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EXHIBIT 2.13
STOCK PURCHASE AGREEMENT
RELATING TO ALL OF THE
OUTSTANDING STOCK OF
PERIPHERAL COMPUTER SUPPORT, INC.
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TABLE OF CONTENTS
1. Sale of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Purchase Price for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Representations and Warranties of Seller . . . . . . . . . . . . . . . . . . . 3
(a) Ownership and Delivery of the Shares and Execution and Effect of Agreement 3
(b) Organization; Good Standing; Authority . . . . . . . . . . . . . . . . . . 4
(c) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(d) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(e) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(f) No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(g) Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . 5
(h) Title to Properties; Absence of Encumbrances . . . . . . . . . . . . . . . 5
(i) Real and Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 6
(j) Patents, Trademarks and Copyrights . . . . . . . . . . . . . . . . . . . . 6
(k) Contracts, Leases and Commitments . . . . . . . . . . . . . . . . . . . . 6
(l) Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(m) Accounts Receivable; Accounts Payable . . . . . . . . . . . . . . . . . . 7
(n) Permits; Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . 7
(o) Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(p) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(q) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(r) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(s) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(t) Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(u) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . 12
(v) Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(w) Illegal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(x) Officers and Directors; Bank Accounts, etc. . . . . . . . . . . . . . . . 13
(y) Expenses Related to this Agreement . . . . . . . . . . . . . . . . . . . . 13
(z) Accuracy of Documents and Information . . . . . . . . . . . . . . . . . . 13
6. Representations and Warranties of Purchaser . . . . . . . . . . . . . . . . . 13
(a) Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . 13
(b) Execution and Effect of Agreement . . . . . . . . . . . . . . . . . . . . 14
(c) Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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7. Covenants of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Access by Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8. Covenants of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . 16
(b) Best Efforts to Close . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9. Conditions Precedent to Obligations of Purchaser . . . . . . . . . . . . . . . 16
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . 16
(b) Performance of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Delivery of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(e) Opinion of Counsel to Seller . . . . . . . . . . . . . . . . . . . . . . . 17
(f) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(g) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(h) Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(i) Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(j) Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(k) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . 17
(l) Intercompany Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 17
(m) No Payments to Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . 18
(n) Tax Allocation Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 18
(o) HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10. Conditions Precedent to Obligations of Seller . . . . . . . . . . . . . . . . 18
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . 18
(b) Performance by Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Opinion of Counsel to Purchaser . . . . . . . . . . . . . . . . . . . . . 18
(e) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(g) Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(h) Tax Allocation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 19
(i) Lender Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(j) HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(k) Payment of Permitted Intercompany Transactions . . . . . . . . . . . . . . 19
11. Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Deliveries of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Deliveries of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Deliveries to the Escrow Agent . . . . . . . . . . . . . . . . . . . . . . 20
12. Restrictive Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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13. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
14. Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . 20
15. Indemnification by Purchaser . . . . . . . . . . . . . . . . . . . . . . . 21
16. Further Provisions Regarding Indemnification . . . . . . . . . . . . . . . 21
(a) Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(c) Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(d) Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(e) Calculation of Damages . . . . . . . . . . . . . . . . . . . . . . . . 22
(f) Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
17. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
18. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
19. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
20. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
21. Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
22. Other Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
23. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
24. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
25. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
26. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
27. Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
28. Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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INDEX OF SCHEDULES AND EXHIBITS
Schedules
5(a) - Ownership and Delivery of the Shares
5(c) - Capitalization
5(e) - Liabilities
5(g) - Customers and Suppliers
5(h) - Encumbered Properties and Assets
5(i) - Real and Personal Property
5(j) - Patents, Trademarks and Copyrights
5(k) - Material Contracts, Leases and Commitments
5(l) - Inventory
5(m) - Accounts Receivable/Accounts Payable
5(n) - Governmental Licenses, Permits and Authorizations
5(o) - Employees
5(p) - Employee Benefit Plans
5(q) - Insurance
5(r) - Litigation
5(s) - Environmental Matters
5(t) - Restrictions
5(u) - Transactions with Affiliates
5(x) - Officers and Directors; Bank Accounts
7(d) - Employment
Exhibits
A - Draft Audited Financials
B - Escrow Agreement
C - Tax Allocation Agreement
D - BPH Opinion
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STOCK PURCHASE AGREEMENT dated March 28, 1997, among PCS ACQUISITION
CO., INC., a Delaware corporation ("Purchaser"), THE CERPLEX GROUP, INC., a
Delaware corporation ("Seller") and Lincolnshire Equity Partners, L.P., a
Delaware limited partnership ("Lincolnshire").
Peripheral Computer Support, Inc., a California corporation (the
"Company"), is engaged in the business of repairing, refurbishing and
remarketing hard disk and CD-ROM drives, as well as other storage devices for
the personal computer industry.
Seller wishes to sell all of the shares (the "Shares") of common
stock of the Company ("Common Stock"), and Purchaser wishes to purchase the
Shares, for the purchase price and upon the terms and subject to the conditions
described below.
Lincolnshire agrees to guarantee all of Purchaser's obligations
hereunder up to and through the Closing, and at the time the Closing is
consummated Lincolnshire's obligations hereunder shall terminate.
Notwithstanding anything contained in this Agreement to the contrary,
Lincolnshire's maximum liability under this Agreement shall be TWO HUNDRED
FIFTY THOUSAND DOLLARS ($250,000.00).
The parties hereby agree as follows:
1. Sale of Shares. At the Closing, Seller shall sell, assign,
transfer and deliver to Purchaser, and Purchaser shall purchase from Seller,
the Shares.
2. Closing.
(a) The Closing of the transactions contemplated by this Agreement
(the "Closing") shall be held at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at 11:00
A.M., Pacific Standard Time, on the first (second if Lincolnshire does not have
notice of the fulfillment of the HSR Condition prior to noon Central Standard
Time on the date such condition is fulfilled) business day following
fulfillment of the HSR Condition (as defined in Section 9) (the "Closing
Date"); provided, however, if the HSR Condition is fulfilled prior to April 10,
1997, the Closing shall be delayed until April 11, 1997 if Lincolnshire shall
have not received the cash required to close under the funding referenced in
Section 8(b) prior to such date. The obligation to close on the Closing Date
shall be subject to the fulfillment of the conditions set forth in Sections 9
and 10.
(b) This Agreement may be terminated at any time prior to the
Closing: (i) by a written agreement among all the parties hereto; (ii) by
Purchaser, if any condition specified in Section 9 shall not have been
fulfilled by Seller or waived in writing by Purchaser on or before the Closing
Date; or (iii) by Seller, if any condition specified in Section 10 shall not
have been fulfilled by Purchaser or waived in writing by Seller on or before
the Closing Date; or (iv) by Purchaser pursuant to Section 7(c), clause (y).
Notwithstanding the foregoing, however, either Purchaser or Seller shall have
the right to terminate this Agreement (i) after 8:00 p.m., EST, on April 2,
1997 if Purchaser has not
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notified Seller in writing that it has satisfied the condition set forth in
Section 9(i) hereof or waived it in writing prior to such time; and (ii) after
8:00 p.m. EST on April 4, 1997 if Purchaser has not notified Seller in writing
that it has satisfied the condition set forth in Section 9(d) hereof or waived
it in writing prior to such time, in either case without liability to
Purchaser, Lincolnshire and Seller (and any of their affiliates) under this
Agreement. Purchaser's and Seller's right to effect such termination pursuant
to the preceding sentence may be exercised by delivering written notice on or
prior to the fifth day following the applicable date specified above.
3. Financial Statements.
(a) Seller has delivered to Purchaser (i) a draft dated March 27,
1997 of an audited balance sheet of the Company as at December 31, 1996 ("Draft
Audited Balance Sheet"), and (ii) a draft dated March 27, 1997 of audited
statements of income, stockholders' equity and cash flows of the Company for
the fiscal year ended December 31, 1996 (collectively, the "Draft Audited
Financials"), all of which are attached hereto as Exhibit A.
(b) At least five business days prior to the Closing, Seller will
deliver to Purchaser an audited balance sheet of the Company as at December 31,
1996 ("Audited Balance Sheet") and audited statements of income, stockholders'
equity and cash flows of the Company for the fiscal year ended December 31,
1996 (collectively, the "Audited Financials"), accompanied by the unqualified
reports thereon of KPMG/Peat Marwick ("KPMG").
(c) After the date hereof, Seller, the Company and KPMG shall give
Purchaser and its officers, directors, accountants, representatives, advisers
and employees, including those of its affiliates, free and full access during
normal business hours to the Company's assets, premises and books and records,
including the audit work papers of KPMG, and such other information as
Purchaser or its officers, directors, accountants and employees, including
those of its affiliates, may from time to time reasonably request, relating to
the Draft Audited Balance Sheet, Draft Audited Financials, Audited Balance
Sheet and Audited Financials.
4. Purchase Price for Shares.
(a) In full consideration for the Shares, Purchaser shall pay to
Seller an aggregate purchase price (the "Purchase Price") equal to FIFTEEN
MILLION DOLLARS ($15,000,000). Purchaser may elect to reduce the purchase
price by FIVE HUNDRED THOUSAND DOLLARS ($500,0000) provided Purchaser delivers
to Seller at Closing a release executed by ▇▇ ▇▇▇▇▇▇ of Seller's obligation to
pay the $500,000 earn out payment payable to ▇▇ ▇▇▇▇▇▇ under the original
acquisition agreement pursuant to which Seller acquired the Company from ▇▇
▇▇▇▇▇▇. The Purchase Price shall be payable as follows:
(i) An amount equal to FOURTEEN MILLION FIVE HUNDRED THOUSAND
DOLLARS ($14,500,000) (subject to reduction of $500,000 if Purchaser delivers
to Seller the ▇▇▇▇▇▇ release as contemplated in (a) above) at the Closing, by
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delivery to Seller by wire transfer to an account specified by Seller no less
than one business day prior to the Closing.
(ii) An amount (the "Escrowed Amount") equal to FIVE HUNDRED
THOUSAND DOLLARS ($500,000) at the Closing, by delivery, to a mutually agreed
upon entity as escrow agent (the "Escrow Agent"), pursuant to an escrow
agreement in the form attached hereto as Exhibit B ("Escrow Agreement"), of a
certified or official bank check or wire transfer.
(iii) If the Company is required in connection with
obtaining a consent from the Landlord of the Company's principal headquarters
at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ to incur any expense or is
obligated to increase a security deposit, then at the Closing Seller will
authorize the use of up to $150,000 of funds otherwise due to be placed in
Escrow to be used for such purpose for a one year period, following which one
year period the amount so applied, with interest at the rate specified in the
Escrow Agreement, shall be returned by Purchaser to the Escrow Agent for use in
accordance with such Escrow Agreement or to Seller if no claims are outstanding
under the Escrow Agreement. The form of Escrow Agreement shall be revised, to
the extent necessary, to reflect the above agreement.
5. Representations and Warranties of Seller. Seller represents,
warrants and agrees as set forth below. All references to "Seller's Knowledge"
shall mean solely to the knowledge of Seller's Chief Executive Officer,
President, Chief Financial Officer, President of International Business and
President of North American Operations. All references to "▇▇▇▇▇▇'▇ Knowledge"
shall mean solely to the knowledge of ▇▇ ▇▇▇▇▇▇.
(a) Ownership and Delivery of the Shares and Execution and Effect of
Agreement. Seller is the record and beneficial owner of all of the Shares.
The Shares constitute all of the issued and outstanding shares of capital stock
of the Company, and, except as set forth on Schedule 5(a), are free and clear
of any and all liens, pledges, security interests, options, encumbrances,
charges, agreements or claims of any kind whatsoever ("claims"). Seller has
the full right, power and authority to enter into and to perform this
Agreement, the Tax Allocation Agreement between Purchaser and Seller and
attached hereto as Exhibit C (the "Tax Allocation Agreement"), the Escrow
Agreement and all other agreements, certificates and documents executed or
delivered, or to be executed or delivered, by Seller in connection herewith
(collectively, with this Agreement, "Seller's Documents"). On the Closing
Date, Seller will have the full right, power and authority to sell, assign,
transfer and deliver all of the Shares as provided in this Agreement, and such
delivery will convey to Purchaser lawful, valid and marketable title to the
Shares, free and clear of any and all liens, claims and encumbrances. This
Agreement has been duly authorized, executed and delivered by Seller, and
Seller's Documents are (or when executed and delivered will be) legal, valid
and binding obligations of Seller, enforceable against Seller in accordance
with their respective terms, except to the extent enforceability may be limited
by equitable principles or by bankruptcy, insolvency or other similar laws of
general application affecting the enforcement of creditors' rights.
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(b) Organization; Good Standing; Authority. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of California, and has full power and authority to own and
lease its assets and properties and to conduct its business as it is presently
being conducted. The Company is duly qualified to do business and is in good
standing as a foreign corporation in every jurisdiction in which the conduct of
its business or the ownership or leasing of its assets requires such
qualification. The copies of the Company's Articles of Incorporation, as
amended (certified by the Secretary of State of the State of California), and
By-Laws (certified by the Secretary of the Company) which have been previously
delivered to Purchaser are correct and complete.
(c) Capitalization. The authorized capital stock of the Company
consists solely of 1,000,000 shares of common stock, of which 235,866 shares
are issued and outstanding. All of the outstanding shares of common stock of
the Company are duly authorized, validly issued and outstanding, fully paid and
nonassessable and, except for such shares, there are no outstanding shares of
capital stock or other securities of the Company. There is no existing option,
warrant, call, commitment or other agreement requiring the issuance or sale of
any additional shares of stock or other securities of the Company and no shares
of stock or other securities of the Company are reserved for issuance for any
purpose. Except as set forth on Schedule 5(c), there are no agreements,
commitments or restrictions relating to ownership, pledges, voting or transfer
of any shares of stock or other securities of the Company. The Company has no
subsidiaries and has no equity interest in any corporation, partnership, joint
venture or other entity. The Company has conducted its business only through
the Company and Peripheral Computer Support GmbH, a German corporation and
former subsidiary of the Company.
(d) Financial Statements. Seller previously has delivered to
Purchaser the Draft Audited Balance Sheet, the Draft Audited Financials, and
monthly reports of the Company for the months of January and February, 1997.
Each of the Draft Audited Financials and Draft Audited Balance Sheet have
been, and each of the Audited Financials and the Audited Balance Sheet will be,
prepared in accordance with the Company's books and records, present or will
present fairly the financial position and results of operations of the Company
as at the dates and for the fiscal year indicated and, in the case of the Draft
Audited Financials and the Draft Audited Balance Sheet have been, and in the
case of the Audited Financials and Audited Balance Sheet will be, prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis. The monthly reports for the months of January and
February 1997 have been prepared in accordance with the Company's books and
records.
(e) Liabilities. There are no material liabilities or contingencies
of the Company (whether accrued, unmatured, contingent or otherwise, and
whether due or to become due), except (i) as set forth or adequately reserved
against on the face of the Draft Audited Balance Sheet or the Audited Balance
Sheet or the footnotes thereto; (ii) as expressly referred to in Schedule 5(e)
hereto; and (iii) trade payables and other current liabilities (other than
funded indebtedness, monetary guaranties and liabilities under contracts
involving the receipt or expenditure of more than $25,000) incurred since
December 31, 1996 in the ordinary course of business and which are not,
individually or in the aggregate, material and
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adverse. On the Closing Date and assuming fulfillment of the condition set
forth in Section 10(k), there will be no liabilities or indebtedness or
contingencies of the Company whatsoever (whether accrued, unmatured, contingent
or otherwise and whether due or to become due) to Seller, Cerplex S.A.S. or any
of their affiliates. Other than as provided above, to Seller's Knowledge there
is no basis for the assertion against the Company of any other material
liability or loss contingency.
(f) No Adverse Change. Since December 31, 1996, the Company has
operated its business only in the ordinary course of business as theretofore
conducted, and there has been no: (i) material adverse change in the business,
properties, assets, liabilities, commitments, earnings, financial condition or
prospects of the Company or, taking the Company's revenues and expenses as a
whole, the Company's gross profit margins; (ii) property damage or destruction
resulting in a loss or cost to the Company of more than $10,000 in the
aggregate, whether or not covered by insurance; or (iii) act or omission which,
if taken or omitted after the date of this Agreement and before the Closing
would violate Section 7(b) below. Since December 31, 1996, there has been no
material adverse change in the ratio and composition of current assets to
current liabilities from that set forth in the Draft Audited Balance Sheet.
(g) Customers and Suppliers. Schedule 5(g) hereto contains a list
of the Company's ten largest customers and suppliers (measured by dollar volume
of purchases and sales, as applicable) and the dollar amount and percentage of
the Company's business which each such customer or supplier represented during
the fiscal year ending December 31, 1996. Except as disclosed on Schedule
5(g), to Seller's Knowledge, the Company is engaged in no material disputes
with such customers or suppliers, and no such customer or supplier has informed
Seller or the Company of any intention to terminate business or change the
manner in which it is presently doing business with the Company. To Seller's
Knowledge, no customer or supplier listed on Schedule 5(g) is considering
termination, non-renewal or any adverse modification of its arrangements with
the Company, and, except for the consents set forth on Schedule 5(t), to
Seller's Knowledge the transactions contemplated by this Agreement will not
have a material adverse effect on the Company's relationship with any of such
suppliers or customers.
(h) Title to Properties; Absence of Encumbrances. The Company has
good and marketable title to or, in the case of leases and licenses, valid and
subsisting leasehold interests or licenses in, all of its properties and assets
of whatever kind used in the operation of the Company and its subsidiaries
(whether real, personal or mixed, tangible or intangible) (collectively, the
"Assets") including, without limitation (i) cash, accounts receivable,
inventory, equipment, office furniture and furnishings, trade names, trademarks
and patents, all operating contracts, agreements, licenses and leases; (ii) all
properties and assets that are shown on the Audited Balance Sheet or the Draft
Audited Balance Sheet (except for assets sold in the ordinary course of
business since December 31, 1996) and (iii) properties and assets that are
shown on any schedule hereto, in each case free and clear of any and all liens,
mortgages, pledges, security interests, prior assignments, claims and
encumbrances of any kind whatsoever, except as may be set forth in Schedule
5(h) hereto and except for other immaterial liens, claims or encumbrances
incurred in the ordinary course of business which
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would not impair in any respect the Company's use or operation of its
properties and Assets in the ordinary course of business. All Assets,
properties and rights relating to the Company's business are held by, and all
material agreements, obligations and transactions relating to the Company's
business have been entered into, incurred and conducted by, the Company rather
than Seller or any of its affiliates.
(i) Real and Personal Property. The Company owns no real property,
building or other like structures. Schedule 5(i) hereto contains a complete
and correct list of all real property (including buildings and structures)
leased by the Company. All such real property, buildings and structures, and
the equipment therein, and the operations and maintenance thereof, comply with
any applicable agreements and restrictive covenants and conform to all
applicable legal requirements (as defined in Section 5(t) below) affecting the
use or enjoyment of the real property leased by the Company, including those
relating to the environment, health and safety, land use and zoning. All work
required to be done by the Company as tenant has been duly performed. To
Seller's Knowledge, Seller and the Company have received no notice of any
condemnation or other proceeding, pending or threatened, which would affect the
use of any such property by the Company. Schedule 5(i) hereto contains a
complete and correct list and brief description of all equipment, machinery,
computers, furniture, leasehold improvements, vehicles and other personal
property owned or leased by the Company and all interests therein as of the
date specified on such schedule. The Company's equipment and other assets
(whether leased or owned) are in good operating condition and repair, subject
to ordinary wear and tear.
(j) Patents, Trademarks and Copyrights. The Company has no
registered trademarks, tradenames or service marks and, to Seller's Knowledge,
has no pending applications or registrations with respect to the foregoing.
The Company uses "Peripheral Computer Support," "PCS" and the Company's logo
(collectively, the "Trademarks") as tradenames and for trademarks and/or
service marks. Seller may have common law rights to the Trademarks. To
Seller's Knowledge, the Company has not received notice from any third party
that the use of the Trademarks by the Company infringes the rights of third
parties. While the Company believes that its processes, pricing, business
plans and other confidential information are important to its business and may
be deemed to be trade secrets, the Company has no patents, copyrights or other
intellectual property that it deems proprietary, and no such rights of third
parties are used in the Company's business except for standard third party
noncustom software (e.g., Windows 95, etc.) which the Seller believes the
Company has adequate rights to use. To Seller's Knowledge, the Company is not
infringing, or otherwise unlawfully using, patents, copyrights or other
intellectual property rights of third parties. The Company is using no other
trademarks or trade names other than the Trademarks and Seller's name in its
business.
(k) Contracts, Leases and Commitments. Seller has furnished to
Purchaser true copies of the contracts, leases and commitments listed in
Schedule 5(k) hereto, including summaries of the terms of any unwritten
commitments. To Seller's Knowledge and to ▇▇▇▇▇▇'▇ Knowledge (other than with
respect to any leases), except as set forth in that Schedule: (1) the Company
and the other parties thereto have complied in all material respects with such
contracts, leases and commitments, all of which are valid and enforceable;
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(2) such contracts, leases and commitments are in full force and effect and
there exists no event or condition which with or without notice or lapse of
time would be a default thereunder, give rise to a right to accelerate or
terminate any provision thereof or give rise to any lien, claim, encumbrance or
restriction on any of the Assets of the Company; and (3) all of such contracts,
leases and commitments have been entered into on an arm's-length basis. To
Seller's Knowledge and to ▇▇▇▇▇▇'▇ Knowledge (other than with respect to any
leases), the Company is not a party, nor are any of its Assets or business
subject, to any contract, open purchase order, lease or commitment not listed
in such Schedule (including without limitation purchase or sales commitments,
license agreements, financing or security agreements or guaranties, repurchase
agreements, agency agreements, manufacturers representative agreements,
commission agreements, employment or collective bargaining agreements, pension,
bonus or profit-sharing agreements, group insurance, medical or other fringe
benefit plans, and leases of real or personal property), other than (i)
contracts terminable without penalty on not more than 30 days' notice that do
not involve, individually or in the aggregate, the receipt or expenditure of
more than $50,000 in any one year, and (ii) immaterial contracts for leases and
standard services which do not, individually, require payments of more than
$2,000 per month or, in the aggregate, require payments in the aggregate
exceeding $50,000 per year. If any of the contracts listed in Schedule 5(k)
should provide for expiration or be subject to termination before the Closing,
Seller after consultation with Purchaser shall cause the Company to use all
reasonable efforts to extend such contracts on reasonable terms in accordance
with the Company's past practice.
(l) Inventory. Schedule 5(l) hereto contains a list of the
Company's inventory as at December 31, 1996, setting forth a brief description
of each item by category and quantity, and by unit and aggregate values.
Except for inventory that has been adequately reserved against on the Company's
Draft Audited Financial Statements or spare parts which are used by the Company
in the normal course of its business, the Company's inventory is in good and
marketable condition and is saleable in the normal course of the Company's
business. Each item of the Company's inventory will be carried on the Audited
Balance Sheet, and is carried on the Draft Audited Balance Sheet, at the lower
of cost or market, with cost determined on a first-in, first-out basis in
accordance with United States generally accepted accounting principles.
Inventory conforming to this representation and warranty shall be deemed
"Eligible Inventory."
(m) Accounts Receivable; Accounts Payable. Schedule 5(m) hereto is
an accurate aged list of the Company's accounts receivable as at December 31,
1996. Except as set forth on Schedule 5(m) hereto, the Company's accounts
receivable arose in the ordinary course of business for goods or services
delivered or rendered, constitute only valid, undisputed claims, and are not
subject to counterclaims or setoffs. Except as set forth on Schedule 5(m)
hereto, all of the Company's accounts payable arose in the ordinary course of
business for goods or services delivered or rendered to the Company and all of
the Company's material accounts payable have been paid in a reasonably timely
manner and there has been no material change in the aging of payables since
December 31, 1996.
(n) Permits; Compliance with Laws. The Company holds the
governmental licenses, permits and authorizations listed in Schedule 5(n)
hereto which,
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except as set forth in that Schedule, are valid and unimpaired, will be
unaffected by a transfer of all of the Shares of the Company to Purchaser, and
constitute all of the licenses, permits and authorizations required for the
ownership or occupancy of its properties and Assets and the operation of its
business. The Company's business is and has been operated in compliance
therewith in all material respects and all laws and regulations (federal,
state, local and foreign) applicable to it, and all required reports and
filings with governmental authorities have been properly made. The
consummation of the transactions contemplated by this Agreement will not give
rise to any liability of the Company for severance pay or termination pay.
Except as set forth on Schedule 5(n), since June 29, 1995 and, to Seller's
Knowledge, for the fourteen (14) months prior thereto, the Company has not
entered into any agreement with, had any material dispute with, or been
investigated by, any governmental authority or like third party.
(o) Employees. Schedule 5(o) hereto contains a list of the names,
office locations, compensation and dates of hire for all employees of the
Company as at December 31, 1996 with compensation in excess of $50,000. Except
as disclosed on Schedule 5(o) hereto, to Seller's Knowledge and to ▇▇▇▇▇▇'▇
Knowledge, there have been no efforts within the last three years to attempt to
organize the Company's employees, and no strike or labor dispute involving the
Company has occurred during the last three years or, to Seller's Knowledge and
to ▇▇▇▇▇▇'▇ Knowledge, is threatened. Except as set forth on Schedule 5(o),
the Company has complied in all material respects with applicable wage and
hour, equal employment, safety and other legal requirements relating to its
employees.
(p) Employee Benefit Plans. Neither the Company nor any member of
any controlled group (within the meaning of Section 4001(a)(14) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 414(b),
(c), (m) or (o) of the Code of which the Company was at any time a member (a
"Controlled Group Member"), has ever maintained or presently maintains or has
any obligation or liability with respect to any "employee benefit plan" subject
to Title IV of ERISA or Section 412 of the Code. Neither the Company nor its
predecessors or a Controlled Group Member has ever contributed to or otherwise
participated in or has any obligation or liability with respect to or has been
required to contribute to or otherwise participate in any "multiemployer plan",
as defined in Section 4001(a)(3) of ERISA or any single employer pension plan
(within the meaning of Section 400(a)(15) of ERISA) which is subject to
Sections 4063 and 4064 of ERISA. Schedule 5(p) contains a true and complete
list of each employee benefit plan within the meaning of Section 3(3) of ERISA
and any other pension, retirement, profit-sharing, deferred compensation,
option, bonus, stock, welfare, medical, disability, insurance, severance,
incentive or other benefit plan, whether written or oral, maintained by the
Company or a Controlled Group Member, or to which the Company contributes, for
any of the Company's employees or under which the Company has or could have any
obligation or liability (each a "Plan" and, collectively, the "Plans"), setting
forth the name of the Plans and the names and addresses of the trustees, and
the basis of the Company's contributions. True and complete copies of each of
the Plans and related trusts are available for review by Purchaser. There has
also been furnished the three most recent actuarial report required to be
prepared with respect to any of such Plans, the most recent Internal Revenue
Service
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("Service") determination letter, the most recent Summary Plan Description and
the most recent Annual Report on Form 5500 series.
The Company is not liable for and will not be liable for any
liability of any other Controlled Group Member (including predecessors) with
regard to any "employee benefit plan" (within the meaning of Section 3(3) of
ERISA) including, without limitation, withdrawal liability. The Company, each
Controlled Group Member, each Plan and each "plan sponsor" or "administrator"
(within the meaning of Section 3(16) of ERISA) of each "welfare benefit plan"
(within the meaning of Section 3(1) of ERISA) has complied in all material
respects with the requirements of Section 4980B of the Code and Title I,
Subtitle B, Part 6 of ERISA.
With respect to each of the Plans on Schedule 5(p):
(i) with respect to each Plan intended to be qualified under
Section 401(a) of the Code, the Plan is so qualified, and a determination
letter from the Service has been received to the effect that the Plan is
qualified under Section 401(c) of the Code and any trust maintained pursuant
thereto is exempt from federal income taxation under Section 501 of the Code,
and Seller and the Company know of no event or circumstances which has occurred
or will occur through the Closing Date (including without limitation the
transactions contemplated by this Agreement) which would cause the loss of such
qualification or exemption or the imposition of any penalty or tax liability;
(ii) all contributions required by the Plan or by law with
respect to all periods through the Closing Date shall have been made by such
date (or provided for by the Company by adequate reserves on its financial
statements) including, without limitation, the discretionary profit sharing
contribution determined to be made by the Company's Board of Directors with
respect to the plan year ending December 31, 1996;
(iii) there are no violations of ERISA with respect to the
filing of applicable reports, documents and notices regarding the Plan with the
Secretary of Labor or Secretary of the Treasury or furnishing such documents to
participants or beneficiaries, as the case may be which in the aggregate would
give rise to a material liability;
(iv) except as disclosed on Schedule 5(p), no material claim,
lawsuit, arbitration or other material action has been threatened in writing,
asserted or instituted against the Plan, any trustee or fiduciary thereof,
Seller, the Company or any of the assets of any trust or the Plan, other than
routine claims for benefits;
(v) all amendments required to bring the Plan into conformity
with any of the applicable provisions of ERISA and the Code have been duly
adopted;
(vi) any bonding required with respect to the Plan in accordance
with applicable provisions of ERISA has been obtained and is in full force and
effect;
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(vii) the Plan has been maintained in all material respects
in accordance with its terms and related documents and the terms and the
provisions of all applicable laws, including without limitation, ERISA (and the
rules and regulations thereunder);
(viii) neither Seller, the Company, nor to the knowledge of
Seller and the Company, any other party has engaged in a "prohibited
transaction," as such term is defined in Section 4975 of the Code or Section
406 of ERISA, with respect to the Plan (and the transactions contemplated by
this Agreement will not constitute or directly or indirectly result in such a
"prohibited transaction") which could subject the Company, Seller or the
Purchaser, or any officer, director or employee of any of the foregoing, or any
trustee, administrator or other fiduciary of the Plan, to a material tax or
penalty on prohibited transactions imposed by ERISA or the Code;
(ix) Seller has not been notified of an audit of any Plan
by the Service or the Department of Labor; and
(x) the Company is not obligated to maintain, contribute
to, or in any way provide for any post-employment benefits of any kind
whatsoever (other than under Section 4980B of the Code, the Federal Social
Security Act or a plan qualified under Section 401(a) of the Code) to any
current or future retiree or terminee.
(xi) No Plan is "Voluntary employees beneficiary
association" within the meaning of Code Section 501(c)(9) or a "Welfare
benefit" within the meaning of Section 419 of the Code.
(q) Insurance. Schedule 5(q) hereto contains a complete and correct
list of all policies of insurance of any kind or nature covering the Company,
including without limitation policies of life, fire, theft, casualty, product
liability, workmen's compensation, business interruption, employee fidelity and
other casualty and liability insurance, indicating the type of coverage, name
of insured, the insurer, the premium, the expiration date of each policy and
the amount of coverage. All such policies (i) are with insurance companies
reasonably believed by Seller to be financially sound and reputable and are in
full force and effect; (ii) are sufficient for compliance with all requirements
of law and of all applicable agreements; (iii) are valid, outstanding and
enforceable policies; and (iv) provide adequate insurance coverage for the
assets and operations of the Company for all risks normally insured against by
persons carrying on the same business as the Company. All premiums payable
with respect to such policies have been paid. Complete and correct copies of
such policies have been furnished to Purchaser. Prior to the Closing, Seller
shall cause the Company to maintain in full force and effect all such policies
of insurance or comparable insurance coverage. Since December 31, 1993, the
Company has not been denied any insurance coverage which it has requested or
made any material reduction in the scope or change in the nature of its
insurance coverage. The products liability and personal injury insurance
maintained by the Company has been on a "claims made" basis during the two-year
period prior to the Closing Date.
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(r) Litigation. Schedule 5(r) hereto contains a complete and
correct list of all actions, suits, proceedings, claims or governmental
investigations pending or, to Seller's Knowledge and to ▇▇▇▇▇▇'▇ Knowledge,
threatened against, the Company or any of its Assets, or, in connection with
the Company's business, Seller or any of the Company's officers, directors or
employees. Except as set forth on Schedule 5(r) hereto, neither the Company
nor, in connection with the Company's business, Seller or any of the Company's
officers, directors or employees, is subject or party to any judgment, order,
or other direction of or stipulation with any court or other governmental
authority or tribunal, or, to the Seller's Knowledge, in violation of any other
legal requirements (as defined in subparagraph 5(t) below), and, to Seller's
Knowledge, no reasonable basis for a claim of such a violation exists. To the
Seller's Knowledge, there are no proposed legal requirements that might
adversely affect in any material respect the operation or prospects of the
Company's business.
(s) Environmental Matters.
(i) Definitions. As used herein, the following terms shall
have the following meanings: (A) "Environmental Laws" shall mean all federal,
state, local or common laws, rules, regulations, ordinances and directives
relating to the protection of human health and the environment and any permits,
licenses, authorizations or approvals issued thereunder; (B) "Hazardous
Materials" shall mean any substance subject to regulation under Environmental
Laws as a hazardous substance, hazardous waste, hazardous material, toxic
substance, pollutant or contaminant or similar denomination intended to classify
substances by reason of toxicity, carcinogenicity, ignitability, corrosivity or
reactivity and includes pesticides and petroleum and petroleum-derived products
and chlorinated solvents.
(ii) To Seller's Knowledge and to ▇▇▇▇▇▇'▇ Knowledge, the
Company has not caused or permitted to exist, as a result of an intentional or
unintentional action or omission, a disposal, discharge, emission, release or
threatened release of a Hazardous Material on, from or under any property now
or previously owned or operated by the Company, or by any entity from which the
Company may have acquired liability contractually or by operation of law, other
than in compliance with the Environmental Laws or a permit or approval issued
thereunder.
(iii) To Seller's Knowledge and to ▇▇▇▇▇▇'▇ Knowledge, there
are no underground storage tanks, asbestos containing material, polychlorinated
biphenyls or Hazardous Materials at any property now or previously owned by the
Company or leased or operated by the Company, other than Hazardous Materials
maintained in small quantities and in their original containers for use in the
ordinary course of business.
(iv) To Seller's Knowledge and to ▇▇▇▇▇▇'▇ Knowledge, there
are no conditions existing at any real property now or previously owned or
operated by the Company, or by any entity from which the Company may have
acquired liability contractually or by operation of law, which require, or
which with the giving of notice or the passage of time or both would require,
remedial action, removal or closure by the Company pursuant to Environmental
Laws.
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(t) Restrictions. The authorization, execution, delivery and
performance of Seller's Documents and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) violate any of the
provisions of the Company's Articles of Incorporation or By-Laws, (ii) except
as set forth on Schedule 5(t), violate, conflict with, result in a breach of or
constitute a default under, require any notice or consent under, give rise to a
right of termination of, or accelerate the performance required by, any terms
or provisions of any agreement, instrument or writing of any nature to which
the Company or Seller is a party or is bound, or any of their Assets or
business is subject, (iii) subject to compliance with the ▇▇▇▇- ▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act"), violate, or result in a breach of, conflict with,
or require any notice, filing or consent under, any statute, rule, regulation
or other provision of law, or any order, judgment or other direction of a court
or other tribunal, or any other governmental requirement, permit, registration,
license or authorization applicable to the Company, Seller or any of their
Assets or business, in each case whether foreign or domestic (collectively,
"legal requirements"), or (iv) result in the creation of any lien, claim,
encumbrance or restriction on any of the Company's Assets or properties.
Except as set forth on Schedule 5(t), the Company is not party to any
non-compete or similar agreement which in any way restricts the operation of
the Company's business.
(u) Transactions with Affiliates.
(i) Since December 31, 1996, the Company has made no dividends
in respect of its capital stock or other distributions or payments of any kind
whatsoever whether in cash or other property to Seller or any of its
subsidiaries or affiliates, except (w) payments to Seller for payroll and
payroll taxes, insurance and similar matters where the payment to Seller is
equal to the amount paid by Seller to the Company or to the Company employees
or to an unaffiliated third party on behalf of the Company, (x) payments made
for commercial repair transactions at arms length pricing in the ordinary
course of the Company's business and consistent with past practice and which do
not adversely affect the Company, (y) the payment to Seller of $2,192,261
(inclusive of payment made through the Closing Date) relating to the Cerplex
S.A.S. inventory and (z) the $180,000 payment to Seller made in January 29,
1997 relating to the transfer of profits for preceding quarters ("Permitted
Intercompany Transactions"). No payment made to Seller with respect to the
Cerplex S.A.S. inventory pursuant to clause (y) above shall (1) result in the
creation of any lien, claim, encumbrance or restriction on any of the Company's
Assets or properties, (2) result in the creation of any obligation on the part
of the Company to Cerplex S.A.S. or any other affiliate or subsidiary of Seller
or any third party or (3) violate any legal requirement (as defined in
subparagraph 5(t) above).
(ii) Except as set forth in Schedule 5(u) hereto and except for
ordinary dealings with its employees and employment arrangements, since June
29, 1995, Seller and, to Seller's Knowledge, the Company have had no direct or
indirect dealings with ▇▇ ▇▇▇▇▇▇ or with any other key employee of the Company
or with any of their affiliates, associates or relatives. Except as set forth
in Schedule 5(u) and except for employment arrangements with its employees, the
Company has no obligation to or claim against ▇▇ ▇▇▇▇▇▇ or any other key
employee of the Company, or any of their affiliates, associates or
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relatives, and no such person or entity has any obligation to or claim against
the Company. To Seller's Knowledge, Schedule 5(u) reasonably describes the
nature and extent of any products, services or benefits provided to the Company
by any such person or entity without a corresponding charge equal to the fair
market value of such products, services or benefits. To Seller's Knowledge,
neither ▇▇ ▇▇▇▇▇▇, any other key employee of the Company, nor any of their
affiliates, associates or relatives has any direct or indirect interest of any
kind in any business or entity which is competitive with the Company.
(v) Books and Records. The books and records of the Company from
which the Company's financial statements are prepared are complete and correct
in all material respects. The minute books of the Company, as previously made
available to Purchaser, contain complete and accurate records of all meetings
and accurately reflect all other corporate action of the shareholders and board
of directors of the Company.
(w) Illegal Payments. To Seller's Knowledge and to ▇▇▇▇▇▇'▇
Knowledge, the Company and its officers, directors, employees and agents have
not made any illegal payments to, or provided any illegal benefit or inducement
for, any governmental official, supplier, customer or other person, in an
attempt to influence any such person to take or to refrain from taking any
action relating to the Company.
(x) Officers and Directors; Bank Accounts, etc. Schedule 5(x)
hereto lists all officers, directors and fiduciaries of the Company; all bank
accounts and safe deposit boxes maintained by the Company and all authorized
signatories therefor, specifying their respective authority; and all credit
cards under which employees of the Company may incur liability, and the persons
holding such cards. No person or entity holds any general or special power of
attorney from the Company.
(y) Expenses Related to this Agreement. The Company has not paid
for any expenses incident to the negotiation or preparation of Seller's
Documents or for any broker's, finder's or similar fee.
(z) Accuracy of Documents and Information. To Seller's Knowledge,
no representations or warranties made by Seller in this Agreement, nor any
schedule, certificate or exhibit attached to this Agreement or furnished by
Seller as required by Section 10 hereof, contains or will contain as of the
Closing any untrue statement of a material fact, or omits or will omit as of
the Closing to state a material fact necessary to make the statements or facts
contained herein or therein not misleading.
6. Representations and Warranties of Purchaser. Purchaser and
Lincolnshire represent, warrant and agree that:
(a) Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Purchaser has not conducted any business prior to the date
hereof, and has no material assets or liabilities. Lincolnshire is a limited
partnership organized under the State of Delaware.
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(b) Execution and Effect of Agreement. Each of Purchaser and
Lincolnshire, as appropriate, has the full right, power and authority to enter
into and perform this Agreement, the Tax Allocation Agreement, the Escrow
Agreement and all other agreements, certificates and documents executed or
delivered or to be executed or delivered by Purchaser in connection herewith
(collectively, with this Agreement, "Purchaser's Documents"). Each of
Purchaser and Lincolnshire, as appropriate, has taken all actions necessary to
authorize it to execute, deliver and perform Purchaser's Documents. This
Agreement has been duly executed and delivered by Purchaser and Lincolnshire
and Purchaser's Documents are (or when executed and delivered by Purchaser and
Lincolnshire, will be) legal, valid and binding obligations of Purchaser and
Lincolnshire, enforceable in accordance with their respective terms.
(c) Restrictions. The authorization, execution, delivery and
performance of Purchaser's Documents and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) violate any of the
provisions of Lincolnshire's partnership agreement or Purchaser's Certificate
of Incorporation or By-Laws, (ii) violate, conflict with, result in a breach of
or constitute a default under, require any notice or consent under, give rise
to a right of termination of, or accelerate the performance required by, any
terms or provisions of any agreement, instrument or writing of any nature to
which Purchaser or Lincolnshire is a party or is bound or any of its Assets or
business is subject, or (iii) subject to compliance with the HSR Act, violate,
conflict with or result in a breach of, or require any notice, filing or
consent under, any statute, rule, regulation or other provision of law, or any
order, judgment or other direction of a court or other tribunal, or any other
governmental requirement, permit, registration, license or authorization
applicable to Purchaser or Lincolnshire.
7. Covenants of Seller. Seller covenants and agrees that between
the date hereof and the Closing:
(a) Access by Purchaser. Purchaser and its officers, directors,
employees, accountants, representatives and advisers, and those of its
affiliates, shall have free and full access during normal business hours (upon
prior notice to the Company) to the Company's assets, premises, books and
records, key employees and accountants, including the audit work papers of
KPMG, and its customers and suppliers, and the Company shall furnish Purchaser
with such information and copies of such documents as Purchaser may reasonably
request. In addition to the requirements of Section 3 hereof, Seller or the
Company shall promptly furnish to Purchaser all financial statements of the
Company that are prepared in the ordinary course of business, including without
limitation monthly reports of sales, revenue and cash flow and quarterly and
monthly balance sheets.
(b) Conduct of Business. Except as expressly permitted or required
below, the business of the Company shall be conducted only in the ordinary
course, consistent with the present conduct of its business, and Seller and the
Company shall use all reasonable efforts to maintain, preserve and protect the
Assets and goodwill of the Company. The Company shall not, without the prior
written consent of Purchaser, take or commit to take any of following actions:
(i) amend its By-Laws or Certificate of Incorporation, (ii) issue
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any additional shares of capital stock or issue, sell or grant any option or
right to acquire or otherwise dispose of any of its authorized but unissued
capital stock or other corporate securities, (iii) declare or pay any dividends
or make any other distribution in cash or property on its capital stock other
than Permitted Intercompany Transactions, (iv) repurchase or redeem any shares
of its capital stock, (v) incur, or perform, pay or otherwise discharge, any
obligation or liability (absolute or contingent), except for current
obligations and liabilities incurred in the ordinary course of business
consistent with past practice, (vi) enter into any employment agreement with,
or become liable for any bonus, profit-sharing or incentive payment to, or
increase the compensation or benefits of, any of its officers, directors or
employees, except pursuant to presently existing plans, arrangements or
agreements disclosed herein or in a schedule hereto, other than normal year-end
bonuses and year-end salary increases, (vii) sell, transfer or acquire any
properties or Assets, tangible or intangible, other than in the ordinary course
of business, (viii) make any material changes in its customary method of
operations, including marketing, selling and pricing policies and maintenance
of business premises, fixtures, furniture and equipment, (ix) modify, amend or
cancel any of its existing leases or enter into any contracts, agreements,
leases or understandings other than in the ordinary course of business or enter
into any loan agreements, (x) make any investments other than in certificates
of deposit or short- term commercial paper, (xi) make any payments or incur any
liability in connection with expenses incident to the negotiation or
preparation of Seller's Documents, (xii) accelerate or discount the collection
of accounts receivable, nor delay the payment of accounts payable or (xiii)
make any dividend, cash distribution or payment to Seller or any of its
subsidiaries or affiliates other than Permitted Intercompany Transactions.
Notwithstanding the foregoing, the Company shall make the payment to Seller of
the unpaid balance on the original amount of $2,192,261 relating to the Cerplex
S.A.S. Inventory prior to Closing.
(c) Supplements. If any representation, warranty or statement of
Seller, or any schedule delivered to Purchaser, shall be or become incorrect,
Seller, as the case may be, shall deliver to Purchaser a supplement in order
that, if possible, said representation, warranty, statement, or schedule, as so
supplemented, shall be true and correct. It is understood and agreed that the
delivery of such a supplement to Purchaser shall not in any manner constitute a
waiver by Purchaser of any of its rights under this Agreement, provided that if
(i) a representation, warranty or statement of Seller prior to the Closing, or
any schedule delivered to Purchaser, shall become incorrect after the date
hereof, (ii) Seller as soon as possible delivers to Purchaser at least five (5)
business days prior to the Closing (in accordance with Section 18 hereof) a
supplement in order that said representation, warranty, statement, or schedule,
as so supplemented, shall be true and correct, and (iii) Seller provides
Purchaser with such other information as Purchaser may reasonably request in
connection with such supplement, then Purchaser shall, at its sole option,
elect (x) to consummate the Closing and thereby cure and correct for all
purposes any breach of representation, warranty or statement which would have
existed by reason of Seller not having made such supplement or (y) if Purchaser
determines in its sole discretion that such representation, warranty or
statement was material, to terminate this Agreement, without further liability
on the part of the parties hereto.
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(d) Employment. If Purchaser fails to continue to employ all
employees listed on Schedule 7(d) at each employee's current pay for at least
thirty (30) days and institute a severance policy which complies with the
requirements of ERISA, Purchaser will cause the Company to be responsible for
any and all liabilities associated with such failure and the limitations under
Section 16 shall not apply to any breach of this Section. The Company will
retain all liability for payment of the accrued but unused vacation, floating
holidays and occasional absence accruals on Schedule 7(d).
8. Covenants of Purchaser. Purchaser covenants and agrees that
between the date hereof and the Closing:
(a) Representations and Warranties. Purchaser will not take any
action which would cause any of the representations and warranties made by it
in Purchaser's Documents not to be true and correct in all material respects on
and as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing Date.
(b) Best Efforts to Close. Purchaser and Lincolnshire acknowledge
that time is of the essence for Seller with respect to the Closing of this
Agreement, and agree to use their best efforts to cause the Closing to occur as
soon as practicable after the date hereof. Such efforts shall include good
faith efforts to expedite to the extent reasonably possible the receipt of
financing from their equity and debt sources without requiring its equity
sources to fund more quickly than required by its existing agreements.
9. Conditions Precedent to Obligations of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing, of each of
the following conditions, any of which may be waived by Purchaser in writing,
and Seller shall use its best efforts to cause such conditions to be fulfilled:
(a) Representations and Warranties. Each of the representations and
warranties of Seller in Seller's Documents shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date, except to the extent that any of
such representations and warranties refers specifically to a date other than
the Closing Date, in which case such representations and warranties shall be
true and correct in all material respects on and as of such date.
(b) Performance of Seller. Seller shall have, or shall have caused
the Company to have, performed and complied in all material respects with all
agreements, covenants and conditions required by Seller's Documents to be
performed or complied with by Seller or the Company at or before the Closing.
(c) Delivery of Shares. All of the Shares shall have been delivered
to Purchaser for purchase by it on the Closing Date in accordance with Section
11(a)(i) hereof.
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(d) Employment Agreement. ▇▇ ▇▇▇▇▇▇ shall have entered into an
employment agreement, management stockholders agreement, subscription agreement
and noncompete agreement (collectively, the "Employment Agreement").
(e) Opinion of Counsel to Seller. Seller shall have delivered to
Purchaser an opinion of ▇▇▇▇▇▇▇ Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel to Seller,
dated the Closing Date, in the form attached hereto as Exhibit D (the "BPH
Opinion").
(f) Certificate. Purchaser shall have received a certificate
executed by Seller dated the Closing Date, certifying as to the fulfillment of
the conditions set forth in Sections 9(a), (b), (c), (g), (j), (k), (l) and (m)
("Seller's Certificate").
(g) Litigation. No action or proceeding shall be pending or
threatened before any court, tribunal or governmental body, and no claim or
demand shall have been made against Purchaser, Seller or the Company, seeking
to restrain or prohibit or to obtain damages or other relief in connection with
the consummation of the transactions contemplated by Seller's Documents or
Purchaser's Documents, or which might materially affect the business of the
Company.
(h) Escrow Agreement. Seller shall have entered into the Escrow
Agreement with Purchaser and the Escrow Agent in the form of Exhibit B hereto.
(i) Financing. Purchaser shall have obtained bank financing (the
"Financing") for the purchase of the Shares contemplated by this Agreement on
terms and conditions reasonably satisfactory to it.
(j) Release of Liens. Purchaser shall have received evidence (the
"Release Evidence") reasonably satisfactory to Purchaser, of the termination of
all loan agreements and security agreements relating to the Assets of the
Company or the Shares, of the termination and release of all liens and security
interests in the Assets of the Company and in the Shares and of the termination
of any UCC financing statements except with respect to equipment leased to the
Company, the existence of which are not material.
(k) No Material Adverse Change. Purchaser shall have received at
least five (5) business days prior to the Closing Date, the Audited Financials
and Audited Balance Sheet. There shall have been no material adverse change in
the financial condition, results of operations, business or prospects of the
Company described in the Audited Financials and Audited Balance Sheet from the
financial condition, results of operations, business or prospects of the
Company described in the Draft Audited Financials and Draft Audited Balance
Sheet, except for the elimination of (i) "Due from parent" of $1,152,292 and
(ii) "Due from affiliates" of $1,363 from the Assets shown on the Draft Audited
Balance Sheet and the corresponding reduction in total stockholders' equity.
(l) Intercompany Indebtedness. Since December 31, 1996, there shall
have been no intercompany transactions between the Company and Seller or its
affiliates other than Permitted Intercompany Transactions.
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(m) No Payments to Affiliates. Since December 31, 1996 and up to
and including the Closing Date, the Company shall have made no dividends,
distributions or payments whatsoever, whether in cash or other property, to
Seller or any of its subsidiaries or affiliates, other than Permitted
Intercompany Transactions.
(n) Tax Allocation Agreement. Seller shall have entered into the
Tax Allocation Agreement with Purchaser in the form of Exhibit C hereto.
(o) HSR Act. The expiration or early termination of the applicable
waiting period under the HSR Act shall have occurred (the "HSR Condition").
10. Conditions Precedent to Obligations of Seller. The obligations
of Seller to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, at or before the Closing, of each of the following
conditions, any of which may be waived by Seller in writing, and Purchaser
shall use its best efforts to cause such conditions to be fulfilled:
(a) Representations and Warranties. The representations and
warranties of Purchaser and Lincolnshire in Purchaser's Documents shall be true
and correct in all material respects on and as of the Closing Date with the
same force and effect as though the same had been made on and as of the Closing
Date, except to the extent that any of such representations and warranties
refers specifically to a date other than the Closing Date, in which case such
representations and warranties shall be true and correct in all material
respects on and as of such date.
(b) Performance by Purchaser. Purchaser shall have performed and
complied in all material respects with the agreements, covenants and conditions
required by Purchaser's Documents to be performed or complied with by it at or
before the Closing.
(c) Purchase Price. The Purchase Price shall have been paid as
provided in Section 4(a) above. If applicable, the ▇▇▇▇▇▇ release shall be
unconditional and in form and substance reasonably satisfactory to Seller.
(d) Opinion of Counsel to Purchaser. Purchaser shall have delivered
to Seller an opinion of Proskauer ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to
Purchaser, dated the Closing Date, in form and substance reasonably
satisfactory to Seller and its counsel (the "PRG&M Opinion").
(e) Certificate. Seller shall have received a certificate executed
by Purchaser, dated the Closing Date, certifying as to the fulfillment of the
conditions set forth in Sections 10(a), (b), (c) and (f).
(f) Litigation. No action or proceeding shall be pending or
threatened before any court, tribunal or governmental body, and no claim or
demand shall have been made against Purchaser, Seller or the Company, seeking
to restrain or prohibit or to obtain
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damages or other relief in connection with the consummation of the transactions
contemplated by Purchaser's Documents or Seller's Documents.
(g) Escrow Agreement. Purchaser shall have entered into the Escrow
Agreement with Seller and the Escrow Agent in the form of Exhibit B attached
hereto.
(h) Tax Allocation Agreement. Purchaser shall have entered into the
Tax Allocation Agreement with Seller in the form of Exhibit C hereto.
(i) Lender Consents. Seller shall have obtained all consents and/or
waivers required under the loan agreements with Seller's senior and/or
subordinated lenders in connection with the execution, delivery and performance
of Seller's Documents and the transactions contemplated thereby.
(j) HSR Act. The expiration or early termination of the applicable
waiting period under the HSR Act shall have occurred (the "HSR Condition").
(k) Payment of Permitted Intercompany Transactions. All Permitted
Intercompany Transactions, which include the remaining balance of the
$2,192,261 relating to the Cerplex S.A.S. Inventory, shall be paid on or prior
to Closing.
11. Closing Deliveries.
(a) Deliveries of Seller. At the Closing, Seller shall deliver, or
shall cause to be delivered, to Purchaser, the following:
(i) Certificates representing the Shares, without legends,
duly endorsed in blank or accompanied by stock powers duly endorsed in blank, as
Purchaser may designate, together with any required stock transfer tax stamps
affixed and cancelled and all taxes on such transfer, if any, paid in full, all
at the expense of Seller. Such Shares shall be delivered to Purchaser, free
and clear of all claims.
(ii) The Tax Allocation Agreement.
(iii) The BPH Opinion.
(iv) Seller's Certificate.
(v) Escrow Agreement.
(vi) The Release Evidence.
(vii) Duly executed resignations of such officers, directors
and fiduciaries of the Company as Purchaser shall designate at least two days
prior to the Closing.
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(b) Deliveries of Purchaser. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller the following:
(i) The Purchase Price, less the Escrowed Amount, by certified
or official bank check or by wire transfer, as Seller may select.
(ii) The PRG&M Opinion.
(iii) Purchaser's Certificate.
(iv) Escrow Agreement.
(v) The Tax Allocation Agreement.
(c) Deliveries to the Escrow Agent. At the Closing, Purchaser shall
deliver or cause to be delivered to the Escrow Agent, the Escrowed Amount.
12. Restrictive Covenant. For two years (five years in the case of
▇▇ ▇▇▇▇▇▇) after the Closing Date, each of Seller and Purchaser shall not, and
shall not permit its affiliates, to directly or indirectly solicit the services
of (whether as an employee, officer, consultant, independent contractor or
otherwise), any person who is then (or was at any time within one year (two
years in the case of ▇▇ ▇▇▇▇▇▇) prior to the time of such solicitation) an
employee, officer, sales representative or agent of the Company or of Seller,
respectively. Because the breach or attempted or threatened breach of this
restrictive covenant will result in immediate and irreparable injury to
Purchaser or Seller, as the case may be, for which Purchaser or Seller, as the
case may be, will not have an adequate remedy at law, Purchaser or Seller, as
the case may be, shall be entitled, in addition to all other remedies, to a
decree of specific performance of this covenant and to a temporary and
permanent injunction enjoining such breach, without posting bond or furnishing
similar security. The provisions of this Section 12 are in addition to and
independent of any agreements or covenants contained in any other agreement
between the Company and Seller.
13. Brokers. Each party represents to the other that it has had no
dealings with any broker or finder in connection with the transactions
contemplated by this Agreement. Should any other claim be made for a broker's,
finder's or similar fee, on account of any actions or dealings by a party or
its agents, such party shall indemnify and hold the other party harmless from
and against any and all liability and expenses, including reasonable attorneys'
fees incurred by reason of any claim made by such broker.
14. Indemnification by Seller. Subject in all respects to Section
16, Seller shall indemnify, defend and hold harmless Purchaser and its
affiliates (including the Company), promptly upon demand at any time and from
time to time, against any and all losses, liabilities, claims, actions, damages
and expenses, including without limitation reasonable attorneys' fees and
disbursements (collectively, "Losses"), arising out of or in connection with
any of the following: (a) any misrepresentation or breach of any warranty made
by Seller in any of Seller's Documents, (b) any breach or nonfulfillment of any
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covenant or agreement made by Seller in any of Seller's Documents and (c) the
sale of Peripheral Computer Support GmbH, a German corporation and a former
subsidiary of the Company.
15. Indemnification by Purchaser. Subject in all respects to Section 16,
Purchaser and Lincolnshire shall indemnify, defend and hold harmless Seller,
promptly upon demand at any time and from time to time, against any and all
Losses arising out of or in connection with any of the following: (a) any
misrepresentation or breach of any warranty made by Purchaser in any of
Purchaser's Documents and (b) any breach or nonfulfillment of any covenant or
agreement made by Purchaser in Purchaser's Documents.
16. Further Provisions Regarding Indemnification.
(a) Survival. Subject to Section 16(b), all representations,
warranties, indemnities, covenants and agreements made by Seller and Purchaser
in Seller's or Purchaser's Documents shall survive the Closing, notwithstanding
any examination or investigation made by or for any party; provided, however,
(i) that the representations and warranties made by Seller (other than Sections
5(a), 5(c) and 5(s)) and Purchaser in this Agreement shall expire on the first
anniversary of the Closing Date, (ii) the representations and warranties made
by Seller in Section 5(a) and Section 5(c) hereof shall not expire, (iii) the
representations and warranties made by Seller in Section 5(s) shall expire on
the date that all applicable statute of limitations with respect to
Environmental Laws have expired and (iv) the survival of representations and
warranties, covenants and obligations contained in the Tax Allocation Agreement
shall be as set forth in Section 5.2 of the Tax Allocation Agreement; and
provided further, however, that any claims for indemnification that have been
made before such dates shall survive until the final resolution thereof.
(b) Limitations.
(i) Neither Seller nor Purchaser (each sometimes being
hereinafter referred to in this Section 16 as a "party") shall be entitled to
indemnification for Losses arising out of matters referred to in Section 14(a)
or Section 15(a), as applicable, unless it shall have given written notice to
the other party, setting forth its claim for indemnification in reasonable
detail, prior to the expiration of the applicable representation, warranty,
obligation, covenant or agreement as set forth in Section 16(a) above or the
Tax Allocation Agreement.
(ii) Notwithstanding anything contained in this Agreement to the
contrary, Seller (1) shall have no obligation hereunder to provide
indemnification for the first $100,000 of Losses (without counting Losses from
Immaterial Claims, as defined below), (2) shall have no further indemnification
obligation hereunder once Seller has paid to Purchaser a total of $4,000,000 in
Losses for all claims other than Ownership Claims, Capitalization Claims, Tax
Claims and Environmental Claims (each as defined below), (3) Seller shall have
no further indemnification obligation hereunder for all claims for Losses
(inclusive of claims regarding a breach of Section 5(a) hereof (an "Ownership
Claim"), Section 5(c) hereof (a "Capitalization Claim"), Section 5(s) hereof
(an "Environmental Claim"), and the Tax
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Allocation Agreement (a "Tax Claim")) once Seller has paid to Purchaser an
amount equal to $15,000,000 and (4) in no event shall Seller or Purchaser have
any liability for any singular incident or fact involving a breach, inaccuracy
or omission of Seller or Purchaser, as applicable, if the Losses from such
singular incident or fact are equal to or less than $2,500 (an "Immaterial
Claim"); and provided further, however, that the foregoing limitation on
Seller's indemnification obligation set forth in clause 1 above shall not apply
to Losses arising out of or in connection with any misrepresentation or breach
of any warranty made by Seller in Sections 5(a), 5(c), 5(r) (to the extent
Seller or ▇▇ ▇▇▇▇▇▇ actually knows of a threatened claim), 5(s) and 5(w) and
Section 13 hereof and in the Tax Allocation Agreement.
(c) Defense. An indemnified party shall promptly give written
notice to the indemnifying party after the indemnified party has knowledge that
any legal proceeding has been instituted or any claim has been asserted in
respect of which indemnification may be sought under the provisions of Section
14 or 15. If the indemnifying party, within 10 days after the indemnified
party has given such notice (or within such shorter period of time as an answer
or other responsive motion may be required), shall have acknowledged in writing
his or its obligation to indemnify, then the indemnifying party shall have the
right to control the defense of such claim or proceeding, and the indemnified
party shall not settle or compromise such claim or proceeding without the
written consent of the indemnifying party, which consent shall not unreasonably
be withheld or delayed. The indemnified party may in any event participate in
any such defense with his or its own counsel and at his or its own expense.
Notwithstanding the foregoing, the right to indemnification hereunder shall not
be affected by any failure of an indemnified party to give such notice (or by
delay by an indemnified party in giving such notice) unless, and then only to
the extent that, the rights and remedies of the indemnifying party shall have
been prejudiced as a result of the failure to give, or delay in giving, such
notice.
(d) Payments. Each amount payable to Purchaser by Seller under
Section 14 (an "Indemnification Amount") shall be paid by Purchaser and Seller
directing the Escrow Agent, pursuant to the terms of Escrow Agreement, to
deliver to Purchaser an amount equal to the Indemnification Amount. Subject to
the limitations on Purchaser's right to indemnification set forth in Section
16(b), any Indemnification Amount remaining unsatisfied after delivery of
amounts held by the Escrow Agent shall be paid promptly in cash, certified
check or wire transfer to Purchaser by Seller (it being understood that
Purchaser's source of payment of Indemnification Amounts under Section 14 are
not limited to the Escrowed Amount). Each amount payable to Purchaser by
Seller under Section 14 shall be paid promptly in cash, certified check or wire
transfer to Purchaser by Seller.
(e) Calculation of Damages. An indemnified party shall be entitled
to recover the full amount of any Loss incurred due to the matter for which
indemnification is sought, but any recovery shall be net of any benefit
received by the indemnified party due to such Loss, including, without
limitation, any tax benefit, insurance proceeds or warranty reimbursements.
(f) Certain Events. Neither Lincolnshire nor Purchaser shall have
any liability under this Agreement if Purchaser fails to close because LaSalle
National Bank (the
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"Lender") fails to close with respect to the financing due to a bona fide,
material environmental liability of the Company identified prior to the Closing
Date or the failure of Seller to remove any liens on, or security interests in,
the Assets of the Company or the Shares by the Closing Date.
17. Further Assurances. The parties shall cooperate and take such
actions, and execute such other documents, at the Closing or subsequently, as
either may reasonably request in order to carry out the provisions or purpose
of this Agreement.
18. Notices. All notices or other communications in connection with
this Agreement shall be in writing and shall be considered given when
personally delivered, telecopied (provided that telecopy is supplemented by
overnight original copy delivery), mailed by overnight courier or three
business days after being mailed by registered or certified mail, postage
prepaid, return receipt requested, as follows:
If to Seller:
The Cerplex Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
PCS Acquisition Co., Inc.
c/o Lincolnshire Management, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: C. ▇▇▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Proskauer ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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19. Entire Agreement. This Agreement (which includes the schedules
and exhibits hereto) sets forth the parties' final and entire agreement with
respect to its subject matter and supersedes any and all prior understandings
and agreements. This Agreement can be amended, supplemented or changed, and
any provision hereof can be waived, only by a written instrument making
specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, change or waiver is sought.
20. Successors. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and assigns;
provided, however, that neither this Agreement nor any right or obligation
hereunder may be assigned or transferred, except that Purchaser may assign this
Agreement and its rights hereunder to any affiliate or any direct or indirect
wholly-owned subsidiary of Purchaser and either Purchaser or Seller may assign
this Agreement to financial institutions.
21. Section Headings. The section headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
22. Other Discussions. Unless this Agreement shall have been
terminated, neither Seller nor the Company shall enter into any negotiations
regarding the acquisition of any assets or capital stock of the Company.
23. Fees and Expenses. Each of the parties hereto shall pay their
own respective expenses in connection with the transactions contemplated
herein, including without limitation the preparation and negotiation of this
Agreement and its schedules and exhibits and the costs, fees and expenses of
their respective advisors and lenders. No costs, fees or expenses incurred by
Purchaser or Seller shall be borne by the Company.
24. Severability. If any provision of this Agreement shall be held
by any court of competent jurisdiction to be illegal, invalid or unenforceable,
such provision shall be construed and enforced as if it had been more narrowly
drawn so as not to be illegal, invalid or unenforceable, and such illegality,
invalidity or unenforceability shall have no effect upon and shall not impair
the enforceability of any other provision of this Agreement.
25. Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the internal law of the State of
California (without reference to its rules as to conflicts of law).
26. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
27. Third Parties. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any person or entity
other than Seller and Purchaser any rights or remedies under or by reason of
this Agreement.
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28. Other Agreements.
(a) Confidentiality. Whether or not the Closing occurs, each
of the parties will treat in confidence all documents, materials and other
information disclosed by any other party, whether during the course of the
negotiations leading to the execution of this Agreement or thereafter, in its
investigation of the other parties and in the preparation of agreements,
schedules and other documents relating to the consummation of such transactions
contemplated hereby. If this Agreement is terminated, Purchaser and Seller will
each use its reasonable efforts to return to the other all originals and copies
of non-public documents and materials which have been furnished in connection
with this Agreement.
(b) Publicity. Prior to the Closing, Purchaser, on the one
hand, and Seller, on the other hand, shall consult with and obtain the consent
of the other before issuing any press release or making any similar disclosure
concerning this Agreement or the transactions referred to in this Agreement,
unless, in the reasonable judgment of the party issuing the release or making
the disclosure, the release or disclosure is required as a matter of law (in
which case it or they shall consult as set forth above prior to issuing the
release or making the disclosure). Purchaser acknowledges that Seller will
make a press release promptly following the execution of this Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
PCS ACQUISITION CO., INC.
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------
C. ▇▇▇▇▇▇▇ ▇▇▇▇
Title:
THE CERPLEX GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President of International Business
LINCOLNSHIRE EQUITY PARTNERS, L.P.
By: Lincolnshire Equity Partners, L.P. its
general partner
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------
C. ▇▇▇▇▇▇▇ ▇▇▇▇
Title:
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DISCLOSURE SCHEDULES
to the
Stock Purchase Agreement
dated March 28, 1997
relating to the purchase of
all of the Outstanding Stock of
Peripheral Computer Support, Inc.
27