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Exhibit 2.6
STOCK PURCHASE AGREEMENT
dated as of November 27, 1996
by and between
Primark Corporation,
Xxxxx & Co., Inc.,
Xxxxxx X. Xxxxxxxxx,
and Xxxxxx X. Xxxxxxxxx, as Trustee
of the Rob and Xxxxx Xxxxxxxxx Trust
with respect to all
outstanding capital stock of
Baseline Financial Services, Inc.
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which
it is attached but is inserted for convenience only.
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ARTICLE I
SALE OF SHARES AND CLOSING
1.01 Purchase and Sale............................................................. 1
1.02 Purchase Price................................................................ 1
1.03 Additional Payments........................................................... 1
1.04 Closing....................................................................... 2
1.05 The Merger.................................................................... 2
1.06 Further Assurances; Post-Closing Cooperation.................................. 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
2.01 Organization of Xxxxx......................................................... 3
2.02 Authority..................................................................... 3
2.03 Organization of the Company................................................... 4
2.04 Capital Stock................................................................. 4
2.05 Subsidiaries.................................................................. 4
2.06 No Conflicts.................................................................. 4
2.07 Governmental Approvals and Filings............................................ 5
2.08 Books and Records............................................................. 5
2.09 Financial Statements.......................................................... 6
2.10 Absence of Changes............................................................ 6
2.11 No Undisclosed Liabilities.................................................... 8
2.12 Taxes......................................................................... 8
2.13 Legal Proceedings............................................................. 10
2.14 Compliance With Laws and Orders............................................... 10
2.15 Benefit Plans; ERISA.......................................................... 11
2.16 Real Property................................................................. 14
2.17 Tangible Personal Property.................................................... 14
2.18 Intellectual Property......................................................... 14
2.19 Computer Programs............................................................. 15
2.20 Contracts..................................................................... 16
2.21 Licenses...................................................................... 18
2.22 Insurance..................................................................... 18
2.23 Affiliate Transactions........................................................ 18
2.24 Employees; Labor Relations.................................................... 19
2.25 Environmental Matters......................................................... 19
2.26 Substantial Customers and Suppliers........................................... 20
2.27 Brokers....................................................................... 20
2.28 Schedules..................................................................... 20
2.29 No Implied Representation..................................................... 20
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.01 Organization.................................................................... 21
3.02 Authority....................................................................... 21
3.03 No Conflicts.................................................................... 21
3.04 Governmental Approvals and Filings.............................................. 22
3.05 Legal Proceedings............................................................... 22
3.06 Purchase for Investment......................................................... 22
3.07 Brokers......................................................................... 22
ARTICLE IV
COVENANTS OF SELLERS
4.01 Regulatory and Other Approvals.................................................. 23
4.02 HSR Filings..................................................................... 23
4.03 Investigation by Purchaser...................................................... 23
4.04 No Solicitations................................................................ 24
4.05 Conduct of Business............................................................. 24
4.06 Financial Statements and Reports; Filings....................................... 25
4.07 Employee Matters................................................................ 25
4.08 Certain Restrictions............................................................ 26
4.09 Affiliate Transactions.......................................................... 27
4.10 Books and Records............................................................... 27
4.11 Noncompetition.................................................................. 28
4.12 Appeal Assets................................................................... 29
4.13 Fulfillment of Conditions....................................................... 29
ARTICLE V
COVENANTS OF PURCHASER
5.01 Regulatory and Other Approvals.................................................. 29
5.02 HSR Filings..................................................................... 30
5.03 Fulfillment of Conditions....................................................... 30
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
6.01 Representations and Warranties................................................... 30
6.02 Performance...................................................................... 31
6.03 Officers' Certificates........................................................... 31
6.04 Orders and Laws.................................................................. 31
6.05 Regulatory Consents and Approvals................................................ 31
6.06 Third Party Consents............................................................. 31
6.07 Opinion of Counsel............................................................... 32
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6.08 Resignations of Directors and Officers........................................... 32
6.09 Employment Agreements............................................................ 32
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLERS
7.01 Representations and Warranties................................................... 32
7.02 Performance...................................................................... 33
7.03 Officers' Certificates........................................................... 33
7.04 Orders and Laws.................................................................. 33
7.05 Regulatory Consents and Approvals................................................ 33
7.06 Third Party Consents............................................................. 33
7.07 Opinion of Counsel............................................................... 33
ARTICLE VIII
TAX MATTERS AND POST-CLOSING TAXES
9.01 General.......................................................................... 39
9.02 Growth Participation Plan........................................................ 39
9.03 Xxxxx Pension Plan............................................................... 39
9.04 Xxxxx Profit Sharing Plan........................................................ 40
9.05 Employee Bonuses................................................................. 40
ARTICLE X
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
10.01 Survival of Representations, Warranties,
Covenants and Agreements...................................................... 40
ARTICLE XI
INDEMNIFICATION
11.01 Indemnification................................................................. 41
11.02 Method of Asserting Claims...................................................... 42
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ARTICLE XII
TERMINATION
12.01 Termination..................................................................... 46
12.02 Effect of Termination........................................................... 46
ARTICLE XIII
DEFINITIONS
13.01 Definitions..................................................................... 46
ARTICLE XIV
MISCELLANEOUS
14.01 Notices......................................................................... 55
14.02 Entire Agreement................................................................ 56
14.03 Expenses........................................................................ 56
14.04 Public Announcements............................................................ 56
14.05 Confidentiality................................................................. 57
14.06 Waiver.......................................................................... 57
14.07 Amendment....................................................................... 58
14.08 No Third Party Beneficiary...................................................... 58
14.09 No Assignment; Binding Effect................................................... 58
14.10 Headings........................................................................ 58
14.11 Invalid Provisions.............................................................. 58
14.12 Governing Law................................................................... 59
14.13 Counterparts.................................................................... 59
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EXHIBITS
EXHIBIT A Officer's Certificate of Xxxxx
EXHIBIT B Secretary's Certificate of Xxxxx
EXHIBIT C Opinions of Counsel to Sellers
EXHIBIT D Form of Employment Agreement
EXHIBIT E Officer's Certificate of Purchaser
EXHIBIT F Secretary's Certificate of Purchaser
EXHIBIT G Opinion of Counsel to Purchaser
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This STOCK PURCHASE AGREEMENT dated as of November 27, 1996 is
made and entered into by and among Primark Corporation, a Michigan corporation
("Purchaser"), Xxxxx & Co., Inc., a New York corporation ("Xxxxx") and Xxxxxx X.
Xxxxxxxxx ("Xxxxxxxxx") and Xxxxxx X. Xxxxxxxxx, as Trustee of the Rob and Xxxxx
Xxxxxxxxx Trust ("Trust" and, together with Xxxxx and Xxxxxxxxx, the "Sellers").
Capitalized terms not otherwise defined herein have the meanings set forth in
Section 13.01.
WHEREAS, Xxxxx owns Nine Hundred (900) shares of common stock,
par value $0.01 per share, of Baseline Financial Services, Inc., a New York
corporation (the "Company"), and Xxxxxxxxx owns 50 shares of common stock, par
value $0.01 per share, of the Company and Trust owns 50 shares of common stock,
par value $0.01 per share, of the Company, which shares together constitute all
issued and outstanding shares of capital stock of the Company (such shares being
referred to herein as the "Shares"); and
WHEREAS, Sellers desire to sell, and Purchaser desires to
purchase, the Shares on the terms and subject to the conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
SALE OF SHARES AND CLOSING
1.01 Purchase and Sale. Sellers agree to sell to Purchaser,
and Purchaser agrees to purchase from Sellers, all of the right, title and
interest of Sellers in and to the Shares at the Closing on the terms and subject
to the conditions set forth in this Agreement.
1.02 Purchase Price. The aggregate purchase price for the
Shares and for the covenant of Sellers contained in Section 4.11 is $40,000,000
(the "Purchase Price") (allocable to Sellers as follows: $36 million to Xxxxx,
$2 million to Xxxxxxxxx and $2 million to the Trust), payable in immediately
available funds at the Closing in the manner provided in Section 1.04.
1.03 Additional Payments. At the Closing, Purchaser shall pay
the following amounts to Xxxxx: (i) an aggregate of $541,000 in respect of the
vesting of the interests in the Xxxxx Profit Sharing Plan of each employee of
the Company participating in such plan who is not vested as of the Closing Date,
and (ii) $192,000 in respect of the vesting of the interests in the Xxxxx
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Pension Plan of each employee of the Company participating in such plan who is
not vested as of the Closing Date. In addition, Purchaser hereby agrees to pay
and discharge when due the following amounts: (x) up to $284,000 in the
aggregate, to the employees entitled thereto under the Baseline Growth
Participation Plan, (y) up to $230,000, in the aggregate, to Xxxxx in payment of
the Company's contribution to the Xxxxx Pension Plan for fiscal year 1996 in
respect of the employees of the Company with vested interests in such plan as of
October 31, 1996, and (z) up to $250,000 in the aggregate, to the employees
entitled thereto in payment of bonuses in respect of the fiscal year ended
October 31, 1996.
1.04 Closing. The Closing will take place at the offices of
Milbank, Tweed, Xxxxxx & XxXxxx, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, X.X.
00000-0000, or at such other place as Purchaser and Sellers mutually agree, at
10:00 A.M. local time, on the Closing Date. At the Closing, Purchaser will pay
the Purchase Price by wire transfer of immediately available funds to such
accounts as each Seller may reasonably direct by written notice delivered to
Purchaser by Seller at least two (2) Business Days before the Closing Date.
Simultaneously, Sellers will assign and transfer to Purchaser all of their
right, title and interest in and to the Shares by delivering to Purchaser
certificates representing the Shares, in genuine and unaltered form, duly
endorsed in blank or accompanied by duly executed stock powers endorsed in
blank, with requisite stock transfer tax stamps, if any, attached. At the
Closing, there shall also be delivered to Sellers and Purchaser the opinions,
certificates and other Contracts, documents and instruments to be delivered
under Articles VI and VII.
1.05 The Merger. As soon as practicable following the Closing
Date, a wholly-owned subsidiary of Purchaser will be merged with and into the
Company with the Company as the surviving corporation.
1.06 Further Assurances; Post-Closing Cooperation. (a) At any
time or from time to time after the Closing, Sellers shall execute and deliver
to Purchaser such other documents and instruments, provide such materials and
information and take such other actions as Purchaser may reasonably request more
effectively to vest title to the Shares in Purchaser and, to the full extent
permitted by Law, to put Purchaser in actual possession and operating control of
the Company and its Assets and Properties and Books and Records, and otherwise
to cause Sellers to fulfill their obligations under this Agreement and the
Operative Agreements to which either of them is a party.
(b) Following the Closing, each party will afford the other
party, its counsel and its accountants, during normal business hours, reasonable
access to the books, records and other
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data relating to the Business or Condition of the Company in its possession with
respect to periods prior to the Closing and the right to make copies and
extracts therefrom, to the extent that such access may be reasonably required by
the requesting party in connection with (i) the preparation of Tax Returns, (ii)
the determination or enforcement of rights and obligations under this Agreement,
(iii) compliance with the requirements of any Governmental or Regulatory
Authority, (iv) the determination or enforcement of the rights and obligations
of any party to this Agreement or any of the Operative Agreements or (v) in
connection with any actual or threatened Action or Proceeding. Further, each
party agrees for a period extending six (6) years after the Closing Date not to
destroy or otherwise dispose of any such books, records and other data unless
such party shall first offer in writing to surrender such books, records and
other data to the other party and such other party shall not agree in writing to
take possession thereof during the ten (10) day period after such offer is made.
(c) Notwithstanding anything to the contrary contained in this
Section , if the parties are in an adversarial relationship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with any provision of this Section shall be subject to applicable rules relating
to discovery.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represent and warrant to Purchaser as follows:
2.01 Organization of Xxxxx. Xxxxx is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
New York.
2.02 Authority. Each Seller has full power and authority
(corporate and otherwise) to execute and deliver this Agreement and the
Operative Agreements to which it is a party and to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Xxxxx of this Agreement and the
Operative Agreements to which it is a party, and the performance by Xxxxx of its
obligations hereunder and thereunder, have been duly and validly authorized by
the Board of Directors of Xxxxx, no other corporate action on the part of Xxxxx
or its stockholders being necessary. This Agreement has been duly and validly
executed and delivered by each Seller and constitutes, and upon the execution
and delivery by each Seller of the Operative Agreements to which it is a party,
such Operative
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Agreements will constitute, (assuming due authorization, execution and delivery
by Purchaser and the other parties to any Operative Agreements) legal, valid and
binding obligations of each Seller enforceable against each Seller in accordance
with their terms, except to the extent limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting creditors'
rights generally and by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
2.03 Organization of the Company. The Company is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of New York, and has full corporate power and authority to conduct its
business as and to the extent now conducted and to own, use and lease its Assets
and Properties. The Company is duly qualified, licensed or admitted to do
business and is in good standing in those jurisdictions specified in Section
2.03 of the Disclosure Schedule, which are the only jurisdictions in which the
ownership, use or leasing of its Assets and Properties, or the conduct or nature
of its business, makes such qualification, licensing or admission necessary,
except for those jurisdictions in which the adverse effects of all such failures
by the Company to be qualified, licensed or admitted and in good standing would
not have a material adverse effect on the Business and Condition of the Company.
Sellers have prior to the execution of this Agreement delivered to Purchaser
true and complete copies of the certificate of incorporation and by-laws of the
Company as in effect on the date hereof.
2.04 Capital Stock. The authorized capital stock of the
Company consists solely of One Thousand (1,000) shares of Common Stock, of which
only the Shares have been issued. The Shares are duly authorized, validly
issued, fully paid and nonassessable. Each Seller owns the Shares listed
opposite its name in Section 2.04 of the Disclosure Schedule beneficially and of
record, free and clear of all Liens (other than Liens arising out of, under or
in connection with this Agreement). Except for this Agreement and as disclosed
in Section 2.04 of the Disclosure Schedule, there are no outstanding Options
with respect to the Company. The delivery of a certificate or certificates at
the Closing representing the Shares in the manner provided in Section 1.03 will
transfer to Purchaser good and valid title to the Shares, free and clear of all
Liens, except for any Liens created by or on behalf of Purchaser or any of its
Affiliates.
2.05 Subsidiaries. The Company does not have any
subsidiaries, nor does the Company own any equity securities of
any other Person.
2.06 No Conflicts. The execution and delivery by each
Seller of this Agreement do not, and the execution and delivery
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by each Seller of the Operative Agreements to which it is a party, the
performance by each Seller of its obligations under this Agreement and such
Operative Agreements and the consummation of the transactions contemplated
hereby and thereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate or articles of
incorporation or by-laws (or other comparable corporate charter documents) of
Xxxxx or the Company;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in Section 2.07 of the
Disclosure Schedule, conflict with or result in a violation or breach of any
term or provision of any Law or Order applicable to Sellers or the Company or
any of their respective Assets and Properties; or
(c) except as disclosed in Section 2.06 of the Disclosure
Schedule, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Sellers or the Company to obtain any consent, approval or action
of, make any filing with or any payment to, or give any notice to any Person as
a result or under the terms of, (iv) result in or give to any Person any right
of termination, cancellation, acceleration or modification in or with respect
to, or (v) result in the creation or imposition of any Lien upon the Company or
any of its respective Assets and Properties under, any Contract required to be
listed on Section 2.20 of the Disclosure Schedule or any License required to be
listed on Section 2.21 of the Disclosure Statement.
2.07 Governmental Approvals and Filings. Except as disclosed
in Section 2.07 of the Disclosure Schedule, no consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the part of
Sellers or the Company is required in connection with the execution, delivery
and performance of this Agreement or any of the Operative Agreements to which it
is a party or the consummation of the transactions contemplated hereby or
thereby.
2.08 Books and Records. The minute books of the Company as
made available to Purchaser prior to the execution of this Agreement contain a
true and complete record, in all material respects, of all action taken at all
meetings and by all written consents in lieu of meetings of the stockholders,
the boards of directors and committees of the boards of directors of the
Company. The stock transfer ledgers of the Company as made available to
Purchaser prior to the execution of this Agreement accurately reflect all record
transfers prior to the execution of this Agreement in the capital stock of the
Company. Except as set forth in Section 2.08 of the Disclosure Schedule, the
Company
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does not have any of its Books and Records recorded, stored, maintained,
operated or otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of the Company.
2.09 Financial Statements. Prior to the execution of this
Agreement, Sellers have delivered to Purchaser true and complete copies of the
unaudited balance sheets of the Company as of October 31, 1994, 1995 and 1996,
and the related unaudited statements of operations, stockholders' equity and
cash flows for each of the fiscal years then ended. Except as disclosed in
Section 2.09 of the Disclosure Schedule, all such financial statements (i) were
prepared in accordance with GAAP (except that such financial statements do not
include notes), (ii) fairly present the financial condition and results of
operations of the Company as of the respective dates thereof and for the
respective periods covered thereby, and (iii) were compiled from the Books and
Records of the Company regularly maintained by management and used to prepare
the financial statements of the Company in accordance with the principles stated
therein.
2.10 Absence of Changes. Except for the execution and delivery
of this Agreement and the transactions to take place pursuant hereto on or prior
to the Closing Date, since the Year End Financial Statement Date (i) there has
not been any material adverse change in the Business or Condition of the Company
and (ii) the business and activities of the Company have been conducted in all
material respects only in the ordinary course. Without limiting the foregoing,
except as disclosed in Section 2.10 of the Disclosure Schedule, there has not
occurred between the Year End Financial Statement Date and the date hereof:
(i) any declaration, setting aside or payment of any dividend
or other distribution in respect of the capital stock of the Company,
or any direct or indirect redemption, purchase or other acquisition by
the Company of any such capital stock of or any Option with respect to
the Company;
(ii) any authorization, issuance, sale or other disposition by the
Company of any shares of capital stock of or Option with respect to the
Company, or any modification or amendment of any right of any holder of
any outstanding shares of capital stock of or Option with respect to
the Company;
(iii) any increase in the salary, wages or other compensation of any
officer, employee or consultant of the Company, except for increases in
the ordinary course of business and consistent with past practice or as
a result of
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or as required by any employment or other agreement, any
policy or any bonus, pension, profit sharing or other plan
or commitment;
(iv) (A) incurrences by the Company of Indebtedness in an aggregate
principal amount exceeding $25,000 (net of any amounts discharged
during such period), or (B) any voluntary purchase, cancellation,
prepayment or complete or partial discharge in advance of a scheduled
payment date with respect to, or waiver of any right of the Company
under, any Indebtedness of or owing to the Company;
(v) any physical damage, destruction or other casualty loss
affecting any of the plant, real or personal property or equipment of
the Company that would, after taking into account any insurance
recoveries payable in respect thereof, have a material adverse effect
on the Business or Condition of the Company;
(vi) any material change in (x) any investment, accounting,
financial reporting, inventory, credit, allowance or Tax practice or
policy of the Company, or (y) any method of calculating any bad debt,
contingency or other reserve of the Company for accounting, financial
reporting or Tax purposes, or any change in the fiscal year of the
Company;
(vii) any write-off or write-down of or any determination to write
off or write down any of the Assets and Properties of the Company in an
aggregate amount exceeding $10,000;
(viii) any acquisition or disposition of, or incurrence of a Lien
(other than a Permitted Lien) on, any Assets and Properties of the
Company, other than in the ordinary course of business consistent with
past practice;
(ix) any (x) amendment of the certificate or articles of
incorporation or by-laws of the Company, (y) recapitalization,
reorganization, liquidation or dissolution of the Company or (z) merger
or other business combination involving the Company and any other
Person;
(x) capital expenditures or commitments for additions to property,
plant or equipment of the Company and the constituting capital assets
in an aggregate amount exceeding $100,000;
(xi) any transaction by the Company with a Seller, any officer,
director or Affiliate (other than the Company) of either Seller (A)
outside the ordinary course of business consistent with past practice
or (B) other than on an arm's-
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length basis, other than pursuant to any Contract in effect on the Year
End Financial Statement Date and disclosed pursuant to Section
2.20(a)(vii) of the Disclosure Schedule; or
(xii) any entering into of a Contract to do or engage in
any of the foregoing after the date hereof.
2.11 No Undisclosed Liabilities. Except as reflected or
reserved against in the balance sheet included in the Year End Financial
Statements or in the notes thereto or as disclosed in Section 2.11 of the
Disclosure Schedule or any other Section of the Disclosure Schedule, there are
no Liabilities against, relating to or affecting the Company or any of its
Assets and Properties, other than Liabilities (i) incurred in the ordinary
course of business consistent with past practice or (ii) which, individually or
in the aggregate, are not material to the Business or Condition of the Company.
2.12 Taxes. (a) The Company has filed all Tax Returns (or the
Tax Returns have been filed on behalf of the Company) required to be filed under
applicable law as of the date hereof. All these Tax Returns were true, complete
and correct in all material respects and filed on a timely basis. The Company
has paid all Taxes that are due on such returns, or claimed or asserted by any
taxing authority to be due, from the Company and each Subsidiary for the periods
covered by the Tax Returns.
(b) Except as disclosed in Section 2.12 of the Disclosure
Schedule, there are no tax liens upon the assets of the Company except Liens for
Taxes not yet due.
(c) Except as disclosed in Section 2.12 of the Disclosure
Schedule, the Company has not requested (and no request has been made on the
Company's behalf) any extension of time within which to file any Tax Return that
does not close under operation of law prior to or on the Closing Date.
(d) Except as disclosed in Section 2.12 of the Disclosure
Schedule, for all Tax Periods that do not close by operation of law prior to or
on the Closing Date (i) the Company has not entered into any agreements with any
taxing authority extending the statute of limitations for the assessment of
Taxes; (ii) there are no ongoing audits or administrative proceedings with
respect to any Taxes of the Company; and (iii) no deficiency for any Taxes has
been proposed, asserted or assessed against the Company that has not been
resolved and paid in full.
(e) Except as disclosed in Section 2.12 of the Disclosure
Schedule, with respect to all Tax Periods that do not close by operation of law
prior to or on the Closing Date, there are no audits or other administrative
proceedings or court
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proceedings presently pending with regard to any Taxes or Tax Returns of the
Company.
(f) Except as disclosed in Section 2.12 of the Disclosure
Schedule, with respect to all Tax Periods that do not close by operation of law
prior to or on the Closing Date, the Company has not received any written ruling
of a taxing authority relating to Taxes or entered into any written and legally
binding agreement with any taxing authority relating to Taxes.
(g) Except as disclosed in Section 2.12 of the Disclosure
Schedule, the Company has made available to Purchaser complete copies of all Tax
Returns and associated work papers related to separate company returns filed by
or on behalf of the Company for all taxable years ending on or prior to the date
of this Agreement.
(h) The Company is not a party or subject to, or bound by, any
agreements relating to the allocation or sharing of Taxes that will be effective
after the Closing Date.
(i) Except as disclosed in Section 2.12 of the Disclosure
Schedule, the Company is not a party to any agreement, contract, or arrangement
that would result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Code Section 280G.
(j) No indebtedness of the Company is "corporate acquisition
indebtedness" within the meaning of Code Section 279(b).
(k) Except as disclosed in Section 2.12 of the Disclosure
Schedule, the Company has not engaged in any transaction with Sellers or any
affiliate of Sellers which would result in the recognition of income by Company
with respect to such transaction for any period ending after the Closing Date.
(l) The Company has complied (and until the Closing Date will
comply) with all applicable laws, rules and regulations relating to the payment
and withholding of Taxes (including, without limitations, withholding of Taxes
pursuant to Code Sections 1441 and 1442 or similar provisions under any
foreign laws) in all material respects and has, within the time and in the
manner prescribed by law, withheld from employee wages and paid over to the
proper governmental authorities all amounts required to be so withheld and paid
over under all applicable laws.
(m) Xxxxx is the common parent corporation of an "affiliated
group" (within the meaning of Code Section 1504(a)), and has filed a
consolidated return for Federal income tax purposes on behalf of itself and the
Company for all tax periods in which the Company was an "includible corporation"
(within the meaning of Code Section 1504(b)).
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(n) No power of attorney has been granted by the Company with
respect to any matter relating to Taxes which is currently in force and will be
in force after the Closing Date.
(o) The Company has not participated, nor will the Company
participate prior to the Closing Date, in or cooperated with an international
boycott within the meaning of Code Section 999.
(p) The Company has not filed, nor will the Company file prior
to the Closing Date, a consent pursuant to Code Section 341(f)(2) or agreed to
have Code Section 341(f)(2) apply to any disposition of a "subsection(f) asset"
(as such term is defined in Code Section 341(f)(4)) owned by the Company.
(q) No property of the Company is property that the Company is
or will be required to treat as being owned by another Person pursuant to the
provisions of Code Section 168(f)(8) (as in effect prior to amendment by the Tax
Reform Act of 1986) or is "tax-exempt use property" within the meaning of Code
Section 168.
(r) Except as disclosed in Section 2.12 of the Disclosure
Schedule, all elections and consents with respect to any Taxes (or computation
thereof) affecting the Company as of the date hereof have been supplied to the
Purchaser. After the date hereof, no election or consent with respect to any
Taxes (or computation thereof) affecting the Company on a separate company
return basis will be made without the written consent of Purchaser.
(s) The Company has not been subject to taxation in any
jurisdiction outside the United States of America.
2.13 Legal Proceedings. Except as disclosed in Section 2.13 of
the Disclosure Schedule (with paragraph references corresponding to those set
forth below):
(a) there are no Actions or Proceedings pending or, to the
Knowledge of Sellers, threatened against, relating to or affecting Sellers or
the Company or any of their respective Assets and Properties; and
(b) there are no Orders outstanding against the Company.
2.14 Compliance With Laws and Orders. Except as disclosed in
Section 2.14 of the Disclosure Schedule, the Company is not, and has not
received any notice that it is, in violation of or in default under, any Law or
Order applicable to the Company or any of its respective Assets and Properties,
other than immaterial violations and defaults.
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2.15 Benefit Plans; ERISA.
(a) Section 2.15(a) of the Disclosure Schedule (i) contains a
true and complete list and description of each of the Benefit Plans, and (ii)
lists each other Plan maintained, established, sponsored or contributed to by an
ERISA Affiliate, or any predecessor thereof, which, during the five-year period
preceding the date of this Agreement, was at any time a Defined Benefit Plan.
Except as disclosed in Section 2.15(a) of the Disclosure Schedule, no loan is
outstanding between the Company and any employee.
(b) The Company does not maintain and is not obligated to
provide benefits under any life, medical or health plan (other than as an
incidental benefit under a Qualified Plan) which provides benefits to retirees
or other terminated employees other than benefit continuation rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(c) Except as set forth in Section 2.15(c) of the Disclosure
Schedule, each Benefit Plan is maintained by Xxxxx and covers employees who are
employed by the Company (or former employees or beneficiaries with respect to
service with the Company), as well as other employees of Xxxxx and its
subsidiaries; however, other than as specifically provided in this Agreement,
the transactions contemplated by this Agreement will require no spin-off of
assets and liabilities or other division or transfer of rights with respect to
any such plan.
(d) Neither the Company, any ERISA Affiliate nor any other
corporation or organization controlled by or under common control with any of
the foregoing within the meaning of Section 4001 of ERISA has at any time
contributed to any "multiemployer plan", as that term is defined in Section 4001
of ERISA.
(e) Each of the Benefit Plans is and has been operated and
administered, in all material respects in substantial compliance with, and the
Company has not received any claim or notice that any such Benefit Plan is not
in compliance with, all applicable Laws and Orders, including the requirements
of ERISA, the Code, the Age Discrimination in Employment Act, the Equal Pay Act
and Title VII of the Civil Rights Act of 1964. Each Qualified Plan is qualified
under Section 401(a) of the Code, and, if applicable, complies with the
requirements of Section 401(k) of the Code. Each Benefit Plan which is intended
to provide for the deferral of income, the reduction of salary or other
compensation or to afford other Tax benefits complies with the requirements of
the applicable provisions of the Code or other Laws required in order to provide
such Tax benefits.
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(f) Neither Xxxxx nor the Company is in default in performing
any of its contractual obligations under any of the Benefit Plans or any related
trust agreement or insurance contract. All contributions and other payments
required to be made by Xxxxx or, the Company to any Benefit Plan with respect to
any period ending before or at or including the Closing Date have been made or
reserves adequate for such contributions or other payments have been or will be
set aside therefor and have been or will be reflected in the Financial
Statements in accordance with GAAP. There are no material outstanding
liabilities of any Benefit Plan other than liabilities for benefits to be paid
to participants in such Benefit Plan and their beneficiaries in accordance with
the terms of such Benefit Plan.
(g) No event has occurred, and to the Knowledge of Sellers
there exists no condition or set of circumstances in connection with any Benefit
Plan, under which the Company, directly or indirectly (through any
indemnification agreement or otherwise), could reasonably be expected to be
subject to any material liability under Section 409 of ERISA, Section 502(i) of
ERISA, Title IV of ERISA or Section 4975 of the Code.
(h) No transaction contemplated by this Agreement will result
in liability to the PBGC under Section 302(c)(ii), 4062, 4063, 4064 or 4069 of
ERISA, or otherwise, with respect to the Company, Purchaser or any corporation
or organization controlled by or under common control with any of the foregoing
within the meaning of Section 4001 of ERISA, and no event or condition exists or
has existed which could reasonably be expected to result in any such liability
with respect to Purchaser, the Company or any such corporation or organization.
No "reportable event" within the meaning of Section 4043 of ERISA has occurred
with respect to any Defined Benefit Plan other than those for which the
reporting requirement has been waived pursuant to the regulations promulgated
under such Sections (except for a "reportable event" under Section 4043(c)(5) of
ERISA). No Subject Defined Benefit Plan has incurred any accumulated funding
deficiency whether or not waived. No filing has been made and no proceeding has
been commenced for the complete or partial termination of, or withdrawal from,
any Benefit Plan which is a Pension Benefit Plan.
(i) No benefit under any Benefit Plan, including, without
limitation, any severance or parachute payment plan or agreement, will be
established or become accelerated, vested, funded or payable by reason of any
transaction contemplated under this Agreement.
(j) To the Knowledge of Sellers, there are no pending or
threatened claims by or on behalf of any Benefit Plan (other than benefits
payable in the ordinary course), by any Person covered thereby, or otherwise,
which allege violations of Law
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which could reasonably be expected to result in material liability on the part
of Purchaser, the Company or any fiduciary of any such Benefit Plan, nor is
there any reasonable basis for such a claim.
(k) No employer securities, employer real property or other
employer property is included in the assets of any Benefit Plan where the
holding or acquisition of such property would or is reasonably likely to
constitute a "prohibited transaction."
(l) The fair market value of the assets of each Subject
Defined Benefit Plan, as determined as of the last day of the plan year of such
plan which coincides with or first precedes the date of this Agreement, was not
less than the present value of the projected benefit obligations under such plan
at such date as established on the basis of the actuarial assumptions applicable
under such Subject Defined Benefit Plan at said date and, to the Knowledge of
Sellers, there have been no material changes in such values since said date.
(m) Complete and correct copies of the following documents
have been furnished to Purchaser prior to the execution of this Agreement:
(i) the Benefit Plans and any predecessor plans referred to
therein, any related trust agreements, and service provider agreements,
insurance contracts or agreements with investment managers, including
without limitation, all amendments thereto;
(ii) current summary Plan descriptions of each Benefit Plan
subject to ERISA, and any similar descriptions of all other Benefit
Plans;
(iii) the most recent Form 5500 and Schedules thereto for each
Benefit Plan subject to ERISA reporting requirements;
(iv) the most recent determination of the IRS with respect to
the qualified status of each Qualified Plan;
(v) the most recent accountings with respect to any Benefit
Plan funded through a trust;
(vi) the most recent actuarial report of the qualified actuary
of any Subject Defined Benefit Plan or any other Benefit Plan with
respect to which actuarial valuations are conducted; and
(vii) all qualified domestic relations orders or other orders
governing payments from any Benefit Plan.
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2.16 Real Property. (a) Section 2.16(a) of the Disclosure
Schedule contains a true and correct list of each parcel of real property leased
by the Company (as lessor or lessee). The Company does not own any real
property.
(b) The Company has a valid and subsisting leasehold estate in
the real properties leased by it for the full term of the lease thereof. Each
lease referred to in paragraph (a) above is a legal, valid and binding
agreement, enforceable in accordance with its terms, of the Company and to the
Knowledge of Sellers, of each other Person that is a party thereto, and except
as set forth in Section 2.16(b) of the Disclosure Schedule, there is no, and the
Company has not received notice of any, default (or any condition or event
which, after notice or lapse of time or both, would constitute a default)
thereunder.
2.17 Tangible Personal Property. The Company is in possession
of and has good title to, or has valid leasehold interests in or valid rights
under Contract to use, all tangible personal property used in the conduct of
their business as presently conducted, including all tangible personal property
reflected on the balance sheet included in the Unaudited Financial Statements
and tangible personal property acquired since the Unaudited Financial Statement
Date other than property disposed of since such date in the ordinary course of
business consistent with past practice. All such tangible personal property is
free and clear of all Liens, other than Permitted Liens and Liens disclosed in
Section 2.17 of the Disclosure Schedule, and is in good working order and
condition, ordinary wear and tear excepted.
2.18 Intellectual Property. (a) Section 2.18 of the Disclosure
Schedule sets forth a complete and accurate list of (i) all patents, including
all reissues, reexaminations, continuations, continuations-in-part and divisions
thereof, all trademarks, service marks, and designs, and all copyrights that, in
the case of each of the foregoing items described in this clause (i), have been
issued to or registered by the Company; (ii) all pending patent applications and
all pending trademark, service xxxx and design applications and all pending
applications for the registration of copyrights in each case filed by or on
behalf of the Company; and (iii) all material unregistered trademarks, service
marks, trade names, service names, design rights, topography rights, logos and
assumed names which are owned by the Company. Section 2.18 of the Disclosure
Schedule also identifies each material license or similar material agreement
entered into by the Company with respect to any Intellectual Property.
(b) The Company, to the extent so identified on Section 2.18
of the Disclosure Schedule: (i) is the sole and exclusive owner of the
Intellectual Property described in clause
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(i) of Section 2.18(a) and listed in Section 2.18 of the Disclosure Schedule;
and (ii) is listed in the records of the appropriate agency as the sole and
exclusive owner of record for each registration and grant listed in Section 2.18
of the Disclosure Schedule. Sellers are not aware, after due inquiry, of any
registration and maintenance fees that have become due and payable to any
governmental agency in respect of any material Intellectual Property owned by
the Company and for which a patent or registration has been issued, that have
not been paid, nor are Sellers aware of any act that has been done or omitted to
be done by the Company or any licensee, distributor, sublicensee, or
subdistributor thereof, to impair or dedicate to the public or entitle any
governmental authority to cancel, forfeit, modify or hold abandoned any of such
Intellectual Property so owned by the Company and listed in Section 2.18 of the
Disclosure Schedule, and to the Knowledge of Sellers, all such Intellectual
Property so owned and listed is valid and enforceable.
(c) Except as set forth in Section 2.18(a) of the Disclosure
Schedule: (i) there are no pending or, to Sellers' knowledge, threatened suits,
claims, oppositions or other challenges by any person against the ownership by
the Company of or the use by the Company of any of the Intellectual Property
owned or used by it; (ii) the Company is in material compliance with the terms
of all licenses, leases or other agreements under which the right to use any of
the Intellectual Property listed in Section 2.18 of the Disclosure Schedule
arose or pursuant to which the Company licenses or otherwise distributes such
Intellectual Property to any third party; and (iii) to the Knowledge of Sellers,
no third party has asserted that the use of any Intellectual Property by the
Company in connection with the conduct of the business of the Company as
currently conducted infringes upon or otherwise violate any right of such third
party.
(d) The Company owns, or is licensed or otherwise has the
right to use, all Intellectual Property necessary for it to conduct its
businesses as currently conducted, free and clear of all Liens other than
Permitted Liens, including without limitation (i) the data bases and computer
programs, and (ii) any user manuals, technical manuals, or other documentation,
or any advertisements or other materials, related to such Intellectual Property,
which are offered or made available to customers by the Company.
2.19 Computer Programs. (a) Section 2.19 of the Disclosure
Schedule lists all of the material computer programs and databases which are
owned, licensed, leased or otherwise used by the Company in connection with the
operation of its business as currently conducted (other than those that are
"off-the-shelf" or otherwise readily commercially available).
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(b) Except as disclosed in Section 2.19(a) of the Disclosure
Schedule, the data bases and computer programs used in or necessary for the
conduct of the business of the Company as currently conducted (including without
limitation the data, articles and other content included therein) are (i) owned
or licensed by the Company, or (ii) currently in the public domain or otherwise
available to the Company without the approval or consent of any third party, or
(iii) included in such database or computer program or system pursuant to rights
granted to the Company so including the same pursuant to a written license or
lease or other consent from a third party.
(c) Except as disclosed in Section 2.19(b) of the Disclosure
Schedule, the Company, with respect to all data bases and computer programs
owned by it, has taken or caused to be taken commercially reasonable steps to
obtain and retain valid and enforceable Intellectual Property rights therein;
provided, however, that patents and registrations of trademarks, service marks,
designs, copyrights or other Intellectual Property or computer programs issued
or applied for are limited to those listed in Section 2.18 of the Disclosure
Schedule. In the ordinary course of its business, it is the Company's practice
to obtain non-disclosure agreements from its employees as a condition to
employment. Such agreements are intended to protect the secrecy and
confidentiality of all trade secrets, know-how and other confidential
information material to the conduct of the business of the Company.
(d) The material computer programs listed in Section 2.19(b)
of the Disclosure Statement as owned by the Company (i) function in all material
respects reasonably in accordance with the specifications therefor published by
the Company; and (ii) provide in all material respects all of the functionality,
features and content described in any user manuals, technical manuals, and any
other documentation related thereto published by the Company or in any
advertisements or other materials therefor made available to customers by the
Company, subject, in the case of clause (i) and (ii) of this Section 2.19(d), to
errors and bugs that arise and are corrected in the normal course of the
Company's business.
(e) In the ordinary course of its business, the Company uses
"anti-virus" software that is intended to identify disabling or destructive
software programs or processes.
2.20 Contracts. (a) Section 2.20(a) of the Disclosure Schedule
(with paragraph references corresponding to those set forth below) contains a
true and complete list of each of the following Contracts or other arrangements
(true and complete copies or, if none, reasonably complete and accurate written
descriptions of which, together with all amendments and supplements thereto,
have been delivered to Purchaser prior to
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23
the execution of this Agreement), to which the Company is a party or by which
any of its Assets and Properties is bound:
(i) (A) all Contracts (excluding Benefit Plans) providing for
a commitment of employment or consultation services for a specified or
unspecified term; and (B) any written representations, commitments,
promises, or other enforceable obligations (excluding Benefit Plans and
any such Contracts referred to in clause (A)) involving an obligation
of the Company to make payments in any year, other than with respect to
salary or incentive compensation payments in the ordinary course of
business, to any employee exceeding $20,000 or any group of employees
exceeding $50,000 in the aggregate;
(ii) all Contracts with any Person containing any provision or
covenant prohibiting or limiting the ability of the Company to engage
in any business activity or compete with any Person or, except as
provided in Section 4.11, prohibiting or limiting the ability of any
Person to compete with the Company;
(iii) all partnership, joint venture, shareholders' or other similar
Contracts with any Person;
(iv) all Contracts relating to Indebtedness of the Company in excess
of $25,000;
(v) all (A) Contracts with distributors, or content or information
providers providing for annual payments in excess of $25,000, and (B)
all Contracts with customers of the Company providing for annual
payments in excess of $25,000 (excepting for purposes of this clause
(v)(B) immaterial and inadvertent omissions);
(vi) all Contracts relating to (A) the future disposition or
acquisition of any Assets and Properties, other than dispositions or
acquisitions in the ordinary course of business consistent with past
practice, and (B) any merger or other business combination;
(vii) all Contracts between or among the Company, on the one hand,
and a Seller, any officer, director or Affiliate (other than the
Company) of either Seller, on the other hand;
(viii) all collective bargaining or similar labor Contracts; and
(ix) all other Contracts (other than Benefit Plans, leases listed in
Section 2.16(a) of the Disclosure Schedule and insurance policies
listed in Section 2.22 of the
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Disclosure Schedule) that (A) involve the payment or potential payment,
pursuant to the terms of any such Contract, by or to the Company of
more than $25,000 annually and (B) cannot be terminated within thirty
(30) days after giving notice of termination without resulting in any
material cost or penalty to the Company.
(b) Except as would not, individually or in the aggregate,
have a material adverse effect on the Business or Condition of the Company, each
Contract required to be disclosed in Section 2.20(a) of the Disclosure Schedule
is in full force and effect and constitutes a legal, valid and binding
agreement, enforceable in accordance with its terms, of the Company, and to the
Knowledge of Sellers, each other party thereto; and except as disclosed in
Section 2.20(b) of the Disclosure Schedule neither the Company nor, to the
Knowledge of Sellers, any other party to such Contract is, or has received
notice that it is, in violation or breach of or default under any such Contract
(or with notice or lapse of time or both, would be in violation or breach of or
default under any such Contract) in any material respect.
2.21 Licenses. Section 2.21 of the Disclosure Schedule
contains a true and complete list of all Licenses used in and material to the
business or operations of the Company (and all pending applications for any such
Licenses). Except as disclosed in Section 2.21 of the Disclosure Schedule:
(i) the Company owns or validly holds all Licenses that are
material to its business or operations;
(ii) each License listed in Section 2.21 of the Disclosure
Schedule is in full force and effect; and
(iii) the Company is not, nor has received any notice that it
is, in default (or with the giving of notice or lapse of time or both,
would be in default) under any such License.
2.22 Insurance. Section 2.22 of the Disclosure Schedule
contains a list of all insurance policies currently in effect that insure the
business, operations or employees of the Company or affect or relate to the
ownership, use or operation of any of the Assets and Properties of the Company
and that (i) have been issued to the Company or (ii) have been issued to any
Person (other than the Company) for the benefit of the Company.
2.23 Affiliate Transactions. Except as disclosed in Section
2.20(a)(vii) or Section 2.23(a) of the Disclosure Schedule, (i) there are no
intercompany Liabilities between the Company, on the one hand, and a Seller, any
officer, director or Affiliate (other than the Company) of a Seller, on the
other, (ii) neither Sellers nor any such officer, director or Affiliate
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25
provides or causes to be provided any assets, services or facilities to the
Company and (iii) the Company does not provide or cause to be provided any
assets, services or facilities to either Seller or any such officer, director or
Affiliate, except, in the case of clause (ii), the provision of assets, services
or facilities in the ordinary course of business on an arm's length basis
consistent with past practice. Except as disclosed in Section 2.23(b) of the
Disclosure Schedule, each of the Liabilities and transactions listed in Section
2.23(a) of the Disclosure Schedule was incurred or engaged in, as the case may
be, on an arm's-length basis. Except as disclosed in Section 2.23(c) of the
Disclosure Schedule, since the Year End Financial Statement Date, all
settlements of intercompany Liabilities between the Company, on the one hand,
and a Seller or any such officer, director or Affiliate, on the other, have been
made, and all allocations of intercompany expenses have been applied, in the
ordinary course of business consistent with past practice.
2.24 Employees; Labor Relations. (a) Section 2.24 of the
Disclosure Schedule lists the year end annual base salary of each officer and
employee of the Company. Sellers have not received any information that would
lead it to believe that a material number of such persons will or may cease to
be employees, or will refuse offers of employment from Purchaser, because of the
consummation of the transactions contemplated by this Agreement.
(b) Except as disclosed in Section 2.24(b) of the Disclosure
Schedule, (i) no employee of the Company is presently a member of a collective
bargaining unit and, to the Knowledge of Sellers, there are no threatened or
contemplated attempts to organize for collective bargaining purposes any of the
employees of the Company, and (ii) no unfair labor practice complaint or sex,
age, race or other discrimination claim has been brought during the last five
(5) years against the Company before the National Labor Relations Board, the
Equal Employment Opportunity Commission or any other Governmental or Regulatory
Authority. Since January 1, 1991, there has been no work stoppage, strike or
other concerted action by employees of the Company. During that period, the
Company have complied in all material respects with all applicable Laws relating
to the employment of labor, including, without limitation those relating to
wages, hours and collective bargaining.
(c) Except as disclosed in Section 2.24(c) of the Disclosure
Schedule, as of the date hereof, the Company has not had a layoff of any of its
employees which constitutes a "plant closing" or "mass layoff" under the
Workers' Adjustment and Retraining Notification Act of 1988, as amended.
2.25 Environmental Matters. The Company is not in material
violation of any federal, state and local Environmental
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26
Laws (as defined in Section 13.01) applicable to it or its properties, or any
material limitations, restrictions, conditions, standards, obligations or
timetables contained in any Environmental Law or any regulation, code, plan,
order, decree, notice or demand letter issued, entered, promulgated or approved
thereunder. No notice or action alleging such violation is pending or, to the
Knowledge of Sellers, threatened, and no past or present condition or practice
of the businesses conducted by the Company would prevent continued compliance
with applicable permits or give rise to any common law or statutory liability or
otherwise form the basis of any claim, action or proceeding with respect to the
Company involving any pollutant or hazardous or toxic material or waste. The
Company has no liability, present and past, under CERCLA, including, without
limitation, as the result of its ownership or operation of any "facility" as
defined in CERCLA, or its arrangement for disposal, treatment or transport of
"hazardous substances," also as defined in CERCLA.
2.26 Substantial Customers and Suppliers. To the Knowledge of
Sellers, none of the Company's twenty (20) largest customers or suppliers (on
the basis of a revenues for goods sold and services provided and the cost of
goods or services purchased for the eleven (11) months ended September 30, 1996)
has, during the 90 days prior to the date of this Agreement, threatened to cease
or materially reduce such purchases, use, sales or provision of services after
the date hereof.
2.27 Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by Sellers directly
with Purchaser without the intervention of any Person on behalf of Sellers in
such manner as to give rise to any valid claim by any Person against Purchaser
or the Company for a finder's fee, brokerage commission or similar payment.
2.28 Schedules. Disclosure of any fact or item in any Section
of the Disclosure Schedule hereto referenced by a particular paragraph or
section in this Agreement shall, should the existence of the fact or item or its
contents be relevant to any other paragraph or section, be deemed to be
disclosed with respect to that other paragraph or section whether or not a
specific cross reference appears.
2.29 No Implied Representation. Sellers are not making any
representation or warranty whatsoever, express or implied, except those
representations and warranties of Sellers contained in this Agreement or in any
Section of the Disclosure Schedule hereto and Purchaser acknowledges and agrees
that it has not relied on or been induced to enter into this Agreement by any
representation or warranty other than those expressly set forth in this
Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
3.01 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Michigan.
3.02 Authority. Purchaser has full corporate power and
authority to execute and deliver this Agreement and the Operative Agreements to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by Purchaser of this Agreement and the Operative Agreements to which it
is a party, and the performance by Purchaser of its obligations hereunder and
thereunder, have been duly and validly authorized by the Board of Directors of
Purchaser, no other corporate action on the part of Purchaser or its
stockholders being necessary. This Agreement has been duly and validly executed
and delivered by Purchaser and constitutes, and upon the execution and delivery
by Purchaser of the Operative Agreements to which it is a party, such Operative
Agreements will constitute, (assuming due authorization, execution and delivery
by Sellers and the other parties to any Operative Agreements) legal, valid and
binding obligations of Purchaser enforceable against Purchaser in accordance
with their terms, except to the extent limited by bankruptcy insolvency,
reorganization, moratorium or other laws relating to or affecting creditors'
rights generally and by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
3.03 No Conflicts. The execution and delivery by Purchaser of
this Agreement do not, and the execution and delivery by Purchaser of the
Operative Agreements to which it is a party, the performance by Purchaser of its
obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the articles of incorporation or by-laws
(or other comparable corporate charter document) of Purchaser;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in Schedule 3.04 hereto,
conflict with or result in a violation or breach of any term or provision of any
Law or Order applicable to Purchaser or any of its Assets and Properties; or
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(c) except as disclosed in Schedule 3.03 hereto, (i) conflict
with or result in a violation or breach of, (ii) constitute (with or without
notice or lapse of time or both) a default under, (iii) require Purchaser to
obtain any consent, approval or action of, make any filing with or give any
notice to any Person as a result or under the terms of, or (iv) result in the
creation or imposition of any Lien upon Purchaser or any of its Assets or
Properties under, any material Contract or License to which Purchaser is a party
or by which any of its material Assets and Properties is bound.
3.04 Governmental Approvals and Filings. Except as disclosed
in Schedule 3.04 hereto, no consent, approval or action of, filing with or
notice to any Governmental or Regulatory Authority on the part of Purchaser is
required in connection with the execution, delivery and performance of this
Agreement or the Operative Agreements to which it is a party or the consummation
of the transactions contemplated hereby or thereby.
3.05 Legal Proceedings. There are no Actions or Proceedings
pending or, to the knowledge of Purchaser, threatened against, relating to or
affecting Purchaser or any of its Assets and Properties which could reasonably
be expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the Operative Agreements.
3.06 Purchase for Investment. The Shares will be acquired by
Purchaser (or, if applicable, its assignee pursuant to Section 14.09(b)(i)) for
its own account for the purpose of investment, it being understood that the
right to dispose of such Shares shall be entirely within the discretion of
Purchaser (or such assignee, as the case may be). Purchaser (or such assignee,
as the case may be) will refrain from transferring or otherwise disposing of any
of the Shares, or any interest therein, in such manner as to cause Seller to be
in violation of the registration requirements of the Securities Act of 1933, as
amended, or applicable state securities or blue sky laws.
3.07 Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by Purchaser directly
with Sellers without the intervention of any Person on behalf of Purchaser in
such manner as to give rise to any valid claim by any Person against Sellers,
the Company or any Subsidiary for a finder's fee, brokerage commission or
similar payment.
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ARTICLE IV
COVENANTS OF SELLERS
4.01 Regulatory and Other Approvals. Sellers will, and will
cause the Company to, as promptly as practicable (a) use its best efforts to
obtain all consents, approvals or actions of, make all filings with and give all
notices to Governmental or Regulatory Authorities or any other Person required
of Sellers or the Company to consummate the transactions contemplated hereby and
by the Operative Agreements, including without limitation those described in
Sections 2.06 and 2.07 of the Disclosure Schedule, (b) provide such other
information and communications to such Governmental or Regulatory Authorities or
other Persons as Purchaser or such Governmental or Regulatory Authorities or
other Persons may reasonably request in connection therewith and (c) cooperate
with Purchaser in connection with the performance of its obligations under
Sections 5.01 and 5.02. Sellers will provide prompt notification to Purchaser
when any such consent, approval, action, filing or notice referred to in clause
(a) above is obtained, taken, made or given, as applicable, and will advise
Purchaser of any material communications (and, unless precluded by Law, provide
copies of any such communications that are in writing) with any Governmental or
Regulatory Authority or other Person regarding any of the transactions
contemplated by this Agreement or any of the Operative Agreements.
4.02 HSR Filings. In addition to and not in limitation of
Sellers' covenants contained in Section 4.01, Sellers will (a) take promptly all
actions necessary to make the filings required of Sellers or their Affiliates
under the HSR Act, (b) comply at the earliest practicable date with any request
for additional information received by Sellers or their Affiliates from the
Federal Trade Commission or the Antitrust Division of the Department of Justice
pursuant to the HSR Act and (c) cooperate with Purchaser in connection with
Purchaser's filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement commenced by either the Federal Trade Commission or the Antitrust
Division of the Department of Justice or state attorneys general.
4.03 Investigation by Purchaser. During the period commencing
on the date hereof and ending on the earlier of the Closing Date or the
termination of this Agreement in accordance with Section 12 hereof, Sellers
will, and will cause the Company to, (a) provide Purchaser and its officers,
directors, employees, agents, counsel, accountants, financial advisors,
consultants and other representatives (together "Representatives") with
reasonable access, upon reasonable prior notice and during normal business
hours, to all officers, employees, agents and accountants of the Company and its
Assets and Properties and
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Books and Records to the extent that doing so does not materially disrupt or
interfere with the operations of the Company, and (b) within a reasonable period
of time, furnish Purchaser and such other Persons with all such information and
data (including without limitation copies of Contracts, Benefit Plans and other
Books and Records) concerning the business and operations of the Company as
Purchaser or any of such other Persons reasonably may request in connection with
such investigation. All requests for information shall be submitted only to
Xxxxxx Xxxxxxxxx or to Xxxxxxx Xxxxxxx & Xxxxxxxx. Purchaser will not initiate
or maintain contact with any employee of Sellers or the Company without Sellers'
prior consent, such consent not to be unreasonably withheld or delayed. Prior to
the Closing, Sellers will also provide Purchaser with a complete and correct
list containing the names of each bank in which the Company has an account or
safe deposit or lock box, the account or box number, as the case may be, and the
name of every person authorized to draw thereon or having access thereto.
4.04 No Solicitations. Sellers will not take, nor will they
permit the Company or any Affiliate of Sellers (or authorize or permit any
investment banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of Sellers, the Company or any such
Affiliate) to take, directly or indirectly, any action to solicit, encourage,
assist or otherwise facilitate (including by furnishing confidential information
with respect to the Company or permitting access to the Assets and Properties
and Books and Records of the Company) any offer or inquiry from any Person
concerning an Acquisition Proposal or participate in any discussions or
negotiations regarding an Acquisition Proposal. If Sellers, the Company or any
such Affiliate (or any such Person acting for or on their behalf) receives from
any Person any offer, inquiry or informational request referred to above,
Sellers will promptly advise such Person, by written notice, of the terms of
this Section 4.04 and will promptly, orally and in writing, advise Purchaser of
such offer, inquiry or request and deliver a copy of such notice to Purchaser.
4.05 Conduct of Business. During the period commencing on the
date hereof and ending on the earlier of the Closing Date or the termination of
this Agreement in accordance with Section 12 hereof, Sellers will cause the
Company to conduct business only in the ordinary course consistent with past
practice. Without limiting the generality of the foregoing, except as permitted,
required or specifically contemplated by this Agreement or as otherwise
consented to or approved in writing by Purchaser, Sellers will:
(a) cause the Company to use commercially reasonable efforts
to (i) preserve intact the present business organization and reputation of the
Company, (ii) keep available (subject to
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dismissals and retirements in the ordinary course of business consistent with
past practice) the services of the present officers, employees and consultants
of the Company, (iii) maintain the Assets and Properties of the Company in good
working order and condition, ordinary wear and tear excepted, (iv) maintain the
good will of customers, suppliers, lenders and other Persons to whom the Company
sells goods or provides services or with whom the Company otherwise has
significant business relationships and (v) continue all current sales, marketing
and promotional activities relating to the business and operations of the
Company;
(b) except to the extent required by applicable Law, (i) cause
the Books and Records to be maintained in the usual, regular and ordinary
manner, (ii) not permit any material change in (A) any pricing, investment,
accounting, financial reporting, inventory, credit, allowance or Tax practice or
policy of the Company, or (B) any method of calculating any bad debt,
contingency or other reserve of the Company for accounting, financial reporting
or Tax purposes and (iii) not permit any change in the fiscal year of the
Company;
(c) (i) use, and will cause the Company to use, commercially
reasonable efforts to maintain in full force and effect until the Closing
substantially the same levels of coverage as the insurance afforded under the
Contracts listed in Section 2.21 of the Disclosure Schedule; and
(d) cause the Company to comply, in all material respects,
with all Laws and Orders applicable to the business and operations of the
Company, and promptly following receipt thereof to give Purchaser copies of any
notice received from any Governmental or Regulatory Authority or other Person
alleging any violation of any such Law or Order.
4.06 Financial Statements and Reports; Filings. As promptly as
practicable, Sellers will deliver to Purchaser true and complete copies of all
financial statements, reports and analyses that are prepared or received by
Sellers or the Company relating to the business or operations of the Company in
the ordinary course of business.
4.07 Employee Matters. Except as may be required by Law or any
Benefit Plans existing on the date hereof, during the period commencing on the
date hereof an ending on the earlier of the closing Date or the termination of
this Agreement, Sellers will refrain, and will cause the Company to refrain,
from directly or indirectly:
(a) making any increase in the salary, wages or other
compensation of any officer, employee or consultant of the Company whose annual
salary is or, after giving effect to such
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change, would be $50,000 or more, other than any increases in the ordinary
course of business and consistent with past practice; or
(b) adopting, entering into or becoming bound by any Benefit
Plan, employment-related Contract or collective bargaining agreement, or
amending, modifying or terminating (partially or completely) any Benefit Plan,
employment-related Contract or collective bargaining agreement, except to the
extent required by applicable Law.
Sellers will cause the Company to administer each Benefit
Plan, or cause the same to be so administered, in all material respects in
accordance with the applicable provisions of the Code, ERISA and all other
applicable Laws. Sellers will promptly notify Purchaser in writing of each
receipt by Sellers or the Company (and furnish Purchaser with copies) of any
notice of investigation or administrative proceeding by the IRS, Department of
Labor, PBGC or other Person involving any Benefit Plan.
4.08 Certain Restrictions. During the period commencing on the
date hereof and ending on the earlier of the Closing Date or the termination of
this Agreement in accordance with Section 12 hereof, except as permitted,
required or specifically contemplated by this Agreement or as otherwise
consented to or approved in writing by Purchaser, Sellers will cause the Company
to refrain from:
(a) amending its certificate of incorporation or by-laws or
taking any action with respect to any such amendment or any recapitalization,
reorganization, liquidation or dissolution;
(b) authorizing, issuing, selling or otherwise disposing of
any shares of capital stock of or any Option with respect to the Company, or
modifying or amending any right of any holder of outstanding shares of capital
stock of or Option with respect to the Company;
(c) declaring, setting aside or paying any dividend or other
distribution in respect of the capital stock of the Company, or directly or
indirectly redeeming, purchasing or otherwise acquiring any capital stock of or
any Option with respect to the Company;
(d) acquiring or disposing of, or incurring any Lien (other
than a Permitted Lien) on, any Assets and Properties in excess of $10,000 in
value in the aggregate, other than in the ordinary course of business consistent
with past practice;
(e) entering into, amending, modifying, terminating (partially
or completely), granting any waiver under or giving any consent with respect to
(A) any Contract that would, if in
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existence on the date of this Agreement, be required to be disclosed in the
Disclosure Schedule pursuant to Section 2.19(a) or (B) any material License,
other than, in each case, immaterial amendments, modifications, waivers or
consents.
(f) (i) incurring Indebtedness in an aggregate principal
amount exceeding $25,000 (net of any amounts of Indebtedness discharged during
such period), or (ii) voluntarily purchasing, cancelling, prepaying or otherwise
providing for a complete or partial discharge in advance of a scheduled payment
date with respect to, or waiving any right of the Company under, any
Indebtedness of or owing to the Company (other than indebtedness due and owing
to Xxxxx);
(g) engaging with any Person in any merger or other business
combination;
(h) making capital expenditures or commitments for additions
to property, plant or equipment constituting capital assets in an aggregate
amount exceeding $100,000;
(i) making any change in the lines of business in which the
Company participates or is engaged;
(j) writing off or writing down any of its Assets and
Properties outside the ordinary course of business consistent with past
practice; or
(k) entering into any Contract to do or engage in any of the
foregoing.
4.09 Affiliate Transactions. Except as set forth in Section
4.09 of the Disclosure Schedule, immediately prior to the Closing, all
Indebtedness and other amounts owing under Contracts between a Seller, any
officer, director or Affiliate (other than the Company) of a Seller, on the one
hand, and the Company, on the other, will be cancelled, and Sellers will
terminate and will cause any such officer, director or Affiliate to terminate
each Contract with the Company. Prior to the Closing, the Company will not enter
into any Contract or amend or modify any existing Contract, and will not engage
in any transaction outside the ordinary course of business consistent with past
practice or not on an arm's-length basis (other than pursuant to Contracts
disclosed pursuant to Section 2.19(a)(vii) of the Disclosure Schedule), with a
Seller or any such officer, director or Affiliate. The parties acknowledge that
prior to the Closing, Xxxxx may cause the Company to pay to Xxxxx all cash held
by the Company (whether by way of dividend, payment of intercompany advances or
otherwise).
4.10 Books and Records. On the Closing Date, Sellers will
deliver or make available to Purchaser at the offices of the
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Company all of the Books and Records, and if at any time after the Closing
Sellers discover in their possession or under their control any other Books and
Records, they will forthwith deliver such Books and Records to Purchaser.
4.11 Noncompetition. (a) Xxxxx will, for a period of three (3)
years from the Closing Date, refrain from, either alone or in conjunction with
any other Person, or directly or indirectly through its present or future
Affiliates:
(i) employing, engaging or seeking to employ or engage any
Person who within the prior twelve (12) months had been an officer or
employee of the Company (other than Persons who have theretofore been
terminated by the Company or who have voluntarily left the employ of
the Company prior to having been contacted in any way by Sellers or any
Affiliate of Sellers;
(ii) causing or attempting to cause (A) any client, customer or
supplier of the Company to terminate or materially reduce its business
with the Company or (B) any officer, employee or consultant of the
Company to resign or sever a relationship with the Company;
(iii) disclosing (unless compelled by judicial or administrative
process) or using any confidential or secret information relating to
the Company or any of its clients, customers or suppliers; or
(iv) participating or engaging in (other than through the ownership
of five percent (5%) or less of any class of securities registered
under the Securities Exchange Act of 1934, as amended), or otherwise
lending assistance (financial or otherwise) to any Person participating
or engaged in, any Competitive Business in the United States. For
purposes of this Section 4.11, "Competitive Business" shall mean the
business of developing, selling and supporting computer based
analytical tools for institutional equity analysts and investors that
incorporate electronic delivery of information on company fundamental
data, earnings, stock prices and industry and economic statistics.
(b) The parties hereto recognize that the Laws and public
policies of the various states of the United States may differ as to the
validity and enforceability of covenants similar to those set forth in this
Section . It is the intention of the parties that the provisions of this Section
be enforced to the fullest extent permissible under the Laws and policies of
each jurisdiction in which enforcement may be sought, and that the
unenforceability (or the modification to conform to such Laws or policies) of
any provisions of this Section shall not render unenforceable, or impair, the
remainder of the provisions of this
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35
Section. Accordingly, if any provision of this Section shall be determined to be
invalid or unenforceable, such invalidity or unenforceability shall be deemed to
apply only with respect to the operation of such provision in the particular
jurisdiction in which such determination is made and not with respect to any
other provision or jurisdiction.
(c) The parties hereto acknowledge and agree that any remedy
at Law for any breach of the provisions of this Section would be inadequate, and
each Seller hereby consents to the granting by any court of an injunction or
other equitable relief, without the necessity of actual monetary loss being
proved, in order that the breach or threatened breach of such provisions may be
effectively restrained.
4.12 Appeal Assets. Prior to the Closing Date, Sellers shall
cause the Company to transfer to Xxxxx the Appeal Assets and all Liabilities
relating thereto, and shall provide Purchaser with a copy of the agreement
pursuant to which such transfer shall occur.
4.13 Fulfillment of Conditions. Sellers will execute and
deliver at the Closing each Operative Agreement that Sellers are required hereby
to execute and deliver as a condition to the Closing, will take all commercially
reasonable steps necessary or desirable and proceed diligently and in good faith
to satisfy each other condition to the obligations of Purchaser contained in
this Agreement and will not, and will not permit the Company to, take or fail to
take any action that could reasonably be expected to result in the
nonfulfillment of any such condition.
ARTICLE V
COVENANTS OF PURCHASER
5.01 Regulatory and Other Approvals. Purchaser will as
promptly as practicable (a) use its best efforts to obtain all consents,
approvals or actions of, make all filings with and give all notices to
Governmental or Regulatory Authorities or any other Person required of Purchaser
to consummate the transactions contemplated hereby and by the Operative
Agreements, including without limitation those described in Schedules 3.03 and
3.04 hereto, (b) provide such other information and communications to such
Governmental or Regulatory Authorities or other Persons as Sellers or such
Governmental or Regulatory Authorities or other Persons may reasonably request
in connection therewith and (c) cooperate with Sellers and the Company in
connection with the performance of their obligations under Sections 4.01 and
4.02. Purchaser will provide prompt notification to Seller when any such
consent, approval, action, filing or notice referred to in clause (a) above is
obtained, taken, made or given, as
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36
applicable, and will advise Sellers of any material communications (and, unless
precluded by Law, provide copies of any such communications that are in writing)
with any Governmental or Regulatory Authority or other Person regarding any of
the transactions contemplated by this Agreement or any of the Operative
Agreements.
5.02 HSR Filings. In addition to and without limiting
Purchaser's covenants contained in Section 5.01, Purchaser will (i) take
promptly all actions necessary to make the filings required of Purchaser or its
Affiliates under the HSR Act, (ii) comply at the earliest practicable date with
any request for additional information received by Purchaser or its Affiliates
from the Federal Trade Commission or the Antitrust Division of the Department of
Justice pursuant to the HSR Act and (iii) cooperate with Sellers in connection
with Sellers' filing under the HSR Act and in connection with resolving any
investigation or other regulatory inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade Commission
or the Antitrust Division of the Department of Justice or state attorneys
general.
5.03 Fulfillment of Conditions. Purchaser will execute and
deliver at the Closing each Operative Agreement that Purchaser is hereby
required to execute and deliver as a condition to the Closing, will take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each other condition to the obligations of Sellers
contained in this Agreement and will not take or fail to take any action that
could reasonably be expected to result in the nonfulfillment of any such
condition.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder to purchase the Shares
are subject to the fulfillment, at or before the Closing, of each of the
following conditions (all or any of which may be waived in whole or in part by
Purchaser in its sole discretion):
6.01 Representations and Warranties. Each of the
representations and warranties of Sellers set forth in this Agreement that are
qualified as to materiality shall be true and correct, and each of the
representations and warranties of Sellers set forth in this Agreement that are
not so qualified shall be true and correct in all material respects, in each
case as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date.
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6.02 Performance. Sellers shall have performed and complied
with, in all material respects, each agreement, covenant and obligation required
by this Agreement to be so performed or complied with by Sellers at or before
the Closing.
6.03 Officers' Certificates. Xxxxx shall have delivered to
Purchaser a certificate, dated the Closing Date and executed in the name and on
behalf of Xxxxx by the Chairman of the Board, the President or any Executive or
Senior Vice President of Xxxxx, substantially in the form and to the effect of
Exhibit A hereto, and a certificate, dated the Closing Date and executed by the
Secretary or any Assistant Secretary of Xxxxx, substantially in the form and to
the effect of Exhibit B hereto.
6.04 Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Purchaser, and there shall not be pending or threatened on the Closing Date
any Action or Proceeding in, before or by any Governmental or Regulatory
Authority which could reasonably be expected to result in the issuance of any
such Order or the enactment, promulgation or deemed applicability to Purchaser,
the Company or the transactions contemplated by this Agreement or any of the
Operative Agreements of any such Law.
6.05 Regulatory Consents and Approvals. All consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit Purchaser and Sellers to perform their
obligations under this Agreement and the Operative Agreements and to consummate
the transactions contemplated hereby and thereby (a) shall have been duly
obtained, made or given, (b) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (c) shall be in full force
and effect, and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement and the Operative Agreements,
including under the HSR Act, shall have occurred.
6.06 Third Party Consents. The consents (or in lieu thereof
waivers) listed in Section 6.06 of the Disclosure Schedule, (a) shall have been
obtained, (b) shall be in form and substance reasonably satisfactory to
Purchaser, (c) shall not be subject to the satisfaction of any condition that
has not been satisfied or waived and (d) shall be in full force and effect,
except where the failure to obtain any such consent (or in lieu
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thereof waiver) could not reasonably be expected, individually or in the
aggregate with other such failures, to materially adversely affect Purchaser or
the Business or Condition of the Company or otherwise result in a material
diminution of the benefits of the transactions contemplated by this Agreement
and the Operative Agreements to Purchaser.
6.07 Opinion of Counsel. Purchaser shall have received (a) the
opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to Xxxxx and the Company, dated
the Closing Date, substantially in the form and to the effect of Exhibit C-1
hereto and (b) the opinion of counsel to Xxxxxxxxx and the Trust, dated the
Closing Date, substantially in the form and to the effect of Exhibit C-2 hereto.
6.08 Resignations of Directors and Officers. Each member of
the board of directors of the Company other than Xx. Xxxxxx X. Xxxxxxxxx shall
have tendered, effective at the Closing, their resignations as such directors.
6.09 Employment Agreements. Xxxxxxxxx shall have executed and
delivered to Purchaser an employment agreement substantially in the form of
Exhibit D hereto.
6.10 Financial Statements. Sellers shall have delivered to
Purchaser true and complete copies of the unaudited balance sheets of the
Company as of October 31, 1994, 1995, and 1996, and the related unaudited
statements of operations, stockholders equity and cash flows for the fiscal
years then ended,in each case prepared in accordance with GAAP in all respects
(including, with respect to fiscal year 1996 only, notes thereto; provided, that
footnotes relating to liabilities that will not continue as liabilities of the
Company following the Closing may be prepared in summary form); and such
financial statements shall not reflect a financial condition of the Company
materially adversely different from the financial condition reflected in the
financial statements previously delivered to Purchaser pursuant to Section 2.09
hereof.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligations of Sellers hereunder to sell the Shares are
subject to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by Sellers in
their sole discretion):
7.01 Representations and Warranties. Each of the
representations and warranties made by Purchaser in this Agreement shall be true
and correct in all material respects on
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and as of the Closing Date as though such representation or warranty was made on
and as of the Closing Date.
7.02 Performance. Purchaser shall have performed and complied
with, in all material respects, each agreement, covenant and obligation required
by this Agreement to be so performed or complied with by Purchaser at or before
the Closing.
7.03 Officers' Certificates. Purchaser shall have delivered to
each Seller a certificate, dated the Closing Date and executed in the name and
on behalf of Purchaser by the Chairman of the Board, the President or any
Executive or Senior Vice President of Purchaser, substantially in the form and
to the effect of Exhibit E hereto, and a certificate, dated the Closing Date and
executed by the Secretary or any Assistant Secretary of Purchaser, substantially
in the form and to the effect of Exhibit F hereto.
7.04 Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law that became effective after the date of this
Agreement restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Operative Agreements.
7.05 Regulatory Consents and Approvals. All consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit Seller and Purchaser to perform their
obligations under this Agreement and the Operative Agreements and to consummate
the transactions contemplated hereby and thereby (a) shall have been duly
obtained, made or given, (b) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (c) shall be in full force
and effect, and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement and the Operative Agreements,
including under the HSR Act, shall have occurred.
7.06 Third Party Consents. All consents (or in lieu thereof
waivers) to the performance by Sellers of their obligations hereunder and to the
consummation of the transactions contemplated hereby as are required under the
Contracts listed in Section 7.06 of the Disclosure Schedule (a) shall have been
obtained, (b) shall not be subject to the satisfaction of any condition that has
not been satisfied or waived and (c) shall be in full force and effect.
7.07 Opinion of Counsel. Sellers shall have received
the opinion of Xxxxxxx X. Xxxxxxx, General Counsel of Purchaser,
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dated the Closing Date, substantially in the form and to the effect of
Exhibit G hereto.
ARTICLE VIII
TAX MATTERS AND POST-CLOSING TAXES
8.1 (a) General Intention of Parties. In general, subject to
the specific provisions contained in this Agreement, it is the intention of the
parties hereto that Xxxxx will pay, or will cause to be paid, all Taxes with
respect to taxable periods that are Pre-Closing Periods or Pre-Closing Partial
Periods except that Xxxxx shall not be responsible for the first forty-six
thousand dollars ($46,000) of state and local income taxes for such Pre-Closing
Periods and Pre-Closing Partial Periods, and that Purchaser will pay, or will
cause to be paid, all Taxes with respect to taxable periods that are
Post-Closing Periods or Post-Closing Partial Periods.
(b) Consolidated/Combined Returns. Xxxxx will cause to be duly
prepared and timely filed all Tax Returns of any consolidated or combined group
in which Xxxxx or any of its Affiliates (other than the Company) and the Company
are included (any such group being referred to herein as a "Seller Group") for
all Pre-Closing Periods of the Company. Xxxxx will include the Company in the
Seller Group's consolidated federal Income Tax Returns for all Pre-Closing
Periods of the Company. Xxxxx will include (or cause to be included) the Company
in any other consolidated or combined basis filing for any Pre-Closing Periods
of the Company as Xxxxx shall xxxx appropriate. Xxxxx will pay, and will
indemnify and hold harmless the Company, Purchaser and Purchaser's Affiliates
from and against any Taxes imposed upon the Company for any Pre-Closing Period
including any Taxes arising as a result of the application of Treas. Reg.
Section 1.1502-6 or any equivalent provision under state or foreign Tax law
except that Xxxxx shall not be responsible for the first forty-six thousand
dollars ($46,000) of state and local income taxes for such Pre-Closing Periods
and Pre-Closing Partial Periods.
(c) Other Returns. Xxxxx will cause to be prepared and filed
on a timely basis all Tax Returns other than those described in Section 8.1(b)
above required to be filed on behalf of the Company for all Pre-Closing Periods.
Xxxxx will pay, and will indemnify and hold harmless the Company, Purchaser and
Purchaser's Affiliates from and against any Taxes imposed on the Company
attributable to any Pre-Closing Periods except that Xxxxx shall not be
responsible for the first forty-six thousand dollars ($46,000) of state and
local income taxes for such Pre-Closing Periods and Pre-Closing Partial Periods.
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(d) Straddle Period. Any tax period of the Company which Xxxxx
has elected, or caused the Company to have elected, to terminate on or before
the Closing Date shall not constitute a Straddle Period and shall constitute a
Pre-Closing Period. Xxxxx will take all actions necessary to have the Company
terminate on the Closing Date the tax periods which commence within twelve (12)
months prior to the Closing Date. Purchaser will timely prepare and file all Tax
Returns required to be filed by the Company for Straddle Periods and shall pay
all Taxes due with respect to such Tax Returns, provided, however, Purchaser
will notify Xxxxx of Purchaser's calculation of Xxxxx'x share of the Taxes of
the Company for any Straddle Periods (determined in accordance with this
paragraph (the "Tax Statement)) and provide to Xxxxx copies of the Tax Returns
and such Tax Statement at least 15 days after the due date for filing any such
Tax Returns. The Sellers shall have the right to review such Tax Returns and the
Tax Statement and to request that the Purchaser make any reasonable changes to
such Tax Returns. Purchaser and Xxxxx shall attempt to resolve in good faith any
disagreement arising out of any Straddle Period Tax Return and/or any
calculation of Xxxxx'x share of the related Tax liability; if any such dispute
is not resolved within ten days after the receipt of the Tax Return and Tax
Statement, the matter shall be submitted for binding resolution to a mutually
acceptable nationally recognized accounting firm in the relevant jurisdiction
with no material relationship to Purchaser or Sellers. No later than fifteen
(15) days following receipt of any such Tax Return and Tax Statement, Xxxxx
shall pay to Purchaser, an amount equal to the Taxes shown on the Tax Statement
as being chargeable to Xxxxx to the extent the amount exceeds the forty-six
thousand dollars ($46,000) referred to in Sections 8.1(a), 8.1(b), and 8.1(c)
unless Xxxxx has disputed such amount. If Xxxxx has disputed such amount, then
Xxxxx shall pay to Purchaser on that date an amount reasonably determined by
Xxxxx as the proper amount of Taxes chargeable to Sellers to the extent the
amount exceeds the forty-six thousand dollars ($46,000) referred to in Sections
8.1(a), 8.1(b), and 8.1(c). Xxxxx shall pay any additional amount in order to
reflect the decision of the Independent Accounting Firm within three (3) days of
the Independent Accounting Firm decision. The Purchaser shall pay to the Xxxxx
excess, if any, of the amount paid by Xxxxx, if any, pursuant to the preceding
sentence over the amount decided upon by the Independent Accounting Firm.
Interest will also be paid with respect to any such adjustments at a rate equal
to the U.S. Federal underpayment rate from the date of the delivery of the
calculation to the date the amount of any adjustment is paid. Purchaser will
cause the Company to pay, and will indemnify and hold harmless Sellers and
Sellers' Affiliates from and against any Taxes imposed upon the Company for any
such Straddle Period, except that Xxxxx will reimburse Purchaser for, and will
indemnify and hold harmless the Company, Purchaser and Purchaser's Affiliates
from and against, the amount of Taxes attributable to any Pre-Closing Partial
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Period. In the case of a Straddle Period, for purposes of this Agreement, Taxes
for the entire Straddle Period shall be allocated between a Pre-Closing Partial
Period and a Post-Closing Partial Period assuming that the books of the Company
were closed as of and including the Closing Date, except that exemptions,
allowances or deductions (such as depreciation deductions) calculated on an
annual basis shall be prorated between the Pre-Closing Partial Period and
Post-Closing Partial Period on a per diem basis and real property Taxes shall be
allocated in accordance with Code Section 164(d). Any Taxes for a Straddle
Period paid prior to the Closing shall be deducted from Xxxxx'x liability
pursuant to the immediately preceding sentence.
(e) Post-Closing Periods. Purchaser will cause to be prepared
and filed all Tax Returns required to be filed by or on behalf of the Company
for Post-Closing Periods. Purchaser will pay, and will indemnify and hold
harmless Sellers and Seller's Affiliates from and against any Taxes imposed on
the Company with respect to any such period.
(f) Payment of Taxes. Sellers and Purchaser hereby agree that
any amount of Taxes paid by Sellers to Purchaser constitute a reduction in the
Purchase Price of the Shares of the Company to which such payments relate.
(g) Refund/Overpayment. Xxxxx will be entitled to retain, or
receive prompt payment from the Company of any refund or credit for overpayment
of Taxes for a Pre-Closing Period or a Pre-Closing Partial Period, plus any
interest received with respect thereto from the relevant taxing authorities
provided, however, that the Purchaser or the Company may retain such refund or
credit to offset any liability of Sellers or Seller Affiliates to Purchaser or
the Company. All refunds received by Xxxxx of Taxes with respect to a
Post-Closing Period or Post-Closing Partial Period of the Company shall be
delivered to Purchaser or the Company promptly after receipt thereof by Sellers,
provided, however, that Xxxxx may retain such refund or credit to offset any
liability of Purchaser to Sellers.
(h) Notice. Purchaser will promptly notify Xxxxx in writing
upon receipt by Purchaser or any of its Affiliates (including, after the
Closing, the Company) of any written notice of any audit or assessment with
respect to Taxes for which Xxxxx would be required to pay or indemnify Purchaser
or any of its Affiliates. Xxxxx shall promptly notify Purchaser in writing upon
receipt by Xxxxx or any Affiliate of Xxxxx of any written notice of any federal,
state, local or foreign Tax audits or assessments or other written
communications from any tax authority relating to the income, properties or
operations of the Company for Post-Closing Periods or Straddle Periods. Xxxxx
shall have the right to control the audit (and disposition thereof) of any Tax
Return actually filed prior to the Closing
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Date relating to a Pre-Closing Period (a "Pre-closing Return"), and at its own
expense to participate in and approve (which approval shall not be unreasonably
withheld) the disposition of the audit of any Tax Return relating to a Straddle
Period, if any such audit or disposition thereof could give rise to a claim for
indemnification hereunder. Purchaser shall have the right to review in advance
and comment upon all submissions made in the course of audits or appeals of any
Pre-closing Return to any Governmental Entity and to approve (which approval
shall not be unreasonably withheld) the disposition of any audit adjustment with
respect to such Pre-closing Return if such submissions and/or disposition could
result in an increase in Taxes of Purchaser, any Affiliate of Purchaser or the
Company for the Partial Post-Closing Period or any Post-Closing Period.
Notwithstanding any of the foregoing, any submission made on behalf of the
Company after the Closing Date (including any documentation relating to a
disposition) that must be signed by the Company shall be signed by the Purchaser
or any of its Affiliates and such signature shall not be unreasonably withheld.
Xxxxx shall have the right to request that Purchaser initiate any claim for
refund prepaid by Xxxxx, or file any amended Tax Return prepaid by Xxxxx
relating to a Pre-closing or Straddle Period and Purchaser shall honor such
request provided Purchaser makes a good faith determination that there is a
reasonable basis for such claim or filing and that such claim or filing does not
result in an increase in Taxes of the Purchaser, any Affiliate of the Purchaser,
or the Company for any period. Xxxxx shall be responsible for all costs
associated with such claims for refund or amended filings.
(i) Access to Documentation. After the Closing Date, each of
Purchaser and Sellers shall furnish or cause to be furnished to each other, upon
request, as promptly as practicable, such information (including access to
books, records and personnel) and assistance as is reasonably requested for the
preparation and filing of any Tax Return or related document, for the
preparation for any Tax audit or for the prosecution or defense of any claim,
suit or proceeding relating to Taxes.
(j) Tax Sharing Agreement. As of the Closing, the Company will
be released from any obligation with respect to any Tax sharing or other Tax
agreements.
(k) Transfer Taxes. Purchaser will pay or cause to be paid,
and will indemnify and hold harmless Sellers from and against, any sales, use,
transfer, stamp, documentary or similar Taxes incurred in connection with the
transactions contemplated by this Agreement.
(l) Purchaser and Xxxxx shall jointly make the election
allowed by Code Section 338(h)(10) in respect of Purchaser's acquisition of the
Shares pursuant to this Agreement the ("Code
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Section 338(h)(10) Election"). Purchaser, Sellers and Sellers' Affiliates shall
timely take all steps to properly complete and sign all forms or certificates
necessary or helpful to properly and timely qualify the Code Section 338(h)(10)
Election. Xxxxx will pay or cause to be paid any and all Taxes imposed as a
result of the sale of assets deemed made pursuant to the Code Section 338(h)(10)
Election and the regulations thereunder upon the sale of the Shares. Within
sixty (60) days after the Closing Date, Purchaser shall deliver to Xxxxx a
completed Internal Revenue Service Form 8023-A and required schedules thereto
(the "Form"), as well as any applicable state, local or foreign forms (the
"State Form"). Provided that the information on the Form is, in the reasonable
determination of Xxxxx, correct and complete in all material respects, Xxxxx
shall, within 30 days after receipt of such Form, execute the Form and deliver
the Form to Purchaser. If any changes or supplements are required to the Form,
the Parties will promptly inform each other of same and Xxxxx and Purchaser will
promptly agree on such changes. Purchaser will timely file the Form, and any
required supplements thereto, and will provide assurance to Xxxxx that it has
done so. Xxxxx and Purchaser agree that neither of them nor any of their
Affiliates shall take any unilateral action to modify or revoke the elections
contained in or the content of the Form, any State Forms and any supplements.
Xxxxx and its Affiliates shall file their respective Federal tax returns (and
affected state and local returns) in a manner consistent with the Section
338(h)(10) Election.
(m) Allocation of Purchase Price. Xxxxx and Purchaser agree to
negotiate in good faith on an allocation of the Purchase Price, as adjusted,
among the assets of the Company that are deemed to have been acquired pursuant
to the 338(h)(10) Election or any state law equivalent. The agreed allocation
shall be set forth in a letter agreement used to file all reports and returns
for taxes. If Xxxxx and Purchaser are unable to agree on an allocation within
sixty days after the Closing Date, Purchaser and Xxxxx shall be free to make any
allocation they desire, and Purchaser shall allow Xxxxx and its authorized agent
and representatives access to the Company and its books and assets to allow
Xxxxx to make an appraisal of such assets and a tax allocation. Should Purchaser
or Xxxxx hire an appraiser to appraise the value of the assets of the Company,
Purchaser or Xxxxx shall provide the other with a true copy of the written
appraisal report made by such firm, upon payment of one-half of the cost of any
such appraisal.
(n) From and after the date hereof, Xxxxx will not make, or
cause the Company to make, any Tax Election not consistent with past practice.
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(o) Sellers will provide certifications of non-foreign status
in accordance with Treasury Regulation Section 1.1445-2(b) substantially in the
form and to the effect of Exhibit H hereto.
ARTICLE IX
EMPLOYEE BENEFITS MATTERS
9.01 General. Purchaser shall cause all employees of the
Company to be eligible as of the Closing to participate in the "employee welfare
benefit plans" and "employee pension plans" (within the meaning of Section 3(1)
and Section 3(2) of ERISA, respectively) of Purchaser, if any, in which
similarly situated employees of Purchaser are generally eligible to participate,
provided that (a) nothing herein shall prevent Purchaser from terminating the
employment of any employee of the Company or modifying or terminating such plans
of Purchaser from time to time, and (b) all employees of the Company and their
dependents shall be covered immediately after the Closing (and shall not be
excluded from coverage on account of any pre-existing condition) under any such
plan that is a group health plan of Purchaser subject to Part 6 of Title I of
ERISA. For purposes of any length of service requirements, waiting periods,
vesting periods or differential benefits based on length of service in any such
plan for which an Employee may be eligible after the Closing, Purchaser shall
ensure that service by such Employee with the Seller or with the Company shall
be deemed to have been service with the Purchaser. Except as provided otherwise
in this Article IX, Purchaser shall be under no obligation to provide or
continue any such plans or other arrangements after the Closing Date and may
amend or terminate any such plan or arrangement in whole or in part, and may
modify any provision thereof, including any provision dealing with eligibility,
levels or types of benefits, deductibles or co-payment obligations, or any other
right, feature other or characteristic.
9.02 Growth Participation Plan. Purchaser shall pay or cause
to be paid when due to employees of the Company, any and all amounts vested and
due to any such employee under the Company's Growth Participation Plan as in
effect on the date hereof (up to a maximum aggregate amount of $284,000). Any
amounts due to employees of the Company under the Company's Growth Participation
Plan in excess of such $284,000 shall be the responsibility of Xxxxx.
9.03 Xxxxx Pension Plan. Xxxxx shall cause each employee of
the Company participating in the Xxxxx Pension Plan and not yet vested therein
to be fully vested on and as of the Closing Date with respect to all benefits
accrued as of the Closing Date
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9.04 Xxxxx Profit Sharing Plan. Xxxxx shall cause each
employee of the Company participating in the Xxxxx Profit Sharing Plan and not
yet vested therein to be fully vested on and as of the Closing Date with respect
to all benefits accrued as of the Closing Date.
9.05 Employee Bonuses. Purchaser or the Company shall be
responsible for and shall pay all bonus amounts earned by employees of the
Company under any Benefit Plans in respect of the year ended October 31, 1996 up
to a maximum of $250,000. Any bonus amounts due to employees of the Company in
respect of such period in excess of $250,000 shall be the responsibility of
Xxxxx.
ARTICLE X
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
10.01 Survival of Representations, Warranties, Covenants and
Agreements. Notwithstanding any right of Purchaser (whether or not exercised) to
investigate the affairs of the Company or any right of any party (whether or not
exercised) to investigate the accuracy of the representations and warranties of
the other party contained in this Agreement, Sellers and Purchaser have the
right to rely fully upon the representations, warranties, covenants and
agreements of the other contained in this Agreement. The representations,
warranties, covenants and agreements of Sellers and Purchaser contained in this
Agreement will survive the Closing (a) indefinitely with respect to (i) the
representations and warranties contained in Sections 2.02, 2.04, 2.27, 3.02 and
3.07 and (ii) the covenants and agreements contained in Sections 1.06, 14.03 and
14.05; (b) until sixty (60) days after the expiration of all applicable statutes
of limitation (including all periods of extension, whether automatic or
permissive) with respect to matters covered by Section 2.12 and Article VIII and
(insofar as they relate to ERISA or the Code) Section 2.15 and Article IX; (c)
until June 30, 1998 in the case of all other representations and warranties and
any covenant or agreement to be performed in whole or in part on or prior to the
Closing or (d) with respect to each other covenant or agreement contained in
this Agreement, until sixty (60) days following the last date on which such
covenant or agreement is to be performed or, if no such date is specified,
indefinitely; provided that the termination of any representation, warranty,
covenant or agreement in accordance with clause (b), (c) or (d) above will have
no effect on any Claim Notice or Indemnity Notice (as applicable) that shall
have been timely given under Article XI on or prior to such termination date.
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ARTICLE XI
INDEMNIFICATION
11.01 Indemnification.
(a) Subject to paragraph (c) of this Section and the other
Sections of this Article XI, Sellers shall indemnify severally and not jointly,
in proportion to their respective share of the aggregate consideration received
pursuant to this Agreement, the Purchaser Indemnified Parties in respect of, and
hold each of them harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to (i) any breach of representation
or warranty of Sellers contained in this Agreement determined in all cases as if
the terms "material" or "materially" were not included therein), (ii) any
nonfulfillment of or failure to perform any covenant or agreement on the part of
Sellers contained in this Agreement, and (iii) any and all Liabilities relating
to, or arising out of or in connection with the Appeal Assets or the operation
of the Appeal Business.
(b) Subject to the other Sections of this Article XI,
Purchaser shall indemnify the Seller Indemnified Parties in respect of, and hold
each of them harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to (i) any breach of representation or warranty
of the Purchaser contained in this Agreement, and (ii) any nonfulfillment of or
failure to perform any covenant or agreement on the part of Purchaser contained
in this Agreement.
(c) No amounts of indemnity shall be payable in the case of a
claim by any Indemnified Party under Section 11.01(a)(i) or 11.01(b)(i) (x)
unless and until such Indemnified Parties have suffered, incurred, sustained or
become subject to Losses referred to in such Section in excess of $100,000 in
the aggregate; in which event the Indemnified Parties shall be entitled to claim
indemnity for Losses over and above such amount, and (y) in excess of
$15,000,000 in the aggregate; provided that this paragraph (c) shall not apply
to a breach of a representation or warranty contained in Section 2.02, 2.04,
2.06, 2.07 or 2.27. For the avoidance of doubt, the parties reiterate that any
amounts payable by Sellers in respect of indemnity claims hereunder shall be
payable severally, in proportion to their respective share of the aggregate
consideration received hereunder.
(d) Notwithstanding anything to the contrary contained in this
Agreement, Sellers shall have no liability under any provision of this Agreement
for any Losses to the extent and only
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to the extent that such Losses result from or arise out of actions taken by
Purchaser, the Company or their respective Affiliates after the Closing Date.
(e) Notwithstanding anything to the contrary contained in this
Article XI, this Article XI shall not apply to any Losses related to Taxes for
which indemnifications are provided in Article VIII.
11.02 Method of Asserting Claims. All claims for
indemnification by any Indemnified Party under Section 11.01 will be asserted
and resolved as follows:
(a) In the event any claim or demand in respect of which an
Indemnified Party might seek indemnity under Section 11.01 is asserted against
or sought to be collected from such Indemnified Party by a Person other than
Seller or any Affiliate of Seller or of Purchaser (a "Third Party Claim"), the
Indemnified Party shall deliver a Claim Notice to the Indemnifying Party as soon
as is practicable and in any event within 30 days of the time that the
Indemnified Party learns of such Third Party Claim. If the Indemnified Party
fails so to provide the Claim Notice, the Indemnifying Party will not be
obligated to indemnify the Indemnified Party with respect to such Third Party
Claim to the extent that the Indemnifying Party's ability to defend has been
irreparably prejudiced by such failure of the Indemnified Party. The
Indemnifying Party will notify the Indemnified Party as soon as practicable
within the Dispute Period whether the Indemnifying Party disputes its liability
to the Indemnified Party under Section 11.01 and whether the Indemnifying Party
desires, at its sole cost and expense, to defend the Indemnified Party against
such Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend
the Indemnified Party with respect to the Third Party Claim pursuant to
this Section 11.02(a), then the Indemnifying Party will have the right
to defend, with counsel reasonably satisfactory to the Indemnified
Party, at the sole cost and expense of the Indemnifying Party, such
Third Party Claim by all appropriate proceedings, which proceedings
will be prosecuted by the Indemnifying Party in good faith or will be
settled at the discretion of the Indemnifying Party (but only with the
consent of the Indemnified Party, which consent will not be
unreasonably withheld, in the case of any settlement that provides for
any relief other than the payment of monetary damages as to which the
Indemnified Party will be indemnified in full). The Indemnifying Party
will be deemed to have waived its right to dispute its liability to the
Indemnified Party under Section 11.01 with respect to any Third Party
Claim as to which it elects to control the defense. The Indemnifying
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Party will have full control of such defense and proceedings, including
(except as provided in the immediately preceding sentence) any
settlement thereof; provided, however, that the Indemnified Party may,
at the sole cost and expense of the Indemnified Party, at any time
prior to the Indemnifying Party's delivery of the notice referred to in
the first sentence of this clause (i), file any motion, answer or other
pleadings or take any other action that the Indemnified Party
reasonably believes to be necessary or appropriate to protect its
interests; and provided further, that if requested by the Indemnifying
Party, the Indemnified Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the Indemnifying
Party in contesting any Third Party Claim that the Indemnifying Party
elects to contest. The Indemnified Party may retain separate counsel to
represent it in, but not control, any defense or settlement of any
Third Party Claim controlled by the Indemnifying Party pursuant to this
clause (i), and the Indemnified Party will bear its own costs and
expenses with respect to such separate counsel, except that the
Indemnifying Party will pay the costs and expenses of such separate
counsel if in the Indemnified Party's good faith judgment, it is
advisable, based on advice of counsel, for the Indemnified Party to be
represented by separate counsel because a conflict or potential
conflict exists between the Indemnifying Party and the Indemnified
Party which makes representation of both parties inappropriate under
applicable standards of professional conduct. Notwithstanding the
foregoing, the Indemnified Party may retain or take over the control of
the defense or settlement of any Third Party Claim the defense of which
the Indemnifying Party has elected to control if the Indemnified Party
irrevocably waives its right to indemnity under Section 11.01 with
respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified
Party within the Dispute Period that the Indemnifying Party desires to
defend the Third Party Claim pursuant to Section 11.02(a), or if the
Indemnifying Party gives such notice but fails to prosecute or settle
the Third Party Claim, then the Indemnified Party will have the right
to defend, at the sole cost and expense of the Indemnifying Party, the
Third Party Claim by all appropriate proceedings, which proceedings
will be prosecuted by the Indemnified Party in good faith or will be
settled at the discretion of the Indemnified Party (with the consent of
the Indemnifying Party, which consent will not be unreasonably
withheld). The Indemnified Party will have full control of such defense
and proceedings, including (except as provided in the immediately
preceding sentence) any settlement thereof; provided, however, that if
requested by the Indemnified
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50
Party, the Indemnifying Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the Indemnified
Party and its counsel in contesting any Third Party Claim which the
Indemnified Party is contesting. Notwithstanding the foregoing
provisions of this clause (ii), if the Indemnifying Party has notified
the Indemnified Party within the Dispute Period that the Indemnifying
Party disputes its liability hereunder to the Indemnified Party with
respect to such Third Party Claim and if such dispute is resolved in
favor of the Indemnifying Party in the manner provided in clause (iii)
below, the Indemnifying Party will not be required to bear the costs
and expenses of the Indemnified Party's defense pursuant to this clause
(ii) or of the Indemnifying Party's participation therein at the
Indemnified Party's request, and the Indemnified Party will reimburse
the Indemnifying Party in full for all reasonable costs and expenses
incurred by the Indemnifying Party in connection with such litigation.
(iii) If the Indemnifying Party notifies the Indemnified Party that
it does not dispute its liability to the Indemnified Party with respect
to the Third Party Claim under Section 11.01 or fails to notify the
Indemnified Party within the Dispute Period whether the Indemnifying
Party disputes its liability to the Indemnified Party with respect to
such Third Party Claim, the Loss arising from such Third Party Claim
will be conclusively deemed a liability of the Indemnifying Party under
Section 11.01 and the Indemnifying Party shall pay the amount of such
Loss to the Indemnified Party on demand following its final
determination. If the Indemnifying Party has timely disputed its
liability with respect to such claim, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a resolution
of such dispute, and if not resolved through negotiations within the
Resolution Period, such dispute shall be resolved by arbitration in
accordance with paragraph (c) of this Section 11.02.
(b) In the event any Indemnified Party should determine in
good faith that it has a claim under Section 11.01 against any Indemnifying
Party that does not involve a Third Party Claim, the Indemnified Party shall
deliver an Indemnity Notice with reasonable promptness to the Indemnifying
Party. The failure by any Indemnified Party to give the Indemnity Notice shall
not impair such party's rights hereunder except to the extent that an
Indemnifying Party has been irreparably prejudiced thereby. If the Indemnifying
Party notifies the Indemnified Party that it does not dispute the claim
described in such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes the claim
described in such Indemnity Notice, the Loss arising from
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51
the claim specified in such Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under Section 11.01 and the Indemnifying
Party shall pay the amount of such Loss to the Indemnified Party on demand
following its final determination. If the Indemnifying Party has timely disputed
its liability with respect to such claim, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations within the Resolution Period,
such dispute shall be resolved by arbitration in accordance with paragraph (c)
of this Section 11.02.
(c) Any dispute submitted to arbitration pursuant to this
Section 11.02 shall be finally and conclusively determined by the decision of a
board of arbitration consisting of three (3) members (hereinafter sometimes
called the "Board of Arbitration") selected as hereinafter provided. Each of the
Indemnified Party and the Indemnifying Party shall select one (1) member and the
third member shall be selected by mutual agreement of the other members, or if
the other members fail to reach agreement on a third member within twenty (20)
days after their selection, such third member shall thereafter be selected by
the American Arbitration Association upon application made to it for a third
member possessing expertise or experience appropriate to the dispute jointly by
the Indemnified Party and the Indemnifying Party. The Board of Arbitration shall
reach and render a decision in writing (concurred in by a majority of the
members of the Board of Arbitration) with respect to the amount, if any, which
the Indemnifying Party is required to pay to the Indemnified Party in respect of
a claim filed by the Indemnified Party. In connection with rendering its
decisions, the Board of Arbitration shall adopt and follow such rules and
procedures as a majority of the members of the Board of Arbitration deems
necessary or appropriate. To the extent practical, decisions of the Board of
Arbitration shall be rendered no more than thirty (30) days following
commencement of proceedings with respect thereto. The Board of Arbitration shall
cause its written decision to be delivered to the Indemnified Party and the
Indemnifying Party. Any decision made by the Board of Arbitration (either prior
to or after the expiration of such thirty (30) calendar day period) shall be
final, binding and conclusive on the Indemnified Party and the Indemnifying
Party and entitled to be enforced to the fullest extent permitted by law and
entered in any court of competent jurisdiction. Each party to any arbitration
shall bear its own expense in relation thereto, including but not limited to
such party's attorneys' fees, if any, and the expenses and fees of the member of
the Board of Arbitration appointed by such party, provided, however, that the
expenses and fees of the third member of the Board of Arbitration and any other
expenses of the Board of Arbitration not capable of being attributed to any one
member shall be borne
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in equal parts by the Indemnifying Party and the Indemnified Party.
ARTICLE XII
TERMINATION
12.01 Termination. This Agreement may be terminated,
and the transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement of Sellers and Purchaser;
(b) at any time before the Closing, by Sellers or Purchaser,
in the event of a material breach hereof by the non-terminating party if such
non-terminating party fails to cure such breach within five (5) Business Days
following notification thereof by the terminating party; or
(c) at any time after January 31, 1997 by Sellers or Purchaser
upon notification of the non-terminating party by the terminating party if the
Closing shall not have occurred on or before such date and such failure to
consummate is not caused by a breach of this Agreement by the terminating party.
12.02 Effect of Termination. If this Agreement is validly
terminated pursuant to Section 12.01, this Agreement will forthwith become null
and void, and there will be no liability or obligation on the part of Sellers or
Purchaser (or any of their respective officers, directors, employees, agents or
other representatives or Affiliates), except as provided in the next succeeding
sentence and except that the provisions with respect to expenses in Section
14.03 and confidentiality in Section 14.05 will continue to apply following any
such termination. Nothing herein shall relieve either party from liability for
any willful breach hereof.
ARTICLE XIII
DEFINITIONS
13.01 Definitions. (a) Defined Terms. As used in this
Agreement, the following defined terms have the meanings indicated below:
"Acquisition Proposal" means any proposal for a merger or
other business combination to which the Company is a party or the direct or
indirect acquisition of any equity interest in, or a substantial portion of the
assets of, the Company, other than the transactions contemplated by this
Agreement.
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53
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means any Person that directly, or indirectly
through one of more intermediaries, controls or is controlled by or is under
common control with the Person specified. For purposes of this definition,
control of a Person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by Contract or
otherwise and, in any event and without limitation of the previous sentence, any
Person owning ten percent (10%) or more of the voting securities of another
Person shall be deemed to control that Person.
"Agreement" means this Stock Purchase Agreement and the
Exhibits, the Disclosure Schedule and the Schedules hereto, as the same shall be
amended from time to time.
"Appeal Assets" means the Assets and Properties of the Company
used or held for use in operation of the Appeal Business.
"Appeal Business" means the Company's line of business
pursuant to which the Company publishes, markets, sells and distributes the
"Appeal Securities Act Handbook" and related products under the "Xxxxx
Publishing" name.
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person.
"Benefit Plan" means any Plan established by the Company, or
any predecessor or Affiliate of any of the foregoing, existing at the Closing
Date or prior thereto, to which the Company contributes or has contributed, or
under which any employee, former employee or director of the Company or any
beneficiary thereof is covered, is eligible for coverage or has benefit rights.
"Board of Arbitration" has the meaning ascribed to it in
Section 11.02(d).
"Books and Records" means all files, documents, instruments,
papers, books and records relating to the Business or Condition of the Company,
including without limitation financial statements, Tax Returns and related work
papers and letters from accountants, budgets, pricing guidelines, ledgers,
journals, deeds, title policies, minute books, stock certificates and books,
stock transfer ledgers, Contracts, Licenses, customer
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54
lists, computer files and programs, retrieval programs, operating data and plans
and environmental studies and plans.
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in the States of New York and Massachusetts are
authorized or obligated to close.
"Business or Condition of the Company" means the business,
condition (financial or otherwise), results of operations, Assets and Properties
of the Company.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and the rules and
regulations promulgated thereunder.
"CERCLIS" means the Comprehensive Environmental
Response and Liability Information System, as provided for by 40
C.F.R. Section 300.5.
"Claim Notice" means written notification pursuant to Section
11.02(a) of a Third Party Claim as to which indemnity under Section 11.01 is
sought by an Indemnified Party, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the
Indemnified Party's claim against the Indemnifying Party under Section 11.01,
together with the amount or, if not then reasonably determinable, the estimated
amount, determined in good faith, of the Loss arising from such Third Party
Claim.
"Closing" means the closing of the transactions contemplated
by Section 1.03.
"Closing Date" means (a) the second Business Day after the day
on which the last of the consents, approvals, actions, filings, notices or
waiting periods described in or related to the filings described in Sections
6.04 through 6.07 and Sections 7.04 through 7.07 has been obtained, made or
given or has expired, as applicable, or (b) such other date as Purchaser and
Sellers mutually agree upon in writing.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Common Stock" means the common stock, par value $0.01
per share, of the Company.
"Company" has the meaning ascribed to it in the
forepart of this Agreement.
"Contract" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract.
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"Defined Benefit Plan" means each Benefit Plan which is
subject to Part 3 of Title I of ERISA, Section 412 of the Code or Title IV of
ERISA.
"Disclosure Schedule" means the record delivered to Purchaser
by Sellers herewith and dated as of the date hereof, containing all lists,
descriptions, exceptions and other information and materials as are required to
be included therein by Sellers pursuant to this Agreement.
"Dispute Period" means the period ending thirty (30) days
following receipt by an Indemnifying Party of either a Claim Notice or an
Indemnity Notice.
"Environmental Law" means any Law or Order relating to the
regulation or protection of the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes into the environment
(including, without limitation, ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any Person who is in the same
controlled group of corporations or who is under common control with Sellers or,
before the Closing, the Company (within the meaning of Section 414 of the Code).
"Financial Statements" means the financial statements of the
Company delivered to Purchaser pursuant to Section 2.09 or 4.06.
"GAAP" means generally accepted accounting principles,
consistently applied throughout the specified period.
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
"Hazardous Material" means (A) any petroleum or petroleum
products, flammable explosives, radioactive materials, asbestos in any form that
is or could become friable, urea formaldehyde foam insulation and transformers
or other equipment
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56
that contain dielectric fluid containing levels of polychlorinated biphenyls
(PCBs); (B) any chemicals or other materials or substances which are now or
hereafter become defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants"
or words of similar import under any Environmental Law; and (C) any other
chemical or other material or substance, exposure to which is now or hereafter
prohibited, limited or regulated by any Governmental or Regulatory Authority
under any Environmental Law.
"HSR Act" means Section 7A of the Xxxxxxx Act (Title II of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"Indebtedness" of any Person means all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (iv) under capital leases and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.
"Indemnified Party" means any Person claiming indemnification
under any provision of Article XI.
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article XI.
"Indemnity Notice" means written notification pursuant to
Section 11.02(b) of a claim for indemnity under Article XI by an Indemnified
Party, specifying the nature of and basis for such claim, together with the
amount or, if not then reasonably determinable, the estimated amount, determined
in good faith, of the Loss arising from such claim.
"Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service xxxx rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, processes, designs, methodologies, data bases and computer programs
(including all source codes) and related documentation, technical information,
manufacturing, engineering and technical drawings, know-how and all pending
applications for and registrations of patents, trademarks, service marks and
copyrights.
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"XXX" xxxxx xxx Xxxxxx Xxxxxx Internal Revenue Service.
"Knowledge of Sellers" or "Known to Sellers" means the
knowledge of Xxxxxx X. Xxxxxxxxx, the Chief Executive Officer, President, Chief
Financial Officer and Controller of Xxxxx, or any vice President of the Company.
"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision or of any Governmental or Regulatory Authority.
"Liabilities" means all obligations and other liabilities of a
Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due).
"Licenses" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind.
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, reasonable fees of attorneys, accountants and other experts or other
expenses of litigation or other proceedings or of any claim, default or
assessment) actually suffered or named by any Person.
"Operative Agreements" means any support or other agreements
to be entered into in connection with the transaction.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive or exercise any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock of such Person, including
any rights to participate in the equity or income of such Person or to
participate in or direct the election of any directors or officers of such
Person or the manner in which any shares of capital stock of such Person are
voted.
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58
"Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"PBGC" means the Pension Benefit Guaranty Corporation
established under ERISA.
"Pension Benefit Plan" means each Benefit Plan which is a
pension benefit plan within the meaning of Section 3(2) of ERISA.
"Permitted Lien" means (i) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, (ii) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability or Indebtedness that is not yet due or delinquent,
(iii) any Lien disclosed in the Financial Statements, and (iv) any Lien or
imperfection of title not materially affect the use of such property in the
conduct of the business of the Company consistent with past practice.
"Person" means any natural person, corporation, general
partnership, limited partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.
"Plan" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation, day or dependent care, legal services, cafeteria, life,
health, accident, disability, workmen's compensation or other insurance,
severance, separation or other employee benefit plan, practice, policy or
arrangement of any kind, whether written or oral, including, but not limited to,
any "employee benefit plan" within the meaning of Section 3(3) of ERISA.
"Post-Closing Partial Period" means that portion of any
Straddle Period beginning the day after the Closing Date and ending on the last
day of the Straddle Period.
"Post-Closing Period" means a taxable period beginning after
the Closing Date.
"Pre-Closing Partial Period" means that portion of any
Straddle Period beginning on the first day of the Straddle Period and ending on
and including the Closing Date.
"Pre-Closing Period" means any Tax period ending on or prior
to the Closing Date and, with respect to any Straddle
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59
Period, the portion of such Straddle Period that ends on and includes the
Closing Date.
"Purchase Price" has the meaning ascribed to it in Section
1.02.
"Purchaser" has the meaning ascribed to it in the forepart of
this Agreement.
"Purchaser Indemnified Parties" means Purchaser and its
officers, directors, employees, agents and Affiliates.
"Qualified Plan" means each Benefit Plan which is intended to
qualify under Section 401 of the Code.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"Representatives" has the meaning ascribed to it in Section
4.03.
"Resolution Period" means the period ending thirty (30) days
following receipt by an Indemnified Party of a written notice from an
Indemnifying Party stating that it disputes all or any portion of a claim set
forth in a Claim Notice or an Indemnity Notice.
"Sellers" has the meaning ascribed to it in the forepart of
this Agreement.
"Seller Indemnified Parties" means each Seller and its
officers, directors, employees, agents and Affiliates.
"Shares" has the meaning ascribed to it in the forepart of
this Agreement.
"Straddle Period" means a taxable year or taxable period of
the Company which begins before the Closing Date and ends after the Closing
Date.
"Subject Defined Benefit Plan" means each Defined Benefit Plan
listed and described in Section 2.15(a) of the Disclosure Schedule.
"Tax Benefit" means in the case of any Tax Return, the sum of
the amount by which the Tax liability is reduced (or the Tax refund is
increased) plus any interest relating to such Tax liability (or Tax refund), and
in the case of a consolidated
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60
federal income Tax Return or similar state, local or other Tax Return, the sum
of the amount by which the Tax liability of the affiliated group of corporations
is reduced (or the Tax refund is increased) plus any interest from such
government or jurisdiction relating to such Tax liability (or Tax refund).
"Tax Election" shall include, but is not limited to, any
election, claim, disclaimer, waiver relating to any Tax, Tax Return, Tax
Attribute or Tax Benefit.
"Tax Return" means a report, return or other information
required to be supplied to a governmental entity with respect to Taxes
including, where permitted or required, combined or consolidated returns for any
group of entities that includes Company or any Subsidiary.
"Taxes" means any federal, state, county, local or foreign
taxes, charges, fees, levies, other assessments, or withholding taxes or charges
imposed by any governmental entity, and includes any interest and penalties
(civil or criminal) on or additions to any such taxes and any expenses incurred
in connection with the determination, settlement or litigation of any Tax
liability.
"Third Party Claim" has the meaning ascribed to it in Section
11.02(a).
"Unaudited Financial Statement Date" means September 30, 1996.
"Unaudited Financial Statements" means the Financial
Statements for the eleven month period ended September 30, 1996 of the Company
delivered to Purchaser pursuant to Section 2.09.
"Year-End Financial Statement Date" means the fiscal year of
the Company ending on October 31, 1996 for which Financial Statements are
delivered to Purchaser pursuant to Section 2.09.
"Year-End Financial Statements" means the Financial Statements
for the fiscal year of the Company ending on October 31, 1996 and delivered to
Purchaser pursuant to Section 2.09.
(b) Construction of Certain Terms and Phrases. Unless the
context of this Agreement otherwise requires, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement; (iv)
the terms "Article" or "Section " refer to the specified Article or Section of
this Agreement; and (v) the
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61
phrases "ordinary course of business" and "ordinary course of business
consistent with past practice" refer to the business and practice of the
Company. Whenever this Agreement refers to a number of days, such number shall
refer to calendar days unless Business Days are specified. All accounting terms
used herein and not expressly defined herein shall have the meanings given to
them under GAAP.
ARTICLE XIV
MISCELLANEOUS
14.01 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to Purchaser, to:
Primark Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. X'Xxxxxx
If to Xxxxx, to:
Xxxxx & Co., Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx Xxxxxx, Xx.
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62
If to Xxxxxxxxx or the Trust, to:
Xxxxxx X. Xxxxxxxxx
c/o Baseline Financial Services, Inc.
00 Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxxxx
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other party hereto.
14.02 Entire Agreement. This Agreement and the Operative
Agreements supersede all prior discussions and agreements between the parties
with respect to the subject matter hereof and thereof, including without
limitation that certain letter of intent between the parties dated September 30,
1996, and contain the sole and entire agreement between the parties hereto with
respect to the subject matter hereof and thereof.
14.03 Expenses. Except as otherwise expressly provided in this
Agreement (including without limitation as provided in Section 12.02), whether
or not the transactions contemplated hereby are consummated, each party will pay
its own costs and expenses, and Sellers shall pay the costs and expenses of the
Company, incurred in connection with the negotiation, execution and closing of
this Agreement and the Operative Agreements and the transactions contemplated
hereby and thereby.
14.04 Public Announcements. At all times at or before the
Closing, Sellers and Purchaser will consult with each other with respect to, and
where reasonably practicable, prior to making, any reports, statements or
releases to the public with respect to this Agreement or the transactions
contemplated
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63
hereby. Sellers and Purchaser will also consult with each other with respect to
the content of any press release to be issued immediately following the Closing
announcing the consummation of the transactions contemplated by this Agreement.
Nothing contained in this Section 14.04 shall be deemed to prohibit any party
from complying with any Law or any requirement of any stock exchange binding
upon such party with respect to any public announcements.
14.05 Confidentiality. Each party hereto will hold, and will
cause its Affiliates and their respective Representatives to hold, in strict
confidence from any Person (other than any such Affiliate or Representative),
unless (i) compelled to disclose by judicial or administrative process
(including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of
Governmental or Regulatory Authorities) or by other requirements of Law or (ii)
disclosed in an Action or Proceeding brought by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder, all documents and
information concerning the other party or any of its Affiliates furnished to it
by the other party or such other party's Representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known by
the party receiving such documents or information, (b) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired by the
receiving party from another source if the receiving party is not aware that
such source is under an obligation to another party hereto to keep such
documents and information confidential; provided that following the Closing the
foregoing restrictions will not apply to Purchaser's use of documents and
information concerning the Company furnished by Sellers hereunder. In the event
the transactions contemplated hereby are not consummated, upon the request of
the other party, each party hereto will, and will cause its Affiliates and their
respective Representatives to, promptly (and in no event later than five (5)
Business Days after such request) redeliver or cause to be redelivered all
copies of documents and information furnished by the other party in connection
with this Agreement or the transactions contemplated hereby and destroy or cause
to be destroyed all notes, memoranda, summaries, analyses, compilations and
other writings related thereto or based thereon prepared by the party furnished
such documents and information or its Representatives.
14.06 Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party
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64
of any term or condition of this Agreement, in any one or more instances, shall
be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
14.07 Amendment. This Agreement may be amended, supplemented
or modified only by a written instrument duly executed by or on behalf of each
party hereto.
14.08 No Third Party Beneficiary. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article XI.
14.09 No Assignment; Binding Effect. Neither this Agreement
nor any right, interest or obligation hereunder may be assigned by any party
hereto without the prior written consent of the other party hereto and any
attempt to do so will be void, except (a) for assignments and transfers by
operation of Law and (b) that Purchaser may assign any or all of its rights,
interests and obligations hereunder (including without limitation its rights
under Article XI) to (i) a wholly-owned subsidiary, provided that any such
subsidiary agrees in writing to be bound by all of the terms, conditions and
provisions contained herein, (ii) any post-Closing purchaser of all of the
issued and outstanding stock of the Company or a substantial part of its assets
or (iii) any financial institution providing purchase money or other financing
to Purchaser or the Company from time to time as collateral security for such
financing, but no such assignment shall relieve Purchaser of its obligations
hereunder. Subject to the preceding sentence, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
14.10 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
14.11 Invalid Provisions. If any provision of this Agreement
is held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
and (c) the remaining provisions of this Agreement will remain in full force and
effect and will not be
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65
affected by the illegal, invalid or unenforceable provision or by
its severance herefrom.
14.12 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
Contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
14.13 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
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66
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
PRIMARK CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman, President & CEO
XXXXX & CO., INC.
By: /s/ X. X. Xxxxxxx
--------------------------------
Name:
Title: Chairman & CEO
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
XXX and XXXXX XXXXXXXXX TRUST
By: /s/ Xxxxxx X. Xxxxxxxxx, Trustee
---------------------------------
Xxxxxx X. Xxxxxxxxx, Trustee
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