EX-2.1 ACQUISITION AGREEMENTAsset Purchase Agreement |
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Exhibit 2.1
Execution Copy
ACQUISITION AGREEMENT
Dated as of September 1, 2005
TABLE OF CONTENTS
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (this “ Agreement ”) is made and entered into as of September 1, 2005 by and among Hiland Operating, LLC, a Delaware limited liability company (“ Buyer ”), Hiland Partners, LLC, an Oklahoma limited liability company (the “ Company ”), and the holders of all of the issued and outstanding membership interests of the Company, each of whom is identified on the signature pages to this Agreement and Schedule 1.1 * (individually, a “ Member ” and collectively, the “ Members ”). Capitalized terms used and not otherwise defined in this Agreement shall have the meanings ascribed to them in Article X .
RECITALS
A. The Buyer, the Company and others are parties to a certain “Omnibus Agreement” dated as of February 15, 2005 (the “ Omnibus Agreement ”) which provides, inter alia , in Section 5.1 thereof, that Buyer has an unconditional right and exclusive option for a period ending February 2007 to purchase for cash for the fair market value certain assets constituting all of the Company’s right, title and interest in, to and under the Bakken Gathering System as that term is defined in the Omnibus Agreement, including Schedule 1 thereto (the “Bakken Gathering System” ).
B. Pursuant to Section 5.2 of the Omnibus Agreement, the Buyer and the Company have established and agreed that $95,000,000 represents the fair market value of the Bakken Gathering System on the date hereof, and Buyer desires to acquire the Bakken Gathering System for such price.
C. The Buyer and the Company have considered the cost and expense that would be incurred by each party if the Buyer were to purchase all of the Company’s right, title and interest in the Bakken Gathering System as an asset purchase, and have agreed that it would be cost-effective for the Buyer to purchase all of the outstanding membership interests in the Company, rather than purchase the assets of the Company constituting the Bakken Gathering System.
D. The Members own all of the issued and outstanding membership interests of the Company.
E. Buyer desires to acquire from the Members, and the Members desire to sell to Buyer, all of the issued and outstanding membership interests of the Company upon the terms and conditions set forth in this Agreement (the “ Acquisition ”).
F. The parties have agreed that the Omnibus Agreement shall be and is hereby amended to permit the Acquisition to occur as provided herein in lieu of requiring the Buyer to purchase the assets constituting the Bakken Gathering System as an asset purchase.
NOW, THEREFORE, in consideration of the mutual agreements, covenants and other promises set forth herein, the mutual benefits to be gained by the performance thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the parties hereby agree as follows:
* In accordance with Item 601(b)(2), the schedules to this agreement have been omitted. The Registrant will furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission upon request.
(a) At the Closing and subject to and upon the terms and conditions of this Agreement, Buyer shall purchase from each Member, and each Member shall sell, convey, transfer, assign and deliver to Buyer, free and clear of all liens, encumbrances or other defects of title, all of the issued and outstanding membership interests (the “ Interests ”) of Company held by such Member as set forth opposite such Member’s name on such Member’s signature page to this Agreement (the “ Member’s Page ”).(b) In consideration of the sale, assignment and transfer of such Interests and the agreements of the Members made in connection with the transactions contemplated hereby, Buyer shall pay to the Members an aggregate purchase price equal to:• $95,000,000; plus
• the amount of the Company’s positive Working Capital Balance as of the Effective Time; plus
• the aggregate amount of all verifiable capital expenditures incurred and paid by the Company with respect to the Bakken Gathering System during the Interim Period, but excluding all such amounts paid by the Company for operating and other administrative expenses with respect to the Bakken Gathering System; less
• an amount equal to all unpaid principal and interest owing by the Company to MidFirst Bank as of the Closing Date; less
• the amount of the Company’s negative Working Capital Balance as of the Effective Time.
(c) The purchase of the Interests as provided herein shall be effective as of 12:01 a.m. on September 1, 2005, irrespective of the actual date and time of the Closing (the “ Effective Time ”).
(a) Unless this Agreement is earlier terminated pursuant to Section 7.1 , the closing of the Acquisition (the “ Closing ”) will take place on later of (i) September 1, 2005, and (ii) a date that is two (2) Business Days following satisfaction or waiver of the conditions set forth in Article VI , at the offices of the Buyer unless another time and/or place is mutually agreed upon in writing by Buyer and the Members. The date upon which the Closing actually occurs shall be referred to herein as the “ Closing Date .”(b) The Members and the Company shall submit a proposed Closing statement (the “ Purchase Price Adjustment Statement ”) to Buyer not fewer than three (3) days prior to
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Closing which shall contain the proposed purchase price for the Interests, and the calculations by which such proposed purchase price has been determined, and shall afford Buyer access to the Company’s records pertaining to the computations contained in the Purchase Price Adjustment Statement. At least two (2) full days prior to Closing, Buyer shall deliver to the Members and the Company a written report containing such changes, if any, which Buyer proposes be made to the Purchase Price Adjustment Statement. The Members, the Company and Buyer shall each make every reasonable effort to agree prior to the Closing Date on the Purchase Price Adjustment Statement. The amount agreed to shall be referred to as the “Estimated Purchase Price” .(c) Subject to the conditions set forth in this Agreement, at the Closing:(i) each Member shall deliver to Buyer one or more duly executed assignments representing the Interests to be sold by such Member to Buyer as set forth on the Member’s Page;(ii) the Buyer shall pay to the Members an amount equal to 95% of the Estimated Purchase Price (the “Preliminary Purchase Price” ), which shall be allocated among the Members pro-rata based on the Interests owned by each Member.(d) At the Final Settlement Date (as defined in Section 5.8 ),(i) Buyer shall pay to the Members the amount, if any, by which the Final Purchase Price, as defined in Section 5.8 , is greater than the Preliminary Purchase Price paid at the Closing, without interest, or(ii) the Members shall pay to the Buyer, as the case may be, the amount, if any, by which the Final Purchase Price, as defined in Section 5.8, is less than the Preliminary Purchase Price paid at the Closing, without interest.(iii) If the Closing occurs on or after December 1, 2005 but prior to March 1, 2006, Buyer shall pay to the Members interest at an annual rate of 6.44% per annum on the amount of the the Final Purchase Price for the period from the Effective Date to and including the Closing Date.1.3 Effect of Transaction . As a result of the transactions contemplated by this Agreement, the Company will, upon the Closing, become a wholly-owned subsidiary of Buyer, which will become the record and beneficial owner of all of the issued and outstanding Interests, and there shall be no outstanding options, warrants or rights to subscribe for or purchase any Interests.
1.4 Required Withholding . Buyer shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement amounts as may be required to be deducted or withheld therefrom under the Code, or under any provision of state, local or foreign tax law or under any other applicable legal requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this
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Agreement as having been paid to the person to whom such amounts would otherwise have been paid.
1.5 Taking of Necessary Action; Further Action . If at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, to vest in Buyer the full right and title to all the Interests or to ensure that the Company retains full right, title and possession to any and all assets, property, rights, privileges, powers and franchises of the Company, Buyer and the officers and managers of the Company are fully authorized in the name of their respective corporations to take all such lawful and necessary action.
ARTICLE II
Each of the Members, jointly and severally, represents and warrants to Buyer, except as set forth in the “ Schedule of Exceptions ” provided to Buyer in connection with this Agreement, that the statements contained in this Article II are true and correct.
2.1 Organization and Standing of the Company . The Company is a limited liability company duly organized, validly existing and in good standing under the laws of Oklahoma. The Company has all requisite limited liability power and authority necessary to enable it to own and operate its properties and to conduct its business as presently conducted and proposed to be conducted. The Company is duly qualified to do business as a foreign limited liability company and is in good standing in each jurisdiction in which the failure to so qualify would have a Company Material Adverse Effect.
2.2 Authority; Valid and Binding Agreements . Each Member has all requisite corporate power and authority to execute and deliver this Agreement and each of the agreements contemplated hereby, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by each Member of this Agreement and each of the agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of each Member and no further corporate action is required. This Agreement and each of the agreements contemplated hereby have been duly executed and delivered by each Member, and assuming the due authorization, execution and delivery of the other parties hereto and thereto, constitute legal, valid and binding obligations of each Member, as applicable, enforceable against each Member, as applicable, in accordance with their respective terms.
2.3 Conflicts; Consents . The execution and delivery by each Member of this Agreement and each of the agreements contemplated hereby does not, and the consummation of the transactions contemplated hereby and thereby and compliance with the terms hereof and thereof will not, breach, conflict with, or result in any violation of or default under (with or without notice or lapse of time or both), or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under, or result in the creation or imposition of any Lien of any nature whatsoever upon any of the properties or assets of the Company or any Member, except as set forth on Schedule 2.3 , under any provision of: (i) any loan or credit agreement, note, bond, mortgage, indenture, lease, deed of trust, agreement,
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contract, commitment, license, franchise, permit, understanding, instrument or obligation or other arrangement to which the Company or any Member is a party or by which the Company or any Member or any of its properties or assets may be bound or affected; (ii) the Articles of Organization or Operating Agreement or other constitutive or governing documents of the Company or of any Member (iii) any Legal Requirement applicable to the Company or any Member or any of its properties or assets. No consent, approval, order, license, permit or authorization of, or notification, registration, declaration or filing with, any Governmental Authority or any other Person is required to be obtained or made by or for the Company, any Member or any of their respective Affiliates in connection with the execution, delivery and performance by each Member of this Agreement or any of the agreements contemplated hereby, or the consummation of the transactions contemplated hereby or thereby, except as required by the HSR Act.
(a) The Company does not directly or indirectly own any capital stock of or other equity interests in any other Person. The Company is not a member of or participant in any other Person.(b) There are no outstanding warrants, options, rights, other securities, agreements, subscriptions or other commitments, arrangements or undertakings pursuant to which the Company may become obligated to issue, deliver or sell, or cause to be issued, delivered or sold, any additional membership interests or other securities of the Company or to issue, grant, extend or enter into any such warrant, option, right, security, agreement, subscription or other commitment, arrangement or undertaking. There are no outstanding options, rights, other securities, agreements or other commitments, arrangements or undertakings pursuant to which the Company is or may become obligated to redeem, repurchase or otherwise acquire or retire any membership interests or other securities of the Company which are presently outstanding or may be issued in the future.
(a) The Interests are the only issued and outstanding equity securities of the Company. All outstanding Interests have been duly authorized and validly issued in compliance with applicable laws, are fully paid and non-assessable and are not subject to any preemptive or subscription rights. All outstanding membership interests are held as of the date of this Agreement by the Members with the domicile addresses and in the classes and amounts set forth on the Member’s Page, which is a true, correct and complete list of the record holders of membership interests of the Company. Such Members own of record and (to the Company’s knowledge) beneficially all the outstanding membership interests, each of them so owning the number of Interests set forth their name on Schedule 1.1 free and clear of all Liens or any other restriction on the right to vote, sell or otherwise dispose of such Interests. All Interests of the Company have been issued in compliance with all applicable federal and state securities laws.(b) Except as set forth on Schedule 2.5(b) , there are no bonds, debentures, notes or other indebtedness or securities of the Company having the right to vote (or convertible into,
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or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote.(c) There are no outstanding rights which permit the holder thereof to cause the Company to file a registration statement under the Securities Act or which permit the holder thereof to include securities of the Company in a registration statement filed by the Company under the Securities Act, and there are no outstanding agreements or other commitments which otherwise relate to the registration of any securities of the Company under the Securities Act.(d) There are no voting trusts, proxies, or other agreements or understandings regarding the voting stock of the Company. As a result of the Acquisition, Buyer will be the sole record and beneficial holder of all issued and outstanding membership interests of the Company and all rights to acquire or receive any membership interests.2.6 Financial Information . Schedule 2.6 includes complete and correct copies of the unaudited, internally prepared balance sheet of the Company and the related statement of operations, as at and for the seven months ended July 31, 2005, and the internally prepared, unaudited balance sheet, statement of operations and members’ equity and cash flows as of and for the twelve (12) months ended December 31, 2004, for the Company (the “ Unaudited Financials ”). The Unaudited Financials are in accordance with the books and records of the Company (which books and records are maintained on a basis utilized for federal income tax purposes and which basis does not, in the aggregate, materially deviate from that which would result had such books and records been prepared in conformity with GAAP (except for the lack of normal year-end adjustments and the lack of footnotes)) and fairly present the consolidated financial condition, results of operations and cash flows of the Company at or for the respective periods then ended.
2.7 Undisclosed Liabilities . Except as set forth in the Unaudited Financials, the Company does not have and, as a result of the transactions contemplated by this Agreement and the agreements contemplated hereby, will not have, any liabilities or obligations or any nature (whether accrued, absolute, contingent, unasserted or otherwise and whether due or to become due) except for liabilities and obligations incurred in the ordinary course of business consistent with past practice, and which, individually or in the aggregate, do not exceed $25,000. The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date of this Agreement and there are no loss contingencies that are required to be accrued by Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for in the Unaudited Financials.
2.8 Taxes . The Company has filed or caused to be filed in a timely manner (within any applicable extension periods) and in the appropriate jurisdictions all Returns relating to any and all Taxes concerning or attributable to the Company or its operations required to be filed and such Returns are and will be true, correct and complete in all material respects. The charges, accruals, and reserves for Taxes for the Company as reflected in the Unaudited Financials are adequate to cover Tax liabilities of the Company accruing through the date thereof. The Company has not incurred any liability for Taxes since December 31, 2004 other than in the ordinary course of business. All Taxes due from and payable by, or due in connection with and
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payable with respect to, the Company on or before the Closing have been or will be fully paid on a timely basis. No Liens have been filed and no claims are being asserted by or against any of the Company for any Taxes (other than Liens for Taxes not yet due and payable). The Company has complied in all material respects with all applicable Legal Requirements relating to the payment and withholding of Taxes and, within the time and in the manner prescribed by law, has withheld from wages, fees and other payments and paid over to the proper governmental or regulatory authorities all amounts required. The Company has not received any notice of assessment or proposed assessment of any Taxes claimed to be owed by it or any other Person on its behalf. No Returns filed by or on behalf of the Company for Taxes are currently being audited or examined and the Company has not received notice of any such audit or examination. No material issue has been raised by any taxing authority regarding the Company in any audit or examination which, by application of similar principles, could reasonably be expected to result in a proposed material adjustment to the liability for Taxes for any period not so examined. No claim has ever been made by an authority in a jurisdiction where the Company does not file Returns that the Company is or may be subject to taxation by that jurisdiction, and the Company has not received any notice or request for information from any such authority. The Company has not been a member of an affiliated group (as defined in Section 1504(a) of the Code) or filed or been included in a combined, consolidated or unitary income tax return. The Company is not required to include in income any adjustment pursuant to Section 481(a) of the Code by reason of a voluntary change in accounting method initiated by the Company, and no Governmental Authority has proposed an adjustment or change in accounting method. The Company is not a party to any Tax sharing or Tax indemnity agreement or any other agreement of a similar nature that remains in effect. The Company has not consented to any waiver of the statute of limitations for the assessment of any Taxes or has requested any extension of time for the payment of any Taxes. The Company has not ever held a beneficial interest in any other Person. The Company is not obligated to make, nor as a result of any event connected with the transactions contemplated by this Agreement will become obligated to make, any payment that would not be deductible under Section 280G of the Code.
2.9 Title to Certain Assets . The Company has good and indefeasible title to the Bakken Gathering System and good and valid title to, or a valid leasehold interest in, as applicable, all of its other assets reflected on the Unaudited Financials or acquired after the date thereof, free and clear of all Liens except statutory liens for the payment of current taxes that are not yet delinquent and which do not affect the properties or assets of the Company in any material respect. All assets leased by the Company, which assets are listed on Schedule 2.9 , are in the condition required by the terms of the lease applicable thereto during the term of such lease and upon the expiration thereof. Such assets, together with the assets listed on Schedule 2.10 , constitute all of the material properties, interests, assets and rights held for use or used in connection with the business and operations of the Company and constitute all those necessary to continue to operate the business of the Company consistent with current and historical practice and as presently contemplated to be conducted. Except as indicated in the preceding sentence, this Section 2.9 does not relate to (i) real property or (ii) intellectual property of the Company; such items are covered under Section 2.10 .
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(a) Schedule 2.10 sets forth (i) a complete list of the real property, including rights of way and easements, owned by the Company (“ Owned Real Property ”), and (ii) a complete list of all real property and interests in real property leased by the Company or which the Company otherwise occupies or has a right to occupy under a written or unwritten agreement (“ Leased Real Property ”). The Company has good and valid title to all Owned Real Property and good and valid leasehold interests in all Leased Real Property, free and clear of all Liens. With respect to the leases or other occupancy agreements affecting the Owned Real Property or the Leased Real Property (each, a “ Lease ”), there exists no default by the Company or any event or circumstance which upon notice or the passage of time, or both, would give rise to any default by the Company, nor, to the knowledge of the Company, is there any such default or events or circumstances of default by any other party to such Lease. No party other than the Company has the right to occupy any of the Owned Real Property or Leased Real Property.(b) The Company is not required to incur any material cost or expense for any restoration or surrender obligations upon the expiration or earlier termination of any Lease. The Company has made available to Buyer true, correct and complete copies of every Lease and lease guaranties including all amendments, terminations and modifications thereof. Except as otherwise described in Schedule 2.10 : (i) the Company has not received any notice from any insurance company of any defects or inadequacies in any Owned Real Property or any part thereof which could materially and adversely affect the insurability of such property or the premiums for the insurance thereof, nor has any notice been given by any insurer of any such property requesting the performance of any repairs, alterations or other work with which compliance has not been made, (ii) there are no service, operating or management agreements or arrangements regarding any of the Owned Real Property that cannot be terminated on thirty (30) days’ notice without penalty or surcharge, and (iii) there are no pending, or, to the knowledge of the Company, threatened condemnation or eminent domain actions or proceedings, or any special assessments or other activities of any public or quasi-public body that are reasonably likely to adversely affect the Owned Real Property.2.11 Intellectual Property and Related Matters .
(a) “ Intellectual Property ” means any and all of the following and all rights in and to (i) any patents and patent applications, including any continuation, continuation-in-part, divisional, reissue, renewal, provisional patent applications, and any patents issuing therefrom, and rights in respect of utility models and industrial designs (collectively, “Patents” ), (ii) copyright, trademark, service marks, trade dress, trade name, licenses, franchises or domain name (regardless of whether such rights have been registered), (iii) registrations and applications for registration of any of the rights listed in clause (i) of this definition, (iv) trade secrets, confidential information, know-how, moral rights, processes, goodwill and any other intangible assets of the Company, (iv) data of any kind, including any rights to use Personally-Identifiable Data, (iv) the likeness, name, signature, voice or other personal characteristics of any Person, and (v) any other proprietary or intellectual property rights of any kind. “ Personally-Identifiable Data ” means data containing personally-identifiable information relating to any natural Person, or any e-mail address. The Company owns no Intellectual Property or license to use Intellectual Property other than commercially available software licensed under “shrink wrap” licenses.
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(b) Without limiting the foregoing, the Company has licensed or otherwise possesses the right to use all software, databases and system or user documentation in use on or in connection with any computer owned or leased by the Company or any server hosted for the Company (“ Internal Use Software ”) as such Internal Use Software is used in connection with the business of the Company as presently conducted.2.12 Material Contracts . Schedule 2.12 sets forth all contracts, agreements and instruments, including term sheets and letters of intent regarding the same, whether written or oral (each, a “ Contract ”), to which the Company is a party or by which the Company is bound that (a) involves or relate to obligations of, or payments to, the Company in excess of $100,000, (b) the license of any patent, copyright, trade secret or other proprietary right, (c) relate to the employment or compensation of any manager, officer or Member of the Company or any Affiliate of such Person, (d) relate to the employment or compensation of any employee, consultant, independent contractor or other agent of the Company, or, to the knowledge of the Company, any Affiliate of such Person, receiving total compensation in excess of $100,000 in any given year, (e) relate to the sale or other disposition of any material assets, properties or rights (other than the sale of inventory), (f) restrict the Company’s ability to do business in any geographic area or grant to any Person exclusive or similar rights in any line of business or in any geographic area, provisions restricting or affecting the development, manufacture or distribution of the Company’s products or services; (g) restrict the Company’s ability to solicit employees of another Person or restrict another Person’s ability to solicit the Company’s employees, (h) to which any Member or Affiliate of any Member is a party, (i) contain provisions providing for indemnification by the Company for infringements of Intellectual Property and other rights (other than indemnification obligations arising from purchase or sale agreements entered into in the ordinary course of business), or (j) is otherwise material to the business, results of operations, financial condition or prospects of the Company, or entered into other than in the ordinary course of business (collectively, the “ Material Contracts ”). All of the Material Contracts are valid, binding and in full force and effect in all material respects, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies and to general principles of equity, and there is no default, or any event which upon notice or the passage of time, or both, would give rise to any material default, in the performance of the Company nor, to the Member’s knowledge, in the performance of any other party to any such Material Contracts. The Company has not violated and is not reasonably likely to violate with its current business practices, any governmental restrictions or regulations covering any of the Company’s Material Contracts. Except as set forth on Schedule 2.12 , all Material Contracts are valid, binding and in full force and effect as to the Company.
2.13 Litigation . There is no action, suit, proceeding, or investigation pending or, to the Company’s knowledge, currently threatened against the Company that questions the validity of, or the right to consummate the transactions contemplated hereby or thereby, or that would reasonably be expected to result, either individually or in the aggregate, in a Company Material Adverse Effect, or in any change in the current equity ownership of the Company. The Company is not a party to or named in or subject to any order, writ, injunction, judgment, or decree of any court, government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company currently pending or that the Company intends to initiate.
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2.14 Absence of Changes or Events . Except as set forth on Schedule 2.14 , since July 31, 2005, the business of the Company has been conducted in the ordinary course consistent with past practice and there has not been:
(a) any event, violation or other matter that could, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect;(b) any obligation or liability (whether absolute, accrued, contingent or otherwise, and whether due or to become due) incurred by the Company in excess of $50,000 individually, other than obligations under customer contracts, current obligations and liabilities, in each case incurred in the ordinary course of business and consistent with past practice;(c) any payment, discharge, satisfaction or settlement of any claim or obligation of the Company, except in the ordinary course of business and consistent with past practice;(d) any declaration, setting aside or payment of any dividend or other distribution for any equity securities of the Company or any direct or indirect redemption, purchase or other acquisition of any such equity securities;(e) any issuance or sale, or any contract entered into for the issuance or sale, of any membership interests or securities convertible into or exercisable for membership interests;(f) any sale, assignment, pledge, encumbrance, transfer or other disposition of any tangible asset of the Company;(g) any creation of any Lien on any property of the Company except for Liens in existence on the date of this Agreement that have been incurred in the ordinary course of business and are described on Schedule 2.14(g);(h) any cancellation of any debts or claims or any amendment, termination or waiver of any rights of the Company, except for those that would not have a Company Material Adverse Effect;(i) any capital expenditure or commitment or addition to property, plant or equipment of the Company in excess of $100,000 individually or $500,000 in the aggregate;(j) any material increase in the compensation of employees of the Company (including any increase pursuant to any written bonus, severance, pension, profit sharing or other benefit or compensation plan, policy or arrangement or commitment) or any declaration, payment or commitment to pay any severance or termination benefit, or any increase in any such compensation or bonus payable to any officer, stockholder, director, consultant or agent of the Company having an annual salary or remuneration in excess of $100,000;(k) any damage, destruction or loss (whether or not covered by insurance) affecting any asset or property of the Company resulting in liability or loss in excess of $100,000;
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(l) any material change in any compensation arrangement or agreement with any employee, officer, director or security holder; or(m) any labor organization activity related to the Company.2.15 Compliance with Applicable Laws .
(a) The Company and its properties (including the Leased Real Property), assets, operations and business are in compliance in all material respects with all applicable Legal Requirements, including, without limitation Hazardous Substances (including, without limitation, any product content, product take back and e-waste fees) and human health and safety (“ Environmental Requirements ”) hazardous materials and occupational safety and health and to the Company’s status as a contractor with any Governmental Authority, except for such instances of noncompliance as would not individually or in the aggregate have a Company Material Adverse Effect or any adverse effect on the Company’s ability to execute, deliver and perform this Agreement and the other agreements contemplated hereby and consummate the transactions contemplated hereby and thereby. No investigation or review by any Governmental Authority regarding the Company is pending or, to the knowledge of the Company, threatened.(b) The Company has obtained and has in effect all permits, licenses and other authorizations which are required for the operation of its business and the ownership of its assets, including without limitation to maintain its good standing as a contractor with any Governmental Authority. The Company is in full compliance with all terms and conditions of such permits, licenses and authorizations, no proceeding is pending or, to the knowledge of the Company, threatened, to revoke or limit any thereof, and the Company does not know of any basis for any such proceeding and the consummation of the transactions contemplated in this Agreement will not result in the non-renewal, revocation or termination of any such license or permit.(c) There are no past or present (or, to the knowledge of the Company, future) events, conditions, circumstances, activities, practices, incidents, actions or plans which may interfere with or prevent compliance or continued compliance by the Company with Environmental Requirements or any judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder, or, to the knowledge of the Company, which may give rise to any common law or legal liability of the Company including liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq. , as amended, or similar federal, state, county, municipal, or local laws, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing, notice of violation, study or investigation against or affecting the Company, based on or related to the generation, manufacture, processing, labeling, distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment (“ Hazardous Materials Activities ”) of any pollutant, contaminant, chemical, or industrial, toxic or hazardous substance or waste (“ Hazardous Substance ”).(d) Except as would not reasonably be expected to result in liability to the Company, there has been no release, discharge, deposit, disposal or contamination of or by a
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Hazardous Substance caused by the Company or any person or entity lawfully acting by or through the Company, or to the knowledge of the Company, by any other person or entity, on, under, or contiguous to any property owned or leased by the Company, and to the knowledge of the Company, none of such properties has been used at any time as a landfill, storage, or waste disposal site.(e) No Hazardous Substance generated, manufactured, processed, used, treated, or stored by the Company or any person or entity lawfully acting by or through the Company or by any other person or entity has been disposed of or treated at any site or location, other than property leased or owned by the Company that was not authorized or licensed to receive such materials for disposal or treatment, or at any site or location for which the Company has received a notice of potential liability or request for information, or at any site or location that has been placed or proposed to be placed on any cleanup list or is the subject of a claim, order or directive or consent (including consent decrees and administrative orders), request, settlement or other demand from any person or entity for removal, remedial, response, corrective action, abatement or cleanup.(f) The Company has not entered into any agreement that may require it to guarantee, reimburse, pledge, defend, hold harmless or indemnify any other party with respect to liabilities arising out of Environmental Requirements or the Hazardous Materials Activities of the Company.(g) The Company has delivered to Buyer or made available for inspection by Buyer and its agents, representatives and employees all records in the Company’s possession concerning the Hazardous Materials Activities of the Company relating to its business and all environmental audits and environmental assessments of any Owned Real Property or Leased Real Property conducted at the request of, or otherwise in the possession of the Company. The Company has complied with all environmental disclosure obligations imposed by applicable law with respect to this transaction.2.16 Certain Employee Matters . Except as set forth on Schedule 2.16 :
(a) The employment of each officer and employee of the Company is terminable at the will of the Company. To the Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has contracted is in violation of any term of any employment contract, proprietary information agreement or other agreement relating to the right of any such individual to be employed by, or to contract with, the Company, and to the Company’s knowledge, the continued employment by the Company of its present employees, and the performance of the Company’s contracts with its independent contractors, will not result in such violation. The Company has not received any notice alleging that any such violation has occurred. The Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company, nor does the Company have a present intention to terminate the employment of any officer, key employee or group of employees. The Company has not experienced any labor disputes, union organization attempts or work stoppage due to labor disagreements. There are no unfair labor practice charges or complaints against the Company pending, or to the knowledge of the Company, threatened before the National Labor Relations Board or any comparable state agency or authority. There
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are no written or oral contracts, commitments, agreements, understandings or other arrangements with any labor organization, nor work rules or practices agreed to with any labor organization or employee association, applicable to employees of the Company, nor is the Company a party to, or bound by, any collective bargaining or similar agreement. There is not any representation of the employees of the Company by any labor organization and, to the knowledge of the Company, there are no union organizing activities among the employees of the Company, and to the knowledge of the Company, no question concerning representation has been raised or is threatened respecting the employees of the Company. The Company is in compliance in all respects with all applicable foreign, federal, state and local laws, rules and regulations respecting employment, employment practices, terms and conditions of employment and wages and hours.(b) To the knowledge of the Company, no employee of the Company, nor any consultant with whom the Company has contracted, is in violation of any term of any employment contract, proprietary information agreement or other agreement relating to the right of any such individual to be employed by, or to contract with, the Company, and to the knowledge of the Company, the continued employment by the Company of its present employees, and the performance of the Company’s contracts with its independent contractors, will not result in such violation. The Company has not received any notice alleging that any such violation has occurred.
(a) The Company has no plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, pension, retirement, savings, deferred compensation, profit-sharing, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind (whether written or otherwise), including without limitation each “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), which is or has been maintained, contributed to or required to be contributed to, by the Company or any other person or entity under common control with the Company within the meaning of Section 414(b), (c), (m) or (o) of the Code (“ ERISA Affiliate ”) for the benefit of any current or former or retired | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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