|
Exhibit
10(ii)(B)
ASSET PURCHASE
AGREEMENT
between
GRAMTEL USA,
INC.
and
BCSIVA INC.
ASSET PURCHASE
AGREEMENT
THIS AGREEMENT (this “
Agreement ”), dated as of the 31 st day of December 2007, is made by and
among GramTel USA, Inc., a Delaware corporation (the “
Company ”), Jordan Industries, Inc., (“
Jordan ”) (solely for the purpose of agreeing to the
provisions of Section 6.5 and Section 6.9 )
and BCSIVA Inc., a Virginia corporation (“ Buyer
”).
ARTICLE I
PURCHASE AND SALE;
PRICE
1.1 Purchase and Sale of
Assets . In consideration of the Purchase Price (hereinafter
defined), and subject to the terms and conditions set forth in this
Agreement, at the Closing (hereinafter defined) except for the
Excluded Assets (hereinafter defined), the Company will sell to
Buyer and Buyer will purchase from the Company all or substantially
all of the assets (real and personal, tangible and intangible),
properties and business of the Company, as the same are more
specifically set forth in Section 1.2
hereof.
1.2 Overview of Purchased
Assets . The assets to be purchased from the Company are all of
the Company’s assets, properties and rights (real and
personal, tangible and intangible) owned or used primarily in the
conduct of its business as of the Closing Date (the “
Business ”) except for the Excluded Assets and those
assets sold, transferred or disposed of in the ordinary and regular
course of business in accordance with Section 4.1 below
(hereinafter collectively referred to as the “ Purchased
Assets ”). The Purchased Assets shall include, without
limitation, the following at the Closing Date:
(a) Equipment . All of
the Company’s machinery, equipment, telephone numbers
(toll-free and others) and other personal property and all of the
Company’s fixed assets, including those listed in Exhibit
1.2(a) including all warranty claims with respect to the
Company’s fixed assets.
(b) Business Records .
All of the Company’s records (other than income and franchise
tax returns and related work papers) relating to the Business,
including with respect to customers and customer
relationships.
(c) Inventory . All
inventories and other supplies pertaining to the Company’s
operations on hand or at third party premises or in transit
including raw materials, work in process and finished goods, and
including any rights of the Company to warranties received from
suppliers.
(d) Intellectual
Property . All of the Company’s right, title and interest
in and to all United States and foreign registered, pending and
common law, trade names,
service marks, trademarks,
trade dress, logos, domain names, the GramTel name and proprietary
designations, including all of the good will of the Company’s
Business associated therewith, all United States and foreign issued
and pending patents, all United States and foreign copyrights and
copyrightable material, whether or not registered, rights of
publicity, franchises and all technology rights and licenses,
including computer software and programs (including all source
codes and object codes), websites (all as set forth in Exhibit
2.12 ) and all proprietary know-how, trade secrets, inventions,
discoveries, developments, research, and formulas, whether or not
patentable, and all other proprietary information or property
relating to the Company’s current Business or business
prospects and any improvements, updates, enhancements or
modifications related to any of the foregoing (hereinafter
collectively referred to as “ Intellectual Property
Assets ”).
(e) Other Intangibles
. All of the Company’s right, title and interest in and to
franchises, licenses, permits, options and any inventions,
developments and ideas.
(f) Contracts; Materials;
Etc . Except for the contracts set forth on Exhibit
1.2(f) (the “ Excluded Contracts ”), all of
the Company’s rights and privileges arising from its
unshipped orders, customer contracts, customer lists, outstanding
offers, sales records, advertising materials, and all agreements
for the sale, purchase or lease of goods or services, causes of
action (other than causes of action arising from or relating to
Excluded Assets, Excluded Contracts or Excluded Liabilities) and
all other contracts, agreements, assets and things of value now
beneficially owned or acquired by the Company at or before the
Closing Date, whether tangible or intangible, real or personal,
inchoate, partial or complete, fixed or contingent, of every kind
and description and wherever situated (all contracts of the Company
which are not Excluded Contracts, collectively the “
Contracts ”),
(g) Real Property .
All land, together with all buildings, structures, improvements and
fixtures located thereon, and all easements and other rights and
interests appurtenant thereto, owned by the Company and used in the
Business of the Company as identified on Exhibit 1.2(g) (the
“ Real Property ”).
(h) Accounts
Receivable . All accounts receivable and rights to payment from
services performed by the Company, whether billed or unbilled, and
whether or not accrued or on the books and records of the Company,
and all reserves and allowances accrued therefor (“
Receivables ”).
(i) Long-Term Assets and
Current Assets . All long-term assets together with all Current
Assets (as defined in Section 1.7 below) on the books
and records of the Company, to the extent not specified
above.
(j) Post Office Boxes
. The Company’s Post Office box or boxes.
1.3 Confirmation of Assets
Excluded From Purchased Assets . The parties hereto acknowledge
and agree that the Purchase Price (hereinafter defined) has been
calculated,
2
and is being paid, based on the
agreement and understanding that the Purchased Assets do not
include those assets set forth on Exhibit 1.3 (the “
Excluded Assets ”).
1.4 Purchase Price .
In consideration of the sale, conveyance, transfer and delivery of
the Purchased Assets provided for in this Agreement, Buyer agrees
to pay an aggregate purchase price of $19,900,000, subject to the
adjustments set forth below in this Section 1.4 and in
Section 1.7 (the “ Purchase Price
”). At Closing, the Purchase Price shall be paid as
follows:
(a) The Buyer shall wire such
funds as are sufficient to satisfy the payoff amounts identified in
the payoff letters received from 1 st Source Bank as contemplated by
Section 6.7 below and any other Liens to be paid off at
Closing as may be agreed upon by the Company and Buyer;
(b) The Buyer will hold back
the sum of $200,000 (the “ Chicago Holdback ”)
to be paid to the Company in accordance with the payment schedule
identified on Exhibit 6.10 within ten (10) days of the
successful renegotiation (in whole or in part) of the Chicago Lease
to incorporate some or all of the terms set forth in
Section 6.10 below.
(c) The Buyer will deposit
the sum of $400,000 (the “ Capex Escrow ”) in
immediately available funds by wire transfer to the bank account of
the Escrow Agent (defined below) to be held and disbursed in
accordance with the terms and conditions of the Escrow Agreement
(defined below) and Section 6.14 below.
(d) The Buyer will deposit
the sum of $300,000 (the “ Consents Escrow ”) in
immediately available funds by wire transfer to the bank account of
the Escrow Agent to be held and disbursed in accordance with the
terms and conditions of the Escrow Agreement and
Section 1.8 , below; and
(e) The remaining amount, in
immediately available funds by wire transfer to the
Company.
1.5 Assumption of
Liabilities . At the Closing, Buyer agrees that it will assume,
discharge, and will indemnify the Company against the following
liabilities and obligations: (a) all liabilities and
obligations arising in connection with the Purchased Assets from
events applicable to any and all periods after the Closing,
including, without limitation, all Contracts included in the
Purchased Assets and (b) the Current Liabilities (as defined
in Section 1.7 , below), accrued as of Closing in the
ordinary course of business in accordance with
Section 2.15 and 4.1 below, (the “
Assumed Liabilities ”). Other than the Assumed
Liabilities, Buyer shall not assume any other obligations of the
Company hereunder and notwithstanding the foregoing, Buyer
expressly excludes and will not assume, discharge or indemnify the
Company against any liabilities or obligations arising in
connection with any Pre-existing Environmental Conditions as
defined in Section 2.13(a)(iii) (all liabilities not
expressly assumed as Assumed Liabilities hereunder, the “
Excluded Liabilities ”).
3
1.6 Purchase Price
Allocation . The Company shall provide a proposed allocation of
the Purchase Price (and the amount of Assumed Liabilities that are
liabilities for Federal income tax purposes) among the Purchased
Assets in accordance with Code Section 1060 (the “
Allocation ”) to Buyer within thirty (30) days
following the Closing Date. Buyer shall propose any changes to the
proposed final Allocation within thirty (30) days thereafter,
together with a reasonably detailed explanation of the reasons
therefore. Buyer and the Company will negotiate in good faith to
resolve any disputed items. In the event Buyer and the Company
cannot agree on the Allocation, the disputed items shall be
submitted to an Independent Accountant (hereinafter defined) for
resolution in accordance with the principles of
Section 1.7(a) . Each of Buyer and the Company shall
timely file IRS Form 8594 and all other Federal, state, local and
foreign tax returns in accordance with the final Allocation, and
neither Buyer or the Company nor any of their respective affiliates
or representatives shall take any position on any tax return or in
any examination, claim for refund or tax contest (administrative or
judicial) that is inconsistent with the final Allocation. The
Company and Buyer agree to promptly provide the other party with
any additional information as required to complete Form
8594.
1.7 Working Capital
Adjustment . The Purchase Price shall be adjusted after the
Closing if the Net Working Capital (hereinafter defined) of the
Company as of the Closing is less than Three Hundred Thousand
Dollars ($300,000) (the “ Minimum Target Net Working
Capital ”) or more than Six Hundred Thousand Dollars
($600,000) (the “ Maximum Target Net Working Capital
”), in accordance with this Section 1.7 . For
purposes of this Agreement, “ Net Working Capital
” shall mean the Current Assets of the Company minus
the Current Liabilities of the Company which constitute Assumed
Liabilities, in each case as determined in accordance with
Generally Accepted Accounting Principles. For purposes of this
Agreement, “ Current Assets ” means Receivables
less reserves and allowances, pre-paid expenses which accrue or
will accrue to the benefit of Buyer (including, but not limited to
prepaid advertising, prepaid maintenance and prepaid connectivity),
sales commission advances, and vendor and real estate deposits, all
determined in accordance with Generally Accepted Accounting
Principles, but specifically excluding cash, prepaid insurance, the
Signal Hill deposit and the No.place.com asset. For purposes of
this Agreement, “ Current Liabilities ” shall
mean trade accounts payable, advance billings and customer deposits
and other current liabilities on the books and records of the
Company, in each case accrued in accordance with Sections
2.15 and 4.1 and in accordance with Generally Accepted
Accounting Principles (other than for advance billings, which shall
be calculated in accordance with the Company’s past
practice), but specifically excluding payroll accruals, obligations
to employees for wages, sales commissions, bonuses, benefits,
vacations or otherwise, any intercompany liabilities or accounts
payable and any accrued interest thereon, any line of credit or
other debt borrowings and any accrued interest thereon, and any tax
liabilities or accruals and any accrued interest thereon. An
example calculation of the Company’s Net Working Capital as
of November 30, 2007 is set forth on Exhibit 1.7
.
(a) Procedure . After
the Closing, at no cost to the Company, Buyer will prepare a
calculation of the Net Working Capital of the Company as of the
Closing Date (the “ Closing Calculation ”). The
Closing Calculation will be completed within forty-five
(45) days after the Closing Date and delivered to the Company
for its review. To facilitate such review, Buyer shall make its
work papers relating to the Closing Calculation available to the
Company and its accountants. The Company shall then have
4
thirty (30) days from
the receipt of same to notify Buyer of any objections to or
disputes of the Closing Calculation. If the Company contests the
Closing Calculation, the parties shall use reasonable efforts to
resolve their dispute. If final resolution is not obtained within
ten (10) days following the Company’s notice to Buyer of
its objections, Buyer and the Company shall retain a mutually
acceptable national independent accounting firm (the “
Independent Accountant ”) to resolve any remaining
dispute. If Buyer and the Company are unable to agree upon an
Independent Accountant, each of Buyer and the Company shall appoint
an independent accounting firm, which independent accounting firms
shall then select a third independent accounting firm which shall
serve as the Independent Accountant pursuant to this Agreement. The
Independent Accountant shall have thirty (30) days after
submission of the dispute to resolve the disputed items in writing,
with a copy to all parties. The determination of the Independent
Accountant shall be final and binding on the parties, and the costs
of the Independent Accountant shall be borne by the party whose
position is determined to be least correct by the Independent
Accountant.
(b) Adjustment . After
the final determination of the Closing Calculation, the Purchase
Price shall be (i) increased by the excess, if any, of the Net
Working Capital of the Company as of the Closing Date as reflected
in the Closing Calculation over the Maximum Target Net Working
Capital (any such excess, a “ Net Working Capital
Excess ”), or (ii) decreased by the shortfall, if
any, of the Net Working Capital of the Company as of the Closing
Date as reflected in the Closing Calculation under the Minimum
Target Net Working Capital (any such deficiency, a “ Net
Working Capital Deficiency ”). If there is a Net Working
Capital Excess, Buyer shall promptly (but in any event within ten
(10) business days following the final determination of the
Closing Calculation) pay to the Company, in cash to an account
designated by the Company, the amount of such Net Working Capital
Excess. If there is a Net Working Capital Deficiency, the Company
shall promptly (but in any event within ten (10) business days
following final determination of the Closing Calculation) pay to
Buyer, in cash to an account designated by Buyer, the amount of
such Net Working Capital Deficiency.
1.8 Consents Escrow .
Certain consents to transactions contemplated by this Agreement may
be required from parties to contracts, leases, licenses or other
agreements to which the Company is a party (including the
Contracts). Prior to the Closing, the Company shall use
commercially reasonable efforts to obtain the Material Consents
(defined in Section 7.2 below); including, without
limitation, those Material Consents that relate to customer
Contracts (the “ Material Customer Consents ”);
provided , that such efforts shall not include any
requirement of the Company to expend money, commence any litigation
or offer or grant any accommodation (financial or otherwise) to any
third party. After the Closing, Buyer shall use commercially
reasonable efforts to obtain those Consents (defined below) that
relate to customer Contracts (the “ Customer Consents
”) (including, without limitation, any Material Customer
Consents) which have not been obtained prior to Closing;
provided , that such efforts shall not include any
requirement of the Buyer to expend money, commence any litigation
or offer or grant any accommodation (financial or otherwise) to any
third party. Buyer shall provide periodic reports to the Company on
the progress of such consent process (with such reports to
in
5
no event be less frequent than weekly)
and shall, upon request of the Company, allow the Company to
participate with Buyer in such consent process provided that the
Company shall participate to the extent reasonably requested by
Buyer. With respect to the Material Customer Consents that have not
been obtained prior to Closing, upon Buyer obtaining a Material
Customer Consent as specified on Exhibit 1.8 hereto, the
Company and Buyer shall cause distributions to be made to the
Company from the Consents Escrow in an amount equal to the amount
set forth on Exhibit 1.8 for that respective Material
Customer Consent. Thereafter, on March 31, 2008, the Buyer
shall provide to the Company a list of all customer Contracts:
(i) for which Customer Consents (which include, for the
avoidance of doubt, Material Customer Consents) have not been
obtained as of such date and which were terminable by the customer
as a result of the failure to obtain Consent and were in fact
terminated by the customer for such reason, or (ii) which were
terminated by the customer pursuant to the exercise of a
change-in-control right under the Contract (collectively, the
“ Non-Consenting Customers ”). The Company shall
have ten (10) business days to object to such list and, if so
objected, the parties will meet in good faith to resolve such
issue. In the event no resolution is reached within fifteen
(15) business days of such objection, the dispute shall be
resolved in accordance with the provisions of this Agreement or as
otherwise agreed to by the parties. Upon resolution, Buyer shall
make a claim against the Consents Escrow in an amount equal to four
(4) times the amount of recurring monthly revenue (as of the
month in which Closing occurs) attributable to the Non-Consenting
Customers and the remainder of the Consents Escrow shall be payable
to the Company within ten (10) business days of such
determination. The Company and Buyer agree to execute such joint
written instructions under the Escrow Agreement as may be
reasonably necessary to effect the payments described in this
Section 1.8 . For the avoidance of doubt, the Consents
Escrow shall be Buyer’s sole recourse with respect to any
customer revenue lost or not transferred to Buyer as a result of
the failure to obtain the Customer Consents, and Buyer shall bear
all risk for any and all such amounts in excess of the Consents
Escrow. In addition, Buyer shall have no recourse against the
Consents Escrow with respect to the failure to obtain Consent for
assignment of any non-customer Contract required in connection with
the transactions contemplated by this Agreement. For purposes of
this Agreement, “ Consent ” shall mean the
consent or approval required of a third party, or waiver of a right
by a third party such as a right to terminate an agreement under a
change-of-control provision, in each case as a result of the
consummation of the transactions contemplated by this
Agreement.
ARTICLE II
REPRESENTATIONS AND
WARRANTIES OF COMPANY
Subject to the provisions of
Article XI, the Company hereby represents and warrants to Buyer, as
follows:
2.1 Corporate
Organization, etc . The Company is a corporation duly
organized, validly existing and in good standing under the laws of
the state of Delaware. The Company has all requisite corporate
power and authority to carry on its business as it is now being
conducted and to own, operate and lease its properties and assets
and the Company is qualified as a foreign corporation in the States
of Illinois and Indiana. Exhibit 2.1 contains complete and
correct copies of the Company’s (i) certificate of
incorporation; (ii) bylaws; (iii) certificates of
authority for the States of Illinois and Indiana, each amended to
date; and (iv) all
6
federal, state, local and foreign
licenses, permits or other approvals required for the operation of
its business as now being conducted.
2.2 Capital Stock;
Options . The Company has authorized 10,000,000 shares of
Common Stock, par value $0.01 (the “ Common Stock
”), 500 shares of Class A Preferred Stock, par value
$0.01 (the “ Class A Preferred Stock ”), and
10,500 shares of Class B Preferred Stock, par value $0.01 (the
“ Class B Preferred Stock ” and together with
the Common Stock and the Class A Preferred Stock, the “
Shares ”). Of such authorized shares, 9,000,000 shares
of Common Stock are issued and outstanding, 450,000 shares of
Common Stock are held in treasury by the Company, all of the shares
of Class A Preferred Stock are issued and outstanding and no
shares of Class B Preferred Stock are issued and outstanding. All
of the Shares are validly issued, fully paid and nonassessable and
are owned by the entities set forth on Exhibit 2.2 , free
and clear of all encumbrances or claims. There are no issued and
outstanding options, warrants, rights, securities, contracts,
commitments, understandings or arrangements by which the Company is
bound to issue any additional shares of its capital stock or
options to purchase shares of its capital stock.
2.3 Subsidiaries . The
Company has no subsidiaries.
2.4 Authorization, etc
. The Company has full power and authority to enter into this
Agreement and to carry out the transactions contemplated
hereby.
2.5 No Violation .
Except as set forth in Exhibit 2.5 , the Company is not
subject to or obligated under any article or certificate of
incorporation, bylaw or any material agreement or instrument, or
any material license, franchise or permit, which would be breached
or violated by Company’s execution, delivery and performance
of this Agreement.
2.6 Governmental
Authorities . The Company is in material compliance with all
laws and orders applicable to the Business, and is not required to
submit any notice, report or other filing with, and no consent,
approval or authorization is required, by any governmental or
regulatory authority in connection with their execution, delivery,
consummation or performance of this Agreement or the transactions
contemplated hereby.
2.7 Contracts .
Exhibit 2.7 sets forth a list of all written Contracts to
which the Company is bound which:
(a) Have a remaining
obligation in excess of $50,000;
(b) Are agency, dealer, sales
representative, marketing or other similar agreements;
(c) Is an agreement for the
lease of personal property to or from any individual, partnership,
corporation, limited liability company, association, trust,
association, joint venture, governmental entity (or any department,
agency or political division thereof) or other entity
(collectively, a “ Person ”);
7
(d) Is an agreement for the
purchase or sale of raw materials, commodities, supplies, products,
or other personal property, or for the furnishing or receipt of
services, the performance of which will occur over a period of more
than one (1) year or involve consideration in excess of
$10,000;
(e) Is an agreement under
which the Company has created, incurred, assumed or guaranteed any
indebtedness for borrowed money, or any capitalized lease
obligation which it has imposed a security interest on any of the
Purchased Assets;
(f) Is an agreement for the
lease of real property; or
(g) Involves any restriction
with respect to the geographical area, scope or type of business in
which the Company may operate.
True and complete copies of each
Contract have been delivered to Buyer. Assuming due and valid
execution by the other parties thereto, each Contract is, in all
material respects, valid, in good standing and enforceable by and
against the Company in accordance with its terms, subject to
(i) bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the enforcement of creditors’ rights
generally and (ii) equitable principles. Neither the Company,
nor to the Company’s knowledge any other party to any
Contract, is in breach of any Contract.
2.8 Title . Except
with respect to real property, which is addressed in
Section 2.14 below, the Company has good title to all
the Purchased Assets (except properties sold or otherwise disposed
of as permitted by Section 4.1 below), free and clear
of all mortgages, security interests, liens, pledges, claims,
escrows, options, rights of first refusal, indentures, easements,
licenses, security agreements or other agreements, arrangements,
contracts, commitments, understandings, obligations, charges or
encumbrances of any kind or character (collectively, “
Liens ”), except for Permitted Personal Property
Liens. “ Permitted Personal Property Liens ”
shall mean (i) Liens for Taxes, assessments or other
governmental charges not yet delinquent; (ii) title of a
lessor under an operating lease; and (iii) Liens set forth on
Exhibit 2.8 , which Liens set forth on Exhibit 2.8
shall be removed at or in connection with the Closing as set forth
in Section 6.7 below.
2.9 Litigation .
Except as set forth in Exhibit 2.9 , there is no lawsuit
pending or, to the Company’s knowledge threatened against the
Company, nor to the Company’s knowledge is there any
judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or
arbitrator outstanding against the Company having, or which,
insofar as can be reasonably foreseen, in the future may have, any
adverse effect on the ability of the Company to operate the
Business.
2.10 Tax Matters . The
term “ Taxes ” means all net income, capital
gains, gross income, gross receipts, sales, use, transfer, ad
valorem, franchise, profits, license, capital, withholding,
payroll, employment, excise, goods and services, severance, stamp,
occupation, premium, property, windfall profits, customs, duties,
regulatory assessments or other taxes, together with any interest,
fines and any penalties, additions to tax or additional amounts
incurred or accrued under applicable law or assessed, charged or
imposed by any governmental authority, domestic or foreign,
provided that any interest, penalties, additions to tax or
additional
8
amounts that relate to Taxes for any
taxable period (including any portion of any taxable period ending
on or before the Closing Date) shall be deemed to be Taxes for such
period, regardless of when such items are incurred, accrued,
assessed or imposed. Except as stated in Exhibit 2.10
:
(a) The Company has duly and
timely filed true, correct and complete tax returns, reports or
estimates, all prepared in accordance with applicable laws, for all
years and periods and for all jurisdictions (whether federal,
state, local or foreign) in which any such returns, reports or
estimates were due. All Taxes shown as due and payable on such
returns, reports and estimates have been paid.
(b) The Company has
(i) withheld all required amounts from its employees, agents,
contractors and nonresidents and remitted such amounts to the
proper agencies; (ii) paid all employer contributions and
premiums and (iii) filed all federal, state, local and foreign
returns and reports with respect to employee income tax
withholding, and social security and unemployment taxes and
premiums, all in compliance with the withholding tax provisions of
the Internal Revenue Code of 1986, as amended (the “
Code ”), as in effect for the applicable year and
other applicable laws.
(c) No asset of the Company
is tax exempt use property under Code Section 168(h). No
portion of the cost of any asset of the Company has been financed
directly or indirectly from the proceeds of any tax exempt state or
local government obligation described in Code
Section 103(a).
(d) None of the assets of the
Company is property that the Company is required to treat as being
owned by any other person pursuant to the safe harbor lease
provision of former Code Section 168(f)(8).
(e) The Company is not a
foreign person within the meaning of Code
Section 1445.
(f) The Company has withheld
or collected all Taxes required to be withheld or collected with
respect to the Business, including sales and use Taxes, and has
properly remitted such Taxes to the proper taxing
authority.
2.11 Employment and
Benefit Matters .
(a) Exhibit 2.11 lists
all of the following: (i) employment contracts, or contractual
arrangements with any agent, employee, officer, director or
shareholder of the Company; (ii) contracts or arrangements
with any Person providing for bonuses, profit sharing payments,
deferred compensation, stock options, stock purchase rights,
retainer, consulting, incentive, severance pay or retirement
benefits, life, medical or other insurance or any other employee
benefits or any other payments, “fringe benefits” or
perquisites which are not terminable at will without liability to
the Company or which are subject to ERISA. The contracts or
arrangements referred to in the foregoing clause (ii) are
herein called “ Benefit Plans ”.
9
(b) Except as set forth on
Exhibit 2.11 , neither the Company, nor any of its ERISA
affiliates, has any union contracts, collective bargaining, union
or labor agreements or other Contract with any group of employees,
labor union or employee representative(s), nor is the Company
currently engaged in any labor negotiations, excepting minor
grievances, nor, to the Company’s knowledge, is the Company
the subject of any union organization effort. The Company is in
material compliance with applicable legal requirements respecting
employment and employment practices and terms and conditions of
employment, including without limitation, health and safety and
wages and hours. No unfair labor practice complaint is pending
against the Company before the National Labor Relations Board or
other Governmental Agency. There is no labor dispute, strike,
slowdown or work stoppage pending or, to the Company’s
knowledge, threatened against the Company.
(c) True and correct copies
of each of the Benefit Plans listed in Exhibit 2.11 that is
subject to ERISA (the “ Company ERISA Plan ”)
and related trust agreements, insurance contracts, and summary
descriptions have been delivered or made available to Buyer by the
Company. The Company has also delivered or made available to Buyer
a copy of the most recently filed IRS Forms 5500, with attached
financial statement and accountant’s opinion, if applicable,
for each of the Company ERISA Plans. The Company has also delivered
or made available to Buyer a copy of, in the case of each of the
Company ERISA Plans intended to qualify under
Section 401(a) of the Code, the most recent Internal
Revenue Service letter as to its qualification under
Section 401(a) of the Code. To the Company’s
knowledge, nothing has occurred prior to or since the issuance of
such letters that could reasonably cause the loss of qualification
under the Code of any of such plans.
(d) Except as disclosed in
Exhibit 2.11 , none of the Company ERISA Plans has
participated in, engaged in or been a party to any prohibited
transaction as defined in ERISA or the Code, and there are no
claims pending or, to the Company’s knowledge, threatened,
involving any Benefit Plan listed in Exhibit 2.11 . To the
Company’s knowledge, there have been no violations of any
reporting or disclosure requirements with respect to any of the
Company ERISA Plans.
2.12 Intellectual
Property . The Company has good title to, and Exhibit
2.12 contains a detailed listing of, each copyright, trademark,
trade name, service mark, domain name and patent (collectively
“ Intellectual Property Rights ”) used in the
operation of its business as currently conducted. Except as
otherwise set forth on Exhibit 2.12 , all of said
Intellectual Property Rights are free and clear of all royalty
obligations, security interests, liens and encumbrances. The
Company has taken all reasonable action to protect against and
defend against, and has no knowledge of, any conflicting use of any
Intellectual Property Rights. The Company does not have nor does
the Company utilize any Intellectual Property Rights except those
which are set forth in Exhibit 2.12 .
2.13 Environmental
.
(a) For purposes of this
Section:
10
(i) “ Hazardous
Materials ” means any hazardous, infectious or toxic
substance, chemical, pollutant, contaminant, emission or waste
which is regulated by any local, state or federal authority
(“ Governmental Authorities ”). Hazardous
Materials include, without limitation, anything which is:
(1) defined as a “pollutant” pursuant to 33 U.S.C.
§ 1362(6); (2) defined as a “hazardous waste”
pursuant to 42 U.S.C. § 6921; (3) defined as a
“regulated substance” pursuant to 42 U.S.C. §
6991; (4) defined as a “hazardous substance”
pursuant to 42 U.S.C. § 9601(14); (5) defined as a
“pollutant or contaminant” pursuant to 42 U.S.C. §
9601(33); (6) petroleum; (7) asbestos; and
(8) polychlorinated biphenyl.
(ii) “ Environmental
Laws and Regulations ” means all limitations,
restrictions, conditions, standards, prohibitions, requirements and
obligations contained in any laws relating to the regulation or
abatement of pollution, or protecting the environment including,
without limitation, (1) the Federal Clean Air Act, 42 U.S.C.
§§ 7401 et seq. ; (2) the
Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. §§ 9601 et seq. ;
(3) the Federal Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. §§ 1101 et seq. ;
(4) the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. §§ 136 et seq. ; (5) the
Federal Water Pollution Control Act, 33 U.S.C. §§ 1251
et seq. ; (6) the Solid Waste Disposal Act, 42
U.S.C. §§ 6901 et seq. ; (7) the Toxic
Substances Control Act, 15 U.S.C. §§ 2601 et
seq. ; (8) laws relating in whole or part to emissions,
discharges, releases, or threatened releases of any Hazardous
Material; and (9) laws relating in whole or part to the
manufacture, processing, distribution, use, coverage, disposal,
transportation, storage or handling of any Hazardous
Material.
(iii) “ Pre-existing
Environmental Condition ” means the presence as of the
Closing Date of any Hazardous Materials in, on, under or about
(A) any real property currently owned by the Company and to be
transferred to Buyer in connection with this Agreement, and
(B) solely to the extent the Hazardous Materials were
released, discharged or disposed during the Company’s
tenancy, any leased real property for which Buyer will assume the
lease from the Company following the Closing Date.
(b) Except as set forth on
Exhibit 2.13 , there are no pending or, to the
Company’s knowledge threatened, claims, investigations,
litigations, administrative proceedings or orders relating to any
Hazardous Materials (collectively, “ Environmental
Claims ”) asserted against the Company, or relating to
any real property currently or heretofore owned, leased or operated
by the Company. Except as set forth on Exhibit 2.13 , the
Company is not liable, and has not assumed any liability of any
person for investigation, cleanup, compliance or required capital
expenditures in connection with any Environmental Claim or under
any Environmental Laws and Regulations.
(c) Except as set forth on
Exhibit 2.13 : (i) no Hazardous Materials are or
previously have been stored in any aboveground or underground
storage tanks, containers or surface impoundments that are located
on real property currently or
11
formerly owned by the
Company, or to the Company’s knowledge any property leased by
the Company; and (ii) no part of real property currently or
formerly owned by the Company, or to the Company’s knowledge
any property leased by the Company, including the soil and
groundwater located thereon, contains Hazardous Materials at
concentrations or in amounts that any Environmental Law or
Regulation would require any person to investigate or remediate,
(iii) the Company has not received any notices of violation,
warning letters, orders, or civil or administrative penalties from
Governmental Authorities under any Environmental Laws and
Regulations regarding its operation and its operations are in
compliance with all applicable Environmental Laws and Regulations,
(iv) the Company holds all permits, licenses and
auth
|
