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Dovebid - Membership Interest Purchase Agreement
EXHIBIT 2.03
MEMBERSHIP INTEREST PURCHASE AGREEMENT
This MEMBERSHIP INTEREST PURCHASE AGREEMENT, dated as of February 29, 2000 (the "Agreement"), is entered into by and among Greenwich Industrial Services, LLC, a Connecticut limited liability company ("Greenwich"), DoveBid, Inc., a Delaware corporation, its affiliates, subsidiaries and assigns ("DoveBid") and William J. Gardner, James F. Gardner, Scott Lonkart and Michael DiProspero, each in his individual capacity (each, individually, a "Member" and, collectively, the "Members").
WHEREAS, the Members own beneficially and of record all of the issued and outstanding membership interests of Greenwich; and
WHEREAS, DoveBid desires to purchase from the Members, and each Member desires to sell to DoveBid, all equity interests of Greenwich owned by the Members on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Agreement to Sell and Purchase Interests. At the Closing, each Member
---------------------------------------- shall sell, transfer and deliver to DoveBid, and DoveBid shall purchase and accept from each Member, all of the Interests (as defined below) owned by such Member, free and clear of all security interests, liens, pledges, charges, escrows, options, rights of first refusal, mortgages, indentures, security agreements or other claims, encumbrances, agreements, arrangements or commitments of any kind or character (collectively, "Liens") in exchange for the following aggregate consideration (the "Purchase Price"), which shall be subject to reduction in accordance with Section 1.2 and allocated among the Members in proportion to the Interest owned by such Member in proportion to the Interests owned by all Members:
(i) a convertible subordinated promissory note substantially in the in the form attached hereto as Exhibit A (each a "Convertible Subordinated
--------- Promissory Note") in the principal amount of $2,000,000;
(ii) a cash payment equal to $3,250,000; and
(iii) pursuant to the terms of the Escrow Agreement attached hereto as Exhibit B (the Escrow Agreement") which agreement shall require that DoveBid
--------- deposit $1,000,000 with Chase Manhattan Bank and Trust Company, N.A. as the escrow agent on the Closing (the "Escrow Funds"), in the event that William J. Gardner, Jr. remains employed by DoveBid on each annual distribution date set forth below and either (A) generates leads for at least five (5) auctions per year or (B) successfully manages at least three (3) full-time salespeople, a cash payment equal to $500,000 on the first anniversary of the Closing, $250,000 on the second anniversary of the Closing and $250,000 on the third anniversary of the Closing
(each, an "Earn-Out Payment" and collectively, the "Earn-Out Payments"); provided, however, that in the event that William J. Gardner terminates his employment for Good Reason or is terminated other than for Cause, as defined in clause (ii) of the definition of Cause set forth below, the payments described in the immediately preceding sentence shall be payable to the Members on the dates set forth in this Section 1.1(iii). In the event that a Member other than William Gardner terminates his employment for Good Reason or is terminated other than for Cause, the Member terminating his employment shall receive within thirty (30) days of any such termination his pro rata portion of the aggregate maximum future Earn-Out Payment payable. For purposes of this agreement, "Good Reason" shall mean the occurrence of any of the following events without such Member's consent: (i) being required by DoveBid to relocate more than twenty- five (25) miles from Greenwich's current location in order to perform his duties; (ii) a reduction in his base salary during from the Effective Time until the second anniversary thereof; (iii) a material reduction in his employee benefits other than a reduction which applies to all DoveBid employees of comparable position and experience; (iv) a material reduction in responsibilities; or (v) death or disability. "Cause" shall mean, in DoveBid's reasonable and good faith determination, such Member's: (i) for Members other than William J. Gardner only, failure to meet specific written performance goals set reasonably and in good faith and in writing by DoveBid; (ii) for William J. Gardner, Jr. only, any failure to generate at least five (5) auctions per year or successfully manage at least three (3) full-time sales people; (iii) willful or material breaches or habitual neglect of the duties he is required to perform under the terms and conditions of his Employment Agreement and as may be assigned from time to time by the Company; (iv) engaging in willful misconduct materially and demonstrably injurious to DoveBid; or (v) committing any acts of a criminal or illegal nature, fraud, dishonesty, misrepresentation, insubordination, or any acts of moral turpitude in connection with DoveBid's business. DoveBid shall provide the respective Member with a forty-five (45) business day opportunity to cure any circumstances that it believes could constitute "Cause" pursuant to clauses (i), (ii) or (iii) in the immediately preceding sentence if, in DoveBid's reasonable and good faith determination, it believes providing such an opportunity would not subject DoveBid to significant further harm in the event such circumstances were not cured. In addition, notwithstanding anything to the contrary in this Section 1.1, the Earn-Out Payments will be immediately due and payable in the event the stock option grants set forth in each Employment Agreement and the additional 30,000 options for employees other than the Members (with the exact allocation to be agreed to by the Members and DoveBid) are not issued pursuant to the terms contained in each Employment Agreement within 30 days of the Closing.
1.2 Purchase Price Adjustments. The Purchase Price shall be subject to adjustment prior to the Closing Date (as defined below) as follows:
1.2.1 As promptly as possible after the Closing (but in any event not later than 45 days thereafter), the Members shall prepare and deliver to DoveBid a consolidated balance sheet of Greenwich, including a statement of Net Book Value (as defined below) (together, the "Closing Balance Sheet"), as of the close of business on the Closing Date (without giving effect to the transactions contemplated by this Agreement). For purposes of this Agreement, "Net Book Value" means the excess of (i) the tangible assets (including without limitation accounts receivable and prepaid expenses) of Greenwich less (ii) all liabilities of Greenwich. Except as set forth below in this Section 1.2.1, the Members shall prepare the Closing Balance Sheet in accordance with generally accepted accounting principles. The inventory set forth in the Closing
Balance Sheet, net of the reserve for unusable inventory and valued at lower of cost or market, shall not include any inventory that is obsolete, of below standard quality, unusable or unsaleable or not saleable within the ordinary course of business within six (6) months after the Closing Date. All property, plant and equipment shown, directly or indirectly, on the Closing Balance Sheet shall be net of all applicable depreciation and amortization.
1.2.2 DoveBid shall be given reasonable access during normal business hours to all work papers, accounting records and personnel related to Greenwich and such other materials as are reasonably necessary for DoveBid's independent evaluation of the Closing Balance Sheet. DoveBid shall deliver to the Members within 45 days after receiving the Closing Balance Sheet a detailed written statement describing any objections thereto. Failure of DoveBid to so object to the Closing Balance Sheet shall constitute acceptance thereof by DoveBid, whereupon the Closing Balance Sheet shall be deemed to be the "Closing Statement." The DoveBid and the Members shall use reasonable efforts to resolve any such objections, but if they do not reach a final resolution within 15 days after notice given of DoveBid's objections, a "Big 5" international accounting firm shall be selected to serve as the Neutral Accountants by mutual agreement of the parties or, if the parties are unable to so agree within 15 days after the Members have received DoveBid's written statement of objections, then an accounting firm shall be selected pursuant to the Commercial Arbitration Rules of the American Arbitration Association ("AAA Rules"). The DoveBid and the Members shall jointly instruct the Neutral Accountants to resolve any unresolved objections of DoveBid and deliver the Closing Statement within 30 days after the date of their appointment. The Neutral Accountants shall, in making their determination, follow the definitions and provisions of Section 1.2.1 of this Agreement. The Closing Balance Sheet shall be adjusted only as needed to conform with the requirements of Section 1.2.1 and, as so adjusted, shall be the "Closing Statement." The determination by the Neutral Accountants shall be conclusive and binding upon DoveBid and the Members, absent fraud or manifest error. Nothing herein shall be construed to authorize or permit the Neutral Accountants to determine (i) any questions or matter whatever under or in connection with this Agreement except the determination of what adjustments, if any, must be made in one or more of the items reflected in the Closing Balance Sheet or (ii) an adjustment to an item on the Closing Balance Sheet that is outside of the range defined by amounts as finally proposed by the Members and DoveBid, respectively.
1.2.3 If the Net Book Value as shown on the Closing Statement is less than $1,027,500 the difference shall be deducted from the Escrow Funds (which shall equal $3,250,000 less the amount by which the Net Book Value as shown on the Closing Statement is less than $1,027,500 (the resulting deficiency being hereinafter referred to as the "Post-Closing Adjustment")). The Members shall pay to DoveBid an amount equal to the Post-Closing Adjustment. Such amount shall be payable by each Member in proportion to the Interest owned by each such Member in proportion to the Interests owned by all Members. Such amount shall be due and payable no later than 30 days after Net Book Value is determined as provided above. In the event of any reduction in Purchase Price, the cash portion of the Purchase Price
shall be reduced and such reduced aggregate consideration shall constitute the "Purchase Price" for all purposes under this Agreement.
1.3 THE CLOSING. Subject to termination of this Agreement as provided in article vii below, the closing will take place at the offices of DoveBid at 1241 East Hillsdale Blvd., Foster City, Ca 94404 at 10:00 a.m., Pacific Standard Time on February 29, 2000 or, if all conditions to closing have not been satisfied or waived by such date, such other place, time and date as Greenwich and DoveBid may mutually select (the "Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF GREENWICH AND THE MEMBERS
Except as specifically set forth in the disclosure schedule provided by Greenwich to DoveBid simultaneously with the signing of this Agreement, dated as of the date of this Agreement (the "Greenwich Disclosure Schedule"), the parts of which are numbered to correspond to the Section numbers of this Agreement, (i) Greenwich and William Gardner hereby jointly and severally represent and warrant to DoveBid and (ii) each Member other than William Gardner hereby severally and not jointly represents and warrants to DoveBid as follows.
2.1 Organization and Good Standing. Greenwich is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Connecticut, has the power and authority to own, operate and lease its properties and to carry on its business as now conducted and as proposed to be conducted, and is qualified to conduct business in each jurisdiction in which it is required to do so, except where the failure to do so would have a material adverse effect on Greenwich, its business, prospects or financial condition.
2.2 Power, Authorization and Validity.
2.2.1 Greenwich and each Member has the right, power, legal capacity and authority to enter into and perform its obligations under this Agreement, and all agreements to which Greenwich and each Member is or will be a party that are required to be executed pursuant to this Agreement (the "Greenwich Ancillary Agreements"). Any and all approvals required by the Operating Agreement or other governing documents of Greenwich or applicable law with respect to the due authorization and approval of this Agreement, the Greenwich Ancillary Agreements or the transactions contemplated hereby or thereby have been obtained.
2.2.2 No filing, authorization or approval, governmental or otherwise, is necessary to enable Greenwich to enter into, and to perform its obligations under, this Agreement and the Greenwich Ancillary Agreements, except for such filings as may be required to comply with federal and state securities laws. All such qualifications and filings will, in the case of qualifications, be effective on the Closing, and will, in the case of filings, be made within the time prescribed below.
2.2.3 This Agreement and the Greenwich Ancillary Agreements are, or when executed by Greenwich and the Members will be, valid and binding obligations of Greenwich and the Members enforceable against Greenwich and the Members in accordance with their
respective terms, except as to the effect, if any, of (a) applicable bankruptcy and other similar laws affecting the rights of creditors generally, (b) rules of law governing specific performance, injunctive relief and other equitable remedies and (c) the enforceability of provisions requiring indemnification in connection with the offering, issuance or sale of securities.
2.3 Capitalization. The outstanding equity interests of Greenwich consist solely of 100% of percentage interests (the "Interests"). All such Interests have been duly authorized and validly issued, are fully paid and nonassessable, are not subject to any right of rescission, and have been offered, issued, sold and delivered by Greenwich in compliance with all registration or qualification requirements (or applicable exemptions therefrom) of applicable federal and state securities laws. A list of all holders of such Interests is set forth in Section 2.3 to the Greenwich Disclosure Schedule. Except as set forth in this Section 2.3, there are no options, warrants, calls, commitments, conversion privileges or preemptive or other rights or agreements outstanding to purchase any of equity or voting interest in Greenwich or any securities convertible into or exchangeable for equity or voting interests of Greenwich or obligating Greenwich to grant, extend, or enter into any such option, warrant, call, right, commitment, conversion privilege or other right or agreement. There is no voting agreement, right of first refusal or other restriction (other than normal restrictions on transfer under applicable federal and state securities laws) applicable to any of Greenwich's outstanding securities. Greenwich is not under any obligation to register under the Securities Act of 1933, as amended (the "Securities Act") any of its presently outstanding securities or any securities that may be subsequently issued. Each Member owns in the aggregate (including Interests held both beneficially and of record and other equity instruments held either beneficially or of record) the number of Interests set forth below Member's name on the signature page of this Agreement, and does not directly or indirectly own, either beneficially or of record, any other equity interests of Greenwich. All Interests held by such Member are, and at all times until and through the Closing will be, free and clear of any Liens. Interests held by Members constitute collectively all of the outstanding equity and voting interests of Greenwich. On the date of this Agreement, there are no, and on the Closing Date there will be, no, options, warrants, calls, commitments, conversion privileges or preemptive or other rights or agreements outstanding to purchase any equity interest of Greenwich or any securities convertible into or exchangeable for any equity interest of Greenwich or obligating Greenwich to grant, extend, or enter into any such option, warrant, call, right, commitment, conversion privilege or other right or agreement. There is no voting agreement, right of first refusal or other restriction (other than normal restrictions on transfer under applicable federal and state securities laws and as set forth in the Operating Agreement) applicable to any of Greenwich's outstanding securities.
2.4 Subsidiaries. Greenwich does not have any subsidiaries or any interest, direct or indirect, in any corporation, partnership, joint venture or other business entity.
2.5 No Conflict. Neither the execution and delivery of this Agreement nor any Greenwich Ancillary Agreement, nor the consummation of the transactions contemplated hereby, will conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach, impairment or violation of (a) any provision of the Operating Agreement or other governance document, as currently in effect, (b) any instrument or contract to which Greenwich or any Member is a party or by which Greenwich or any Member is bound, or (c) any federal, state, local or foreign judgment, writ, decree, order, statute, rule or regulation applicable to
Greenwich or any Member or their respective assets or properties. The consummation of the transactions contemplated by this Agreement does not and will not require the consent of any third party other than as specifically provided for in this Agreement.
2.6 Litigation. There is no action, proceeding, claim or investigation pending against Greenwich before any court or administrative agency, nor has any such action, proceeding, claim or investigation been threatened. There is no reasonable basis for any member or former member of Greenwich, or any other person, firm, corporation, or entity, to assert a claim against Greenwich, or any Member or DoveBid based upon: (a) ownership or rights to ownership of any Interests or other ownership interest in Greenwich, (b) any rights as a Greenwich Member, including any option or preemptive rights or rights to notice or to vote, or (c) any rights under any agreement among Greenwich and its members.
2.7 Taxes. Greenwich has filed all federal, state, local and foreign tax returns required to be filed, has paid all taxes required to be paid in respect of all periods for which returns have been filed, has established an adequate accrual or reserve for the payment of all taxes payable in respect of the periods subsequent to the periods covered by the most recent applicable tax returns, has made all necessary estimated tax payments, and has no liability for taxes in excess of the amount so paid or accruals or reserves so established. Greenwich is not delinquent in the payment of any tax or in the filing of any tax returns, and no deficiencies for any tax have been threatened, claimed, proposed or assessed. No tax return of Greenwich has ever been audited by the Internal Revenue Service or any state taxing agency or authority. Greenwich has never made a "check-the-box" election to be characterized as a corporation for tax purposes. For the purposes of this Section, the terms "tax" and "taxes" include all federal, state, local and foreign income, gains, franchise, excise, property, sales, use, employment, license, payroll, occupation, recording, value added or transfer taxes, governmental charges, fees, levies or assessments (whether payable directly or by withholding), and, with respect to such taxes, any estimated tax, interest and penalties or additions to tax and interest on such penalties and additions to tax.
2.8 Greenwich Financial Statements. Greenwich has delivered to DoveBid, hereto attached as Exhibit C, copies of: (a) Greenwich's audited consolidated
--------- balance sheet as of December 31, 1999 (the "Balance Sheet"); (b) Greenwich's audited consolidated income statement and statement of cash flows for the twelve months ended December 31, 1999; (c) Greenwich's unaudited consolidated balance sheet as of January 31, 2000, and (d) Greenwich's unaudited consolidated income statement and cash flows for the one month ended January 31, 2000 (collectively, with the Balance Sheet, the "Financial Statements"). The Financial Statements (a) are in accordance with the books and records of Greenwich, (b) fairly present the financial condition of Greenwich at the date therein indicated and the results of operations for the period therein specified and (c) have been prepared in accordance with generally accepted accounting principles applied on a consistent basis. Greenwich has no debt, liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, that is not reflected or reserved against in the Financial Statements, except for those contained in agreements and arrangements listed in the Greenwich Disclosure Schedule and for those that may have been incurred after the date of the Financial Statements in the ordinary course of its business, consistent with past practice in individual amounts less than $25,000.
2.9 Title to Properties. Greenwich has good and marketable title to all of its assets as shown on the Balance Sheet, free and clear of all liens, charges, restrictions or encumbrances (other than for taxes not yet due and payable). All machinery and equipment included in such properties is in good condition and repair, normal wear and tear excepted, and all leases of real or personal property to which Greenwich is a party are fully effective and afford Greenwich peaceful and undisturbed possession of the subject matter of the lease. Greenwich is not in violation of any zoning, building, safety or environmental ordinance, regulation or requirement or other law or regulation applicable to the operation of owned or leased properties, or has received any notice of violation with which it has not complied.
2.10 Absence of Certain Changes. Since January 31, 2000, there has not been with respect to Greenwich:
(a) any change in the financial condition, properties, assets, liabilities, business or operations thereof which change by itself or in conjunction with all other such changes, whether or not arising in the ordinary course of business, has had or will have a material adverse effect thereon;
(b) any contingent liability incurred thereby as guarantor or otherwise with respect to the obligations of others;
(c) any mortgage, encumbrance or lien placed on any of the properties thereof;
(d) any material obligation or liability incurred thereby other than obligations and liabilities incurred in the ordinary course of business in individual amounts less than $25,000;
(e) any purchase or sale or other disposition, or any agreement or other arrangement for the purchase, sale or other disposition, of any of the properties or assets thereof other than in the ordinary course of business in individual amounts less than $25,000;
(f) any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the properties, assets or business thereof;
(g) any declaration, setting aside or payment of any dividend on, or the making of any other distribution in respect of, the capital stock thereof, any split, combination or recapitalization of the capital stock thereof or any direct or indirect redemption, purchase or other acquisition of the percentage interests thereof;
(h) any labor dispute or claim of unfair labor practices, any change in the compensation payable or to become payable to any of its officers, managers, employees or agents, or any bonus payment or arrangement made to or with any of such officers, managers, employees or agents;
(i) any change with respect to the management, supervisory or other key personnel thereof;
(j) any payment or discharge of a material lien or liability thereof which lien was not either shown on the Balance Sheet or incurred in the ordinary course of business thereafter; or
(k) any obligation or liability incurred thereby to any of its officers, employees, managers or members or any loans or advances made thereby to any of its officers, employees, managers or members except normal compensation and expense allowances payable to officers and employees.
2.11 Contracts and Commitments. Except as set forth in Section 2.11 to the Greenwich Disclosure Schedule, Greenwich has no contract, obligation or commitment which involves a potential future commitment in excess of $25,000 or any percentage interest redemption or purchase agreement, financing agreement, license, lease or franchise. A true and complete copy of each agreement or document listed in Section 2.11 to the Greenwich Disclosure Schedule has been delivered to DoveBid. Greenwich is not in default under any contract, obligation or commitment listed in Section 2.11 to the Greenwich Disclosure Schedule or otherwise. Greenwich does not have any liability for renegotiation of government contracts or subcontracts, if any.
2.12 Intellectual Property. Greenwich owns, or has the right to use, sell or license all Intellectual Property Rights (as defined below) necessary or required for the conduct of business as presently conducted, including but not limited to all Intellectual Property Rights to the name Greenwich Industrial Services (such Intellectual Property Rights being hereinafter collectively referred to as the "Greenwich IP Rights") and such rights to use, sell or license are reasonably sufficient for the conduct of its business. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not constitute a breach of any instrument or agreement governing any Greenwich IP Right (the "Greenwich IP Rights Agreements"), do not and will not cause the forfeiture or termination or give rise to a right of forfeiture or termination of any Greenwich IP Right or impair the right of Greenwich to use, sell or license any Greenwich IP Right or portion thereof. There is no royalty, honoraria, fee or other payment payable by Greenwich to any person by reason of the ownership, use, license, sale or disposition of any Greenwich IP Right (other than as set forth in the Greenwich IP Rights Agreements listed in Section 2.12 to the Greenwich Disclosure Schedule). Neither the manufacture, marketing, license, sale or intended use of any product currently licensed or sold by Greenwich or currently under development by Greenwich violates any license or agreement between Greenwich and any third party or infringes any Intellectual Property Right of any other person or entity; and there is no pending or threatened claim or litigation contesting the validity, ownership or right to use, sell, license or dispose of any Greenwich IP Right nor is there any basis for any such claim, nor has Greenwich received any notice asserting that any Greenwich IP Right or the proposed use, sale, license or disposition thereof conflicts, or will conflict, with the rights of any other person or entity, nor is there any basis for any such assertion. Greenwich has taken reasonable and practicable steps designed to safeguard and maintain the secrecy and confidentiality of, and its proprietary rights in, all Greenwich IP Rights. Each officer, employee and consultant of Greenwich has executed and delivered to Greenwich an agreement regarding the protection of proprietary information and the assignment to Greenwich of all Intellectual Property Rights arising from the services performed for Greenwich by such person. Section 2.12 to the Greenwich Disclosure Schedule contains a list
of all applications, registrations, filings and other formal actions made or taken pursuant to federal, state and foreign laws by Greenwich to perfect or protect its interest in Greenwich IP Rights, including, without limitation, all patents, patent applications, trademarks, trademark applications and service marks. As used herein, the term "Intellectual Property Rights" shall mean all worldwide industrial or intellectual property rights, including, without limitation, patents, patent applications, patent rights, trademarks, trademark applications, trade names, service marks, service mark applications, copyright, copyright applications, franchises, licenses, inventories, know-how, trade secrets, customer lists, proprietary processes and formulae, all source and object code, algorithms, architecture, structure, display screens, layouts, inventions, development tools and all documentation and media constituting, describing or relating to the above, including, without limitation, manuals, memoranda and records.
2.13 Compliance with Laws. Greenwich has complied, or prior to the Closing Date will have complied, and is or will be at the Closing in full compliance with all applicable laws, ordinances, regulations, and rules, and all orders, writs, injunctions, awards, judgments, and decrees applicable to it or to the assets, properties, and business thereof, including, without limitation: (a) all applicable federal and state securities laws and regulations, (b) all applicable federal, state, and local laws, ordinances, regulations, and all orders, writs, injunctions, awards, judgments, and decrees pertaining to (i) the sale, licensing, leasing, ownership, or management of its owned, leased or licensed real or personal property, products and technical data, (ii) employment and employment practices, terms and conditions of employment, and wages and hours and (iii) safety, health, fire prevention, environmental protection, toxic waste disposal, building standards, zoning and other similar matters (c) the Export Administration Act and regulations promulgated thereunder and all other laws, regulations, rules, orders, writs, injunctions, judgments and decrees applicable to the export or re-export of controlled commodities or technical data and (d) the Immigration Reform and Control Act. Greenwich has received all permits and approvals from, and has made all filings with, third parties, including government agencies and authorities, that are necessary in connection with its present business. There are no legal or administrative proceedings or investigations pending or threatened, that, could be expected to be enacted or determined adversely to Greenwich.
2.14 Certain Transactions and Agreements. None of the officers, managers, Members or employees of Greenwich, nor any member of their immediate families, has any direct or indirect ownership interest in any firm or corporation that competes with Greenwich (except with respect to any interest in less than one percent of the stock of any corporation whose stock is publicly traded). None of said officers managers, Members or employees, or any member of their immediate families, is directly or indirectly interested in any contract or informal arrangement with Greenwich, except for normal compensation for services as an officer, manager, Member or employee thereof. None of said officers, managers, Members or employees or any member of their immediate families has any interest in any property, real or personal, tangible or intangible, including inventions, patents, copyrights, trademarks or trade names or trade secrets, used in or pertaining to the business of Greenwich, except for the normal rights of a holder of a percentage interest.
2.15. Employees, ERISA and Other Compliance.
2.15.1 Greenwich does not have any employment contract or consulting agreement currently in effect that is not terminable at will (other than agreements with the sole purpose of providing for the confidentiality of proprietary information or assignment of inventions). All officers, managers, employees and consultants of Greenwich having access to proprietary information have executed and delivered to Greenwich an agreement regarding the protection of such proprietary information and the assignment of inventions to Greenwich; true and complete copies of the form of all such agreements have been delivered to DoveBid's counsel.
2.15.2 Greenwich (i) has not ever been nor is now subject to a union organizing effort, (ii) is not subject to any collective bargaining agreement with respect to any of its employees, (iii) is not subject to any other contract, written or oral, with any trade or labor union, employees' association or similar organization, or (iv) has no current labor disputes. Greenwich has good labor relations, and has no knowledge of any facts indicating that the consummation of the transactions contemplated hereby will have a material adverse effect on such labor relations, and has no knowledge that any of its key employees intends to leave its employ.
2.15.3 Section 2.15.1 to the Greenwich Disclosure Schedule identifies (i) each "employee benefit plan," as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and (ii) all other written or formal plans or agreements involving direct or indirect compensation or benefits (including any employment agreements entered into between Greenwich and any employee of Greenwich, but excluding workers' compensation, unemployment compensation and other government-mandated programs) currently or previously maintained, contributed to or entered into by Greenwich under which Greenwich or any ERISA Affiliate (as defined below) thereof has any present or future obligation or liability (collectively, the "Greenwich Employee Plans"). For purposes of this Section 2.8, "ERISA Affiliate" shall mean any entity which is a member of (A) a "controlled group of corporations," as defined in Section 414(b) of the Internal Revenue Code of 1986, as amended (the "Code"), (B) a group of entities under "common control," as defined in Section 414(c) of the Code, or (C) an "affiliated service group," as defined in Section 414(m) of the Code, or treasury regulations promulgated under Section 414(o) of the Code, any of which includes Greenwich. Copies of all Greenwich Employee Plans (and, if applicable, related trust agreements) and all amendments thereto and written interpretations thereof (including summary plan descriptions) have been delivered to DoveBid or its counsel, together with the three most recent annual reports (Form 5500, including, if applicable, Schedule B thereto) prepared in connection with any such Greenwich Employee Plan. All Greenwich Employee Plans which individually or collectively would constitute an "employee pension benefit plan," as defined in Section 3(2) of ERISA (collectively, the "Greenwich Pension Plans"), are identified as such in Section 2.15.1 to the Greenwich Disclosure Schedule. All contributions due from Greenwich with respect to any of the Greenwich Employee Plans have been made as required under ERISA or have been accrued on the Financial Statements. Each Greenwich Employee Plan has been maintained substantially in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations, including, without limitation, ERISA and the Code, which are applicable to such Greenwich Employee Plans.
2.15.4 No Greenwich Pension Plan constitutes, or has since the enactment of ERISA constituted, a "multiemployer plan," as defined in Section 3(37) of ERISA. No Greenwich Pension Plans are subject to Title IV of ERISA. No "prohibited transaction," as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Greenwich Employee Plan which is covered by Title I of ERISA which would result in a liability to Greenwich taken as a whole, excluding transactions effected pursuant to a statutory or administrative exemption. Nothing done or omitted to be done and no transaction or holding of any asset under or in connection with any Greenwich Employee Plan has or will make Greenwich or any officer or director of Greenwich subject to any liability under Title I of ERISA or liable for any tax (as defined in Section 2.7 hereof) or penalty pursuant to Sections 4972, 4975, 4976 or 4979 of the Code or Section 502 of ERISA.
2.15.5 Any Greenwich Pension Plan which is intended to be qualified under Section 401(a) of the Code (a "Greenwich 401(a) Plan") is so qualified and has been so qualified during the period from its adoption to date, and the trust forming a part thereof is exempt from tax pursuant to Section 501(a) of the Code. Greenwich has delivered to DoveBid or its counsel a complete and correct copy of the most recent Internal Revenue Service determination letter with respect to each Greenwich 401(a) Plan.
2.15.6 Section 2.15.6 to the Greenwich Disclosure Schedule lists each employment, severance or other similar contract, arrangement or policy and each plan or arrangement (written or oral) providing for insurance coverage (including any self-insured arrangements), workers' benefits, vacation benefits, severance benefits, disability benefits, death benefits, hospitalization benefits, retirement benefits, deferred compensation, profit-sharing, bonuses and all forms of incentive compensation or post-retirement insurance, compensation or benefits for employees, consultants or managers which (A) is not a Greenwich Employee Plan, (B) is entered into, maintained or contributed to, as the case may be, by Greenwich and (C) covers any employee or former employee of Greenwich. Such contracts, plans and arrangements as are described in this Section 2.15.6 are herein referred to collectively as the "Greenwich Benefit Arrangements." Each Greenwich Benefit Arrangement has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Greenwich Benefit Arrangement. Greenwich has delivered to DoveBid or its counsel a complete and correct copy or description of each Greenwich Benefit Arrangement.
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