EXECUTION COPY
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PURCHASE AGREEMENT
by and among
ATTENTION, LLC,
THE HOLDERS OF THE INTERESTS OF
ATTENTION, LLC,
THE SELLERS' REPRESENTATIVE
and
WEST CORPORATION
Dated as of July 23, 2002
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TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS......................................................... 1
SECTION 2. PURCHASE AND SALE OF INTERESTS...................................... 9
SECTION 2.1. Closing Date Transactions................................... 9
SECTION 2.2. Additional Purchase Price Payments.......................... 10
SECTION 2.3. Sellers' Representative..................................... 13
SECTION 3. ADJUSTMENT TO PURCHASE PRICE........................................ 14
SECTION 3.1. Closing Date Adjustments.................................... 14
SECTION 3.2. Post-Closing Determination.................................. 14
SECTION 3.3. Post-Closing Adjustment..................................... 15
SECTION 4. CLOSING............................................................. 15
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE SELLERS..................................................... 16
SECTION 5.1. Organization................................................ 16
SECTION 5.2. Qualification to Do Business................................ 16
SECTION 5.3. Authorization and Validity of Agreement; No Conflict or
Violation................................................... 16
SECTION 5.4. Consents and Approvals...................................... 16
SECTION 5.5. Membership Interests........................................ 17
SECTION 5.6. Subsidiaries and Equity Investments......................... 17
SECTION 5.7. Financial Statements........................................ 17
SECTION 5.8. Absence of Certain Changes or Events........................ 18
SECTION 5.9. Tax Matters................................................. 19
SECTION 5.10. Absence of Undisclosed Liabilities.......................... 20
SECTION 5.11. Leases...................................................... 20
SECTION 5.12. Assets of the Company....................................... 21
SECTION 5.13. Intellectual Property....................................... 21
SECTION 5.14. Software.................................................... 22
SECTION 5.15. Licenses and Permits........................................ 23
SECTION 5.16. Compliance with Law......................................... 23
SECTION 5.17. Litigation.................................................. 23
SECTION 5.18. Contracts................................................... 24
SECTION 5.19. Employee Plans.............................................. 25
SECTION 5.20. Insurance................................................... 26
SECTION 5.21. Transactions with Sellers and Affiliates.................... 26
SECTION 5.22. Change in Ownership......................................... 27
SECTION 5.23. Labor Matters............................................... 27
SECTION 5.24. Environmental Matters....................................... 27
SECTION 5.25. Customers................................................... 28
SECTION 5.26. No Brokers.................................................. 28
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SECTION 5.27. Illegal or Unauthorized Payments; Political Contributions... 28
SECTION 5.28. Trust or Custodial Accounts................................. 29
SECTION 5.29. Annual Operating Plan....................................... 29
SECTION 5.30. Accuracy of Information..................................... 29
SECTION 6. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS........... 29
SECTION 6.1. Title to Interests.......................................... 29
SECTION 6.2. Authorization and Validity of Agreements.................... 29
SECTION 6.3. No Conflict or Violation.................................... 30
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE BUYER........................ 30
SECTION 7.1. Corporate Organization...................................... 30
SECTION 7.2. Qualification to Do Business................................ 30
SECTION 7.3. Authorization and Validity of Agreement..................... 30
SECTION 7.4. No Conflict or Violation.................................... 30
SECTION 7.5. Consents and Approvals...................................... 31
SECTION 7.6. SEC Reports................................................. 31
SECTION 7.7. Financial Ability........................................... 31
SECTION 7.8. No Brokers.................................................. 31
SECTION 7.9. Accuracy of Information..................................... 31
SECTION 8. COVENANTS OF THE COMPANY AND THE SELLERS........................... 32
SECTION 8.1. Conduct of Business Before the Closing Date................. 32
SECTION 8.2. Consents and Approvals...................................... 34
SECTION 8.3. Access to Properties and Records............................ 35
SECTION 8.4. Negotiations................................................ 35
SECTION 8.5. Reasonable Best Efforts..................................... 35
SECTION 8.6. Notice of Breach............................................ 35
SECTION 8.7. Disclosure Schedules........................................ 36
SECTION 9. ADDITIONAL COVENANTS OF THE SELLERS................................ 36
SECTION 9.1. Restrictive Covenants....................................... 36
SECTION 9.2. "Key Man" Life Insurance.................................... 38
SECTION 10. COVENANTS OF THE BUYER............................................. 38
SECTION 10.1. Actions Before Effective Date............................... 38
SECTION 10.2. Consents and Approvals...................................... 38
SECTION 10.3. Concurrent Acquisitions..................................... 38
SECTION 10.4. Access to Properties and Records............................ 39
SECTION 10.5. Reasonable Best Efforts..................................... 39
SECTION 10.6. Notice of Breach............................................ 39
SECTION 10.7. Release of Guaranties....................................... 39
SECTION 10.8. Directors' and Officers' Insurance.......................... 39
SECTION 10.9. Disclosure Schedules........................................ 39
SECTION 11. TAXES.............................................................. 40
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SECTION 11.1. Tax Covenants...................................................... 40
SECTION 11.2. Purchase Price Allocation.......................................... 40
SECTION 11.3. Cooperation........................................................ 40
SECTION 11.4. Transfer Taxes..................................................... 40
SECTION 12. MANAGEMENT AND MANAGEMENT INCENTIVE PLANS................................. 41
SECTION 12.1. Management of the Company.......................................... 41
SECTION 12.2. Reports............................................................ 41
SECTION 12.3. Key Employee and Management Profit-Sharing Bonus Program........... 41
SECTION 12.4. Management Ownership Incentive Program............................. 42
SECTION 12.5. Annual Incentive Compensation...................................... 42
SECTION 12.6. Long-Term Incentive Compensation................................... 43
SECTION 13. INDEMNIFICATION........................................................... 43
SECTION 13.1. Survival........................................................... 43
SECTION 13.2. Indemnification by the Sellers..................................... 43
SECTION 13.3. Indemnification by the Buyer....................................... 46
SECTION 13.4. Procedures for Indemnification..................................... 47
SECTION 13.5. Exclusive Remedy................................................... 47
SECTION 14. CONDITIONS PRECEDENT TO PERFORMANCE BY THE COMPANY AND THE SELLERS........ 47
SECTION 14.1. Representations and Warranties of the Buyer........................ 47
SECTION 14.2. Performance of the Obligations of the Buyer........................ 48
SECTION 14.3. Consents and Approvals............................................. 48
SECTION 14.4. HSR Act............................................................ 48
SECTION 14.5. No Violation of Orders............................................. 48
SECTION 14.6. No Material Adverse Change......................................... 48
SECTION 14.7. Employment Agreements.............................................. 48
SECTION 14.8. Opinion of Counsel................................................. 48
SECTION 14.9. Other Closing Documents............................................ 48
SECTION 14.10. Legal Matters...................................................... 49
SECTION 15. CONDITIONS PRECEDENT TO PERFORMANCE BY THE BUYER.......................... 49
SECTION 15.1. Representations and Warranties of the Company and the Sellers...... 49
SECTION 15.2. Performance of the Obligations of the Company and the Sellers...... 49
SECTION 15.3. Consents and Approvals............................................. 49
SECTION 15.4. Interests.......................................................... 49
SECTION 15.5. HSR Act............................................................ 49
SECTION 15.6. No Violation of Orders............................................. 49
SECTION 15.7. No Material Adverse Change......................................... 50
SECTION 15.8. Opinion of Counsel................................................. 50
SECTION 15.9. Releases of Sellers and Officers; Resignations..................... 50
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SECTION 15.10. Other Closing Documents................................ 50
SECTION 15.11. Legal Matters.......................................... 50
SECTION 15.12. Dissolution of Attention II............................ 50
SECTION 15.13. Consulting Agreement................................... 50
SECTION 15.14. Clearance Certificates................................. 51
SECTION 15.15. Employment Agreements.................................. 51
SECTION 16. TERMINATION................................................... 51
SECTION 16.1. Conditions of Termination.............................. 51
SECTION 16.2. Effect of Termination.................................. 51
SECTION 16.3. Willful Breach......................................... 52
SECTION 17. SELLERS' REPRESENTATIVE....................................... 52
SECTION 17.1. Appointment; Acceptance................................ 52
SECTION 17.2. Authority.............................................. 52
SECTION 17.3. Actions................................................ 53
SECTION 17.4. Effectiveness.......................................... 53
SECTION 17.5. Indemnification; Fees and Expenses..................... 53
SECTION 17.6. Successor.............................................. 54
SECTION 17.7. Survival of Authorizations............................. 54
SECTION 18. MISCELLANEOUS................................................. 54
SECTION 18.1. Successors and Assigns................................. 54
SECTION 18.2. Governing Law, Jurisdiction............................ 54
SECTION 18.3. Expenses............................................... 54
SECTION 18.4. Severability........................................... 55
SECTION 18.5. Notices................................................ 55
SECTION 18.6. Amendments; Waivers.................................... 56
SECTION 18.7. Public Announcements................................... 56
SECTION 18.8. Entire Agreement....................................... 56
SECTION 18.9. Parties in Interest.................................... 56
SECTION 18.10. Section and Paragraph Headings......................... 57
SECTION 18.11. Counterparts........................................... 57
SECTION 18.12. Knowledge.............................................. 57
SECTION 18.13. Arbitration............................................ 57
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INDEX TO SCHEDULES
1 Sellers
1.1 Working Capital
2.2(b) EBIT Multiple
3.1 GAAP Exceptions
5.2 Foreign Qualifications
5.3 Conflicts or Violations
5.4 Consents and Approvals
5.5 Sellers and Seller Percentages
5.6 Subsidiaries and Equity Investments
5.7 Financial Statements
5.8(a) & (b) Certain Changes or Events
5.9 Tax Matters
5.10 Undisclosed Liabilities and Long-Term Debt
5.11(a), (b) & (c) Leases
5.12(a) & (b) Assets
5.13(a) & (b) Exceptions to Intellectual Property
5.13(c) Listed Intellectual Property
5.13(d) Intellectual Property Agreements
5.14 Software
5.15 Licenses and Permits
5.16 Compliance with Law
5.17 Litigation
5.18 Contracts
5.19 Employee Plans
5.20 Insurance
5.21 Transactions with Sellers and Affiliates
5.23(a) Employment and Consulting Agreements
5.23(b) Compliance with Labor Laws
5.25 Customers
5.29 Annual Operating Plan
6.1 Title to Interests
8.1(a) Conduct of Business Before the Closing Date
8.1(c) Client Obligation
10.7 Release of Guaranties
11.2 Purchase Price Allocation
12.5 Annual Incentive Compensation
13.2(c) Losses not Subject to Deductible
15.9 Employees
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INDEX TO EXHIBITS
A Form of Written Assignment
B Form of Amended and Restated Employment Agreement
C Form of Opinion of Counsel to the Buyer
D Form of Opinion of Counsel to the Company and the Sellers
E Form of Release
F Form of Letter of Resignation
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PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of July 23, 2002, by and among Attention,
LLC, a Georgia limited liability company (the "Company"), the owners of all of
the issued and outstanding membership interests of the Company specifically set
forth on Schedule 1 hereto (collectively, the "Sellers"), the Sellers'
Representative (as such term is defined in Section 17.1) and West Corporation, a
Delaware corporation (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Sellers own all of the issued and outstanding membership
interests of the Company (the "Interests"); and
WHEREAS, the Buyer desires to purchase the Interests from the Sellers,
and the Sellers desire to sell the Interests to the Buyer, in each case upon the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective covenants and agreements hereinafter contained, the parties hereby
agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
"Action" -- See Section 5.17;
"Actual Working Capital Deficiency" -- See Section 3.3(a);
"Actual Working Capital Surplus" -- See Section 3.3(b);
"Additional Purchase Price Payment" -- See Section 2.2(a);
"Additional Purchase Price Payment Period" -- See Section 2.2(a);
"Affiliate" shall mean, with respect to a Person, any Person, directly
or indirectly, controlling, controlled by or under common control with the
Person specified;
"Assignment" -- See Section 2.3(a);
"Attention II" shall mean Attention II, Inc., a Georgia corporation
and a wholly owned subsidiary of the Company;
"Board" -- See Section 7.3;
"Bonus Program" -- See Section 12.3;
"Broker" shall mean Kaulkin, Xxxxxxxx Company;
"Business Day" shall mean a day other than a Saturday, Sunday or other
day which is not an authorized national holiday in the United States;
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"Buyer" -- See Preamble hereto;
"Buyer Indemnitees" -- See Section 13.2;
"Capital Charges" shall mean as of any date of determination
with respect to the Company, the sum of (a) the total cash and non-cash cost of
any (i) acquisition made after the Closing Date by or for the benefit of the
Company or any of its Affiliates (so long as such Affiliate is engaged in
substantially the same line of business as the Company, such acquired entities
or assets are managed by or under the direction of Xxxxxxxx as provided for in
Section 12.1, and the operations of such acquired entities or assets are
included in the calculation of the Company's EBIT as provided for in this
Agreement), or (ii) any investment made after the Closing Date by or for the
benefit of the Company or any such Affiliate outside of the ordinary course of
business consistent with past practice (so long as such Affiliate is engaged in
substantially the same line of business as the Company, such investment is
managed by or under the direction of Xxxxxxxx as provided for in Section 12.1,
and the operations related to such investment are included in the calculation of
the Company's EBIT as provided for in this Agreement), in each case of clauses
(i) and (ii) above after the date hereof (including, without limitation, cash
payment, assumption of debt, the fair market value of any non-cash
consideration, fees (investment banking, brokerage, accounting, consulting,
legal, auditing and the like), and expenses) plus (b) an annual charge of 5.5%
of any such capital used on such acquisition or any such investment from the
date of such acquisition or investment, as the case may be, through the date of
determination. Following the Closing Date, not later than 30 days following the
date on which a transaction made by or for the benefit of the Company or any of
its Affiliates and which is expected to be reflected in Capital Charges is
consummated, the Buyer shall provide the Sellers' Representative with a schedule
of the Capital Charges incurred as a result of such transaction;
"Cash Balance" -- See Section 2.2(f);
"Cause" shall be deemed to exist if (i) the Company's (or any
of its successors') board of directors or similar governing body, in good faith,
determines that an Eligible Seller has engaged, during the performance of his or
her duties hereunder, in acts or omissions constituting dishonesty, fraud,
willful misconduct or gross negligence relating to the business of the Company
(or any of its successors) or such Eligible Seller's duties under his or her
employment agreement, or any other conduct which materially and adversely
affects the business or reputation of the Company (or any of its successors), or
(ii) the Eligible Seller is convicted of a felony or any crime involving moral
turpitude;
"Change of Control Event" shall mean the occurrence of the
events in paragraph (i) and either paragraph (ii) or (iii) below:
(i) (A) any Person (including any syndicate or group deemed
to be a "person" under Section 13(d)(3) of the Securities and
Exchange Act of 1934, as amended), after the date hereof, becomes
the beneficial owner, directly or indirectly, through a purchase
or other acquisition transaction or series of transactions of
shares of the Buyer's or the Company's or any of the Company's
parents (or any of their successors) capital stock entitling such
Person to exercise in excess of 50% of the total voting power of
all shares
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of the Buyer's or the Company's or any of the Company's parents (or any
of their successors) capital stock entitled to vote generally in the
election of directors; or (B) the Buyer or the Company or any of the
Company's parents (or any of their successors) consolidates with, or
the Buyer or the Company or any of the Company's parents (or any of
their successors) merges into, any other Person, any other Person
merges into the Buyer or the Company or any of the Company's parents
(or any of their successors) or the Buyer or the Company or any of the
Company's parents (or any of their successors) sells or transfers its
assets, as an entirety or substantially as an entirety, to another
Person (other than (x) any such transaction pursuant to which the
holders of the such relevant entity's common stock, immediately prior
to such transaction have, directly or indirectly, shares of capital
stock of the continuing or surviving corporation immediately after such
transaction which entitle such holders to exercise in excess of 50% of
the total voting power of all shares of capital stock of the continuing
or surviving corporation entitled to vote generally in the election of
directors and (y) any merger which does not result in any
reclassification, conversion, exchange or cancellation of the
outstanding shares of such relevant entity's common stock or in which
the Buyer participates solely to change the jurisdiction of its
incorporation and results in a reclassification, conversion or exchange
of outstanding shares of such relevant entity's common stock solely
into shares of stock carrying substantially the same relative rights as
such common stock); and
(ii) a majority of the voting seats (other than vacant
seats) on the board of directors or similar governing body, as
applicable, of the Buyer or the Company or any of the Company's parents
(or any of their successors) shall, at the time of the consummation of
the transaction contemplated in paragraph (i) above, be occupied by
Persons who were neither nominated by a majority of the board of
directors of such relevant entity nor appointed by directors so
nominated; or
(iii) at least three out of the top five of the executive
officers of the Buyer or the Company or any of the Company's parents
(or any of their successors), in office prior to the date of the
consummation of the transaction contemplated in paragraph (i) above,
should no longer be in such office.
For the purposes of the foregoing, the term "beneficial
owner" will be determined in accordance with Rule 13d-3 under the Securities and
Exchange Act of 1934, as amended;
"Client Obligation" -- See Section 8.1(c);
"Closing" -- See Section 4;
"Closing Balance Sheet" -- See Section 3.2;
"Closing Balance Sheet Report" -- See Section 3.2;
"Closing Date" -- See Section 4;
"Closing Date Purchase Price" -- See Section 2.1(a);
"Code" shall mean the Internal Revenue Code of 1986, as
amended;
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"Company" -- See preamble hereto, it being understood that such term
shall include any Person surviving to a merger of the Company with such Person;
"Contract" -- See Section 5.18(c);
"Controlled Group" -- See Section 5.19(d);
"Xxxxxxx" shall mean Xx. Xxxx X. Xxxxxxx, Chief Financial Officer of
the Company;
"Disability" shall mean any physical or mental disability or illness,
as a result of which an Eligible Seller is unable to perform the essential
functions of his or her position with the Company for a period of 120 days
(whether consecutive or not) during any 360-day period;
"EBIT" shall mean Earnings before Interest and Taxes (each such
initially capitalized term having the definition attributed thereto by GAAP);
provided, however, that the following shall be excluded from EBIT (and
consequently shall not reduce EBIT): (i) amortization of intangible assets in
connection with acquisitions, (ii) any distributions made or expenses booked
related to the Additional Purchase Price Payments, if any, (iii) the Ownership
Plan, (iv) the Management Incentive Payments, if any, (v) the cost of corporate
services (but, for greater certainty, not centralized services) allocated to the
Buyer's Affiliates in the normal course of the Buyer's business and consistent
with the Buyer's past practice of allocating such services to its Affiliates,
(vi) the Sellers' Representative's non-recurring expenses and costs (which, for
greater certainty, are not due or payable by the Buyer or the Company), (vii)
the costs associated with the "key man" life insurance policy described in
Section 9.2(a), (viii) the Client Obligation, and (ix) the fees, expenses and
costs of the Company incurred in connection with this Agreement and the
transactions contemplated hereby, but, in the case of clauses (viii) and (ix),
only to the extent that such amounts have actually been paid by the Company
prior to Closing or accrued by the Company prior to Closing so long as such
accruals are reflected in the Working Capital;
"EBIT Multiple" -- See Schedule 2.2(b);
"EBIT Statement" -- See Section 12.2;
"Eligible Employees" -- See Section 12.4(b);
"Eligible Sellers" -- shall mean the Sellers;
"Employment Agreement" shall mean the employment agreement, dated as
of the date hereof, by and between Xxxxxxxx and the Company and effective as of
the Closing Date;
"Environmental Laws" -- See Section 5.24;
"Equity Value" -- See Section 2.2(b);
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended;
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"Estimated Closing Balance Sheet" -- See Section 3.1;
"Financial Statements" -- See Section 5.7;
"Forfeiting Eligible Seller" shall mean any Eligible Seller who
forfeits his or her Additional Purchase Price Payments as provided in Section
2.2(c)(i);
"GAAP" shall mean United States generally accepted accounting
principles, consistently applied;
"Good Reason" shall be deemed to exist if (A) without an Eligible
Seller's consent: (i) the Company materially diminishes such Eligible Seller's
title, duties, responsibilities or compensation and benefits; or (ii) the
Eligible Seller's principal office location is relocated more than fifty (50)
miles from its current location, (B) the Company materially breaches such
Eligible Seller's employment agreement with the Company, or (C) the Buyer or the
Company materially breaches any of their respective obligations under this
Agreement; provided, however, that in no event shall Xxxxxxxx' Voluntary
Resignation or the termination of Xxxxxxxx' employment with the Company for any
reason whatsoever constitute "Good Reason" for any other Eligible Seller;
provided, further, however, a termination shall not be treated as a termination
for Good Reason unless an Eligible Seller shall have delivered written notice to
the Company within thirty (30) days of having actual knowledge of the occurrence
of one of such events stating that the Eligible Seller intends to terminate his
or her employment for Good Reason and specifying the factual basis for such
termination, and such event, if capable of being cured, shall not have been
cured by the Company or the Buyer within thirty (30) days of the receipt of such
notice;
"Governmental Entity" shall mean any federal, state or foreign
governmental, regulatory or other public body, agency or authority (including
self-regulatory organizations), domestic or foreign;
"Hardship" shall mean a severe hardship resulting from an illness or
accident of the Eligible Seller or a dependent or spouse of the Eligible Seller,
a sudden and unexpected loss of the Eligible Seller's property due to casualty,
or other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the Eligible Seller's control; provided, however, that
the determination of "Hardship" shall be made in accordance with Section 18.13;
"HSR Act" -- See Section 7.5;
"Indemnitee" -- See Section 13.4;
"Indemnitor" -- See Section 13.4;
"Independent Accounting Firm" -- See Section 3.2;
"Intellectual Property" shall mean all of the following owned by,
issued to, used by or licensed to the Company: (i) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations, continuations-
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in-part, revisions, extensions and reexaminations thereof; (ii) all trademarks,
service marks, trade dress, logos, trade names, and corporate names, together
with all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications, registrations
and renewals in connection therewith; (iii) all copyrightable works (including,
without limitation, all software developed by the Company, all copyrights, and
all applications, registrations and renewals in connection therewith); (iv) all
mask works and all applications, registrations and renewals in connection
therewith; (v) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals); (vi) all computer
software (including data and related documentation); (vii) all Internet Web Site
and domain names; (viii) all other proprietary rights; and (ix) all copies and
tangible embodiments thereof (in whatever form or medium); including, without
limitation, those items listed in Schedules 5.13(c), 5.13(d) and 5.14 hereto;
"Interests" -- See Recitals hereto;
"Interim Balance Sheet" -- See Section 5.7;
"XxXxxxx" shall mean Xx. Xxxx XxXxxxx;
"Leased Real Property" -- See Section 5.11(a);
"Leases" -- See Section 5.11(a);
"Licenses and Permits" shall mean licenses, permits, franchises,
authorizations and approvals issued or granted to the Company and each of its
Subsidiaries by any Governmental Entity;
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or other), conditional sale agreement, claim,
charge, limitation or restriction;
"Listed Intellectual Property" -- See Section 5.13(c);
"Long-Term Debt" shall mean the amount equal to the amount of
long-term indebtedness, of the Company and its Subsidiaries specifically
described on Schedule 5.10 as of the close of business on the Closing Date
(which schedule shall include, without limitation, capitalized lease obligations
but exclude the Client Obligation), determined in accordance with GAAP subject
to those exceptions specifically set forth on Schedule 3.1;
"Losses" -- See Section 13.2(a);
"Management Incentive Payments" -- See Section 12.4(b);
"Material Adverse Effect" -- See Section 5.8(a)(i);
"Maximum Additional Purchase Price Payment Amount" shall mean
$50,000,000; provided, however, that if there shall be one or more Forfeiting
Eligible Sellers, the
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Maximum Additional Purchase Price Payment Amount to be paid to the remaining
Sellers shall be (i) reduced by an amount equal to all such Forfeiting Eligible
Sellers' Seller Percentage of $50,000,000, and (ii) increased by an amount equal
to the aggregate amount of all Additional Purchase Price Payments previously
paid to all such Forfeiting Eligible Sellers.
"Minimum Additional Purchase Price Payment" shall mean the amount set
forth opposite each of the Additional Purchase Price Payment Periods below:
Year ended December 31 Minimum Amount
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2003 $5,000,000
2004 $5,250,000
2005 $5,500,000
2006 $5,750,000
provided, however, that in the event there shall be one or more
Forfeiting Eligible Sellers, each of the remaining Minimum Additional Purchase
Price Payments set forth above shall be reduced by an amount equal to all such
Forfeiting Eligible Sellers' Seller Percentage of each such Minimum Additional
Purchase Price Payment (whether or not paid);
"Multiemployer Plans" -- See Section 5.19(e);
"Options" -- See Section 12.6;
"Organizational Documents" shall mean certificates of incorporation,
by-laws, certificates of formation, limited liability company operating
agreements, partnership or limited partnership agreements or other formation or
governing documents of a particular entity;
"Ownership Plan" -- See Section 12.4(a);
"Per Share Price" -- See Section 2.2(f);
"Person" shall mean any individual, corporation, company, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, Governmental Entity or other entity;
"Plans" -- See Section 5.19(a);
"Post-Retirement Benefits" -- See Section 5.19(f);
"Pre-Closing Tax Period" shall mean any Tax period ending on or before
the Closing Date;
"Proprietary Software" -- See Section 5.14(a);
"Punches" shall mean Xx. Xxxxxx Punches;
"Purchase Price" -- See Section 2.1(a);
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"Restricted Period" -- See Section 9.1(e);
"Xxxxxxxx" shall mean Xx. Xxxxx X. Xxxxxxxx, General Manager of the
Company;
"Xxxxxx" shall mean Xx. Xxxx Xxxxxx;
"SEC" shall mean the Securities and Exchange Commission;
"SEC Reports" -- See Section 7.6;
"Seller Delivered Agreements" -- See Section 17.2(a);
"Seller Percentage" shall mean, with respect to any Seller, the
percentage set forth opposite such Seller's name on Schedule 5.5 hereto;
"Sellers" -- See Preamble hereto;
"Sellers' Representative" -- See Section 17.1;
"Shares" -- See Section 2.2(f);
"Significant Customers" -- See Section 5.25;
"Software" -- See Section 5.14(a);
"Straddle Period" shall mean any Tax period that begins on or prior to
the Closing Date and ends after the Closing Date;
"Straddle Tax Return" shall mean any Tax Return required to be filed
by or with respect to the Company relating to a Straddle Period;
"Subsidiaries" shall mean, with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereto is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof;
"Tax Return" shall mean any report, return, information return,
exhibit, filing, claim for refund or other information, including any schedules
or attachments thereto, and any amendments to any of the foregoing required to
be supplied to a Taxing Authority in connection with Taxes;
"Tax" and "Taxes" shall mean all federal, state, local or foreign
taxes, including, without limitation, income, gross income, gross receipts,
production, excise, employment, sales, use, transfer, ad valorem, profits,
license, capital stock, franchise, severance, stamp, withholding, Social
Security, employment, unemployment, disability, worker's compensation, payroll,
utility, windfall profit, custom duties, personal property, real property,
registration, alternative or add-on minimum, estimated and other taxes,
governmental fees or like charges of any kind whatsoever,
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including any interest, penalties or additions thereto, imposed by any
Governmental Entity ("Taxing Authority"), whether disputed or not; and "Tax"
shall mean any one of them;
"Taxing Authority" -- See the definition of "Tax" in Section 1;
"Threshold EBIT Multiple" -- See Schedule 2.2(b);
"Transfer Taxes" -- See Section 11.4;
"Voluntary Resignation" shall mean an Eligible Seller's voluntary
resignation, which resignation shall not occur at the request of the Buyer or
the Company or any Affiliate thereof;
"Welfare Plan" -- See Section 5.19(c); and
"Working Capital" shall mean the amount equal to the amount of the
current assets less the amount of the current liabilities of the Company as of
the close of business on the Closing Date, the calculation of which is
specifically set forth on Schedule 1.1, determined in accordance with GAAP
subject to those exceptions specifically set forth on Schedule 3.1 (it being
understood that Working Capital shall specifically exclude the Client
Obligation, to the extent that the full amount of such obligation has actually
been paid by the Company prior to Closing).
SECTION 2. PURCHASE AND SALE OF INTERESTS.
SECTION 2.1. Closing Date Transactions.
(a) Subject to the terms and conditions set forth in this Agreement
and in reliance upon the representations and warranties of the Company, the
Sellers and the Buyer set forth below, on the Closing Date the Buyer shall
purchase from each of the Sellers and each of the Sellers shall sell to the
Buyer all of such Seller's Interests, free and clear of all Liens. The aggregate
purchase price for the Interests (the "Purchase Price") shall be (i) $35,000,000
in cash (the "Closing Date Purchase Price"), and (ii) the Additional Purchase
Price Payments, if any, to be paid by the Buyer pursuant to Section 2.2 hereof.
The Closing Date Purchase Price shall be paid by the Buyer in accordance with
Section 2.1(b) and shall be subject to adjustment as provided in Section 3.
(b) On the Closing Date, the Assignments deposited with the Sellers'
Representative by the Sellers pursuant to Section 2.3(a) shall be delivered by
the Sellers' Representative to the Buyer, against payment by the Buyer to each
Seller of such Seller's Percentage of the Closing Date Purchase Price. Such
payment shall be made by wire transfer of immediately available funds to such
account of each Seller as the Sellers' Representative shall, not less than three
Business Days prior to the Closing Date, designate in writing to the Buyer.
(c) On the Closing Date, the Buyer shall execute each of the documents
and make each of the deliveries to the Sellers and the Company set forth in
Section 14.
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(d) On the Closing Date, the Sellers and the Company shall execute
each of the documents and make each of the deliveries to the Buyer set forth in
Section 15.
(e) On or prior to the Closing Date, the Company shall pay the Client
Obligation in full and in cash.
(f) On the Closing Date, the Buyer shall pay all Long-Term Debt in
full.
SECTION 2.2. Additional Purchase Price Payments.
(a) Subject to Section 13.2(d) and the other terms and conditions set
forth in this Agreement, the Buyer shall, after the Closing Date, make the
payments set forth in Section 2.2(b) or 2.2(c) (each, an "Additional Purchase
Price Payment") for each of the calendar years ended December 31, 2003, 2004,
2005 and 2006 (each such year, an "Additional Purchase Price Payment Period") to
each of the Sellers.
(b) The Buyer shall pay to the Sellers an Additional Purchase Price
Payment for each Additional Purchase Price Payment Period calculated as set
forth in this Section 2.2(b); provided, however, that if any of the events set
forth in Section 2.2(c) shall occur or otherwise become applicable, the Buyer
shall make payments to the Eligible Sellers in accordance with Section 2.2(c) in
place of payments pursuant to this Section 2.2(b).
The aggregate amount of an Additional Purchase Price Payment for any
Additional Purchase Price Payment Period shall be equal to 7.5% multiplied by
the Equity Value for such period. "Equity Value" shall mean the Company's EBIT
for an Additional Purchase Price Payment Period, multiplied by the applicable
EBIT Multiple less the Company's Capital Charges for such period; provided,
however, that in the event the Company's EBIT for any Additional Purchase Price
Payment Period exceeds the maximum amount of the range applicable to the
Threshold EBIT Multiple in such period, the Equity Value for such year shall be
the sum of:
(i) the maximum amount of the range applicable to the Threshold
EBIT Multiple for such year multiplied by 10; plus
(ii) the amount in excess of such maximum amount (on an
incremental basis per the range applicable to the EBIT Multiples for such
year) multiplied by the applicable EBIT Multiples for such year,
less the Company's Capital Charges for such year.
In no event shall the Additional Purchase Price Payments payable by
the Buyer pursuant to this Section 2.2(b):
(A) for any Additional Purchase Price Payment Period be less
than the Minimum Additional Purchase Price Payment for such period, except
if the aggregate amount of all of the Additional Purchase Price Payments
previously paid by the Buyer exceeds the aggregate amount of all of the
Minimum Additional Purchase Price Payments; and
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(B) exceed, in the aggregate, the Maximum Additional Purchase
Price Payment Amount.
With respect to any Additional Purchase Price Payment or Minimum
Additional Purchase Price Payment payable by the Buyer hereunder, each Seller
shall receive such Seller's Seller Percentage of such payment; provided,
however, that in the event any Minimum Additional Purchase Price Payment shall
be reduced by reason of there being one or more Forfeiting Eligible Sellers,
each Seller (other than the Forfeiting Eligible Seller(s)) shall receive a
percentage of such Minimum Additional Purchase Price Payment as is equal to such
Seller's Seller Percentage of the aggregate amount of the remaining Interests
held by the Sellers other than the Forfeiting Eligible Seller(s).
Notwithstanding anything to the contrary in this Section 2.2(b),
Punches shall always be entitled to receive his payment (i.e., his Seller
Percentage of any Additional Purchase Price Payment) in accordance with this
Section 2.2(b).
(c) As liquidated damages for the expected loss of goodwill and going
concern value, the right of any Eligible Seller (including, without limitation,
Xxxxxxxx) to receive an Additional Purchase Price Payment as set forth in
Section 2.2(b) shall be subject to the occurrence of any of the following:
(i) in the event of (A) such Eligible Seller's Voluntary
Resignation other than as provided in paragraph (ii) or (iii) below, or (B)
the termination of such Eligible Seller's employment with the Company for
Cause by reason of material fraud to or embezzlement from the Buyer, the
Company or any of their Affiliates determined in accordance with Section
18.13, such Eligible Seller shall, (X) in the case of a Voluntary
Resignation pursuant to clause (A) above, forfeit his or her right to any
Additional Purchase Price Payment(s), if any, as are payable pursuant to
this Section 2.2 after the date of such resignation (but, for greater
certainty, he or she shall be entitled to any Additional Purchase Price
Payment earned for the Additional Purchase Price Payment Period, if any,
immediately preceding the date of such Voluntary Resignation, so long as
such earned Additional Purchase Price Payment has not been paid as of such
date), and (Y) in the case of a termination of employment pursuant to
clause (B) above, forfeit his or her right to any Additional Purchase Price
Payment due and payable as of the date of such termination and such
Additional Purchase Price Payment(s), if any, as are payable pursuant to
this Section 2.2 thereafter;
(ii) in the event of such Eligible Seller's notice of Voluntary
Resignation within 30 days following a Change of Control Event, the
Additional Purchase Price Payments to which such Eligible Seller shall be
entitled (for the Additional Purchase Price Payment Period during which the
Change of Control Event occurs and for each such period thereafter) shall
be the Minimum Additional Purchase Price Payments;
(iii) in the event of such Eligible Seller's Voluntary
Resignation due to the Eligible Seller's Hardship or for Good Reason, such
Eligible Seller shall be entitled to the Additional Purchase Price Payments
calculated as set forth in Section 2.2(b);
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(iv) in the event of the termination of such Eligible Seller's
employment with the Company for Cause other than as provided in paragraph
(i) above, such Eligible Seller shall be entitled (for the Additional
Purchase Price Payment Period during which such termination occurs and for
each such period thereafter) to the Minimum Additional Purchase Price
Payments; and
(v) in the event of the termination of such Eligible Seller's
employment with the Company without Cause or by reason of such Eligible
Seller's death or Disability, such Eligible Seller shall be entitled to the
Additional Purchase Price Payments calculated as set forth in Section
2.2(b).
(d) The Additional Purchase Price Payments payable under Section
2.2(b) or (c) shall be paid by the Buyer to each Seller as set forth in this
Section 2.2(d). Within five (5) Business Days after the Buyer's delivery to the
Sellers' Representative of an EBIT Statement (which EBIT Statement shall be
delivered in accordance with Section 12.2) for an Additional Purchase Price
Payment Period including a determination of the Additional Purchase Price
Payment as provided in Section 12.2, the Buyer shall pay to each Seller, the
Additional Purchase Price Payment or the Minimum Additional Purchase Price
Payment, if any, with respect to such Additional Purchase Price Payment Period,
by wire transfer of immediately available funds to a separate bank account for
each Seller designated in writing to the Buyer by the Sellers' Representative.
If the Sellers' Representative objects to the statement in the manner permitted
by Section 12.2 and the amount of the Additional Purchase Price Payment for such
Additional Purchase Price Payment Period is subsequently determined to be
greater than as set forth in such statement, within five (5) Business Days after
such determination, the Buyer shall pay to each Seller such additional amount of
the Additional Purchase Price Payment or the Minimum Additional Purchase Price
Payment by wire transfer of immediately available funds to a separate bank
account for each Seller designated in writing by the Sellers' Representative.
(e) Interest shall accrue on any Additional Purchase Price Payment or
Minimum Additional Purchase Price Payment or any portion thereof not paid when
due, beginning on the date which is five (5) days following receipt by the Buyer
of written notice from the Sellers' Representative of the Buyer's failure to
make any such payment and continuing until such payment is paid, at a rate of
five and one-half percent (5.5%) per annum compounded daily.
(f) From and after the Closing Date until the date on which the Buyer
has paid the last Additional Purchase Price Payment, the Buyer shall:
(i) as soon as reasonably practicable but not later than ninety
(90) days following its receipt of a written request from the Sellers'
Representative, and regardless of its Cash Balance (defined below) as of
the end of any calendar quarter, establish an irrevocable letter of credit
for the benefit of the Sellers in an amount equal to the aggregate amount
of the Minimum Additional Purchase Price Payments (set forth in Section
2.2(b)) less the aggregate amount of all Additional Purchase Price Payments
paid by the Buyer, each as of the date of such request. The Buyer shall
maintain such letter of credit until the earlier of (A) such time as the
Sellers' Representative shall notify the Buyer in writing, or (B) the
establishment of a letter of credit pursuant to clause (ii)
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below. The Sellers shall be jointly and severally liable for all costs,
expenses and fees of the Buyer in establishing and maintaining a letter of
credit pursuant to this Section 2.2(f)(i) and such costs, expenses and fees
shall be paid by the Sellers' Representative to the Buyer not later than
the date on which the letter of credit is issued and thereafter, promptly
following the receipt by the Sellers' Representative of any written
statement from the Buyer of such costs, expenses and fees. In the event of
any failure to pay any such costs, expenses and fees, which shall not have
been remedied within fifteen (15) days following receipt by the Sellers'
Representative from the Buyer of written notice of such failure, the Buyer
may terminate the letter of credit established under this Section 2.2(f)(i)
and bring a claim against the Sellers, jointly and severally, for the
payment thereof; and
(ii) in the event the amount in the line item "Cash and cash
equivalents" on any consolidated balance sheet of the Buyer (the "Cash
Balance") as of the end of any calendar quarter is less than $50,000,000,
as soon as reasonably practicable but not later than ninety (90) days
thereafter, establish an irrevocable letter of credit for the benefit of
the Sellers in an amount equal to the lesser of (i) $25,000,000, and (ii)
the maximum aggregate amount of the remaining unpaid Additional Purchase
Price Payments payable by the Buyer. The Buyer shall maintain such letter
of credit until such time as the Cash Balance as of the end of any calendar
quarter exceeds $50,000,000. The Buyer shall be liable for all costs,
expenses and fees in establishing and maintaining a letter of credit
pursuant to this Section 2.2(f)(ii).
In the event the Buyer shall have established a letter of credit
pursuant to clause (i) above, and if the Cash Balance as of the end of any
calendar quarter shall be less than $50,000,000, the Buyer may, in place of
establishing a letter of credit pursuant to clause (ii) above, maintain the
letter of credit established pursuant to clause (i) above in an amount equal to
the amount required for a letter of credit pursuant to clause (ii) above. In
such case, the Buyer shall, as and from the last date of the calendar quarter in
which the Cash Balance is less than $50,000,000, be liable for all of the costs,
expenses and fees for the maintenance of such letter of credit; provided,
however, that the Buyer shall not be required to reimburse the Sellers for any
of their costs, expenses and fees previously paid or owing to the Buyer for the
establishment of such letter of credit or for the maintenance thereof.
SECTION 2.3. Sellers' Representative.
(a) On the date hereof, each Seller shall deposit with the Sellers'
Representative a written assignment, substantially in the form attached as
Exhibit A hereto (the "Assignment"), of each Seller's Interests being purchased
by the Buyer from such Seller, duly executed for transfer. The Sellers'
Representative shall hold the Assignments deposited by the Sellers pursuant to
this Section 2.3(a) in escrow until the Closing, at which time the Sellers'
Representative shall deliver such Assignments to the Buyer in accordance with
Section 2.1(b).
(b) In accordance with the provisions of Section 17, the Sellers'
Representative shall make any and all determinations and calculations on behalf
of each Seller set forth in this Agreement which determinations and calculations
shall be binding upon each Seller as if made by such Seller.
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SECTION 3. ADJUSTMENT TO PURCHASE PRICE.
SECTION 3.1. Closing Date Adjustments. At the Closing, the
Closing Date Purchase Price shall be adjusted as set forth in this Section 3.1.
Not more than five (5) Business Days nor less than two (2) Business Days before
the Closing Date, the Company and the Buyer shall, in good faith using the
Company's then available financial information, jointly prepare an estimated
balance sheet of the Company as of the close of business on July 31, 2002 (the
"Estimated Closing Balance Sheet") setting forth an estimate of the amount of
the Long-Term Debt. The Estimated Closing Balance Sheet shall be prepared in
accordance with GAAP subject to the exceptions specifically set forth on
Schedule 3.1. If the estimated Long-Term Debt set forth on the Estimated Closing
Balance Sheet is greater than $5,000,000, the Closing Date Purchase Price
payable to the Sellers at the Closing shall be reduced by an amount equal to
such excess. If the estimated Long-Term Debt set forth on the Estimated Closing
Balance Sheet is less than $5,000,000, the Closing Date Purchase Price payable
to the Sellers at the Closing shall be increased by an amount equal to such
deficiency.
SECTION 3.2. Post-Closing Determination. Within sixty (60)
calendar days after the Closing Date, the Buyer shall deliver to the Sellers'
Representative the balance sheet of the Company as of the close of business on
the Closing Date (the "Closing Balance Sheet"), prepared in accordance with GAAP
subject to the exceptions specifically set forth on Schedule 3.1. The Closing
Balance Sheet shall set forth a calculation of the Working Capital. During the
preparation of the Closing Balance Sheet by the Buyer and the period of any
dispute with respect to the application of this Section 3.2, the Sellers and the
Seller's Representative shall cooperate with the Buyer to the extent reasonably
requested by the Buyer to prepare the Closing Balance Sheet or to investigate
the basis for any dispute. The Closing Balance Sheet shall be examined by the
Sellers' Representative, and the Sellers' Representative shall, not later than
sixty (60) calendar days after receipt of the Closing Balance Sheet and any
information and documents reasonably requested in writing by the Sellers'
Representative, render a report thereon (the "Closing Balance Sheet Report").
The Closing Balance Sheet Report shall list those items, if any, to which the
Sellers' Representative (on behalf of the Sellers) takes exception and the
Sellers' Representative proposed adjustment. The Seller's Representative shall
be deemed to have agreed with all other items and amounts contained in the
Closing Balance Sheet to which no specific objection has been made. If the
Sellers' Representative fails to deliver to the Buyer the Closing Balance Sheet
Report within sixty (60) calendar days following receipt of the Closing Balance
Sheet (such sixty (60) day period being conditioned upon all such information
reasonably requested in writing by the Sellers' Representative being promptly
provided to the Sellers' Representative by the Buyer), the Sellers shall be
deemed to have accepted the Closing Balance Sheet for the purposes of any
adjustment to the Purchase Price under Section 3.3. If the Buyer does not give
the Sellers' Representative notice within twenty (20) calendar days following
receipt of the Closing Balance Sheet Report, the Buyer shall be deemed to have
accepted the Closing Balance Sheet as adjusted by the Sellers' Representative
for the purposes of any adjustment to the Purchase Price under Section 3.3. If
the Buyer gives the Sellers' Representative notice of objections to the Closing
Balance Sheet, and if the Sellers' Representative and the Buyer are unable,
within thirty (30) calendar days after receipt by the Sellers' Representative of
the notice from the Buyer of objections, to resolve the disputed exceptions,
such disputed exceptions shall be referred to PricewaterhouseCoopers or another
firm of independent certified public accountants mutually acceptable to the
Sellers'
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Representative and the Buyer (the "Independent Accounting Firm"). The
Independent Accounting Firm, in reviewing such dispute, shall only consider
those items or amounts in the Closing Balance Sheet as to which the Sellers'
Representative has, in the Closing Balance Sheet Report, disagreed and such
other issues as may reasonably be affected by the items as to which the Sellers'
Representative has disagreed in the Closing Balance Sheet Report. The
Independent Accounting Firm shall, within sixty (60) days following its
selection, deliver to the Sellers' Representative and the Buyer a written report
determining the proper treatment of such disputed exceptions, and its
determinations shall be conclusive and binding upon the parties thereto
(including the Sellers) for the purposes of any adjustment to the Purchase Price
under Section 3.3. The fees and disbursements of the Independent Accounting Firm
acting under this Section 3.2 shall be shared equally by the Buyer and the
Sellers.
SECTION 3.3. Post-Closing Adjustment.
(a) If the Working Capital1 is less than $1,000,000 (an
"Actual Working Capital Deficiency") based upon the preparation or computation
and final determination, pursuant to Section 3.2, of the Closing Balance Sheet,
the Additional Purchase Price Payment for any Additional Purchase Price Payment
Period, beginning with the Additional Purchase Price Payment Period ended
December 31, 2003, shall be reduced by the amount of the Actual Working Capital
Deficiency until such time as the Buyer has been reimbursed for the amount of
the Actual Working Capital Deficiency. The Buyer shall not receive any payment
or other consideration for an Actual Working Capital Deficiency other than
through the reduction of the Additional Purchase Price Payments provided for in
the preceding sentence of this Section 3.3(a).
(b) If the Working Capital is more than $1,000,000 (an "Actual
Working Capital Surplus") based upon the preparation or computation and final
determination, pursuant to Section 3.2, of the Closing Balance Sheet, the
Additional Purchase Price Payment for the Additional Purchase Price Payment
Period ended December 31, 2003 shall be increased by the amount of the Actual
Working Capital Surplus.
SECTION 4. CLOSING.
The closing (the "Closing") of the transactions contemplated
by this Agreement shall take place at such location as the parties shall
mutually agree at 10:00 a.m. on August 1, 2002, or, if all the conditions to the
obligations of the parties hereunder set forth in Sections 14 and 15 hereof have
not been satisfied or waived on or prior to such date, on the third Business Day
after all the conditions to the obligations of the parties hereunder set forth
in Sections 14 and 15 hereof have been satisfied or waived, or at such other
place and time as may be mutually agreed to by the parties hereto (such date,
the "Closing Date").
___________________
/1/ The Working Capital baseline amounts shall be reduced for any income
tax liabilities of the Sellers attributable to taxable income of the
Company during the preceding quarter, to the extent not otherwise
reflected as current liabilities in the determination of Working
Capital. The parties agree that any such income tax liabilities shall
be computed for this purpose by applying a tax rate to such income that
equitably adjusts for the tax benefit otherwise realizable by the
Sellers upon the sale of the Interests.
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE SELLERS.
The Company and the Sellers hereby jointly and severally
represent and warrant to the Buyer as follows:
SECTION 5.1. Organization. The Company is duly organized and
validly existing as a limited liability company under the laws of the State of
Georgia. The Company an0d each of its Subsidiaries have all requisite power and
authority to own their respective properties and assets and to conduct their
respective businesses as now conducted. Copies of the Organizational Documents
of the Company and each of its Subsidiaries, with all amendments thereto, have
been furnished to the Buyer or its representatives, and such copies are true,
accurate and complete.
SECTION 5.2. Qualification to Do Business. The Company and
each of its Subsidiaries are duly qualified to do business as foreign entities
and are in good standing or valid existence, as the case may be, in every
jurisdiction in which the character of the properties owned or leased by them or
the nature of the businesses conducted by them makes such qualification
necessary. Schedule 5.2 specifically sets forth all jurisdictions in which the
Company and each of its Subsidiaries are qualified to do business as foreign
entities.
SECTION 5.3. Authorization and Validity of Agreement; No
Conflict or Violation. The Company has the authority to enter into this
Agreement and any related agreement and to carry out its obligations hereunder
and thereunder. This Agreement and each related agreement has been duly executed
by the Company and constitutes its valid and binding obligation, enforceable
against it in accordance with its terms. Except as specifically set forth on
Schedule 5.3, the execution, delivery and performance by the Company of this
Agreement and any related agreement does not and will not (a) violate or
conflict with any provision of any Organizational Document of the Company and
its Subsidiaries, (b) violate any provision of law, or any order, judgment or
decree of any court or other governmental or regulatory authority, (c) violate
or result in a breach of or constitute (with due notice or lapse of time or
both) a default under any contract, lease, loan agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which any of them is bound or to
which any of their respective properties or assets is subject, (d) result in the
creation or imposition of any Lien (other than as a result of Transfer Taxes to
be paid by the Sellers) upon any of the assets, properties or rights of the
Company or any of its Subsidiaries, or (e) result in the cancellation,
modification, revocation or suspension of any of the Licenses and Permits,
except in the case of clauses (b), (c), (d) and (e) above, for violations,
conflicts, breaches or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole.
SECTION 5.4. Consents and Approvals. Schedule 5.4 specifically
sets forth a true and complete list of each consent, waiver, authorization or
approval of any Governmental Entity, or of any other Person, and each
declaration to or filing or registration with any such Governmental Entity, that
is required in connection with the execution and delivery of this Agreement and
any related agreement by the Company and the Sellers or the performance by the
Company and the Sellers of any of its and their obligations hereunder and
thereunder, except for
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such consents, approvals and filings, of which the failure to obtain or make
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole.
SECTION 5.5. Membership Interests. The Interests are the sole
outstanding membership interests of the Company; the Company does not have
outstanding any securities convertible into or exchangeable for any membership
interests, any rights to subscribe for or to purchase or any options for the
purchase of, or any oral or written agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any other
character relating to the issuance of, any membership interests, or any
securities convertible into or exchangeable for any membership interests; and
the Company is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any membership interests except as
specifically set forth on Schedule 5.5. The Interests are not represented by
certificates or any equivalent evidence of the ownership by the Sellers thereof;
evidence of such ownership is maintained in the books and records of the Company
in accordance with the Georgia Limited Liability Company Act. Schedule 5.5
specifically sets forth the names of the beneficial and record owners of the
Interests and the percentage of the total Interests held by each such owner. The
Interests are validly issued.
SECTION 5.6. Subsidiaries and Equity Investments. The Company
has no Subsidiaries, except (i) as of the date hereof, Attention II and
Attention III, LLC, and (ii) as of the Closing Date, Attention III, LLC, and
except as specifically set forth on Schedule 5.6, the Company does not, directly
or indirectly, own or hold any rights to acquire, any capital stock or any other
securities, interests or investments in any other Person other than investments
that constitute cash or cash equivalents. Except as specifically set forth on
Schedule 5.6, all of the outstanding membership interests of the Subsidiaries
are owned of record and beneficially by the Company, free and clear of any
Liens, and are the sole outstanding membership interests of the Subsidiaries;
the Subsidiaries do not have outstanding any securities convertible into or
exchangeable for any membership interests, any rights to subscribe for or to
purchase or any options for the purchase of, or any oral or written agreements
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any other character relating to the issuance of, any
membership interests, or any securities convertible into or exchangeable for any
membership interests; and the Subsidiaries are not subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
membership interests.
SECTION 5.7. Financial Statements. The Company has heretofore
furnished to the Buyer (a) copies of the audited consolidated balance sheets of
the Company as of December 31, 2001 and 2000 audited by Xxxxxxx & Xxxxx, X.X.,
together with the related audited consolidated statements of earnings and
members' equity and cash flows for the fiscal years then ended and the notes
thereto, accompanied by the reports thereon of such public accountants, and (b)
copies of the consolidated balance sheet of the Company as of April 30, 2002
(the "Interim Balance Sheet"), together with the related unaudited consolidated
statements of earnings and members' equity and cash flows for the period then
ended, and the notes thereto (all the financial statements referred to in
clauses (a) and (b) above being hereinafter collectively referred to as the
"Financial Statements"). Except as specifically set forth on Schedule 5.7, the
Financial Statements, including the notes thereto, (i) were prepared in
accordance with GAAP, (ii) present fairly the financial position, results of
operations and changes in financial position of
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the Company as of such dates and for the periods then ended (subject, in the
case of the unaudited interim Financial Statements, to normal year-end audit
adjustments consistent with prior periods), (iii) are complete, correct and in
accordance with the books of account and records of the Company, (iv) can be
legitimately reconciled with the financial statements and the financial records
maintained and the accounting methods applied by the Company for federal income
tax purposes, and (v) reflect accurately all costs and expenses of the Company.
SECTION 5.8. Absence of Certain Changes or Events.
(a) Except as specifically set forth on Schedule 5.8(a), since
December 31, 2001, there has not been:
(i) any material adverse change in the business,
operations, properties, assets, condition (financial or other) or
prospects, or any event that has had or could reasonably be expected to
have a material adverse effect on the foregoing (a "Material Adverse
Effect"), of the Company and its Subsidiaries, taken as a whole, and no
factor or condition exists and no event has occurred that could
reasonably be expected to result in any such change to the Company and
its Subsidiaries, taken as a whole;
(ii) any material loss, damage, destruction or other
casualty to the assets or properties of the Company or any Subsidiary
(other than any for which insurance awards have been received or
guaranteed);
(iii) any change in any method of accounting or
accounting practice of the Company or any Subsidiary; or
(iv) any loss of the employment, services or benefits
of any key employee of the Company or any Subsidiary.
(b) Since December 31, 2001, the Company and each of its
Subsidiaries have operated in the ordinary course of their businesses consistent
with past practice and, except as specifically set forth on Schedule 5.8(b)
hereto, have not:
(i) incurred any material obligation or liability
(whether absolute, accrued, contingent or otherwise) except in the
ordinary course of business consistent with past practice;
(ii) failed to discharge or satisfy any Lien or pay or
satisfy any obligation or liability (whether absolute, accrued,
contingent or otherwise), other than liabilities being contested in
good faith and for which adequate reserves have been provided and Liens
arising in the ordinary course of business that do not, individually or
in the aggregate, interfere with the use, operation, enjoyment or
marketability of any of their respective assets, properties or rights;
(iii) mortgaged, pledged or subjected to any Lien any of
their respective material assets, properties or rights, except for
mechanics' liens and Liens for Taxes not yet due and payable and Liens
arising in the ordinary course of business that do
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not, individually or in the aggregate, interfere with the use, operation,
enjoyment or marketability of any of their respective assets, properties or
rights;
(iv) sold or transferred any of their assets or canceled any
debts or claims or waived any rights, except in the ordinary course of
business consistent with past practice;
(v) disposed of any patents, trademarks or copyrights or any
patent, trademark or copyright applications;
(vi) defaulted on any material obligation;
(vii) entered into any transaction material to their respective
businesses, except in the ordinary course of business consistent with past
practice;
(viii) written off as uncollectible any material accounts
receivable or any portion thereof not reflected in the Interim Balance
Sheet;
(ix) granted any increase in the compensation or benefits of
their employees, other than increases in accordance with past practice not
exceeding 5% or entered into any employment or severance agreement or
arrangement with any of them;
(x) made, in excess of $25,000, any capital expenditure or
additions to property, plant and equipment used in its operations other
than ordinary repairs and maintenance;
(xi) laid off any of their employees;
(xii) discontinued the offering of any services or product;
(xiii) incurred any obligation or liability for the payment of
severance benefits;
(xiv) declared, paid, or set aside for payment any dividend or
other distribution in respect of shares of capital stock, membership
interests or other securities, or redeemed, purchased or otherwise
acquired, directly or indirectly, any shares of capital stock, membership
interests or other securities, or agreed to do so; or
(xv) entered into any agreement or made any commitment to do
any of the foregoing.
SECTION 5.9. Tax Matters. Except as specifically disclosed in
Schedule 5.9: (a) the Company and each of its Subsidiaries has filed or caused
to be filed, when due, all Tax Returns required by applicable law to be filed
and has paid all Taxes required to be paid in respect of the Tax periods to
which such Tax Returns relate; (b) the information contained in such Tax Returns
is materially true, complete and accurate; (c) the Company and each of its
Subsidiaries has paid, or will have paid, all material Taxes owed by it (whether
or not shown on any Tax Return) that are required to be paid on or prior to the
Closing Date; (d) any material
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liability of the Company and its Subsidiaries for Taxes not due and payable as
of the Closing Date, or that are being contested in good faith, will be
reflected in the reserve for Tax liability shown on the Closing Balance Sheet;
(e) there is no action, suit, proceeding, investigation, audit or claim for
additional Tax or assessment now pending or threatened against, or with respect
to, the Company or any of its Subsidiaries in respect of any Tax; (f) none of
the assets, properties or rights of the Company or any of its Subsidiaries are
"tax-exempt use property" within the meaning of Section 168(h) of the Code; (g)
none of the assets, properties or rights of the Company or any of its
Subsidiaries include any lease made pursuant to former Section 168(f)(8) of the
Internal Revenue Code of 1954; (h) there is no Lien affecting any of the assets,
properties or rights of the Company or any of its Subsidiaries that arose in
connection with any failure or alleged failure to pay any Tax; (i) the Company
and each of its Subsidiaries has been and will be classified as a partnership
(within the meaning of Treasury Regulations Section 301.7701-2(c)(1)) or an
entity disregarded as separate from its owner (within the meaning of Treasury
Regulations Section 301.7701-2(c)(2)), as applicable, for U.S. federal Tax
purposes for all periods of its existence up to and including the Closing Date;
(j) there has been no waiver or extension of any applicable statute of
limitation for the assessment or collection of any Taxes of the Company or any
of its Subsidiaries, and no power of attorney granted by or with respect to the
Company or any of its Subsidiaries relating to Taxes is currently in force; (k)
neither the Company nor any of its Subsidiaries is a party to any agreement
other than with the Buyer, whether written or unwritten, providing for the
payment of Taxes, payment for Tax losses, entitlement to refunds or similar Tax
matters; (l) the Company and each of its Subsidiaries has withheld and paid all
Taxes required to be withheld in connection with any amount paid or owing to any
employee, creditor, independent contractor or other Person; and (m) no claim has
been made by any Tax Authority in a jurisdiction where the Company or any
Subsidiary of the Company does not currently file a Tax Return that the Company
or such Subsidiary is or may be subject to Tax by such jurisdiction, nor to
Sellers' knowledge is any such assertion threatened.
SECTION 5.10. Absence of Undisclosed Liabilities. Except as
specifically set forth on Schedule 5.10, the Company and its Subsidiaries have
no indebtedness or liability, absolute or contingent, known or unknown, which is
not shown or provided for on the Interim Balance Sheet, except for current
liabilities incurred in the ordinary course of business consistent with past
practice. Except as shown on the Interim Balance Sheet or as specifically set
forth on Schedule 5.10, neither the Company nor any Subsidiary is directly or
indirectly liable upon or with respect to (by discount, repurchase agreements or
otherwise), or obligated in any other way to provide funds in respect of, or to
guarantee or assume, any debt, obligation or dividend of any Person, except
endorsements in the ordinary course of business in connection with the deposit,
in banks or other financial institutions, of items for collection.
SECTION 5.11. Leases.
(a) The Company and its Subsidiaries do not own any real property.
Schedule 5.11(a) specifically sets forth a list of all leases, licenses,
permits, subleases and occupancy agreements, together with all amendments
thereto, with respect to all properties in which the Company and its
Subsidiaries have a leasehold interest, whether as lessor or lessee (each, a
"Lease" and collectively, the "Leases"; the property covered by Leases under
which the Company is a lessee is referred to herein as the "Leased Real
Property"). No option has been exercised under any of such Leases, except
options whose exercise has been evidenced by a
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written document, a true, complete and accurate copy of which has been delivered
to the Buyer with the corresponding Lease. Except as specifically set forth on
Schedule 5.11(a) hereto, the transactions contemplated by this Agreement do not
require the consent or approval of the other party to the Leases.
(b) Except as specifically set forth on Schedule 5.11(b), no Lease
has been modified or amended in writing and no party to any Lease has given the
Company written notice of or made a claim with respect to any breach or default.
(c) Except as specifically set forth on Schedule 5.11(c), none of the
Leased Real Property is subject to any sublease, license or other agreement
granting to any Person or entity any right to the use, occupancy or enjoyment of
such property or any portion thereof. All improvements on the Leased Real
Property and the operations therein conducted conform to all applicable health,
fire, environmental, safety, zoning and building laws, ordinances and
administrative regulations, Permits and other regulations (including, without
limitation, the Americans with Disabilities Act), except for nonconforming uses
or violations that do not and will not materially interfere with the present
use, operation or maintenance thereof by the Company as now used, operated or
maintained or access thereto, and that do not and will not materially affect the
value thereof, and the Company has not received any notice to the contrary.
SECTION 5.12. Assets of the Company.
(a) The assets, properties and rights of the Company and its
Subsidiaries constitute all of the assets and rights which are used in the
operation of the businesses of the Company and its Subsidiaries immediately
prior to Closing and which are materially necessary or required for the conduct
of such businesses as currently conducted. Except as specifically set forth on
Schedule 5.12(a), there are no assets, properties, rights or interests of any
kind or nature that the Company and its Subsidiaries have been using, holding or
operating in their respective businesses prior to the Closing that will not be
used, held or owned by the Company and its Subsidiaries immediately following
the Closing.
(b) Except as specifically set forth on Schedule 5.12(b), the Company
and its Subsidiaries have good and marketable title, free and clear of any
Liens, to, or a valid leasehold interest under enforceable leases in, all of
their respective assets, properties and rights.
SECTION 5.13. Intellectual Property.
(a) Except as specifically set forth on Schedule 5.13(a), the Company
and its Subsidiaries own all right, title and interest in and to, or have a
valid and enforceable license to use all the Intellectual Property, which
represents all intellectual property rights necessary to the conduct of their
respective businesses as now conducted. Except as specifically set forth on
Schedule 5.13(a), the Company and its Subsidiaries are in compliance with all
material contractual obligations relating to the protection of such of the
Intellectual Property as it uses pursuant to license or other agreements.
(b) Except as specifically set forth on Schedule 5.13(b), to the
knowledge of the Company and the Sellers, there are no conflicts with or
infringements of any Intellectual Property by any third party. Except as
specifically set forth on Schedule 5.13(b), the conduct of
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the Company's and its Subsidiaries' respective businesses as currently conducted
or contemplated does not conflict with or infringe any proprietary right of any
third party. There is no claim, suit, action or proceeding pending or, to the
knowledge of the Sellers, threatened against the Company or any Subsidiary: (i)
alleging any such conflict or infringement with any third party's proprietary
rights; or (ii) challenging the ownership or use of, or the validity or
enforceability of any Intellectual Property.
(c) Schedule 5.13(c) specifically sets forth a complete and current
list of all registrations, patents or applications pertaining to the
Intellectual Property ("Listed Intellectual Property") and the owner of record,
date of application or issuance and relevant jurisdiction as to each. Except as
specifically described in Schedule 5.13(c), all Listed Intellectual Property is
owned by the Company, free and clear of all Liens. All Listed Intellectual
Property is valid, subsisting, unexpired, in proper form and enforceable and all
renewal fees and other maintenance fees that have fallen due on or prior to the
effective date of this Agreement have been paid. Except as specifically listed
in Schedule 5.13(c), no Listed Intellectual Property is the subject of any
proceeding before any governmental, registration or other authority in any
jurisdiction, including any office action or other form of preliminary or final
refusal of registration. The consummation of the transactions contemplated by
this Agreement will not alter or impair any Intellectual Property.
(d) Schedule 5.13(d) specifically sets forth a complete list of all
agreements relating to the Intellectual Property or to the right of the Company
or any Subsidiary to use of the intellectual property or other proprietary
rights of any third party. Except as specifically set forth on Schedule 5.13(d),
neither the Company nor any Subsidiary is under any obligation to pay royalties
or other payments in connection with any agreement or is restricted from
assigning its rights respecting Intellectual Property. Except as specifically
set forth on Schedule 5.13(d), the Company will not be, as a result of the
execution and delivery of this Agreement or any related agreement or the
performance of its obligations under this Agreement or any related agreement, in
breach of any agreement relating to the Intellectual Property.
SECTION 5.14. Software.
(a) The operating and applications computer software programs and
databases used by the Company and its Subsidiaries that are material to the
conduct of their respective businesses as now conducted and as presently
contemplated to be conducted (collectively, the "Software") are specifically
listed on Schedule 5.14 hereto. The Company and each Subsidiary: (i) holds valid
licenses to use all copies of the Software, other than any portion thereof
(collectively, the "Proprietary Software") that was developed by or under
contract with it; and (ii) either owns outright, or has a perpetual,
royalty-free license to use, reproduce, modify, distribute and sublicense the
Proprietary Software and, except as specifically listed on Schedule 5.14, the
Company and its Subsidiaries have not sold, licensed, leased or otherwise
transferred or granted any interest or rights in or to any portion thereof. To
the knowledge of the Sellers, none of the Software used by the Company and the
Subsidiaries, nor any use thereof, conflicts with, infringes upon or violates
any intellectual property or other proprietary right of any other Person and, no
claim, suit, action or other proceeding with respect to any such infringement or
violation is pending or, to the knowledge of the Sellers, threatened. The
Company and the Subsidiaries
-22-
have taken the steps reasonably necessary to protect their respective right,
title and interest in and to the Software.
(b) Upon consummation of the transactions contemplated by this
Agreement and any related agreement, the Company and its Subsidiaries will
continue to own all the Proprietary Software owned by them, free and clear of
all Liens, and, with respect to all agreements for the lease or license of
Software required by the Company to continue its operations which require
consents or other actions as a result of the consummation of the transactions
contemplated by this Agreement and any related agreement in order for the
Company and its Subsidiaries to continue to use and operate such Software after
the Closing Date, the Company and its Subsidiaries will have obtained such
consents or taken such other actions so required.
SECTION 5.15. Licenses and Permits. Schedule 5.15 specifically sets
forth a true and complete list of all material Licenses and Permits, and all
pending applications therefor. Each License and Permit has been duly obtained,
is valid and in full force and effect, and is not subject to any pending or, to
the knowledge of the Sellers, threatened, administrative or judicial proceeding
to revoke, cancel, suspend or declare such License and Permit invalid in any
respect. The Licenses and Permits are sufficient and adequate in all respects to
permit the continued lawful conduct of the businesses of the Company and its
Subsidiaries in the manner now conducted and as has been proposed to be
conducted, and none of the operations of the Company and its Subsidiaries are
being conducted in a manner that violates any of the terms or conditions under
which any License and Permit was granted. Except as specifically set forth on
Schedule 5.15, the consummation of the transactions contemplated by this
Agreement will not result in the termination or suspension of any License or
Permit.
SECTION 5.16. Compliance with Law. Except as specifically set forth
on Schedule 5.16, the operation of the businesses of the Company and each
Subsidiary has been conducted in accordance with all applicable laws (including,
without limitation, the Fair Debt Collection Practices Act, the Fair Credit
Reporting Act and state laws covering comparable subject matter), regulations,
orders and other requirements of all courts and other governmental or regulatory
authorities having jurisdiction over such entity and its assets, properties and
operations. Except as specifically set forth on Schedule 5.16, neither the
Company nor any Subsidiary has received any notice of any violation of any such
law, regulation, order or other legal requirement, and the Company and the
Subsidiaries are not in default with respect to any order, writ, judgment,
award, injunction or decree of any national, state or local court or
governmental or regulatory authority or arbitrator, domestic or foreign,
applicable to any of their respective assets, properties or operations.
SECTION 5.17. Litigation. Except as specifically set forth on
Schedule 5.17, there are no claims, actions, suits, proceedings, labor disputes
or investigations (each, an "Action") pending or, to the knowledge of the
Company and the Sellers, threatened, before any Governmental Entity, or before
any arbitrator of any nature, brought by or against the Company, its
Subsidiaries or any of their officers, directors, shareholders, employees,
agents or Affiliates involving, affecting or relating to the Company or the
Subsidiaries, the assets, properties or rights of the Company and the
Subsidiaries, or the transactions contemplated by this Agreement. There is no
Action pending, or to the knowledge of the Company and the Sellers, threatened,
-23-
relating to the termination of, or limitation of, the rights of the Company or
any Subsidiary under any registrations or qualifications with various
self-regulatory bodies, states or other jurisdictions. Schedule 5.17
specifically sets forth a list and a summary description of all such pending
Actions. Neither the Company nor any Subsidiary nor any of their respective
assets, properties or rights is subject to any order, writ, judgment, award,
injunction or decree of any Governmental Entity or arbitrator, nor is the
Company or any Subsidiary party to any written agreement, consent agreement or
memorandum of understanding with, or party to any commitment letter or similar
undertaking to, any Governmental Entity that, individually or in the aggregate,
affects or is reasonably likely to materially affect the business, assets,
properties or rights of the Company and its Subsidiaries or that would or is
reasonably likely to prevent the consummation of the transactions contemplated
by this Agreement.
SECTION 5.18. Contracts.
(a) Schedule 5.18 specifically sets forth a complete and correct list
and a summary description of all Contracts (as defined below).
(b) To the knowledge of the Company and the Sellers, each Contract is
valid, binding and enforceable against the parties thereto in accordance with
its terms, and in full force and effect. Except as specifically set forth on
Schedule 5.18, the Company and each of its Subsidiaries have performed all
material obligations required to be performed by them to date under, and are not
in default or delinquent in performance, status or any other respect (claimed or
actual) in connection with, any Contract, and no event has occurred which, with
due notice or lapse of time or both, would constitute such a default. To the
knowledge of the Sellers, no other party to any Contract is in default in
respect thereof, and no event has occurred which, with due notice or lapse of
time or both, would constitute such a default. The Company has delivered to the
Buyer or its representatives true and complete originals or copies of all the
Contracts.
(c) A "Contract" means any agreement, contract or commitment, oral or
written, to which the Company or any Subsidiary is a party or by which it or any
of its assets are bound constituting:
(i) a mortgage, indenture, security agreement, guaranty, "keep
well," comfort letter, pledge and other agreement or instrument relating to
the borrowing of money or extension of credit;
(ii) an employment, severance or consulting agreement;
(iii) a joint venture, partnership or limited liability company
agreement (other than any such agreement entered into in connection with an
investment made in the ordinary course of business);
(iv) a non-competition agreement or any other agreement or
obligation which purports to limit in any material respect the manner in
which, or the localities in which, the business of the Company may be
conducted;
(v) a Lease;
-24-
(vi) an agreement limiting or restricting the ability of the
Company to make distributions in respect of the Interests;
(vii) an agreement to make a capital expenditure (as defined in
GAAP and which in no event shall include investments purchased in the
ordinary course of business) in excess of $25,000; or
(viii) any other agreement not in the ordinary course of the
business of the Company.
SECTION 5.19. Employee Plans.
(a) Schedule 5.19 specifically sets forth all pension, savings,
retirement, health, insurance, severance and other employee benefit or fringe
benefit plans, programs, arrangements or agreements (including "employee benefit
plans" as defined in Section 3(3) of ERISA) maintained or sponsored by the
Company or with respect to which the Company has any responsibility, obligation
or liability, contingent or otherwise (collectively referred to herein as the
"Plans"). With respect to the Plans, the Company has delivered to the Buyer
copies of: (i) the Plan documents, and, where applicable, related trust
agreements, and any related agreements which are in writing; (ii) summary plan
descriptions; (iii) the most recent Internal Revenue Service determination
letter relating to each Plan for which a letter of determination was obtained;
(iv) to the extent required to be filed, the most recent Annual Report (Form
5500 Series and accompanying schedules of each Plan and applicable financial
statements) as filed with the Internal Revenue Service; and (v) audited
financial statements, if any.
(b) Each Plan conforms to, and its maintenance and administration is
in material compliance with, all applicable requirements of law, including,
without limitation, ERISA and the Code and all of the Plans are in full force
and effect as written, and all premiums, contributions and other payments
required to be made by the Company under the terms of any Plan have been made or
accrued.
(c) Each Plan maintained by the Company that is intended to be
qualified under Section 401(a) of the Code and each trust maintained pursuant
thereto has been determined to be exempt from federal taxation by the Internal
Revenue Service and has a favorable determination letter from the Internal
Revenue Service with respect to each such Plan. No Plan maintained by the
Company that is an employee welfare benefit plan as defined in Section 3(1) of
ERISA (the "Welfare Plan") is funded through a voluntary employee beneficiary
association as defined in Section 501(c)(9) of the Code.
(d) None of the Company or any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b), (c), (m) or (o) of the Code (the "Controlled Group") has ever
maintained, contributed to or incurred any liability with respect to any Plan
subject to Title IV of ERISA or Section 412 of the Code.
(e) There are no multiemployer plans (as defined in Subsection 3(37)
of ERISA) ("Multiemployer Plans") to which the Company or any other member of
the Controlled Group is, or has been, required to make a contribution or other
payment.
-25-
(f) The Company has never maintained any Plan providing
post-retirement benefits ("Post-Retirement Benefits"). The Company is not liable
for Post-Retirement Benefits under any plan not maintained by the Company. The
Company has complied in all material respects with the requirements of Section
4980B of the Code and Sections 601 to 608 of ERISA or similar state laws
relating to continuation coverage for group health plans.
(g) There has been no material violation of ERISA or the Code with
respect to the filing of applicable reports, documents and notices regarding the
Plans with the Secretary of Labor or the Secretary of the Treasury or the
furnishing of required reports, documents or notices to the participants or
beneficiaries of the Plans. To the extent required to be filed, all Annual
Reports (Form 5500 Series and accompanying schedules of each Plan and applicable
financial statements) have been timely filed with the Internal Revenue Service.
(h) There are no pending actions, claims or lawsuits which have been
asserted, instituted or, to the knowledge of the Sellers, threatened, against
the Plans, the assets of any of the trusts under such Plans or the Plan sponsor
or the Plan administrator, or, to the knowledge of the Sellers, against any
fiduciary of the Plans with respect to the operation of such Plans (other than
routine benefit claims).
(i) Except as specifically set forth on Schedule 5.19, the execution
of, and performance of the transactions contemplated in, this Agreement will
not, either alone or upon the occurrence of subsequent events, result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee.
SECTION 5.20. Insurance. Schedule 5.20 specifically lists the
aggregate coverage amount and type and generally applicable deductibles of all
policies of title, liability, fire, casualty, business interruption, workers'
compensation and other forms of insurance insuring the Company, its Subsidiaries
and their respective assets, properties, operations and employees. The Company
has furnished a true, complete and accurate copy of all such policies to the
Buyer. Except as specifically set forth on Schedule 5.20, all such policies and
bonds are in full force and effect, sufficient for all applicable requirements
of law and will not in any way be affected by or terminated or lapsed by reason
of the consummation of the transactions contemplated by this Agreement. Neither
the Company nor any Subsidiary is in material default under any provisions of
any such policy of insurance, nor has the Company or any Subsidiary received
notice of cancellation of any such insurance. To the knowledge of the Company
and the Sellers, the insurance maintained by the Company and its Subsidiaries in
connection with their respective businesses is adequate in accordance with
industry standards, the requirements of any applicable Leases and customer
contracts.
SECTION 5.21. Transactions with Sellers and Affiliates. Except as
specifically set forth on Schedule 5.21, neither the Company nor any Subsidiary
is a party to any agreement or arrangement with any of the Sellers or any
Affiliate of the Sellers under which it: (a) leases any real or personal
property (either to or from such Person); (b) licenses technology (either to or
from such Person); (c) is obligated to purchase any tangible or intangible asset
from or sell such asset to such Person; (d) purchases products or services from
such Person; (e) pays or receives commissions, rebates or other payments; or (f)
provides or receives any other
-26-
material benefit. Neither the Company nor any Subsidiary employs as an employee
or engages as a consultant any family member of any of the Sellers. To the
knowledge of the Sellers, except as specifically set forth on Schedule 5.21,
none of the Sellers or any family member of any of the Sellers has been a
director, officer, manager or member of, or has had any direct or indirect
interest in, any Person which during such period has been a customer of the
Company or any Subsidiary or has competed with or been engaged in any business
of the kind being conducted by the Company and the Subsidiaries. No Affiliate of
the Company or any Subsidiary owns or has any rights in or to any of the assets,
properties or rights used by the Company and the Subsidiaries in the ordinary
course of their respective businesses.
SECTION 5.22. Change in Ownership. To the knowledge of the Sellers,
the consummation of the transactions contemplated by this Agreement will not
have a material impact on the business of the Company and its Subsidiaries,
taken as a whole, or result in the loss of the benefits of any material
relationship with any customer of the Company or any Subsidiary.
SECTION 5.23. Labor Matters.
(a) Except as specifically set forth on Schedule 5.23(a): (i) neither
the Company nor any Subsidiary is a party to any outstanding employment
agreements or contracts with officers, managers or employees of the Company or
any Subsidiary that are not terminable at will, or that provide for the payment
of any bonus or commission; (ii) neither the Company nor any Subsidiary is a
party to any agreement, policy or practice that requires it to pay termination
or severance pay to salaried, non-exempt or hourly employees of the Company or
any Subsidiary (other than as required by law); and (iii) neither the Company
nor any Subsidiary is a party to any consulting agreement providing for
consulting services to be rendered to the Company or any of its Subsidiaries.
(b) Except as specifically set forth on Schedule 5.23(b): (i) the
Company and its Subsidiaries are in compliance with all applicable laws relating
to employment and employment practices, wages, hours, and terms and conditions
of employment; (ii) there are no charges with respect to or relating to the
Company or any Subsidiary pending before the Equal Employment Opportunity
Commission or any state, local or foreign agency responsible for the prevention
of unlawful employment practices; and (iii) neither the Company nor any
Subsidiary has received any notice from any national, state, local or foreign
agency responsible for the enforcement of labor or employment laws of an
intention to conduct an investigation of the Company or any Subsidiary and no
such investigation is in progress.
(c) The Seller has heretofore delivered to the Buyer a list dated as
of July 19, 2002 containing the name, position, starting employment date,
current annual salary and bonus and commissions in 2001 of each current employee
of the Company and its Subsidiaries.
SECTION 5.24. Environmental Matters. The Company and each of its
Subsidiaries have obtained and maintained in effect all licenses, permits and
other authorizations required under all applicable laws, regulations and other
requirements of governmental or regulatory authorities relating to pollution or
to the protection of the environment ("Environmental Laws") and are in
compliance in all material respects with all Environmental
-27-
Laws and with all such licenses, permits and authorizations. Neither the Company
nor any Subsidiary has performed or suffered any act which could give rise to,
or has otherwise incurred, liability to any Person (governmental or not) under
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. (S) 9601 et seq. or any other Environmental Laws, nor has the Company or
any Subsidiary received notice of any such liability or any claim therefor or
submitted notice pursuant to section 103 of such Act to any governmental agency
with respect to any of its assets. No hazardous substance, hazardous waste,
contaminant, pollutant or toxic substance (as such terms are defined in any
applicable Environmental Law) has been released, placed, dumped or otherwise
come to be located on, at, beneath or near any of the Leased Real Property or
any surface waters or groundwaters thereon or thereunder. Neither the Company
nor any Subsidiary owns or operates, and has ever owned or operated, an
underground storage tank containing a regulated substance, as such term is
defined in Subchapter IX of the Resource Conservation and Recovery Act, 42
U.S.C. (S) 6991 et seq. No Lien or other encumbrance has been imposed on the
Leased Real Property pursuant to any Environmental Law and no investigation,
audit or inquiry has been commenced by any Governmental Entity with respect to
the Company, any Subsidiary or the Leased Real Property pursuant to any
Environmental Law.
SECTION 5.25. Customers. Schedule 5.25 specifically sets forth a
complete and correct list of all customers of the Company and each Subsidiary
(including, but not limited to, NCO Group, Inc.) accounting for more than two
percent (2%) of the Company's consolidated revenues during the fiscal year ended
December 31, 2001 and from such date to the date hereof (the "Significant
Customers"), and the aggregate revenues generated from each such Significant
Customer for each such period. As of the date of this Agreement, except as
specifically set forth on Schedule 5.25, (a) neither the Company nor any
Subsidiary is engaged in any dispute with any Significant Customer, (b) no
Significant Customer has proposed any adverse modification or change in its
business relationship with the Company or any Subsidiary, and (c) no Significant
Customer has given the Company or any Subsidiary notice that it is subject to
any bankruptcy, insolvency or similar proceeding and no such proceeding is
pending or, to the Sellers' knowledge, threatened. Except as specifically set
forth on Schedule 5.25, since December 31, 2001, neither the Company nor any
Subsidiary has at any time delivered to, or received from, any Significant
Customer any formal notice or written allegation of a default or breach with
respect to any agreement, contract or other arrangement and none of such
Significant Customers has terminated, failed to exercise any option to renew, or
otherwise changed significantly its relationship with the Company or any
Subsidiary, and to the Sellers' knowledge, has no current intention to do any of
the foregoing.
SECTION 5.26. No Brokers. No broker, finder or similar intermediary
has acted for or on behalf of, or is entitled to any broker's, finder's or
similar fee or other commission from any of the Sellers, the Company or any of
their respective Affiliates in connection with this Agreement or any related
agreement or the transactions contemplated hereby or thereby. The Broker has not
acted for or on behalf of any of the Sellers or the Company or any of their
respective Affiliates in connection with this Agreement and the transactions
contemplated hereby.
SECTION 5.27. Illegal or Unauthorized Payments; Political
Contributions. Neither the Company or any of its Subsidiaries nor the Sellers
or, to the knowledge of the Company and the Sellers, any of the officers,
directors, employees, agents or other
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representatives of the Company or any of its Subsidiaries or any other business
entity or enterprise with which the Company or any of its Subsidiaries is or has
been affiliated or associated, has, directly or indirectly, made or authorized
any payment, contribution or gift of money, property, or services, whether or
not in contravention of applicable law, (a) as a kickback or bribe to any Person
or (b) in excess of $1,000 in any one payment or contribution to any political
organization, or the holder of or any aspirant to any elective or appointive
public office except for personal political contributions not involving the
direct or indirect use of funds of the Company or any of its Subsidiaries.
SECTION 5.28. Trust or Custodial Accounts. All trust or custodial
accounts maintained by the Company and/or its subsidiaries for the benefit of
the Company's customers comply with all applicable laws and regulations and the
terms and provisions in any agreement, arrangement and understanding with the
respective customer (including, but not limited to requirements that such
account be separate and be maintained with an FDIC insured bank). All payments
of principal and interest or fees that have been received by the Company or its
Subsidiaries from any customer's debtor have been credited to the appropriate
trust accounts, subject, however, to contractual rights, if any, of the Company
or its Subsidiaries, as the case may be, to deduct its own fees and expenses
prior to remitting the appropriate amounts to the trust account. The total
amount of funds in the trust accounts was and is equal to, at any time, such
total amount the Company was and is obligated to maintain in such trust accounts
pursuant to its agreements, arrangements and understandings with its customers.
SECTION 5.29. Annual Operating Plan. The annual operating plan of the
Company for the year ended December 31, 2002 is specifically set forth on
Schedule 5.29.
SECTION 5.30. Accuracy of Information. None of the representations,
warranties or statements of the Sellers or the Company contained in this
Agreement or any related agreement, or in the exhibits or schedules hereto or
thereto, contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make any of such representations, warranties
or statements in light of the circumstances under which they were made not
misleading.
SECTION 6. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
Each of the Sellers hereby severally represents and warrants to the
Buyer as follows:
SECTION 6.1. Title to Interests. Except as specifically set forth on
Schedule 6.1, such Seller has, and will have at the Closing, good and marketable
title to all of the Interests owned by such Seller, free and clear of any Liens.
SECTION 6.2. Authorization and Validity of Agreements. Such Seller
has the authority to enter into this Agreement and, if applicable, the
Employment Agreement and to carry out such Seller's obligations hereunder and
thereunder. This Agreement has been duly executed by such Seller and constitutes
such Seller's valid and binding obligation, enforceable against such Seller in
accordance with its terms.
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SECTION 6.3. No Conflict or Violation. The execution, delivery and
performance by such Seller of this Agreement and, if applicable, the Employment
Agreement do not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority,
nor violate nor will result in a breach of or constitute (with due notice or
lapse of time or both) a default under any contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or instrument
to which such Seller is a party or by which such Seller is bound.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer hereby represents and warrants to the Company and the
Sellers as follows:
SECTION 7.1. Corporate Organization. The Buyer and each Subsidiary
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate power and
authority to own their respective properties and assets and to conduct their
respective businesses as now conducted.
SECTION 7.2. Qualification to Do Business. The Buyer and each of its
Subsidiaries are duly qualified to do business as foreign corporations and are
in good standing in every jurisdiction in which the character of the properties
owned or leased by them or the nature of the business conducted by them makes
such qualification necessary.
SECTION 7.3. Authorization and Validity of Agreement. The Buyer has
all requisite corporate power and authority to enter into this Agreement and any
related agreement and to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each related agreement and the
performance of the Buyer's obligations hereunder and thereunder have been duly
authorized by all necessary corporate action of the Buyer, including by the
Board of Directors of the Buyer (the "Board"), and no other corporate
proceedings on the part of the Buyer are necessary to authorize such execution,
delivery and performance. Each of this Agreement and each related agreement has
been duly executed by the Buyer and constitute the Buyer's valid and binding
obligation, enforceable against the Buyer in accordance with its terms.
SECTION 7.4. No Conflict or Violation. The execution, delivery and
performance by the Buyer of this Agreement and any related agreement does not
and will not (a) violate or conflict with any provision of the Certificate of
Incorporation or By-laws of the Buyer, (b) violate any provision of law, or any
order, judgment or decree of any court or other governmental or regulatory
authority, or (c) violate nor result in a breach of or constitute (with due
notice or lapse of time or both) a default under any contract, lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or
instrument to which the Buyer is a party or by which it is bound or to which any
of its properties or assets is subject, except in the case of clauses (b) and
(c), for violations, breaches or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect on the ability of the Buyer to
consummate the transactions contemplated hereby or thereby.
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SECTION 7.5. Consents and Approvals. The execution, delivery and
performance of this Agreement and any related agreement on behalf of the Buyer
does not require the consent or approval of, or filing with, any Governmental
Entity or other entity or person, except for (a) the filing of a pre-merger
notification report under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of
1976, as amended (the "HSR Act") and (b) such consents, approvals and filings,
of which the failure to obtain or make would not, individually or in the
aggregate, have a Material Adverse Effect on the ability of the Buyer to
consummate the transactions contemplated hereby and thereby.
SECTION 7.6. SEC Reports. The Buyer has filed all forms, reports and
documents required to be filed with the SEC (collectively, the "SEC Reports").
The SEC Reports, including the financial statements and schedules thereto
included therein, were prepared in accordance in all material respects with the
requirements of the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, as the case may be, and the published rules
and regulations of the SEC promulgated thereunder as in effect at the time such
SEC Reports were filed (and, in the case of a registration statement, at the
time of effectiveness of such registration statement).
SECTION 7.7. Financial Ability. The Buyer has, and will have at
Closing, sufficient immediately available funds in cash or cash equivalents to
pay (i) the Closing Date Purchase Price payable pursuant to this Agreement, (ii)
the Long-Term Debt, and (iii) all fees and commissions payable to the Broker in
connection with the transactions contemplated by this Agreement, and to effect
the transactions contemplated hereby.
SECTION 7.8. No Brokers. No broker, finder or similar intermediary
(other than Kaulkin Xxxxxxxx Company) has acted for or on behalf of, or is
entitled to any broker's, finder's or similar fee or other commission from the
Buyer in connection with this Agreement or the transactions contemplated hereby.
The Buyer shall be responsible for the payment of all of the fees and
commissions due to the Broker in accordance with the terms of the engagement of
the Broker by the Buyer, and the Buyer shall indemnify and hold the Sellers
harmless from any such payment alleged to be due by or through the Broker solely
as a result of the action of the Buyer, its officers, agent or representatives.
SECTION 7.9. Accuracy of Information. None of the representations,
warranties or statements of the Buyer contained in this Agreement or any related
agreement, or in the exhibits or schedules hereto and thereto, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make any of such representations, warranties or statements
in light of the circumstances under which they were made not misleading.
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SECTION 8. COVENANTS OF THE COMPANY AND THE SELLERS.
The Company and the Sellers hereby jointly and severally covenant as
follows:
SECTION 8.1. Conduct of Business Before the Closing Date.
(a) Without the prior written consent of the Buyer, between the date
hereof and the Closing Date, the Company shall not, and the Sellers shall not
permit the Company to, except as otherwise expressly permitted pursuant to the
terms hereof:
(i) make any material change in the conduct of its businesses
or enter into any transaction other than in the ordinary course of business
consistent with past practices;
(ii) make any change in any Organizational Document; issue any
additional membership interests or other equity securities, or grant any
option, warrant or right to acquire any membership interests or other
equity securities, or issue any security convertible into or exchangeable
for such securities; or alter in any way any of its outstanding securities
or make any change in the outstanding Interests, whether by reason of a
reclassification, recapitalization, combination, exchange or readjustment
of membership interests or otherwise;
(iii) make any sale, assignment, transfer, abandonment or other
conveyance of its assets, properties or rights or any part thereof, except
transactions pursuant to the existing Contracts specifically set forth in
the schedules hereto;
(iv) subject any of its assets, properties or rights or any
part thereof, to any Lien or suffer such to exist other than such Liens as
may arise in the ordinary course of business consistent with past practice
by operation of law;
(v) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any membership interests of the Company, or declare, set aside
or pay any dividends or other distribution in respect of such interests,
other than distributions (A) provided for in the Operating Agreement, dated
as of September 30, 1999, by and among the Company and the Sellers, as
amended, and in accordance with the Company's debt agreements specifically
set forth on Schedule 5.10, and (B) made to reduce Working Capital, except
in the case of both clauses (A) and (B) above, where any such distributions
could reasonably be expected to result in an Actual Working Capital
Deficiency;
(vi) acquire any assets or properties, or enter into any other
transaction, other than in the ordinary course of business consistent with
past practice;
(vii) enter into any new (or amend any existing) employee
benefit plan, program or arrangement or any new (or amend any existing)
employment, severance or consulting agreement, grant any general increase
in the compensation of officers or employees (including any such increase
pursuant to any bonus, pension, profit-sharing or other plan or commitment)
or grant any increase in the compensation payable or to
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become payable to any employee, except in accordance with pre-existing
contractual provisions;
(viii) make or commit to make capital expenditures in excess of
$25,000 in the aggregate disclosed to the Buyer on or prior to date hereof;
(ix) except as specifically set forth on Schedule 8.1(a), pay,
lend or advance any amount to, or sell, transfer or lease any properties or
assets to, or enter into any agreement or arrangement with, any of its
Affiliates, other than the payment of salary, bonus and benefits to the
Sellers and the officers and employees of the Company pursuant to existing
arrangements, cash distributions with respect to the Interests or as
contemplated by this Agreement;
(x) fail to keep in full force and effect insurance
comparable in amount and scope to coverage maintained on the date hereof;
(xi) take any other action that would cause any of the
representations and warranties made by the Company and the Sellers in this
Agreement not to remain true and correct in all respects;
(xii) make any change in any method of accounting or accounting
principle, method, estimate or practice except for any such change required
by reason of a concurrent change in GAAP, or write off as uncollectible any
accounts receivable except in the ordinary course of business consistent
with past practice;
(xiii) make, change or revoke any election or method of
accounting with respect to Taxes affecting or relating to it;
(xiv) enter into any closing or other agreement or settlement
with respect to Taxes affecting or relating to it;
(xv) settle, release or forgive any claim or litigation or
waive any right thereto in excess of $10,000 individually and $50,000 in
the aggregate;
(xvi) make, enter into, modify, amend in any material respect
or terminate any Contract (A) entailing payments in excess of $25,000, or
(B) having a term in excess of 12 months;
(xvii) make, enter into, modify, amend in any material respect
or terminate any agreement or understanding with a Significant Customer
where such action, modification or amendment would have a Material Adverse
Effect on the Company; or
(xviii) commit to do any of the foregoing.
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(b) From and after the date hereof and until the Closing Date, the
Company shall, and the Sellers shall cause the Company, to:
(i) continue to maintain its assets, properties, rights and
operations in accordance with present practice in a condition suitable for
their current use;
(ii) continue to conduct its business in the ordinary course
consistent with past practice;
(iii) keep its books of account, files and records in the
ordinary course consistent with past practice; and
(iv) preserve intact its operations, organization and
reputation, keep available the services of its present officers and key
employees and preserve the goodwill and material business relationships of
its customers.
(c) Notwithstanding anything in this Section 8.1 to the contrary, the
Company shall, on or prior to the Closing Date:
(i) pay the client obligation specifically set forth on
Schedule 8.1(c) (the "Client Obligation");
(ii) take all actions reasonably necessary to effect the
dissolution of Attention II;
(iii) purchase directors' and officers' liability insurance, on
terms not less favorable than those in effect on the date hereof in terms
of coverage and amounts, covering, for a period of not less than three (3)
years following the Closing Date, the Sellers who are currently covered by
the Company's directors' and officers' liability insurance policy for any
action, suit, proceeding or investigation relating to events occurring
prior to the Closing Date, including, without limitation, this Agreement
and the transactions contemplated hereby; and
(iv) take all actions reasonably necessary to amend the
Membership Interests Issuance Agreements, or any portion thereof, by and
between the Company and certain of the Sellers.
All of the amounts set forth in clauses (i) through (iii) of this
Section 8.1(c) shall be reflected in Working Capital for purposes of Section
3.3, but, in the case of clause (i), only to the extent that the full amount of
the Client Obligation has not actually been paid by the Company prior to
Closing.
SECTION 8.2. Consents and Approvals. The Company and the Sellers
shall, at the cost and expense of the Company, (a) use their reasonable best
efforts to obtain all necessary consents, waivers, authorizations and approvals
of all Governmental Entities, and of all other Persons, required by it and them
in connection with the execution, delivery and performance by the Company and
the Sellers of this Agreement, and (b) diligently assist and cooperate with the
Buyer in preparing and filing all documents required to be submitted by the
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Buyer to any Governmental Entities, in connection with such transactions and in
obtaining any governmental consents, waivers, authorizations or approvals which
may be required to be obtained by the Buyer in connection with such transactions
(which assistance and cooperation shall include, without limitation, timely
furnishing to the Buyer all information concerning the Company that counsel to
the Buyer reasonably determines is required to be included in such documents or
would be helpful in obtaining any such required consent, waiver, authorization
or approval). Notwithstanding the foregoing, all costs and filing fees incurred
in connection with the filing under the HSR Act more particularly described in
Section 7.5 shall be paid by the Buyer.
SECTION 8.3. Access to Properties and Records. The Company shall, and
the Sellers shall cause the Company to, afford to the Buyer, and to the
accountants, counsel and representatives of the Buyer, full access during normal
business hours throughout the period prior to the Closing Date (or the earlier
termination of this Agreement pursuant to Section 16) to all properties, books,
Contracts, commitments and files and records (including, but not limited to, Tax
Returns and correspondence with accountants) of the Company and, during such
period, shall furnish promptly to the Buyer all other information concerning the
Company and its properties and personnel as the Buyer may reasonably request,
provided that no investigation or receipt of information pursuant to this
Section 8.3 shall qualify any representation or warranty of the Company or the
Sellers or the conditions to the obligations of the Buyer. The Company shall,
and the Sellers shall cause the Company to, afford to the Buyer full access to
the Company's assets and operations throughout the period prior to the Closing
Date (or earlier termination of this Agreement pursuant to Section 16 hereof).
All such requests for access or information shall be directed to Xxxxxxx.
SECTION 8.4. Negotiations. From and after the date hereof and until
the earlier to occur of the Closing Date or the termination of this Agreement
pursuant to Section 16 hereof, the Company and the Sellers shall not, and shall
cause the officers and directors of the Company and any Person acting on behalf
of the Company or the Sellers not to, directly or indirectly, encourage,
solicit, engage in discussions or negotiations with, or provide any information
to, any Person or group (other than the Buyer or its representatives) concerning
any (a) merger, consolidation or similar transaction, (b) sale, lease or other
substantial disposition of assets, (c) issuance, sale or other disposition of
membership interests or other securities (or options, rights or warrants to
purchase, or securities convertible into, such securities), in each case
involving the Company, or (d) any other transaction inconsistent with the
transactions contemplated hereby. The Company and the Sellers shall promptly
communicate to the Buyer any inquiries or communications concerning any such
transaction which any of them may receive or of which they may become aware.
SECTION 8.5. Reasonable Best Efforts. Upon the terms and subject to
the conditions of this Agreement, the Company and the Sellers shall use their
reasonable best efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable consistent with
applicable law to consummate and make effective in the most expeditious manner
practicable the transactions contemplated hereby.
SECTION 8.6. Notice of Breach. Through the Closing Date, the Company
and the Sellers shall promptly give written notice with particularity upon
having knowledge of
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any matter that may constitute a breach of any representation, warranty,
agreement or covenant contained in this Agreement.
SECTION 8.7. Disclosure Schedules. Not less than three (3) Business
Days prior to the Closing Date, the Company and the Sellers shall cause the
Sellers' Representative to deliver to the Buyer updated disclosure schedules to
this Agreement and to all other agreements and other documents delivered by the
Company and the Sellers to the Buyer pursuant to this Agreement, which schedules
shall reflect only those events occurring from the date hereof to the date
thereof. The sole purpose of the updated disclosure schedules delivered pursuant
to this Section 8.7 shall be the qualification as of the Closing Date of the
representations and warranties of the Company and the Sellers contained in this
Agreement.
SECTION 9. ADDITIONAL COVENANTS OF THE SELLERS.
Each of the Eligible Sellers severally but not jointly covenants as
follows:
SECTION 9.1. Restrictive Covenants. The Eligible Sellers acknowledge
and agree that (1) the agreements and covenants contained in this Section 9 are
(x) reasonable and valid in geographical and temporal scope and in all other
respects, and (y) essential to protect the value of the Company's business and
assets, and (2) the Eligible Sellers have obtained knowledge, contacts,
know-how, training and experience and there is a substantial probability that
such knowledge, know-how, contacts, training and experience could be used to the
substantial advantage of a competitor of the Company or the Buyer and to the
Company's or the Buyer's substantial detriment.
(a) Covenant Not To Compete. Each Eligible Seller covenants and
agrees that during the Restricted Period (as defined in subsection (e) below),
such Eligible Seller shall not, directly or indirectly, individually or on
behalf of any Person, company, enterprise or entity, or as a sole proprietor,
partner, stockholder, director, officer, principal, agent, executive, or in any
other capacity or relationship, engage in any business or employment, or aid or
endeavor to assist any person, business, enterprise or legal entity (other than
the Company), which is engaged in any capacity in a business, anywhere within
the United Stated of America, which is materially competitive with the Company.
(b) Non-Solicitation of Customers and Employees. Each Eligible Seller
covenants and agrees that during the Restricted Period, such Eligible Seller
shall not, without the prior written consent of the Company and the Buyer,
directly or indirectly, either individually or on behalf of or through any other
person, business, enterprise or entity (other than the Company), (i) solicit or
induce, or in any manner attempt to solicit or induce, any person employed by,
an agent of, or a service provider to, the Company to terminate such person's
employment, agency or service, as the case may be, with the Company; or (ii)
divert, or attempt to divert, any person, concern, or entity from doing business
with the Company, or attempt to induce any such person, concern or entity to
cease being a customer or supplier of the Company.
(c) Remedies for Breach of Section 9.1. Without intending to limit
the remedies available to the Company or the Buyer, each Eligible Seller
acknowledges that a breach of any of the covenants contained in subsections (a)
and (b) of this Section 9.1 may result in
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irreparable injury to the Buyer, the Company or its Subsidiaries or Affiliates
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company or the Buyer shall be entitled to obtain a
temporary restraining order and/or a preliminary or permanent injunction,
without the necessity of proving irreparable harm or injury as a result of such
breach or threatened breach, restraining the Eligible Seller from engaging in
activities prohibited by subsections (a) and (b) above or such other relief as
may be required specifically to enforce such covenants. Notwithstanding any
other provision to the contrary, the Restricted Period with respect to an
Eligible Seller shall be tolled during any period of violation of any of the
covenants in subsections (a) and (b) above and during any other period required
for litigation during which the Company or the Buyer seeks to enforce these
covenants against such Eligible Seller if it is ultimately determined that such
Eligible Seller was in breach of such covenants.
(d) Independence and Severability. Each of the rights enumerated in
this Section 9.1 shall be independent of the others and shall be in addition to
and not in lieu of any other rights and remedies available to the Company or the
Buyer at law or in equity. If any of the covenants contained herein or any part
of any of them is hereafter construed or adjudicated to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants or rights or remedies, which shall be given full effect without regard
to the invalid portions. If any of the covenants contained herein are held to be
invalid or unenforceable because of the duration of such provisions or the area
or scope covered thereby, the Eligible Sellers agree that the court making such
determination shall have the power to reduce the duration, scope and/or area of
such provision to the maximum and/or broadest duration, scope and/or area
permissible by law and in its reduced form said provision shall then be
enforceable.
(e) Restricted Period. For purposes of this Section 9.1, the term
"Restricted Period" shall mean for each Eligible Seller, the period commencing
on the Closing Date and ending on the later to occur of (A) the five (5) year
anniversary of the Closing Date; and (B) the one (1) year anniversary of
December 31 of the Additional Purchase Price Payment Period for which such
Eligible Seller is entitled to receive his or her final Additional Purchase
Price Payment in accordance with Section 2.2. For example, if such Eligible
Seller is entitled to received his or her final Additional Purchase Price
Payment for the Additional Purchase Price Payment Period ending December 31,
2005, then the applicable Restricted Period shall end on December 31, 2006; if
such Eligible Seller is entitled to received his or her final Additional
Purchase Price Payment for the Additional Purchase Price Payment Period ending
December 31, 2006, then the applicable Restricted Period shall end on December
31, 2007. Notwithstanding the foregoing:
(i) the Restricted Period for Xxxxxx and XxXxxxx shall mean the
period commencing on the Closing Date and ending:
(A) in the case of Xxxxxx'x or XxXxxxx'x Voluntary
Resignation (other than upon notice within 30 days following a Change
of Control Event or for Good Reason) or the termination of Xxxxxx'x or
XxXxxxx'x employment with the Company for Cause, on the later to occur
of (A) the five (5) year anniversary of the Closing Date; and (B) the
one (1) year anniversary of December 31 of the Additional Purchase
Price Payment Period for which Xxxxxx or XxXxxxx, as
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applicable, is entitled to receive his or her final Additional
Purchase Price Payment in accordance with Section 2.2; and
(B) in the case of Xxxxxx'x or XxXxxxx'x Voluntary
Resignation or the termination of Xxxxxx'x or XxXxxxx'x employment
with the Company, in each case for any reason other than as provided
in paragraph (A) above, on the one (1) year anniversary of the date on
which Xxxxxx or XxXxxxx, as applicable, is so terminated; and
(ii) the Restricted Period shall terminate forthwith following
receipt by the Buyer of written notice from the Sellers' Representative of
the failure by the Buyer to make any Additional Purchase Price Payment due
and payable in accordance with Section 2.2(d) and the Buyer's failure to
make such payment within thirty (30) days after receipt of any such notice.
(f) Punches. Notwithstanding anything in this Agreement to the
contrary, Punches shall not be bound by or subject to this Section 9.1 in any
matter whatsoever, and no action taken by Punches shall have any effect on any
Eligible Seller for purposes hereof.
SECTION 9.2. "Key Man" Life Insurance.
(a) Upon the written request of the Buyer, Xxxxxxxx shall take such
action as reasonably requested by the Buyer in connection with the Buyer's
obtaining, at its cost, "key man" life insurance on Xxxxxxxx that designates the
Buyer as the sole beneficiary thereof.
(b) The Company shall take all actions reasonably necessary prior to
the Closing Date to transfer to the Buyer, effective as of the Closing Date,
ownership of the Company's "key man" life insurance policies on the Sellers,
including, without limitation, Xxxxxxxx, and to designate the Buyer as the sole
beneficiary thereof.
SECTION 10. COVENANTS OF THE BUYER.
SECTION 10.1. Actions Before Effective Date. The Buyer shall not take
any action that shall cause it to be in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement. The Buyer shall
use reasonable best efforts to perform and satisfy all conditions to Closing to
be performed or satisfied by it under this Agreement as soon as possible, but in
no event later than the Closing Date.
SECTION 10.2. Consents and Approvals. The Buyer shall use reasonable
best efforts (which in no event shall require the Buyer or any Affiliate of the
Buyer to divest any assets) to obtain all consents and approvals of third
parties (including, without limitation, Governmental Entities) required to be
obtained by it in connection with the execution, delivery and performance by the
Buyer of this Agreement and to effect the transactions contemplated by this
Agreement.
SECTION 10.3. Concurrent Acquisitions. From and after the date hereof
and until the earlier to occur of the Closing Date or the termination of this
Agreement pursuant to Section 16 hereof, the Buyer shall notify the Company in
writing reasonably in advance of
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entering into any agreement for the acquisition of or merger with any business
in substantially the same line of business as the Company, subject to any
restrictions against any such notification under the federal securities laws.
SECTION 10.4. Access to Properties and Records. The Buyer shall afford
to the Sellers and the Company, and to the accountants, counsel and
representatives of the Sellers and the Company, full access during normal
business hours throughout the period prior to the Closing Date (or earlier
termination of this Agreement to Section 16) to all properties, books,
contracts, commitments and files and records (including, but not limited to, Tax
Returns and correspondence with accountants) of the Buyer and, during such
period, shall furnish promptly to the Sellers and the Company all other
information concerning the Buyer and its properties and personnel as the Sellers
and the Company may reasonably request, provided that no investigation or
receipt of information pursuant to this Section 10.4 shall qualify any
representation or warranty of the Buyer or the conditions to the obligations of
the Sellers and the Company. The Buyer shall afford to the Sellers and the
Company full access to the Buyer's assets and operations throughout the period
prior to the Closing Date (or earlier termination of this Agreement pursuant to
Section 16).
SECTION 10.5. Reasonable Best Efforts. Upon the terms and subject to
the conditions of this Agreement, the Buyer shall use its reasonable best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable consistent with applicable law
to consummate and make effective in the most expeditious manner practicable the
transactions contemplated hereby.
SECTION 10.6. Notice of Breach. Through the Closing Date, the Buyer
shall promptly give written notice with particularity upon having knowledge of
any matter that may constitute a breach of any representation, warranty,
agreement or covenant contained in this Agreement.
SECTION 10.7. Release of Guaranties. At Closing, the Buyer shall take
all actions reasonably necessary to have each Seller's personal guaranties of
the obligations of the Company specifically set forth on Schedule 10.7 released.
SECTION 10.8. Directors' and Officers' Insurance. The Buyer shall have
effective as of the Closing Date directors' and officers' liability insurance
for Xxxxxxxx and any other Eligible Seller who may be an officer or director of
the Company after the Closing on terms not less favorable than those of the
Company in effect on the date hereof in terms of coverage and amounts.
SECTION 10.9. Disclosure Schedules. Not less than three (3) Business
Days prior to the Closing Date, the Buyer may deliver to the Sellers'
Representative updated disclosure schedules to this Agreement and to all other
agreements and other documents delivered by the Buyer to the Company and the
Sellers pursuant to this Agreement, which schedules shall reflect only those
events occurring from the date hereof to the date thereof. The sole purpose of
the updated disclosure schedules delivered pursuant to this Section 10.9 shall
be the qualification as of the Closing Date of the representations and
warranties of the Buyer contained in this Agreement.
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SECTION 11. TAXES.
SECTION 11.1. Tax Covenants.
(a) For income Tax purposes, the Buyer, the Sellers and the Company
agree to report the transactions contemplated herein in accordance with Revenue
Ruling 99-6, 1999-1 C.B. 432 (January 15, 1999).
(b) The Sellers shall prepare and file, or cause to be prepared and
filed, when due, all Tax Returns that are required to be filed by or with
respect to the Company for all Pre-Closing Tax Periods and shall pay, or cause
to be paid, any Taxes due in respect of such Tax Returns.
(c) The Buyer shall prepare and file, or cause to be prepared and
filed, when due, all Straddle Tax Returns and shall cause the Company to pay the
Taxes shown to be due thereon; provided, however, that the Sellers shall
promptly reimburse the Buyer for the portion of any such Tax that relates to the
portion of the Straddle Period ending on the Closing Date to the extent such Tax
was not reflected in the determination of Working Capital. The Sellers will
furnish to the Buyer all information and records reasonably requested by the
Buyer for use in preparation of any Straddle Tax Return. The Buyer shall allow
the Sellers to review, comment upon and reasonably approve without undue delay
any Straddle Tax Return at any time during the forty-five (45) day period
immediately preceding the filing of such Straddle Tax Return.
SECTION 11.2. Purchase Price Allocation. The Buyer and the Sellers
shall allocate the Purchase Price and any assumed liabilities of the Company in
accordance with Schedule 11.2. The Buyer, the Sellers and the Company mutually
agree that all Tax Returns filed by the parties shall be filed consistent with
such allocation. The Buyer, the Sellers and the Company further agree to take no
position, unless otherwise required by applicable law, with respect to any Taxes
inconsistent with such allocation.
SECTION 11.3. Cooperation. The Sellers and the Buyer shall reasonably
cooperate, and shall cause their respective Affiliates, officers, employees,
agents, auditors and representatives reasonably to cooperate, in preparing and
filing all Tax Returns (including claims for refund), including maintaining and
making available to each other all records necessary in connection with Taxes
and in resolving all disputes and audits with respect to all Tax periods
relating to Taxes.
SECTION 11.4. Transfer Taxes. All excise, sales, use, transfer
(including real property transfer or gains), stamp, documentary, filing,
recordation and other similar taxes, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties, resulting directly or indirectly from the transactions contemplated
by this Agreement (the "Transfer Taxes"), shall be paid by the Sellers. The
Buyer shall take all such actions as are reasonably necessary to minimize the
Sellers' liability for Transfer Taxes. Notwithstanding Section 5.9, which shall
not apply to Tax Returns relating to Transfer Taxes, any Tax Returns that must
be filed in connection with Transfer Taxes shall be prepared and filed when due
by the Sellers.
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SECTION 12. MANAGEMENT AND MANAGEMENT INCENTIVE PLANS.
SECTION 12.1. Management of the Company. Following the Closing,
including during any Additional Purchase Price Payment Period, and subject to
Xxxxxxxx' continuing employment with the Company, the business of the Company
(and any business(es) subsequently acquired by or merged with the Buyer, the
Company or any Affiliate thereof which business is in substantially the same
line of business as the Company on the date hereof) shall be managed by or under
the direction of Xxxxxxxx. Xxxxxxxx shall have the authority to manage such
businesses as is comparable to the authority of those executive officers of the
Subsidiaries of the Buyer who are employed in a capacity similar to Xxxxxxxx.
Neither the Buyer nor Xxxxxxxx shall have any obligation during such periods to
operate the Company with a view to maximizing the amount of the Additional
Purchase Price Payments.
SECTION 12.2. Reports. Within 90 calendar days after the end of each
Additional Purchase Price Payment Period, the Buyer shall deliver to the
Sellers' Representative a statement (the "EBIT Statement") setting forth the
EBIT for such period and calculating (pursuant to Sections 2.2(b)) the
Additional Purchase Price Payment, if any, to be paid with respect to such
period. The Sellers shall be deemed to have accepted the determinations set
forth in the EBIT Statement unless the Sellers' Representative delivers to the
Buyer not later than sixty (60) calendar days after receipt of the EBIT
Statement and any information and documents reasonably required in writing by
the Sellers' Representative a written notice listing in reasonable detail those
items to which the Sellers' Representative (on behalf of the Sellers) takes
exception and its proposed adjustment. The Sellers' Representative shall be
deemed to have agreed with all other items and amounts contained in the EBIT
Statement to which no specific objection has been made. If the Sellers'
Representative and the Buyer are unable, within sixty (60) calendar days after
receipt by the Buyer of the notice by the Sellers' Representative of objections
(such sixty (60) day period being conditioned upon all such information
reasonably requested in writing by the Sellers' Representative being promptly
provided to the Sellers' Representative by the Buyer), to resolve the disputed
exceptions, such disputed exceptions will be referred to the Independent
Accounting Firm. The Independent Accounting Firm, in reviewing such dispute,
shall only consider those items or amounts in the EBIT Statement as to which the
Sellers' Representative has, in the objection notice, disagreed and such other
issues as may be reasonably affected by the items as to which the Sellers'
Representative has disagreed in the objection notice. The Independent Accounting
Firm shall, within sixty (60) days following its selection, deliver to the
Sellers' Representative and the Buyer a written report determining such disputed
exceptions, and its determinations will be conclusive and binding upon the
parties thereto for the purposes of any adjustment to the Additional Purchase
Price Payment. The Independent Accounting Firm shall determine what portion, if
any, of the fees and disbursements of the Independent Accounting Firm acting
under this Section shall be borne by the Buyer and what portion, if any, shall
be borne by the Sellers.
SECTION 12.3. Key Employee and Management Profit-Sharing Bonus
Program. The Company shall take all actions necessary and appropriate to provide
that after the date hereof, no units under the Company's key employee and
management profit-sharing bonus program (the "Bonus Program") shall be
distributed (including, without limitation, for the year ended December 31,
2002). Any amounts contributed to the Bonus Program prior to the Closing which
have not been distributed on or prior to the Closing Date shall be paid to those
persons
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eligible for such payments subject to and in accordance with the terms of the
Bonus Program and at such times as are specified therein. The Company shall
accrue the following amounts under the Bonus Program: (i) $2,222 for each month
from January 1, 2001 through the Closing Date in connection with allocations for
the year ended December 31, 2000; and (ii) $4,833 for each month from January 1,
2002 through the Closing Date in connection with allocations for the year ended
December 31. 2001. All amounts under the Bonus Program accrued by the Company as
of the Closing Date shall not be treated as current liabilities for purposes of
the calculation of Working Capital or as Long-Term Debt. All amounts under the
Bonus Program accrued by the Company following the Closing Date shall be charged
to the Company's EBIT, including, without limitation, for purposes of Section
2.2.
SECTION 12.4. Management Ownership Incentive Program.
(a) The Company shall take all actions necessary and appropriate to
provide that upon the Closing, the Company's management ownership incentive plan
(the "Ownership Plan") shall terminate. The cash component of any obligations
due and payable under the Ownership Plan on the Closing Date shall be paid by
the Buyer or the Company immediately following the Closing.
(b) Following the Closing, the Company shall be obligated to pay to
those employees of the Company eligible under the Ownership Plan (the "Eligible
Employees") an aggregate amount equal to 6.2% of the gross amount (for greater
certainty, notwithstanding any reduction in the event there shall be one or more
Forfeiting Eligible Sellers) of each of the Additional Purchase Price Payments,
if any, for each of the Additional Purchase Price Payment Periods (the
"Management Incentive Payments"). The Company shall pay such Management
Incentive Payments concurrently with the Buyer's payment of the Additional
Purchase Price Payments. Xxxxxxxx (or his successor) shall determine those
Eligible Employees to whom Management Incentive Payments shall be made and the
amount of each such payment thereto, in each case subject to the prior approval
of the Board. In the event of any Eligible Employee's Voluntary Resignation
(other than upon notice within 30 days following a Change of Control Event of
for Good Reason or Hardship) or the termination of such Eligible Employee's
employment with the Company for Cause by reason of material fraud to or
embezzlement from the Buyer, the Company or any of their Affiliates determined
in accordance with Section 18.13, he or she shall forfeit all of his or her
rights to receive any future Management Incentive Payments, including the
payment, if any, for the year in which his or her employment with the Company
shall have ceased; in the event such Eligible Employee shall cease to be an
employee of the Company for any other reason whatsoever, he or she shall
continue to be entitled to Management Incentive Payments hereunder. No
Management Incentive Payments shall reduce the Company's EBIT for purposes of
Section 2.2.
SECTION 12.5. Annual Incentive Compensation. The Company's annual
incentive compensation plan, the terms of which are set forth in the minutes of
the meeting of the Company's Compensation Committee on February 8, 2002, shall
remain in place following the Closing Date until December 31, 2002. All amounts
payable by the Company under such plan are specifically set forth on Schedule
12.5. From and after January 1, 2003, Xxxxxxxx or any successor shall develop
and implement annual incentive compensation plans for the employees
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of the Company; provided, however, that the implementation of any such plan
shall be subject to the prior approval thereof by the board of the Company or
any similar governing body.
SECTION 12.6. Long-Term Incentive Compensation. Promptly following the
Closing, the Buyer shall, subject to approval by the Board, allocate under its
current option plan 80,000 options to purchase Shares ("Options") for the
benefit of certain employees of the Company. The Buyer shall grant such Options
in equal installments on a quarterly basis during the two year period
immediately following the Closing Date (i.e., 10,000 Options per quarter).
Xxxxxxxx or any successor shall determine on a quarterly basis those employees
of the Company to whom Options shall be granted and the number of Options to be
granted thereto, in each case subject to the prior approval of the Board.
SECTION 13. INDEMNIFICATION.
SECTION 13.1. Survival. Each of the representations and warranties set
forth in this Agreement or in any related agreement shall survive the Closing;
provided, however, that no claim, lawsuit, or other proceeding arising out,
related to or based upon the breach of any representation or warranty contained
in this Agreement or in any related agreement may be made by any Indemnitee
unless notice of such claim, lawsuit or other proceeding, is given to the
Indemnitor in accordance with Section 13.4 prior to the date which is eighteen
(18) months following the date of the Closing. Notwithstanding the foregoing,
claims, lawsuits or other proceedings:
(a) based upon fraud may be asserted by any Indemnitee at any time
following the Closing Date;
(b) relating to a breach of the representations and warranties
contained in Section 5.9 may be asserted by any Buyer Indemnitee until the
expiration of the applicable statute of limitations (including any extensions
thereof) for either the assessment or collection of Taxes for the periods
referred to therein;
(c) relating to a breach of the representations and warranties
contained in Sections 5.19 and 5.24 may be asserted by any Buyer Indemnitee
until the expiration of the applicable statute of limitations (including any
extensions thereof) with respect to the matters set forth therein; and
(d) relating to a breach of the representations and warranties
contained in Sections 5.5 and 6.1 may be asserted by any Buyer Indemnitee at any
time following the Closing Date.
SECTION 13.2. Indemnification by the Sellers.
(a) Notwithstanding the Closing and regardless of any investigation
at any time made by or on behalf of the Buyer or of any knowledge or information
that the Buyer may have, each Seller shall, jointly and severally, indemnify and
fully defend, save and hold the Buyer, any Affiliate of the Buyer, the Company,
any Affiliate of the Company (other than the Sellers) and their respective
directors, officers, agents and employees (the "Buyer Indemnitees"), harmless
against any damage (including, without limitation, punitive damages but
excluding
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consequential damages), liability, loss, cost, expense (including all reasonable
attorneys' fees actually incurred), deficiency, interest, penalty, impositions,
assessments or fines (collectively, "Losses") suffered or incurred by any Buyer
Indemnitee at any time and from time to time, arising out of or resulting from,
or shall pay or become obligated to pay any sum on account of, one or more of
the following:
(i) any untruth or inaccuracy in any representation or
certification of the Company or any Seller or the breach of any warranty of
the Company or any Seller, in each case, without regard to any of the
materiality and knowledge qualifications set forth therein, contained (in
each case, other than those contained in Section 6) in this Agreement, in
any related agreement, in any schedule or in any certificate delivered to
the Buyer in connection with the Closing (other than with respect to
Section 6);
(ii) to the extent not covered by Section 13.2(a)(i) hereof, any
failure of the Company to duly perform or observe prior to the Closing Date
any term, provision, covenant, agreement or condition contained in this
Agreement or in any related agreement on the part of the Company to be
performed or observed; and
(iii) to the extent not covered by Section 13.2(a)(i) hereof, any
failure of any Seller to duly perform or observe any joint (as among the
Sellers) term, provision, covenant, agreement or condition contained in
this Agreement or in any related agreement on the part of the Sellers to be
performed or observed.
(b) Notwithstanding the Closing and regardless of any investigation
at any time made by or on behalf of the Buyer or of any knowledge or information
that the Buyer may have, each of the Sellers shall, severally and not jointly,
indemnify and fully defend, save and hold the Buyer Indemnitees harmless against
any Losses suffered by any Buyer Indemnitee at any time or from time to time,
arising out of or resulting from, or shall pay or become obligated to pay any
sum on account of, one or more of the following:
(i) any untruth or inaccuracy in any representation or
certification of such Seller or the breach of any warranty of such Seller,
without regard to any of the materiality and knowledge qualifications set
forth therein, contained in Section 6 of this Agreement (or any schedule to
such Section 6) or in any certificate delivered to the Buyer in connection
with the Closing with respect to Section 6; and
(ii) any failure of such Seller to duly perform or observe any
term, provision, covenant, agreement or condition contained (other than
those subject to Section 13.2(a)(iii)) in this Agreement on the part of
such Seller to be performed or observed.
(c) Notwithstanding anything in this Section 13.2 to the contrary:
(i) except as specifically set forth on Schedule 13.2(c), the
Sellers shall not have any liability under Section 13.2(a) or Section
13.2(b) unless the aggregate of all Losses relating thereto for which the
Sellers would, but for this Section 13.2(c)(i) be liable exceeds on a
cumulative basis an amount equal to $300,000 (subject to Section
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13.2(c)(ii)), but upon reaching such amount, the Sellers shall be liable
for any Losses in excess of such amount;
(ii) the maximum amount for which the Sellers shall be liable
with respect to matters covered by Sections 13.2(a) and 13.2(b), whether
jointly or severally, individually or in the aggregate, (whether such
liability would be pursuant to such sections or under any other theory of
liability) shall not exceed the aggregate amount of all Additional Purchase
Price Payments paid to the Sellers pursuant to Section 2.2 (b) or (c) and
for each Seller its Seller's Percentage thereof; provided, however, that
any claims based upon fraud shall not be subject to the limitations set
forth in clause (i) or (ii) of this Section 13.2(c); and
(iii) Losses suffered or incurred by any Buyer Indemnitee at any
time and from time to time, arising out of or resulting from any untruth or
inaccuracy in any representation or certification of the Company or any
Seller qualified by knowledge, or the breach of any warranty of the Company
or any Seller qualified by knowledge, in each case contained in Section
5.22 or Section 5.25 (and only in such sections) shall be split equally
with the Buyer if and only if the arbitrator(s), in an arbitration
proceeding in accordance with Section 18.13, determines that the Sellers
have demonstrated that the untruth or inaccuracy in any such representation
or certification, or the breach of any such warranty, contained in Section
5.22 or Section 5.25, as the case may be (and only in such sections), is
primarily due to the acquisition by the Buyer of the Company as
contemplated in this Agreement.
In respect of clause (iii) of this Section 13.2(d), the Company and
each of the Sellers confirms that, as of the date of this Agreement, the Company
and each such Seller have no knowledge, nor, as of the Closing Date, will the
Company or each such Seller have any knowledge of any untruth or inaccuracy in
any representation or certification of the Company or any Seller, or the breach
of any warranty of the Company or any Seller contained in Section 5.22 and
Section 5.25.
(d) The Buyer shall collect and enforce any amounts payable to the
Buyer Indemnitees pursuant to this Section 13 by:
(i) recovering from the Sellers an amount not exceeding the
aggregate amount of the Additional Purchase Price Payments paid by the
Buyer to the Sellers in accordance with Section 2.2;
(ii) withholding such amounts from any amounts otherwise payable
by the Buyer to the Sellers, if any, including, without limitation,
pursuant to Section 2.2 and Section 3; and
(iii) any combination of clauses (i) and (ii) above.
The Buyer shall deposit with a third party mutually agreeable to the
Buyer and the Sellers' Representative any and all amounts withheld pursuant to
clause (ii) of this Section 13.2(d) to be held in escrow pending final
resolution of the indemnification claim of which any such amount is subject in
accordance with Section 18.13.
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Each of the Sellers hereby agrees to waive the time limit for the
execution of judgments set forth in ss. 5072 of the Delaware Code Annotated and
any other time-based defense, including, without limitation, the expiration of
any applicable statute of limitation and laches, in respect of the collection
and enforcement of any judgment, final binding ruling by the arbitrator(s)
pursuant to Section 18.13 or settlement agreement for any amounts payable to the
Buyer Indemnitees pursuant to Section 13. The immediately preceding sentence
shall in no way affect the time periods set forth in Section 13.1 for the
bringing of any claim, lawsuit or other proceeding thereunder or otherwise under
this Section 13.
(e) Notwithstanding anything to the contrary contained herein and in
any related agreement, it is expressly understood and agreed that, the Buyer may
pursue and enforce any claim for Losses under Section 13.2(a) against all
Sellers collectively and/or against any Seller individually.
(f) If the Company experiences any Losses subject to this Section 13
and the Sellers shall have reimbursed the Buyer and/or the Company for such
Losses in accordance with the terms of this Section 13, no charge for such
Losses shall be made to the Company's EBIT for the Additional Purchase Price
Payment Period during which the Losses occurred or for any Additional Purchase
Price Payment thereafter, but only to the extent that such Losses have actually
been paid.
SECTION 13.3. Indemnification by the Buyer. Notwithstanding the
Closing, the Buyer shall indemnify and agree to fully defend, save and hold the
Sellers harmless if the Sellers shall at any time or from time to time suffer
any Losses arising out of or resulting from, or shall pay or become obligated to
pay any sum on account of any one or more of the following:
(a) any untruth or inaccuracy in any representation or certification
of the Buyer or the breach of any warranty of the Buyer contained in this
Agreement, in any related agreement or in any certificate delivered to the
Company and the Sellers in connection with the Closing; or
(b) any failure of the Buyer duly to perform or observe any term,
provision, covenant, agreement or condition contained in this Agreement or in
any related agreement on the part of the Buyer to be performed or observed.
The maximum amount for which the Buyer shall be liable with respect to
matters covered by Sections 13.3(a) and 13.3(b) (whether such liability would be
pursuant to such sections or under any other theory of liability) shall not
exceed the amount equal to the aggregate of all Additional Purchase Price
Payments paid or owing to the Sellers pursuant to Section 2.2(b) or (c);
provided, however, that any failure by the Buyer to pay the Additional Purchase
Price Payments or Minimum Additional Purchase Price Payments, as the case may
be, in accordance with Section 2.2 shall not be subject to the limitation set
forth herein.
The Buyer hereby agrees to waive the time limit for the execution of
judgments set forth in ss. 5072 of the Delaware Code Annotated and any other
time-based defense, including, without limitation, the expiration of any
applicable statute of limitation and laches, in respect of the collection and
enforcement of any judgment, final binding ruling by the arbitrator(s) pursuant
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to Section 18.13 or settlement agreement for any amounts payable to the Sellers
pursuant to Section 13. The immediately preceding sentence shall in no way
affect the time periods set forth in Section 13.1 for the bringing of any claim,
lawsuit or other proceeding thereunder or otherwise under this Section 13.
SECTION 13.4. Procedures for Indemnification. If a party entitled to
indemnification under this Section 13 (an "Indemnitee") asserts that a party
obligated to indemnify it under this Section 13 (an "Indemnitor") has become
obligated to such Indemnitee pursuant to Section 13.2 or 13.3, or if any suit,
action, investigation, claim or proceeding is begun, made or instituted as a
result of which the Indemnitor may become obligated to an Indemnitee hereunder,
such Indemnitee shall give written notice to the Indemnitor. The Indemnitor
agrees to defend, contest or otherwise protect the Indemnitee against any such
suit, action, investigation, claim or proceeding at its sole cost and expense
and shall have the right to defend against, negotiate, settle, or otherwise deal
with any such suit, action, investigation, claim or proceeding; provided,
however, that the Indemnitor shall not settle for any type of equitable relief
under any law, regulation or ordinance without the prior written consent of the
Indemnitee. The Indemnitee shall have the right, but not the obligation, to
participate at its own expense in the defense thereof by counsel of the
Indemnitee's choice and shall in any event cooperate with and assist the
Indemnitor to the extent reasonably possible. If the Indemnitor fails timely to
defend, contest or otherwise protect against such suit, action, investigation,
claim or proceeding, the Indemnitee shall have the right to do so, including,
without limitation, the right to make any compromise or settlement thereof, and
the Indemnitee shall be entitled to recover the entire cost thereof from the
Indemnitor, including, without limitation, reasonable attorneys' fees,
disbursements and amounts paid as the result of such suit, action,
investigation, claim or proceeding.
SECTION 13.5. Exclusive Remedy. Notwithstanding any provision of this
Agreement or in any related agreement to the contrary (other than Section
9.1(c)), absent fraud on the part of any party, indemnification claims brought
in accordance with and subject to this Section 13 shall be the exclusive remedy
of any Indemnitee after the Closing with respect to, arising out of or resulting
from the subject matter of this Agreement.
SECTION 14. CONDITIONS PRECEDENT TO PERFORMANCE BY THE COMPANY AND THE
SELLERS.
The obligations of the Company and the Sellers to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or before the Closing Date, of the following conditions, any one or more of
which may be waived by the Company and the Sellers in their sole discretion:
SECTION 14.1. Representations and Warranties of the Buyer. All
representations and warranties made by the Buyer in this Agreement that are
qualified as to materiality shall be true and correct, and all representations
and warranties of the Buyer that are not so qualified shall be true and correct
in all material respects, in each case, as of the date hereof, and, except to
the extent such representations and warranties refer to a specific date, as of
the Closing Date as though made by the Buyer on and as of the Closing Date, and
the Company
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and the Sellers shall have received a certificate to that effect dated the
Closing Date and signed by any authorized Vice President of the Buyer.
SECTION 14.2. Performance of the Obligations of the Buyer. The Buyer
shall have performed all obligations required under this Agreement to be
performed by it on or before the Closing Date, and the Company and the Sellers
shall have received a certificate to that effect dated the Closing Date and
signed by any Vice President of the Buyer.
SECTION 14.3. Consents and Approvals. All consents, waivers,
authorizations and approvals of any Governmental Entities, and of any other
Person, required in connection with the execution, delivery and performance of
this Agreement shall have been duly obtained and shall be in full force and
effect on the Closing Date.
SECTION 14.4. HSR Act. Any applicable waiting period under the HSR Act
shall have expired or been terminated.
SECTION 14.5. No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or other governmental or
regulatory authority, domestic or foreign, nor any statute, rule, regulation,
decree or executive order promulgated or enacted by any Governmental Entity that
declares this Agreement invalid or unenforceable in any respect or which
prevents the consummation of the transactions contemplated hereby shall be in
effect; and no action or proceeding before any court or regulatory authority,
domestic or foreign, shall have been instituted or threatened by any
Governmental Entity or by any other Person, which seeks to prevent or delay the
consummation of the transactions contemplated by this Agreement or which
challenges the validity or enforceability of this Agreement, and which in any
such case has a reasonable likelihood of success in the opinion of counsel to
the Seller.
SECTION 14.6. No Material Adverse Change. During the period from
January 1, 2002 to the Closing Date, there shall not have occurred any event
that, individually or when considered together with any other matter, has had or
is reasonably likely to have a Material Adverse Effect on the Buyer and its
Subsidiaries, taken as a whole.
SECTION 14.7. Employment Agreements. The Company shall have executed
and delivered to each of the Eligible Sellers (other than Xxxxxxxx) an Amended
and Restated Employment Agreement substantially in the form attached as Exhibit
B hereto.
SECTION 14.8. Opinion of Counsel. The Company and the Sellers shall
have received an opinion, dated as of the Closing Date, from, Xxxxxxx Xxxx &
Xxxxxxxxx, counsel to the Buyer, covering the matters set forth on Exhibit C
attached hereto, subject to customary qualifications, limitations and
qualifications for opinions given in transactions of the kind contemplated
hereby.
SECTION 14.9. Other Closing Documents. The Company and the Sellers
shall have received such other certificates, instruments and documents in
confirmation of the representations and warranties of the Buyer or in
furtherance of the transactions contemplated by this Agreement as the Company
and the Sellers or their counsel may reasonably request.
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SECTION 14.10. Legal Matters. All certificates, instruments, opinions
and other documents required to be executed or delivered by or on behalf of the
Buyer under the provisions of this Agreement, and all other actions and
proceedings required to be taken by or on behalf of the Buyer in furtherance of
the transactions contemplated hereby, shall be reasonably satisfactory in form
and substance to counsel to the Company and the Sellers.
SECTION 15. CONDITIONS PRECEDENT TO PERFORMANCE BY THE BUYER.
The obligations of the Buyer to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by the Buyer in its sole discretion:
SECTION 15.1. Representations and Warranties of the Company and the
Sellers. All representations and warranties made by the Company and the Sellers
in this Agreement that are qualified as to materiality shall be true and
correct, and all representations and warranties of the Company and the Sellers
that are not so qualified shall be true and correct in all material respects, in
each case, as of the date hereof, and, except to the extent such representations
and warranties refer to a specific date, as of the Closing Date as though made
by the Company and the Sellers on and as of the Closing Date. The Buyer shall
have received a certificate to that effect dated the Closing Date and signed by
the Company and Xxxxxxxx on behalf of the Sellers.
SECTION 15.2. Performance of the Obligations of the Company and the
Sellers. The Company and the Sellers shall have performed all obligations
required under this Agreement to be performed by them on or before the Closing
Date, and the Buyer shall have received a certificate to that effect dated the
Closing Date and signed by the Company and Xxxxxxxx on behalf of the Sellers.
SECTION 15.3. Consents and Approvals. All consents, waivers,
authorizations and approvals of any Governmental Entity and of any other Person,
required in connection with the execution, delivery and performance of this
Agreement shall have been duly obtained and shall be in full force and effect on
the Closing Date.
SECTION 15.4. Interests. The Sellers' Representative shall have
delivered to the Buyer not less than one hundred percent (100%) of the Interests
deposited by the Sellers pursuant to Section 2.3(a), which Interests shall
represent all of the issued and outstanding membership interests of the Company.
SECTION 15.5. HSR Act. Any applicable waiting period under the HSR Act
shall have expired or been terminated.
SECTION 15.6. No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or governmental or regulatory
authority, domestic or foreign, nor any statute, rule, regulation, decree or
executive order promulgated or enacted by any Governmental Entity, which
declares this Agreement invalid in any respect or prevents the consummation of
the transactions contemplated hereby, or which has a Material Adverse Effect on
the Company, shall be in effect; and no action or proceeding before any court or
-49-
governmental or regulatory authority, domestic or foreign, shall have been
instituted or threatened by any Governmental Entity or by any other Person which
seeks to prevent or delay the consummation of the transactions contemplated by
this Agreement or which challenges the validity or enforceability of this
Agreement, and which in either such case has a reasonable likelihood of success
in the opinion of counsel to the Buyer.
SECTION 15.7. No Material Adverse Change. During the period from
January 1, 2002 to the Closing Date, there shall not have occurred any event
that, individually or when considered together with any other matter, has had or
is reasonably likely to have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole.
SECTION 15.8. Opinion of Counsel. The Buyer shall have received an
opinion, dated as of the Closing Date, from Xxxxxx, Xxxxxx & Xxxxxxx, a
Professional Corporation, counsel to the Company and the Sellers, covering the
matters set forth on Exhibit D attached hereto, subject to customary
qualifications, limitations and qualifications for opinions given in
transactions of the kind contemplated hereby.
SECTION 15.9. Releases of Sellers and Officers; Resignations. There
shall have been delivered to the Buyer releases, substantially in the form
attached as Exhibit E hereto, by the Sellers and the officers of the Company and
its Subsidiaries of all claims against the Company and its Subsidiaries, except
for compensation and expenses payable to such Sellers and officers up to the
Closing Date for the then current pay period. Each of those officers and
employees of the Company and its Subsidiaries specifically listed on Schedule
15.9 shall have delivered to the Buyer a letter of resignation, substantially in
the form attached as Exhibit F hereto, from their respective positions with the
Company and its Subsidiaries.
SECTION 15.10. Other Closing Documents. The Buyer shall have received
such other certificates, instruments and documents in confirmation of the
representations and warranties of the Company and the Sellers or in furtherance
of the transactions contemplated by this Agreement as the Buyer or its counsel
may reasonably request.
SECTION 15.11. Legal Matters. All certificates, instruments, opinions
and other documents required to be executed or delivered by or on behalf of the
Company and the Sellers under the provisions of this Agreement, and all other
actions and proceedings required to be taken by or on behalf of the Company or
the Sellers in furtherance of the transactions contemplated hereby, shall be
reasonably satisfactory in form and substance to counsel to the Buyer.
SECTION 15.12. Dissolution of Attention II. The Buyer shall have
received written evidence from the Secretary of State of the State of Georgia of
the dissolution of Attention II.
SECTION 15.13. Consulting Agreement. Punches shall have executed and
delivered to the Company a consulting agreement on terms mutually agreeable to
Punches and the Buyer.
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SECTION 15.14. Clearance Certificates. The Buyer shall have received
from the Sellers any clearance certificates or similar documents that may be
required by any Tax Authority in order to relieve a Seller of his or her
obligation to pay any Transfer Tax.
SECTION 15.15. Employment Agreements. Each of the Eligible Sellers
(other than Xxxxxxxx) shall have executed and delivered to the Company such
Seller's Amended and Restated Employment Agreement substantially in the form
attached as Exhibit B hereto.
SECTION 16. TERMINATION.
SECTION 16.1. Conditions of Termination. Notwithstanding anything to
the contrary contained herein, this Agreement may be terminated at any time
before the Closing:
(a) By mutual consent of the Sellers and the Buyer;
(b) By the Buyer if the Company or any of the Sellers has breached
any representation, warranty, covenant or agreement contained in this Agreement
and has not, in the case of a breach of a covenant or agreement, cured such
breach within ten (10) Business Days after written notice to the Company and the
Sellers (provided, that the Buyer is not then in material breach of the terms of
this Agreement, and provided further, that no cure period shall be required for
a breach which by its nature cannot be cured) such that the conditions set forth
in Section 15.1 or Section 15.2 hereof, as the case may be, will not be
satisfied;
(c) By the Sellers if the Buyer has breached any representation,
warranty, covenant or agreement contained in this Agreement and has not, in the
case of a breach of a covenant or agreement, cured such breach within ten (10)
Business Days after written notice to the Buyer (provided, that neither the
Company nor any of the Sellers are then in material breach of the terms of this
Agreement, and provided further, that no cure period shall be required for a
breach which by its nature cannot be cured) such that the conditions set forth
in Section 14.1 or Section 14.2 hereof, as the case may be, will not be
satisfied;
(d) By the Sellers or the Buyer if: (i) there shall be a final,
non-appealable order of a federal or state court in effect preventing
consummation of the transactions contemplated hereby; or (ii) there shall be any
final action taken, or any statute, rule, regulation or order enacted,
promulgated or issued or deemed applicable to the transactions contemplated
hereby by any Governmental Entity which would make consummation of the
transactions contemplated hereby illegal; or
(e) By the Sellers or the Buyers if the Closing shall not have been
consummated by September 6, 2002, provided that the right to terminate this
Agreement under this Section 16.1(e) shall not be available to any party whose
failure to fulfill any material obligation under this Agreement has been both
willful and the cause of, or resulted in, the failure of the Closing to occur on
or before such date.
SECTION 16.2. Effect of Termination. In the event of the termination
of this Agreement as provided in Section 16.1 hereof, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of the Company, the Sellers or the Buyer, or their respective officers,
directors, stockholders, partners, option holders or other Persons under
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their control, except to the extent that such termination results from the
willful breach by a party hereto of any of its representations, warranties,
covenants or agreements set forth in this Agreement which shall be subject to
Section 16.3, and provided that the provisions of Sections 16 and 18, hereof
shall remain in full force and effect and survive any termination of this
Agreement.
SECTION 16.3. Willful Breach.
(a) In the event of a willful breach by the Buyer of any of its
obligations under this Agreement prior to the Closing Date, the Buyer shall pay
to the Company and the Sellers, as liquidated damages and not as a penalty, the
reasonable documented expenses of the Company and the Sellers, respectively,
incurred in connection with the transactions contemplated by this Agreement;
provided, however, that in no event shall such expenses (for both the Company
and the Sellers) exceed $250,000 in the aggregate. Any amounts payable by the
Buyer to the Sellers under this Section 16.3(a) shall be paid to each Seller pro
rata on the basis of his or her Seller Percentage.
(b) In the event of a willful breach by the Company or the Sellers of
any of their respective obligations under this Agreement prior to the Closing
Date, the Company shall pay to the Buyer, as liquidated damages and not as a
penalty, the reasonable documented expenses of the Buyer, respectively, incurred
in connection with the transactions contemplated by this Agreement; provided,
however, that in no event shall such expenses exceed $250,000 in the aggregate.
SECTION 17. SELLERS' REPRESENTATIVE.
SECTION 17.1. Appointment; Acceptance. By executing this Agreement,
each Seller hereby irrevocably constitutes and appoints Xxxxxxxx and his
successors, acting as hereinafter provided, as its attorney-in-fact and agent in
its name, place and stead in connection with the transactions and agreements
contemplated by this Agreement and any related agreement (the "Sellers'
Representative"), and acknowledges that such appointment is coupled with an
interest and is intended to be durable and to survive the disability or mental
incapacity of each Seller. By executing and delivering this Agreement under the
heading "Sellers' Representative," the person who is appointed as Sellers'
Representative hereby (a) accepts his appointment and authorization to act as
Sellers' Representative as attorney-in-fact and agent on behalf of the Sellers
in accordance with the terms of this Agreement and (b) agrees to perform its
obligations under this Agreement and any related agreement.
SECTION 17.2. Authority. Each Seller fully and completely, without
restriction:
(a) Authorizes the Sellers' Representative: (i) to prepare, finalize,
approve and authorize all exhibits, schedules and other attachments to this
Agreement and all other agreements and other documents (including, without
limitation, documents delivered pursuant to Section 2, 3 or 12) delivered by the
Sellers pursuant to this Agreement (the "Seller Delivered Agreements") and such
approval and authorization may be conclusively evidenced by the Sellers'
Representative and (ii) to execute and deliver, and to accept delivery, on his
behalf of
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such amendments as may be deemed by the Sellers' Representative in its sole
discretion to be appropriate under the Seller Delivered Agreements; provided,
however, that nothing in this Section 17 shall be deemed to authorize the
Sellers' Representative to communicate any inaccurate or misleading information
to the Buyer on behalf of any Seller.
(b) Agrees to be bound by all notices received and agreements and
determinations made by and documents executed and delivered by the Sellers'
Representative under the Seller Delivered Agreements.
(c) Authorizes the Sellers' Representative: (i) to dispute or to
refrain from disputing and thereby accept any claim made by the Buyer under the
Seller Delivered Agreements; (ii) to negotiate and settle any dispute which may
arise under, and exercise or refrain from exercising remedies available under
the Seller Delivered Agreements, to sign any releases or other documents with
respect to such dispute or remedy; (iii) to waive any condition contained in the
Seller Delivered Agreements; (iv) to give any and all consents under the Seller
Delivered Agreements (including, without limitation, in connection with the
Additional Purchase Price Payment); and (v) to give such instructions and do
such other things and refrain from doing such things as the Sellers'
Representative shall deem appropriate to carry out the provisions of the Seller
Delivered Agreements.
SECTION 17.3. Actions. Each Seller hereby expressly acknowledges and
agrees that (a) the Sellers' Representative is exclusively authorized to act on
its behalf, notwithstanding any dispute or disagreement among the Sellers, and
(b) the Buyer and any other person or entity shall be entitled to rely on any
and all actions taken by the Sellers' Representative under this Agreement and
the other Seller Delivered Agreements without any liability to, or obligation to
inquire of, any of the Sellers. All notices, counternotices or other instruments
or designations delivered by any Seller or the Sellers' Representative shall not
be effective unless, but shall be effective if, signed by the Sellers'
Representative, and if not, such document shall have no force and effect
whatsoever hereunder and the Buyer and any other person or entity may proceed
without regard to any such document. The Buyer and any other person or entity
are hereby expressly authorized to rely on the genuineness of the signature of
the Sellers' Representative, and upon receipt of any writing which reasonably
appears to have been signed by the Sellers' Representative, the Buyer and any
other person or entity may act upon the same without any further duty of inquiry
as to the genuineness of the writing.
SECTION 17.4. Effectiveness. The authorization of the Sellers'
Representative shall be irrevocable and effective until its rights and
obligations under this Agreement terminate by virtue of the termination of any
and all of the obligations of the Sellers to the Buyer under the Seller
Delivered Agreements.
SECTION 17.5. Indemnification; Fees and Expenses. The Sellers hereby
jointly and severally agree (a) to indemnify and hold the Sellers'
Representative harmless from any and all liability, loss, cost, damage or
expense, including attorneys fees (reasonably incurred or suffered as a result
of the performance of its duties under this Agreement), and (b) that the
Sellers' Representative shall not have any liability to the Sellers for any act
or omission hereunder, except for gross negligence or willful misconduct.
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SECTION 17.6. Successor. Upon ninety (90) day prior written notice to the
Company, the Sellers' Representative shall have the right to resign at his sole
discretion for any reason at any time and in such event, the Sellers'
Representative shall continue to have all rights to indemnification, fees and
expenses as provided in Section 17.5 above. If the Sellers' Representative
resigns or ceases to function in its capacity as such for any reason whatsoever,
such Sellers' Representative shall immediately give notice to the other parties
to this Agreement. In such event, Xxxxxxx shall be appointed as the successor
Sellers' Representative; provided, however, that if for any reason Xxxxxxx shall
not be appointed as the successor within ninety (90) days after the Sellers'
Representative resigns or otherwise ceases to function, then the Buyer shall
have the right, upon notice to each Seller and opportunity to be heard, to
petition a court of competent jurisdiction for the appointment of one or more
successors to be selected from among those Sellers employed by the Company or
any of its Affiliates as of the date of such petition so long as any such Seller
is still so employed.
SECTION 17.7. Survival of Authorizations. EACH SELLER INTENDS FOR THE
AUTHORIZATIONS AND AGREEMENTS IN THE FOREGOING SECTIONS OF THIS SECTION 17 TO
REMAIN IN FORCE AND NOT BE AFFECTED IF SUCH SELLER SUBSEQUENTLY BECOMES MENTALLY
OR PHYSICALLY DISABLED, INCOMPETENT OR INCAPACITATED, DOES HEREBY AUTHORIZE SUCH
RECORDINGS AND FILINGS HEREOF AS THE SELLERS' REPRESENTATIVE MAY DEEM
APPROPRIATE, AND DOES HEREBY DIRECT THAT NO FILING OF ACCOUNTS OR INVENTORIES OR
POSTING OF A SURETY BOND SHALL BE REQUIRED.
SECTION 18. MISCELLANEOUS.
SECTION 18.1. Successors and Assigns. Except as otherwise provided in this
Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other parties
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect; provided, however, that the Buyer may
assign its rights hereunder to an Affiliate; and provided, further, that no such
assignment shall reduce or otherwise vitiate any of the obligations of the Buyer
hereunder. This Agreement shall inure to the benefit of and shall be binding
upon the successors and permitted assigns of the parties hereto.
SECTION 18.2. Governing Law, Jurisdiction. This Agreement shall be
construed, performed and enforced in accordance with, and governed by, the laws
of the State of Delaware, without giving effect to the conflict or choice of law
rules thereof. The parties hereto irrevocably elect as the sole judicial forum
for the adjudication of any matters arising under or in connection with this
Agreement or the transactions contemplated hereby, and consent to the
jurisdiction of, any state or federal court sitting in the State of Delaware,
and such parties irrevocably waive, to the fullest extent permitted by law, any
objection that they may now have or hereafter obtain to the laying of venue in
any such court in connection therewith.
SECTION 18.3. Expenses. Except as otherwise provided for in this Agreement,
all of the fees, expenses and costs incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party hereto
incurring such fees, expenses and costs.
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SECTION 18.4. Severability. In the event that any part of this Agreement is
declared by any court or other judicial or administrative body to be null, void
or unenforceable, said provision shall survive to the extent it is not so
declared, and all of the other provisions of this Agreement shall remain in full
force and effect.
SECTION 18.5. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served personally on the
party to whom notice is to be given; (b) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission;
(c) on the day after delivery to Federal Express or similar overnight courier or
the Express Mail service maintained by the United States Postal Service; or (d)
on the fifth (5) day after mailing, if mailed to the party to whom notice is to
be given, by first class mail, registered or certified, postage prepaid and
properly addressed, to the party as follows:
If to the Company: Attention, LLC
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxx, Xxxxxx & Xxxxxxx, a Professional
Corporation
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to a Seller or the Sellers'
Representative, to the Sellers' Representative at:
Attention, LLC
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxx, Xxxxxx & Xxxxxxx, a Professional
Corporation
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Buyer: West Corporation
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. X'Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Any party may change its address for the purpose of this Section by giving
the other party written notice of its new address in the manner set forth above.
SECTION 18.6. Amendments; Waivers. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by all of
the parties hereto, or in the case of a waiver, by the party waiving compliance.
Any waiver by any party of any condition, or of the breach of any provision,
term, covenant, representation or warranty contained in this Agreement, in any
one or more instances, shall not be deemed to be nor construed as a further or
continuing waiver of any such condition, or of the breach of any other
provision, term, covenant, representation or warranty of this Agreement.
SECTION 18.7. Public Announcements. The parties agree that after the
signing of this Agreement, the Company, the Sellers and the Buyer shall not make
any press release or public announcement concerning this transaction without the
prior written approval of the other parties hereto unless a press release or
public amendment is required by law, rule or regulation.
SECTION 18.8. Entire Agreement. This Agreement and the Mutual
Confidentiality Agreement, dated as of October 30, 2001, by and between the
Company and the Buyer contain the entire understanding among the parties hereto
with respect to the transactions contemplated hereby and supersede and replace
all prior and contemporaneous agreements and understandings, oral or written,
with regard to such transactions. All exhibits and schedules hereto and any
documents and instruments delivered pursuant to any provision hereof are
expressly made a part of this Agreement as fully as though completely set forth
herein.
SECTION 18.9. Parties in Interest. Nothing in this Agreement is intended to
confer any rights or remedies under or by reason of this Agreement on any
Persons other than parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement is intended to relieve or discharge the
obligations or liability of any third persons to the
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Company, the Sellers or the Buyer. No provision of this Agreement shall give any
third parties any right of subrogation or action over or against the Company,
the Sellers or the Buyer.
SECTION 18.10. Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
SECTION 18.11. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same instrument.
SECTION 18.12. Knowledge. As used in this Agreement, the term "knowledge"
shall, as to any Person, refer to all facts of which such Person shall have
notice or actual knowledge. The Sellers and the Company confirm that (a) there
are in effect procedures that are reasonably designed to inform the Sellers and
the Company fully as to the matters that are the subject of their respective
representations and warranties and that the Sellers and the Company have
observed such procedures, and (b) the Sellers and the Company have made due and
diligent inquiry as to the matters that are the subject of their respective
representations and warranties.
SECTION 18.13. Arbitration. Any controversy or claim arising out of or
relating to (i) the determination of Hardship, (ii) the determination of
material fraud or embezzlement for purposes of Section 2.2(c)(i), or (iii) any
indemnification claim for purposes of Section 13.2(d), shall be settled by
arbitration in accordance with the then prevailing Commercial Arbitration Rules
of the American Arbitration Association, and judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
Federal Rules of Evidence shall apply to all arbitration proceedings hereunder
and shall control and prevail over any Rules of the American Arbitration
Association. Arbitration proceedings shall be conducted at such location as the
parties to such proceedings shall mutually agree or as the arbitrator(s) shall
determine in his, her or their sole discretion. The prevailing party, as
determined by the arbitrator, shall be entitled to its reasonable attorney fees,
arbitration costs, and other related collection costs and expenses incurred in
enforcing its rights under Sections 2.2(c)(i) or 13.2(d), as the case may be.
The decision of the arbitrator(s) shall be final and binding on the parties and
may, if necessary, be reduced to a judgment in any court of competent
jurisdiction. This agreement to arbitrate shall survive any termination or
expiration of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
Company
ATTENTION, LLC
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxx
Title: General Manager
Sellers
/s/ Xxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxx Xxxxxxx
---------------------------
Xxxx Xxxxxxx
/s/ Xxxxx Xxxxxxxxx
---------------------------
Xxxxx Xxxxxxxxx
/s/ Xxx Xxxxxx
---------------------------
Xxx Xxxxxx
/s/ Xxxxxx Punches
---------------------------
Xxxxxx Punches
/s/ Xxxx Xxxxxx
---------------------------
Xxxx Xxxxxx
/s/ Xxxx XxXxxxx
---------------------------
Xxxx XxXxxxx
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Sellers' Representative
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx
Buyer
WEST CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title Executive Vice President
Strategic Business Development
-59-
EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
OF LIMITED LIABILITY COMPANY INTEREST IN
ATTENTION LLC
ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") made as of the ____
day of July, 2002, by and between [SELLER] (the "Assignor"), and WEST
CORPORATION, a Delaware corporation (the "Assignee").
WHEREAS, Assignor, Assignee, Attention, LLC, a Georgia limited liability
company (the "Company"), other holders of interests in the Company and the
Sellers' Representative (as defined in the Purchase Agreement), have entered
into a Purchase Agreement, dated July __, 2002 (the "Purchase Agreement")
relating to the sale and purchase of all outstanding interests in the Company;
WHEREAS, the Assignor owns the limited liability company interest in the
Company set forth opposite his or her name on Exhibit A hereto (such interest in
the Company, the "Interest", which term shall include all rights, privileges,
interests and assets that the Assignor shall have under or pursuant to the
Operating Agreement (as hereinafter defined) or otherwise with respect to the
Company), which Company exists under the laws of the State of Georgia and is
governed by that certain Limited Liability Company Agreement dated as of
September 30, 1999, as amended (the "Operating Agreement"); and
WHEREAS, in accordance with the obligations set forth in Sections 2.1(b)
and 2.3 of the Purchase Agreement, the Assignor desires to transfer the Interest
to the Assignee and the Assignee desires to acquire the Interest.
NOW THEREFORE, in consideration of good and valuable consideration set
forth in the Purchase Agreement, the receipt and sufficiency of which are hereby
acknowledged, the Assignor and the Assignee hereby agree as follows:
1. Assignment. As of the date hereof (the "Effective Date"), and upon
execution of this Agreement by the parties hereto, the Assignor hereby transfers
and assigns absolutely to the Assignee all of the Assignor's right, title and
interest in and to the Interest, free and clear of all preemptive rights, liens,
claims and encumbrances other than pursuant to the Operating Agreement.
2. Assumption. The Assignee hereby accepts the transfer of the Interest as
of the Effective Date, and the Assignee takes the Interest subject to, and
hereby assumes, the Assignor's duties and obligations under the Operating
Agreement with respect to such Interest accruing from and after the date hereof.
Notwithstanding any provision in the Operating Agreement to the contrary,
contemporaneously with the assignment described in Paragraph 1 above, Assignee
shall be admitted to the Company as a substitute member of the Company. The
admission shall occur, and for all purposes shall be deemed to have occurred,
immediately prior to the Assignee's withdrawal as a member of the Company and
resignation as a managing member of the Company.
3. Withdrawal. Notwithstanding any provision in the Operating Agreement to
the contrary, immediately following the admission of the Assignee as a
substitute member of the Company, the Assignor shall and does hereby withdraw
from the Company as a member and resign from the Company as a managing member,
and shall thereupon cease to be a member of the Company, and shall thereupon
cease to have or exercise any right or power as a member or managing member of
the Company. From and after the Effective Date, the Assignor shall have no
further interest in the Interest, including, without limitation, the profits,
gains and income allocable to the Interest, and shall not be liable for any of
the expenses, obligations or liabilities allocable to the Interest or relating
to the Company accruing from and after the date hereof, other than as provided
in the Purchase Agreement to the contrary. Assignor shall remain liable for all
expenses, liabilities and obligations allocable to the Interest or relating to
the Company accruing prior to the date hereof, except as otherwise agreed
between the Assignor and the Company in the Purchase Agreement, or otherwise.
4. Continuation of the Company. The parties hereto agree that the
assignment of the Interest, the admission of the Assignee as a substitute member
of the Company and the withdrawal of the Assignor as a member of the Company and
the resignation of the Assignor as a managing member of the Company shall not
dissolve the Company and that the business of the Company shall continue.
5. Books and Records. The Assignee of the Company shall take all actions
necessary under the Georgia Limited Liability Company Act (GA. CODE XXX. SS.
00-00-000, et seq.) and the Operating Agreement, including causing the amendment
of the Operating Agreement, to evidence the Assignor's withdrawal from the
Company as a member and resignation from the Company as a managing member and
the admission of the Assignee to the Company as a member.
6. Notices. All notices and other communications provided to any party
hereto under this Agreement shall be in writing or by facsimile or by electronic
mail address and addressed, delivered or transmitted to such party at its
address or facsimile number or electronic mail address set forth on the
signature page hereto or at such other address or facsimile number as may be
designated by such party in a notice to the other party. Any notice, if mailed
and properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any notice, if
transmitted by facsimile or electronic mail address, shall be deemed given when
transmitted (telephonic confirmation in the case of facsimile).
7. Severability. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
8. Further Assurances. Each of the parties hereto agrees to cooperate at
all times from and after the Effective Date with respect to all of the matters
described herein, and to execute such further assignments, releases, assumptions
and amendments of the Operating Agreement, notifications and other documents as
may be reasonably requested for the purpose of
A-2
giving effect to, or evidencing or giving notice of, the transactions
contemplated by this Agreement.
9. Amendment, Waiver. Neither this Agreement nor any term hereof may be
amended, modified, changed, waived, discharged or terminated, except by an
agreement in writing signed by the parties hereto.
10. Governing Law; Jurisdiction. This Agreement is drawn under the laws of
the State of Delaware, and it shall be governed by and construed in accordance
with said laws without regard to conflict of law principles. The parties agree
that any legal dispute regarding this Agreement or any other agreement
contemplated hereby shall take place in a state or federal court of appropriate
jurisdiction within the State of Delaware.
11. Entire Agreement. The Purchase Agreement and this Agreement embody the
entire agreement and understanding between the parties hereto with respect to
the subject matter thereof and hereof and supersede all prior agreements and
understandings between such parties relating to such subject matter except as
specifically set forth therein and herein.
12. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
13. Binding Effect. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns.
[Signatures continued on next page.]
A-3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
ASSIGNOR:
[SELLER]
By:____________________________
Address:
Telecopy No.:
ASSIGNEE:
WEST CORPORATION
By:____________________________
Name:
Title:
A-4
EXHIBIT A
Limited Liability Company Interest
Assignor: Percentage Interest in Attention, LLC
SELLER %
A-5
EXHIBIT B
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Agreement is entered into as of this _____day of _________________,
2002, by and between ______________________, an individual resident of the state
of _______________ (the "Employee"), and Attention, LLC a Georgia limited
liability company (the "Company").
WHEREAS, Employee and the Company entered into an Employment Agreement
dated _____________, and effective August 1, 2002 (the "Restatement Date"), such
Agreement shall be amended and restated as provided herein.
WHEREAS, the Company is engaged in the business of marketing and
providing accounts receivable management and collection services to creditors
(the "Business"). The "Business" includes, without limitation, conducting the
affairs and activities of the corporate office functions (currently located at
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000) in conjunction with
the Business.
WHEREAS, the Employee has significant experience in managing and
operating marketing and sales operations, and managing and operating call center
facilities in the Business, and the Company desires to retain the exclusive
services of the Employee, both in the Business and in ancillary business lines
into which the Company enters, and the Employee desires to render such services
to the Company commencing on the Effective Date (as defined below), on the terms
and conditions set forth in this Agreement.
WHEREAS, the success of the Company in the Business depends to a great
extent on there being complete confidentiality and strict secrecy kept with
respect to certain confidential information, trade secrets and inventions of the
Company and its business and it is imperative that the confidentiality of such
information be maintained.
WHEREAS, in the course of Employee's employment, Employee shall (a) gain
knowledge of the business, affairs, finances, management, marketing programs,
techniques, systems and methods, customers and methods of operation of the
Company and Buyer, (b) be trained by the Company at Company expense in the
operation and management of the Business and the marketing and sale of the
Company's services and (c) be furnished by Company with access to lists of the
Company's and Buyer's customers and their needs, and will or has become
personally known to and acquainted with the Company's customers thereby
establishing a personal relationship with such customers for the benefit of the
Company.
B-1
WHEREAS, the Company and Buyer would suffer irreparable harm if the
Employee were to use such knowledge, training, information, or relationships in
competition with the Company or Buyer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, terms and conditions set forth in this Agreement, the parties hereby
agree, effective as of the Restatement Date, as follows:
1. Services.
1.1. Employment. The Company hereby employs the Employee, commencing on
the Effective Date, as _________________________. Employee shall report directly
to, and shall perform such assignments as may be given him by, the
____________________________. Employee's duties and responsibilities in such
position ("Duties") shall be set forth in Exhibit "A" attached hereto and made a
part hereof. As and when the duties of Employee materially change, Company and
Employee agree to amend Exhibit "A" to reflect such changes in duties and such
other tasks the President may assign to Employee from time to time. By executing
this Agreement, the Employee agrees to serve in such position and to devote full
time, attention, loyalty and best efforts to the performance of the Employee's
duties hereunder.
1.2. Term of Employment/Exclusivity. The employment of Employee shall
commence on the Effective Date and shall continue until December 31, 2004 (the
"Initial Term of Employment"). Thereafter, employment of Employee shall
automatically renew and extend for successive terms of twelve (12) months each
(a "Renewal Term"), unless either party shall give written notice to the other
party of the non-renewal of this Agreement at least sixty (60) days prior to the
expiration of the then current term. Notwithstanding the foregoing, the
employment of Employee shall be subject to termination at any time prior to the
expiration of the Initial Term of Employment or any Renewal Term as provided in
paragraphs 3 and 4 hereof. The Employee shall render his services under this
Agreement on a full time (except for vacation in accordance with Company
policy), exclusive basis to the Company.
1.3. Confidentiality. The Employee acknowledges that his employment
under this Agreement shall provide the Employee access to the Company's (which
for purposes of this paragraph 1.3 shall mean the Company, its subsidiaries and
affiliated companies) Trade Secrets (as defined in Exhibit B to this Agreement)
or Confidential Information (as defined in Exhibit B to this Agreement). The
Employee further acknowledges that the services agreed to under this Agreement
are of a special and unique character and that the Company competes in the
Business with others for which the Employee's services and expertise would be
valuable. In recognition thereof, the Employee agrees and covenants as follows:
B-2
1.3.1 During Employee's employment and at all times thereafter,
Employee shall (a) not use or disclose to others, without the prior written
consent of the Company, any Trade Secrets or Confidential Information except any
use or disclosure thereof in the normal performance of Employee's duties, and
(b) take reasonable precautions to safeguard and maintain the confidentiality
and secrecy of all Trade Secrets and Confidential Information and limit the
disclosure of all Trade Secrets and Confidential Information to those who have a
need to know.
1.3.2 Upon termination of Employee's employ with the Company for
any reason, Employee shall not take any document, data, manuals, databases,
contact lists or program of the Company or its customers containing or
pertaining to Trade Secrets or Confidential Information of the Company or of its
customers. All tangible expressions, in any media, of such data, documents,
manuals, databases, contact lists and programs and all copies thereof shall be
surrendered by Employee to the President of the Company on or prior to the
termination of Employee's employment as well as any computers, software programs
and other property of the Company provided to Employee. Employee will obtain a
receipt of such delivery to evidence Employee's compliance with this provision.
1.3.3 The parties agree that the limitations herein on the
disclosure and use of Trade Secrets and Confidential Information shall apply
during Employee's employment hereunder and for a period of two (2) years from
termination of such employment, except that Confidential Information of any
customer of the Company shall be kept confidential for such longer period, if
any, as the Company and the customer have agreed or as otherwise permitted by
law, subject to the earlier termination of such limitations as provided in
paragraph 3 of Exhibit B. The limitations herein on the disclosure and use of
Trade Secrets shall continue for so long as such information remains a Trade
Secret.
1.4. (Deleted intentionally).
1.5. (Deleted intentionally).
1.6. Proprietary Property. All intellectual property, including without
limitation any design, name, xxxx, process, invention, and all patentable or
copyrightable materials, including without limitation specifications, marketing
or other promotional brochures or other materials whether or not reduced to
practice or to a writing which is either (a) created, devised or discovered by
Employee in the course of Employee's services to the Company, or (b) created,
devised or discovered within six (6) months after termination of Employee's
employment with the Company and is based in whole or in part upon Confidential
Information or Trade Secrets and (collectively, the "Work Product"), are
specifically intended to be works made for hire and shall be the sole and
exclusive property of Company. The Work Product shall be deemed made
B-3
for hire whether created within or without the Company's facilities, alone or
with others, and whether during or outside normal business hours. Employee shall
promptly disclose and describe all such Work Product and shall cooperate with
the Company in the protection of the Work Product and the Company's proprietary
rights therein and, to the extent deemed desirable by the Company, the
application for and registration of such trademarks, trade names, patents and
copyrights. Employee shall execute all paper and documents delivered to Employee
for execution and perform all other acts necessary or appropriate in the
discretion of the Company to evidence or further document the Company's
ownership of the Work Product and the above-mentioned proprietary rights
therein, at no additional expense to Company. Employee shall further assist the
Company in obtaining, registering, maintaining and defending for the Company's
benefit (which defense shall be at the Company's expense) all copyrights, trade
secret rights, patents, and other proprietary rights in the Work Product in any
and all countries as the Company may determine in its sole discretion.
1.7. Reasonableness, Severability; Injunctive Relief, Etc. The Company and
Employee agree that the prohibitions contained in Sections 1.3 and 1.6 above, or
in any of their subparagraphs, are essential to this Agreement; that each of the
covenants of Employee and restrictions is reasonable and necessary to protect
and preserve the legitimate interests and properties of Company and its
Business; that irreparable loss and damage will be suffered by Company should
Employee breach any of such covenants and agreements; that each of such
covenants and agreements is separate, distinct and severable not only from the
other of such covenants and agreements but also from the other and remaining
provisions of this Agreement; that the unenforceability of any such covenant or
agreement shall not affect the validity or enforceability of any other such
covenant or agreement or any other provision or provisions of this Agreement;
and that, in addition to other remedies available to it, the Company shall be
entitled to both temporary and permanent injunctions to prevent a breach or
contemplated breach by Employee of any of such covenants or agreements. In the
event that the Company should seek an injunction hereunder, the Employee waives
any requirement that the Company post a bond or any other security.
Company and Employee intend that in the event that a court, in construing
the enforceability of any provision of this Agreement, determines that the
covenant is unenforceably broad or ambiguous, such court shall have full power
and authority to disregard or strike through any portion of the provision that
renders the provision unenforceably broad or ambiguous or to modify or to reform
the provision to the extent necessary to render it enforceable.
2. Compensation.
2.1. Base Compensation. In full consideration for the services to be
rendered by the Employee under this Agreement commencing on , the Company agrees
to pay the Employee an annual salary of _________________________
($_______________)
B-4
("Base Compensation"). Commencing on the Restatement Date, Employee's annual
Base Compensation shall be $_____________.
Such salary shall be payable on a basis in accordance with the Company's
payroll procedures, unless otherwise agreed by the Company and the Employee in
writing. All amounts paid to Employee by Company shall be subject to deductions
for taxes, social security and other withholdings as may be required by law (as
determined by Company).
2.2. Bonus Compensation. In addition to Employee's Base Compensation,
the Company may pay to Employee such bonuses or other increases as the Company
may determine, from time to time, in its sole discretion ("Bonus Compensation").
Such bonuses, if any, may be based on the profitability of the Company,
specified business segments or otherwise. Nothing herein shall be construed to
obligate the Company to pay any bonuses or increases to Employee. [add
guaranteed bonus, if applicable]
2.3. Employee Benefits. The Company shall, while the Employee is
employed with the Company, provide the Employee with the same or equivalent
level of benefits generally provided by the Company to other employees of the
Company.
2.4. Reimbursement. Subject to the Company's approval consistent with
Company policy as in effect from time to time, the Company shall pay or
reimburse the Employee for all reasonable and necessary expenses actually
incurred or paid by the Employee while employed with the Company in connection
with the performance of his services under this Agreement upon presentation of
expense statements or vouchers or such other supporting information as the
Company may reasonably require.
[Special Provisions for Xxxx XxXxxxx:
2.5. Automobile Payments. The Company shall provide to Employee a leased
automobile for use in connection with Employee's services to the Company, the
monthly lease payments for which automobile shall not exceed $600 or such other
amount reasonably determined by the Company. The Company shall also pay to
Employee $500 per month as reimbursement to Employee for automobile expenses,
including without limitation, insurance, gasoline and repairs or service to the
automobile.
2.6. Bonus Compensation. In addition to Employee's Base Compensation,
the Company may pay to Employee such bonuses or other increases as the Company
may determine, from time to time, in its sole discretion, with a guaranteed
annual bonus of not less than Sixty Thousand Dollars ($60,000) ("Guaranteed
Bonus") and a potential
B-5
maximum annual bonus of not more than One Hundred Twenty Thousand Dollars
($120,000) ("Bonus Compensation"). Such bonuses shall be payable quarterly and
shall be subject to deductions for taxes, social security and other withholdings
as may be required by law. Such bonuses, if any, may be based on the
profitability of the Company, specified business segments or otherwise. Other
than Company's obligation to pay the Guaranteed Bonus during the term of this
Agreement, nothing herein shall be construed to obligate the Company to pay any
bonuses or increases to Employee.]
3. Termination of Employment.
3.1. Termination by the Company.
3.1.1 Termination for Cause. Solely for the purposes of this
Agreement, the Company may terminate Employee's employment with the Company "For
Cause" by written notice to the Employee, with the consequences set forth in
paragraph 3.3.1 below. "For Cause" shall, solely for purposes of this Agreement,
exist at any time after the happening of one or more of the following events:
(1) failure or refusal to comply in any material respect with the reasonable
policies, standards or regulation of the Company; (2) failure or refusal in any
material respect to perform Employee's duties as established herein, or a
failure or refusal to follow in any material respect the directives of the
General Manager of the Company, provided, however, that if such failure to
perform arises out of the disability of Employee (as such disability is defined
in Section 4.1 herein), Cause shall not exist; (3) unethical or fraudulent
conduct or conduct that materially discredits the Company or is materially
detrimental to the reputation, character, business or standing of the Company;
(4 ) a deliberate attempt to do an injury to the Company; (5) Employee's
material breach of a term of his Employment Agreement or the Operating Agreement
to which Employee is a party; (6) an unlawful or criminal act which would
reflect badly on the Company in the Company's reasonable judgment; (7) the use
of alcohol such that it adversely affects performance; (8) the unlawful use of
controlled substances; or (9) a material violation of any statutory, contractual
or common law duty of loyalty to the Company.
3.1.2 Other Termination. Upon thirty (30) days written notice to
Employee, the Company shall have the right in its sole discretion to terminate
Employee's employment with the Company for any reason whatsoever, or for no
reason, with the consequences set forth in paragraph 3.3.2 below.
3.2. Termination by the Employee. Upon thirty (30) days written notice to
the Company the Employee shall have the right in his sole discretion to
terminate his employment with the Company for any reason whatsoever, or for no
reason, with the consequences set forth in paragraph 3.3.1 below.
B-6
3.3. Severance Benefits.
3.3.1 Termination by the Company For Cause or by Employee. If the
Company terminates Employee's employment with the Company pursuant to paragraph
3.1.1, or if Employee terminates Employee's employment with the Company pursuant
to paragraph 3.2 or by providing notice to the Company of non-renewal of a term
of employment hereof pursuant to paragraph 1.2, the Employee shall have no right
to any further compensation, except for any accrued but unpaid portion of Base
Compensation due the Employee for services rendered prior to the date of such
termination, and such health benefits as the Company is required by law to
provide for a period of thirty (30) days following termination. All such amounts
paid under this paragraph 3.3.1 shall be subject to deductions for taxes, social
security and other withholdings as may be required by law (as determined by
Company).
3.3.2 Other Termination. If the Employee's employment with the
Company is terminated by the Company pursuant to paragraph 3.1.2 hereof, the
Employee terminates his employment with the Company for Good Reason (as defined
below) or if the Company provides notice to Employee of non-renewal of a term of
employment pursuant to paragraph 1.2 hereof, then Employee shall be entitled to
receive severance compensation equal to the greater of (a) Employee's monthly
Base Compensation for a period of six (6) months following termination of
employment or (b) Employee's monthly Base Compensation for the number of full
months following termination of employment until the expiration of the remaining
term of Employment, regardless of whether such term is the Initial Term of
Employment or a Renewal Term. Such severance compensation shall be payable on a
monthly basis in accordance with the Company's payroll procedures. All such
amounts paid under this paragraph 3.3.2 shall be subject to deductions for
taxes, social security and other withholding as may be required by law (as
determined by Company).
3.3.3 Good Reason. For purposes of this Agreement, "Good Reason"
shall be deemed to exist if (A) without Employee's consent: (i) the Company
materially diminishes Employee's title, duties, responsibilities or compensation
and benefits; or (ii) Employee's principal office location is relocated more
than fifty (50) miles from its current location, (B) the Company materially
breaches this Agreement, or (C) the Company or West Corporation ("West")
materially breach any of their respective obligations under Purchase Agreement,
dated as of July 23, 2002, by and among the Company, the holders of the
outstanding membership interests of the Company and West, among others;
provided, however, that a termination shall not be treated as a termination for
Good Reason unless Employee shall have delivered written notice to the Company
within thirty (30) days of having actual knowledge of the occurrence of one of
such events stating that Employee intends to terminate his or her employment for
Good Reason and specifying the factual basis for such termination, and such
event, if capable of being cured, shall not have been cured by the Company or
West within thirty (30) days of the receipt of such notice.
B-7
4. Death and Disability.
4.1. Disability. Should the Employee be unable to adequately perform
services under this Agreement due to physical or mental disability, incapacity
or illness for any consecutive one hundred eighty (180) day period during the
Initial Term of Employment or any Renewal Term, the Company may, at any time
after such on hundred eighty (180) day period, at the Company's written
election, immediately terminate Employee's employment with the Company,
effective on notice thereof by the Company to Employee. The Company's
determination of such inability of Employee to perform adequately shall be
conclusive. In the event Employee's physical or mental disability or incapacity
is covered under the federal Family Medical Leave Act, the one hundred eighty
(180) day period established herein shall be extended to the minimum period
required by such act. If the Company terminates Employee's employment with the
Company pursuant to this paragraph 4.1, the Employee shall be entitled to
receive, (a) accrued but unpaid Base Compensation, (b) accrued but unpaid Bonus
compensation, if any, the form and amount of which had already been determined
by the Company's General Manager for the calendar year in which Employee's
employment with the Company was terminated pursuant to this paragraph 4.1, and
(c) Base Compensation for a period of six (6) months following such termination
(the "Disability Severance Payment"). In the event of any termination pursuant
to the foregoing provisions of this paragraph 4.1, the Company shall be released
and discharged from all further obligations under this Agreement except for the
Disability Severance Payment and any accrued but unpaid portion of Base
Compensation and Bonus compensation (if any) due the Employee for services
rendered prior to the date of such termination.
4.2. Death. Should the Employee die at any time during the Initial Term
of Employment or any Renewal Term, this Agreement shall terminate, and the
Company shall be released and discharged from all further obligations under this
Agreement, except for any accrued but unpaid portion of Base Compensation and
incentive compensation (if any) due the Employee for services rendered prior to
the date of such termination.
5. (Deleted intentionally).
6. Relationship Between the Parties.
(a) The Employee is being employed as an employee by the Company to
provide his full time and exclusive services to the Company. If Employee is an
owner or member of the Company, Employee's relationship to the Company during
the period of this Agreement in which Employee is an owner or member shall be
that of an employee for all purposes, but for federal and state income tax
purposes. In such event, for purposes of federal and state income and
self-employment tax purposes during such period, Employee is considered to be a
service provider to an entity treated as a partnership. Accordingly, all
compensation, bonuses, benefits and
B-8
otherwise during such period shall constitute "guaranteed payments" as such term
is defined in the Internal Revenue Code and shall be subject to federal, state
and local income taxes and self-employment taxes. Employee hereby indemnifies
and holds the Company harmless from and against any losses, liabilities, claims,
suits, fines, penalties, interest charges, expenses or costs (including, without
limitation, attorneys' fees) incurred by Company and arising out of compensation
paid to Employee during such period.
(b) Employee acknowledges that his authority to bind the Company to
contracts or to otherwise commit the Company to binding agreements is limited.
Unless and until Employee is authorized by the Company in writing, Employee
shall not attempt to nor purport to bind the Company to any contract, sales
contract or agreement, or purport to execute any agreement on behalf of the
Company.
7. General.
7.1. Assignment. This Agreement shall inure to the benefit of the
Company and the Company's successors and assigns, grantees and affiliated
companies. Subject to the terms, covenants and conditions of this Agreement, the
Employee agrees that the Company may assign this Agreement, grant its rights and
delegate its duties, in whole or in part.
7.2. Severability. If any clause or any portion of this Agreement is
determined to be void or unenforceable for any reason, such determination shall
not affect the validity or enforceability of any other clause or portion of this
Agreement, all of which shall remain in full force and effect.
7.3. Notice. Any notice required or desired to be given under this
Agreement shall be given in writing, and shall be addressed to the Company at
its principal executive office, or to the Employee at his address set forth
below his signature, or such other address as the Company or the Employee may
designate to the other in writing after the Effective Date of this Agreement,
and shall be deemed given (a) by personal delivery when personally served, (b)
one (1) business day after transmitted by facsimile, or (c) five (5) days after
mailing by registered or certified mail, postage prepaid, return-receipt
requested.
7.4. Attorney's Fees. If any action in law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
7.5. Headings. The description headings used in this Agreement have been
inserted
B-9
for convenience only and do not constitute a part of this Agreement.
7.6. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia.
7.7. Entire Agreement. This Agreement sets forth the entire understanding
of the parties relating to the Employee's employment by the Company and shall
supercede any prior or contemporaneous agreements, memorandums, term sheets, or
understandings between the parties with respect to the subject matter hereof.
7.8. Dispute Resolution. In the event of a dispute arising under this
Agreement not resolved by the parties within thirty (30) days, such dispute
shall be resolved in Atlanta, Georgia pursuant to the rules of the American
Arbitration Association using one arbitrator; provided, however, that this
paragraph 6.8 shall not apply to a dispute arising from Employee's alleged
breach of the covenants contained in paragraphs 1.3 or 1.6, and therefore shall
not prevent the Company from enforcing its right to equitable relief provided in
paragraph 1.7 above. By initialing this paragraph 6.8, Company and Employee
agree to be bound by its terms.
Initial: Company _________
Employee ________
7.9. Waiver. None of the terms or provisions of this Agreement shall be
modified or waived, and this Agreement may not be amended, except by a written
instrument signed by both parties hereto. No waiver of any one provision shall
be considered a waiver of any other provision, and a fact that an obligation is
waived for a period of time shall not be considered to be a continuing waiver.
7.10. Survival. The covenants and agreements of the parties hereto set
forth in Sections 1, 3 and 4 shall survive termination of this Agreement.
B-10
IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of
the day and year first above written.
EMPLOYEE
_______________________________(SEAL)
Name:
Address:
_____________________________________
_____________________________________
Facsimile:_______________________
COMPANY
ATTENTION, LLC
By: _________________________________
Title:
_____________________________________
Address:
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
(Facsimile) (000)000-0000
B-11
EXHIBIT "A"
Duties
B-12
EXHIBIT "B"
"Confidential Information and Trade Secrets"
1. "Trade Secrets" shall mean information of the Company or of its customers
and suppliers, without regard to form, including but not limited to,
technical and nontechnical data, formula, pattern, compilation, program,
device, method, technique, drawing, process, financial data, financial
plans, product plans, and a list of actual or potential customers or
suppliers which is not commonly known by or available to the public and
which information: (i) derives economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from its
disclosure or use; and (ii) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy. Trade Secrets shall
include only information constituting a Trade Secret within the meaning
of Section 10-1-761(4) of the Georgia Trade Secrets Act of 1990,
including all amendments hereafter adopted ("Act").
2. "Confidential Information" shall mean all information and data of the
Company and its customers or suppliers which is protectable as a legal
form of nonpublic, competitively sensitive information or data of or
about the Company. Confidential Information shall not include any
information or data, which constitute a Trade Secret within the meaning
of the Act.
3. Trade Secrets and Confidential Information shall not include such
information (i) which becomes publicly known through no wrongful act of
Employee; (ii) is lawfully received by Employee from a third party
without a similar restriction regarding confidentiality and without a
breach of this Agreement or (iii) which is independently developed by
Employee before commencement of or after termination of his employment
with the Company. Failure to xxxx any Trade Secrets or Confidential
Information as confidential or a trade secret shall not affect their
status as Trade Secrets or Confidential Information under this Agreement.
B-13
EXHIBIT C
FORM OF OPINION OF COUNSEL TO THE BUYER
Capitalized terms used and not otherwise defined herein shall have the meanings
given to them in the Agreement to which this Exhibit C is attached.
1. The Buyer is a corporation duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware, and
has all requisite power and authority to own its properties and assets
and to conduct its businesses as now conducted.
2. The Buyer has all requisite corporate power and authority to enter into
this Agreement and any related agreement and to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and each related agreement and the performance of the Buyer's
obligations hereunder and thereunder have been duly authorized by all
necessary corporate action of the Buyer, including by the Board, and no
other corporate proceedings on the part of the Buyer are necessary to
authorize such execution, delivery and performance.
3. Each of this Agreement and each related agreement has been duly executed
by the Buyer and constitute the Buyer's valid and binding obligation,
enforceable against the Buyer in accordance with its terms.
EXHIBIT D
FORM OF OPINION OF COUNSEL TO
THE COMPANY AND THE SELLERS
Capitalized terms used and not otherwise defined herein shall have the meanings
given to them in the Agreement to which this Exhibit D is attached. All schedule
references herein are to the disclosure schedules to the Agreement and to all
other agreements and other documents delivered by the Company and the Sellers to
the Buyer pursuant to the Agreement.
1. The Company is duly organized and validly existing as a limited
liability company under the laws of the State of Georgia. Attention III
is duly organized and validly existing as a limited liability company
under the laws of the State of Georgia. The Company and Attention III
have all requisite power and authority to own their respective
properties and assets and to conduct their respective businesses as now
conducted.
2. The Company and Attention III are duly qualified to do business as
foreign entities and are in good standing or validly existing, as the
case may be, in every jurisdiction in which the character of the
properties owned or leased by them or the nature of the businesses
conducted by them makes such qualification necessary.
3. The Company has the authority to enter into the Agreement and any
related agreement and to carry out its obligations thereunder. The
Agreement and each related agreement have been duly executed by the
Company and constitutes its valid and binding obligation, enforceable
against it in accordance with their terms. The execution, delivery and
performance by the Company of the Agreement and any related agreement
does not and will not (a) violate or conflict with any provision of any
Organizational Document of the Company or Attention III, (b) except as
set forth on Schedule 5.3, violate any provision of law, or to our
knowledge, any order, judgment or decree of any court or other
governmental or regulatory authority, (c) except as set forth in
Schedule 5.3, violate or result in a breach of or constitute (with due
notice or lapse of time or both) a default under any contract, lease,
loan agreement, mortgage, security agreement, trust indenture or other
agreement or instrument to which the Company or Attention III is a party
or by which either of them is bound or to which any of their respective
properties or assets is subject and which is known to us, (d) result in
the creation or imposition of any Lien (other than possibly as a result
of Transfer Taxes to be paid by the Sellers) upon any of the assets,
properties or rights of the Company or Attention III, or (e) to our
knowledge, and except as set forth on Schedule 5.15, result in the
cancellation, modification, revocation or suspension of any of the
Licenses and Permits, except in the case of clauses (b), (c), (d) and
(e) above, for violations, conflicts, breaches or defaults that would
not, individually or in the aggregate, have a Material Adverse Effect on
the Company and Attention III, taken as a whole.
4. The Company has no Subsidiaries except Attention III, LLC ("Attention
III"), and to our knowledge, the Company does not, directly or
indirectly, own or hold any rights to acquire, any capital stock or any
other securities, interests or investments in any other Person other
than investments that constitute cash or cash equivalents. All of the
outstanding membership interests of Attention III are owned of record
and beneficially by the Company, and to our knowledge and except as set
forth on Schedule 5.6, are free and clear of any Liens. The outstanding
membership interests of Attention III are the sole outstanding
membership interests of Attention III. Attention III does not have
outstanding any securities convertible into or exchangeable for any
membership interests, any rights to subscribe for or to purchase or any
options for the purchase of, or any written or, to our knowledge, oral
agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any other character relating to the
issuance of, any membership interests, or any securities convertible
into or exchangeable for any membership interests; and Attention III is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any membership interests.
5. The Interests are the sole outstanding membership interests of the
Company; the Company does not have outstanding any securities
convertible into or exchangeable for any membership interests, any
rights to subscribe for or to purchase or any options for the purchase
of, or any written, or to our knowledge, oral agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any other character relating to the issuance of, any
membership interests, or any securities convertible into or exchangeable
for any membership interests; and the Company is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any membership interests. The Interests are not represented by
certificates or any equivalent evidence of the ownership by the Sellers
thereof; evidence of such ownership is maintained in the books and
records of the Company in accordance with the Georgia Limited Liability
Company Act. Schedule 5.5 sets forth the names of the beneficial and
record owners of the Interests and the number of Interests and the
percentage of the total Interests held by each such owner. The Interests
are validly issued.
6. To our knowledge and except as set forth on Schedule 5.16, the operation
of the businesses of the Company and Attention III has been conducted in
accordance with all applicable laws (including, without limitation, the
Fair Debt Collection Practices Act, the Fair Credit Reporting Act and
state laws covering comparable subject matter), regulations, orders and
other requirements of all courts and other governmental or regulatory
authorities having jurisdiction over such entity and its assets,
properties and operations. To our knowledge and except as set forth on
Schedule 5.16, neither the Company nor Attention III has received any
notice of any violation of any such law, regulation, order or other
legal requirement, and to our knowledge and except as set forth on
Schedule 5.16, the Company and Attention III are not in default with
respect to any order, writ, judgment, award, injunction or decree of any
national, state or local court or governmental or regulatory authority
or arbitrator, domestic or foreign, applicable to any of their
respective assets, properties or operations.
D-2
7. To our knowledge and except as set forth on Schedule 5.17, there are no
Actions pending or threatened, before any Governmental Entity, or before
any arbitrator of any nature, brought by or against the Company,
Attention III or any of their officers, directors, shareholders,
employees, agents or Affiliates involving, affecting or relating to the
Company or Attention III, the assets, properties or rights of the
Company and Attention III, or the transactions contemplated by this
Agreement. To our knowledge and except as set forth on Schedule 5.17,
there is no Action pending, or to the knowledge of the Company and the
Sellers, threatened, relating to the termination of, or limitation of,
the rights of the Company or Attention III under any registrations or
qualifications with various self-regulatory bodies, states or other
jurisdictions. To our knowledge and except as set forth on Schedule
5.17, neither the Company nor Attention III nor any of their respective
assets, properties or rights is subject to any order, writ, judgment,
award, injunction or decree of any Governmental Entity or arbitrator,
nor is the Company or Attention III party to any written agreement,
consent agreement or memorandum of understanding with, or party to any
commitment letter or similar undertaking to, any Governmental Entity
that, individually or in the aggregate, affects or is reasonably likely
to materially affect the business, assets, properties or rights of the
Company and Attention III or that would or is reasonably likely to
prevent the consummation of the transactions contemplated by the
Purchase Agreement.
8. Each of the Sellers has good and marketable title to all of the
Interests owned by such Seller, free and clear of any Liens.
9. Each of the Sellers has the authority to enter into this Agreement and,
if applicable, the Employment Agreement and to carry out such Seller's
obligations thereunder. The Agreement has been duly executed by each of
the Sellers and constitutes such each such Seller's valid and binding
obligation, enforceable against such Seller in accordance with its
terms.
10. The execution, delivery and performance by each of the Sellers of the
Agreement and, if applicable, the Employment Agreement do not and will
not violate any provision of law, or to our knowledge and except as set
forth on Schedule 5.3, any order, judgment or decree of any court or
other governmental or regulatory authority, nor violate nor will result
in a breach of or constitute (with due notice or lapse of time or both)
a default under any contract, lease, loan agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to which any
Seller is a party or by which any Seller is bound and which is known to
us, except as set forth on Schedule 5.4.
D-3
EXHIBIT E
FORM OF RELEASE OF CLAIMS
1. _______________________, on behalf of himself/herself and his/her family,
heirs, executors, administrators, legal representatives, beneficiaries
and assigns (collectively referred to herein as the "Seller"), pursuant
to Section 15.9 of that certain Purchase Agreement, dated as of July
______, 2002 (the "Purchase Agreement"), by and among Attention, LLC, the
holders of the outstanding membership interests of Attention, LLC and
West Corporation, among others, and in exchange for consideration, the
adequacy of which is acknowledged by the Seller and the Company (as
defined below), does hereby unconditionally release and forever discharge
Attention, LLC and any of its direct or indirect subsidiaries and
affiliated companies, and their directors, officers, employees, members,
agents and their successors and assigns (collectively referred to herein
as the "Company") from any and all actions or inactions, causes of
action, suits, controversies, claims and demands whatsoever, for or by
reason of any matter, cause or thing whatsoever, whether known or
unknown, including, but not limited to any alleged tort, breach of
express or implied contract, defamation, or violation of any federal,
state or local law or regulation, arising at any time on or before the
Closing Date (as defined in the Purchase Agreement), or any such causes
of action, suits, controversies, claims or demands arising after the
Closing Date with respect to actions or inactions that occurred prior to
the Closing Date. This Release of Claims (this "Release") shall not apply
to any claim (i) for unpaid compensation for periods occurring prior to
the Closing Date; (ii) for reasonable business expenses that have not
been reimbursed for periods occurring prior to the Closing Date; or (iii)
for benefits which may be due the Seller under the Company's employee
benefit plans. The Seller represents that he/she has not, prior to the
date of this Release, individually or with any person, filed, or
commenced the filing of, any charges, lawsuits, complaints or proceedings
with any governmental agency, or against the Company (any "Proceeding"),
with respect to any of the matters released by the Seller pursuant to
this Release. The Seller covenants and agrees that he/she will never,
individually or with any person, file or commence the filing of any
Proceeding with respect to any of the matters released by the Seller
pursuant to this Release.
2. The Seller expressly acknowledges that the acts done and evidenced
hereby, and the release granted hereunder, are done and granted to
compromise any doubtful and disputed claims and to avoid litigation, and
are not an admission by the Company of any violation of any employment
law, regulation, ordinance, or administrative procedure, or any other
federal, state, or local law, common law, regulation or ordinance,
liability for which is expressly denied.
3. If any provision or paragraph of this Release is ever determined not
enforceable, the remaining provisions and paragraphs shall remain in full
force and effect.
4. The Seller acknowledges that this Release will be governed by and
construed and enforced in accordance with the internal laws of the State
of Georgia.
5. THE SELLER ACKNOWLEDGES THAT HE/SHE HAS READ THIS RELEASE, THAT HE/SHE
HAS BEEN ADVISED THAT HE/SHE SHOULD CONSULT WITH AN ATTORNEY BEFORE
EXECUTING THIS RELEASE, AND THAT HE/SHE UNDERSTANDS ALL OF ITS TERMS AND
EXECUTES IT VOLUNTARILY AND WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND
THE CONSEQUENCES THEREOF.
______________________
Name:
Date:
E-2
EXHIBIT F
FORM OF LETTER OF RESIGNATION
[Date]
Attention, LLC
Xxxxx X. Xxxxxxxx, General Manager
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Dear Sirs:
By this letter, I hereby tender my resignation as ___________________ of
Attention, LLC (the "Company"), which resignation shall be effective as of the
Closing Date (as such term is defined in that certain Purchase Agreement, dated
as of July __, 2002, by and among the Company, the holders of the outstanding
membership interests of the Company and West Corporation, among others).
Sincerely,
_______________
Name
