DATED AS OF FEBRUARY 14,
2007
MASTEC NORTH AMERICA,
INC.
ATLAS TRAFFIC MANAGEMENT SYSTEMS
LLC
AMENDED AND RESTATED ASSET PURCHASE
AGREEMENT
This AMENDED AND
RESTATED ASSET PURCHASE AGREEMENT (“ Agreement
”) is hereby made and entered into this 14th day of February,
2007, by and between ATLAS Traffic Management Systems LLC, a
Delaware limited liability company (formerly known as LM-ITS
Acquisition Company LLC) (“ Buyer ”), and MasTec
North America, Inc., a Florida corporation (“ Seller
”).
WHEREAS ,
Seller, through its department of transportation service group,
provides specialty contracting services to state Departments of
Transportation, including traffic management systems, related IT
installations, and roadside construction services (such service
group, the “ Business ”); and
WHEREAS ,
Buyer and Seller desire that Buyer acquire certain assets and
assume certain liabilities of the Business, including substantially
all of Seller’s state Department of Transportation related
projects and assets, on the terms and conditions hereinafter set
forth;
WHEREAS ,
the parties have previously entered into that certain Asset
Purchase Agreement (the “ Original Agreement ”)
dated as of November 9, 2006 (the “ Original
Agreement Date ”); and
WHEREAS ,
the parties wish to modify certain agreements and understandings
set forth in such Original Agreement by entering into this Amended
and Restated Asset Purchase Agreement which amends and restates
such Original Agreement, except that (i) the obligations and
responsibilities set forth in the Original Agreement to be met by
either party hereto since the Original Agreement Date shall not be
deemed to have been postponed to the date hereof; and (ii) the
representations and warranties made by either party hereto shall
not supersede or replace the representations and warranties made by
either party under the Original Agreement as of the Original
Agreement Date and the Schedules delivered in connection
therewith.
NOW,
THEREFORE , in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties hereto, intending to
be legally bound, agree as follows:
1.
Recitals and Definitions .
a.
Recitals . The recitals contained herein are true and
correct and by this reference are incorporated herein and made a
part of this Agreement.
b.
Definitions . Capitalized terms not otherwise defined herein
shall have the respective meanings set forth on
Exhibit A .
2.
Purchase and Sale of Assets . Upon the terms and subject to
the conditions contained herein, at the Closing Seller shall sell,
assign, transfer and convey to Buyer, and Buyer shall
purchase from
Seller, free and clear of any Encumbrances, other than Permitted
Encumbrances, all of Seller’s right, title and interest in
the following assets (collectively, the “ Assets
”):
a. all
accounts receivable (whether current or noncurrent) of the
Business, other than the Excluded Receivables, and all causes of
action specifically pertaining to the collection of the foregoing
(collectively, the “ Acquired Receivables
”);
b. all
Inventory of the Business (collectively, the “ Acquired
Inventory ”);
c. all
of the Intellectual Property set forth on Schedule 2(c)
(the “ Acquired Intellectual Property
”);
d. all
rights and interest of the Seller under the Contracts, including
the Contracts set forth on Schedule 2(d) (the “
Acquired Contracts ”);
e. all
tangible personal property of the Business, including the
machinery, equipment, tools, supplies, construction in progress,
furniture and computer hardware, whether owned, leased or licensed
set forth on Schedule 2(e) (the “ Acquired
Personal Property ”);
f. all
projects of the Business set forth on Schedule 2(f) ,
other than projects completed prior to the Closing Date, and other
projects of the Business entered into after the date of this
Agreement in accordance with this Agreement (the “ Current
Projects ”);
g. all
other current assets, retainages and other long term assets of the
Business as of the Closing Date, including those set forth on
Schedule 2(g) ;
h. except
to the extent Seller is required to retain the originals pursuant
to any Applicable Law (in which case a copy will be provided to the
Buyer), the originals and/or copies (if originals are unavailable)
of all information and records relating primarily to the Assets or
the Business, including books, records, databases, ledgers, files,
documents, correspondence, lists, plats, plans and designs of
fixtures and equipment, specifications, technical information,
creative materials, advertising and promotional materials, studies,
reports, sales records, service records, supplier lists, customer
lists, sales order files, engineering data files, purchase order
files, supplier files, other supplier information, customer files,
other customer information, environmental control, monitoring and
test records and all other printed or written materials, whether or
not confidential or proprietary;
i. all
software, programs and source code, program documentation, manuals,
forms, guides, and other materials with respect thereto, to the
extent transferable to Buyer without cost to Seller, including
without limitation Microsoft Office applications, including
Microsoft Windows (the “ Transferable Software
”), provided that the Oracle software shall not be
transferred even if permitted pursuant to Seller’s license
from Oracle;
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j. all
expenses that have been prepaid by Seller relating primarily to the
operation of the Business, including but not limited to ad valorem
taxes, lease and rental payments;
k. all
rights, claims, credits, causes of action or rights of set-off or
recoupment against Persons other than Seller and its Affiliates
relating primarily to the Business or the Assets, including,
without limitation, unliquidated rights under manufacturers’
and vendors’ warranties and rights to insurance proceeds as
to the Assets;
l. all
Permits used in the Business, to the extent the transfer thereof is
permitted by Applicable Law, including those set forth on
Schedule 2(l) (collectively, the “ Acquired
Permits ”);
m. $2,500,000
of cash (the “ Minimum Cash ”); and
n. the
right to use the letters “ITS” to the extent Seller has
any right to use such letters (for purposes of clarity and
notwithstanding anything to the contrary set forth herein, MasTec
makes no representation or warranty as to ownership or the right to
use such letters), but without any reference to MasTec.
3.
Excluded Assets . Notwithstanding anything to the contrary
set forth in Section 2 or elsewhere in this Agreement, the
following assets of Seller (collectively, the “ Excluded
Assets ”) are not part of the sale and purchase
contemplated hereunder, are excluded from the Assets and shall
remain the property of Seller after the Closing:
a. all
cash and cash equivalents (including, without limitation, checking
account balances, certificates of deposit and other time deposits
and petty cash) other than the Minimum Cash;
b. all
accounts receivable of Seller not related to the
Business;
c. accounts
receivable of the Business to be designated by Seller prior to
Closing on Schedule 3(c) in the aggregate amount of no
more than $2,500,000 (the “ Excluded Receivables
”);
d. all
Inventory of Seller other than the Acquired Inventory;
e. all
rights and interest of Seller under all contracts, agreements,
leases, licenses, commitments, sales and purchase orders, and other
undertakings of any kind, whether written or oral other than the
Acquired Contracts;
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f. all
tangible personal property, including machinery, equipment, tools,
supplies, construction in progress, furniture and fixtures,
leasehold improvements and computer hardware, whether owned, leased
or licensed other than the Acquired Personal Property;
g. all
projects of Seller other than the Current Projects;
h. all
(i) confidential personnel and medical records pertaining to
any employee of Seller or its affiliates the disclosure or transfer
of which is prohibited by Applicable Law; (ii) corporate
minute books, charter documents, corporate stock record books and
such other books and records as pertain to the organization,
existence or share capitalization of Seller; (iii) documents
relating to proposals to acquire the Assets by Persons other than
Buyer; and (iv) all accounting and other books and records
that do not relate to the Assets;
i. all
insurance policies and agreements;
j. all
refunds, prepayments, rights of recoupment, and other rights with
respect to any Taxes relating to periods prior to and including the
Closing;
k. all
intercompany accounts receivable, loans and advances;
l. all
of Seller’s assets which are not primarily used in connection
with the Business;
m. the
name “MasTec” and all other Intellectual Property of
the Seller and its Affiliates other than the Acquired Intellectual
Property;
n. all
assets related to Excluded Liabilities;
o. all
software, programs and source code, program documentation, manuals,
forms, guides, and other materials with respect thereto, other than
the Transferable Software;
p. all
Permits other than the Acquired Permits;
q. all
of Seller’s rights hereunder; and
r. Notwithstanding
anything in this Agreement to the contrary, this Agreement shall
not constitute an assignment of any Contract or Permit if an
attempted assignment thereof, without the consent of a third party
thereto, would constitute a breach thereof or would be legally
ineffective. If any such consent is not obtained prior to Closing,
including, but not limited to, consents from customers of those
Current Projects set forth on Schedule 3(r) , or does
not remain in full force and effect at Closing in satisfaction of
the conditions set forth in Sections 14(e) and 15(e) or
if such consent is not required to be obtained pursuant to such
sections, or if any attempt at an assignment thereof would be
ineffective or would affect the rights of Seller thereunder so that
Buyer would not in fact receive all such rights, (i) Buyer
and
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Seller shall
use commercially reasonable efforts, following the Closing, to
obtain any consents or approvals not obtained prior to Closing, and
(ii) Buyer and Seller shall use reasonable efforts to enter
into a mutually agreeable, reasonable and lawful arrangement under
which Buyer obtains the benefits and assumes the obligations in
respect of such Contract or Permit from and after the Closing,
including subcontracting, sublicensing or subleasing to Buyer, and
under which Seller would enforce for the benefit of Buyer, with
Buyer assuming the obligations, any and all rights of Seller
against a third Person party thereto.
4.
Assignment and Assumption of Liabilities .
a. Subject
to the terms and conditions set forth in this Agreement (including
without limitation Section 17(d)) and except for the Excluded
Liabilities, Buyer shall assume all of the Assumed Liabilities.
“ Assumed Liabilities ” means:
i)
all Liabilities of the Business (including all Liabilities pursuant
to the Acquired Contracts and Acquired Permits) arising or to be
performed after or in respect of periods following the Closing,
including all Liabilities for liquidated damages under the Acquired
Contracts or related to the Assets;
ii)
all accounts payable related to the Business;
iii)
all Liabilities in respect of Transferred Employees, and
beneficiaries of employees of the Business, including under or
relating to WARN or any similar state or local law in each case to
the extent relating to or arising out of any actions taken by Buyer
on or after the Closing Date;
iv)
all Liabilities relating to claims of manufacturing or design
defects with respect to any product sold (regardless of whether any
such product was purchased prior to or after the Closing Date) or
service provided by the Business on or after the Closing Date,
including Liabilities in respect of investigations regarding
product safety, product recall and related matters;
v)
all liabilities and obligations relating to warranty obligations or
services with respect to any product sold or service provided by
the Business prior to, on or after the Closing Date;
vi)
all Liabilities relating to the ITS Leases with respect to the
period after the Closing Date;
vii)
all Liabilities relating to the Occupational Safety and Health Act
of 1970, as amended, and any regulations, decisions or orders
promulgated thereunder, together with any state or local law,
regulation or ordinance pertaining to worker, employee or
occupational safety or health in effect as the same may be amended,
supplemented or
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superseded,
relating to or arising out of the operation, affairs and conduct of
the Business by Buyer in respect of periods following the
Closing;
viii)
all Liabilities arising from or relating to the Proceedings set
forth on Schedule 4(a)(viii) and all Proceedings arising
after the Closing Date in connection with any Assumed Liability
(the “ Assumed Proceedings ”); and
ix)
a pro rata portion of all ad valorem real property taxes for the
portion of the taxable year ending after the Closing
Date.
b. The
assumption by Buyer of the Assumed Liabilities, the transfer
thereof by Seller, and the limitations of such transfer shall in no
way expand the rights or remedies of any third party against Buyer
or Seller or its Affiliates as compared to the rights and remedies
which such third party would have had against Seller or its
Affiliates had Buyer not assumed such liabilities. Without limiting
the generality of the preceding sentence, the assumption by Buyer
of the Assumed Liabilities shall not create any third party
beneficiary rights which are not presently granted to any party
under the terms of any Contract which is expressly assumed by Buyer
under the terms of this Agreement.
5.
Excluded Liabilities . Buyer shall not assume, and shall not
be deemed to have assumed, the following liabilities (collectively,
the “ Excluded Liabilities ”):
a. any
liability or obligation of the Seller arising under this
Agreement;
b. except
to the extent provided in Section 12(f) , any liability
or obligation of the Seller or its Affiliates with respect to, or
arising out of, any employee benefit plan, executive deferred
compensation plan or any other plans or arrangements for the
benefit of any employees of the Seller or any such Affiliate,
including the Transferred Employees;
c. any
liability or obligation of the Seller to any shareholders of the
Seller or any of their Affiliates or to any party claiming to have
a right to acquire any ownership interests or other securities
convertible into or exchangeable for any ownership interests of the
Seller;
d. all
Environmental Liabilities relating to or arising out of the
operation, affairs and conduct of the Business by Buyer in respect
of periods prior to Closing;
e. any
Taxes, fees, expenses or other amounts required to be paid as a
result of the transaction contemplated by this
Agreement;
f. any
liability of Seller for Taxes (with respect to the Business or
otherwise) for periods prior to the Closing;
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g. all
Liabilities arising from or relating to Proceedings other than the
Assumed Proceedings;
h. except
to the extent an Assumed Liability pursuant to
Section 4 , liabilities and obligations asserted after
Closing relating to or arising out of the operation, affairs and
conduct of the Business by Seller in respect of periods prior to
the Closing;
i. Defective
Installation Losses to the extent the aggregate amount of such
Defective Installation Losses exceeds $250,000, in which case
Seller shall indemnify Buyer for the aggregate amount of such
Defective Installation Losses in excess of $250,000; and
j. all
equipment lease payments owing for the month of February 2007
on the leased vehicles and equipment of the Business in the
approximate amount of $170,000.
a. The
purchase price for the Assets shall be:
i)
$1,000,000 payable in cash to the Seller at Closing (the “
Base Purchase Price ”) by wire transfer of immediately
available funds to such account or accounts as Seller shall have
designated prior to the Closing Date; plus
ii)
additional earn-out consideration (the “ Earn-Out
”) up to a maximum amount of $12,000,000 (subject to
reduction in accordance with Section 19(g)), which is
accruable until December 31, 2013 and shall be accrued and
paid in accordance with Section 6(b)(i) and (iv) below
(the “ Earn-Out Amount ”), as
follows:
b. Earn-Out.
In addition to the Base Purchase Price, Seller shall be entitled,
to the extent not prohibited by the terms of any credit facilities
in favor of Buyer (to the extent any such restrictions exist, all
payments which would be payable under this section absent such
restriction shall be deferred until such time as the payment
thereof is not prohibited by the terms of any such credit
facilities (including upon a Change of Control upon which all such
deferred accrued amounts shall be paid in accordance with
Section 6(b)(iv) below) and Buyer shall use commercially
reasonable best efforts to remove or exclude all such restrictions
from the terms of such credit facilities), to any accrued portion
of the Earn-Out Amount as follows:
i)
With respect to the calendar year ending December 31, 2008 and
each calendar year thereafter until December 31, 2013 (the
“ Earn-Out Period ”), Buyer shall pay to Seller
an amount (each such amount, an “ Earn-Out Payment
”), equal to 25% of the sum of (a) the EBITDA of the
Business during such calendar year (the “ Determination
Year ”), and (b) the EBITDA Loss Accrual, if any. An
“EBITDA Loss Accrual”, which shall only exist if
aggregate EBITDA during the Calculation Period (as defined below)
is less than zero, means with respect to any Determination Year,
the aggregate EBITDA of the Business during the Calculation
Period.
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1)
The “ Calculation Period ” with respect to any
Determination Year shall be from January 1 st of
the first year of the Earn-Out Period during which EBITDA was less
than zero (or, if an Earn-Out Payment was paid or accrued in a
prior Determination Year (a “ Payout Year ”),
January 1 st
of the first year of the Earn-Out
Period during which EBITDA was less than zero following the most
recent Payout Year) through December 31st of the calendar year
immediately preceding the Determination Year.
2)
For purposes of clarity, any portion of the $12,000,000 maximum
Earn-Out Amount that has not accrued as of the time when the final
calculation of Cumulative EBITDA for the calendar year ending
December 31, 2013 has been agreed upon by the Buyer and Seller
shall expire and be of no further force or effect.
ii)
Computation of EBITDA. For purposes of this Agreement, “
EBITDA ” of the Business for any calendar year shall
mean the earnings from operations before interest, taxes,
depreciation and amortization, calculated as if the Business was
being operated as a separate and independent entity (which for
purposes of clarity shall not include any other businesses acquired
by Buyer following the date hereof and all costs and expenses in
connection therewith). All components of EBITDA shall be determined
in accordance with US GAAP, consistently applied. In calculating
EBITDA: (a) EBITDA shall be computed without regard to
“extraordinary items” of gain or loss as that term
shall be defined pursuant to US GAAP, (b) EBITDA shall not
include any gains, losses or profits realized from the sale of any
assets other than in the ordinary course of business, (c) EBITDA
will be increased by the amount by which all management fees and
other charges and payments made to Buyer or any of its Affiliates
exceeds $300,000 per annum, (d) no deduction shall be made for
any legal, accounting or other diligence fees or expenses arising
out of this Agreement or the transactions contemplated hereby,
(e) EBITDA will exclude any impact from the “cumulative
effect of a change in accounting principles” as that term is
defined pursuant to US GAAP, (f) EBITDA will exclude any
non-cash impairment charges, and (g) the purchase and sales
prices of goods and services sold by the Business to Buyer or any
of its Affiliates or purchased by the Business from Buyer or any of
its Affiliates shall be adjusted to reflect the amounts that the
Business would have realized or paid if dealing with an independent
party in an arm’s-length commercial transaction. Buyer shall
calculate EBITDA based upon the year-end audited financial
statements of the Business and pay the Earn-out Payment, if any, to
Seller no later than the 150 th day of each calendar year by wire transfer of
same day funds to an account designated by Seller.
iii)
Restrictions on Buyer. During the period which the payment of any
accrued Earn-Out is deferred as provided for in Section 6(b),
Buyer shall not:
8
1)
pay or cause to be paid any management fees, other charges or
payments to any Affiliate of Borrower or otherwise in excess of
$300,000 in the aggregate during any 12-month period; or
2)
declare or pay any dividends, purchase, redeem, retire, defease or
otherwise acquire for value any of its equity interests now or
hereafter outstanding, return any capital to its stockholders,
partners or members (or the equivalent Persons thereof) as such, or
permit any of its subsidiaries to purchase, redeem, retire, defease
or otherwise acquire for value any equity interests in Borrower or
to issue or sell any equity interests therein; provided that Buyer
may make annual distributions to its equity holders in an amount
not to exceed the federal income tax liability of such holders as a
result of Buyer’s income during such period.
iv)
Change of Control. Upon any Change of Control of Buyer, the
proceeds paid to Buyer and its equity holders directly as a result
of that Change of Control and limited only to those proceeds as a
result of same, and its equity holders shall be paid or retained as
follows:
1)
first, Buyer shall pay Seller all Earn-Out Payments which were
otherwise accrued and payable pursuant to Section 6(b)(i), but
were deferred pursuant to such section;
2)
second, Buyer shall retain an amount equal to all Invested
Capital;
3)
third, Buyer shall retain an amount equal to the Minimum
Return;
4)
fourth, Buyer shall pay Seller an amount equal to the unpaid
accrued balance of the Earn-out Amount; and
5)
finally, 100% of the remaining distributions shall be retained by
Buyer.
v)
For purposes of this Section 6(b), the following terms have
the respective meanings below:
1)
“Invested Capital” means the aggregate amount of equity
contributed to Buyer less the aggregate amount of equity
distributed from Buyer to its equity holders, excluding all
management fees.
2)
“Minimum Return” means, a 20% per annum compounded
return, on all Invested Capital.
9
3)
“Change of Control” means the occurrence after the date
hereof of any of (i) an acquisition after the date hereof by
an individual or legal entity or “group” (as described
in Rule 13d-5(b)(1) promulgated under the Exchange Act of
1934, as amended) of effective control (whether through legal or
beneficial ownership of equity interests of the Buyer, by contract
or otherwise) of in excess of 50% of the voting securities, limited
partnership interests, general partnership interests or any other
equity interests of the Buyer, or (ii) the Buyer merges into
or consolidates with any other Person, or any Person merges into or
consolidates with the Buyer and, after giving effect to such
transaction, the equity holders of the Buyer immediately prior to
such transaction own less than 50% of the equity interests of the
Buyer or the successor entity of such transaction, (iii) the
Buyer sells, transfers, leases or licenses its assets, as an
entirety or substantially as an entirety, to another Person, or
(iv) the execution by the Buyer of an agreement to which the
Buyer is a party or by which it is bound, providing for any of the
events set forth above in (i) through (iii).
vi)
Restrictions. Until such time as the Earn-Out Amount (as adjusted
pursuant to this Agreement) has been paid in full:
1)
the Business shall be managed and operated as a separate, stand
alone entity;
2)
without the prior written consent of Seller, there shall be no
expenses imposed upon the Business by any Affiliate of Buyer,
including without limitation, any corporate overhead charges,
management fees, general and administrative expense allocation or
charges or expenses relating to accounting, human resources, legal
and compliance and information technology nor will any services or
products be provided to the Business by an Affiliate of Buyer,
except at rates that are at least as favorable as the Business
could obtain from third parties; provided that Buyer shall be
permitted to pay a management fee of no more than $25,000 per month
to an Affiliate of Buyer; and
3)
Buyer shall not make any distributions, pay or declare any
dividends or otherwise transfer any of its assets to its Affiliates
or other equity holders; provided that Buyer may make annual
distributions to its equity holders in an amount not to exceed the
federal income tax liability of such holders as a result of
Buyer’s income during such period.
c.
Allocation of Purchase Price . The Base Purchase Price and
the Earn-Out shall be referred to collectively as the “
Purchase Price ”. Prior to Closing, the Seller shall
provide to Buyer a proposed allocation of the Purchase Price plus
liabilities deemed assumed (the “ Tax Purchase Price
”) for the sale of the Assets. The Tax Purchase Price shall
be allocated using principles that are consistent with the Internal
Revenue Code of 1986, as amended. Prior to Closing, the Buyer and
Seller shall mutually agree on a final allocation (the “
Final Allocation ”) of the Tax Purchase Price, which
Final Allocation will be attached hereto as
Schedule 6(d) . After the Closing, the parties shall
make consistent use of the allocation, fair market value and useful
lives specified on Schedule 6(d) for all tax purposes
and in all filings, declarations and
10
reports with
the Internal Revenue Service (“ IRS ”) and
similar reports for state, local, or foreign purposes in respect
thereof, including the reports required to be filed under
Section 1060 of the Internal Revenue Code of 1986, as amended.
Buyer shall prepare and deliver IRS Form 8594 to Seller within
forty-five (45) days after the Closing Date to be filed with
the IRS in accordance with Schedule 6(d) . In any
proceeding related to the determination of any tax, neither Buyer
nor Seller shall contend or represent that such allocation is not a
correct allocation.
7.
Intentionally Omitted .
8.
Seller’s Representations and Warranties . The Seller
makes the representations and warranties to the Buyer set forth in
this Section 8 as of the Original Agreement Date
(except for those representations and warranties contained in
Sections 8(m)(ii) and (iii) which are made as of the date
hereof). All such representations and warranties are made subject
to the exceptions noted in the Disclosure Schedules as delivered on
the Original Agreement Date or any updated Disclosure Schedules as
delivered on the date hereof. Notwithstanding anything to the
contrary contained in this Agreement or in the Disclosure
Schedules, any information disclosed in one section of the
Disclosure Schedules shall be deemed to be disclosed against all
the representations and warranties of the Seller. Certain
information set forth in the Disclosure Schedules and the Data Room
is included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement. The disclosure
of any information in the Disclosure Schedules and the Data Room
shall not be deemed to constitute an acknowledgement that such
information is required to be disclosed in connection with the
representations and warranties made by the Seller in this Agreement
or that it is material, nor shall such information be deemed to
establish a standard of materiality. All descriptions of documents
contained in the Disclosure Schedules and the Data Room are
qualified in their entirety by reference to the documents so
described.
a.
Corporate Status and Authority . Seller is a corporation
duly organized, validly existing, and in good standing under the
laws of the State of Florida; has the requisite corporate power to
own, operate, and lease its assets and properties and to carry on
the Business as it is now being conducted; and is duly qualified to
do business in all jurisdictions in which the nature of the
Business requires such qualification. The Business currently
conducts business in the States set forth in
Schedule 8(a) .
b.
Title to Assets; Encumbrances . Except as set forth in
Schedule 8(b) , Seller owns, leases or has the legal
right to use all of the Assets. Seller has good and transferable
title to, or in the case of leased or subleased assets, valid or
subsisting leasehold interests in, all of the Assets, free and
clear of any Encumbrances other than Permitted Encumbrances and
Encumbrances created by or through Buyer or its
Affiliates.
c.
Legal Proceedings; Orders .
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i)
Except as set forth on Schedule 8(c)(i) , there is no
pending or, to Seller’s Knowledge, threatened Proceeding:
(i) by or against Seller that relates to or may affect the
Business, or any of the Assets or (ii) that challenges, or
that may have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of the transactions contemplated by
this Agreement.
ii)
Except as set forth on Schedule 8(c)(ii) , there is no
Order to which Seller with respect to the Business or any of the
Assets is subject.
iii)
Except as set forth on Schedule 8(c)(iii) :
(i) Seller is, and, at all times since January 1, 2002
has been, in compliance in all material respects with all of the
terms and requirements of each Order applicable to the Business or
any of the Assets; and (ii) Seller has not received, at any
time since January 1, 2002, any written notice or other
communication from any Governmental Authority regarding any
violation of, or failure to comply with, any term or requirement of
any Order applicable to the Business or any of the
Assets.
i)
Except as set forth in Schedule 8(d) , as of the date
hereof Seller, with respect to the Business, is not party to or
otherwise bound by or subject to:
1)
any written employment, severance or sales representative contract
which contains an obligation (excluding commissions) to pay more
than $100,000 per year;
2)
any written consulting contract;
3)
any real property lease or equipment lease which constitutes part
of the Business or the Assets;
4)
any Contract containing any covenant limiting the freedom of
Seller, with respect of the Business or the operations of the
Business, to engage in any line of business or compete with any
Person in any geographic area in any material respect;
5)
any Contract in effect on the date of this Agreement relating to
the disposition or acquisition of the assets of, or any interest
in, any business enterprise which relates to the Business other
than in the Ordinary Course of Business;
6)
any offset agreement entered into in connection with an
international sales transaction and relating to any contract that
imposes on the Business an obligation to perform that will continue
in effect on or after the Closing Date;
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7)
any Contract of any kind that (i) requires a payment by any
party in excess of, or a series of payments which in the aggregate
exceed, $100,000, (ii) has a term, or requires the performance
of any obligations by any party over a period, in excess of one
year, or (iii) involves any director, officer or stockholder
of the Seller;
8)
any Contract pursuant to which the Seller on behalf of the Business
has made or will make loans or advances, or has or will have
incurred debts or become a guarantor or surety or pledged its
credit on or otherwise become responsible with respect to any
undertaking of another Person, in each case, in an amount over
$100,000 (except for the negotiation or collection of negotiable
instruments in transactions in the Ordinary Course of
Business);
9)
any indenture, loan agreement, note, mortgage, security agreement,
lease of real property or personal property or other Contract
relating to the borrowing of funds, an extension of credit or
financing for which the Business is obligated; or
10)
any Contract involving a partnership, joint venture or other
cooperative undertaking.
ii)
Except as disclosed in Schedule 8(d) , each contract
disclosed in Schedule 8(d) is a legal, valid and binding
obligation of Seller enforceable against Seller in accordance with
its terms (except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect
relating to or affecting creditors’ rights generally,
including the effect of statutory and other laws regarding
fraudulent conveyances and preferential transfers), and except with
respect to liquidated damages owed by Seller and any delays or
circumstances in connection therewith, Seller is not in default and
has not failed to perform any obligation thereunder, and, to the
Knowledge of Seller, there does not exist any event, condition or
omission which would constitute a material breach or material
default (whether by lapse of time or notice or both) by any other
Person, which would give rise to any right of termination. Except
as disclosed in Schedule 8(d) , as of the date of this
Agreement Seller has not received any written notification from any
other Person party to any of the Contracts disclosed in
Schedule 8(d) of a claim of default by Seller. Seller
has previously made available to Buyer (i) true, accurate and
complete copies of each document set forth on
Schedule 8(d) (collectively, the “ Identified
Contracts ”) and (ii) a written description of each
oral arrangement so listed on Schedule 8(d) . Except as
set forth on Schedule 8(d) , all such Identified
Contracts and arrangements have been entered into by Seller in the
Ordinary Course of Business. Except for sales of assets in the
Ordinary Course of Business and this Agreement, neither Seller nor
any of its Affiliates has any Contract or arrangement with respect
to the sale or other disposition of the Business or any of the
Assets.
e.
Compliance with Law and Other Regulations. The Business and
each of the Assets is in compliance with, and no violation with
respect thereto exists under, any and all Applicable Laws. As of
the date of this Agreement, no action is pending or, to
the
13
Knowledge of
Seller, has been threatened against the Seller regarding the
material violation by the Business of any Applicable
Laws.
f.
No Material Adverse Effect . Except as set forth in
Schedule 8(f) , since the date of the Interim Balance
Sheet, there has not been any Material Adverse Effect.
g.
Agreement Not in Breach of Other Instruments Affecting
Seller . Except as set forth on Schedule 8(g) ,
neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to
which the Seller, the Business or any of the Assets is subject or
any provision of the charter or bylaws (or similar constitutive
document) of the Seller or (ii) other than the need to obtain
third party consents to the assignment of certain Acquired
Contracts, violate or conflict with, result in a breach or
termination of, constitute a default under, result in the
acceleration of, give any third party any additional right
(including the right to accelerate, terminate, modify, or cancel)
under, require any notice or consent under or result in or
constitute a circumstance which, with or without notice or lapse of
time or both, would constitute any of the foregoing under, any
Contract to which the Seller is a party or by which it or the
Business is bound or to which any of the Assets is subject (or
result in the imposition of any security interest upon any of the
Assets or Business). Except as set forth on
Schedule 8(g) , the Seller is not required to give any
notice to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Authority in order for the
parties to consummate the transactions contemplated by this
Agreement.
h.
Power of Seller to Execute Agreement . Seller has full
corporate power and authority to execute, deliver, and perform this
Agreement, and this Agreement has been duly executed and delivered
and is the valid and legally binding obligation of Seller and is
enforceable against it in accordance with its terms, except
(i) to the extent that such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or
other laws now or hereafter in effect relating to creditors’
rights generally, including the effect of statutory and other laws
regarding fraudulent conveyances and preferential transfers and
(ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefore may be brought (regardless of whether such
enforceability is considered in a proceeding at law or in
equity).
i.
Employee Benefit Plans .
i)
Schedule 8(i) lists each Employee Plan or material
Benefit Arrangement which covers Transferred Employees and each
collective bargaining agreement covering Transferred
Employees.
ii)
Except as set forth in Schedule 8(i), with respect to
the Business:
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1)
neither Seller nor any member of its “Controlled Group”
(defined as any organization which is a member of a controlled
group of organizations within the meaning of Code
Sections 414(b). (c), (m) or (o) such member being
referred to as an “ERISA Affiliate”) contributes, is
obligated to contribute or has ever contributed to or had any
liability to a multiemployer plan, as defined in Section 3(37)
of ERISA;
2)
no fiduciary of any funded Employee Plan has engaged in a nonexempt
“prohibited transaction” (as that term is defined in
Section 4975 of the Code and Section 406 of ERISA) which
could subject Buyer to a penalty tax imposed by Section 4975
of the Code or Section 502(i) of ERISA;
3)
no Employee Plan that is subject to Section 412 of the Code
has incurred an “accumulated funding deficiency” within
the meaning of Section 412 of the Code, whether or not
waived;
4)
each Employee Plan and Benefit Arrangement has been established and
is operated and administered in all material respects in accordance
with its terms and in material compliance with Applicable
Law;
5)
no Employee Plan subject to Title IV of ERISA has incurred any
material liability under such title other than for the payment of
premiums to the Pension Benefit Guaranty Corporation (“
PBGC ”);
6)
no Employee Plan which is a “defined benefit plan”
(within the meaning of ERISA) has been terminated; nor have there
been any “reportable events” (as that term is defined
in Section 4043 of ERISA and the regulations thereunder),
other than reportable events arising directly from the Agreement or
any of the transactions contemplated thereby, which would present a
risk that an Employee Plan would be terminated by the PBGC in a
distress termination;
7)
each Employee Plan intended to qualify under Section 401 of
the Code has received a determination letter, or an opinion or
advisory letter upon which it may rely, that it is so qualified
and, to the Seller’s knowledge, no event has occurred with
respect to any such Employee Plan which could cause the loss of
such qualification or exemption;
8)
with respect to each Employee Plan listed in
Schedule 8(i) , Seller has made available to Buyer the
most recent copy (where applicable) of (1) the plan document
and all amendments; (2) the most recent determination letter;
(3) any summary plan description and summary of material
modifications; and (4) Form 5500;
9)
with respect to the Transferred Employees, there are no
post-retirement medical or health plans, dental plans,
hospitalizations, life insurance or other plans or arrangements in
effect;
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10)
there are no actions, claims or investigations pending or, to the
knowledge of Seller threatened, against any Employee Plan, Benefit
Arrangement, or any administrator, fiduciary or sponsor thereof
with respect to the Business, other than benefit claims arising in
the normal course of operation of such Employee Plan or Benefit
Arrangement;
11)
the consummation of the transactions contemplated by the Agreement
in and of themselves will not entitle any individual to severance
pay that is payable by Buyer, and will not accelerate the time of
payment or vesting, or increase the amount of any compensation or
benefits due any Transferred Employee to the extent such
compensation or benefits are the responsibility of
Buyer;
12)
neither the Seller nor any ERISA Affiliate has any Liability that
could have become a Liability of the Buyer (partially or totally
within the meaning of ERISA) from any Employee Plan; and, without
limitation by reference to any other provision of this Agreement or
any schedule annexed hereto, neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby shall result in a withdrawal (partial or total
within the meaning of ERISA by the Seller or ERISA Affiliate) from
any Employee Plan that could become a Liability; and
13)
there are no contributions that have not been or will not be timely
made to trusts in connection with “defined contribution
plans” (within the meaning of Section 3(340 of ERISA)
with respect to services rendered by Transferred Employees prior to
the Closing Date.
j.
Consents . Except as set forth on Schedule 8(j)
, the Seller is not required to give any notice to or obtain any
consent from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of
any of the transactions contemplated by this Agreement.
k.
Permits . Except as set forth on Schedule 8(k) ,
the Acquired Permits, true and complete copies of which have been
made available to Buyer, comprise all Permits required by
Applicable Law for the conduct of the Business as now
conducted.
i)
Each of Seller and its Subsidiaries has timely filed all material
Tax Returns that it was required to file. All such Tax Returns were
correct and complete in all material respects and were prepared in
material compliance with all applicable laws and regulations. All
Taxes owed by Seller or any of its Subsidiaries (whether or not
shown or required to be shown on any Tax Return) have been paid or
Seller has made provision therefor, except such Taxes as are being
contested in good faith and as to which adequate reserves have been
provided in the Interim Balance Sheet. Neither Seller nor any of
its Subsidiaries currently is the beneficiary of any extension
within which to file any Tax Return. No claim has even
been
16
made by any
authority in a jurisdiction where Seller or any of its Subsidiaries
does not file Tax Returns that Seller or any of its Subsidiaries is
or may be subject to taxation by that jurisdiction. There are no
liens on any of the assets of Seller and any of its Subsidiaries
that arose in connection with any failure or alleged failure to pay
any Tax.
ii)
Each of Seller and its Subsidiaries has withheld and paid all Taxes
required to have been withheld and paid in connection with any
amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party, and all Forms W-2 and
1099 required with respect thereto have been properly completed and
timely filed.
iii)
Seller and its Subsidiaries do not expect any tax authority to
assess any additional Taxes for any period for which Tax Returns
have been filed. There is no dispute or claim concerning any Tax
Liability of Seller and any of its Subsidiaries either
(A) claimed or raised by any authority in writing or
(B) as to which Seller has Knowledge.
iv)
Neither Seller nor any of its Subsidiaries has waived any statute
of limitations with respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency.
v)
The unpaid Taxes of Seller and its Subsidiaries (A) did not,
as of the most recent fiscal month end, exceed the reserve for Tax
Liability set forth on the face of the most recent Balance Sheet
and (B) do not exceed that reserve as adjusted for the passage
of time through the Closing Date in accordance with past custom and
practice of Seller and its Subsidiaries in filing their Tax
Returns.
vi)
None of the Assumed Liabilities is an obligation to make a payment
that is not deductible under Code Section 280G.
vii)
Seller has no liability for Taxes of any person under Treasury
Regulation Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by
contract or otherwise.
m.
Financial Statements .
i)
Set forth on Schedule 8(m)(i) are true and complete
copies of the unaudited balance sheet of the Seller as to the
Business only as of December 31, 2005 (being hereinafter
referred to as the “ December 31, 2005 Balance
Sheet ”), and the related unaudited internally prepared
statements of operations and shareholders’ equity for the
year then ended (collectively, with the December 31, 2005
Balance Sheet, the “ Financial Statements ”).
The December 31, 2005 Balance Sheet fairly presents in all
material respects the financial condition of the Business as of the
date thereof and the other related year end statements included in
the Financial Statements fairly present in all material respects
the results of operations of the Business for the fiscal year then
ended; and each of the Financial Statements is consistent
with
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the financial
statements utilized for the preparation of the Seller’s
audited consolidated financial statements and has been prepared
from and in accordance with the books and records of the Seller
except as otherwise noted therein.
ii)
Set forth on Schedule 8(m)(ii) are true and complete
copies of the unaudited balance sheet of the Seller as to the
Business only as of December 31, 2006 (being herein referred
to as the “ Interim Balance Sheet ”), and the
related unaudited internally prepared statements of operations and
shareholders’ equity for the fiscal period then ended
(collectively, with the Interim Balance Sheet, the “
Interim Financial Statements ”). The Interim Balance
Sheet fairly presents in all material respects the financial
condition of the Business as of the date thereof and the other
related internally prepared statements included in the Interim
Financial Statements fairly present in all material respects the
results of operations of the Business for the fiscal period then
ended, subject to normal recurring year-end adjustments (the effect
of which will not, individually or in the aggregate, be materially
adverse). Each of the Interim Financial Statements has been
prepared from and in accordance with the books and records of the
Seller except as otherwise noted therein.
iii)
Except as set forth on Schedule 8(m)(iii) , the
Business has no liabilities or obligations of any type (whether
accrued, contingent, absolute, fixed or otherwise) that are
required by GAAP to be reflected or reserved against on a balance
sheet prepared in accordance with GAAP principles that were not
(i) fully reflected in, reserved against or otherwise
disclosed in the Interim Balance Sheet or (ii) incurred since
December 31, 2006 in the Ordinary Course of Business and not
in breach of this Agreement.
iv)
Notwithstanding anything to the contrary set forth herein, the
Seller makes no representation or warranty in this
Section 8(m) with respect to the adequacy of its
reserves against accounts receivable and Seller shall have no
liability to Buyer in connection therewith.
n.
Events Subsequent to Interim Balance Sheet . Since the date
of the Interim Balance Sheet the Seller has not, with respect to
the Business or the Assets:
i)
engaged in any practice, taken any action, or entered into any
transaction with respect to the Business outside the Ordinary
Course of Business;
ii)
sold, transferred, conveyed, assigned or otherwise disposed of any
of the Assets, except sales of Inventory, machinery and equipment
in the Ordinary Course of Business;
iii)
waived, released or canceled any claims against third parties or
debts owing to it or any rights which have any value, other than
credits, reductions of claims, discounts and similar concessions to
customers in the Ordinary Course of Business;
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iv)
made any changes in its accounting systems, policies, principles or
practices;
v)
suffered or permitted the creation of any security interest over
any of the Assets other than in the Ordinary Course of Business or
Permitted Encumbrances; or
vi)
entered into any transaction or arrangement of any kind, including
transactions or arrangements in the Ordinary Course of Business as
contemplated by Sections 8(n)(i)-(v) , that
(i) requires or reasonably may in the future require the
Seller to pay or guarantee amounts or transfer assets or interests
having fair market value in excess of in the aggregate $75,000,
(ii) has a term, or requires the performance of any obligations by
the Seller over a period, in excess of one year, or
(iii) involves any director, officer or employee of the Seller
or any of the Affiliates of such individuals or any Affiliate of
the Seller.
o.
Real Property . Schedule 8(o) sets forth a true
and complete list of all ITS Leases which constitute the only
Leases currently in effect with respect to the Business. Other than
the office and yard space currently occupied by the Business
located at 2801 SW 46th Avenue, Fort Lauderdale, Florida, parts of
which are used exclusively by the Business, Seller has no Owned
Real Property used exclusively by the Business.
p.
Intellectual Property . Schedule 2(c) sets forth
a complete list of the Acquired Intellectual Property and whether
it is licensed to or owned by Seller. Except as set forth on
Schedule 8(p) and except for Excluded
Assets:
i)
to the Knowledge of the Seller, the conduct of the Business by the
Seller does not currently infringe on any material Intellectual
Property of any other Person;
ii)
as of the date of this Agreement, no action is pending or, to the
Knowledge of the Seller, has been threatened against the Seller
regarding the infringement by the Business of any material
Intellectual Property owned by any other Person;
iii)
to the Knowledge of the Seller, as of the date of this Agreement
there is no current infringement or unauthorized use by any other
Person of any material Acquired Intellectual Property;
and
iv)
Seller is not in material default or material breach of any license
to any Acquired Intellectual Property that would give rise to any
right of termination; to the Knowledge of Seller, no other party
thereto is in default or breach thereof; and no such Intellectual
Property license is the subject of any notice of termination given
or threatened.
q.
Powers of Attorney . There are no outstanding powers of
attorney relating to the Business.
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r.
Insurance . The Seller maintains insurance for the Business
reasonable in amounts and coverage for a business of its size and
character. Schedule 8(r) sets forth a true, accurate
and complete list of all claims (other than health and related
claims) that have been made by Seller within the past year under
any workmen’s compensation, general liability, property or
other insurance policy held by Seller or its Affiliates with
respect to the Assets or the operations of the Business. Except as
set forth on Schedule 8(r) , there are no pending or,
to the Knowledge of Seller, prospective claims under any insurance
policy with respect thereto. Such claim information includes the
following information with respect to each accident, loss or other
event: (i) the identity of the claimant; (ii) the date of
the occurrence and (iii) the status as of the report
date.
s.
Accounts Receivable . Each Acquired Receivable represents a
valid obligation arising from a sale actually made or services
actually performed by Seller in the Ordinary Course of Business.
Except as set forth on Schedule 8(s) , Seller has
performed all of its obligations required thereby to deliver the
goods or perform the services to which such account receivable
relates.
t.
Condition and Sufficiency of Assets . The Assets constitute
all the assets, properties and rights that are required for or
(except for the Excluded Assets and Inventory sold in the Ordinary
Course of Business and assets used to provide services to Buyer
pursuant to the Transition Services Agreement) currently used in
connection with the conduct of the Business as it is presently
conducted and has been conducted since the date of the Interim
Balance Sheet.
u.
Inventory . The Acquired Inventory is all of the Inventory
of the Business, other than Inventory sold in the Ordinary Course
of Business.
v.
Customers and Suppliers .
i)
Schedule 8(v)(i) sets forth a true, accurate and
complete list of:
1)
the twenty (20) largest customers of the Business in terms of
revenue earned during the period beginning January 1, 2006 and
ending on September 30, 2006 (collectively, the “
Major Customers ”); and
2)
the twenty (20) largest suppliers of the Business in terms of
purchases during the period beginning January 1, 2006 and
ending on September 30, 2006 (collectively, the “
Major Suppliers ”).
ii)
Since the date of the Interim Balance Sheet, except as set forth on
Schedule 8(v)(ii) , there has been no material dispute,
between Seller or any of its Affiliates and any Major Customer or
Major Supplier and no Major Customer or Major Supplier has
communicated to Seller in writing that it intends to reduce
materially its purchases from, or sales to, the
Business.
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w.
Environmental Matters . Except as set forth on
Schedule 8(w) :
i)
Permits . The Seller possesses all Environmental Permits
necessary in order to conduct the Business as it is now being
conducted (the “ ITS Environmental Permits ”). A
true and complete copy of each ITS Environmental Permit has been
made available to Buyer. Each ITS Environmental Permit is in full
force and effect. The Seller is in compliance, in all material
respects, with all requirements, terms and provisions of the ITS
Environmental Permits, and has filed on a timely basis (and updated
as required) all reports, notices, applications or other documents
required to be filed pursuant to the Environmental
Permits.
ii)
Compliance With Environmental Laws . With respect to the
operation of the Business, the Seller is in compliance with all
Environmental Permits and Environmental Laws.
iii)
Reports, Disclosures and Notifications . The Seller has
prepared and filed on a timely basis (and updated as required) all
reports, disclosures, notifications, applications, pollution
prevention, stormwater prevention or discharge prevention or
response plans or other emergency or contingency plans required to
be filed under Environmental Laws, with respect to the Business or
any of Seller’s operations at the Property, including without
limitation, Title III of the Superfund Amendments and
Reauthorization Act, 42 U.S.C. §11001 et seq. Schedule
8(w)(iii) lists all such reports, disclosures, notifications,
applications and plans filed by Seller with respect to the Business
under Environmental Laws. Copies of all such reports, disclosures,
notifications, applications and plans made available to Buyer are
true, accurate and complete.
iv)
Notices . The Seller has not received any written notice
from any Governmental Authority that Seller or the Properties:
(1) is in violation of the requirements of any Environmental
Permit or Environmental Laws; (2) is the subject of any suit,
claim, proceeding, demand, order, investigation or request or
demand for information arising under any Environmental Permit or
Environmental Laws; or (3) has actual or potential liability
under any Environmental Laws, including without limitation, CERCLA,
RCRA or any comparable state or local Environmental
Laws.
v)
No Reporting or Remediation Obligations . There are no
Environmental Conditions arising out of or relating to Seller, the
Business, or the use, operation or occupancy by Seller of the
Properties that result or reasonably could be expected to result in
(1) any obligation of Seller to file any report or notice, to
obtain any Environmental Permit, to conduct any investigation,
sampling or monitoring or to effect any environmental cleanup or
remediation, whether on-site or offsite; or (2) liability,
either to governmental agencies, including Environmental
Authorities, or third parties, for damages (whether to person,
property or natural resources), cleanup costs or remedial costs of
any kind or nature whatsoever.
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vi)
Liens and Encumbrances . No federal, state, local or
municipal governmental agency or authority, including without
limitation any Environmental Authority, has obtained or asserted an
encumbrance or lien upon the Properties or the Assets as a result
of any Release, use or cleanup of any Hazardous Material for which
Seller is legally responsible, nor has any such Release, use or
cleanup occurred which could result in the assertion or creation of
such a lien or encumbrance.
vii)
Storage, Transport or Disposal of Hazardous Materials
.
1)
To Seller’s Knowledge, there is not now nor has there ever
been located on the Properties any areas or vessels used or
intended for the treatment, storage, deposit or disposal of
Hazardous Materials, including, but not limited to, drum storage
areas, surface impoundments, incinerators, landfills, tanks,
lagoons, ponds, waste piles or deep well injection systems, other
than quantities of materials regularly used for routine maintenance
and cleaning of the Properties in the Ordinary Course of Business
that are used and stored in compliance, in all material respects,
with Environmental Laws.
2)
The Seller has not transported for storage, treatment or disposal,
by contract, agreement or otherwise, or arranged for the
transportation, storage, treatment or disposal, of any Hazardous
Material at or to any location including, without limitation, any
location used for the treatment, storage or disposal of Hazardous
Materials.
x.
Labor Relations; Employees .
i)
Except as set forth in Schedule 8(c)(i) , there is no
labor strike, work stoppage, arbitration, lawsuit or administrative
proceeding relating to labor or employment matters, or other labor
dispute pending, or to the Knowledge of Seller, threatened against
the Seller with respect to the Business. The Seller is in
compliance with all applicable laws, regulations, orders and
agreements to which it is a party, relating to the employment of
labor, wages and hours, labor relations, civil rights, safety and
health, and/or workers’ compensation;
ii)
The Seller is not now and never has been a party to or bound by any
collective bargaining agreement or union contract which covers or
covered the employees of the Business;
iii)
No employee of the Business is party to an employment agreement
with the Seller.
y.
Limitations on Representations and Warranties .
i)
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH
IN THIS SECTION 8 , THE SELLER DISCLAIMS ALL LIABILITY AND
RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY,
22
STATEMENT MADE
OR INFORMATION COMMUNICATED (WHETHER ORALLY OR IN WRITING) TO THE
BUYER (INCLUDING ANY OPINION, INFORMATION OR ADVICE WHICH MAY HAVE
BEEN PROVIDED TO BUYER OR ANY OF ITS AFFILIATES BY ANY SHAREHOLDER,
PARTNER, DIRECTOR, OFFICER, EMPLOYEE, ACCOUNTING FIRM, LEGAL
COUNSEL, OR OTHER AGENT, CONSULTANT, OR REPRESENTATIVE OF
SELLER).
ii)
THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES TO THE BUYER
EXCEPT AS CONTAINED IN THIS SECTION 8 , AND ANY AND ALL
STATEMENTS MADE OR INFORMATION COMMUNICATED BY SELLER OR ITS
REPRESENTATIVES OUTSIDE OF THIS AGREEMENT (INCLUDING BY WAY OF THE
DOCUMENTS CONTAINED IN THE DATA ROOM), WHETHER VERBALLY OR IN
WRITING, ARE DEEMED TO HAVE BEEN SUPERSEDED BY THIS AGREEMENT, IT
BEING INTENDED THAT NO SUCH PRIOR STATEMENTS OR COMMUNICATIONS
SHALL SURVIVE THE EXECUTION AND DELIVERY OF THIS
AGREEMENT.
9.
Buyer’s Representations and Warranties . Buyer
represents and warrants to Seller as follows:
a.
Status and Authority . Buyer is, and at the Closing will be,
a limited liability company, duly organized, validly existing, and
in good standing under the laws of the State of Delaware with full
limited liability company power and authority to conduct business
as contemplated to be conducted. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been validly authorized by all appropriate limited
liability company action. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a valid and binding
obligation of Buyer, enforceable against it in accordance with its
terms.
b.
Litigation . There are no suits, actions, claims,
arbitrations, administrative, or other proceedings or governmental
investigations pending or threatened against or affecting Buyer in
any court or before or by any federal, state, local, or other
governmental department or agency that seek to restrain or prohibit
the consummation, legality or validity of this Agreement or the
transactions contemplated hereby or which would materially impair
the ability of the Buyer to consummate such
transactions.
c.
Agreement Not in Breach of Other Instruments . The execution
and delivery of this Agreement by Buyer, the consummation by Buyer
of the transactions contemplated hereby, and the fulfillment by
Buyer of the terms hereof, will not violate any provision of the
formation or operating documents of Buyer nor will they result in
the breach of any term or provision of, or constitute a default
under, or conflict with, or cause the acceleration of any
obligation under, any loan agreement, note, debenture, indenture,
mortgage, deed of trust,
23
lease,
contract, agreement, or other obligation of any description to
which Buyer is a party or by which it is bound, or constitute a
violation of Applicable Law.
d.
Investment Intent . The Buyer has sufficient knowledge and
experience in financial and business matters so as to be capable of
evaluating the merits and risks of its purchase of the Assets, and
the Buyer is capable of bearing the economic risks of such
investment, including a complete loss of its investment. In
evaluating the suitability of the investment, the Buyer has relied
solely upon the represen
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