Exhibit 10.5
Execution Copy
STOCK PURCHASE AGREEMENT
Among
VOLUME SERVICES AMERICA HOLDINGS, INC.
BCP VOLUME L.P.
BCP OFFSHORE VOLUME L.P.
RECREATIONAL SERVICES L.L.C.
VSI MANAGEMENT DIRECT L.P.
GENERAL ELECTRIC CAPITAL CORPORATION
and
XXXXX ENTERTAINMENT, INC.
dated as of
June 24, 1999
TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE OF STOCK 1
1.1 Transfer of Stock 1
1.2 Consideration 1
1.3 Escrow Deposit 3
1.4 The Closing 6
1.5 Further Assurances 8
ARTICLE II REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY 8
2.1 Corporate Organization 8
2.2 Capital Stock 8
2.3 Subsidiaries of the Company 9
2.4 Authorization, Etc. 10
2.5 Balance Sheets and Income Statements 10
2.6 No Undisclosed Liabilities 11
2.7 No Approvals or Conflicts 11
2.8 Compliance with Law; Governmental Authorizations 11
2.9 Litigation 11
2.10 Title to Assets; Inventories 12
2.11 Absence of Certain Changes 12
2.12 Taxes and Reports 13
2.13 Employee Benefits 14
2.14 Labor Relations 15
2.15 Intellectual Property 15
2.16 Contracts 16
2.17 Environmental Matters 17
2.18 Insurance 18
2.19 Licenses and Permits 19
2.20 No Brokers' or Other Fees 19
2.21 Volume Services America, Inc. Integration/Transition Plan 20
2.22 1998 Contract EBITDA 20
2.23 Ethical Standards 20
2.24 Directors; Officers; Compensation 20
2.25 Bank Accounts 20
2.26 Material Untruths or Omissions 20
2.27 Receivables and Payables 21
2.28 Year 2000 21
2.29 1999 Budget 21
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS 21
3.1 Ownership of Shares 21
3.2 Title to Shares 21
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3.3 Authority 22
3.4 No Approvals or Conflicts 22
3.5 Brokers and Advisors 22
3.6 Claims on the Company 22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER 23
4.1 Organization 23
4.2 Authorization, Etc. 23
4.3 No Approvals or Conflicts 23
4.4 Acquisition for Investment 24
4.5 No Knowledge of Breach 24
4.6 No Brokers' or Other Fees 24
ARTICLE V CONDITIONS TO OBLIGATIONS OF THE COMPANY AND SELLERS 24
5.1 Representations and Warranties 25
5.2 Performance 25
5.3 Officer's Certificate 25
5.4 HSR Act 25
5.5 Injunctions 25
ARTICLE VI CONDITIONS TO PURCHASER'S OBLIGATIONS 25
6.1 Representations and Warranties 25
6.2 Performance 25
6.3 Sellers' and Officer's Certificates 26
6.4 Resignation of Directors 26
6.5 XXX Xxx 00
6.6 Injunctions 26
6.7 Spinoff Condition 26
ARTICLE VII COVENANTS AND AGREEMENTS 27
7.1 Conduct of Business by Company 27
7.2 Access to Books and Records; Cooperation 28
7.3 Filings and Consents 28
7.4 Publicity 29
7.5 Notice of Breaches 29
7.6 Covenant to Satisfy Conditions 29
7.7 Director and Officer Liability Insurance 29
7.8 Employee Benefits 29
7.9 Contact with Customers and Suppliers 30
7.10 No Solicitation of Other Offers 30
7.11 Termination of Stockholders' Agreement, Xxxxxxx
Employment Agreement, Share Exchange Agreement and
Monitoring Agreements 31
7.12 Fee to Blackstone 31
7.13 Disposition of Hatch Interest 31
ARTICLE VIII TERMINATION 32
8.1 Termination 32
8.2 Procedure and Effect of Termination 33
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Page
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ARTICLE IX SURVIVAL OF REPRESENTATIONS AND WARRANTIES 33
9.1 Representations and Warranties Relating to the Company 33
9.2 Representations and Warranties of Sellers 33
9.3 Representations and Warranties of the Purchaser 34
9.4 Limitation of Recourse 34
9.5 Acknowledgment by the Parties 34
ARTICLE X MISCELLANEOUS 35
10.1 Fees and Expenses 35
10.2 Governing Law 35
10.3 Amendment 35
10.4 Assignment 35
10.5 Waiver 35
10.6 Notices 35
10.7 Complete Agreement. 37
10.8 Counterparts 38
10.9 Headings 38
10.10 Knowledge and Fraud 38
10.11 Construction 38
10.12 Severability 38
10.13 Third Parties 38
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS 38
10.15 WAIVER OF JURY TRIAL 39
Annex A -- Ownership of Shares
Disclosure Schedule
Exhibit A -- Documents Purchaser Has Read
Exhibit B-1 -- Compliance Notice
Exhibit B-2 -- Non-Compliance Notice
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated as of June
24, 1999, is entered into by and among Volume Services America Holdings, Inc., a
Delaware corporation (the "Company"), BCP Volume L.P., a Delaware limited
partnership ("Volume"), BCP Offshore Volume L.P., a Cayman Islands exempted
limited partnership ("Offshore"), Recreational Services L.L.C., a Delaware
limited liability company ("Services"), VSI Management Direct L.P., a Delaware
limited partnership ("Management Direct" and, together with Volume, Offshore and
Services, the "Sellers"), General Electric Capital Corporation, a Delaware
corporation ("GECC"), and Xxxxx Entertainment, Inc., a Delaware corporation
("Purchaser").
WHEREAS, Sellers as of the date hereof own, beneficially and of
record, an aggregate of 332.67315 shares (the "Shares") of common stock, par
value $.01 per share (the "Common Stock"), of the Company in the respective
amounts set forth in Annex A hereto;
WHEREAS, the Shares constitute all of the issued and outstanding
shares of capital stock of the Company; and
WHEREAS, Purchaser desires to purchase and Sellers desire to sell
the Shares upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
1.1 Transfer of Stock. On the Closing Date (as hereinafter defined) and subject
to the terms and conditions set forth in this Agreement, Sellers shall sell,
assign, transfer and deliver to Purchaser and the Company (in the proportions
described in Section 1.2(a)) the Shares, free and clear of all options, pledges,
security interests, liens, mortgages, charges, hypothecations, claims or other
encumbrances or restrictions on voting or transfer or other restrictions or
encumbrances of any kind or nature whatsoever ("Encumbrances"), except that the
transfer of such shares may trigger change of control provisions in the
Indenture and the Credit Agreement referred to in Section 2.2 of the Disclosure
Schedule (attached hereto, the "Disclosure Schedule"), and contracts referred to
in Section 2.7 of the Disclosure Schedule (the restrictions imposed by such
change of control provisions, "Permitted Encumbrances").
1.2 Consideration. (a) On the Closing Date and subject to the terms and
conditions set forth in this Agreement, in reliance on the representations,
warranties, covenants and agreements of the parties contained herein and in
consideration of the sale, assignment, transfer and delivery of the Shares, (i)
Purchaser shall pay to Sellers, for 98.531% of the Shares, by wire transfer of
immediately available funds, an amount equal to $127,000,000 ($127,000,000
subject to the last sentence of this paragraph, the "Purchase Price") less the
Net Escrow Amount (as defined below), subject to any adjustments made pursuant
to Section 7.7 and
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(ii) the Company shall pay to Sellers, for 1.469% of the Shares, by wire
transfer of immediately available funds, an amount equal to $1,865,616, such
amount to be paid from, and only to the extent of, the proceeds from the
repayment at Closing of the Company Notes (as defined in Section 7.13 of the
Disclosure Schedule) and the $673,801 received by the Company pursuant to the
Refinancing Distribution (as defined in Section 7.13 of the Disclosure
Schedule). In the event the Closing Date occurs after September 30, 1999, the
Purchase Price will increase by an amount recalculated at a rate of 10% per
annum, compounded quarterly, from and including September 30, 1999 to but
excluding the date on which the Closing occurs, provided, such increase will be
reduced by the interest earned during such period on the Net Escrow Amount.
(b) In the event that the Closing occurs on or prior to August 24, 1999,
then, immediately prior to such Closing, Services may distribute to GECC that
number of Shares having a value (based on the Purchase Price) equal to the
amount to which GECC would otherwise be entitled at the Closing, provided, that
GECC will remain the sole manager of Services, and provided further, that as a
condition precedent to such distribution:
(i) GECC enters into an agreement, in form and substance reasonably
satisfactory to Purchaser, to be bound by this Agreement with respect to
Services and the Shares distributed to it as fully and with the same
effect as if originally a Seller hereunder and to transfer such Shares to
Purchaser at the Closing pursuant to the terms and conditions of this
Agreement; and
(ii) Services enters into agreements guaranteed by each of the
members of Services, in form and substance reasonably satisfactory to
Purchaser, (A) granting to Purchaser and the Company the option to
purchase all of the Shares owned by Services (on a 98.531 to 1.469 basis
as described above) at any time during the period commencing and including
August 26, 1999 and ending and including September 7, 1999 at a price per
Share equal to the price per Share paid to the other Sellers at the
Closing (the "Per Share Price"), and providing Services the right to
require Purchaser and the Company to purchase (on a 98.531 to 1.469 basis
as described above) all of the Shares owned by Services at any time during
the period commencing September 27, 1999 and ending October 4, 1999, at a
price per Share equal to the Per Share Price increased or decreased, as
the case may be, by an amount equal to the Per Share Price multiplied by
the percentage change in the Dow Xxxxx Industrial Average from September
8, 1999 to September 27, 1999 (up to a maximum percentage increase or
decrease of five percent), and (B) providing for the immediate deposit
upon such distribution by Services of all of the remaining Shares owned by
it, duly endorsed or accompanied by duly executed stock powers for the
transfer of such Shares to Purchaser or the Company, as the case may be,
into escrow with an escrow agent selected by Purchaser, such Shares to be
delivered by such escrow agent to Purchaser and the Company upon deposit
by Purchaser and the Company with such escrow agent of the purchase price
for such Shares under the option/put agreement described in clause (A)
above. The payment made to Services will be subject to Section 7.7 and
10.1 to the same extent applicable to the other Sellers. There will be no
conditions to the consummation of such option/put other than the accuracy
of Sections 3.2, 3.3, 3.4, 3.5 and 3.6.
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(c) If Section 1.2(b) applies, the payments and contribution required to
be made by Purchaser and the Company pursuant to Sections 1.2(a) and 1.4(b) will
be proportionally allocated between the Closing Date and the closing date for
the exercise of the option/put under Section 1.2(b).
(d) Notwithstanding anything herein to the contrary, if Purchaser, GECC
and the Company cannot agree upon the terms and conditions of the agreements
referred to in clauses (A) and (B) of clause (b)(ii) above prior to the day that
the Closing would otherwise occur pursuant to Section 1.4 hereof (without regard
to the parenthetical in such section referencing Section 1.2(b)), Services may
not distribute to its members any Shares owned by it, the Closing shall occur
without regard to the provisions contained in Section 1.2(b) above and at the
Closing all of the Shares will be transferred to Purchaser and the Company.
1.3 Escrow Deposit.
(a) Concurrent with the execution and delivery of this Agreement,
Purchaser is depositing with Norwest Bank Minnesota, National Association, as
escrow agent (the "Escrow Agent"), $10,000,000 in immediately available funds
(the "Escrow"). Upon the Closing, such amount (together with interest earned
thereon), net of fees, expenses and other charges of the Escrow Agent (the "Net
Escrow Amount"), will be applied toward the Purchase Price.
(b) If the Closing has not occurred by the 42nd day after the date of this
Agreement or such later date, no later than the 57th day after the date of this
Agreement, selected by Sellers (the "Closing Target Date"), then the Escrow will
remain in effect and on the Closing Target Date the Company and Sellers will
deliver to Purchaser duly executed certificates either (x) of the type described
in Section 6.3 dated as of the Closing Target Date or (y) identifying the
specific facts and circumstances alleged to breach either the representations
and warranties of Article II or III or the covenants to be performed by the
Company or Sellers on or prior to the Closing Target Date (the certificates
referred to in clauses (x) or (y) collectively the "Company Certificates") and
within 15 days thereafter Purchaser will deliver to the Company, Sellers and the
Escrow Agent either:
(i) a duly executed certificate, in the form attached as Exhibit
B-1, to the effect that Purchaser irrevocably waives (subject to Section
1.3(i)) any claim that the conditions to Closing set forth in Sections
6.1, based on Article II (other than Section 2.20), and 6.2 to the extent
relating to the performance of covenants on or prior to the Closing Target
Date were not satisfied as of the Closing Target Date (the "Compliance
Notice"); or
(ii) a duly executed certificate, in the form attached as Exhibit
B-2, identifying the specific facts and circumstances alleged to breach
(as of the Closing Target Date) either the representations and warranties
of Article II or Article III or the covenants to be performed by the
Company or Sellers on or prior to the Closing Target Date, which breaches
in good faith are reasonably alleged by the Purchaser to give rise to a
failure of the conditions to Closing set forth in Sections 6.1 or 6.2 (the
"NonCompliance Notice").
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(c) Subject to Section 1.3(i), upon receipt of the Compliance Notice, or
if no NonCompliance Notice is received, by the Company, Sellers and Escrow Agent
on or before the 15th day after the Closing Target Date, (i) the condition of
Section 6.1 will thereafter not be deemed to relate back to any representation
or warranty in Article II (other than Section 2.20), (ii) the condition of
Section 6.2 will thereafter not be deemed to relate back to the performance or
alleged non-performance of any covenant to be performed by the Company or
Sellers on or prior to the Closing Target Date and (iii) if the Agreement
subsequently terminates without a Closing, the Net Escrow Amount will be applied
as follows:
(A) If, as of the date of such termination, the then applicable
conditions in Article VI (other than Section 6.7) are satisfied (the
conditions in Sections 6.3 and 6.4 being deemed satisfied as of such
termination date), the Net Escrow Amount will be paid to Sellers.
(B) If, as of the date of such termination, any one or more of the
then applicable conditions in Article VI (other than Section 6.7) is or
are not satisfied (the conditions in Sections 6.3 and 6.4 being deemed
satisfied as of such termination date), the Net Escrow Amount will be paid
to the Purchaser. However, if the preceding sentence would not have
applied but for the Purchaser's failure to comply in all material respects
with the agreements and covenants contained in this Agreement to be
performed by it on or before the date of such termination, the Net Escrow
Amount will instead be paid to Sellers.
(d) Upon receipt of the Non-Compliance Notice by the Company, Sellers and
the Escrow Agent on or before the 15th day after the Closing Target Date, (A)(i)
the condition of Section 6.1 will thereafter not be deemed to relate back to any
representation or warranty in Article II (other than Section 2.20) and (ii) the
condition of Section 6.2 will thereafter not be deemed to relate back to the
performance or alleged non-performance of any covenant to be performed by the
Company or Sellers on or prior to the Closing Target Date, except that, in each
case, those elements of the representations, warranties or covenants relating to
the alleged breaches specifically identified in the Non-Compliance Notice based
on identified facts and circumstances (the "Alleged Breaches") will survive,
provided, if such Alleged Breaches do not in fact give rise to a failure of the
Section 6.1 or 6.2 condition as of the Closing Target Date or prior to
termination of this Agreement such failure resulting from such Alleged Breaches
is otherwise cured, Purchaser will be deemed to have waived any claim that the
condition of Section 6.1 or 6.2 was not satisfied as of the Closing Target Date
as a result of such Alleged Breaches, (B) subject to paragraph (k) below, in the
event that the parties have not agreed upon a resolution for such Alleged
Breaches in accordance with their obligations set forth in Section 1.3(h) below,
effective two weeks after delivery of the NonCompliance Notice Section 7.10 will
no longer apply and the Company will be entitled to terminate this Agreement at
any time, and (C) if this Agreement subsequently terminates without a Closing,
the Net Escrow Amount will be applied as follows:
(i) If, as of the date of such termination, the then applicable
conditions in Article VI (other than Section 6.7) are satisfied (the
conditions in Section 6.3 and 6.4 being deemed satisfied as of such
termination date), the Net Escrow Amount will be paid to Sellers.
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(ii) If, as of the date of such termination, any one or more of the
then applicable conditions in Article VI (other than Section 6.7) is or
are not satisfied (the conditions in Section 6.3 or 6.4 being deemed
satisfied as of such termination date), the Net Escrow Amount will be paid
to Purchaser. However, if the preceding sentence would not have applied
but for the Purchaser's failure to comply in all material respects with
the agreements and covenants contained in this Agreement to be performed
by it on or before the date of such termination, the Net Escrow Amount
will instead be paid to Sellers.
(e) The payment of the Net Escrow Amount to the party or parties entitled
thereto will be made as promptly as practicable after the date of termination of
this Agreement.
(f) In connection with the delivery of the Purchaser's Compliance Notice
or Non-Compliance Notice described in Section 1.3(b), reference is made to
Section 7.2(c) of this Agreement, it being understood that Purchaser will have
the specific opportunity during the fifteen day period referred to in Section
1.3(b) to ascertain whether it deems the applicable conditions of Sections 6.1
and 6.2 to be satisfied as of the Closing Target Date.
(g) If the Agreement terminates before the Closing Target Date, the
parties will use Sections 1.3(c) and 1.3(d) to determine how the Escrow Amount
is distributed unless (i) the Agreement is terminated under Section 8.1(a)(vi),
in which case the Escrow Amount will be paid to Sellers or (ii) the Agreement is
terminated by the Purchaser pursuant to Section 8.1(a)(vii), in which case the
Escrow Amount will be paid to Purchaser.
(h) In the event Section 1.3(d) applies, should any Alleged Breaches
survive, the parties will cooperate in good faith to resolve such Alleged
Breaches for a period of two weeks after delivery of the Non-Compliance Notice
in order to permit their cure, provided that the Company and Sellers will not be
required to expend funds in order to effect any such cure, unless Purchaser
provides such funds.
(i) If, prior to Closing, it is established that any Seller or the Company
had knowledge (as such term is defined in Section 10.10 hereof) as of the
Closing Target Date of items that should have been identified on the Company
Certificate delivered on the Closing Target Date but such items were not so
identified, they will be deemed to have been identified in the Non-Compliance
Notice (or, if a Compliance Notice was previously given, it will be deemed to
convert into a Non-Compliance Notice that refers to such items). In such case,
the provisions of Section 1.3(d) and 1.3(h) will apply ab initio to such revised
Non-Compliance Notice, provided, if a Non-Compliance Notice was previously given
and the parties were unable to resolve such Alleged Breaches so that Section
7.10 no longer applies, the two week waiting period in paragraph (d)(B) of this
Section need not apply a second time.
(j) All disputes arising under this Section 1.3 will be resolved by
binding arbitration in accordance with the applicable rules of the American
Arbitration Association. The arbitration shall be held in New York City, New
York before a panel of three arbitrators selected in accordance with Section
R-13 of the American Arbitration Association Commercial Arbitration Rules, and
shall otherwise be conducted in accordance with the American Arbitration
Association Commercial Arbitration Rules, provided, that each of Purchaser and
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Sellers will have the opportunity to reject within five business days any
arbitrator proffered and in no event will the American Arbitration Association
have the power to make the appointments of an arbitrator unless the procedures
in R-13(a) and (b) (but for the last sentence of R-13(b)) have failed to yield a
panel of three arbitrators after submissions of three lists. The parties
covenant that they will participate in the arbitration in good faith and that
they will share equally its costs except as otherwise provided herein. The
provisions of this paragraph (j) will be enforceable in any court of competent
jurisdiction, and the parties will bear their own costs in the event of any
proceeding to enforce this Agreement except as otherwise provided herein. The
arbitrators may in their discretion assess costs and expenses (including the
reasonable legal fees and expenses of the prevailing party) against any party to
a proceeding. Any party unsuccessfully refusing to comply with an order of the
arbitrators will be liable for costs and expenses, including attorneys' fees,
incurred by the other party in enforcing the award.
(k) At any time prior to termination of this Agreement, Purchaser may by
written notice to the Company and Sellers irrevocably convert a NonCompliance
Notice into a Compliance Notice, whereupon Section 7.10 will apply from the date
of such conversion forward, Section 1.3(d), including, without limitation, the
Company's termination right set forth therein, will no longer apply, and Section
1.3(c) will apply.
1.4 The Closing. The closing (the "Closing") of the transactions contemplated in
this Agreement (other than the closing of the option/put under Section 1.2(b),
which will take place as provided therein) shall take place at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 a.m., local time, on the fifth business day after satisfaction of the
conditions set forth in Articles V (other than delivery of the certificate
referred to in Section 5.3 which shall be delivered at the Closing) and VI
(other than delivery of the certificates and resignations referred to in
Sections 6.3 and 6.4 which shall be delivered at the Closing and the delivery of
the certificate referred to in Section 6.7 which if the Closing takes place on
or prior to September 30, 1999, shall be delivered at the Closing (to avoid
confusion, it is understood that the Closing will not occur on or prior to
September 30, 1999 unless Purchaser has made the determination referred to in
Section 6.7)) (the "Closing Date"), or at such other place, date and time as may
be agreed upon by Sellers and Purchaser.
(a) Deliveries by Sellers. At or prior to the Closing, Sellers shall
deliver or cause to be delivered to Purchaser or the Company, as the case may
be, the following:
(i) subject to Section 1.2(b), certificates evidencing the Shares,
which certificates shall be properly endorsed for transfer or accompanied
by duly executed stock powers, in either case executed in blank or in
favor of Purchaser or the Company, as the case may be, and otherwise in a
form acceptable for transfer on the books of the Company;
(ii) resignations of those officers and directors of the Company and
each of the Company Subsidiaries (as hereinafter defined) other than the
Excluded Entities (as hereinafter defined) whose resignations are
requested by Purchaser no later than five business days prior to the
Closing, as contemplated by Section 6.4 hereof, such resignations to be
effective as of the Closing; provided that Sellers shall have no
obligation to deliver resignations of officers who do not agree to resign
and provided further that Purchaser shall be responsible for all
liabilities and obligations resulting from such resignations;
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(iii) all other previously undelivered documents required by this
Agreement to be delivered by the Company or Sellers to Purchaser at or
prior to the Closing Date in connection with the transactions contemplated
hereby;
(iv) certificate of good standing of the Company and each of the
Company Subsidiaries (other than the three joint ventures identified on
Section 2.3 of the Disclosure Schedule) in their respective jurisdictions
of incorporation and qualification; and
(v) the minute books, seals and stock records of the Company and
each of the Company Subsidiaries, to the extent available.
(b) Deliveries by Purchaser. At or prior to the Closing, Purchaser shall
deliver or cause to be delivered to Sellers the following:
(i) subject to Section 1.2(b), the Purchase Price, less the Net
Escrow Amount delivered to Sellers on the Closing Date, by wire transfer
of immediately available funds to the account or accounts designated by
Sellers by notice to Purchaser at least two business days prior to the
Closing Date; and
(ii) all other previously undelivered documents required by this
Agreement to be delivered by Purchaser to the Company or Sellers at or
prior to the Closing Date in connection with the transactions contemplated
hereby.
(c) All instruments and documents executed and delivered to Purchaser
pursuant hereto shall be in form and substance, and shall be executed in a
manner, reasonably satisfactory to Purchaser. All instruments and documents
executed and delivered to the Company or Sellers pursuant hereto shall be in
form and substance, and shall be executed in a manner, reasonably satisfactory
to Sellers.
1.5 Further Assurances. After the Closing, each party hereto shall from time to
time, at the request of another party and without further cost or expense to the
party to whom such request is made, execute and deliver such other instruments
of conveyance and transfer and take such other actions as such other party may
reasonably request in order to more effectively consummate the transactions
contemplated hereby and to vest in Purchaser good and valid title to the Shares,
free and clear of all Encumbrances other than Permitted Encumbrances.
ARTICLE II
REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY
The Company hereby represents and warrants to Purchaser, and (i)
Volume, Offshore and Management Direct jointly and severally, on the basis of
their aggregate percentage ownership of the Shares, represent and warrant to
Purchaser and (ii) Services on the basis of its percentage ownership of Shares
represents and warrants to Purchaser, as follows (for the absence of doubt, it
is agreed that Services makes no representation as to the other Sellers or their
Shares):
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2.1 Corporate Organization. The Company is a corporation validly existing and in
good standing under the laws of the State of Delaware. The Company has full
corporate power and authority to own its properties and assets and to carry on
its business as now being conducted and is duly qualified or licensed to do
business as a foreign corporation in good standing in the jurisdictions in which
the ownership of its property or the conduct of its business requires such
qualification. The Company has delivered or made available to Purchaser complete
and correct copies of the Certificate of Incorporation and all amendments
thereto to the date hereof, and the Bylaws (or comparable organizational
documents) as presently in effect of the Company and each Company Subsidiary (as
hereinafter defined). Except as set forth in Section 2.1 of the Disclosure
Schedule, the Company does not own, directly or indirectly, any capital stock or
other equity securities of any corporation or have any direct or indirect equity
or ownership interest in any partnership, limited liability company, joint
venture or other business.
2.2 Capital Stock. The authorized capital stock of the Company consists of 1,000
shares of Common Stock, of which only the Shares as of the date hereof are and
as of the Closing will be issued and outstanding and no other shares of any
other class or series of capital stock of the Company are issued and
outstanding. The Shares have been issued in full compliance with applicable
federal and state securities laws. Except as set forth in Section 2.2 of the
Disclosure Schedule or as expressly provided in this Agreement, there are no
subscriptions, options, warrants, calls, rights, contracts, commitments,
understandings, restrictions or arrangements relating to the issuance, sale,
transfer or voting of any shares of capital stock of the Company, including any
rights of conversion or exchange under any outstanding securities or other
instruments, other than restrictions imposed by Federal and state securities
laws. All of the Shares have been validly issued and are fully paid,
nonassessable and, as of the date hereof, are free and clear of preemptive
rights and other Encumbrances except as set forth in Section 2.2 of the
Disclosure Schedule and, as of the Closing Date, will be free and clear of all
Encumbrances other than Permitted Encumbrances.
2.3 Subsidiaries of the Company. The Company owns and except with respect to the
joint venture with the Baltimore Convention Center (which is expected to
terminate when the related account terminates in July 1999 and from such point
such joint venture would no longer be considered a Company Subsidiary, as
defined below), as of the Closing Date the Company will own, directly or through
one or more wholly-owned subsidiaries, the number of shares of each class of
outstanding capital stock and the percentage of outstanding ownership interests
listed as being owned by the Company or its subsidiaries of each of the entities
listed in Section 2.3 of the Disclosure Schedule (hereinafter referred to
collectively as the "Company Subsidiaries"). Section 2.3 of the Disclosure
Schedule sets forth an organizational chart for the Company Subsidiaries and the
legal name and state of incorporation or formation, as the case may be, of each
Company Subsidiary. Each Company Subsidiary is duly organized, validly existing
and (except for the joint ventures and the limited liability company listed
under the heading "Joint Venture Interests" in Section 2.1 of the Disclosure
Schedule (the "Excluded Entities")) in good standing under the laws of the state
of incorporation or formation, as the case may be, indicated for each Company
Subsidiary in Section 2.3 of the Disclosure Schedule. Each Company Subsidiary
(except for the Excluded Entities) is duly qualified and in good standing as a
foreign entity in each jurisdiction in which it is required so to qualify and
each Company Subsidiary has full power and authority to carry on the business in
which it is now engaged. Except as set forth
8
in Section 2.3 of the Disclosure Schedule, the Company and the Company
Subsidiaries do not own, directly or indirectly, any interest in the capital
stock of any other corporation, association, trust or similar entity, any
interest in the equity of any partnership or similar entity, any share in any
joint venture, or any other equity or proprietary interest in any entity or
enterprise, however organized and however such interest may be denominated or
evidenced. Section 2.3 of the Disclosure Schedule accurately sets forth the
capitalization and ownership, and/or the issued and outstanding capital stock,
as applicable, of each of the Company Subsidiaries. All of the outstanding
capital stock or other ownership interests of the Company Subsidiaries owned by
the Company or any of the Company Subsidiaries are duly authorized and validly
issued, fully paid and nonassessable and free and clear of all Encumbrances
(except as set forth in Section 2.3 of the Disclosure Schedule). None of the
shares of capital stock of the Company Subsidiaries and, to the knowledge of the
Company with respect to the minority owned Excluded Entities were issued in
violation of any preemptive rights binding on the Company Subsidiaries. There
are no issued or outstanding shares of any class of capital stock of, or
ownership interests in, as applicable, any of the Company Subsidiaries other
than those set forth in Section 2.3 of the Disclosure Schedule. Except as
disclosed in Section 2.3 of the Disclosure Schedule, none of the Company
Subsidiaries has outstanding, or has agreed to issue or sell, any options,
rights, warrants, calls or other commitments (either in the form of convertible
securities or otherwise) pursuant to which the holder thereof has or will or may
have the right to purchase or otherwise acquire any shares of stock or any other
security of any of the Company Subsidiaries.
2.4 Authorization, Etc. The Company has full power and authority to execute and
deliver this Agreement and to carry out the transactions contemplated hereby.
The execution and delivery by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby have been duly approved
and authorized, and no other corporate proceedings on the part of the Company
are necessary to approve and authorize the execution and delivery by the Company
of this Agreement and the consummation by the Company of the transactions
contemplated hereby. This Agreement has been duly and validly executed by the
Company and, assuming this Agreement constitutes the valid and binding agreement
of Purchaser and Sellers, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to applicable laws of bankruptcy, insolvency and similar laws affecting
creditors' rights generally and the application of general rules of equity.
2.5 Balance Sheets and Income Statements. The Company has previously delivered
to Purchaser the following financial statements, including the related notes and
Schedules thereto (collectively, the "Financial Statements"):
(a) the audited consolidated balance sheets of the Company and its
subsidiaries as at December 31, 1996, December 30, 1997, and December 30, 1998
and the related statements of operations for each of the years then ended;
(b) the audited consolidated balance sheets of Service America Corporation
and its subsidiaries (collectively, "SAC") as at December 28, 1996, December 27,
1997, and the consolidated statements of operations of SAC for the fifty three
(53) week period ended March 30, 1996, the thirty-nine (39) week period ended
December 28, 1996, and the fifty-two (52) week period ended December 27, 1997;
and
9
(c) the unaudited consolidated balance sheet (the "Balance Sheet") of the
Company and the Company Subsidiaries as at March 30, 1999 and the related
unaudited statement of operations for the three (3) month period then ended.
The Financial Statements present fairly the consolidated assets, liabilities,
stockholders' equity and results of operations and financial position of the
Company and its consolidated subsidiaries or of SAC, as the case may be, as at
the dates and for the periods indicated, and (including the related notes and
schedules thereto) have been prepared in accordance with United States generally
accepted accounting principles as consistently applied ("GAAP").
2.6 No Undisclosed Liabilities. At March 30, 1999, neither the Company nor any
Company Subsidiary had any liabilities or obligations, whether accrued, absolute
or contingent, that were required to be reflected on a balance sheet of the
Company and the Company Subsidiaries prepared in accordance with GAAP (including
appropriate footnote disclosure), other than liabilities and obligations that
are reflected, accrued or reserved for in the Balance Sheet. Except as disclosed
in Section 2.6 of the Disclosure Schedule, since March 30, 1999, neither the
Company nor any Company Subsidiary has incurred any liabilities or obligations
other than those incurred in the ordinary course of business or pursuant to its
Budget (as defined below) or as expressly permitted by Section 7.1(b)(vi) or any
other Section of this Agreement.
2.7 No Approvals or Conflicts. Except as set forth in Section 2.7 of the
Disclosure Schedule, neither the execution and delivery by the Company of this
Agreement nor the consummation by the Company of the transactions contemplated
hereby will (i) violate, conflict with or result in a breach of any provision of
the Certificate of Incorporation or Bylaws (or comparable organizational
documents) of the Company or any Company Subsidiary, (ii) violate, conflict with
or result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties of the Company or any Company Subsidiary, any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit, lease,
contract, agreement or other instrument to which the Company, the Company
Subsidiaries or any of their respective properties may be bound, (iii) violate
any order, injunction, judgment, ruling, law or regulation of any court or
governmental authority applicable to the Company, the Company Subsidiaries or
any of their respective properties or (iv) except for applicable requirements of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), require any consent, approval or authorization of, or notice to, or
declaration, filing or registration with, any governmental or regulatory
authority, or any other third party.
2.8 Compliance with Law; Governmental Authorizations. Except as set forth in
Section 2.8 of the Disclosure Schedule or as reflected, accrued or reserved for
in the Balance Sheet, the Company is not now, and has not been, during any
period for which the applicable statute of limitations has not yet expired, in
violation of any license, permit, order, injunction, judgment, ruling, law or
regulation of any court or governmental authority applicable to the property or
business of the Company. Except as set forth in Section 2.8 of the Disclosure
Schedule, the licenses, permits and other governmental authorizations held by
the Company and
10
the Company Subsidiaries are valid and sufficient to lawfully conduct the
businesses of the Company and the Company Subsidiaries as currently conducted.
2.9 Litigation. Except as set forth in Section 2.9 of the Disclosure Schedule or
as reflected, accrued or reserved for in the Balance Sheet, (i) there are no
actions, proceedings or investigations pending or, to the knowledge of the
Company, threatened against the Company or any Company Subsidiary or the
transactions contemplated by this Agreement, before any court or governmental or
regulatory authority or body and (ii) the Company has no knowledge of any facts
or circumstances that would reasonably be expected to result in any such action,
proceeding or investigation.
2.10 Title to Assets; Inventories. Except as set forth in Section 2.10 of the
Disclosure Schedule, on March 30, 1999, the Company and each Company Subsidiary
had and, except with respect to assets disposed of in the ordinary course of
business since March 30, 1999, the Company and each Company Subsidiary now has,
good and valid title to all the properties and assets owned by it and reflected
on the Balance Sheet or which would have been reflected on the Balance Sheet if
acquired prior to March 30, 1999, free and clear of all encumbrances of any
nature except for (i) exceptions to title as set forth in Section 2.10 of the
Disclosure Schedule; (ii) mortgages and encumbrances which secure indebtedness
or obligations which are properly reflected on the Balance Sheet; (iii) liens
for Taxes (as defined in Section 2.12) not yet payable or any Taxes being
contested in good faith; (iv) liens arising as a matter of law in the ordinary
course of business, provided that the obligations secured by such liens are not
delinquent or are being contested in good faith; and (v) such minor
imperfections of title and encumbrances, if any, as do not impair the ability of
the Company to realize the practical benefits of ownership of such property.
Except as set forth in Section 2.10 of the Disclosure Schedule, the Company and
each Company Subsidiary owns, or has valid leasehold interests in, all tangible
properties and assets used in the conduct of its business purported to be owned
by it. The Company does not own any real property.
(a) The assets currently owned or leased by the Company or any Company
Subsidiary, or to which the Company or any Company Subsidiary is ordinarily
given access in providing its services, are adequate and in satisfactory
operating condition, subject to ordinary maintenance requirements from time to
time, for the uses to which they are being put, and constitute all of the assets
necessary for the continued conduct of the business of the Company and the
Company Subsidiaries after the Closing Date in substantially the same manner as
conducted prior to the Closing Date.
(b) All inventories of the Company and the Company Subsidiaries are of
good, usable and merchantable quality (subject to normal and customary
allowances for spoilage, damage and outdated items in the case of food
inventory) and, except as set forth in Section 2.10 of the Disclosure Schedule,
do not include any obsolete or discontinued items. Except as set forth in
Section 2.10 of the Disclosure Schedule, (i) all inventories are of such quality
as to meet any applicable governmental quality control standards, (ii) all
inventories that are finished goods are saleable as current inventories at the
current prices thereof and (iii) all inventories are recorded on the books of
the Company or the Company Subsidiaries, as applicable, at the lower of average
cost, determined on the FIFO basis, or market.
11
2.11 Absence of Certain Changes. Except as disclosed in Section 2.11 of the
Disclosure Schedule and as otherwise provided herein, since March 30, 1999, (i)
the business of the Company and each Company Subsidiary has been conducted only
in the ordinary course and consistent with past practice; and (ii) there has not
been any event or circumstances that would have a material adverse effect on the
business, results of operations or financial condition or prospects of the
Company and the Company Subsidiaries taken as a whole (hereinafter referred to
as a "Material Adverse Effect").
(a) Since March 30, 1999, the Company and each Company Subsidiary has not,
except as set forth in Section 2.11 of the Disclosure Schedule, (i) purchased,
agreed to purchase, redeemed or called for redemption of any outstanding shares,
issued any options, warrants, shares, bonds or other securities, interests or
rights to acquire securities or interests or declared or paid any dividend or
distribution on or authorized or effected any split up or recapitalization of
any shares; (ii) authorized any changes in its charter or by-laws; (iii) made or
contracted for any capital expenditures or incurred or paid any liabilities or
obligations, other than in the ordinary course of business or pursuant to its
Budget (as defined below) or as expressly permitted by Section 7.1(b)(vi) or any
other Section of this Agreement; (iv) sold, leased, or otherwise transferred, or
contracted to sell, lease or otherwise transfer, any of its assets, other than
in the ordinary course of business, or mortgaged, pledged or subjected to any
lien, charge or other encumbrance any of its assets, other than in the ordinary
course of business; (v) made any loan or advance to any person or entity, other
than in the ordinary course of business; (vi) made any changes in directors or
officers or made any change in the compensation payable to, or made any
arrangement for the payment of or paid any bonus to, any director or officer;
(vii) failed to keep in force any insurance coverage then in force; (viii)
suffered any uninsured damage to or destruction of any of its properties or
assets of any premises owned or leased by it, whether by fire, accident, labor
disturbance or otherwise; (ix) transferred or granted any right under any lease,
license, agreement, patent, trade name, copyright or other valuable asset, other
than in the ordinary course of business; (x) failed to pay any payable or
collect any receivable other than in accordance with past practice or in
connection with any matter disclosed as in dispute under Section 2.9 of the
Disclosure Schedule, or (xi) agreed to do any of the things set forth in
Sections 2.11(b)(i), (ii), (iii), (iv), (v), (vi), (ix), or (x) above.
2.12 Taxes and Reports.
(a) Filing of Tax Returns. Except as set forth in Section 2.12(a) of the
Disclosure Schedule, there have been properly completed and filed on a timely
basis (taking into account extensions of time to file granted therefor) all tax
returns required to be filed with respect to the Company and the Company
Subsidiaries on or prior to the date hereof.
(b) Payment of Taxes. All Taxes of the Company or any of the Company
Subsidiaries that are due and owing with respect to taxable periods ending on or
before the Closing Date hereof have been paid, except to the extent that such
Taxes are being contested in good faith by appropriate proceedings and disclosed
in Section 2.12(b) of the Disclosure Schedule hereto or are reserved as and to
the extent required by GAAP on the Financial Statements.
12
(c) Audit History. Except as disclosed in Section 2.12(c) of the
Disclosure Schedule, no issues have been raised in writing by any taxing
authority in connection with any tax return of the Company and the Company
Subsidiaries with respect to the Company and the Company Subsidiaries. Except as
disclosed in Section 2.12(c) of the Disclosure Schedule, no waivers of statutes
of limitation with respect to any such tax returns have been given by the
Company or the Company Subsidiaries. Except to the extent shown in Section
2.12(c) of the Disclosure Schedule, all deficiencies asserted or assessments
made as a result of any examinations have been paid, or are reflected as a
liability in the Financial Statements, or are being contested and are reserved
as and to the extent required by GAAP on the Financial Statements.
(d) Liens. Except as disclosed in Section 2.12(d) of the Disclosure
Schedule, there are no liens for Taxes on the assets of the Company or any
Company Subsidiary other than for current Taxes not yet due and payable or if
due, (i) not delinquent or (ii) being contested in good faith by appropriate
proceedings.
(e) Prior Affiliated Groups. Except as disclosed in Section 2.12(e) of the
Disclosure Schedule and except for the group of which the Company and the
Company Subsidiaries are presently members, neither the Company nor any of the
Company Subsidiaries has ever been a member of an affiliated group of
corporations, within the meaning of Section 1504 of the Code.
(f) Tax-Exempt Use Property. Except as disclosed in Section 2.12(f) of the
Disclosure Schedule, as of Closing, none of the assets of the Company or any of
the Company Subsidiaries is "tax exempt use property" within the meaning of
Section 168(h) of the Code.
(g) Definitions. For purposes of this Agreement, (i) "Taxes" shall mean
all taxes, charges, fees, levies, penalties or other assessments imposed by any
United States Federal, state, local or foreign taxing authority, including, but
not limited to, income, excise, property, sales and use, transfer, franchise,
payroll, withholding, social security or other taxes, including any interest,
penalties or additions attributable thereto and (ii) "Tax Return" shall mean any
return, report, information return or other document (including any related or
supporting information) filed or required to be filed with any taxing authority
with respect to Taxes.
2.13 Employee Benefits. Section 2.13 of the Disclosure Schedule sets forth a
true and complete list of each employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained or to which the Company or Company Subsidiary, as
applicable, is a party or obligated to contribute for or on behalf of, current
or former employees or directors of the Company or any Company Subsidiary (the
"Plans"). With respect to each of the Plans, and except as set forth in Section
2.13 of the Disclosure Schedule, other than multi-employer plans, the Seller has
heretofore delivered or made available to Purchaser true and complete copies of
(i) the text of the Plan and of any trust or insurance contract maintained in
connection therewith, (ii) the most recent summary plan descriptions and all
modifications thereto (including any written summaries of any unwritten Plan),
any employee handbook and other communications and all modifications thereto, if
any, (iii) the most recent three annual reports (Form 5500 series) together with
required schedules filed with the Internal Revenue Service (the "IRS") and any
financial statements or
13
opinions required under ERISA, if any, (iv) the most recent determination letter
issued by the IRS with respect to 401(k) plans and the related submission and
communications with the IRS, and (v) the most recent actuarial report, if any.
Except as set forth in Section 2.13 of the Disclosure Schedule, each Plan has
been maintained in substantial compliance with all applicable laws and
regulations and has been operated in substantial compliance with its terms.
Except as set forth in Section 2.13 of the Disclosure Schedule, (a) no Plan has
an accumulated or waived funding deficiency within the meaning of Section 412 of
the Internal Revenue Code of 1986, as amended (the "Code"), (b) no proceedings
have been instituted to terminate (i) any Plan that is subject to Title IV of
ERISA or (ii) any "employee pension benefit plan" (as defined in Section (3)(2)
of ERISA) sponsored by a member of the Company's "Controlled Group" (defined as
any organization which is a member of the same controlled group of organizations
within the meaning of Code Sections 414(b) or (c) that is subject to Title IV of
ERISA), and (c) the current value of the assets of each of the Plans that are
subject to Title IV of ERISA, based upon the actuarial assumptions currently
used by the Plans, exceeds the present value of the accrued benefits under each
such Plan. Any Plan intended to be "qualified" (within the meaning of Section
401 (a) of the Code) either (x) has received a favorable Determination Letter
from the Internal Revenue Service and, to the knowledge of the Company, no event
has occurred nor condition exists which could reasonably be expected to result
in the revocation of such Determination Letter, or (y) is the subject of an
application for such a Determination Letter. Except as set forth on Section 2.13
of the Disclosure Schedule, no Plan provides health, dental, medical,
hospitalization or life insurance (whether on an insured or self-insured basis)
to current employees or former employees after their retirement or other
termination of employment from the Company and Company Subsidiaries (other than
continuation coverage required under COBRA which may be purchased at such
employees' sole expense).
2.14 Labor Relations. Except as set forth in Section 2.14 of the Disclosure
Schedule, neither the Company nor any Company Subsidiary is a party to any
collective bargaining agreement applicable to employees of the Company or
Company Subsidiary, as applicable. Except as set forth in Section 2.14 of the
Disclosure Schedule, the Company and the Company Subsidiaries are in compliance
with all applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours and is not engaged in any
unfair labor practice, and, there is no labor strike, dispute, slowdown or
stoppage actually pending or, to the knowledge of the Company, threatened
against or affecting the Company or any Company Subsidiary.
2.15 Intellectual Property. Section 2.15 of the Disclosure Schedule contains an
accurate and complete list of all registered patents, trademarks, trade names,
service marks and copyrights (collectively, "Intellectual Property") owned by
the Company or any Company Subsidiary and an accurate and complete list of all
licenses and other agreements relating to Intellectual Property (collectively,
"License Agreements"). Except as set forth in Section 2.15 of the Disclosure
Schedule, (i) the consummation of the transactions contemplated by this
Agreement will not impair Purchaser's right to use any Intellectual Property or
the enforceability of the License Agreements, (ii) neither the Company nor any
Company Subsidiary has received, during any period for which the applicable
statute of limitations has not yet expired, a written notice of any claims by
any person relating to the Company's or Company Subsidiary's, as applicable, use
of any Intellectual Property, or challenging or questioning the validity or
enforceability of any such License Agreement, except for such claims that have
been resolved with
14
no further obligations by the Company or the Company Subsidiaries, and (iii)
neither the Company nor any Company Subsidiary has given any notice of
infringement to any third party with respect to any such Intellectual Property
or has knowledge of facts relating to the infringement by any third party of any
Intellectual Property.
2.16 Contracts. With respect to the Company and the Company Subsidiaries, the
Company has delivered or made available to Purchaser true and complete copies of
(i) each contract for the purchase of inventory in excess of $500,000 per
calendar year, (ii) each contract with a customer involving revenues to the
Company or any Company Subsidiary reasonably anticipated to be in excess of
$100,000 per calendar year, (iii) each contract pertaining to employment,
consulting or severance arrangements with any officer, director, employee or
independent contractor, (iv) each indenture, mortgage, note, letter of credit or
other instrument relating to the borrowing of money (or the guarantee thereof)
involving an amount in excess of $10,000, (v) each franchise contract, (vi) each
contract that was not entered into in the ordinary course of business and that
involves expenditures in excess of $25,000 over its term, (vii) each lease,
rental or occupancy agreement, license, installment and conditional sale
agreement, software maintenance agreement, and other contract affecting the
ownership of, leasing of, title to, use of, or any leasehold or other interest
in, any real or personal property (except personal property leases and
installment and conditional sales agreements having a value per item or
aggregate payments of less than $100,000 and with terms of less than one year)
(with respect to those agreements in this clause (vii) pertaining to personal
property, the "Personal Property Leases"), (viii) each collective bargaining
agreement and other contract to or with any labor union or other employee
representative of a group of employees, (ix) each joint venture, partnership and
other contract involving a sharing of profits, losses, costs or liabilities by
the Company or any Company Subsidiary with any other Person, (x) each License
Agreement, (xi) each contract limiting the freedom to engage in any line of
business or compete with any person or entity or operate at any location and
(xii) each contract, agreement, commitment or other understanding not otherwise
disclosed pursuant to the foregoing clauses which, to the knowledge of the
Company, would reasonably be expected to be material to the Company and the
Company Subsidiaries (the items described in clauses (i) through (xii),
collectively, the "Material Contracts"). Section 2.16 of the Disclosure Schedule
sets forth a true and correct list of all Material Contracts as of the date
hereof.
(a) Except as set forth in Section 2.16 of the Disclosure Schedule, (i)
each of the Material Contracts is in full force and effect, and (ii) there are
no existing defaults by the Company or, to the Company's knowledge, the other
party thereunder, which defaults are likely to result in a termination of any
Material Contract.
2.17 Environmental Matters. As used herein, "Material Environmental Amount"
shall mean an amount payable by the Company or any Company Subsidiary, in the
aggregate, for investigative and remedial costs, compliance costs, damages,
fines or penalties pursuant to Environmental Laws (as hereinafter defined) that
in the aggregate exceeds $250,000. Except as set forth in Section 2.17 of the
Disclosure Schedule and except as would not reasonably be expected, individually
and in the aggregate, to result in the payment of a Material Environmental
Amount:
15
(i) neither the Company nor any Company subsidiary has as of the
date hereof received any written notice and otherwise has no knowledge of
any alleged violation of any applicable Federal, state or local laws,
regulations, ordinances, orders or principles of common law related to
Hazardous Materials, pollution or the protection of the environment and/or
occupational health and safety ("Environmental Laws"). To the Company's
knowledge, there are no facts or circumstances that would reasonably be
expected to result in any such allegation.
As used herein, "Hazardous Material" means any hazardous or toxic
material pollutant, contaminant, substance or waste defined in or governed
by any Environmental Law, including but not limited to any material listed
under the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. 9601, et seq.; the Hazardous Materials Transportation Act,
49 U.S.C. 1801, et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. 6901, et seq.; the Federal Water Pollution Control Act, 33 U.S.C.
1251, et seq.; the Clean Air Act, 42 U.S.C. 7401, et seq.; the Toxic
Substances Control Act, 15 U.S.C. 2601; asbestos and asbestos containing
material; petroleum, petroleum products and waste oil; or any other waste,
material, substance, pollutant or contaminant that might reasonably be
expected to result in liability under any applicable Environmental Law.
(ii) The Company and the Company Subsidiaries are in compliance
with, and at all times prior to the date hereof complied with, all
Environmental Laws.
(iii) The Company and the Company Subsidiaries have obtained and are
in compliance with all permits and authorizations required under any
Environmental Law ("Environmental Permits") to lawfully conduct the
business of the Company and the Company Subsidiaries as currently
conducted. All such Environmental Permits are in full force and effect.
There is no proceeding pending or, to the Company's knowledge, threatened,
seeking the revocation, cancellation, suspension or adverse modification
of any Environmental Permit.
(iv) No Hazardous Material has been used, stored, treated or
disposed of by the Company or Company Subsidiaries except in compliance
with Environmental Laws. To the best of the Company's knowledge, no
Hazardous Materials generated by the Company or any Company Subsidiary has
ever been sent directly or indirectly to any site listed or formally
proposed for listing on the National Priorities List promulgated pursuant
to CERCLA or to any site listed on any state list of hazardous substance
sites requiring cleanup.
(v) To the best of the Company's knowledge, no Hazardous Material is
present on, at, under or migrating from any property where the Company and
the Company Subsidiaries have conducted their business.
(vi) The Company and Company Subsidiaries have maintained all
records in the manner and the time periods required by all Environmental
Laws and Environmental Permits.
16
(vii) There are no liens, encumbrances or restrictions of any nature
whatsoever against the Company or the Company Subsidiaries arising under
any Environmental Law.
(viii) The Company has made available to Purchaser complete copies
of all reports, analyses or other documentation prepared by or on behalf
of the Company or otherwise in the Company's possession relating to (i)
the Company's and the Company Subsidiaries' compliance with Environmental
Laws, and (ii) the presence or absence of Hazardous Materials on, at,
under or migrating from any property where the Company and the Company
Subsidiaries have conducted their business (collectively referred to as
"Environmental Reports"). Each Environmental Report delivered or made
available to Purchaser has been listed on Section 2.17 of the Disclosure
Schedule. By way of example only and not by way of limitation,
Environmental Reports include Phase I and Phase II audits, compliance
audits, tank closure reports, remedial investigation reports, remedial
action reports or other documentation relating to investigation and
remediation activities.
(ix) To the extent required under Environmental Laws: all existing
underground and above ground storage tanks currently operated by the
Company or Company Subsidiaries are properly registered with the
appropriate local, state and federal governmental authorities; all
underground storage tanks currently operated by the Company or the Company
Subsidiaries meet the federal and all applicable state and local upgrade
requirements effective December 22, 1998; and no underground or above
ground storage tank operated by the Company or the Company Subsidiaries
has been closed, abandoned or removed during the Company's or the Company
Subsidiaries' operations, except in compliance with all applicable
Environmental Laws. Section 2.17 of the Disclosure Schedule lists all
underground and above ground storage tanks now operated by the Company or
any Company Subsidiary, together with applicable registration forms,
filings and permits.
2.18 Insurance. Section 2.18 of the Disclosure Schedule lists all insurance
policies, including, without limitation, workers compensation insurance
policies, covering the assets, employees and operations of the Company and the
Company Subsidiaries as of the date hereof. Such insurance policies are in full
force and effect, all premiums due thereon have been paid (except as described
in Section 2.18 of the Disclosure Schedule) and such policies are adequate to
insure the business of the Company and the Company Subsidiaries in such amounts
and against such risks as are customary for companies engaged in businesses
similar to that of the Company and the Company Subsidiaries.
(a) There are no unpaid deductibles or retentions or self-insured
retention ("SIR") for reported insurance claims other than those that are listed
in Section 2.18 of the Disclosure Schedule, where the aggregate of all such
deductibles, retentions and SIR's could exceed $50,000.
(b) There are no deductibles, retentions or SIR's for claims that are
incurred but not yet reported other than those that are listed in Section 2.18
of the Disclosure Schedule.
(c) There have been no "portfolio risk transfers" or "buyouts of claim
tail" other than those that are attached as Section 2.18 of the Disclosure
Schedule.
17
(d) There is no liability for retrospectively rated insurance premiums
other than those listed in Section 2.18 of the Disclosure Schedule.
(e) There is no liability to insurers for future audit premiums other than
those listed in Section 2.18 of the Disclosure Schedule.
(f) A current list of all surety bonds, with obligee, obligor, face
amount, and description, is attached as Section 2.18 of the Disclosure Schedule.
2.19 Licenses and Permits. Set forth on Section 2.19 of the Disclosure Schedule
is a list of each liquor license held by the Company or any of the Company
Subsidiaries as of the date hereof. Subject to any filings required to be made
or governmental approvals required to be obtained in connection with the
Closing, which the Company, Sellers and Purchaser will cooperate in making or
obtaining but which shall in any event be the obligation of Purchaser to make or
obtain, the Company and each Company Subsidiary has all local, state and federal
licenses, including liquor licenses, permits, registrations, certificates,
consents, accreditations and approvals (collectively, the "Licenses and
Permits") necessary to conduct its business in the manner currently conducted.
Except as set forth in Section 2.19 of the Disclosure Schedule, there is no
default under any of the Licenses and Permits, no notices have been received by
the Company or any Company Subsidiary with respect to threatened, pending, or
possible revocation, termination, suspension or limitation of any such License
or Permit, and there exists no grounds for revocation, termination, suspension
or limitation of any such License or Permit.
2.20 No Brokers' or Other Fees. Except as set forth on Section 2.20 of the
Disclosure Schedule, no broker, finder or investment banker is entitled to any
fee or commission in connection with the transactions contemplated hereby based
upon arrangements made by or on behalf of the Company.
2.21 Volume Services America, Inc. Integration/Transition Plan. The Company has
heretofore delivered or made available to Purchaser a true, correct and complete
copy of the Volume Services America Integration/Transition Plan (the "Plan")
pursuant to which Volume Services, Inc. and SAC were combined. Except as
disclosed in Section 2.21 of the Disclosure Schedule attached hereto:
(a) all cost saving measures included in the Plan have been fully
implemented;
(b) all one-time expenses incurred in connection with implementation of
the Plan that are allowed to be reserved for under GAAP have been reserved by
the Company for accounting purposes in 1998, which reserve is reflected in the
Company's 1998 income statement delivered or made available pursuant to Section
2.5; and
(c) all cash payments required to implement the Plan have been paid in
full prior to the date hereof.
2.22 1998 Contract EBITDA. The Company has heretofore delivered to Purchaser as
Section 2.22 of the Disclosure Schedule a true, correct and complete list of the
18
approximate earnings before interest, taxes, depreciation, and amortization
("EBITDA") contributed by each of the Company's customer locations in 1998
(other than customers individually accounting for less than $100,000 of EBITDA),
which list fairly represents the EBITDA results of such customer locations,
taken as a whole.
2.23 Ethical Standards. SAC and Volume Services Inc. have adopted written
policies regarding ethical standards, copies of which have been delivered or
made available to Purchaser. To the Company's knowledge, such policies are being
complied with.
2.24 Directors; Officers; Compensation. Section 2.24 of the Disclosure Schedule
contains a true and complete list, as of the date of this Agreement, of all of
the Company's directors and officers, and all salaried employees who receive
annual compensation in excess of $50,000 and the salaries of such directors,
officers and salaried employees.
2.25 Bank Accounts. Section 2.25 of the Disclosure Schedule contains a complete
list showing the name of each bank in which the Company has an account or safety
deposit box and a complete list of each such account or safety box and the name
of each person authorized to draw thereon or have access thereto.
2.26 Material Untruths or Omissions. This Agreement, including any disclosure
contained or referred to in any Section (including Section 2.26) of the
Disclosure Schedule, does not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements herein and
therein, in the light of the circumstances in which they were made, not
misleading.
2.27 Receivables and Payables. Except as set forth in Section 2.27 of the
Disclosure Schedule, all receivables of the Company as of March 30, 1999: (i)
were incurred in the ordinary course of the Company's business and (ii) are not,
to the Company's or any Seller's knowledge, subject to any defense,
counter-claim or set off, other than those arising in the ordinary course of
business, provided that certain receivables are subject to claims and
counterclaims as disclosed in Section 2.9 of the Disclosure Schedule. All
payables of the Company as of March 30, 1999 were incurred in the ordinary
course of business.
2.28 Year 2000. The Company's primary information system, and all accounting
systems at its headquarters location, are ready for "Y2K" transactions. The
Company has developed a plan outline to assess, remediate and test secondary
information technology systems, such as communication, security, and point of
sale systems. In the second quarter of 1999, the Company plans on conducting a
survey of secondary information systems to assess additional "Y2K" exposure. An
independent consultant has been retained to assist the Company in performing the
survey and assessment. The Company has, through normal operating requirements,
been upgrading secondary information systems on an as required basis.
2.29 1999 Budget. The 1999 Budget heretofore delivered by the Company to
Purchaser (the "Budget"), including the estimated capital expenditures reflected
therein, has been prepared in good faith, giving effect to assumptions made on a
reasonable basis and reflects the best available estimates and judgments of the
Company's management as to the future financial performance of the Company.
19
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Volume, Offshore and Management Direct hereby jointly and severally
represent and warrant to Purchaser as to themselves and their Shares, and
Services hereby represents and warrants to Purchaser severally and not jointly,
as to itself and its Shares, as follows (for the absence of doubt, it is agreed
that Services makes no representation as to the other Sellers or their Shares):
3.1 Ownership of Shares. The Shares constitute all the issued and outstanding
shares of capital stock of the Company.
3.2 Title to Shares. As of the date hereof, except as set forth in Section 3.2
of the Disclosure Schedule, each of the Sellers has good and valid title to the
Shares indicated as being owned by it in Annex A, free and clear of all
Encumbrances. As of the Closing Date, each of the Sellers will have good and
valid title to the Shares indicated as being owned by it in Annex A. Except as
set forth in Section 3.2 of the Disclosure Schedule, each Seller represents and
warrants that, as of the date hereof there are no restrictions against the
transfer of its Shares to Purchaser or the Company, as the case may be. Each
Seller represents and warrants that as of the Closing Date, there will be no
restrictions against the transfer of its Shares to Purchaser or the Company, as
the case may be. Delivery of the Shares by Sellers to Purchaser or the Company,
as the case may be, in accordance with Sections 1.2 and 1.4(a) will convey to
Purchaser or the Company, as the case may be, good and valid title to such
Shares.
3.3 Authority. Each Seller has full power and authority to execute and deliver
this Agreement and to carry out the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby by each of the Sellers have been duly and validly authorized
by all requisite action on the part of such Seller. This Agreement has been duly
and validly executed by each Seller and assuming this Agreement constitutes the
valid and binding agreement of Purchaser and the Company, constitutes the legal,
valid and binding obligation of each Seller enforceable in accordance with its
terms, subject to applicable laws of bankruptcy, insolvency and similar laws
affecting creditors' rights generally and the application of general rules of
equity.
3.4 No Approvals or Conflicts. Except as set forth in Section 3.4 of the
Disclosure Schedule, neither the execution and delivery of this Agreement, nor
the consummation by each Seller of the transactions contemplated hereby will:
(a) violate, conflict with or result in a breach of any provision of the
certificate of incorporation or charter papers or bylaws or other organizational
documents of such Seller; (b) violate any order, injunction, judgment, ruling,
law or regulation of any court or governmental authority to which such Seller or
its subsidiaries or any of their respective properties is subject; (c) violate,
conflict with or result in a breach of any provision of, or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the creation of any lien, security interest, charge
or encumbrance upon any of Seller's properties under any note, bond, mortgage,
20
indenture, deed of trust, license, franchise, permit, lease, contract, agreement
or other instrument to which Sellers or their subsidiaries or any of their
respective properties may be bound, or (d) except for applicable requirements of
the HSR Act and the Exchange Act, require any consent, approval or authorization
of, or notice to, or declaration, filing or registration with, any governmental
or regulatory authority or other third party. Except as set forth on Section 3.4
of the Disclosure Schedule, no consent or approval of or notification to any
governmental authority is required in connection with the execution and delivery
by such Seller of this Agreement or the consummation of the transactions
contemplated hereby.
3.5 Brokers and Advisors. Except as set forth in Section 2.20 of the Disclosure
Schedule, no action taken by any Seller in connection with or in furtherance of
the transactions contemplated hereby has or shall cause any of the Company, any
Company Subsidiary or Purchaser to be subject to any claim against it for a
brokerage commission, finder's fee, investment banker's fee or other like
payment.
3.6 Claims on the Company. No Seller and no director, officer, partner or other
affiliate of such Seller (other than the Company and the Company Subsidiaries)
has any claim against the Company or any Company Subsidiary in respect of
borrowed money or funded indebtedness or obligations or liabilities for fees,
expenses and advances (other than amounts payable in the ordinary course of
business as compensation to any person who is also an employee of the Company or
any Company Subsidiary), nor is any Seller or director, officer, partner or any
of its other affiliates (other than the Company and the Company Subsidiaries)
party to any agreement, transaction or other business arrangement with the
Company or any Company Subsidiary, except (other than those in connection with
such person's acting as an employee of the Company or any Company Subsidiary),
with respect to both of the foregoing clauses, (i) as described in Section 3.6
of the Disclosure Schedule or (ii) reimbursements and advances in accordance
with the policies of the Company and the Company Subsidiaries to directors and
officers for expenses incurred in connection with the Company's business.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company and Sellers
as follows:
4.1 Organization. Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
4.2 Authorization, Etc. Purchaser has full corporate power and authority to
execute and deliver this Agreement, and to carry out the transactions
contemplated hereby. The execution and delivery by Purchaser of this Agreement
and the consummation by Purchaser of the transactions contemplated hereby have
been duly approved and authorized, and no other corporate proceedings on the
part of Purchaser are necessary to approve and authorize the execution and
delivery by Purchaser of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby. This Agreement has been duly and validly
executed by Purchaser and, assuming this Agreement constitutes the valid and
binding agreement of the
21
Company and Sellers, constitutes a valid and binding agreement of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to
applicable laws of bankruptcy, insolvency and similar laws affecting creditors'
rights generally and the application of general rules of equity.
4.3 No Approvals or Conflicts. Neither the execution and delivery by Purchaser
of this Agreement nor, as of the Closing, the consummation by Purchaser of the
transactions contemplated hereby will (i) violate, conflict with or result in a
breach of any provision of the Certificate of Incorporation or By-laws of
Purchaser, (ii) violate, conflict with or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of Purchaser's properties
under, any note, bond, mortgage, indenture, deed of trust, license, franchise,
permit, lease, contract, agreement or other instrument to which Purchaser or its
subsidiaries or any of their respective properties may be bound, (iii) violate
any order, injunction, judgment, ruling, law or regulation of any court or
governmental authority applicable to Purchaser or its subsidiaries or any of
their respective properties, or (iv) except for applicable requirements of the
Exchange Act and the HSR Act require any consent, approval or authorization of,
or notice to, or declaration, filing or registration with, any governmental or
regulatory authority or other third party.
(a) Purchaser understands that the procurement of any required consents
from, or giving of notices to, customers and other parties with contractual
arrangements with the Company and the Company Subsidiaries or, subject to
Sections 6.5 and 6.6, governmental authorities (other than the Department of
Justice and the Federal Trade Commission) who may require such consents or
notices (regardless of whether such consents or notices are included in Section
2.7 of the Disclosure Schedule) will not be a condition to any party's
obligation to effect the Closing. Purchaser also understands that consummation
of this transaction requires the prior consent of the lenders under the bank
credit facility pertaining to the Company and the Company Subsidiaries, and in
the absence of such consent, Purchaser would have to cause the Company and/or
the Company Subsidiaries to refinance such facility at Closing and, subject to
Section 7.3, no Seller will be responsible for the failure to obtain such
consent or to effect such refinancing. Finally, Purchaser understands that
consummation of this transaction will constitute a "change of control" under the
indenture for the 11-1/4% Notes due 2009 (the "Company Notes") and as a result,
a repurchase offer must be made following the Closing in accordance with the
requirements of such indenture.
4.4 Acquisition for Investment. Purchaser acknowledges that neither the offer
nor the sale of the Shares has been registered under the Securities Act.
Purchaser is acquiring the Shares solely for its own account and not with a view
to any distribution or other disposition of such Shares, and the Shares will not
be transferred except in a transaction registered or exempt from registration
under the Securities Act.
4.5 No Knowledge of Breach. As of the date hereof, Purchaser has no knowledge of
any breaches of any representations or warranties set forth in Article II or III
above. Purchaser acknowledges that it has read the copies of the documents
included in Exhibit A to this Agreement, which Exhibit A has been initialed by
Sellers, the Company, and Purchaser.
22
4.6 No Brokers' or Other Fees. No broker, finder or investment banker is
entitled to any fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of Purchaser.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE COMPANY AND SELLERS
The obligation of the Company and Sellers to effect the Closing
under this Agreement is subject to the satisfaction, at or prior to the Closing,
of each of the following conditions, unless waived in writing by Sellers.
5.1 Representations and Warranties. The representations and warranties made by
Purchaser in this Agreement shall be true and correct in all material respects
on the Closing Date as though such representations and warranties were made at
such date, except for changes expressly permitted or contemplated by this
Agreement.
5.2 Performance. Purchaser shall have performed and complied in all material
respects with all agreements, obligations and conditions required by this
Agreement to be so performed or complied with by Purchaser prior to the Closing.
5.3 Officer's Certificate. Purchaser shall have delivered to Sellers a
certificate, dated as of the Closing Date and executed by the President or a
Vice President of Purchaser, certifying to the best of such person's knowledge
(as the term knowledge is defined in Section 10.10) to the fulfillment of the
conditions specified in Sections 5.1 and 5.2 hereof.
5.4 HSR Act. All applicable waiting periods under the HSR Act with respect to
the transactions contemplated hereby shall have expired or been terminated.
5.5 Injunctions. On the Closing Date there shall be no (i) injunction, writ,
preliminary restraining order or other order in effect of any nature issued by a
court or governmental agency of competent jurisdiction directing that the
transactions provided for herein not be consummated as provided herein or (ii)
statute, law, ordinance, rule or regulation enacted, entered or promulgated by
any governmental authority ("Law") prohibiting or restraining the consummation
of the transactions contemplated hereby.
ARTICLE VI
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to effect the Closing under this
Agreement is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions, unless waived in writing by Purchaser.
6.1 Representations and Warranties. The representations and warranties made by
the Company and Sellers in this Agreement shall be true and correct in all
respects on the Closing Date as though such representations and warranties were
made at such date, except for (i)
23
changes expressly permitted or contemplated by the terms of this Agreement and
(ii) any breaches of such representations and warranties that, individually and
in the aggregate, do not constitute a Material Adverse Effect.
6.2 Performance. The Company and Sellers shall have performed and complied in
all respects with all agreements, obligations and conditions required by this
Agreement to be so performed or complied with by the Company and Sellers prior
to the Closing, except where the failure to so perform or comply does not,
individually and in the aggregate, result in a Material Adverse Effect.
6.3 Sellers' and Officer's Certificates. (a) Each Seller shall have delivered to
Purchaser a certificate, dated as of the Closing Date, and executed by a
principal, a general partner or a managing member, as the case may be, of such
Seller, certifying, to the best of the certifying person's knowledge (as the
term knowledge is defined in Section 10.10), to the fulfillment of the
conditions specified in Sections 6.1 and 6.2 hereof insofar as such conditions
relate to such Seller's representations and warranties and such Seller's
covenants and (b) the Company shall have delivered to Purchaser a certificate,
dated as of the Closing Date and executed by the President or a Vice President
of the Company, certifying, to the best of such person's knowledge (as the term
knowledge is defined in Section 10.10), to the fulfillment of the conditions
specified in Sections 6.1 and 6.2 hereof insofar as such conditions relate to
the Company's representations and warranties and the Company's covenants.
6.4 Resignation of Directors. Sellers shall have delivered to Purchaser the
written resignations of those directors and officers of the Company and each of
the Company Subsidiaries (other than the Excluded Entities) whose resignations
are requested by Purchaser no later than five business days prior to the
Closing, such resignations to be effective as of the Closing Date; provided,
however, that Sellers shall have no obligation to deliver resignations of
officers who do not agree to resign and provided further that Purchaser shall be
responsible for all liabilities and obligations resulting from such
resignations.
6.5 HSR Act. All applicable waiting periods under the HSR Act with respect to
the transactions contemplated hereby shall have expired or been terminated.
6.6 Injunctions. On the Closing Date there shall be no (i) injunction, writ,
preliminary restraining order or other order in effect of any nature issued by a
court or governmental agency of competent jurisdiction directing that the
transactions provided for herein not be consummated as provided herein or (ii)
Law prohibiting or restraining the consummation of the transactions contemplated
hereby.
6.7 Spinoff Condition. Either (a) September 30, 1999 shall have passed, or (b)
Purchaser shall have delivered to Sellers and the Company on or prior to
September 30, 1999, a certificate executed by the President or any Vice
President of Purchaser certifying that Purchaser shall have determined, in its
sole judgment, that consummation of the transactions contemplated by this
Agreement (including, without limitation, any financing or refinancing
transaction to be undertaken in connection therewith) is not reasonably likely
to have a material adverse effect on (a) the business, results of operations,
condition (financial or otherwise), prospects or capital structure of Xxxxx
Corporation or any of its subsidiaries or business
24
segments, individually or in the aggregate, or (b) the ability of Xxxxx
Corporation to consummate all or any material part of the recapitalization
transaction publicly announced by it on March 11, 1999.
ARTICLE VII
COVENANTS AND AGREEMENTS
7.1 Conduct of Business by Company. Except (i) for actions taken to implement
this Agreement and the transactions contemplated hereby, (ii) as disclosed in
Section 7.1 of the Disclosure Schedule or any other section of the Disclosure
Schedule or (iii) with the prior written consent of Purchaser, from and after
the date of this Agreement and until the Closing Date Sellers will not take any
actions that will impair the ability of the Company to comply with these
covenants, and the Company shall and shall cause the Company Subsidiaries to:
(a) use reasonable efforts consistent with good business judgment to:
preserve intact the present business organization of the Company and each
Company Subsidiary, preserve the goodwill of and maintain satisfactory
relationships with customers, suppliers and other persons and entities having
business relationships with the Company or any Company Subsidiary and generally
operate the Company and each Company Subsidiary in the ordinary and regular
course of business consistent with prior practices in all material respects; and
(b) not (i) cause to be issued or sold any shares of capital stock or
other securities of the Company or any Company Subsidiary or any options,
warrants or commitments of any kind with respect thereto, (ii) directly or
indirectly cause to be purchased, redeemed or otherwise acquired or disposed of
any shares of capital stock of the Company or any Company Subsidiary, (iii)
declare, set aside or pay any dividend or other distribution out of the Company,
(iv) permit or allow the Company or any Company Subsidiary to borrow or agree to
borrow any funds or incur, whether directly or by way of guarantee, any
obligation for borrowed money, other than short-term accounts payable and
borrowings under any existing credit facility incurred in the ordinary course of
business and consistent with past practice, (v) subject any of the property or
assets of the Company or any Company Subsidiary (real, personal or mixed,
tangible or intangible) to any mortgage, pledge, lien or encumbrance or
otherwise permit or allow the disposition of any property or assets of the
Company or any Company Subsidiary (real, personal or mixed, tangible or
intangible), other than in each case the ordinary course of business and
consistent with past practice, (vi) enter into any new contract, which contract
requires the Company or any Company Subsidiary to make capital expenditures in
excess of $1,000,000, without Purchaser's consent, (vii) permit the Company or
any Company Subsidiary to, except as set forth in Section 7.1 of the Disclosure
Schedule, make or grant any increase in payments, wages, salaries or benefits to
any director, officer or employee of the Company or any Company Subsidiary whose
salary as of the date hereof is above $100,000, or hire any person at an annual
salary above $100,000; (viii) make any acquisitions in excess of $100,000, (ix)
change any accounting policies, (x) make a payment in excess of $25,000 for any
one action, proceeding or investigation to settle or otherwise dispose of any
such action, proceeding or investigation, provided that settlements of all such
actions, proceedings or investigations under this Section 7.1 shall not exceed
$100,000, (xi) enter into any contract, arrangement, understanding or
transaction with any Seller or any of the Seller's
25
affiliates, directors, officers, partners or employees, in each case, who are
not also employees of the Company (it being acknowledged that dealings with such
Company employees are governed by Section 7.1(vii)), (xii) take any action
prohibited by 2.11(b)(i), (ii), (iii), (iv) or (v); or (xiii) agree to do any of
the foregoing.
7.2 Access to Books and Records; Cooperation.
(a) Purchaser agrees that from the date of the Closing and until the
second anniversary of the Closing (or such longer period as shall be necessary
with respect to any tax period prior to the Closing Date for which the statute
of limitations has not expired at the end of such two-year period), during
normal business hours, it shall permit, at no charge, cost or expense to
Purchaser and without disruption of Purchaser's business, Sellers and their
respective auditors and other representatives to have reasonable access to the
properties, auditors and officers of the Company and to all books and records
relating to the Company and to examine and take at Seller's expense copies
thereof to the extent such access is reasonably necessary in connection with
such Seller's tax returns or otherwise to enable such Seller to fulfill
applicable legal, regulatory or contractual requirements. In connection with any
dispute under Section 1.3, Purchaser will make available to Sellers due
diligence memoranda and like materials prepared in contemplation of the
acquisition of the Company.
(b) Purchaser agrees not to destroy at any time any files or records which
are subject to Section 7.2(a) without giving reasonable notice to Sellers and,
within 30 days of Sellers' receipt of such notice, to deliver to Sellers (at
Sellers' expense) the records intended to be destroyed.
(c) Between the date of this Agreement and the Closing Date, each of the
Company and the Company Subsidiaries shall afford Purchaser and its
representatives, upon reasonable prior notice by Purchaser and during normal
business hours, access to the personnel, properties, contracts, files, book,
records, documents and other information of the Company and the Company
Subsidiaries and shall make available for inspection and copying by Purchaser
true and complete copies of any documents relating to the foregoing. The Company
shall authorize its accountants to make work papers relating to the Company and
the Company Subsidiaries during any period prior to the Closing Date available
to Purchaser, and the Company shall not take any action to preclude such
accountants from making such work papers available. No investigation by
Purchaser pursuant to this Section 7.2(c) shall affect any representations or
warranties of the parties hereto or their respective rights and obligations
hereunder, subject to the provisions of Sections 1.3, 4.5 and 7.5.
7.3 Filings and Consents. The Company, Sellers and Purchaser shall use all
reasonable efforts to obtain and to cooperate in obtaining any consent,
approval, authorization or order of, and in making any registration or filing
with, any governmental agency or body or other third party required in
connection with the execution, delivery or performance of this Agreement. The
parties agree to cause to be made all appropriate filings under the HSR Act as
soon as reasonably practicable after the date of this Agreement (but in no event
later than five business days after the date hereof) and to diligently pursue
early termination of the waiting period under such act.
26
7.4 Publicity. The parties hereto will not issue any press release or otherwise
make any public statement with respect to the transactions contemplated hereby
without the consent of the other party or parties (which consent shall not be
unreasonably withheld), except as may be required by law, in which event such
press release or public statements shall be made only after consultation with
the other party or parties.
7.5 Notice of Breaches. If either Purchaser or the Company or the Sellers learns
of any facts or circumstances that could reasonably be expected to result in a
failure of the conditions set forth in Section 5.1 or 5.2, 6.1 or 6.2 to be
satisfied, such party shall notify the other parties as promptly as practicable
thereafter of such facts or circumstances; provided, however, that the delivery
of any notice pursuant to this Section 7.5 shall not limit or otherwise affect
the remedies available hereunder of any party receiving such notice or otherwise
constitute an admission of breach. If the Company or Sellers breach any of their
respective representations and warranties, and with respect to the elements of
such breaches Purchaser has knowledge thereof as of the date hereof but did not
disclose such knowledge under Section 4.5, such breaches by the Company or
Sellers will be disregarded for purposes of Section 6.1.
7.6 Covenant to Satisfy Conditions. Each party agrees to use all reasonable
efforts to insure that the conditions set forth in Article V and Article VI
hereof are satisfied, insofar as such matters are within the control of such
party; provided, however, that in no event shall Sellers and the Company, on the
one hand, and Purchaser, on the other hand, be required to expend in excess of
$25,000 in the aggregate in performing under Section 7.3 above and this Section
7.6 (other than HSR Act filing fees which Purchaser and Sellers will bear 50%
each).
7.7 Director and Officer Liability Insurance. The parties agree that the Company
shall be permitted to purchase directors and officers liability insurance
coverage for purposes of indemnifying and insuring persons covered by such
insurance of the Company or Company Subsidiaries, as the case may be,
immediately prior to the Closing Date, which coverage shall be on terms and in
amounts at least as favorable to such persons as they were on the Closing Date;
provided, that the Purchase Price shall be reduced by the amount of the premiums
paid or required to be paid in the future by the Company to obtain such
coverage.
7.8 Employee Benefits.
(a) Continuation of Benefits. During the period from the Closing Date
until the end of the twelve months following the Closing Date, Purchaser shall
maintain or cause to be maintained wages, compensation levels, employee pension
and welfare plans for the benefit of employees and former employees of the
Company or Company Subsidiaries, which are equal, in the aggregate, or greater
than those wages, compensation levels and other benefits provided under the
Plans that are in effect on the date hereof.
(b) Credit for Deductibles. Purchaser will, or will cause the Company and
Company Subsidiaries to, (i) waive all limitations as to preexisting conditions,
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the employees of the Company or Company Subsidiaries
under any welfare plan that such employees may be eligible to participate in
after the Closing Date, (ii) provide each employee of the
27
Company or any Company Subsidiary with credit for any co-payments and
deductibles paid prior to the Closing Date in satisfying any applicable
deductible or out-of-pocket requirements under any welfare plans that such
employees are eligible to participate in after the Closing Date, and (iii)
provide each employee of the Company or any Company Subsidiary with credit for
all service with the Company or Company Subsidiary, as applicable, under each
employee benefit plan, program, or arrangement of Purchaser or its affiliates in
which such employees are eligible to participate; provided, however, that in no
event shall the employees be entitled to any credit to the extent that it would
result in a duplication of benefits with respect to the same period of service.
(c) Severance Policy and Other Agreements. With respect to any salaried
officer or employee (other than hourly employees or employees covered by
collective bargaining agreements) who is covered by a severance policy or plan
separate from the standard severance policy for employees of the Company or any
Company Subsidiary, Purchaser shall maintain or cause to be maintained such
separate policy or plan as in effect as of the date hereof, and as to all other
officers and employees (other than hourly employees or employees covered by
collective bargaining agreements), Purchaser shall maintain or cause to be
maintained the Company's or Company Subsidiary's, as applicable, standard
severance policy as in effect as of the date hereof for a period of at least
twelve months from the Closing Date.
(d) 1999 Bonus. Purchaser will maintain, or cause to be maintained, the
Company's and each Company Subsidiary's bonus plans, as in effect on the date
hereof, through the end of 1999.
7.9 Contact with Customers and Suppliers. Purchaser and its representatives
shall contact and communicate with the employees, customers, suppliers and
licensers of the Company and the Company Subsidiaries in connection with the
transactions contemplated hereby only with the prior written consent of Sellers,
and which consent may be conditioned upon a designee of Sellers being present at
any such meeting or conference.
7.10 No Solicitation of Other Offers. Subject to the provisions of Section 1.3,
from the date hereof until the earlier of the Closing or a termination of this
Agreement, none of the Sellers, the Company or any of their representatives
will, directly or indirectly, solicit, encourage, assist, initiate discussions
or engage in negotiations with, provide any nonpublic information to, or enter
into any agreement or transaction with, any person, other than Purchaser,
relating to the possible merger, consolidation, business combination or direct
or indirect sale of assets or capital stock of the Company or the Company
Subsidiaries, except for the sale of assets by the Company or the Company
Subsidiaries in the ordinary course of business consistent with past practices
or the terms of this Agreement.
7.11 Termination of Stockholders' Agreement, Xxxxxxx Employment Agreement, Share
Exchange Agreement and Monitoring Agreements. No later than the Closing, Sellers
and the Company shall cause (i) the Amended and Restated Stockholders'
Agreement, dated as of August 24, 1998, among the Company and Sellers to
terminate with no further liability to any party thereto, and Sellers and the
Company
28
shall deliver to Purchaser prior to the Closing evidence satisfactory to
Purchaser of such termination with no further liability, (ii) the Share Exchange
Agreement, dated as of July 27, 1998, among the Company and the other parties
thereto, to terminate without further liability to any party thereto, and
Sellers and the Company shall deliver to Purchaser prior to the Closing evidence
satisfactory to Purchaser of such termination with no further liability,
provided, that Sections 7.13(a) (the second sentence only) and 7.13(b)
(together, the "Surviving Sections") shall survive and Sections 9.1, 9.2, 9.3
(other than paragraph (d) of Section 9.3) and 9.4 shall survive insofar as they
relate to the Surviving Sections, and provided further, any claims otherwise
arising under such Share Exchange Agreement (other than with respect to the
Surviving Sections) and including claims arising after the date hereof are
irrevocably waived as of Closing, and (iii) the Monitoring Agreements listed as
items (2) and (3) of Section 2.20 of the Disclosure Schedule to terminate.
Purchaser and the Company hereby irrevocably waive any claim against Blackstone
Management Partners L.P. and GECC, and the Company and Sellers will cause
Blackstone Management Partners L.P. and GECC irrevocably to waive any claim
against Purchaser and the Company, in connection with the provision of
monitoring services under the Monitoring Agreements. Notwithstanding anything in
this Agreement to the contrary, the Employment Agreement between Xxxxxxx and the
Company dated August 24, 1998 may be terminated by the Company upon notice from
GECC. GECC will be obligated to make the payments for which it agreed to be
responsible pursuant to a Letter Agreement dated July 27, 1998 between GECC and
Service America Corporation and a Reimbursement Agreement dated as of August 24,
1998 between GECC and Service America Corporation. In addition, GECC will be
responsible for all severance payments and benefits to be paid or accruing to
Xx. Xxxxxxx pursuant to the terms of his Employment Agreement in the event Xx.
Xxxxxxx is terminated prior to August 24, 1999.
7.12 Fee to Blackstone. Prior to the Closing Date, the Company will enter into
an investment advisory agreement and pay a one-time investment banking fee plus
expenses not to exceed a maximum amount of $3 million in the aggregate to an
affiliate of The Blackstone Group L.P. as described in Section 2.20 of the
Disclosure Schedule.
7.13 Disposition of Hatch Interest. Prior to or concurrent with the Closing (i)
the transaction in respect of the Hatch interests will occur as described in
Section 7.13 of the Disclosure Schedule and (ii) each of the "selected
employees" referred to in Section 7.13 of the Disclosure Schedule shall have
executed releases, in form and substance reasonably satisfactory to Purchaser,
releasing the Company and Purchaser (and their respective affiliates, employees,
officers, directors, agents and representatives) of all liability and waiving
any claims against the Company and Purchaser in respect of the transactions
described in Section 7.13 of the Disclosure Schedule.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated and abandoned at any time
prior to the Closing:
(a) by the mutual consent of the Company and Purchaser;
(b) as provided in Section 1.3;
29
(c) by either the Company or Purchaser in the event the Closing has not
occurred on or before the Termination Date (as defined below), unless the
absence of such consummation is due to the failure of the party seeking to
terminate this Agreement to comply in all material respects with the agreements
and covenants contained herein to be performed by such party on or before the
Termination Date;
(d) by either the Company or Purchaser in the event any court or
governmental agency of competent jurisdiction shall have issued an order, decree
or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby and such order, decree or
ruling or other action shall have become final and nonappealable;
(e) by the Company if any conditions in Article V are not reasonably
capable of being satisfied or by Purchaser if any then applicable conditions in
Article VI (other than Section 6.7) are not reasonably capable of being
satisfied; provided that the party seeking to terminate the Agreement must
deliver to the other parties written notice of such termination at least ten
business days prior to the intended date of such termination (provided that the
parties will cooperate in good faith to satisfy such conditions for a period of
two weeks in order to permit their cure, provided that the Company and Sellers
will not be required to expend funds in order to effect any such cure, unless
Purchaser provides such funds);
(f) by Purchaser on or prior to September 30, 1999, if Purchaser delivers
to Sellers and the Company a certificate executed by the President of Xxxxx
Corporation, certifying as to such person's belief that the determination
referred to in Section 6.7(b) cannot in Purchaser's sole judgment be made and,
specifying the reasons therefor, and terminating the Agreement under this clause
as of the date such certificate is delivered; or
(g) by Purchaser if the Company and/or any Seller fails to deliver to
Purchaser the Company Certificates in accordance with Section 1.3. (b)
"Termination Date" shall mean September 30, 1999. Purchaser may by at least five
business days prior written notice to the Company and Sellers extend the
Termination Date for up to two (2) one month periods, such that the Termination
Date may be extended to no later than November 30, 1999; provided, however, that
upon any such extension, Section 6.7 shall, as of October 1, 1999, no longer
apply.
8.2 Procedure and Effect of Termination. If the transactions contemplated by
this Agreement are terminated as provided herein:
(a) each party will redeliver all documents, work papers and other
material of the other party relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to the party
furnishing the same;
(b) All confidential information received by Purchaser with respect to the
business of the Company and the Company Subsidiaries shall be treated in
accordance with the provisions of the Confidentiality Agreement, dated as of
February 24, 1999, between Purchaser and Sellers (the "Confidentiality
Agreement"), which shall survive the termination of this Agreement in accordance
with its terms; and
30
(c) No party to this Agreement will have any liability under this
Agreement to the other except (i) with respect to the obligations set forth in
the last sentence of Section 7.2(a) and Sections 7.4, 8.2(a), 8.2(b) and 10.1,
(ii) in accordance with Section 1.3, (iii) for any failure to perform or satisfy
in all material respects all of the agreements and covenants to be performed
hereunder at or prior to the Closing, (iv) as provided in the Confidentiality
Agreement and (v) in respect of fraud in connection with any representation or
warranty under this Agreement.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
9.1 Representations and Warranties Relating to the Company. Subject to Sections
1.3 and 9.4, the representations and warranties of the Company and Sellers
contained in Article II of this Agreement shall expire as of the Closing Date
and shall not survive the Closing, except for the representations set forth in
Section 2.20, which shall survive the Closing until the expiration of the
applicable statute of limitations.
9.2 Representations and Warranties of Sellers. The representations and
warranties of Sellers contained in Article III of this Agreement shall survive
the Closing until the expiration of the applicable statute of limitations.
9.3 Representations and Warranties of the Purchaser. The representations and
warranties of Purchaser contained in Article IV of this Agreement shall survive
the Closing until the expiration of the applicable statute of limitations.
9.4 Limitation of Recourse. Following the Closing, no party shall have any
liability or obligation to indemnify or otherwise hold harmless any other party
(or any of their successors or permitted assigns) for any claim or any loss or
liability arising from or in any way relating to this Agreement or any of the
transactions contemplated hereby or any other transaction or event occurring on
or prior to the Closing (including, without limitation, any misrepresentation or
inaccuracy in, or breach of, any representations or warranties (other than the
representations or warranties contained in Section 2.20, Article III and Article
IV) or any breach or failure in performance prior to the Closing of any
covenants or agreements contained in this Agreement to be performed prior to the
Closing or in any exhibit or the Disclosure Schedule hereto or any certificate
or instrument delivered hereunder), and no party (nor any of their successors or
permitted assigns) shall be entitled to bring any claim based on, relating to or
arising out of any of the foregoing against any other party (or any of such
other party's employees, officers, directors, agents or representatives), except
that Sellers agree jointly but not severally to indemnify and hold harmless the
Company and Purchaser (and their respective affiliates, employees, officers,
directors, agents and representatives) from and against any loss, damage, claim,
liability, judgment or settlement, including expenses relating thereto, arising
out of, resulting from or relating to any claims or proceedings brought against
the Company or Purchaser (or any of their respective affiliates, employees,
officers, directors, agents and representatives) in respect of the transactions
described in Section 7.13 of the Disclosure Schedule. Nothing in this Article IX
(including, without limitation, the expiration of the representations and
warranties referred to in Sections 9.1, 9.2 and 9.3) shall limit any party's
right to bring an action for fraud. Without limiting the generality of the
foregoing, in the absence of fraud in connection with a party's representations
31
and warranties, neither Purchaser nor its respective successors or permitted
assigns shall be entitled to seek any recission of the transactions consummated
under this Agreement or other remedy at law or in equity based on the
representations and warranties of the Company and Sellers in this Agreement
(other than the representations and warranties contained in Section 2.20 and
Article III).
9.5 Acknowledgment by the Parties. Each party understands that the
representations and warranties of the other parties will not survive the Closing
(except as expressly set forth in Sections 9.1, 9.2, 9.3 and 9.4) and constitute
the sole and exclusive representations and warranties of such other parties in
connection with the transactions contemplated hereby, and each party
understands, acknowledges and agrees that all other representations and
warranties of any kind or nature expressed or implied (including, without
limitation, any relating to the future or historical financial condition,
results of operations, assets or liabilities of the Company or the Company
Subsidiaries) are specifically disclaimed by the other parties.
ARTICLE X
MISCELLANEOUS
10.1 Fees and Expenses. Except as otherwise provided in this Agreement, the
parties hereto shall bear their own respective expenses in connection with the
negotiation and consummation of the transactions contemplated by this Agreement.
The fees and expenses of outside advisors, including without limitation outside
legal counsel to the Company and Sellers, incurred in connection with the
transactions contemplated by this Agreement shall be paid by Sellers in
proportion to their relative share ownership. Other than the fees described in
Section 2.20 of the Disclosure Schedule (which shall be paid by the Company at
the Closing), each party shall bear the fees and expenses of any broker or
finder retained by such party or parties in connection with the transactions
contemplated herein.
10.2 Governing Law. This Agreement shall be construed under and governed by the
laws of the State of New York without regard to the conflicts of laws provisions
thereof.
10.3 Amendment. This Agreement may not be amended, modified or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
10.4 Assignment. Except as otherwise expressly permitted under this Agreement,
no party hereunder shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of the other parties hereto.
Notwithstanding the preceding sentence, Purchaser may, upon five business days
prior written notice to the other parties, assign its rights hereunder to Xxxxx
Corporation, or any wholly-owned direct or indirect U.S. subsidiary of Xxxxx
Corporation, prior to the date of the Closing; provided, however, Purchaser
shall remain liable for all of its obligations under this Agreement. Nothing in
this Agreement is intended or shall be construed to confer upon any person other
than the parties
32
hereto and their respective permitted assigns any right, remedy or claim under
or by reason of this Agreement or any part hereof.
10.5 Waiver. Any of the terms or conditions of this Agreement that may be
lawfully waived may be waived in writing at any time by the party that is
entitled to the benefits thereof. Any waiver of any of the provisions of this
Agreement by any party hereto shall be binding only if set forth in an
instrument in writing signed on behalf of such party. No failure to enforce any
provision of this Agreement shall be deemed to or shall constitute a waiver of
such provision and no waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
10.6 Notices. Any notice, demand, or communication required or permitted to be
given by any provision of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if (a) personally delivered, (b)
mailed by registered or certified first-class mail, prepaid with return receipt
requested, (c) sent by a nationally recognized overnight courier service, to the
recipient at the address below indicated or (d) delivered by facsimile which is
confirmed in writing by sending a copy of such facsimile to the recipient
thereof pursuant to clause (a) or (c) above:
If to Purchaser:
Xxxxx Services Corp.
Xxx Xxxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: President, with copy to
General Counsel
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
If to Sellers or the Company:
The Blackstone Group, L.P.
000 Xxxx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
33
With copies to:
Volume Services America Holdings, Inc.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Chief Executive Officer and General Counsel
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
Recreational Services L.L.C.
c/o General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Counsel - Commercial Finance
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner.
Except as otherwise provided herein, any notice under this Agreement will be
deemed to have been given (x) on the date such notice is personally delivered or
delivered by facsimile, (y) four days after the date of mailing if sent by
certified or registered mail or (z) the next succeeding business day after the
date such notice is delivered to the overnight courier service if sent by
overnight courier; provided that in each case notices received after 4:00 p.m.
(local time of the recipient) shall be deemed to have been duly given on the
next business day.
10.7 Complete Agreement. This Agreement, the Confidentiality Agreement and the
other documents and writings referred to herein or delivered pursuant hereto
contain the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings,
both written and oral, between the
34
parties with respect to the subject matter hereof and thereof. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
10.8 Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and each of which
shall be deemed an original.
10.9 Headings. The headings contained in this Agreement are for reference only
and shall not affect in any way the meaning or interpretation of this Agreement.
10.10 Knowledge and Fraud. For purposes of this Agreement, (a) the term
"knowledge" means the actual knowledge of, or the willful failure to obtain
knowledge by (A) with respect to Company or any Sellers, any executive officer,
general partner, managing member or regional vice president, of such Seller or
the Company, as applicable, and (B) with respect to Purchaser, any of the
persons named in Section 10.10 of the Disclosure Schedule, and (b) the term
"fraud" shall require knowledge (as defined in (a) above) of Purchaser, such
Seller or the Company, as applicable. Whenever this Agreement calls for a
certificate to be given to the best of a person's knowledge, (i) such
certificate shall not alter or qualify the representations and warranties of the
party on whose behalf the certificate is given contained in this Agreement (as
such certificate shall so state) and (ii) the person executing such certificate
shall have no personal liability in connection with rendering such certificate.
10.11 Construction. This Agreement has been negotiated by Sellers, the Company
and Purchaser and their respective legal counsel, and legal and equitable
principles that might require the construction of this Agreement against the
party drafting this Agreement shall not apply in any construction or
interpretation of this Agreement.
10.12 Severability. Any provision of this Agreement which is invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions hereof in such jurisdiction or
rendering that or any other provision of this Agreement invalid, illegal or
unenforceable in any other jurisdiction.
10.13 Third Parties. Except as specifically set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any person or corporation, other than the parties hereto and
their permitted successors or assigns, any rights or remedies under or by reason
of this Agreement.
10.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE PARTIES HERETO HEREBY
CONSENT TO THE JURISDICTION OF ANY PANEL OF THREE ARBITRATORS PURSUANT TO
SECTION 1.3(J) HERETO WITH RESPECT TO THE MATTERS IN SECTION 1.3 AND OTHERWISE
TO ANY STATE OR FEDERAL COURT LOCATED WITHIN THE AREA ENCOMPASSED BY THE STATE
OF NEW YORK AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF
OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS OR BY SUCH
ARBITRATORS. THE PARTIES HERETO EACH ACCEPT FOR
35
ITSELF AND IN CONNECTION WITH ITS RESPECTIVE PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION AND VENUE OF THE AFORESAID COURTS OR
ARBITRATORS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREE
TO BE BOUND BY ANY NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION WITH
THIS AGREEMENT. THE PARTIES HERETO EACH DESIGNATE CT CORPORATION SYSTEM, INC.
AND SUCH OTHER PERSONS AS MAY HEREINAFTER BE SELECTED BY SELLERS WHO IRREVOCABLY
AGREE IN WRITING TO SO SERVE AS AGENT TO RECEIVE ALL PROCESS IN ANY SUCH
PROCEEDINGS IN ANY COURT PROCEEDING, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY
THE PARTIES HERETO TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY
OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO THE PARTIES
HERETO, AS PROVIDED HEREIN, EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE
LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF
PROCESS.
10.15 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES
HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE PARTIES
HERETO ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT
FOR THIS WAIVER, BE REQUIRED OF ANY OF THE OTHER PARTIES. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED HEREBY. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
36
IN WITNESS WHEREOF, the parties hereto have consent this Agreement
to be executed as of the date first written by their respective duly authorized
officers.
XXXXX ENTERTAINMENT, INC.
By:
Name:
Title:
37
VOLUME SERVICES AMERICA HOLDINGS, INC.
By:
Name:
Title:
BCP VOLUME L.P.,
By: Blackstone Capital Partners II
Merchant Banking Fund L.P.
By: Blackstone Management Associates
II L.L.C., as General Partner
By:
Name:
Title:
BCP OFFSHORE VOLUME L.P.
By: Blackstone Offshore Capital Partners II L.P.
By: Blackstone Management Associates
II L.L.C., as General Partner
By: ____________________________________ Name:
Title:
By: Blackstone Service (Cayman) LDC
as Administrative General Partner
By:
Name:
Title:
38
VSI MANAGEMENT DIRECT L.P.
By: VSI Management I L.L.C.
By: ________________________________
Title:
By: Blackstone Management
Associates II L.L.C., as
Managing Member
By: ____________________________
Title:
39
RECREATIONAL SERVICES L.L.C.
By: General Electric Capital Corporation
Managing Member
By:
Name: Xxxxxxx Xxxxxxx
Title: Attorney-In-Fact
As to Sections 1.2(b), 1.2(c), 1.2(d) and 7.11 of this
Agreement:
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Name:
Title:
40
Annex A
BCP Volume L.P. 157.01965 shares
BCP Offshore Volume L.P. 40.73462 shares
VSI Management Direct L.P. 14.12904 shares
Recreational Services L.L.C. 120.78984 shares
Total 332.67315 shares
41
Exhibit B-1
COMPLIANCE NOTICE
The undersigned hereby certifies as follows:
Xxxxx Entertainment, Inc., a Delaware corporation ("Purchaser"),
irrevocably waives (subject to Section 1.3(i) of the Stock Purchase Agreement
dated as of June 24, 1999 (the "Agreement") among Volume Services America
Holdings, Inc., a Delaware corporation (the "Company"), BCP Volume L.P., a
Delaware limited partnership ("Volume"), BCP Offshore Volume L.P., a Cayman
Islands exempted limited partnership ("Offshore"), Recreational Services L.L.C.,
a Delaware limited liability company ("Services") and VSI Management Direct
L.P., a Delaware limited partnership ("Management Direct" and, together with
Volume, Offshore and Services, the "Sellers") and Purchaser) any claim that the
conditions to Closing set forth in Sections 6.1 of the Agreement, based on
Article II of the Agreement (other than Section 2.20), and 6.2 of the Agreement
to the extent relating to the performance of covenants by any Seller and/or the
Company on or prior to the Closing Target Date, were not satisfied as of the
Closing Target Date.
Capitalized terms not defined herein shall have the meaning assigned
thereto in the Agreement.
Date: ______ __, 0000
XXXXX XXXXXXXXXXXXX, INC.
By: ____________________________
Name:
Title:
Exhibit B-2
NON-COMPLIANCE NOTICE
The undersigned hereby certifies as follows:
Xxxxx Entertainment, Inc., a Delaware corporation ("Purchaser"), hereby
alleges that the specific facts and circumstances identified in the attached
description result in a breach as of the Closing Target Date of the indicated
representations and warranties of Article II or Article III of the Stock
Purchase Agreement, dated as of June 24, 1999 (the "Agreement"), among Volume
Services America Holdings, Inc., a Delaware corporation (the "Company"), BCP
Volume L.P., a Delaware limited partnership ("Volume"), BCP Offshore Volume
L.P., a Cayman Islands exempted limited partnership ("Offshore"), Recreational
Services L.L.C., a Delaware limited liability company ("Services") and VSI
Management Direct L.P., a Delaware limited partnership ("Management Direct" and,
together with Volume, Offshore and Services, the "Sellers") and Purchaser,
and/or the indicated covenants to be performed by the Company and/or any Seller
on or prior to the Closing Target Date, which in good faith are reasonably
alleged by the Purchaser to give rise to a failure of the conditions to Closing
set forth in Sections 6.1 or 6.2 of the Agreement.
Capitalized terms not defined herein shall have the meaning assigned
thereto in the Agreement.
Date: ________, 1999
XXXXX ENTERTAINMENT, INC.
By: ____________________________
Name:
Title:
