the
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execution, delivery or performance of this Purchase Agreement by the Company.
4.25 AUTHORIZATION
Except as set forth in the Disclosure Schedule, the execution,
delivery and performance by the Company of this Purchase Agreement and all other
Documents executed by the Company in connection with the transactions
contemplated hereby, the fulfillment of and compliance with the respective terms
and provisions hereof, and the consummation by the Company of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
(which authorization has not been modified or rescinded and is in full force and
effect), and do not and will not: (a) conflict with, or violate any provision
of, any Law having applicability to the Company, or any provision of the
certificate of incorporation or bylaws of the Company; (b) conflict with, or
result in any breach of, or constitute a default under any Agreement to which
the Company is a party or by which it or any of its Assets may be bound; or (c)
result in or require the creation or imposition of or result in the acceleration
of any indebtedness, or of any Encumbrance of any nature upon, or with respect
to, the Company or any of the Assets now owned or hereafter acquired by the
Company.
4.26 ABSENCE OF VIOLATION
The Company is not in violation of or default under, nor has it
breached, any term or provision of its certificate of incorporation or bylaws or
any Agreement to which the Company is a party or by which the Company or any
Asset thereof is bound or affected, except for any violations, breaches or
defaults under Agreements which do not, individually or in the aggregate with
any other such violations, breaches and defaults, have a Material Adverse
Effect. The Company has complied and is in compliance with all Laws, the failure
to comply with which could have a Material Adverse Effect. Neither the Company
nor any of its officers or directors, any employees or, to the knowledge of the
Company and the Stockholders, any of the Company's agents (or the stockholders,
distributors, representatives or other persons acting on the express authority
of the Company) has paid, given or received or has offered or promised to pay,
give or receive, any bribe or other unlawful, questionable or unusual payment of
money or other thing of value, any extraordinary discount, or any other unlawful
or unusual inducement, to or from any person, business association or
governmental official or entity in the United States or elsewhere in connection
with or in furtherance of the business of the Company (including, without
limitation, any offer, payment or promise to
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pay money or other thing of value (a) to any foreign official or political party
(or official thereof) for the purposes of influencing any act, decision or
omission in order to assist the Company in obtaining business for or with, or
directing business to, any person, or (b) to any person, while knowing that all
or a portion of such money or other thing of value will be offered, given or
promised to any such official or party for such purposes). The business of the
Company is not in any manner dependent upon the making or receipt of such
payments, discounts or other inducements.
4.27 COPIES OF DOCUMENTS
True and complete copies of all Documents listed in the
Disclosure Schedule have been furnished to Buyer prior to the execution of this
Purchase Agreement.
4.28 BINDING OBLIGATION
This Purchase Agreement constitutes, and each Document to be
executed by the Company pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall constitute, a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights generally and by the application of general
principles of equity.
4.29 DISCLOSURE
No representation or warranty by the Company or the Stockholders
in this Purchase Agreement, and no certificate expressly referred to in this
Purchase Agreement as being furnished or to be furnished by the Company or the
Stockholders to Buyer pursuant to this Purchase Agreement, or in connection
herewith or with the transactions contemplated hereby, contains or will contain
any material untrue or misleading statement or omits or will omit any material
fact necessary to make the statements contained herein or therein, in light of
the circumstances under which made, not misleading.
5. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
In addition to the representations and warranties made by the
Stockholders in Section 4 hereof, each Stockholder, severally with respect to
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such Stockholder and not jointly with the other Stockholders, hereby represents
and warrants to Buyer as follows:
5.01 TITLE TO CAPITAL STOCK
Such Stockholder is and on the Closing Date will be, the sole
legal, beneficial and record owner of all of the issued and outstanding shares
of capital stock of the Company set forth next to such Stockholder's name on
Exhibit A hereto, with good, valid and marketable title thereto, free and clear
of all Encumbrances, except such restrictions on the transfer of such shares as
may be applicable under federal and state securities laws, with full right and
lawful authority to sell and transfer the shares to Buyer pursuant to this
Purchase Agreement.
5.02 AUTHORITY AND CAPACITY
Such Stockholder has full legal right, capacity, power and
authority to execute and deliver this Purchase Agreement and all other Documents
executed or to be executed by such Stockholder pursuant hereto, and to
consummate the transactions contemplated hereby and thereby.
5.03 ABSENCE OF VIOLATION
The execution, delivery and performance by such Stockholder of
this Purchase Agreement and all other Documents contemplated hereby to which
such Stockholder is a party, the fulfillment of and the compliance with the
respective terms and provisions hereof and thereof, and the consummation of the
transactions contemplated hereby and thereby, do not and will not (a) conflict
with, or violate any provision of, any Laws having applicability to such
Stockholder; or (b) conflict with, or result in any breach of, or constitute a
default under, any Agreement to which such Stockholder is a party.
5.04 RESTRICTIONS AND CONSENTS
There are no Agreements, Laws or other restrictions of any kind
to which such Stockholder is a party or subject that would prevent or restrict
the execution, delivery or performance of this Purchase Agreement by such
Stockholder.
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5.05 BINDING OBLIGATION
This Purchase Agreement constitutes, and each Document to be
executed by such Stockholder pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall constitute, a valid and binding
obligation of such Stockholder, enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights generally and by the application of general
principles of equity.
5.06 TRANSFER OF TITLE
Upon payment at Closing for the Shares to be purchased from such
Stockholder pursuant to the terms of this Purchase Agreement, Buyer will acquire
good, valid and marketable title thereto, free and clear of all Encumbrances,
except such restrictions on the transfer of such shares as may be applicable
under federal and state securities laws.
6. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company and the
Stockholders as follows:
6.01 ORGANIZATION AND STANDING
Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Virginia and has the
corporate power and authority to enter into this Purchase Agreement and to carry
out the transactions contemplated hereby.
6.02 AUTHORIZATION
The execution, delivery and performance by Buyer of this
Purchase Agreement and all other Documents executed or to be executed by Buyer
in connection with the transactions contemplated hereby, the fulfillment of and
the compliance with the respective terms and provisions hereof and thereof, and
the consummation by Buyer of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action (which authorization
has not been modified or rescinded and is in full force and effect), and do not
and will not: (a) conflict with, or violate any provision of, any Law having
applicability to Buyer or any provision of the articles of incorporation or
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bylaws of Buyer; (b) conflict with, or result in any breach of, or constitute a
default under, any Agreement to which Buyer is a party or by which Buyer is
bound; or (c) result in or require the creation or imposition of or result in
the acceleration of any indebtedness, or of any Encumbrance of any nature upon,
or with respect to, Buyer or any of the Assets now owned or hereafter acquired
by Buyer. No other corporate action is necessary for Buyer to enter into this
Purchase Agreement and all other Documents contemplated hereby and to consummate
the transactions contemplated hereby and thereby.
6.03 BINDING OBLIGATION
This Purchase Agreement constitutes, and each Document to be
executed by Buyer pursuant hereto, when executed and delivered in accordance
with the provisions hereof, shall constitute, a valid and binding obligation of
Buyer, enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general applicability relating to or affecting creditors' rights
generally and by the application of general principles of equity.
6.04 NO REGISTRATION UNDER THE SECURITIES ACT
Buyer understands that the capital stock to be purchased by it
under this Purchase Agreement has not been registered under the Securities Act
or any state securities laws, in reliance upon exemptions contained in the
Securities Act and such state securities laws or interpretations thereof, and
cannot be offered for sale, sold or otherwise transferred unless such capital
stock being acquired hereunder subsequently is so registered or qualifies for
exemption from registration under the Securities Act and such state securities
laws.
6.05 ACQUISITION FOR INVESTMENT
The capital stock is being acquired under this Purchase
Agreement by Buyer in good faith solely for its own account, for investment and
not with a view toward resale or other distribution within the meaning of the
Securities Act. Such capital stock will not be offered for sale, sold or
otherwise transferred by Buyer without either registration or exemption from
registration under the Securities Act and applicable state securities laws.
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6.06 EVALUATION OF MERITS AND RISKS OF INVESTMENT
Buyer has such knowledge and experience in financial and
business matters that Buyer is capable of evaluating the merits and risks of
Buyer's investment in such capital stock being acquired hereunder. Buyer
understands and is able to bear any economic risks associated with such
investment (including, without limitation, the necessity of holding such capital
stock for an indefinite period of time, inasmuch as such capital stock has not
been registered under the Securities Act or any state securities laws).
6.07 DISCLOSURE
No representation or warranty by Buyer in this Purchase
Agreement contains any material untrue or misleading statement or omits any
material fact necessary to make the statements contained herein in light of the
circumstances under which made, not misleading.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDERS
The obligations of the Company and the Stockholders under this
Purchase Agreement are subject to the fulfillment, at or prior to the Closing,
of each of the following conditions, and failure to satisfy any such condition
shall excuse and discharge all obligations of the Company and the Stockholders
to carry out the provisions of this Purchase Agreement, unless such failure is
agreed to in writing by the Company and the Stockholders:
7.01 REPRESENTATIONS AND WARRANTIES
The representations and warranties made by Buyer in this
Purchase Agreement or in any Document furnished by Buyer pursuant to this
Purchase Agreement shall be true and correct in all material respects when made
and on and as of the Closing Date as though such representations and warranties
were made on and as of the Closing Date (provided that any representation or
warranty contained herein that is qualified by a materiality standard shall not
be further qualified hereby).
7.02 PERFORMANCE
Buyer shall have performed and complied in all material respects
with all Agreements and conditions required by this Purchase Agreement to be
performed or complied with by Buyer prior to the Closing Date.
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7.03 BUYER'S CERTIFICATE
Buyer shall have delivered to the Company and the Stockholders a
certificate, dated as of the Closing Date and executed by a senior officer of
Buyer, certifying to the fulfillment of the conditions set forth in Section 7.01
and Section 7.02.
7.04 DOCUMENTS AT CLOSING
All Documents required to be furnished by Buyer to the Company
and/or the Stockholders prior to or at the Closing shall have been so furnished.
7.05 CONSULTING AGREEMENT
Buyer shall have executed and delivered to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇. a consulting agreement substantially in the form of Exhibit E hereto.
7.06 LEGAL OPINION
The Company and the Stockholders shall have received an opinion
from ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel to Buyer, in the form attached hereto as
Exhibit H.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Purchase Agreement are subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions, and failure to satisfy any such condition shall excuse and discharge
all obligations of Buyer to carry out the provisions of this Agreement, unless
such failure is agreed to in writing by Buyer:
8.01 REPRESENTATIONS AND WARRANTIES
The representations and warranties made (jointly or
individually) by the Company and the Stockholders in this Purchase Agreement and
the statements contained in the Disclosure Schedule and Exhibits attached hereto
or in any Document furnished by the Company or the Stockholders pursuant to this
Purchase Agreement shall be true and correct in all material respects when made,
and on and as of the Closing Date as though such representations
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and warranties were made on and as of the Closing Date (provided that any
representation or warranty contained herein that is qualified by a materiality
standard shall not be further qualified hereby).
8.02 PERFORMANCE
The Company and the Stockholders shall have performed and
complied in all material respects with all Agreements and conditions required by
this Purchase Agreement to be performed or complied with prior to the Closing
Date. Neither the Credit Agreement nor the loans made to the Company thereunder
shall have been amended or otherwise modified in any respect.
8.03 ABSENCE OF ADVERSE CHANGES
There shall have been no material adverse changes since the
Balance Sheet Date in the business, operations, condition (financial or
otherwise), Assets or liabilities of the Company.
8.04 LEGAL PROCEEDINGS
No action or proceeding by or before any governmental authority
shall have been instituted or threatened (and not subsequently settled,
dismissed or otherwise terminated) which is reasonably expected to restrain,
prohibit or invalidate the transactions contemplated by this Purchase Agreement.
8.05 OFFICER'S CERTIFICATE
The Company shall have delivered to Buyer a certificate, dated
as of the Closing Date and executed by the Company's President, in his capacity
as such, certifying to the fulfillment of the conditions specified in Sections
8.01 through 8.04.
8.06 STOCKHOLDERS' CERTIFICATE
The Stockholders shall have delivered to Buyer a certificate,
dated as of the Closing Date and executed by the Stockholders, certifying to the
fulfillment of the conditions specified in Sections 8.01 through 8.04.
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8.07 SUBORDINATION AGREEMENT
The Stockholders shall have executed and delivered to Buyer the
Subordination Agreement and such other agreements, documents and certificates
reasonably requested by Buyer's senior lender pursuant to the Subordination
Agreement to evidence the subordination of the Promissory Notes.
8.08 DOCUMENTS AT CLOSING
All Documents required to be furnished by the Company and/or the
Stockholders to Buyer prior to or at the Closing shall have been so furnished.
8.09 CONSENTS
All consents, authorizations, approvals and notifications
required to be obtained or made by the Company or the Stockholders in connection
with the consummation of the transactions contemplated by this Purchase
Agreement shall have been duly obtained or made and shall be in full force and
effect as of the Closing Date; provided, however, that none of the consents set
forth on Schedule 4.24 of the Disclosure Schedule is required to be obtained as
a condition to Buyer's obligation under this Purchase Agreement.
8.10 RESIGNATION OF DIRECTORS
Buyer shall have received the written resignations of all of the
members of the Board of Directors of the Company (effective as of the Closing
Date).
8.11 CONSULTING AGREEMENT
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. shall have executed and delivered to
Buyer a consulting agreement substantially in the form of Exhibit E hereto.
8.12 LEGAL OPINION
Buyer shall have received an opinion from Winston & ▇▇▇▇▇▇,
counsel to the Company and the Stockholders, in the form attached hereto as
Exhibit F.
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8.13 MINIMUM NET ASSETS
The Company shall have delivered to Buyer (a) a balance sheet
dated as of a date not more than seventeen (17) days prior to the Closing Date,
certified by the chief financial officer of the Company, showing that the net
assets of the Company (as determined in accordance with generally accepted
accounting principles and in a manner consistent with the determination of net
assets on the Company's December 22, 2000, balance sheet) are not less than
Three Million Seven Hundred Fifty Thousand Dollars ($3,750,000) as of such date;
and (b) a balance sheet dated as of March 16, 2001 (the "Closing Balance Sheet")
which shall include an accrual for unpaid Transaction Expenses of the Company
and the Stockholders through the Closing Date, which accrual would not typically
be included on the Closing Balance Sheet under generally accepted accounting
principles. The net assets reflected on the Closing Balance Sheet (taking into
account the accrual for Transaction Expenses) shall not be less than Three
Million Seven Hundred Fifty Thousand Dollars ($3,750,000) as of such date.
8.14 NONCOMPETITION AGREEMENTS
Each Stockholder shall have executed and delivered to Buyer a
noncompetition agreement substantially in the form of the noncompetition
agreement for such Stockholder attached at Exhibit G hereto.
8.15 TERMINATION OF STOCKHOLDERS' AGREEMENT
The Company and the Stockholders shall have executed a
termination agreement in a form reasonably acceptable to Buyer terminating the
Amended and Restated Stockholders' Agreement dated as of December 28, 1999, by
and among the Company and the Stockholders.
9. CLOSING
9.01 CLOSING OF SALE AND PURCHASE
Subject to the terms and conditions of this Purchase Agreement,
the Closing shall take place on the Closing Date at the offices of ▇▇▇▇▇ &
▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other place acceptable to Buyer, the Company and the Stockholders.
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9.02 DELIVERIES BY THE STOCKHOLDERS
At the Closing, the Stockholders shall deliver to Buyer
certificates representing the shares of capital stock being sold to Buyer
pursuant to Section 2.01, duly endorsed in blank or with duly executed stock
powers attached. The Stockholders also shall deliver to Buyer the following:
(a) the certificate required by Section 8.06; and
(b) the Subordination Agreement.
9.03 DELIVERIES BY THE COMPANY
At the Closing, the Company shall deliver to Buyer the
following:
(a) a copy of the resolutions adopted by the Board of
Directors of the Company authorizing the transactions contemplated by this
Purchase Agreement certified by the Secretary or other duly authorized officer
of the Company;
(b) the written resignations of all of the current members
of the Board of Directors of the Company (effective as of the Closing Date);
(c) the certificate required by Section 8.05;
(d) certificates of incumbency and specimen signatures of
the signatory officers of the Company;
(e) a certificate of good standing of the Company issued by
the state of Delaware, and a good standing certificate from each state in which
the Company is qualified to do business, each such certificate to be dated as of
a date not more than seven (7) days prior to the Closing Date;
(f) the certificate of incorporation, bylaws, minute books
and stock books of the Company and all other books and records reasonably
requested by Buyer;
(g) the Consulting Agreement described in Section 8.11 duly
executed by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.;
(h) the legal opinion described in Section 8.12;
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(i) a payoff letter executed by First Virginia Bank, in a
form reasonably acceptable to Buyer, which specifies separately the amount of
all outstanding indebtedness of the Company and the Stockholders to such bank as
of the Closing Date, and includes an obligation of such bank to execute all
release documents necessary to terminate and release the Encumbrances securing
the loans made pursuant to the Credit Agreement; and
(j) the noncompetition agreements described in Section 8.14
duly executed by each Stockholder.
9.04 DELIVERIES BY BUYER
At the Closing, Buyer shall deliver the following:
(a) the Promissory Note to each Stockholder;
(b) a certified copy of the resolutions adopted by the
Board of Directors of Buyer authorizing the transactions contemplated by this
Purchase Agreement;
(c) the certificate required by Section 7.03;
(d) the Consulting Agreement described in Section 7.05 duly
executed by Buyer;
(e) the Subordination Agreement;
(f) the noncompetition agreements described in Section 8.14
each duly executed by Buyer; and
(g) the legal opinion described in Section 7.06.
10. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES
10.01 SURVIVAL OF REPRESENTATIONS
All representations, warranties, covenants, indemnities and
other Agreements made by any party to this Purchase Agreement herein or pursuant
hereto, or made pursuant to any Disclosure Schedule, shall be deemed made on and
as of the Closing Date as though such representations, warranties, covenants,
indemnities and other Agreements were made on and as of such
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date, and all such representations, warranties, covenants, indemnities and other
Agreements shall survive the Closing and any investigation, audit or inspection
at any time made by or on behalf of any party hereto, as follows: (a) unless
otherwise specified herein below, representations and warranties shall survive
for a period of eighteen (18) months after the Closing Date; (b) representations
and warranties with respect to Taxes shall survive until the expiration of the
applicable statute of limitations; (c) representations, warranties and covenants
for matters relating to title to the capital stock of the Company shall continue
in full force and effect in perpetuity; (d) representations, warranties and
covenants for matters relating to title to the Company's Assets shall continue
in full force and effect for a period of two (2) years after the Closing Date;
and (e) the covenants and agreements in this Article 10 and the covenants and
agreements which by their terms survive Closing shall continue in full force and
effect until fully discharged. Notwithstanding anything herein to the contrary,
any representation, warranty, covenant or Agreement which is the subject of a
claim which is asserted in writing prior to the expiration of the applicable
period set forth above shall survive with respect to such claim or dispute until
the final resolution thereof.
10.02 AGREEMENT OF STOCKHOLDERS TO INDEMNIFY
Subject to the conditions and provisions of this Article 10, the
Stockholders hereby jointly and severally agree to indemnify, defend and hold
harmless the Buyer Indemnified Persons from and against and in respect of all
Losses resulting from, imposed upon or incurred by the Buyer Indemnified
Persons, directly or indirectly, by reason of or resulting from (a) any
misrepresentation or breach of any representation or warranty, or noncompliance
with any conditions or other Agreements, given or made by the Stockholders or
the Company in this Purchase Agreement or in the Disclosure Schedules or
Exhibits attached hereto or in any Document furnished by or on behalf of any
such party pursuant to this Purchase Agreement; (b) any arrangements between the
Company and/or the Stockholders and any broker, finder, agent or similar advisor
in connection with the transactions contemplated by the Purchase Agreement, and
any claim for fees or other amounts arising out of any such arrangement or
alleged arrangement; and (c) any claims made under any Agreements or
arrangements between the Stockholders and/or the Company and any former officer,
director or stockholder of the Company that were entered into prior to the
Closing Date; provided, however, that, except for Losses arising out of a
willful or intentional breach of representations, warranties or covenants by the
Company or the Stockholders, Losses arising out of any breach of representations
or warranties for matters relating to title to the capital stock of the Company,
the obligations
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of the Stockholders and the Company under Article 11 and the obligations of the
Stockholders under Section 13.03 hereof, none of which shall be subject to the
following limitations, the Stockholders shall not have any liability under
Section 10.02(a) except to the extent that the aggregate amount of claims for
Losses asserted under such Section exceeds One Hundred Thousand Dollars
($100,000); provided, further, however, in no event shall the aggregate amount
of liability of the Stockholders for Losses asserted under Section 10.02(a)
(except for Losses arising out of a willful or intentional breach of
representations, warranties or covenants by the Company or the Stockholders,
Losses arising out of any breach of representations or warranties for matters
relating to title to the capital stock of the Company, the obligations of the
Stockholders and the Company under Article 11 and the obligations of the
Stockholders under Section 13.03 hereof), exceed Two Million Dollars
($2,000,000). It shall be a condition to the right of any Buyer Indemnified
Person to indemnification pursuant to this Section that such Buyer Indemnified
Person shall assert a claim for such indemnification within the applicable
survival periods set forth in Section 10.01 hereof.
10.03 AGREEMENT OF BUYER TO INDEMNIFY
Subject to the conditions and provisions of this Article 10, Buyer
hereby agrees to indemnify, defend and hold harmless the Stockholders from and
against and in respect of all Losses resulting from, imposed upon or incurred by
the Stockholders, directly or indirectly, by reason of or resulting from any
misrepresentation or breach of any representation or warranty, or noncompliance
with any conditions or other Agreements, given or made by Buyer in this Purchase
Agreement or in the Exhibits or in any Document furnished by or on behalf of
Buyer pursuant to this Purchase Agreement; provided, however, that, except for
Losses arising out of a willful or intentional breach of representations,
warranties or covenants by Buyer and the obligations of Buyer under Article 11
hereof, none of which shall be subject to the following limitations, Buyer shall
have no liability under this Section 10.03 until the aggregate amount of claims
for Losses asserted under such Section exceeds One Hundred Thousand Dollars
($100,000); provided, further, however, in no event shall the aggregate amount
of liability of Buyer for Losses asserted under this Section 10.03 (except for
Losses arising out of a willful or intentional breach of representations,
warranties or covenants by Buyer and the obligations of Buyer under Article 11
hereof), exceed Two Million Dollars ($2,000,000). It shall be a condition to the
rights of the Stockholders to indemnification pursuant to this Section that such
parties shall assert a claim for such indemnification within the applicable
survival periods set forth in Section 10.01 hereof.
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10.04 CONDITIONS OF INDEMNIFICATION
The obligations and liabilities of the Company, the Stockholders
and Buyer hereunder with respect to their respective indemnities pursuant to
this Article 10, resulting from any Third Party Claim shall be subject to the
following terms and conditions:
(a) The party seeking indemnification (the "Indemnified
Party") must give the other party (the "Indemnifying Party"), notice of any
Third Party Claim which is asserted against, resulting to, imposed upon or
incurred by the Indemnified Party and which may give rise to liability of the
Indemnifying Party pursuant to this Article 10, stating (to the extent known or
reasonably anticipated) the nature and basis of such Third Party Claim and the
amount thereof; provided that the failure to give such notice shall not affect
the rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party shall have suffered actual material damage by reason of such
failure.
(b) Subject to Section 10.04(c) below, the Indemnifying
Party shall have the right to undertake, by counsel or other representatives of
its own choosing, the defense of such Third Party Claim at the Indemnifying
Party's risk and expense.
(c) In the event that (i) the Indemnifying Party shall
elect not to undertake such defense, (ii) within a reasonable time after notice
from the Indemnified Party of any such Third Party Claim, the Indemnifying Party
shall fail to undertake to defend such Third Party Claim, (iii) there is a
reasonable probability that such Third Party Claim may materially and adversely
affect the Indemnified Party other than as a result of money damages or other
money payments, or (iv) there is a reasonable probability that the amount of
Losses asserted under such Third Party Claim may exceed the Indemnifying Party's
obligations under this Article 10, then the Indemnified Party (upon further
written notice to the Indemnifying Party) shall have the right to undertake the
defense, compromise or settlement of such Third Party Claim, by counsel or other
representatives of its own choosing, on behalf of and for the account and risk
of the Indemnifying Party; provided, however, that if the Indemnified Party
undertakes defense of such Third Party Claim under clause (iv) above, the
Indemnified Party shall not, without the Indemnifying Party's written consent
(which consent shall not be unreasonably withheld), settle such Third Party
Claim if the Indemnifying Party will be responsible for any amounts under such
settlement. In the event that the Indemnified Party undertakes the defense of a
Third Party Claim under this Section 10.04(c), the Indemnifying Party shall pay
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to the Indemnified Party, in addition to the other sums required to be paid
hereunder, the reasonable costs and expenses incurred by the Indemnified Party
in connection with such defense, compromise or settlement as and when such costs
and expenses are so incurred.
(d) Anything in this Section 10.04 to the contrary
notwithstanding, (i) the Indemnifying Party shall not, without the Indemnified
Party's written consent, settle or compromise such Third Party Claim or consent
to entry of any judgment which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Indemnified Party of a
release from all liability in respect of such Third Party Claim in form and
substance satisfactory to the Indemnified Party; (ii) in the event that the
Indemnifying Party undertakes defense of such Third Party Claim, the Indemnified
Party, by counsel or other representative of its own choosing and at its sole
cost and expense, shall have the right to participate in the defense, compromise
or settlement thereof and each party and its counsel and other representatives
shall cooperate with the other party and its counsel and representatives in
connection therewith; and (iii) in the event that the Indemnifying Party
undertakes defense of such Third Party Claim, the Indemnifying Party shall have
an obligation to keep the Indemnified Party informed of the status of the
defense of such Third Party Claim and furnish the Indemnified Party with all
documents, instruments and information that the Indemnified party shall
reasonably request in connection therewith.
10.05 NO RECOURSE AGAINST THE COMPANY
The Stockholders hereby irrevocably waive any and all right to
recourse against the Company with respect to any misrepresentation or breach of
any representation, warranty or indemnity, or noncompliance with any conditions
or covenants, given or made by the Stockholders or the Company in this Purchase
Agreement. The Stockholders shall not be entitled to contribution from,
subrogation to or recovery against the Company with respect to any liability of
the Stockholders that may arise under or pursuant to this Purchase Agreement or
the transactions contemplated hereby.
10.06 SPECIFIC PERFORMANCE
In addition to any other remedies which Buyer may have at law or
in equity, the Company and the Stockholders hereby acknowledge that the Company
and its capital stock are unique, and that the harm to Buyer resulting from
breaches by the Company and the Stockholders of their respective obligations
cannot be adequately compensated by damages.
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Accordingly, the Company and the Stockholders agree that Buyer shall have the
right to have all obligations, undertakings, Agreements, covenants and other
provisions of this Purchase Agreement specifically performed by the Company and
the Stockholders, as the case may be, and that Buyer shall have the right to
obtain an order or decree of such specific performance in any of the courts of
the United States of America or of any state or other political subdivision
thereof.
10.07 REMEDIES CUMULATIVE
The remedies provided herein shall be cumulative and shall not
preclude the assertion by the Company, the Stockholders or Buyer of any other
rights or the seeking of any other remedies against the other, or their
respective successors or assigns.
11. TAX MATTERS
11.01 SECTION 338(h)(10) ELECTION
At Buyer's request, the Stockholders shall join with Buyer in
making an election under Section 338(h)(10) of the Code (any corresponding
election under state, local or foreign tax law) with respect to the purchase and
sale of stock of the Company (the "Section 338(h)(10) Election") in form and
substance satisfactory to the Buyer. Buyer shall be responsible for the filing
of any Form 8023 or analogous, ancillary or supporting forms, documents and
statements under state, local or foreign law to make the Section 338(h)(10)
Elections (the "Section 338 Forms"). The Stockholders will include any income,
gain loss, deduction, or other tax item resulting from the Section 338(h)(10)
Election on their Tax Returns to the extent required by applicable Laws. The
Stockholders shall also pay any Tax liability imposed on the Company
attributable to or in any way arising from the making of the Section 338(h)(10)
Election, including, but not limited to, (a) any Tax imposed under Code Section
1374, (b) any Tax imposed under Reg. Section 1.338(h)(10)-1(e)(5), or (c) any
state, local or foreign Tax imposed on the Company's gain, and the Stockholders
shall jointly and severally indemnify Buyer and the Company against any Losses
arising out of any failure to pay the Taxes attributable to the Company.
11.02 ALLOCATION OF PURCHASE PRICE
Buyer, the Company and each of the Stockholders agree that the
Purchase Price and the liabilities of the Company (plus other relevant items)
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will be allocated to the Assets of the Company for all purposes (including Tax
and financial accounting) in accordance with their fair market values as
reasonably determined by Buyer in accordance with the applicable rules of
Section 338 of the Code and the regulations thereunder and consented to by the
Stockholders (which consent shall not be unreasonably withheld), which
allocation shall be binding upon the parties. Within ninety (90) days following
the Closing, Buyer and the Company shall agree on a list of assets to which the
"Aggregate Deemed Sales Price" (as defined under applicable Treasury
Regulations) of the assets of the Company shall be allocated. All allocations
contained in such schedule shall be used by each party in preparing the Section
338 Forms and all relevant Tax Returns (including amended returns and claims for
refund), subject to adjustment to reflect (a) Stockholders' selling expenses as
a reduction of sales proceeds, and (b) Buyer's acquisition expenses as an
addition to the Purchase Price.
11.03 S CORPORATION STATUS
Prior to Closing, neither the Company nor any Stockholder shall
revoke the Company's election to be taxed as an S corporation within the meaning
of Sections 1361 and 1362 of the Code. Prior to Closing, neither the Company nor
any Stockholder shall knowingly take or allow any action (other than the sale of
the Company's stock pursuant to this Purchase Agreement) that would result in
the termination of the Company's status as a validly electing S corporation
within the meaning of Sections 1361 and 1362 of the Code. After the Closing,
neither Buyer, the Company, nor any Stockholder shall take any position
inconsistent with the Company being an S corporation for all periods through the
Closing Date.
11.04 TAX RETURNS AND PAYMENTS
The Stockholders shall prepare or cause to be prepared and Buyer
shall timely file or cause to be filed all Tax Returns for the Company for all
Tax periods ending on or prior to the Closing Date ("Pre-Closing Periods") which
are due after the Closing Date. Such Returns shall be prepared in a manner
consistent with the Company's prior practice and the allocation of the Purchase
Price pursuant to Section 11.02. At least fifteen (15) days prior to the filing
of each such Return, the Stockholders shall provide the Return to Buyer for its
review and comment and the Stockholders shall make such revisions to such Return
as are necessary to conform the Return with the preceding sentence or to be
consistent with applicable Law and shall provide the Return, as revised, to
Buyer for filing. Buyer shall prepare or cause to be prepared and Buyer shall
timely file or cause to be filed any Tax Returns of the Company for Tax
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periods which begin before the Closing Date and end after the Closing Date (the
"Straddle Periods"). Such Returns shall be prepared in a manner consistent with
the Company's prior practice to the extent consistent with applicable Laws. At
least fifteen (15) days prior to the filing of each such Return with respect to
Straddle Periods, Buyer shall provide copies of such Return to the Stockholders
for the Stockholders' review and comment and Buyer shall make such revisions to
such Tax Returns as are reasonably requested by the Stockholders. The
Stockholders shall pay to Buyer within fifteen (15) days after the date on which
Taxes are paid (a) in the case of each Return filed by Buyer relating to a
Pre-Closing Period the amount of Tax paid with respect to such period as show on
the Return in excess of (i) the reserve for such Tax liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) as shown on the balance sheet in the Unaudited Financial
Statements and (ii) the amount of such Taxes for which Buyer is responsible
pursuant to Section 11.01 and (b) in the case of each Return relating a Straddle
Period, the portion of such Taxes which relates to the portion of such Taxable
period ending on the Closing Date in excess of (i) any reserve for such Tax
liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) shown on the balance sheet in
the Unaudited Financial Statements and (ii) any portion of such Taxes which is
Buyer's responsibility pursuant to Section 11.01 (such excess "Straddle Period
Taxes"). Such Straddle Period Taxes shall be calculated as though the taxable
year of the Company terminated as of the close of business on the Closing Date;
provided, however, that in the case of a Tax not based on income, receipts,
proceeds, profits or similar items, such Straddle Period Taxes shall be equal to
the amount of Tax for the taxable period multiplied by a fraction, the numerator
of which shall be the number of days from the beginning of the taxable period
through the Closing Date and the denominator of which shall be the number of
days in the taxable period. To the extent permitted by applicable law, the
Stockholders shall include any income, gain, loss, deduction or other tax items
for periods ending on or before the Closing Date and for periods beginning
before and ending after the Closing Date on their Tax Returns in a manner
consistent with the Schedule K-1s furnished by the Company to the Stockholders
for such periods. After the Closing, the Company shall not amend any Tax Return
filed before the Closing without Stockholders' consent.
11.05 COOPERATION ON TAX MATTERS
(a) Buyer, the Company and the Stockholders shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to this Section 11 and any
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audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such filing,
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. The Company and the Stockholders agree (i) to
retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by
Buyer or the Stockholders, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority, and (ii) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the other party so requests the Company or the Stockholders, as the case may
be, shall allow the other party to take possession of such books and records
prior to such transfer, destruction or discarding.
(b) Buyer and the Stockholders further agree, upon request,
to use their reasonable best efforts to obtain any certificate or other document
from any governmental authority or any other person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).
11.06 CERTAIN TAXES
Except as otherwise agreed, all transfer, documentary, sales,
use, stamp, registration and other such Taxes and fees (including any penalties
and interest) incurred in connection with this Purchase Agreement (including any
city transfer tax and any similar tax imposed in other states or subdivisions),
shall be paid one-half by Buyer and one-half by the Stockholders when due, and
the party required by applicable Laws will, at their own expense, file all
necessary Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and, if
required by applicable Laws, Buyer will, and will cause its Affiliates to, join
in the execution of any such Tax Returns and other documentation.
11.07 TAX AUDITS
(a) The Stockholders shall have the right to represent the
interests of the Company in any Tax audit or administrative or court proceeding
relating to taxable periods of the Company which end on or before the Closing
Date, and to employ counsel of its choice at its expense, provided
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that the Stockholders acknowledge in writing their liability, pursuant to
Section 11.04 of this Agreement, for such Tax or Tax Return. Buyer shall have
the right to participate in any such Tax proceeding which may adversely affect
the Company after the Closing Date and the Stockholders will not settle any such
audit without the prior written consent of Buyer. Buyer agrees that it will
cooperate fully with the Stockholders and their counsel in the defense or
compromise of any claim in any such proceeding.
(b) Buyer shall have the sole right to represent the
interests of the Company in all other Tax audits or administrative or court
proceedings.
12. TERMINATION
12.01 TERMINATION
This Purchase Agreement may be terminated at any time before the
Closing Date under any one or more of the following circumstances:
(a) by the mutual written consent of all of the parties
hereto;
(b) by Buyer, the Company or the Stockholders, by written
notice of termination delivered to the other parties if the Closing shall not
have occurred prior to April 30, 2001; provided, however, that the right to
terminate this Purchase Agreement under this Section 12.01(b) shall not be
available to any party whose breach of representations, warranties, covenants or
agreements contained in this Purchase Agreement has been the cause of, or
resulted in, the failure of the Closing to occur by such date;
(c) by Buyer if the Company or the Stockholders shall have
breached, or failed to comply with, in any material respect any of their
respective material obligations under this Purchase Agreement or any
representation or warranty made by such party shall have been incorrect in any
material respect when made or shall have since ceased to be true and correct in
any material respect, and such breach, failure or misrepresentation is not cured
within thirty (30) days after notice thereof;
(d) by the Company or the Stockholders if Buyer shall have
breached, or failed to comply with, in any material respect any of its material
obligations under this Purchase Agreement or any representation or warranty made
by Buyer shall have been incorrect in any material respect when made or shall
have since ceased to be true and correct in any material respect, and
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such breach, failure or misrepresentation is not cured within thirty (30) days
after notice thereof; and
(e) by Buyer, the Company or the Stockholders if any decree,
permanent injunction, judgment, order or other action by any court of competent
jurisdiction or any governmental or regulatory authority preventing or
prohibiting consummation of the transactions under this Purchase Agreement shall
have become final and non-appealable.
12.02 EFFECT OF TERMINATION
In the event this Purchase Agreement is terminated as provided
in this Article 12, this Purchase Agreement shall forthwith become wholly void
and of no effect, and the parties shall be released from all future obligations
hereunder; provided, however, that the obligations of the parties as to
confidentiality provided in Section 3.02 and the provisions of Section 13.03
relating to the payment of expenses, shall not be extinguished but shall survive
such termination, and nothing herein shall relieve any party for any breach of
this Agreement. The parties hereto shall have any and all remedies to enforce
such obligations provided at law or in equity (including, without limitation,
specific performance).
13. MISCELLANEOUS
13.01 ADDITIONAL ACTIONS AND DOCUMENTS
Each of the parties hereto hereby agrees to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further Documents, and will obtain such
consents, as may be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Purchase Agreement.
13.02 BROKERS
(a) The Company and the Stockholders jointly and severally
represent and warrant to Buyer that neither such party has (i) engaged any
broker, finder or agent in connection with the transactions contemplated by this
Purchase Agreement or (ii) incurred (or will incur) any unpaid liability to any
broker, finder or agent for any brokerage fees, finders' fees or commissions,
with respect to the transactions contemplated by this Purchase Agreement.
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(b) Buyer represents and warrants to the Company and the
Stockholders that Buyer has not (i) engaged any broker, finder or agent in
connection with the transactions contemplated by this Purchase Agreement or (ii)
incurred (and will not incur) any unpaid liability to any broker, finder or
agent for any brokerage fees, finders' fees or commissions, with respect to the
transactions contemplated by this Purchase Agreement.
(c) Each party agrees to indemnify, defend and hold harmless
each of the other parties from and against any and all claims asserted against
such parties for any fees or commissions other than those set forth in this
Section by any persons purporting to act or to have acted for or on behalf of
the indemnifying party.
13.03 EXPENSES
Subject to the provisions of Article 10, each party hereto shall
pay its own Transaction Expenses; provided, however, that the Company shall be
permitted to pay the Transaction Expenses incurred by the Stockholders prior to
April 2, 2001; provided, further, that the Stockholders shall be jointly and
severally liable for any Transaction Expenses of the Company and the
Stockholders incurred after April 2, 2001.
13.04 ASSIGNMENT
Buyer shall have the right to assign its rights and obligations
under this Purchase Agreement (except for its obligations under Section 10.03),
in whole or in part, to an entity in which Buyer owns all of the issued and
outstanding stock (to the extent permitted by law). Except as described in the
immediately preceding sentence, no party shall assign its rights and obligations
under this Purchase Agreement, in whole or in part, whether by operation of law
or otherwise, without the prior written consent of the other parties hereto, and
any such assignment contrary to the terms hereof shall be null and void and of
no force and effect. In no event shall the assignment by any party of its
respective rights or obligations under this Purchase Agreement, whether before
or after the Closing, release such party from its respective liabilities and
obligations hereunder.
13.05 ENTIRE AGREEMENT; AMENDMENT
This Purchase Agreement, including the Disclosure Schedule, the
Exhibits and other Documents referred to herein or furnished pursuant hereto,
constitute the entire Agreement among the parties hereto with respect to the
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transactions contemplated herein, and supersede all prior oral or written
Agreements, commitments or understandings with respect to the matters provided
for herein. No amendment, modification or discharge of this Purchase Agreement
shall be valid or binding unless set forth in writing and duly executed and
delivered by the party against whom enforcement of the amendment, modification,
or discharge is sought.
13.06 WAIVER
No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Purchase Agreement or under
any other Documents furnished in connection with or pursuant to this Purchase
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial exercise
of any such right, power or privilege shall preclude the further exercise of
such right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
13.07 CONSENT TO JURISDICTION
(a) This Purchase Agreement and the duties and obligations
of the parties hereunder and under each of the Documents referred to herein
shall be enforceable against any party in the courts of the United States of
America and of the Commonwealth of Virginia. For such purpose, each party hereto
hereby irrevocably submits to the non-exclusive jurisdiction of such courts, and
agrees that all claims in respect of this Purchase Agreement and such other
Documents may be heard and determined in any of such courts.
(b) Each party hereto hereby irrevocably agrees that a final
judgment of any of the courts specified above in any action or proceeding
relating to this Purchase Agreement or to any of the other Documents referred to
herein or therein shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law.
13.08 SEVERABILITY
If any part of any provision of this Purchase Agreement or any
other Agreement or document given pursuant to or in connection with this
Purchase Agreement shall be invalid or unenforceable in any respect, such part
shall be ineffective to the extent of such invalidity or unenforceability only,
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without in any way affecting the remaining parts of such provision or the
remaining provisions of this Purchase Agreement.
13.09 GOVERNING LAW
This Purchase Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia
(excluding the choice of law rules thereof).
13.10 NOTICES
All notices, demands, requests, or other communications which
may be or are required to be given, served, or sent by any party to any other
party pursuant to this Purchase Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
telegram, telecopy or telex, addressed as follows:
(i) If to Buyer:
BTG, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(ii) If to the Company:
Research Planning, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ___________
Telecopy No.: _________
with a copy (which shall not constitute notice) to:
Winston & ▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.:
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: _________
with a copy (which shall not constitute notice) to:
Winston & ▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iv) If to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: _________
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(v) If to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.:
---------------------
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be hand delivered,
sent, mailed, telecopied or telexed in the manner described above, or which
shall be delivered to a telegraph company, shall be deemed sufficiently given,
served, sent, received or delivered for all purposes at such time as it is
delivered to the addressee (with the return receipt, the delivery receipt, or
(with respect to a telecopy or telex) the answerback being deemed conclusive,
but not exclusive, evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.
13.11 HEADINGS
Article and Section headings contained in this Purchase
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Purchase Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
13.12 EXECUTION IN COUNTERPARTS
To facilitate execution, this Purchase Agreement may be executed
in as many counterparts as may be required. It shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
Agreement. It shall not be necessary in making proof of this Purchase Agreement
to produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
13.13 LIMITATION ON BENEFITS
The covenants, undertakings and agreements set forth in this
Purchase Agreement shall be solely for the benefit of, and shall be enforceable
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only by, the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns, except that the
agreements set forth in Article 10 also shall be for the benefit of, and
enforceable by, Buyer Indemnified Persons and their respective successors,
heirs, executors, administrators, legal representatives or permitted assigns.
13.14 BINDING EFFECT
Subject to any provisions hereof restricting assignment, this
Purchase Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and assigns.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Stock Purchase Agreement, or have caused this Stock Purchase Agreement to be
duly executed on their behalf, as of the day and year first above written.
BUYER:
BTG, INC.
By: /s/ ▇▇▇▇▇▇ ▇. Berosff
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
COMPANY:
RESEARCH PLANNING, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
STOCKHOLDERS:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
61
EXHIBIT A TO THE
STOCK PURCHASE AGREEMENT
CAPITALIZATION
----------------------------------------------------------------------------------------------
NO. CLASS B
NO. CLASS A NON-VOTING OWNERSHIP
STOCKHOLDER: VOTING SHARES: SHARES: TOTAL SHARES: INTEREST:
----------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 26,000 21,812 47,812 75%
----------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III 6,500 6,250 12,750 20%
----------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0 3,188 3,188 5%
----------------------------------------------------------------------------------------------
TOTALS: 32,500 31,250 63,750 100%
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-----------------------------------------------------------------
PRINCIPAL AMOUNT OF
STOCKHOLDER: PROMISSORY NOTE:
-----------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. $6,750,000
-----------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III $1,800,000
-----------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $450,000
-----------------------------------------------------------------
62
EXHIBIT B TO THE
STOCK PURCHASE AGREEMENT
DEFINITIONS
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgements, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and attorneys' fees and expenses.
"Affiliate" means: (a) with respect to an individual person, any
member of such person's immediate family, consisting of such person's spouse or
children; (b) with respect to an entity, any officer or director of such entity;
and (c) with respect to an individual person or entity, any person or entity
which directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such person or entity.
"Agreement" means any binding agreement between two or more
persons (or entities) with respect to their relative rights and/or obligations
or with respect to a thing done or to be done.
"Article" means an Article of this Purchase Agreement.
"Assets" means assets of every kind and everything that is or
may be available for the payment of liabilities (whether inchoate, tangible or
intangible), including, without limitation, real and personal property.
"Audited Financial Statements" has the meaning set forth in
Section 4.06(a) of the Purchase Agreement.
"Balance Sheet Date" means December 22, 2000.
"Buyer" means BTG, Inc., a Virginia corporation.
"Buyer Indemnified Persons" means Buyer and its subsidiaries and
their respective officers and directors.
"Closing" means the closing of the sale and purchase of shares
of the Company's capital stock pursuant to this Purchase Agreement.
"Closing Balance Sheet" has the meaning set forth in Section
8.13 of the Purchase Agreement.
63
"Closing Date" means 10:00 a.m. local time on the date on which
the satisfaction or, if permissible, waiver of the closing conditions set forth
in Articles 7 and 8 occurs, or such other time and such date as shall be
mutually agreed upon by Buyer, the Company and the Stockholders.
"Code" means the Internal Revenue Code of 1986, as amended, and
all regulations promulgated thereunder.
"Common Control Entity" means any trade or business under common
control (as such term is defined in Section 414(b) or 414(c) of the Code) with
the Company.
"Company" means Research Planning, Inc., a Delaware corporation.
"Company Tax Returns" means all returns, reports, declarations
and information statements required to be filed by the Company (without regard
to extensions of time permitted by law or otherwise) with any federal, state,
local or foreign governmental authority or agency.
"Confidentiality Agreement" means that certain Confidentiality
Agreement dated October 10, 2000 between the Company, Buyer and the
Stockholders.
"Control" means possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of voting securities, by Agreement or otherwise).
"Credit Agreement" means that certain Five Million Dollar
($5,000,000) secured line of credit evidenced by a Commitment Letter dated May
3, 2000, among First Virginia Bank, the Company and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., and
a Promissory Note dated December 21, 2000, in the stated principal amount of
Five Million Dollars ($5,000,000) made by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. to First
Virginia Bank.
"Defined Benefit Plan" means a Plan that is or was a "defined
benefit plan" as such term is defined in Section 3(35) of ERISA.
"Disclosure Schedule" means the disclosure schedule identified
as the Disclosure Schedule to the Purchase Agreement. The sections of the
Disclosure Schedule shall be numbered to correspond to the applicable Section of
this Purchase Agreement and together with all matters under such heading,
ExB - ii -
64
shall be deemed to qualify the applicable Section and any other Section,
subsection or clause hereof to which such disclosure clearly relates.
"Documents" means any written or similar material (including,
without limitation, computer storage media) on which is recorded (by letters,
numbers or other marks) information, including, without limitation, legal
opinions, mortgages, indentures, notes, instruments, leases, Agreements,
insurance policies, reports, studies, financial statements (including, without
limitation, the notes thereto), other written financial information, schedules,
certificates, charts, maps, plans, letters, memoranda and all similar materials.
"DOL" means the Department of Labor or its successors.
"Encumbrance" means any mortgage, lien, pledge, encumbrance,
security interest, deed of trust, option, encroachment, reservation, order,
decree, judgment, restriction, charge, Agreement, claim or equity of any kind.
"Environmental Laws" means any Laws (including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act), including any regulations promulgated pursuant to such Laws, now
in effect relating to the generation, production, installation, use, storage,
treatment, transportation, release, threatened release, or disposal of Hazardous
Materials, noise control, or the protection of human health or the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and all Laws promulgated pursuant thereto or in connection
therewith.
"ESOP" means any "employee stock ownership plan" as such term is
defined in Section 407(d)(6) of ERISA or Section 4975(c)(7) of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and all regulations promulgated thereunder.
"Exhibit" means an exhibit attached to the Purchase Agreement.
"Financial Statements" has the meaning set forth in Section
4.06(b) of the Purchase Agreement.
"Government Contract" means any Agreement with or for (and any
subcontract at any tier under an Agreement with or for) any federal, state or
ExB - iii -
65
local governmental agency, department, commission, board, bureau, authority or
instrumentality.
"Hazardous Materials" means any wastes, substances, radiation or
materials (whether solids, liquids or gases) (i) which are defined as
"pollutants", "contaminants", "hazardous wastes", "hazardous substances", "toxic
substances", "radioactive materials", "solid wastes" or other similar
designations in, or otherwise subject to regulation under, any Environmental
Laws; (ii) without limitation, which contain polychlorinated biphenyls (PCBs),
asbestos and asbestos-containing materials, lead-based paints, urea-formaldehyde
foam insulation, and petroleum or petroleum products (including, without
limitation, crude oil or any fraction thereof) or (iii) which are known to the
Company or the Stockholders to pose a hazard to human health, safety, natural
resources, industrial hygiene, or the environment, or an impediment to working
conditions.
"Indemnified Party" has the meaning set forth in Section
10.04(a).
"Indemnifying Party" has the meaning set forth in Section
10.04(a).
"Individual Account Plan" means a Plan that is or was an
"individual account plan" as such term is defined in Section 3(34) of ERISA.
"Intellectual Property" means all franchises, patents, patent
qualifications, trademarks, service marks, trade names, trade styles, brands,
private labels, copyrights, know-how, computer software, industrial designs and
drawings and general intangibles of a like nature, trade secrets, licenses, and
rights and filings with respect to the foregoing, and all reissues, extensions
and renewals thereof.
"Laws" means all foreign, federal, state and local statutes,
laws, ordinances, regulations, rules, resolutions, orders, determinations,
writs, injunctions, awards (including, without limitation, awards of any
arbitrator), judgments and decrees applicable to the specified persons or
entities and to the businesses and Assets thereof (including, without
limitation, Laws relating to securities registration and regulation; the sale,
leasing, ownership or management of real property; employment practices, terms
and conditions, and wages and hours; building standards, land use and zoning;
safety, health and fire prevention; and environmental protection, including
Environmental Laws).
"Losses" means all demands, losses, claims, actions or causes of
action, assessments, damages, liabilities, costs and expenses, including,
ExB - iv -
66
without limitation, interest, penalties and reasonable attorneys' fees and
disbursements.
"Material Adverse Effect" means a material adverse effect upon
the business, operations, Assets or condition (financial or otherwise) of the
Company taken as a whole.
"Minimum Funding Plan" means a Pension Plan that is subject to
Title I, Subtitle B, Part 3 of ERISA (concerning funding).
"Multiemployer Plan" means a "multiemployer plan" as such term
is defined in Section 3(37) of ERISA.
"Ordinary Course of Business" means ordinary course of the
Company's business consistent with past practices.
"Other Arrangement" means a benefit program or practice
providing for bonuses, incentive compensation, vacation pay, severance pay,
insurance, restricted stock, stock options, employee discounts, company cars,
tuition reimbursement or any other perquisite or benefit (including, without
limitation, any fringe benefit under Section 132 of the Code, except for a de
minimis fringe under Code Section 132(e)) to employees, officers or independent
contractors that is not a Plan.
"Pension Plan" means an "employee pension benefit plan" as such
term is defined in Section 3(2) of ERISA.
"Plan" means any plan, program or arrangement, whether or not
written, that is or was an "employee benefit plan" as such term is defined in
Section 3(3) of ERISA and (a) which was or is established or maintained by the
Company; (b) to which the Company contributed or was obligated to contribute or
to fund or provide benefits; or (c) which provides or promises benefits to any
person who performs or who has performed services for the Company and because of
those services is or has been (i) a participant therein or (ii) entitled to
benefits thereunder.
"Pre-Closing Periods" has the meaning set forth in Section 11.04
of the Purchase Agreement.
"Promissory Notes" has the meaning set forth in Section 2.02 of
the Purchase Agreement.
ExB - v -
67
"Proposal" means any proposal, offer or indication of interest
from any person, entity or group relating to any acquisition or purchase of all
or (other than in the Ordinary Course of Business) any portion of the Assets of,
or any equity in, the Company or any business combination with the Company,
other than the transactions contemplated by the Purchase Agreement.
"Purchase Agreement" means this Stock Purchase Agreement,
including the Disclosure Schedule and all Exhibits hereto.
"Purchase Price" has the meaning set forth in Section 2.02 of
the Purchase Agreement.
"Qualified Plan" means a Pension Plan that satisfies or is
intended to satisfy, the requirements for tax qualification described in Section
401 of the Code.
"Real Property" means the portions of real property (and all
improvements thereon) leased or used by the Company.
"Release" means any emission, spill, seepage, leak, escape,
discharge, leaching, injection, pumping, pouring, emptying, dumping, disposal,
or release of Hazardous Materials from the Real Property into or upon the air,
soil, improvements, surface water, groundwater, the sewer, septic system, storm
drain, publicly owned treatment works, or waste treatment, storage or disposal
systems at, on, above, or under the Real Property.
"Restricted Contracts" has the meaning set forth in Section
4.17(e) of the Purchase Agreement.
"SBA" has the meaning set forth in Section 3.01(c) of the
Purchase Agreement.
"SEC" means the Securities and Exchange Commission.
"Section" means a Section (or a subsection) of the Purchase
Agreement.
"Section 338(h)(10) Election" has the meaning set forth in
Section 11.01 of the Purchase Agreement.
"Section 338 Forms" has the meaning set forth in Section 11.01
of the Purchase Agreement.
ExB - vi -
68
"Securities Act" means the Securities Act of 1933, as amended,
and all regulations promulgated thereunder.
"Security Interests" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for Taxes not yet due and payable,
(c) purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the ordinary course of business and
not incurred in connection with the borrowing of money.
"Shares" has the meaning set forth in the Recitals.
"Statutory Waiver Plan" means a Pension Plan that is not subject
to Title I, Subtitle B, Part 3 of ERISA (concerning funding).
"Stockholders" means ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
III and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
"Straddle Periods" has the meaning set forth in Section 11.04 of
the Purchase Agreement.
"Straddle Period Taxes" has the meaning set forth in Section
11.04 of the Purchase Agreement.
"Subsidiary" means any corporation, partnership, joint venture
or other legal entity of which the Company (either alone or through or together
with any other Subsidiary) (i) owns, directly or indirectly, fifty percent (50%)
or more of the stock, partnership interests or other equity interests the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation, partnership, joint
venture or other legal entity; or (ii) possesses, directly or indirectly,
control over the direction of management or policies of such corporation,
partnership, joint venture or other legal entity (whether through ownership of
voting securities, by agreement or otherwise).
"Taxes" means all federal, state, local and foreign taxes
(including, without limitation, income, profit, franchise, sales, use, real
property, personal property, ad valorem, excise, employment, social security and
wage withholding taxes) and installments of estimated taxes, assessments,
deficiencies, levies, imports, duties, withholdings, or other similar charges
imposed by any
ExB - vii -
69
governmental or quasi-governmental authorities, and any interest,
penalties or additions to tax imposed thereon or in connection therewith.
"Third Party Claim" means any claim or other assertion of
liability by any third party.
"Title I Plan" means a Plan that is subject to Title I of ERISA.
"Transaction Expenses" of a party to this Purchase Agreement
means the expenses incurred by such party in connection with the negotiation,
preparation, execution and consummation of this Purchase Agreement and the
transactions contemplated hereby, including all legal and accounting fees and
disbursements.
"Unaudited Financial Statements" has the meaning set forth in
Section 4.06(b) of the Purchase Agreement.
"Welfare Plan" means an "employee welfare benefit plan" as such
term is defined in Section 3(1) of ERISA.
ExB - viii -
70
EXHIBIT C TO THE
STOCK PURCHASE AGREEMENT
FORM OF PROMISSORY NOTES
71
EXHIBIT D TO THE
STOCK PURCHASE AGREEMENT
FORM OF SUBORDINATION AGREEMENT
72
EXHIBIT E TO THE
STOCK PURCHASE AGREEMENT
FORM OF CONSULTING AGREEMENT
73
EXHIBIT F TO THE
STOCK PURCHASE AGREEMENT
FORM OF LEGAL OPINION OF WINSTON & ▇▇▇▇▇▇
74
EXHIBIT G TO THE
STOCK PURCHASE AGREEMENT
FORMS OF NONCOMPETITION AGREEMENTS
75
EXHIBIT H TO THE
STOCK PURCHASE AGREEMENT
FORM OF LEGAL OPINION OF ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.