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EXHIBIT 2.1
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ACQUISITION AGREEMENT
DATED AS OF
DECEMBER 14, 2000
AMONG
SECURICOR PLC,
SECURICOR GEORGIA, INC.,
AND
AHL SERVICES, INC.,
XXXXXXXXXXX HOLDINGS LIMITED,
XXXXXXXXXXX, INC.
XXXXXXXXXXX SECURITY, INC.
THE ADI GROUP LIMITED
AND
AHL EUROPE LIMITED
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TABLE OF CONTENTS
ARTICLE 1 Definitions .............................................................................................2
ARTICLE 2 Purchase And Sale of US Business and UK Business .......................................................17
Section 2.01 Purchase and Sale ................................................................................17
ARTICLE 3 Closing of Purchase and Sale of US Business and UK Business ............................................18
Section 3.01 Closing ..........................................................................................18
Section 3.02 Delivery of Purchase Price .......................................................................18
Section 3.03 US Closing Deliveries ............................................................................18
Section 3.04 UK Closing Deliveries ............................................................................19
ARTICLE 4 Post Closing Balance Sheet; Purchase Price Adjustment ..................................................21
Section 4.01 US Balance Sheet and European Completion Accounts ................................................21
Section 4.02 Adjustment of Purchase Price .....................................................................23
ARTICLE 5 Representations And Warranties of The Xxxxxxxxxxx Entities .............................................23
Section 5.01 Corporate Existence and Power ....................................................................24
Section 5.02 Corporate Authorization ..........................................................................24
Section 5.03 Governmental Authorization .......................................................................24
Section 5.04 Noncontravention .................................................................................24
Section 5.05 Capitalization ...................................................................................25
Section 5.06 Ownership of US Shares ...........................................................................25
Section 5.07 Xxxxxxxxxxx Security Subsidiaries ................................................................25
Section 5.08 Financial Statements .............................................................................26
Section 5.09 Books and Records ................................................................................26
Section 5.10 Absence of Certain Changes .......................................................................26
Section 5.11 No Undisclosed Material Liabilities ..............................................................28
Section 5.12 Intercompany Accounts ............................................................................28
Section 5.13 Material Contracts ...............................................................................28
Section 5.14 Suppliers ........................................................................................30
Section 5.15 Litigation .......................................................................................30
Section 5.16 Compliance with Laws and Court Orders ............................................................31
Section 5.17 Ownership of US Assets ...........................................................................31
Section 5.18 Real Property ....................................................................................32
Section 5.19 Intellectual Property ............................................................................33
Section 5.20 Insurance ........................................................................................35
Section 5.21 Licenses and Permits .............................................................................35
Section 5.22 Receivables ......................................................................................36
Section 5.23 Accuracy of Projections ..........................................................................36
Section 5.24 Finders' Fees ....................................................................................36
Section 5.25 Employees ........................................................................................36
Section 5.26 Labor Relations ..................................................................................37
Section 5.27 Employee Benefit Plans ...........................................................................38
Section 5.28 Environmental Matters ............................................................................41
Section 5.29 Worker's Compensation Claims .....................................................................42
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Section 5.30 Record Keeping Practices .........................................................................42
Section 5.31 Knowledge of Sellers .............................................................................42
Section 5.32 Certain Business Practices .......................................................................42
ARTICLE 6 Warranties of AHL Europe Relating To UK Assets .........................................................42
ARTICLE 7 Representations and Warranties of Securicor Georgia and Purchaser ......................................43
Section 7.01 Corporate Existence and Power ....................................................................43
Section 7.02 Corporate Authorization ..........................................................................43
Section 7.03 Governmental Authorization .......................................................................43
Section 7.04 Noncontravention .................................................................................43
Section 7.05 Litigation .......................................................................................43
Section 7.06 Finders' Fees ....................................................................................44
Section 7.07 Financing ........................................................................................44
ARTICLE 8 Covenants of the Sellers and AHL .......................................................................44
Section 8.01 Conduct of US Business ...........................................................................44
Section 8.02 Conduct of UK Business ...........................................................................47
Section 8.03 Access to Information; Confidentiality ...........................................................49
Section 8.04 Notices of Certain Events ........................................................................50
Section 8.05 Resignations .....................................................................................51
Section 8.06 Noncompetition ...................................................................................51
Section 8.07 Efforts to Consummate ............................................................................52
Section 8.08 Releases .........................................................................................52
Section 8.09 Assignment of Contracts ..........................................................................52
Section 8.10 Leased Real Property .............................................................................53
Section 8.11 Licenses and Performance Bonds ...................................................................53
Section 8.12 Use of US Trade Names ............................................................................53
Section 8.13 Use of European Trade Names ......................................................................53
Section 8.14 Use of Sellers' Trade Names ......................................................................54
Section 8.15 Supplements to Disclosure ........................................................................54
Section 8.16 Restriction on Distributions .....................................................................54
Section 8.17 Philadelphia Settlement Agreement ................................................................55
ARTICLE 9 Covenants of Purchaser .................................................................................55
Section 9.01 Confidentiality Agreement ........................................................................55
Section 9.02 Access ...........................................................................................55
ARTICLE 10 Covenants of Purchaser and Sellers ....................................................................56
Section 10.01 Best Efforts; Further Assurances ................................................................56
Section 10.02 Certain Filings .................................................................................56
Section 10.03 Public Announcements ............................................................................56
Section 10.04 [Intentionally omitted] .........................................................................56
Section 10.05 Intercompany Accounts ...........................................................................56
Section 10.06 Philadelphia Settlement Agreement ...............................................................56
Section 10.07 HSR Filing ......................................................................................57
Section 10.08 Release of Guarantees and Indemnities ...........................................................57
ARTICLE 11 Tax Matters Relating to the US Business ...............................................................58
ARTICLE 12 Tax Matters Relating to the UK Business ...............................................................58
ARTICLE 13 Employee Benefits Relating To The US Business .........................................................58
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Section 13.01 AHL Services Group 401(k) Plan ..................................................................58
Section 13.02 AHL Services, Inc. Nonqualified Deferred Compensation Plan ......................................58
Section 13.03 AHL Services, Inc. Flexible Benefits Plan .......................................................59
Section 13.04 Xxxxxxxxxxx Holdings Limited Health and Welfare Benefits ........................................59
Section 13.05 Contribution and Premium Payments ...............................................................60
ARTICLE 15 Conditions To Closing .................................................................................60
Section 15.01 Conditions to Obligations of Purchaser and Sellers ..............................................60
Section 15.02 Satisfaction of Conditions in Section 15.01(c) and Section 15.02(d) .............................61
Section 15.03 Conditions to Obligation of Purchaser ...........................................................61
Section 15.04 Conditions to Obligation of Sellers .............................................................63
ARTICLE 16 Survival; Indemnification .............................................................................64
Section 16.01 Survival ........................................................................................64
Section 16.02 Indemnification .................................................................................64
Section 16.03 Procedures ......................................................................................67
Section 16.04 Waiver of Rights ................................................................................67
Section 16.05 Specific European Indemnities ...................................................................68
ARTICLE 17 Termination ...........................................................................................69
Section 17.01 Grounds for Termination .........................................................................69
Section 17.02 Effect of Termination ...........................................................................69
ARTICLE 18 Miscellaneous .........................................................................................70
Section 18.01 Notices .........................................................................................70
Section 18.02 Amendments and Waivers ..........................................................................71
Section 18.03 Expenses ........................................................................................71
Section 18.04 Successors and Assigns ..........................................................................71
Section 18.05 Governing Law ...................................................................................72
Section 18.06 Jurisdiction ....................................................................................72
Section 18.07 Waiver Of Jury Trial ............................................................................72
Section 18.08 Counterparts; Third Party Beneficiaries .........................................................72
Section 18.09 Entire Agreement ................................................................................72
Section 18.10 Severability ....................................................................................73
Section 18.11 Captions ........................................................................................73
Section 18.12 Guaranty of Payment and Performance .............................................................73
Section 18.13 Governing Agreement .............................................................................73
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INDEX OF ANNEXES
Annex VI. European Warranties .................................................................................Tab 1
Annex XI. US Tax Matters Annex ................................................................................Tab 2
Annex XII. European Tax Warranties ............................................................................Tab 3
Annex XVI. UK Limitation of Liability .........................................................................Tab 4
INDEX OF EXHIBITS
Exhibit A. Employees Signing Employment Agreements ............................................................Tab 5
Exhibit B. US Transition Services Agreement ...................................................................Tab 6
Exhibit C. Interim Equipment Access Agreement .................................................................Tab 7
Exhibit D. Budget .............................................................................................Tab 8
INDEX OF SCHEDULES
Schedule 2.01. Earnout Consideration and Purchase Price Adjustment Provisions .................................Tab 9
Schedule 3.04(a). Tax Deed ....................................................................................Tab 10
Schedule 3.04(b). Personnel Supply Agreement ..................................................................Tab 11
Schedule 4.02(a). European Net Working Capital ................................................................Tab 12
Schedule 4.02(b). US Net Working Capital ......................................................................Tab 13
Schedule 8.06. Non Competition Provisions Relating to the UK Business .........................................Tab 14
Schedule 11.04. Non-Foreign Status Affidavit ..................................................................Tab 15
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (this "Agreement") dated as of December 14,
2000, is entered into among Securicor plc, a company incorporated under the laws
of England and Wales with number 3811216 ("Purchaser"); Securicor Georgia, Inc.,
a Georgia corporation and wholly-owed subsidiary of Purchaser ("Securicor
Georgia"); AHL Services, Inc., a Georgia corporation ("AHL"), Xxxxxxxxxxx
Holdings Limited, a Georgia corporation and wholly-owned subsidiary of AHL
("Holdings"); Xxxxxxxxxxx, Inc., a Georgia corporation and wholly-owned
subsidiary of Holdings ("Xxxxxxxxxxx"); Xxxxxxxxxxx Security, Inc., a Georgia
corporation and wholly-owned subsidiary of Holdings ( "Xxxxxxxxxxx Security");
The ADI Group Limited, a company incorporated under the laws of England and
Wales with number 2831083 ("ADI"); and AHL Europe Limited, a company
incorporated under the laws of England and Wales with number 3804405 ("AHL
Europe").
WITNESSETH:
WHEREAS, Holdings is the record and beneficial owner of all of the
issued and outstanding capital stock of Xxxxxxxxxxx Security (the "US Shares");
and
WHEREAS, certain Xxxxxxxxxxx Entities (as defined below) will transfer
or cause to be transferred to Xxxxxxxxxxx Security the US Transportation Assets
(as defined below) prior to the closing of the transfer of the US Shares; and
WHEREAS, AHL Europe is the legal and beneficial owner of all of the
issued and outstanding shares in the capital of ADI (the "ADI Shares"); and
WHEREAS, ADI, on December 12, 2000 entered into an agreement with AHL
Europe for the sale of Right 4 Staff Limited and Draefern Holdings Limited and
their respective subsidiaries to AHL Europe (completion of which shall take
place on or before January 31, 2001); and
WHEREAS, Holdings, following the transfer of the US Transportation
assets to Xxxxxxxxxxx Security, desires to sell the US Shares to Purchaser and
Purchaser, through Securicor Georgia, desires to purchase the US Shares, upon
the terms and subject to the conditions hereinafter set forth, and AHL Europe
desires to sell the ADI Shares to Purchaser and Purchaser desires to purchase
the ADI Shares upon the terms and conditions hereinafter set forth; and
WHEREAS, Purchaser has required that certain members of the management
of the Xxxxxxxxxxx Entities enter into employment agreements effective on the
Closing Date with Xxxxxxxxxxx Security and such members of management have
agreed to become employees of Xxxxxxxxxxx Security.
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NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties agree as
follows:
ARTICLE 1
Definitions
Section 1.01 Definitions
(a) The following terms, as used herein, have the following
meanings:
"1934 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Accounts Date" means December 31, 1999.
"ADI" means The ADI Group Limited, a company incorporated under the
laws of England and Wales with number 2831083.
"ADI Germany" means Aviation Defence International Germany Limited.
"ADI Shares" means the 10,296,868 issued ordinary shares of 1(pound)
each in the capital of ADI.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"AHL" means AHL Services, Inc., a Georgia corporation, which owns all
of the issued and outstanding capital stock of Holdings.
"AHL Alpha" means AHL Alpha, Inc., an Illinois corporation and
wholly-owned Subsidiary of Xxxxxxxxxxx, which owns all right, title and interest
in (i) certain US Intellectual Property Rights utilized by Xxxxxxxxxxx in
connection with the conduct of the US Transportation Business and (ii) other
additional trademarks, trade names and service marks not utilized in connection
with the conduct of the US Business.
"AHL Beta" means AHL Beta, Inc., an Illinois corporation and
wholly-owned Subsidiary of Xxxxxxxxxxx Security, which owns all right, title and
interest in certain US Intellectual Property Rights utilized by Xxxxxxxxxxx
Security in connection with the conduct of the US Security Business.
"AHL Delta" means AHL Delta, Inc., an Illinois corporation and
wholly-owned Subsidiary of Holdings, which was formed for the specific purpose
of acting as the assignee of the Intercompany Debt Documents.
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"AHL Plan" means any "pension plan" (as defined in Section 3(2) of
ERISA) sponsored or maintained by AHL or any of its Affiliates or Subsidiaries,
other than Xxxxxxxxxxx Security.
"Xxxxxxxxxxx" means Xxxxxxxxxxx, Inc., a Georgia corporation and
wholly-owned Subsidiary of Holdings, which conducts the US Transportation
Business and other non-related businesses which are not the subject matter of
this Agreement.
"Xxxxxxxxxxx Entity" means, collectively, AHL, Holdings, Xxxxxxxxxxx,
Xxxxxxxxxxx Security, AHL Alpha, AHL Beta and AHL Delta.
"Xxxxxxxxxxx Logo" shall have the same meaning as set forth in Section
8.12 of this Agreement.
"Xxxxxxxxxxx Plan" means any "pension plan" (as defined in Section 3(2)
of ERISA) sponsored or maintained by any Xxxxxxxxxxx Entity.
"Xxxxxxxxxxx Security" means Xxxxxxxxxxx Security, Inc., a Georgia
corporation and wholly-owned Subsidiary of Holdings, which, on the date hereof,
conducts the US Security Business and which prior to the Closing will acquire
the US Transportation Assets and the US Intellectual Property Rights owned by
AHL Alpha and AHL Beta.
"Xxxxxxxxxxx Securities" shall have the same meaning as set forth in
Section 5.05 of this Agreement.
"Assets" means the US Assets together with the UK Assets.
"Balance Sheet Date" means September 30, 2000.
"Basket" shall have the same meaning as set forth in Section 16.02(a)
of this Agreement.
"Benefit Arrangement" means any employment, severance or similar
contract or arrangement (whether or not written) or any plan, policy, fund,
program or contract or arrangement (whether or not written) providing for
compensation, bonus, profit-sharing, stock option, or other stock related rights
or other forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance or other
benefits) that (i) is not an Employee Plan, (ii) is entered into, maintained,
administered or contributed to, as the case may be, by Xxxxxxxxxxx Security,
Holdings, AHL or any other Xxxxxxxxxxx Entity (or Affiliates of Xxxxxxxxxxx
Security, Holdings, AHL or any other Xxxxxxxxxxx Entity) and (iii) covers any
employee or former employee of the US Business.
"Business" means the US Business together with the UK Business.
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"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the state of Georgia or
in the United Kingdom.
"Cap" shall have the same meaning as set forth in Section 16.02(a) of
this Agreement.
"CERCLA" means the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and any rules or regulations
promulgated thereunder.
"Certified English Properties" means: (i) Part Ground and Part First
Floor, Somerville House, Bath Road, Hounslow; (ii) Part 0xx Xxxxx, Xxxxxxxx
Xxxxx, Xxxxxxx Xxx, Xxxxxxx; and (iii) Xxxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx
Xxxxxxxxx, XX0 SEY.
"Certificate of Title" means the certificate of title in respect of the
Certified English Properties.
"Claims" shall have the same meaning as set forth in Section 5.15 of
this Agreement.
"Closing" shall mean the US Closing together with the UK Closing.
"Closing Date" means the date of the closing of the transactions
contemplated by this Agreement as provided in Section 3.01 hereof.
"Closing Date European Fixed Assets" means the aggregate net book value
of the tangible fixed assets of the UK Business as of the close of business on
the Closing Date.
"Closing Date European Net Working Capital" means the Net Working
Capital of the UK Business as of the close of business on the Closing Date as
shown on the European Completion Accounts, stated in British Pounds Sterling.
"Closing Date US Fixed Assets" means the aggregate net book value of
the tangible fixed assets of the US Business as of the close of business on the
Closing Date.
"Closing Date US Net Working Capital" means the Net Working Capital of
the US Business as of the close of business on the Closing Date as shown on the
Closing US Balance Sheet, stated in United States Dollars.
"Closing US Balance Sheet" means the balance sheet of Xxxxxxxxxxx
Security as of the Closing Date prepared by the Purchaser in accordance with
Section 4.01(a) of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Companies Act" means the Companies Xxx 0000, as amended.
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"Company Information Technology Systems" means all Information
Technology Systems used in connection with the UK Business.
"Competition Commission" means the statutory body established under the
Competition Xxx 0000 to replace the Monopolies and Mergers Commission.
"Completion" means completion of the sale and purchase of the ADI
Shares in accordance with Section 3.01(b) of this Agreement.
"Confidentiality Agreement" shall have the same meaning as set forth in
Section 9.01 of this Agreement.
"Confidential Information" means any information which does not rise to
the level of a Trade Secret.
"Credit Facility" means the Second Amended and Restated Credit
Agreement dated as of October 15, 1999, among AHL and First Union Bank, as
Administrative Agent, and the lenders party thereto, as amended and the
Revolving Note issued thereunder.
"Damages" shall have the same meaning as set forth in Section 16.02 of
this Agreement.
"December Balance Sheet" shall have the same meaning as set forth in
Section 4.01(a) of this Agreement.
"Disclosed Scheme" means the ADI Management Pension Scheme and the
Aviation Defence International Limited Group Life Assurance Scheme.
"Disclosure Memorandum" or "Disclosure Memoranda" shall have the same
meaning as set forth in Section 8.15 of this Agreement.
"DOJ" means the United States Department of Justice.
"Dollar Equivalent" means, on any Business Day with respect to any
amount in Pounds sterling, Euros or other currency (other than U.S. dollars),
the amount of U.S. dollars that could be purchased with such amount in Pounds
sterling, Euros or other currency at the Spot Exchange Rate.
"Employment Agreements" means employment agreements in form and
substance reasonably acceptable to Purchaser between Xxxxxxxxxxx Security or ADI
and certain individuals identified in Exhibit A.
"Employee Option" means an option to purchase one or more shares of
common stock of AHL granted to a US Transferred Employee under any plan or
arrangement of Xxxxxxxxxxx Security, AHL or any other Xxxxxxxxxxx Entity.
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"Employee Plan" means any "employee benefit plan," as defined in
Section 3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii) is
maintained, administered or contributed to by Xxxxxxxxxxx Security, Holdings,
AHL or any other Xxxxxxxxxxx Entity (or Affiliates of Xxxxxxxxxxx Security,
Holdings, AHL or any other Xxxxxxxxxxx Entity, and (iii) covers any employee or
former employee of the US Business.
"Employee Restricted Share" means a restricted share of common stock of
AHL granted to a US Transferred Employee under any plan or arrangement of
Xxxxxxxxxxx Security or any Xxxxxxxxxxx Entity.
"English Properties" means the properties listed in the European
Disclosure Document, 13.34 of the European Disclosure Memorandum.
"Environment" means the natural and man-made environment and all or any
of the following media, namely, air (including air within buildings and air
within other natural or manmade structures above or below ground), water
(including water under or within land and inland waters), soil (including
surface and subsurface), and any living organisms or systems supported by those
media.
"Environmental Law" means, to the extent that they have the force of
law in England on or before Completion all applicable laws, regulations,
directives, statutes, subordinate legislation, common law, civil codes and other
national and local laws, and all codes of practice, industry agreements and
guidance notes which relate or apply to the protection of or the compensation
for damages to the Environment or human health and safety and includes all such
laws relating to actual or threatened emissions, seepages, discharges, escapes,
releases or leaks of Hazardous Substances relating to the creation, handling,
storage or disposal of Hazardous Substances but not the Planning Acts (other
than Section 215 of the Town and Country Planning Act 1990).
"Environmental Permit" means any license, consent, authorization,
certification, registration or permit required under any Environmental Law.
"ERISA" means the United States Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" of any entity means any other entity which, together
with such entity, would be treated as a single employer under Section 414 of the
Code.
"European Assumed Contracts" means all contracts entered into by any
member of the European Group or any their Affiliates in respect to the UK
Business, including, but not limited to, all customer contracts, real estate
leases, equipment leases, supplier agreements and UK Intellectual Property
license agreements.
"European Accounts" means the audited consolidated balance sheet of the
European Group as at the Accounts Date and the audited consolidated profit and
loss account of the
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European Group in respect of the accounting reference period of the European
Group ended on the Accounts Date.
"European Completion Accounts" means the consolidated balance sheet and
profit and loss account of the European Group as of the close of business on the
Completion date.
"European Disclosure Documents" means the documents contained in the
data room in the Sellers' UK Solicitors, which documents are listed in Schedule
1 to the European Disclosure Memorandum.
"European Disclosure Memorandum" means the disclosure memorandum
delivered by AHL Europe as of the date of the execution of this Agreement
relating to the UK Business disclosing information constituting documents
qualifying the European Warranties (including, for the avoidance of doubt, the
European Disclosure Documents) as the same may be supplemented and amended in
accordance with the terms of this Agreement.
"European Environmental Warranties" means the warranties set out in
Section 6.06 of Annex VI attached hereto.
"European General Warranties" means the warranties set out in Annex VI
attached hereto.
"European Group" means ADI and the European Subsidiaries.
"European Marked Materials" shall have the same meaning as set forth in
Section 8.13 of this Agreement.
"European Net Working Capital" means the amount computed in accordance
with the illustration set forth on Schedule 4.02(a) hereto.
"European Properties" means the Certified English Properties, the
English Properties, the French Properties, the German Properties, the Scottish
Properties and the Other European Property Interests.
"European Subsidiaries" means the following: Executive Aircraft
Services, Limited, ADI Greece S.A., Aviation Defence International France
Limited, ADI UK Limited, ADI Investments Limited, Aviation Defence International
Germany Limited, Aviation Defence International Italia S.A., ADI Overseas
Limited and their respective Subsidiaries.
"European Tax Warranties" means the warranties relating to taxation set
out in Annex XII attached hereto.
"European Warranties" means, together, the European General Warranties,
the European Environmental Warranties and the European Tax Warranties.
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"Excluded Claims" shall have the same meaning as set forth in Section
16.02(a) of this Agreement.
"Exon-Xxxxxx Amendment" means the United States Exon-Xxxxxx amendment
to the Defense Production Act of 1950, 50 U.S.C. 2170, et seq.
"Final Closing Date European Net Working Capital" means the Closing
Date European Net Working Capital (i) as shown in Purchaser's calculation
delivered pursuant to Section 4.01(b), if no notice of disagreement with respect
thereto is delivered pursuant to Section 4.01(c) or (ii) if such a notice of
disagreement is delivered, (A) as agreed by Purchaser and Sellers pursuant to
Section 4.01(d) or (B) in the absence of such agreement, as shown in the report
delivered by PWC pursuant to Section 4.01(d); provided that in no event shall
the Final Closing Date European Net Working Capital be less than Purchaser's
calculation of Closing Date European Net Working Capital delivered pursuant to
Section 4.01(b) or more than Sellers' calculation of Closing Date European Net
Working Capital delivered pursuant to Section 4.01(c).
"Final Closing Date European Fixed Assets" means the Closing Date
European Fixed Assets (i) as shown in Purchaser's calculation delivered pursuant
to Section 4.01(b), if no notice of disagreement with respect thereto is
delivered pursuant to Section 4.01(c) or (ii) if such a notice of disagreement
is delivered (A) as agreed by Purchaser and Sellers pursuant to Section 4.01(d)
or (B) in the absence of such agreement, as shown in the report delivered by PWC
pursuant to Section 4.01(d), provided that in no event shall the Final Closing
Date European Fixed Assets be less than Purchaser's calculation of Closing Date
European Fixed Assets delivered pursuant to Section 4.01(b) or more than
Sellers' calculation of Closing Date European Fixed Assets delivered pursuant to
Section 4.01(c).
"Final Closing Date US Fixed Assets" means the Closing Date US Fixed
Assets (i) as shown in Purchaser's calculation delivered pursuant to Section
4.01(a), if no notice of disagreement with respect thereto is delivered pursuant
to Section 4.01(c) or (ii) if such a notice of disagreement is delivered (A) as
agreed by Purchaser and Sellers pursuant to Section 4.01(d) or (B) in the
absence of such agreement, as shown in the report delivered by PWC pursuant to
Section 4.01(d), provided that in no event shall the Final Closing Date US Fixed
Assets be less than Purchaser's calculation of Closing Date US Fixed Assets
delivered pursuant to Section 4.01(a) or more than Sellers' calculation of
Closing Date US Fixed Assets delivered pursuant to Section 4.01(c).
"Final Closing Date US Net Working Capital" means the Closing Date US
Net Working Capital (i) as shown in Purchaser's calculation delivered pursuant
to Section 4.01(a), if no notice of disagreement with respect thereto is
delivered pursuant to Section 4.01(c) or (ii) if such a notice of disagreement
is delivered, (A) as agreed by Purchaser and Sellers pursuant to Section 4.01(d)
or (B) in the absence of such agreement, as shown in the report delivered by PWC
pursuant to Section 4.01(d); provided that in no event shall the Final Closing
Date US Net Working Capital be less than Purchaser's calculation of Closing Date
US Net Working Capital delivered pursuant to Section 4.01(a) or more than
Sellers' calculation of Closing Date US Net Working Capital delivered pursuant
to Section 4.01(c).
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"French Properties" means the properties listed in European Disclosure
Document 13.32 of the European Disclosure Memorandum.
"FTA" means the Fair Trading Act of 1973.
"FTC" means the United States Federal Trade Commission.
"German Properties" means the properties listed in European Disclosure
Document 13.36 of the European Disclosure Memorandum.
"GPP" means the ADI Group Personal Pension Scheme.
"Group Health Plan" means any Employee Plan that is a "group health
plan" as defined in Code Section 5000(b)(i).
"Hazardous Substances" means any substance or organism which alone, or
in combination with others, is likely to cause harm or damage to the Environment
or human health and safety and includes, without limitation, any hazardous or
toxic materials, pollutants and Waste.
"Holdings" means Xxxxxxxxxxx Holdings Limited, a Georgia corporation
and wholly-owned subsidiary of AHL.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"HSR Fees" shall have the same meaning as set forth in Section 10.07 of
this Agreement.
"Indemnified Party" shall have the same meaning as set forth in Section
16.03 of this Agreement.
"Indemnifying Party" shall have the same meaning as set forth in
Section 16.03 of this Agreement.
"Information Technology Systems" means all communications systems and
computer systems including all computer hardware, software, networks, data, and
arrangements relating to the provision of maintenance and support, security,
disaster, recovery, facilities management, bureau and on-line services.
"Intercompany Debt Documents" means (i) the Promissory Note dated
December 26, 1998 delivered by Xxxxxxxxxxx made payable to the order of
Xxxxxxxxxxx Security in the outstanding principal amount of $6,300,000, (ii) the
Promissory Note dated December 26, 1998, delivered by Xxxxxxxxxxx Security made
payable to the order of Holdings in the outstanding principal amount of
$15,400,000 and (iii) the Promissory Note dated December 26, 1998,
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delivered by Xxxxxxxxxxx made payable to the order of Holdings in the
outstanding principal amount of $63,650,000, all of which on December 26, 1998,
were assigned (with recourse) to AHL Delta and any other document which
evidences or governs debt between Xxxxxxxxxxx Security and any other Xxxxxxxxxxx
Entity.
"Intercompany Subordination Agreement" means the Intercompany
Subordination Agreement, dated October 15, 1999, executed by certain Xxxxxxxxxxx
Entities in connection with the Credit Facility.
"Knowledge of the Sellers" means, with respect to (a) the US
representations and warranties, all facts known on the relevant date by Xxxxx X.
Xxxxxxxxxxx, Xx., Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Best, Xxxxx
X. Xxxxxxx, Xxx Xx Xxxxxx, Xxxx Xxxxxxxx and Xxxx Xxxxxx; and (b) with respect
to the European Warranties, all the facts known on the relevant date by Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxx Xxxxxx and Xxx Xxxxx, and with respect to both
clauses (a) and (b), including such facts as should be known to such individuals
after diligent inquiry.
"Know-how" means all know-how, trade secrets and confidential
information, in any form.
"Leased Real Property" shall have the same meaning as set forth in
Section 5.18 of this Agreement.
"LIBOR" means the 12-month LIBOR rate published in the Wall Street
Journal on the Closing Date.
"Licenses" shall have the same meaning as set forth in Section 5.21 of
this Agreement.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any property or asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise), business (including the continued operation
thereof in accordance with past practices), assets, results of operations or
prospects of the US Business, taken as a whole, or the UK Business, taken as a
whole.
"Material Contracts" shall have the meaning set forth in Section
5.13(b) of this Agreement.
"Multiemployer Plan" means each Employee Plan that is a multiemployer
plan, as defined in Section 3(37) of ERISA.
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"Non-Assigned Contracts" shall have the same meaning set forth in
Section 8.09 of this Agreement.
"Non-Certified Properties" means the English Properties, the Scottish
Properties, the French Properties and the German Properties.
"Obligations" shall have the same meaning set forth in Section 18.12 of
this Agreement.
"Other European Property Interests" means the arrangements detailed in
European Disclosure Document 13.35 of the European Disclosure Memorandum.
"PAYE" means Pay As You Earn.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means (i) Liens for taxes and other governmental
charges and assessments arising in the ordinary course of business which are not
yet due and payable, (ii) Liens and claims of mechanics and materialmen and
other like Liens arising in the ordinary course of business for sums not yet due
and payable, (iii) all existing utility, access or other easements and rights of
way of record (provided that no encroachment of any such easement or right of
way shall be considered a Permitted Lien) relating to Leased Real Property, (iv)
zoning and land use laws regulating the use or enjoyment of the Leased Real
Property (provided that no violation of any such laws shall be considered a
Permitted Lien), (v) Liens placed by or arising through a landlord or other
third party with respect to Leased Real Property, (vi) insofar as the date of
the execution of this Agreement is concerned, Liens in favor of the lenders
pursuant to the Credit Facility, which Liens shall be discharged upon the
Closing, and (vii) any other matters which, either individually or in the
aggregate, do not, in Purchaser's reasonable judgment, materially interfere with
or materially impair the present use or operation of the US Business, or, in
Purchaser's reasonable judgment, materially impair the value of owned or leased
real property used in the conduct of the US Business.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"Planning Acts" means the Town and Country Planning Acts or any other
enactment for the time being in force relating to the use, development and
enjoyment of land and buildings (including, without limitation, Section 96 of
and Schedules 13 and 14 to the Environment Act 1995).
"Pledge Agreement" means the Pledge Agreement dated as of February 10,
1998, by Holdings in favor of First Union National Bank associated with the
Credit Facility.
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"Premerger Rules" shall have the same meaning as set forth in Section
10.07 of this Agreement.
"Purchase Price" shall have the same meaning as set forth in Section
2.01 of this Agreement.
"Purchaser" means Securicor plc, a company incorporated under the laws
of England and Wales with number 3811216.
"Purchaser Basket" shall have the same meaning as set forth in Section
16.02(b) of this Agreement.
"Purchaser Cap" shall have the same meaning as set forth in Section
16.02(b) of this Agreement.
"Purchaser Damages" shall have the same meaning as set forth in Section
16.02(b) of this Agreement.
"Purchaser Excluded Claims" shall have the same meaning as set forth in
Section 16.02(b) of this Agreement.
"Purchaser Plan" means any "pension plan" (as defined in Section 3(2)
of ERISA) sponsored or maintained by Purchaser, or any of its respective
Affiliates.
"Purchaser's UK Solicitors" means Xxxxxxx Xxxxx of Xxxxxxxx Xxxxx,
Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX.
"PWC" means PricewaterhouseCoopers LLP or such other independent
certified public accounting firm mutually acceptable to Purchaser and Sellers.
"Real Property Leases" shall have the same meaning as set forth in
Section 5.18 of this Agreement.
"Registered Intellectual Property Rights" means all patents, utility
models, registered designs, registered copyrights, plant variety rights,
registered trade and service marks and the goodwill attaching to them, domain
names and applications for registration and rights to grant of them and any
rights or forms of protection of a similar nature anywhere in the world.
"Releases" shall have the same meaning as set forth in Section 5.17(b)
of this Agreement.
"Representative Member" shall have the same meaning as set forth in
Section 12.13 of Annex XII attached hereto.
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"Required Records" shall have the same meaning as set forth in Section
5.30 of this Agreement.
"RTPA" means the Restrictive Trade Practices Acts 1976 and 1977.
"Scottish Properties" means the properties listed in European
Disclosure Document 13.31 of the European Disclosure Memorandum.
"Securicor Georgia" means Securicor Georgia, Inc., a Georgia
corporation and wholly-owned subsidiary of Purchaser.
"Security Agreement" means that certain Security Agreement, dated
February 10, 1998, and associated with the Credit Facility.
"Sellers" means, collectively, Holdings and AHL Europe.
"Sellers' French Solicitors" means Xxxx & Associates of 00 xxx Xxxxxxx
X'Xxxxxxx 00000 Xxxxx.
"Sellers' German Solicitors" means Arcon Rechtsanwalte of
Xxxxxxxxxxxxx, 0, 00000 Xxxxxxxxx.
"Sellers' Marked Materials" shall have the same meaning as set forth in
Section 8.14 of this Agreement.
"Sellers' Scottish Solicitors" means Tods Xxxxxx XX of 00, Xxxxx
Xxxxxx, Xxxxxxxxx XX0 0XX.
"Sellers' UK Solicitors" means Xxxxxxxx Xxxxxxx of 000 Xxxxxxxxxx
Xxxxxx, Xxxxxx ECIA 4EJ.
"Shrinkwrap Software" means third party software sold in a standard
configuration and readily available on standard terms and conditions.
"Spot Exchange Rate" means, on any day, (i) with respect to British
Pounds Sterling, Euros or other such currency other than US Dollars, the spot
rate at which US Dollars are offered for delivery two (2) Business Days forward
for British Pounds Sterling, Euros or such other currency at approximately 11:00
a.m. (London time) as published by Xxxxxx Monitor Money Rates Service, and (ii)
with respect to US Dollars in relation to British Pounds Sterling, Euros or such
other currency, the spot rate at which British Pounds Sterling, Euros or such
other currency is offered for US Dollars for delivery two (2) Business Days
forward at approximately 11:00 a.m. (London time) as published by Xxxxxx Monitor
Money Rates Service.
"Subsidiary" means any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other Persons performing
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similar functions are owned by another entity and with respect to Xxxxxxxxxxx
Security shall include Premium Services Management, Inc.
"Target European Fixed Assets" shall mean an amount equal to (pound)
2,200,000.
"Target European Net Working Capital" shall mean an amount equal to
(pound) 8,300,000.
"Target US Fixed Assets" shall mean an amount equal to $ 8,900,000.
"Target US Net Working Capital" shall mean an amount equal to US
$41,800,000.
"Taxation" or "Tax" means Tax, as defined in Annex XI or taxation or
tax as defined in the Tax Deed and Annex XII as the context may require.
"The London Stock Exchange" means London Stock Exchange plc.
"Taxes Act" means the Income and Corporation Taxes Xxx 0000.
"Tax Deed" means the tax deed substantially in the form of Schedule
3.04(a) attached hereto.
"TCGA" means the Taxation of Chargeable Gains Xxx 0000.
"Tenancy" shall have the same meaning as set forth in Section 6.05 of
Annex VI attached hereto.
"Title IV Plan" means an Employee Plan subject to Title IV of ERISA
other than any Multiemployer Plan.
"Transaction Documents" means this Agreement and other agreements,
contracts, instruments, certificates and documents executed by any Xxxxxxxxxxx
Entity in connection with this Agreement and those documents identified as such
in Section 8.07 of this Agreement other than the Employment Agreements.
"Transition Services Agreements" means: (i) the US Transition Services
Agreement between Securicor Georgia, Xxxxxxxxxxx Security, AHL and Holdings and
(ii) the Interim Equipment Access Agreement between ADI, Right4Staff and AHL
Europe, both such agreements to be entered into on the Closing Date and to be
substantially in the form of Exhibit B and C hereto.
"Trade Secret" as to a Person shall mean any information, without
regard to form, which 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
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
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"UK Assets" means all assets related to the UK Business and the ADI
Shares.
"UK Business" means, collectively, the aviation services business as
conducted by ADI and its European Subsidiaries.
"UK Closing" means the Completion of the sale of the ADI Shares by AHL
Europe.
"UK Intellectual Property Rights" means all Registered Intellectual
Property Rights and all inventions (whether patentable or not), design rights,
database rights, copyright, semiconductor topography rights, unregistered trade
and service marks, logos, get-up and trade names and the goodwill attaching to
them, Know-how, and any rights or forms of protection of a similar nature and
having equivalent or similar effect to any of them which subsist anywhere in the
world.
"UK Listing Authority" means the Financial Services Authority as the
competent authority for listing in the United Kingdom under Part IV of the
Financial Services Xxx 0000.
"US Assets" means all assets owned by Xxxxxxxxxxx Security and any and
all other assets related to or used in connection with the US Business,
including, but not limited to, all trademarks, leases, contracts with customers,
agreements with employees (including nondisclosure, noncompete and
nonsolicitation obligations identified in Section 1.01(a) of the US Disclosure
Memorandum). For the avoidance of doubt, the parties acknowledge and agree that
the US Assets do not include any military armored vehicles, any sporting
firearms or any asset located in AHL's Buckhead Atlanta corporate office.
"US Assumed Contracts" means all contracts entered into by any
Xxxxxxxxxxx Entity or any of their Affiliates in respect of the US Business,
including, but not limited to, all customer contracts, real estate leases,
equipment leases, supplier agreements and the US Intellectual Property license
agreements.
"US Balance Sheet" means the balance sheet of the US Business dated as
of September 30, 2000.
"US Business" means, collectively, the US Security Business and the US
Transportation Business.
"US Closing" means the closing of the sale of the US Shares by
Holdings.
"US Disclosure Memorandum" means the disclosure memorandum delivered by
Holdings as of the date of the execution of this Agreement relating to the US
Business, as the same may be supplemented and amended in accordance with the
terms of this Agreement.
"US Environmental Laws" means any United States federal, state, local
or foreign law (including, without limitation, common law), treaty, judicial
decision, regulation, rule, judgment,
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order, decree, injunction, permit, policy or governmental restriction or
requirement or any agreement with any governmental authority or other third
party, whether now or hereafter in effect, relating to human health and safety,
the environment or to pollutants, contaminants, wastes or chemicals or any
toxic, radioactive, ignitable, corrosive, reactive or otherwise US Hazardous
Substances, wastes or materials.
"US Environmental Permits" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by US Environmental Laws and affecting, or
relating in any way to, (i) the US Business as currently conducted or (ii) any
US Asset.
"US Hazardous Substances" means any pollutant, material, contaminant,
waste, substance or chemical or any toxic, radioactive, ignitable, corrosive,
reactive or otherwise hazardous substance, waste or material mixture or any
substance, waste or material having any constituent elements displaying any of
the foregoing characteristics, including, without limitation, petroleum, its
derivatives, byproducts and other hydrocarbons, and any substance, waste or
material regulated under any US Environmental Laws.
"US Intellectual Property Right" means (i) any trademark, service xxxx,
trade name, mask work, invention, patent, trade secret, copyright, know-how
(including any registrations or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual property right
necessary for the conduct of the US Business, (ii) all computer software
necessary for the conduct of the US Business, (iii) any telephone numbers,
Internet addresses, URLs and domain names relating to the US Business, (iv) all
customer lists relating to the US Business and (v) any and all trade rights,
Trade Secrets and other intangible property and information which is proprietary
to the US Business.
"US Marked Materials" shall have the same meaning as set forth in
Section 8.12 of this Agreement.
"US Net Working Capital" means the amount computed in accordance with
the illustration set forth on Schedule 4.02(b) hereto.
"US Security Business" means the facility security services business
and the aviation security business as conducted by any Xxxxxxxxxxx Entity as of
the date hereof and as of the Closing Date.
"US Shares" means all of the issued and outstanding capital stock of
Xxxxxxxxxxx Security.
"US Transferred Employee" means any individual whose employment duties
and responsibilities as of the Closing Date primarily relate to the US Business,
including, without limitation, the employees identified in Section 5.25 of the
US Disclosure Memorandum.
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"US Transportation Assets" means the assets which are used in the
conduct of the US Transportation Business identified in Section 5.17(a) of the
US Disclosure Memorandum.
"US Transportation Business" means the ground transportation and cargo
business as conducted by any Xxxxxxxxxxx Entity utilizing the US Transportation
Assets.
"Waste" means any waste as defined in the UK Environmental Protection
Xxx 0000.
"Worker's Compensation Claims" shall have the same meaning as set forth
in Section 5.29 of this Agreement.
The words, "Group" and "Subsidiary" and "Subsidiary Undertakings" shall
have the same meanings set forth in Annexes VI, XII and XVI to this Agreement as
their respective definitions in the Companies Act except that this shall not
exclude the inclusion of Aviation Defence International Italia S.A. in the
definition of European Subsidiaries.
ARTICLE 2
Purchase And Sale of US Business and UK Business
Section 2.01 Purchase and Sale.
(a) Upon the terms and subject to the conditions of this
Agreement, Holdings agrees to sell to Purchaser or its designee, and Purchaser
agrees to purchase or cause its designee to purchase from Holdings the US Shares
at the Closing, and AHL Europe agrees to sell to Purchaser, and Purchaser agrees
to purchase from AHL Europe the ADI Shares at Closing. Both the US Shares and
the ADI Shares are to be sold by Holdings and AHL Europe, respectively, free and
clear of any and all Liens. Subject to adjustment as hereinafter provided, the
purchase price for the US Shares is US $150,000,000 (the "US Purchase Price")
and the purchase price for the ADI Shares is US $35,000,000 (the "UK Purchase
Price," and, together with the "US Purchase Price," referred to herein as the
"Purchase Price"). The Purchase Price shall be paid in cash and shall be subject
to adjustment as provided in Section 4.02 and Schedule 2.01 attached hereto.
(b) On or prior to the Closing Date, Holdings agrees to sell,
convey, transfer, assign and deliver, or cause one or more of the Xxxxxxxxxxx
Entities to sell, convey, transfer, assign and deliver, to Xxxxxxxxxxx Security
or its designee, free and clear of all Liens, other than Permitted Liens, all of
their right, title and interest in, to and under the US Transportation Assets.
On or prior to the Closing Date, AHL Alpha will sell, convey, transfer, assign
and deliver such to Xxxxxxxxxxx Security, free and clear of all Liens, other
than Permitted Liens, all of its right, title and interest in, to and under the
trade name "Xxxxxxxxxxx" and such other intellectual property rights necessary
for operation of the US Business as operated immediately prior to Closing to the
extent owned by AHL Alpha. On or prior to the Closing Date, AHL Beta will sell,
convey, transfer, assign and deliver, to Xxxxxxxxxxx Security, free and clear of
all Liens, other than Permitted Liens, all of its right, title and interest in,
to and under all intellectual property rights necessary for the operation of the
US Business as operated immediately prior to Closing to the extent owned by AHL
Beta.
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ARTICLE 3
Closing of Purchase and Sale of US Business and UK Business
Section 3.01 Closing.
(a) The US Closing of the purchase and sale of the US Shares
hereunder shall take place at the offices of Xxxxxxxx Xxxxxxx LLP, on December
29, 2000 at 10:00 a.m. EST or as soon as possible thereafter, but in no event
later than, five (5) Business Days, after satisfaction or waiver of the
conditions set forth in Article 15, or at such other time or place as Purchaser
and Holdings may agree.
(b) The UK Closing of the purchase and sale of the ADI Shares
shall take place at the offices of Xxxxxxx Xxxxx, London, England on the Closing
Date at 3:00 p.m. GMT, or at such other place as Purchaser and AHL Europe may
agree.
Section 3.02 Delivery of Purchase Price. At the Closing:
Purchaser shall deliver to Holdings the US Purchase Price in
immediately available funds by wire transfer to an account with a bank (or
banks) located in the United States and designated in writing by Holdings at
least two (2) Business Days prior to Closing, by notice to Purchaser, on the
Closing Date. Purchaser shall deliver to AHL Europe the UK Purchase Price by
wire transfer in immediately available funds to an account with a bank located
in the United Kingdom and designated in writing by AHL Europe at least two (2)
Business Days prior to Closing, by notice to Purchaser, on the Closing Date.
Section 3.03 US Closing Deliveries. At the Closing:
(a) Holdings shall deliver to Purchaser certificates for the US
Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with
any required transfer stamps affixed thereto;
(b) Xxxxxxxxxxx Security and the respective employees of the US
Business named therein shall enter into the Employment Agreements described in
Exhibit A; and
(c) Holdings and Purchaser shall enter into the Transition
Services Agreement with respect to the US Business attached hereto as Exhibit B.
Section 3.04 UK Closing Deliveries.
(a) At the UK Closing, AHL Europe shall deliver or cause to be
delivered to the Purchaser or the Purchaser's UK Solicitors:
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(i) Duly executed transfers to the Purchaser or its
nominee of all of the ADI Shares together with definitive share
certificates for them in the names of the relevant transferors;
(ii) Any power of attorney under which any document is
executed on behalf of the relevant transferors;
(iii) Any waivers, consents or other documents reasonably
required to vest in the Purchaser the full beneficial ownership of the
ADI Shares and to enable the Purchaser to procure them to be registered
in the name of Purchaser or its nominee;
(iv) The certificate(s) of incorporation, common seal, all
statutory and minute books (which shall be written up to, but not
including, the date of Completion of the sale) and share certificate
book of ADI and each of the European Subsidiaries together with all
unused share certificate forms (or, in each case, their equivalent for
companies incorporated outside of England and Wales);
(v) Definitive certificates in respect of all the shares
beneficially owned by ADI or any of the European Subsidiaries in each
of the European Subsidiaries together with duly executed transfers in
blank in respect of all shares in the European Subsidiaries not
registered in the name of ADI or of another of the European
Subsidiaries;
(vi) All deeds and documents in the possession of AHL
Europe relating to the title of ADI or any of the European Subsidiaries
to each of the European Properties or in respect of the French
Properties, the German Properties and the Scottish Properties
irrevocable letters of instruction from Sellers' French Solicitors,
Sellers' German Solicitors and Sellers' Scottish Solicitors,
respectively, to hold such of the deeds and documents of title in the
possession of AHL Europe relating to the French Properties, the German
Properties and the Scottish Properties, respectively, to the order of
the Purchaser;
(vii) Certificates of Title given by the Sellers' UK
Solicitors in respect of each of the Certified English Properties in
the agreed terms;
(viii) The written resignations of all directors of and the
secretaries (or their equivalent in the case of companies incorporated
outside of England and Wales) of ADI and each of the European
Subsidiaries (other than any director or secretary whom the Purchaser
may wish to remain in office) (as indicated in a written notice from
Purchaser to AHL Europe or Sellers' UK Solicitors not less than five
(5) Business Days prior to the Closing Date) executed as a deed in the
agreed terms;
(ix) A written undertaking from the Sellers' UK Solicitors
to deliver a copy of a release of each charge to which any of the
assets or undertaking of ADI or any of the European Subsidiaries is
subject has been released or discharged;
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(x) A power of attorney from AHL Europe (and the holders
of any nominee shares) in the agreed terms relating to the exercise of
rights in respect of the ADI Shares pending their registration in the
name of the Purchaser and/or its nominee;
(xi) A notice of resignation of the existing auditors of
ADI and each of the European Subsidiaries containing a statement that
there are no circumstances connected with such resignation which the
auditors consider should be brought to the attention of the members or
creditors of ADI or any other European Subsidiary, in accordance with
section 394 of the Companies Xxx 0000 (or any equivalent requirement
for companies incorporated outside of England and Wales);
(xii) The Supplemental European Disclosure Memorandum (if
any) as provided for under Section 8.15;
(xiii) The Tax Deed duly executed by AHL Europe in the form
attached hereto as Schedule 3.04(a);
(xiv) The Personnel Supply Agreement duly executed by Right
4 Staff Limited in the form attached hereto as Schedule 3.04(b); and
(xv) The Transition Services Agreement with respect to UK
Business (the "Interim Equipment Access Agreement") duly executed by
ADI, Right 4 Staff Limited and AHL Europe in the form attached hereto
as Exhibit C.
(b) AHL Europe shall ensure that the following business is
transacted at meetings of the directors of ADI and each of the European
Subsidiaries:
(i) The directors of ADI shall approve the transfers of
the ADI Shares for registration and the entry of the transferee in the
register of members of ADI, in each case subject only to the transfers
being subsequently presented duly stamped;
(ii) The situation of the registered office (or its
equivalent for companies incorporated outside of England and Wales) of
ADI and each of the European Subsidiaries shall be changed to that
nominated by the Purchaser;
(iii) All existing mandates for the operation of the bank
accounts of ADI and each of the European Subsidiaries shall be revoked
and new mandates issued giving authority to those persons nominated by
the Purchaser in each case to the extent notified in writing by the
Purchaser prior to Completion;
(iv) The accounting reference date (or its equivalent for
companies incorporated outside of England and Wales) of ADI and each of
the European Subsidiaries shall be changed to September 30;
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(v) Any person nominated by the Purchaser for appointment
as a director or the secretary of ADI or any of the European
Subsidiaries shall be so appointed; and
(vi) Xxxxx Xxxxx shall be appointed to replace the
existing auditors of ADI.
ARTICLE 4
Post Closing Balance Sheet; Purchase Price Adjustment
Section 4.01 US Balance Sheet and European Completion Accounts.
(a) As promptly as practicable, but no later than ninety (90) days
after the Closing Date, Purchaser will cause to be prepared and delivered to
Sellers the Closing US Balance Sheet and a certificate of an officer of
Purchaser based on such Closing US Balance Sheet setting forth Purchaser's
calculation of Closing Date US Net Working Capital and the Closing Date US Fixed
Assets. The Closing US Balance Sheet shall (i) fairly present the consolidated
financial position of the US Business as at the close of business on the Closing
Date in accordance with United States generally accepted accounting principles
applied on a basis consistent with those used in the preparation of the audited
consolidated balance sheet of AHL as of December 31, 1999 (the "December Balance
Sheet"), (ii) include line items substantially consistent with those in the
December Balance Sheet and (iii) be prepared in accordance with United States
generally accepted accounting principles and the accounting policies and
practices consistent with those used in the preparation of the December Balance
Sheet, with United States generally accepted accounting principles to control in
the event of any conflict between such principles and past practice.
(b) As promptly as practicable, but no later than ninety (90) days
after the Closing Date, Purchaser will cause to be prepared and delivered to the
Sellers the European Completion Accounts and a certificate of an officer of
Purchaser based on such European Completion Accounts setting forth the
Purchaser's calculation of Closing Date European Net Working Capital and the
Closing Date European Fixed Assets. The European Completion Accounts shall (i)
fairly present the consolidated financial position of the UK Business at the
close of business on the Closing Date in accordance with United Kingdom
generally accepted accounting principles applied on a basis consistent with
those used in the preparation of the December Balance Sheet, (ii) include line
items substantially consistent with the December Balance Sheet and (iii) be
prepared in accordance with United Kingdom generally accepted accounting
principles and accounting policies and practices consistent with those used in
the preparation of the European Accounts, with United Kingdom generally accepted
accounting principles to control in the event of any conflict between such
principles and past practice.
(c) If Sellers disagree with Purchaser's calculation of Closing
Date US Net Working Capital, Closing Date European Net Working Capital, Closing
Date US Fixed Assets or Closing Date European Fixed Assets, Sellers may, within
thirty (30) days after delivery of the documents referred to in Section 4.01(a)
and (b), deliver a notice to Purchaser disagreeing with such calculation and
setting forth Sellers' calculation of such amount. Any such notice of
disagreement shall specify those items or amounts as to which Sellers disagree
and the reasons
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for such disagreement, and Sellers shall be deemed to have agreed with all other
items and amounts contained in the Closing US Balance Sheet, the European
Completion Accounts and Purchaser's calculation of Closing Date US Net Working
Capital, Closing Date European Net Working Capital, Closing Date US Fixed Assets
and Closing Date European Fixed Assets delivered pursuant to Section 4.01(a) and
(b).
(d) If a notice of disagreement shall be duly delivered pursuant
to Section 4.01(c), Purchaser and Sellers shall, during the fifteen (15) days
following such delivery, use their best efforts to reach agreement on the
disputed items or amounts in order to determine, as may be required, the amount
of Closing Date US Net Working Capital, Closing Date European Net Working
Capital, Closing Date US Fixed Assets and Closing Date European Fixed Assets, as
the case may be, which amount shall not be less than the amount thereof shown in
Purchaser's calculation delivered pursuant to Section 4.01(a) or (b) nor more
than the amount thereof shown in Sellers' calculation delivered pursuant to
Section 4.01(c). If, during such period, Purchaser and Sellers are unable to
reach such agreement, they shall promptly thereafter cause PWC promptly to
review this Agreement and the disputed items or amounts for the purpose of
calculating Closing Date US Net Working Capital, Closing Date European Net
Working Capital, Closing Date US Fixed Assets and/or Closing Date European Fixed
Assets, as the case may be. In making this calculation, PWC shall consider only
those items or amounts in the Closing Date US Balance Sheet, the European
Completion Accounts or Purchaser's calculation of Closing Date US Net Working
Capital, Closing Date European Net Working Capital, Closing Date US Fixed Assets
or Closing Date European Fixed Assets, as to which Sellers have disagreed. PWC
shall deliver to Purchaser and Sellers, as promptly as practicable, and in no
event more than sixty (60) days following submission of the dispute to PWC, a
report setting forth this calculation. Such report shall be final and binding
upon Purchaser and Sellers. The cost of this review and report shall be borne
(i) by Purchaser if (A) the difference between the (1) aggregate of the Final
Closing Date US Net Working Capital, Final Closing Date European Net Working
Capital, Final Closing Date US Fixed Assets and Final Closing Date European
Fixed Assets determined by PWC and (2) Purchaser's calculation of Closing Date
US Net Working Capital, Closing Date European Net Working Capital, Closing Date
US Fixed Assets and Closing Date European Fixed Assets delivered pursuant to
Sections 4.01(a) and (b) is greater than (B) the difference between (1) the
aggregate of the Final Closing Date US Net Working Capital, Final Closing Date
European Net Working Capital, Final Closing Date US Fixed Assets and Final
Closing Date European Fixed Assets determined by PWC and (2) Sellers'
calculation of Closing Date US Net Working Capital, Closing Date European Net
Working Capital, Closing Date US Fixed Assets and/or Closing Date European Fixed
Assets, as the case may be, delivered pursuant to Sections 4.01(a) and (b), (ii)
by Sellers if the first such difference is less than the second such difference
and (iii) otherwise, equally by Purchaser and Sellers.
(e) Purchaser and Sellers agree that they will, and agree to cause
their respective independent accountants and each of their Subsidiaries to,
cooperate and assist in the preparation of the Closing US Balance Sheet and the
European Completion Accounts and the calculation of Final Closing Date US Net
Working Capital, Final Closing Date European Net Working Capital, Final Closing
Date US Fixed Assets and Final Closing Date European Fixed Assets and in the
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conduct of the audits and reviews referred to in this Section 4.01, including
without limitation, the making available to the extent necessary of books,
records, work papers and personnel.
Section 4.02 Adjustment of Purchase Price.
(a) The Purchase Price shall be adjusted as follows:
(i) In the event Target US Net Working Capital exceeds
Final Closing Date US Net Working Capital, Holdings shall pay to Purchaser, as
an adjustment to the US Purchase Price, an amount in United States Dollars,
equal to such excess. In the event Target European Net Working Capital exceeds
Final Closing Date European Net Working Capital, AHL Europe shall pay to
Purchaser, as an adjustment to the UK Purchase Price, an amount in British
Pounds Sterling, equal to such excess;
(ii) In the event Final Closing Date US Fixed Assets are
less than Target US Fixed Assets, Holdings shall pay to Purchaser, as an
adjustment to the US Purchase Price, an amount in US Dollars, equal to such
shortage. In the event Final Closing Date European Fixed Assets are less than
Target European Fixed Assets, AHL Europe shall pay to Purchaser, as an
adjustment to the UK Purchase Price, an amount in British Pounds Sterling, equal
to such shortage.
(iii) In the event Final Closing Date US Net Working
Capital exceeds Target US Net Working Capital, Purchaser shall pay to Holdings,
as an adjustment to the US Purchase Price an amount in United States Dollars,
equal to such excess. In the event Final Closing Date European Net Working
Capital exceeds Target European Net Working Capital, Purchaser shall pay to AHL
Europe, as an adjustment to the UK Purchase Price an amount in British Pounds
Sterling, equal to such excess.
(iv) In the event Final Closing Date US Fixed Assets
exceed Target US Fixed Assets or Final Closing Date European Fixed Assets exceed
Target European Fixed Assets, no adjustment shall be made to the Purchase Price.
(b) Payment pursuant to Section 4.02(a) shall be made to the
Purchaser, Holdings, or AHL Europe, as the case may be, promptly (and in no
event more than five (5) Business Days) following the determination of the Final
Closing Date US Net Working Capital, the Final Closing Date European Net Working
Capital, the Final Closing Date US Fixed Assets and the Final Closing Date
European Fixed Assets by wire transfer of immediately available funds to an
account designated in writing by the party entitled to receive the payment.
ARTICLE 5
Representations And Warranties of The Xxxxxxxxxxx Entities
Each of AHL, Holdings and Xxxxxxxxxxx jointly and severally represents
and warrants to Purchaser as of the date hereof and as of the Closing Date that:
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Section 5.01 Corporate Existence and Power. Each Xxxxxxxxxxx
Entity is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all corporate powers
and, except as set forth in Section 5.01 of the US Disclosure Memorandum, all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted. Except as set forth in Section 5.01
of the US Disclosure Memorandum, each Xxxxxxxxxxx Entity is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not, individually or in the aggregate, result
in a Material Adverse Effect. Each Xxxxxxxxxxx Entity has heretofore delivered
to Purchaser true and complete copies of its certificate or articles of
incorporation and bylaws as currently in effect.
Section 5.02 Corporate Authorization. The execution, delivery and
performance by each Xxxxxxxxxxx Entity of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
hereby or thereby are within each Xxxxxxxxxxx Entity's corporate powers and have
been duly authorized by all necessary corporate actions on the part of each
Xxxxxxxxxxx Entity, and no other corporate or other approval of any Xxxxxxxxxxx
Entity or its stockholders is required in connection therewith. This Agreement
and each other Transaction Document to which any Xxxxxxxxxxx Entity is a party
has been duly executed and delivered by each Xxxxxxxxxxx Entity and constitutes
a legal, valid and binding agreement of such Xxxxxxxxxxx Entity enforceable
against it in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency and other similar laws affecting the enforceability of
creditors' rights generally, general equitable principles and the discretion of
courts in granting equitable remedies. Notwithstanding the foregoing, Sellers
and Purchaser hereby acknowledge that the Xxxxxxxxxxx Entities do not represent
that the Employment Agreements are enforceable in accordance with their terms.
Section 5.03 Governmental Authorization. The execution, delivery
and performance by each Xxxxxxxxxxx Entity of this Agreement and each other
Transaction Document and the consummation of the transactions contemplated
hereby and thereby require no action by or in respect of, or filing with, any
governmental body, agency or official other than (i) compliance with any
applicable requirements of the HSR Act, (ii) compliance with any applicable
requirements of the 1934 Act, (iii) compliance with the Exon-Xxxxxx Amendment
and (iv) the approvals described in Section 5.03 of the US Disclosure
Memorandum.
Section 5.04 Noncontravention. The execution, delivery and
performance by each Xxxxxxxxxxx Entity of this Agreement and each other
Transaction Document and the consummation of the transactions contemplated
hereby do not and will not (i) violate the certificate or articles of
incorporation, bylaws, charter or similar organizational documents of such
Xxxxxxxxxxx Entity, (ii) assuming compliance with the matters referred to in
Section 5.03, violate any applicable law, rule, regulation, judgment,
injunction, order or decree to which any Xxxxxxxxxxx Entity is subject or that
relates to the US Business, (iii) except as set forth in Section 5.04 of the US
Disclosure Memorandum, require any consent or other action by any Person under,
constitute a material default under, give rise to any right of any Person to
require any Xxxxxxxxxxx Entity to purchase any equity interest held by such
Person, or give rise to any right
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of termination, cancellation or acceleration of any material right or
obligation of any Xxxxxxxxxxx Entity that relates to the US Business or to a
loss of any benefit to which any Xxxxxxxxxxx Entity is entitled under, any
provision of any agreement or other instrument binding upon any Xxxxxxxxxxx
Entity that relates to the US Business or (iv) result in the creation or
imposition of any Lien on any US Asset other than Permitted Liens.
Section 5.05 Capitalization.
(a) Section 5.05(a) of the US Disclosure Memorandum sets forth the
authorized, issued and outstanding shares of each class of capital stock of
Xxxxxxxxxxx Security and its Subsidiaries.
(b) All outstanding shares of capital stock of Xxxxxxxxxxx
Security and its Subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable. There are no outstanding (i) shares of
capital stock or voting securities of Xxxxxxxxxxx Security or its Subsidiaries,
(ii) securities convertible into or exchangeable for shares of capital stock or
voting securities of Xxxxxxxxxxx Security or its Subsidiaries or (iii) options
or other rights to acquire any securities of Xxxxxxxxxxx Security or its
Subsidiaries, or other obligations of Xxxxxxxxxxx Security or its Subsidiaries
to issue any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Xxxxxxxxxxx Security (the
items in clauses 5.05(b)(i), 5.05(b)(ii) and 5.05(b)(iii) being referred to,
collectively, as the "Xxxxxxxxxxx Securities"). None of the issued and
outstanding Xxxxxxxxxxx Securities were issued in violation of any preemptive
rights. There are no outstanding obligations to repurchase, redeem or otherwise
acquire any securities of Xxxxxxxxxxx Security.
Section 5.06 Ownership of US Shares.
(a) Holdings is the record and beneficial owner of all of the US
Shares, free and clear of any Lien (other than Permitted Liens) and any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of the US Shares), and will transfer and deliver to
Purchaser or one of Purchaser's designees at the Closing valid title to the US
Shares free and clear of any Lien and any such limitation or restriction.
(b) On or before the Closing Date, Xxxxxxxxxxx Security (or, if
requested by Purchaser pursuant to Section 2.01, one or more designees of
Xxxxxxxxxxx Security) will have acquired good and marketable title in and to, or
a valid leasehold interest in, each of the US Transportation Assets, free and
clear of all Liens, except for the Permitted Liens.
Section 5.07 Xxxxxxxxxxx Security Subsidiaries. All Subsidiaries
of Xxxxxxxxxxx Security and their respective jurisdictions of incorporation and
organization are identified in Section 5.07 of the US Disclosure Memorandum. Any
such Subsidiaries are corporations duly incorporated or organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, have all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
their business as now conducted, is duly qualified to do business as a foreign
corporation and is in good standing in
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each jurisdiction where such qualification is necessary. Xxxxxxxxxxx Security
does not own and has no contract to acquire, any equity securities or other
securities of any Person or any direct or indirect equity or ownership interest
in any other business except for AHL Beta.
Section 5.08 Financial Statements.
(a) The unaudited balance sheets of the US Business as of December
31, 1998 and 1999 and as of September 30, 2000 and the related unaudited
statements of income for the periods then ended fairly present, in conformity
with United States generally accepted accounting principles applied on a
consistent basis the combined financial position of the US Business as of the
dates thereof and their consolidated results of operations for the periods then
ended (except with respect to the absence of footnotes and the matters that
would have been disclosed therein, and subject to normal year-end adjustments);
and
(b) Except as set forth in Section 5.08(b) of the US Disclosure
Memorandum, neither Xxxxxxxxxxx Security nor any of its Subsidiaries has
incurred, assumed or guaranteed any indebtedness.
Section 5.09 Books and Records. Except as set forth in Section
5.09 of the US Disclosure Memorandum, the books of account, minute books, stock
record books and other records of the US Business, all of which have been made
available to Purchaser, are complete and correct and have been maintained in
accordance with sound business practices and the requirements of Section
13(b)(2) of the 1934 Act, as amended, including the maintenance of an adequate
system of internal controls. Except as set forth in Section 5.09 of the US
Disclosure Memorandum, the minute books of Xxxxxxxxxxx Security and its
Subsidiary contain accurate and complete records of all meetings held of, and
corporate action taken by the stockholders, the Board of Directors and
committees of the Board of Directors of Xxxxxxxxxxx Security and its
Subsidiaries, and no meeting of any such shareholders, Board of Directors or
committee has been held for which minutes have not been prepared and are not
contained in such minute books. At the Closing, all of the books and records of
the US Business will be in the possession of Xxxxxxxxxxx Security.
Section 5.10 Absence of Certain Changes. Except as set forth in
Section 5.10 of the US Disclosure Memorandum, since the Balance Sheet Date, the
US Business has been conducted in the ordinary course consistent with past
practices and there has not been:
(a) Any event, occurrence, development or state of circumstances
or facts which, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect;
(b) Any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of Xxxxxxxxxxx
Security, or any repurchase, redemption or other acquisition by Xxxxxxxxxxx
Security of any outstanding shares of capital stock or other securities of
Xxxxxxxxxxx Security;
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(c) Any amendment of any material term of any outstanding shares
of capital stock of Xxxxxxxxxxx Security or any of its Subsidiaries;
(d) Any incurrence, assumption or guarantee by Xxxxxxxxxxx
Security or any of its Subsidiaries of any indebtedness for borrowed money,
other than pursuant to the Credit Facility;
(e) Any creation or other incurrence of any Lien on any shares of
capital stock of Xxxxxxxxxxx Security or on any asset of Xxxxxxxxxxx Security or
on any of the US Transportation Assets, other than Permitted Liens;
(f) Any making of any loan, advance or capital contributions to or
investment in any Person;
(g) Any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the US Business or US Assets which, individually
or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect;
(h) Any transaction or commitment made, or any contract or
agreement entered into, by Xxxxxxxxxxx Security or any of its Subsidiaries
relating to their respective assets or business (including the acquisition or
disposition of any assets) or any relinquishment by Xxxxxxxxxxx Security of any
contract or other right, or by any Xxxxxxxxxxx Entity or any of its Affiliates
with respect to the US Transportation Assets, in each case, material to the US
Business other than transactions and commitments in the ordinary course of
business consistent with past practices and those contemplated by this
Agreement;
(i) Any oral or written material adverse change in the price,
payment terms or scope of any of the customer contracts listed in Section 5.13
of the US Disclosure Memorandum;
(j) Any change in any method of accounting or accounting practice
by any Xxxxxxxxxxx Entity except for any such change after the date hereof
required by reason of a concurrent change in United States generally accepted
accounting principles;
(k) Any (i) employment, deferred compensation, severance,
retirement or other similar agreement entered into with any director, officer or
employee relating to the US Business (or any amendment to any such existing
agreement), (ii) grant of any severance or termination pay to any director,
officer or employee relating to the US Business or (iii) change in compensation
or other benefits payable to any director, officer or employee relating to the
US Business pursuant to any severance or retirement plans or policies thereof;
(l) Any labor dispute, other than routine individual grievances,
or any activity or proceeding by a labor union or representative thereof to
organize any employees relating to the US Business, which employees were not
subject to a collective bargaining agreement at the Balance Sheet Date, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to any employees relating to the US Business;
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(m) Any single incident which resulted in worker's compensation
claims being submitted by ten (10) or more employees relating to the US Business
with respect to services performed in respect of the US Business; and/or
(n) Any capital expenditure, or commitment for a capital
expenditure, for additions or improvements to property, plant and equipment in
an amount in excess of US $100,000 other than as disclosed as part of the fixed
assets described in Section 5.17(a) of the US Disclosure Memorandum.
Section 5.11 No Undisclosed Material Liabilities. There are no
liabilities of the US Business of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, other than:
(a) Liabilities provided for in the US Balance Sheet or disclosed
in the notes thereto;
(b) Liabilities incurred since September 30, 2000 in the ordinary
course of the operation of the US Business;
(c) Liabilities disclosed in Section 5.11 of the US Disclosure
Memorandum;
(d) Other undisclosed liabilities which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;
and
(e) Liabilities that will be disclosed on the Closing Date US
Balance Sheet and that are the subject of an adjustment of the Purchase Price
pursuant to Article 4 of this Agreement.
Section 5.12 Intercompany Accounts. Since the Balance Sheet Date
there has not been any accrual of liability by Xxxxxxxxxxx Security to any
Xxxxxxxxxxx Entity or other transaction between Xxxxxxxxxxx Security and any
Xxxxxxxxxxx Entity or its Affiliates, except with respect to the period prior to
the date of this Agreement, in the ordinary course of the US Business consistent
with past practice and except for the transactions contemplated by this
Agreement, and thereafter, as provided in Section 5.12 of the US Disclosure
Memorandum.
Section 5.13 Material Contracts.
(a) Except as disclosed in Section 5.13(a) of the US Disclosure
Memorandum, Xxxxxxxxxxx Security (or, to the extent involving any of the US
Assets, any Xxxxxxxxxxx Entity, including without limitation Xxxxxxxxxxx with
respect to the US Transportation Assets) is not a party to or bound by:
(i) Any lease (whether of real or personal property)
providing for annual rentals of US $60,000 or more;
(ii) Any agreement (including related agreements, as one
agreement) for the purchase of materials, supplies, goods, services,
equipment or other assets providing for
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annual payments by Xxxxxxxxxxx Security or any of its Subsidiaries of
US $100,000 or more;
(iii) Any sales, distribution option, license, franchise or
other similar agreement providing for the sale by Xxxxxxxxxxx Security
or any of its Subsidiaries of materials, supplies, goods, services,
equipment or other assets that provides for either annual payments to
Xxxxxxxxxxx Security or any of its Subsidiaries of US $500,000 or more;
(iv) Any partnership, joint venture or other similar
agreement or arrangement;
(v) Any agreement relating to the acquisition or
disposition of any business (whether by merger, sale of stock, sale of
assets or otherwise pursuant to which Xxxxxxxxxxx Security or other
Xxxxxxxxxxx Entity currently has any right or obligation);
(vi) Any agreement containing an amount or similar
provision or otherwise providing for a contingent payment by or to
Xxxxxxxxxxx Security or any of its Subsidiaries or in respect of the US
Business;
(vii) Any agreement relating to indebtedness for borrowed
money or the deferred purchase price of property (in either case,
whether incurred, assumed, guaranteed or secured by any asset), except
any such agreement with an aggregate outstanding principal amount not
exceeding US $10,000 provided that the amount of all such agreements
does not exceed US $15,000 in the aggregate;
(viii) Any agency, dealer, sales representative, marketing
or other similar agreement;
(ix) Any agreement or judgment that limits the freedom of
the US Business to compete in any line of business or with any Person
or in any area or which would so limit the freedom of Xxxxxxxxxxx
Security or any of its Subsidiaries after the Closing Date;
(x) Any agreement that limits the freedom of any
Xxxxxxxxxxx Entity or any Affiliate to own, operate, sell, transfer,
pledge or otherwise dispose of or encumber any US Asset or which would
so limit the freedom of Purchaser or its Affiliates after the Closing
Date;
(xi) Any agreement with (A) any Xxxxxxxxxxx Entity or any
of its Affiliates, (B) any Person directly or indirectly owning,
controlling or holding with power to vote five percent (5%) or more of
the outstanding voting securities of any Xxxxxxxxxxx Entity or any of
its Affiliates, (C) any Person five percent (5%) or more of whose
outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote by any Xxxxxxxxxxx Entity or any
of its Affiliates or (D) any director or officer of any Xxxxxxxxxxx
Entity or any of its Affiliates or any "associates" or members of the
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"immediate family" (as such terms are respectively defined in Rule
12b-2 and Rule 16a-1 of the 0000 Xxx) of any such director or officer;
(xii) Any contract involving payment of $100,000 or more by
Xxxxxxxxxxx Security and or its Subsidiaries or that cannot be
terminated upon thirty (30) days or less notice without penalty to
Xxxxxxxxxxx Security or any Subsidiary; and
(xiii) Any agreement not made in the ordinary course of
business that is material to the US Business.
(b) Each agreement, contract, plan, lease, arrangement or
commitment disclosed in Section 5.13 of the US Disclosure Memorandum (each a
"Material Contract" and, collectively, the "Material Contracts") is a valid and
binding agreement of Xxxxxxxxxxx Security or an Xxxxxxxxxxx Entity, as the case
may be, and is in full force and effect (other than those contracts listed as
expired in Section 5.13(b) of the US Disclosure Memorandum under which the
parties thereto continue to perform upon substantially the terms and conditions
set forth in such contracts), and no Xxxxxxxxxxx Entity nor, to the knowledge of
the Sellers, any other party thereto is in default or breach in any material
respect under the terms of any such Material Contract. True and complete copies
of each such written Material Contract and a written summary of the terms of any
oral Material Contract have been provided to Purchaser.
(c) Section 5.13(c) of the US Disclosure Memorandum sets forth a
true, correct and complete list of all material consents or notices required to
be obtained or given under the Material Contracts in connection with the
transactions contemplated by this Agreement.
(d) Except as set forth in Section 5.13(d) of the US Disclosure
Memorandum, no Xxxxxxxxxxx Entity has received any notice (oral or written) that
any of the counterparts under any of the Material Contracts may terminate such
Material Contracts.
(e) Section 5.13(e) of the US Disclosure Memorandum sets forth all
of the Material Contracts which require special security clearances for the
officers and/or directors of Xxxxxxxxxxx Security or the applicable Xxxxxxxxxxx
Entity, as the case may be.
Section 5.14 Suppliers. Except as set forth in Section 5.14 of the
US Disclosure Memorandum, since January 1, 2000, no supplier to the US Business
has canceled or otherwise modified, or, to Sellers' knowledge, threatened to
cancel or otherwise modify, its relationship with Xxxxxxxxxxx Security or any
Xxxxxxxxxxx Entity or otherwise in respect of the US Business.
Section 5.15 Litigation. Except as set forth in Section 5.15 of
the US Disclosure Memorandum, there is no action, suit, investigation or
proceeding pending against, or to the Knowledge of the Sellers, threatened
against or affecting, any Xxxxxxxxxxx Entity or its Affiliates or any of their
respective properties or any US Asset before any court or arbitrator or any
governmental body, agency or official (i) which, individually or in the
aggregate, if determined or resolved adversely in accordance with the
plaintiff's demands, could reasonably be expected to have a Material Adverse
Effect, (ii) involves damages in excess of US $100,000 individually
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or when aggregated with all other related actions, suits investigations or
proceedings, (iii) which seeks injunctive relief or (iv) which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement (collectively, "Claims"). The
current insurance maintained by or on behalf of Xxxxxxxxxxx Security is adequate
to cover all pending or threatened Claims in excess of the amounts of such
Claims as to which Xxxxxxxxxxx Security is self-insured, and/or such insurance
coverage is reasonably regarded as adequate against risks normally insured
against by companies carrying on similar businesses. Xxxxxxxxxxx Security has
given all required notice of such Claims to its appropriate insurance carrier(s)
and/or all such Claims have been fully reserved for on the US Balance Sheet,
except for Claims filed after such date.
Section 5.16 Compliance with Laws and Court Orders. Except as set
forth in Section 5.16 of the US Disclosure Memorandum, none of the Xxxxxxxxxxx
Entities are in violation of, and has not since the Balance Sheet Date violated,
and is not under investigation with respect to and has not been threatened to be
charged with or given notice of any violation of, any applicable law, rule,
regulation, judgment, injunction, order or decree, except for violations that
have not had and could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 5.17 Ownership of US Assets.
(a) Section 5.17(a) of the US Disclosure Memorandum sets forth all
of the fixed assets used in the conduct of the US Business. Xxxxxxxxxxx Security
and AHL Beta have or will have as of the Closing good and marketable title to
(i) the property and assets (whether real, personal, tangible or intangible)
reflected on the US Balance Sheet and in Section 5.17(a) of the US Disclosure
Memorandum, except for obsolete assets disposed of since the US Balance Sheet
Date in the ordinary course of business consistent with past practices, (ii) the
US Transportation Assets as described in Section 5.17(a) of the US Disclosure
Memorandum, (iii) the forty-nine percent (49%) ownership interest in Premium
Services Management, Inc., and (iv) all customer contracts related to the
security services business, the aviation business, the cargo/mail business and
the transportation business as conducted on the date hereof and immediately
prior to Closing by the Xxxxxxxxxxx Entities and their Affiliates. Except as set
forth in Section 5.17(b) of the US Disclosure Memorandum, none of such property
or assets is subject to any Lien except for Permitted Liens. Except as disclosed
in Section 5.17(a) of the US Disclosure Memorandum, all assets necessary for the
conduct of the US Business are in the possession and control of Xxxxxxxxxxx
Security. In addition, ADI will own all assets used in the conduct of the UK
Business immediately prior to the Closing.
(b) Section 5.17(b) of the US Disclosure Memorandum lists all
releases ("Releases") necessary to satisfy and fully discharge all Liens (other
than Permitted Liens) on all US Assets used in the conduct of the US Business
(except for those US Assets that are leased by an Xxxxxxxxxxx Entity from an
unrelated third party).
(c) The US Assets constitute all of the property and assets used
or held for use in connection with the US Business and are adequate to conduct
the US Business as currently
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conducted. Subject to any specifically applicable exceptions set forth in the
European Disclosure Memorandum, the UK Assets constitute all of the property and
assets used or held for use in connection with the UK Business and are adequate
to conduct the UK Business as currently conducted.
(d) All equipment and other items of tangible property and assets
included in the US Assets or used in the conduct of the US Business are in good
operating condition and in a state of good maintenance and repair, ordinary wear
and tear excepted, are usable in the regular and ordinary course of business and
conform in all material respects to all applicable laws, ordinances, codes,
rules and regulations applicable thereto. No person other than Xxxxxxxxxxx
Security owns any equipment or other tangible assets or properties situated on
any premises leased by Xxxxxxxxxxx Security which are necessary to the operation
of the US Business, except for the leased items. Since September 30, 2000, the
Xxxxxxxxxxx Entities have not sold, transferred or disposed of any assets
necessary for the conduct of the US Business other than sales in the ordinary
course of business.
(e) All leased tangible property is in good operating condition
and in a state of good maintenance and repair, ordinary wear and tear excepted,
is usable in the regular course of the US Business and conforms to all
applicable laws, ordinances, codes, rules and regulations applicable thereto.
Section 5.18 Real Property.
(a) Real Property Lease Obligations.
(i) Each lease of real property (the "Leased Real
Property") used or occupied by Xxxxxxxxxxx Security or used or occupied
by any other Xxxxxxxxxxx Entity in connection with the US Business (the
"Real Property Leases") is legal, valid, binding and enforceable, and
in full force and effect, except as enforceability may be limited by
bankruptcy, insolvency and other similar laws affecting the
enforceability of creditors rights generally, general equitable
principles and the discretion of courts in granting equitable remedies.
Neither Xxxxxxxxxxx Security nor any other party is in default, breach
or violation in any respect under any Real Property Lease or any lease
superior to such Real Property Lease, and no event, to the best
knowledge of any Xxxxxxxxxxx Entity, has occurred and is continuing
that constitutes, or with notice and/or the passage of time would
constitute, a default, violation or breach in any respect under any
Real Property Lease or any lease superior to such Real Property Lease.
The Xxxxxxxxxxx Entities are not subject to any present claim, contest,
dispute, action or, to the knowledge of any Xxxxxxxxxxx Entity,
threatened action, at law or in equity or otherwise related to any of
the Leased Real Property except as set forth in Section 5.18(a)(i) of
the US Disclosure Memorandum.
(ii) Each Real Property Lease grants the tenant under the
Real Property Lease the exclusive right to use and occupy the demised
premises thereunder. Xxxxxxxxxxx Security has, or will have as of the
Closing Date, good and valid title to the leasehold
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estate under each Real Property Lease to which it is a party, free and
clear of all Liens, other than Permitted Liens. Xxxxxxxxxxx Security
enjoys or will enjoy as of the Closing Date peaceful and undisturbed
possession under its respective Real Property Leases of the Leased Real
Property.
(iii) There are no forfeiture or other similar proceedings
pending or, to the knowledge of any Xxxxxxxxxxx Entity, threatened
affecting any portion of the Leased Real Property. There is no writ,
injunction, decree, order, award, ruling, stipulation or judgment
outstanding, nor any action, claim, suit or proceeding pending or, to
the knowledge of any Xxxxxxxxxxx Entity, threatened relating to the
ownership, lease, use, occupancy or operation by any Person of any
Leased Real Property.
(iv) Except as set forth in Section 5.18(a)(iv) of the US
Disclosure Memorandum, the use and operation of the Leased Real
Property in the conduct of the US Business does not violate in any
material respect any agreement to which any Xxxxxxxxxxx Entity is a
party or of which any Xxxxxxxxxxx Entity is aware affecting the Leased
Real Property. To the best knowledge of any Xxxxxxxxxxx Entity, there
are no matters affecting the Leased Real Property which might curtail
or interfere with the use of the Leased Real Property for the purposes
for which it is used in connection with the US Business.
(v) The Leased Real Property and the use thereof by
Xxxxxxxxxxx Security or any Xxxxxxxxxxx Entity, as applicable, is in
compliance in all material respects with all applicable building,
zoning or planning, fire, water, health, environmental and other land
use and similar laws affecting the Leased Real Property.
(vi) The Leased Real Property is in good operating
condition and repair.
(vii) The expenditure of substantial sums of money on the
Leased Real Property by Xxxxxxxxxxx Security is not anticipated or
necessary in the near future.
(b) Other. The Leased Real Property constitutes all the interests
in real property held for use in connection with or necessary for the conduct of
the US Business as now conducted. No Xxxxxxxxxxx Entity has any interest in or
any right or obligation to acquire any interest in, or any residual liability in
respect of, any other real property.
Section 5.19 Intellectual Property.
(a) Section 5.19(a) of the US Disclosure Memorandum sets forth the
following information with respect to the US Intellectual Property Rights owned
or licensed and used or held for use by Xxxxxxxxxxx Security or any other
Xxxxxxxxxxx Entity in connection with the US Business, specifying as to each, as
applicable: (i) the nature of such US Intellectual Property Right, (ii) the
owner of such US Intellectual Property Right, (iii) the jurisdictions by or in
which such US Intellectual Property Right (A) is recognized (without regard to
registration) or (B) has
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been issued or registered or in which an application for such issuance or
registration has been filed, (iv) the registration or application numbers and
(v) the termination or expiration dates.
(b) Section 5.19(b) of the US Disclosure Memorandum sets forth a
list of all licenses, sublicenses and other agreements to which Xxxxxxxxxxx
Security (and the other Xxxxxxxxxxx Entities to the extent used in the US
Business) is a party and pursuant to which any Person (other than an Xxxxxxxxxxx
Entity) is authorized to use any US Intellectual Property Right, including (i)
the identity of all parties thereto, (ii) a description of the nature and
subject matter thereof, (iii) the applicable royalty and/or other payments and
(iv) the term thereof.
(c) Xxxxxxxxxxx Security has or will have as of the Closing Date
the right to use the US Intellectual Property Rights and the products, processes
and materials covered thereby. In addition, Xxxxxxxxxxx Security has or will
have as of the Closing Date the right to sell, license, assign, transfer, convey
or dispose of all rights associated with any trademark, trade name and service
xxxx, including, but not limited to, the "Xxxxxxxxxxx" name and the Xxxxxxxxxxx
Logo, which is utilized in connection with the US Business. Notwithstanding the
foregoing, the other Xxxxxxxxxxx Entities acknowledge and agree that each
Xxxxxxxxxxx Entity has the right to sell, license, assign, transfer and convey
all such US Intellectual Property Rights (excluding computer software licensed
from a third party) to Xxxxxxxxxxx Security on or before the Closing Date. To
the knowledge of Holdings and the other Xxxxxxxxxxx Entities, all patents and
registered trademarks, service marks, trade names and other company, product or
service identifiers and copyrights held by Xxxxxxxxxxx Security or any other
Xxxxxxxxxxx Entity in respect to the US Intellectual Property Rights are valid
and enforceable. Neither Xxxxxxxxxxx Security nor any other Xxxxxxxxxxx Entity
is or will be, as a result of the consummation of the transactions contemplated
by this Agreement, in violation or breach of, nor will Xxxxxxxxxxx Security or
any other Xxxxxxxxxxx Entity forfeit, terminate or in any way impair, any US
Intellectual Property Right whether or not pursuant to any license, sublicense
or agreement with respect to such US Intellectual Property Rights.
(d) No Xxxxxxxxxxx Entity to the extent it is engaged in the US
Business has been a defendant in any action, suit, investigation or proceeding
relating to, or otherwise has been notified of, any alleged claim of
infringement of any US Intellectual Property Right or any claim that the use of
any US Intellectual Property infringes any right of any other Person, and no
Xxxxxxxxxxx Entity has any knowledge of any other such infringement, by
Xxxxxxxxxxx Security or any other Xxxxxxxxxxx Entity and (ii) no Xxxxxxxxxxx
Entity has an outstanding claim or suit for, nor has any knowledge of, any
continuing infringement by any other Person of any US Intellectual Property
Rights. To Sellers' knowledge, no US Intellectual Property Right is subject to
any outstanding judgment, injunction, order, decree or agreement restricting the
use thereof by Xxxxxxxxxxx Security or any other Xxxxxxxxxxx Entity or
restricting the licensing thereof by Xxxxxxxxxxx Security or any other
Xxxxxxxxxxx Entity to any Person. Neither Xxxxxxxxxxx Security nor any other
Xxxxxxxxxxx Entity has entered into any agreement to indemnify any other Person
against any charge of infringement of any US Intellectual Property Right.
(e) The US Assets will include as of the Closing Date any and all
rights to utilize all software programs, modules, routines, data, text or
graphic files, source or object codes,
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hardware, firmware and other components of all management information systems
which are used in the operation of the US Business, and all such management
operating systems shall include all written and electronic documentation which
is in the possession of any Xxxxxxxxxxx Entity in respect of the US Business.
Except as disclosed in Section 5.19(e) of the US Disclosure Memorandum,
Xxxxxxxxxxx Security does not lease any computer hardware or software and has
not entered into any agreements for the maintenance or support of any computer
hardware and/or software.
Section 5.20 Insurance. Section 5.20 of the US Disclosure
Memorandum sets forth a complete and correct list of all insurance policies and
fidelity bonds relating to the assets, business, operations, employees, officers
or directors of the US Business and its potential liabilities to third parties.
Holdings has furnished or made available to Purchaser true, correct and complete
copies of all such insurance policies and fidelity bonds. There is no claim by
Xxxxxxxxxxx Security or any other Xxxxxxxxxxx Entity pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed
by the underwriters of such policies or bonds or in respect of which such
underwriters have reserved their rights. All premiums payable under all such
policies and bonds have been timely paid and Xxxxxxxxxxx Security and each
Xxxxxxxxxxx Entity have otherwise complied fully with the terms and conditions
of all such policies and bonds. Such policies of insurance and bonds (or other
policies and bonds providing substantially similar insurance coverage) have been
in effect since the Balance Sheet Date and, to the Sellers' knowledge remain in
full force and effect. Such policies and bonds are of the type and in amounts
customarily carried by Persons conducting businesses similar to the US Business.
No Xxxxxxxxxxx Entity knows of any threatened termination of, premium increase
with respect to, or material alteration of coverage under, any of such policies
or bonds, other than with respect to the aviation insurance which, effective as
of October 1, 2000, has a deductible of US $250,000 per occurrence and US
$1,500,000 in the aggregate. Xxxxxxxxxxx Security has adequately reserved on the
US Balance Sheet in respect of any payments which may be required under any self
insurance policies. All Workers' Compensation Claims incurred prior to the
Closing Date (including all incurred but not reported claims) are either fully
insured by a third-party insurer which is not an Affiliate of Holdings or are
self-insured subject to an excess liability insurance policy carried with a
third-party insurer which is not an Affiliate of Holdings and which covers the
full amount of Workers' Compensation Claims in excess of US $250,000 per
occurrence.
Section 5.21 Licenses and Permits.
(a) Section 5.21 of the US Disclosure Memorandum correctly
describes each material license, franchise, permit, certificate, approval or
other similar authorization affecting, or relating in any way to, the US Assets
or the US Business (the "Licenses"), together with the name of the government
agency or entity issuing such License. The Licenses listed in Section 5.21 of
the US Disclosure Memorandum are all of the government licenses, permits,
approvals and other authorizations necessary to conduct the US Business as it is
now being conducted. Except as set forth in Section 5.21 of the US Disclosure
Memorandum, (i) the Licenses are valid and in full force and effect, (ii)
neither Xxxxxxxxxxx Security nor any Xxxxxxxxxxx Entity is in default under,
and no condition exists that with notice or lapse of time or both would
constitute a default under,
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the Licenses and (iii) none of the Licenses will be terminated or impaired or
become terminable, in whole or in part, as a result of the transactions
contemplated hereby.
(b) To the knowledge of any Xxxxxxxxxxx Entity, no proceeding is
pending or threatened seeking the revocation or limitation of any such Licenses,
and to the knowledge of any Xxxxxxxxxxx Entity there is no basis or grounds for
any such revocation of such Licenses. Except as set forth in Section 5.21 of the
US Disclosure Memorandum, since January 1, 1995, no notice, citation, summons or
order has been received by any Xxxxxxxxxxx Entity, no complaint has been filed
and served on any Xxxxxxxxxxx Entity and no penalty has been assessed with
respect to (a) any alleged failure by any Xxxxxxxxxxx Entity to have a License
in respect of the US Business or (b) any alleged material violation by any
Xxxxxxxxxxx Entity of any Law or License in respect to the US Business. The
conduct of the US Business complies in all respects with all applicable laws,
governmental licenses, permits, orders and other authorizations that are
applicable thereto.
Section 5.22 Receivables. Section 5.22 of the US Disclosure
Memorandum sets forth an accounts receivable aging schedule. All accounts, notes
receivable and other receivables (other than receivables collected since the
Balance Sheet Date) reflected on the US Balance Sheet and in Section 5.22 of the
US Disclosure Memorandum are, and all accounts and notes receivable arising from
or otherwise relating to the US Business as of the Closing Date will be, valid,
genuine and fully collectible in the aggregate amount thereof, subject to normal
and customary trade discounts, less any reserves for doubtful accounts recorded
on the US Balance Sheet. All accounts, notes receivable and other receivables
arising out of or relating to the US Business as of the Balance Sheet Date have
been included in the US Balance Sheet, and all accounts, notes receivable and
other receivables arising out of or relating to the US Business as of the
Closing Date will be included in the Closing Balance Sheet, in accordance with
United States generally accepted accounting principles applied on a consistent
basis.
Section 5.23 Accuracy of Projections. The financial projections
relating to the US Business and the UK Business delivered to Purchaser were
prepared in good faith and were based upon reasonable assumptions at the time
they were made. With respect to the Budget attached hereto as Exhibit D, to the
Knowledge of the Sellers, there is no fact or set of circumstances that would
lead them to believe that the projections contained therein are incorrect or
misleading in any material respect. The projections contained in the Budget are
the projections used by AHL for its internal business and strategic planning
purposes. Sellers have advised Purchaser that there can be no assurances that
such financial projections will be realized and that actual results may differ
from projected results and such differences could be material.
Section 5.24 Finders' Fees. Except for Deutsche Bank whose fees
will be paid by AHL, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of any
Xxxxxxxxxxx Entity who might be entitled to any fee or commission in connection
with the transactions contemplated by this Agreement.
Section 5.25 Employees. Section 5.25 of the US Disclosure
Memorandum sets forth a true and complete list as of the Closing Date of (a) the
names, titles, annual salaries and other
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compensation of all officers relating to the US Business and all other US
Transferred Employees (other than temporary employees) whose annual base salary
exceeds US $75,000 and (b) the wage rates (by classification) for non-salaried
US Transferred Employees (other than temporary employees). To the knowledge of
Sellers, none of such employees have indicated to any Xxxxxxxxxxx Entity that he
or she intends to resign (except as contemplated by Section 8.05) or retire as a
result of the transactions contemplated by this Agreement or otherwise within
one year after the Closing Date.
Section 5.26 Labor Relations. Since December 31, 1998, except as
set forth in Section 5.26 of the US Disclosure Memorandum: (a) no employees of
Xxxxxxxxxxx Security or the US Business have been and are not currently
represented by a labor organization which was either National Labor Relations
Board ("NLRB") certified or voluntarily recognized, (b) neither Xxxxxxxxxxx
Security nor any Xxxxxxxxxxx Entity has been or is a signatory to a collective
bargaining agreement with any labor organization with respect to the US
Business, (c) no representation election petition has been filed by employees of
Xxxxxxxxxxx Security or any Xxxxxxxxxxx Entity involving the US Business or is
pending with the NLRB and no union organizing campaign involving employees of
the US Business has occurred or is in progress, (d) no NLRB unfair labor
practice claims have been filed and/or are presently pending against Xxxxxxxxxxx
Security or any Xxxxxxxxxxx Entity with respect to the US Business or any labor
organization representing its employees, (e) no grievance or arbitration demand,
whether or not filed pursuant to a collective bargaining agreement, has been
filed or is pending against Xxxxxxxxxxx Security or any other Xxxxxxxxxxx Entity
with respect to the US Business, (f) with respect to the US Business, no
handbilling, picketing, work stoppage (sympathetic or otherwise), or other
"concerted action" involving the employees of Xxxxxxxxxxx Security or the US
Business has occurred or is in progress, (g) no breach of contract and/or denial
of fair representation claim has been filed or is pending against Xxxxxxxxxxx
Security or any Xxxxxxxxxxx Entity and/or any labor organization representing
its employees with respect to the US Business, (h) no claim for unpaid wages or
overtime or for child labor or recordkeeping violations has been filed or is
pending under the Fair Labor Standards Act, Xxxxx-Xxxxx Act, Xxxxx-Xxxxxx Act,
or Service Contract Act or any other federal, state local or foreign law,
regulation, or ordinance, (i) with respect to the US Business, no discrimination
and/or retaliation claim has been filed or is pending against Xxxxxxxxxxx
Security or any Xxxxxxxxxxx Entity with respect to the US Business under the
1866 or 1964 Civil Rights Acts, the Equal Pay Act, the Age Discrimination in
Employment Act, the Employee Retirement Security Act, in each case, as amended,
or any other federal law or any comparable state fair employment practices act
or foreign law regulating discrimination in the workplace, (j) neither
Xxxxxxxxxxx Security nor any other Xxxxxxxxxxx Entity is obligated with respect
to the US Business to develop and maintain an affirmative action plan, (k) no
discrimination claim, show cause notice, conciliation proceeding, or sanctions
proceeding has been filed or is pending with the Office of Federal Contract
Compliance Programs or any other Federal agency or any comparable State or
foreign agency or court and no desk audit or on-site review is in progress with
respect to the US Business, (l) no citation has been issued by the Occupational
Safety and Health Administration ("OSHA") against Xxxxxxxxxxx Security or any
other Xxxxxxxxxxx Entity with respect to the US Business, and no notice of
contest or OSHA administrative enforcement proceeding involving Xxxxxxxxxxx
Security or any other Xxxxxxxxxxx Entity has been filed or is pending with
respect to the US
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Business, and/or (m) no citation of Xxxxxxxxxxx Security or any other
Xxxxxxxxxxx Entity has occurred and no enforcement proceeding has been initiated
or is pending under federal or foreign immigration law with respect to the US
Business. Except as set forth in Section 5.26 of the US Disclosure Memorandum,
Xxxxxxxxxxx Security and each Xxxxxxxxxxx Entity are in compliance with all
federal, state and local laws respecting employment and employment practices,
terms and conditions of employment, wages and hours with respect to the US
Business, and neither Xxxxxxxxxxx Security nor any other Xxxxxxxxxxx Entity is
engaged in any unfair labor or unlawful employment practice with respect to the
US Business.
Section 5.27 Employee Benefit Plans.
(a) Section 5.27(a) of the US Disclosure Memorandum identifies
each Employee Plan. Holdings has furnished to Purchaser copies of the Employee
Plans (and, if applicable, related trust agreements), other than Multiemployer
Plans, and all amendments thereto and material written interpretations thereof
together with the three (3) most recent annual reports (complete Form 5500
returns, including all applicable schedules thereto), if applicable, and the
most recent actuarial valuation report, if applicable, prepared in connection
with any Employee Plan.
(b) Except as provided in Section 5.27(b) of the US Disclosure
Memorandum, at no time during the last six years has Xxxxxxxxxxx Security or its
ERISA Affiliates (i) sponsored, maintained, contributed to or been required to
contribute to any plan subject to Title IV of ERISA or Section 412 of the Code,
(ii) contributed to or been required to contribute to any Multiemployer Plan,
(iii) incurred any withdrawal liability to any Multiemployer Plan, or (iv)
sponsored, maintained, contributed to or been required to contribute to any
Benefit Arrangement specifically in connection with any US Transferred
Employee's employment outside the United States. The PBGC has not assessed any
liability with respect to any Employee Plan against AHL or its ERISA Affiliates
that has not been paid by AHL or its ERISA Affiliates.
(c) Except as specifically set forth on Section 5.27(c) of the US
Disclosure Memorandum, to the Knowledge of the Sellers, no material violation of
Sections 402, 403, 404, 405, 406 or 407 of ERISA or Section 4975 of the Code has
occurred with respect to any Employee Plan, which transaction has or will cause
Xxxxxxxxxxx Security to incur any material liability under ERISA, the Code or
otherwise, excluding transactions effected pursuant to and in compliance with a
statutory or administrative exemption.
(d) Except as specifically set forth in Section 5.27(d) of the US
Disclosure Memorandum, each Employee Plan that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service on its qualification under such section or is
within the remedial amendment period for obtaining such favorable determination
letter. To the Knowledge of the Sellers, each Employee Plan has been maintained
in material compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Code. To the Knowledge of the Sellers, nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualification of an Employee Plan under Section 401(a)
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of the Code which loss would result in material liability to Xxxxxxxxxxx
Security under the Internal Revenue Service's Employee Plans Compliance
Resolution System or the Department of Labor's Voluntary Fiduciary Correction
Program (as such programs of the Internal Revenue Service's or the Department of
Labor may be amended from time to time).
(e) Section 5.27(e) of the US Disclosure Memorandum identifies
each Benefit Arrangement. Holdings has furnished to Purchaser copies or
descriptions of each Benefit Arrangement (and, if applicable, related trust
agreements) and all amendments thereto and material written interpretations
thereof. To the Knowledge of the Sellers, each Benefit Arrangement has been
maintained in material compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and regulations.
(f) Except as may be required under a Multiemployer Plan,
Xxxxxxxxxxx Security has no current or projected liability in respect of
post-employment or post-retirement health or medical or life insurance coverage
for retired, former or current employees of Xxxxxxxxxxx Security or US
Transferred Employees, except as required to avoid excise tax under Section
4980B of the Code. Xxxxxxxxxxx Security has reserved the right to amend or
terminate any Employee Plan or Benefit Arrangement that provides health or
medical benefits in respect of any retired, former or current active employee of
Xxxxxxxxxxx Security, except to the extent limitations are imposed under the
terms of a collective bargaining agreement.
(g) The liability to make all contributions which have been
accrued or related to any period on or prior to the Closing Date under each
Employee Plan and Benefit Arrangement, maintained in accordance with generally
accepted accounting practices consistently applied as of the Closing Date, will
be discharged on or prior to the Closing Date except to the extent such
liability is (i) reflected as a liability on the Closing Balance Sheet or (ii)
retained by Holdings or any of its Affiliates (other than Xxxxxxxxxxx Security).
There has been no amendment to, written interpretation of, or announcement
(whether or not written) by Xxxxxxxxxxx Security or any Xxxxxxxxxxx Entity
relating to any other Employee Plan or Benefit Arrangement that would materially
increase the expense of maintaining such Employee Plan or Benefit Arrangement to
Xxxxxxxxxxx Security, either before or after Closing, above the level of the
expense incurred in respect thereof for the most recent fiscal year ended prior
to the date hereof.
(h) There is no contract, plan or arrangement (written or
otherwise) covering any US Transferred Employee that, individually or,
collectively, could give rise to the payment of any amount that would not be
deductible to Xxxxxxxxxxx Security pursuant to the terms of Section 280G of the
Code.
(i) To the Knowledge of the Sellers, there has been no failure of
a Group Health Plan to meet the material requirements of or comply in all
material respects with Code Section 4980B(f) of the Code and Sections 601-609 of
ERISA with respect to a qualified beneficiary (as defined in Section 4980B(g) of
the Code). To the Knowledge of the Sellers, Xxxxxxxxxxx Security has not
contributed to a nonconforming group health plan (as defined in Section 5000(c))
of the Code and no ERISA Affiliate of Xxxxxxxxxxx Security has incurred a tax
under Section 5000(a) of the Code which is or could become a liability of
Xxxxxxxxxxx Security.
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(j) Except as may be required pursuant to the 401(k) Plan or the
AHL Services, Inc. Nonqualified Deferred Compensation Plan, no US Transferred
Employee will become entitled to any bonus, retirement, severance, job security
or similar benefit or enhanced such benefit (including acceleration of vesting
or exercise of an incentive award) from Xxxxxxxxxxx Security under any Employee
Plan or Benefit Arrangement exclusively as a result of the sale of US Shares or
the other transactions contemplated hereby.
(k) With respect to each Employee Plan or Benefit Arrangement, all
insurance premiums applicable to service performed on or before the Closing Date
have been or will be paid.
(l) Each of Xxxxxxxxxxx Security and its ERISA Affiliates is in
material compliance with terms and provisions of the collective bargaining
agreements set forth on Section 5.27 of the US Disclosure Memorandum, including,
without limitation, such of the collective bargaining agreements for which the
stated term has expired but for which there is a mutual agreement to continue
operations as if such agreement were validly in place.
(m) With respect to each Employee Plan or Benefit Arrangement, the
reporting and disclosure requirements of ERISA have been complied with in all
material respects.
(n) With respect to each Employee Plan or Benefit Arrangement, all
contributions and insurance premiums required as of the Closing Date have been
or will be paid.
(o) Except as specifically set forth in Section 5.27(o) of the US
Disclosure Memorandum, there are no liabilities for which Xxxxxxxxxxx Security
could be held responsible with respect to retiree medical or life insurance
benefits (or any other post-retirement benefits, other than pensions).
(p) Each of Xxxxxxxxxxx Security, Holdings, AHL or any other
Xxxxxxxxxxx Entity is in compliance with terms and provisions of the collective
bargaining agreements set forth on Section 5.27 of the US Disclosure Memorandum,
including, without limitation, such of the collective bargaining agreements for
which the stated term has applied but for which there is a mutual agreement to
continue operations as if such agreement were validly in place.
(q) The fiduciaries and administrators of each Employee Plan or
Benefit Arrangement have at all times complied with all applicable provisions of
law (including, without limitation, the provisions of ERISA) in operating and
dealing with each such Employee Plan or Benefit Arrangement. No such fiduciary
or administrator has taken any action, or failed to take any action, that would
subject it or any other person to liability for excise tax or breach of
fiduciary duty in connection with any Employee Plan or Benefit Arrangement.
(r) All reports and returns required to be filed with any
government agency with respect to each Employee Plan or Benefit Arrangement have
been timely and accurately filed.
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No government agency has conducted an audit or investigation or made an
assessment of taxes or penalties with respect to an Employee Plan or Benefit
Arrangement.
Section 5.28 Environmental Matters.
(a) No notice, notification, demand, request for information,
citation, inquiry, summons or order has been received, no complaint has been
filed, no penalty has been assessed and no investigation, action, claim, suit,
proceeding or review is pending, or to the knowledge of any Xxxxxxxxxxx Entity,
threatened by any governmental entity or other Person with respect to any
matters relating to the US Business or the US Assets and relating to or arising
out of any US Environmental Law;
(b) There are no liabilities or responsibilities of or relating to
the US Business of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, arising under or relating to any US
Environmental Law, and there are no facts, conditions, situations or set of
circumstances which could reasonably be expected to result in or be the basis
for any such liability or responsibility;
(c) No US Hazardous Substance has been discharged, disposed of,
dumped, injected, pumped, deposited, spilled, leaked, emitted or released at, on
or under any property by Xxxxxxxxxxx Security, any other Xxxxxxxxxxx Entity or
any of their respective Affiliates, at any property now or previously owned,
leased or operated by Xxxxxxxxxxx Security or any other Xxxxxxxxxxx Entity with
respect to the US Assets.
(d) Xxxxxxxxxxx Security and each other Xxxxxxxxxxx Entity, with
respect to any US Assets, have been and are in compliance with all US
Environmental Laws and have obtained and are in compliance with all US
Environmental Permits; such US Environmental Permits are valid and in full force
and effect and will not be terminated or impaired or become terminable, in whole
or in part, as a result of the transactions contemplated hereby.
(e) There has been no environmental investigation, study, audit,
test, review or other analysis conducted of which any Xxxxxxxxxxx Entity has
knowledge in relation to the US Business or the current or prior business of
Xxxxxxxxxxx Security or any property or facility now or previously owned, leased
or operated by Xxxxxxxxxxx Security which has not been delivered to Purchaser at
least ten (10) days prior to the date hereof.
(f) Except as set forth on Section 5.28(f) of the US Disclosure
Memorandum, with respect to the US Assets, no Xxxxxxxxxxx Entity operates any
motor vehicle fueling, repair or service facility. With respect to those repair
or service facilities listed in Section 5.28(f) of the US Disclosure Memorandum,
there have been no releases, spills or discharges to soil or ground water.
(g) For purposes of this Section 5.28(g), the terms "Xxxxxxxxxxx
Security" shall include any entity which is, in whole or in part, a predecessor
of Xxxxxxxxxxx Security.
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Section 5.29 Worker's Compensation Claims. Section 5.29 of the US
Disclosure Memorandum contains a true, correct and complete list of all pending
claims for workers' compensation submitted by any employee of Xxxxxxxxxxx
Security or the US Business with respect to services performed on behalf of
Xxxxxxxxxxx Security or the US Business (the "Worker's Compensation Claims").
Each claim listed includes the total reserve amount established for such claim
by the third party administrator that manages Xxxxxxxxxxx Security's workers'
compensation self insurance program. Except as set forth in Section 5.29 of the
US Disclosure Memorandum, to the knowledge of any Xxxxxxxxxxx Entity there are
no facts or state of facts existing which could give rise to additional Workers'
Compensation Claims by any employee of Xxxxxxxxxxx Security or any Xxxxxxxxxxx
Entity in respect to the US Business.
Section 5.30 Record Keeping Practices. Xxxxxxxxxxx Security, ADI
and each other Xxxxxxxxxxx Entity, are in compliance in all material respects
with all applicable laws, rules, regulations, audits, decrees, writs and
contractual provisions requiring the conduct or maintenance of background
investigations, fingerprint records, training, or other qualification or
certification of employees or agents of Xxxxxxxxxxx Security, ADI or such other
Xxxxxxxxxxx Entity in respect to the US Business and the UK Business ("Required
Records"). All the Required Records relating to the US Business shall be in the
possession of Xxxxxxxxxxx Security as of the Closing Date, and all Required
Records relating to the UK Business shall be in the possession of ADI as of the
Closing Date.
Section 5.31 Knowledge of the Sellers. Sellers confirm that the
individuals specified within the definition of Knowledge of the Sellers are the
correct people to provide disclosures related to this Agreement and that no
relevant individuals have been omitted.
Section 5.32 Certain Business Practices. Neither Xxxxxxxxxxx
Security, any Xxxxxxxxxxx Entity nor any of their respective directors,
officers, employees and agents has made, offered to make or authorized the
unlawful payment or giving anything of value to any governmental authority,
political party or candidate for political office or any other Person for the
purposes of (a) illegally influencing or affecting any act, decision or omission
of a governmental authority, political party or official or political candidate
or (b) illegally assisting Xxxxxxxxxxx Security and/or any Xxxxxxxxxxx Entity in
obtaining or retaining business for or with, or directing business to, any
Person. No funds or assets of Xxxxxxxxxxx Security or the US Business have been
used for illegal or improper purposes. No unrecorded fund or asset of
Xxxxxxxxxxx Security or the US Business has been established for any purpose
that would violate any federal, state or local law, rule or regulation and that
would have a Material Adverse Effect on Xxxxxxxxxxx Security or the US Business.
ARTICLE 6
Warranties of AHL Europe Relating To UK Assets
AHL Europe warrants to the Purchaser in respect of the UK Assets on the
terms set forth in Annex VI and Annex XII attached hereto and incorporated
herein by reference both as of the date hereof and as of the Closing Date.
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ARTICLE 7
Representations and Warranties of Securicor Georgia and Purchaser
Securicor Georgia and Purchaser represent and warrant to Holdings, AHL
and AHL Europe as of the date hereof and as of the Closing Date that:
Section 7.01 Corporate Existence and Power. Securicor Georgia is a
corporation duly incorporated, validly existing and in good standing under the
laws of Georgia, and Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of England and Wales.
Section 7.02 Corporate Authorization. The execution, delivery and
performance by Securicor Georgia and Purchaser of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby are within the powers of each of Securicor Georgia and
Purchaser and have been duly authorized by all necessary action on the part of
each of Securicor Georgia and Purchaser. This Agreement and the other
Transaction Documents to which Purchaser and/or Securicor Georgia, as the case
may be, are party constitute valid and binding agreements of Securicor Georgia
and/or Purchaser as the case may be, enforceable in accordance with their
respective terms, except as such enforceability may be affected by bankruptcy,
insolvency and other similar laws affecting the enforceability of creditors'
rights generally, general equitable principles and the discretion of courts in
granting equitable remedies.
Section 7.03 Governmental Authorization. The execution, delivery
and performance by Securicor Georgia and Purchaser of this Agreement and the
other Transaction Documents to which Purchaser and/or Securicor Georgia, as the
case may be, are party and the consummation of the transactions contemplated
hereby and thereby require no action by or in respect of, filing with or consent
from any governmental body, agency or official other than (a) compliance with
any applicable requirements of the HSR Act, (b) compliance with any applicable
requirements of the act against restraints of competition (Gesetzgegen
Wettbewerbsbeschrankungen/GWS), and (c) compliance with any applicable
requirement of the Exon-Xxxxxx Amendment.
Section 7.04 Noncontravention. The execution, delivery and
performance by Securicor Georgia and Purchaser of this Agreement and the other
Transaction Documents to which Purchaser and/or Securicor Georgia, as the case
may be, are a party and the consummation of the transactions contemplated hereby
and thereby do not and will not (i) violate the articles of incorporation or
bylaws of Securicor Georgia or organizational documents of Purchaser, (ii)
assuming compliance with the matters referred to in Section 7.03, violate any
applicable law, rule, regulation, judgment, injunction, order or decree binding
upon Securicor Georgia or Purchaser, (iii) except as necessary to comply with
applicable requirements of the HSR Act and the Exon-Xxxxxx Amendment, require
any consent of any Person or (iv) constitute a material default made under any
material agreement to which Purchaser is party or by which it is bound.
Section 7.05 Litigation. As of the date of this Agreement, there
is no action, suit, investigation or proceeding pending against, or to the
knowledge of Purchaser or Securicor
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Georgia threatened against or affecting, Purchaser or Securicor Georgia before
any court or arbitrator or any governmental body, agency or official which in
any manner challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement.
Section 7.06 Finders' Fees. Except for Lazard, whose fees will be
paid by Purchaser, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Purchaser who might be entitled to any fee or commission from Holdings or any of
its Affiliates upon consummation of the transactions contemplated by this
Agreement.
Section 7.07 Financing. Purchaser has complied or, as appropriate,
will comply, in all material respects, with each of the terms and conditions set
forth in the loan commitment letters delivered to Sellers on December 12, 2000.
Purchaser is not aware of any fact or circumstance that would reasonably be
expected to cause the issuers of such loan commitments to fail or refuse to make
the loans or advances called for therein. The consummation of the loan (or
loans) contemplated by the loan commitment letters is within the corporate power
of Purchaser and has been, or on or prior to Closing will be, duly authorized,
by all necessary corporate action on the part of Purchaser.
ARTICLE 8
Covenants of the Sellers and AHL
AHL and the Sellers hereby covenant and agree that:
Section 8.01 Conduct of US Business. From the date hereof until
the Closing Date, AHL and Holdings shall cause Xxxxxxxxxxx Security and each
other Xxxxxxxxxxx Entity to conduct the US Business in the ordinary course
consistent with past practice and to use their best reasonable efforts to
preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and
employees, in each case as to the US Business. Without limiting the generality
of the foregoing, except as expressly required by this Agreement or permitted by
this Agreement or with the prior consent of the Purchaser, from the date hereof
until the Closing Date, AHL and Holdings will not and will not permit
Xxxxxxxxxxx Security or any other Xxxxxxxxxxx Entity to:
(a) Adopt or propose any change in the articles of incorporation
or bylaws of Xxxxxxxxxxx Security;
(b) As to Xxxxxxxxxxx Security, issue or agree to issue any
additional shares of capital stock of any class or series, or any securities
convertible into or exchangeable for shares of its capital stock or issue any
options, warrants or other rights to acquire any shares of its capital stock;
(c) As to Xxxxxxxxxxx Security, declare, set aside, make or pay
any dividend or other distribution payable with respect to any of its capital
stock; provided, however, that the Purchaser acknowledges and agrees that
Xxxxxxxxxxx Security shall be permitted to distribute all cash and
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cash equivalents in its account and the shares of capital stock of AHL Beta to
Holdings prior to Closing;
(d) As to Xxxxxxxxxxx Security, merge or consolidate with any
other Person or acquire a material amount of assets from any other Person;
(e) As to Xxxxxxxxxxx Security, sell, lease, license or otherwise
dispose of any assets or property or as to any other Xxxxxxxxxxx Entity, sell,
lease, license or otherwise dispose of any US Assets except (i) pursuant to
existing contracts or commitments and (ii) in the ordinary course consistent
with past practice;
(f) Incur, assume or guarantee any indebtedness in excess of US
$10,000, except pursuant to the Credit Facility and except for repayment
obligations with respect to the Performance Bonds;
(g) Except as otherwise contemplated herein, enter into any
agreement relating to the acquisition of assets or property in an amount in
excess of US $10,000;
(h) (i) Cancel any debts or waive any claims or rights, except in
the ordinary course of business consistent with past practice (except for the
cancellation of intercompany debt as contemplated by this Agreement) or (ii)
make any loans or advances to any Person;
(i) Accelerate or delay the collection of accounts or notes
receivable or the payment of accounts or notes receivable or otherwise operate
the US Business in a manner that would artificially affect the computation of
any Purchase Price adjustment pursuant to Article 4 hereof;
(j) As to Xxxxxxxxxxx Security and as to any other Xxxxxxxxxxx
Entity in respect of the US Business, enter into any agreement with any
Affiliate other than the transfer of the US Transportation Assets to Xxxxxxxxxxx
Security and the transfer of certain US Intellectual Property Rights owned by
AHL Alpha and AHL Beta to Xxxxxxxxxxx Security as contemplated by this
Agreement;
(k) As to Xxxxxxxxxxx Security and as to any other Xxxxxxxxxxx
Entity in respect of the US Business, except as may be required as a result of a
change in law or in United States generally accepted accounting principles,
change any of the accounting practices, methods or principles as used in the US
Business;
(l) Cause or permit any material damage, destruction or other
casualty loss (whether or not covered by insurance) to or affecting the US
Business or US Assets;
(m) Fail to discharge or satisfy any Lien on any property of the
US Business or pay or satisfy any claim, obligation or liability (whether
absolute, accrued, contingent or otherwise) of the US Business when the same
shall become due and payable;
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(n) Permit or allow any US Asset or other property of the US
Business to be subjected to any Lien (other than a Permitted Lien), or enter
into any conditional sale or other title retention agreement with respect to
such property or asset;
(o) Reclassify, combine, split, subdivide or redeem or otherwise
repurchase any capital stock of the US Business, Xxxxxxxxxxx Security, or
create, authorize, issue, sell, deliver, pledge or encumber any additional
capital stock of Xxxxxxxxxxx Security (whether authorized but unissued or held
in treasury) or other securities equivalent to or exchangeable for capital stock
of Xxxxxxxxxxx Security, or grant or otherwise issue any options, warrants or
other rights with respect thereto;
(p) Make any loan or advance (whether in cash or other property),
or make any investment in or capital contribution to, or extend any credit to,
any Person, except (i) short-term investments pursuant to customary cash
management policies and (ii) advances made in the ordinary course of business to
employees consistent with past practices;
(q) Enter into any agreement with any labor union or association
representing any US Transferred Employee or make any wage or salary increase or
bonus, agree to the payment of severance to any US Transferred Employee, or
increase in any other direct or indirect manner the compensation for or to any
of its officers, directors or employees who are US Transferred Employees, except
in the ordinary course;
(r) Enter into, amend, terminate or fail to renew any Material
Contract;
(s) Make any tax election or settle or compromise any tax
liability other than in the ordinary course of business, consistent with past
practices, and other than an election under Section 338(h)(10) of the Code with
respect to the transactions contemplated by this Agreement;
(t) Fail to perform in all material respects all of its
obligations under all Material Contracts;
(u) Fail to use commercially reasonable efforts to maintain in
full force and effect and in the same amounts policies of insurance comparable
in amount and scope of coverage to that now maintained;
(v) Fail to use all commercially reasonable efforts to continue to
collect its accounts receivable in the ordinary course of business and
consistent with past practice;
(w) Fail to prepare and file all tax returns or extensions
required to be filed by it;
(x) Institute or amend any Employee Plan or Benefit Arrangement
except as may be required by law, or enter into or modify any written employment
arrangement with any individual who is a US Transferred Employee;
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(y) Fail to use all commercially reasonable efforts to maintain in
full force and effect all required permits and licenses required to conduct the
US Business; and/or
(z) Agree or commit to do any of the foregoing.
Holdings will not, and will not permit Xxxxxxxxxxx Security or any
Xxxxxxxxxxx Entity or Affiliate to, (i) take or agree or commit to take any
action that would make any representation or warranty of any Xxxxxxxxxxx Entity
hereunder inaccurate in any respect at, or as of any time prior to, the Closing
Date or (ii) omit or agree or commit to omit to take any action necessary to
prevent any such representation or warranty from being inaccurate in any respect
at any such time.
Section 8.02 Conduct of UK Business. From the date hereof until
the Closing Date, AHL and AHL Europe shall cause ADI to conduct the UK Business
in the ordinary course consistent with past practice and to use its reasonable
best efforts to preserve intact its business organizations and relationships
with third parties and to keep available the services of its present officers
and employees, in each case as to the UK Business. Without limiting the
generality of the foregoing, except as expressly required by this Agreement or
with the prior consent of the Purchaser (such consent not to be unreasonably
withheld or delayed), from the date hereof until the Closing Date, AHL Europe
will not and will not permit ADI or any of the European Subsidiaries to:
(a) Adopt or propose any change in its Memorandum and Articles of
Association;
(b) Issue or agree to issue any additional share or loan capital
of any class or any securities convertible into or exchangeable for shares or
loan capital or issue any options, warrants or other rights to acquire any
shares or loan capital;
(c) Except in connection with the transfer of Right 4 Staffing
Limited and Draefern Holdings Limited and their respective Subsidiaries to AHL
Europe, declare, set aside, make or pay any dividend or other distribution
payable with respect to any of its share or loan capital or repay any
intercompany debt or other intercompany account or any share or loan capital;
provided, however, that Purchaser acknowledges and agrees that ADI shall be
permitted to distribute all cash and cash equivalents in its accounts to AHL
Europe prior to Closing;
(d) Merge or consolidate with any other Person or acquire a
material amount of assets from any other Person (or agree to any of the
foregoing) otherwise than in the ordinary course of business;
(e) Sell, lease, license or otherwise dispose of any UK Assets
except (i) pursuant to existing contracts or commitments and (ii) in the
ordinary course consistent with past practice;
(f) (i) Cancel any debts or waive any claims or rights, except in
the ordinary course of business consistent with past practice or (ii) make any
loans or advances to any Person;
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(g) Accelerate or delay the collection of accounts or notes
receivable or the payment of accounts or notes receivable or otherwise operate
the UK Business in a manner that would artificially affect the computation of
any adjustment pursuant to Article 4 hereof;
(h) Enter into any agreement with any Xxxxxxxxxxx Entity or their
respective Affiliates in respect to the UK Business;
(i) Except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
practices, methods or principles as used in the UK Business;
(j) Cause or permit any material damage, destruction or other
casualty loss (whether or not covered by insurance) to or affecting the UK
Business or UK Assets;
(k) Fail to discharge or satisfy any claim, obligation or
liability (whether absolute, accrued, contingent or otherwise) of the UK
Business when the same shall become due and payable except in the ordinary
course;
(l) Permit or allow any UK Asset or other property of the UK
Business to be subjected to any Lien, or enter into any conditional sale or
other title retention agreement with respect to such property or asset;
(m) Reclassify, combine, split, subdivide or redeem or otherwise
repurchase any share or loan capital of the UK Business, or create, authorize,
issue, sell, deliver, pledge or encumber any additional share or loan capital
(whether authorized but unissued or held in treasury) or other securities
equivalent to or exchangeable for share or loan capital, or grant or otherwise
issue any options, warrants or other rights with respect thereto;
(n) Make any loan or advance (whether in cash or other property),
or make any investment in or capital contribution to, or extend any credit to,
any Person in excess of (pound) 25,000, except (i) short-term investments
pursuant to customary cash management policies, (ii) advances made in the
ordinary course of business to employees consistent with past practices and
(iii) trade credit in the ordinary course of business;
(o) Except in the ordinary course enter into any agreement with
any labor union or association representing any salaried employee or make any
wage or salary increase or bonus, agree to the payment of severance to any such
employee, or increase in any other direct or indirect compensation, for or to
any of its officers, directors or salaried employees;
(p) Enter into, amend, terminate or fail to renew any material
contract relating to the UK Business;
(q) Fail to perform in all material respects all of its material
obligations under all material contracts relating to the UK Business which has
any Material Adverse Effect;
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(r) Fail to use commercially reasonable efforts to maintain in
full force and effect and in the same amounts policies of insurance comparable
in amount and scope of coverage to that now maintained;
(s) fail to use all commercially reasonable efforts to continue to
collect its accounts receivable in the ordinary course of business and
consistent with past practice;
(t) Fail to prepare and file all tax returns or extensions
required to be filed by it;
(u) Institute or amend any employee benefit plan except as may be
required by law, or enter into or modify any written employment arrangement with
any individual except in the ordinary course of business;
(v) Fail to use all commercially reasonable efforts to maintain in
full force and effect all material required permits and licenses required to
conduct the UK Business; and/or
(w) Agree or commit to do any of the foregoing.
Notwithstanding anything to the contrary in this Agreement or in any
Annex to this Agreement, any Subsidiary of ADI which is an eligible entity shall
be permitted to make an election under Treasury Regulation Section 301.7701-3(c)
on Form 8832 to be treated for US tax purposes as disregarded as an entity
separate from its owner. AHL Europe will not, and will not permit ADI or any of
its subsidiaries to, (i) take or agree or commit to take any action that would
make any representation or warranty of ADI contained in Annex VI attached hereto
inaccurate in any material respect at, or as of any time prior to, the Closing
Date or (ii) omit or agree or commit to omit to take any action necessary to
prevent any such representation or warranty from being inaccurate in any
material respect at any such time.
Section 8.03 Access to Information; Confidentiality.
(a) From the date hereof until the Closing Date, Sellers, and each
of them, will (i) give, and will cause their respective Affiliates to give,
Purchaser, its counsel, financial advisors, auditors and other authorized
representatives reasonable access during normal business hours to the offices,
properties, books and records of Sellers and their respective Affiliates as to
the US Business and the UK Business, (ii) furnish, and will cause their
respective Affiliates to furnish or make available, to Purchaser, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information relating to the US Business and the UK
Business as such Persons may reasonably request and (iii) following public
announcement of this Agreement and the transactions contemplated herein,
instruct the employees, counsel and financial advisors of Sellers and their
respective Affiliates to cooperate with Purchaser in its investigation of the US
Business and the UK Business. In addition, Sellers will offer to Purchaser and
its agents on its reasonable request reasonable access accompanied by a
representative of the Sellers during normal business hours to customers of each
of the US Business and the UK Business for the purpose of facilitating the
transactions contemplated by this Agreement following the public announcement of
this Agreement and the transactions
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contemplated herein until the Closing Date. No investigation by Purchaser or
other information received by Purchaser shall operate as a waiver or otherwise
affect any representation, warranty or agreement with respect to the US Business
given or made by Sellers, or any of them, hereunder.
(b) Sellers, and each of them, will hold, and will use their best
efforts to cause their respective Affiliates, officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
indefinitely after the Closing, all Trade Secrets relating to the US Business
and/or the UK Business and, for a period of two (2) years after Closing, all
Confidential Information relating to the US Business and/or the UK Business.
Notwithstanding the foregoing, Sellers may disclose such Trade Secrets and/or
Confidential Information relating to the US Business and/or the UK Business if
compelled to disclose by judicial or administrative process or by other
requirements of law provided that Sellers provide notice to Purchaser prior to
such disclosure in order to provide Purchaser with the opportunity to protect
the confidential nature of such information. For purposes of this Section
8.03(b), Purchaser and Sellers acknowledge and agree that Trade Secrets and
Confidential Information do not include any information (i) in the public domain
through no fault of Sellers or any of them or (ii) later lawfully acquired by
Sellers or any of them from sources other than those related to their prior
ownership of the US Business and the UK Business.
(c) On and after the Closing Date, Sellers and each of them, will
afford as soon as reasonably practicable to Purchaser and its agents reasonable
access to the books of account, financial and other records (including, without
limitation, accountant's work papers), information, employees and auditors of
Sellers, and each of them, to the extent necessary for Purchaser in connection
with any audit, investigation, dispute or litigation or any other reasonable
business purpose relating to the US Business and the UK Business; provided that
any such access by Purchaser shall not unreasonably interfere with the conduct
of the business of Sellers.
Section 8.04 Notices of Certain Events. Sellers shall promptly
notify Purchaser of:
(a) Any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) Any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) Any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened against, relating to or involving or
otherwise affecting Sellers, or any of them, and/or any of their respective
Affiliates as to the US Assets or the US Business that, if pending on the date
of this Agreement, would have been required to have been disclosed pursuant to
the representations and warranties contained herein or that relate to the
consummation of the transactions contemplated by this Agreement.
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Section 8.05 Resignations. Holdings will deliver to Purchaser the
resignations of all officers and directors of Xxxxxxxxxxx Security (other than
US Transferred Employees who will be officers, directors or employees of
Xxxxxxxxxxx Security after the Closing Date) from their positions with
Xxxxxxxxxxx Security at or prior to the Closing Date.
Section 8.06 Noncompetition.
(a) The Xxxxxxxxxxx Entities (other than Xxxxxxxxxxx Security
after the Closing) agree that for a period of five (5) full years from the
Closing Date, neither it nor any of its Affiliates shall engage, either directly
or indirectly, as a principal or for its own account or solely or jointly with
others, or as stockholders in any corporation or joint stock association (other
than the ownership of less than three percent (3%) of the equity interest of any
corporation or entity whose interests or shares are traded in any stock exchange
or market, the NASDAQ or any over-the-counter market) in any business that is
involved in the provision of services provided as a part of the US Business
anywhere in the world.
(b) The Xxxxxxxxxxx Entities (other than Xxxxxxxxxxx Security
after the Closing) agree that for a period of five full (5) years from the
Closing Date, none of the Xxxxxxxxxxx Entities (other than Xxxxxxxxxxx Security)
nor any of their respective Affiliates shall hire, solicit or induce any US
Transferred Employee (except for Xxxxx X. Xxxxxxxxxxx, Xx.) to become an
employee of any Xxxxxxxxxxx Entity or any of its Affiliates. Notwithstanding the
preceding sentence, Sellers shall be permitted to hire any US Transferred
Employee (other than a US Transferred Employee whose annual compensation exceeds
$75,000) who (i) has terminated his or her employment with Purchaser (or an
Affiliate of Purchaser), other than as a result of Sellers' breach of this
Section, prior to being contacted by Sellers or (ii) responds to any newspaper
or any other public recruitment advertisement of general circulation. In
addition, notwithstanding the foregoing, Sellers shall be permitted to hire any
US Transferred Employee whose annual compensation exceeds $75,000 provided that
Sellers obtain the prior written consent of Purchaser which consent shall not be
unreasonably withheld.
(c) If any provision contained in this Section shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section, but this Section shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein. It is the intention
of the parties that if any of the restrictions or covenants contained herein is
held to cover a geographic area or to be for a length of time which is not
permitted by applicable law, or in any way construed to be too broad or to any
extent invalid, such provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable law, a court of competent jurisdiction shall construe and interpret
or reform this Section to provide for a covenant having the maximum enforceable
geographic area, time period and other provisions (not greater than those
contained herein) as shall be valid and enforceable under such applicable law.
The Xxxxxxxxxxx Entities (other than Xxxxxxxxxxx Security after the Closing)
acknowledge that Purchaser would be irreparably harmed by any breach of this
Section and that there would be no adequate remedy at law or in damages to
compensate Purchaser for any such breach. The Xxxxxxxxxxx Entities (other than
Xxxxxxxxxxx Security after the Closing)
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agree that Purchaser shall be entitled to injunctive relief requiring specific
performance by the Xxxxxxxxxxx Entities (other than Xxxxxxxxxxx Security after
the Closing) of this Section, and the Xxxxxxxxxxx Entities (other than
Xxxxxxxxxxx Security after the Closing) consent to the entry thereof.
(d) The noncompetition provisions relating to the UK Business are
set forth in Schedule 8.06 attached hereto.
Section 8.07 Efforts to Consummate. Purchaser and Securicor
Georgia shall use reasonable efforts to take or cause to be taken all actions
and do or cause to be done all things required under applicable law in order to
consummate the transactions contemplated hereby, including, without limitation,
(a) obtaining all authorizations, consents and approvals of any Person that are
required for or in connection with the consummation of the transactions
contemplated hereby and by the other documents describing the transactions
contemplated hereby (collectively, the "Transaction Documents"), (b) taking any
and all reasonable actions necessary to satisfy all of the conditions to their
respective obligations hereunder as set forth in Article 15 and (c) executing
and delivering all agreements and documents required by the terms hereof to be
executed and delivered by Sellers, Purchaser, Securicor Georgia or any of them,
on or prior to the Closing. Nothing in this Section 8.07 shall prejudice the
right of Purchaser to rely on the condition in Section 15.03(c). Sellers and
Purchaser will use their reasonable best efforts to obtain the consent of the
other parties to any contract, license, performance bond, lease or other
document or any claim or right or benefit arising thereunder for the assignment
thereof to Purchaser as Purchaser reasonably may request. If such consent is not
obtained or if an intended assignment thereof would be ineffective or would
adversely affect the rights of Sellers or any of their respective Affiliates
thereunder so that Purchaser would not in fact receive all such rights, Sellers
and Purchaser will cooperate in a mutually agreeable arrangement under which
Purchaser would obtain the benefits and assume the obligations thereunder in
accordance with this Agreement, including subcontracting, sublicensing or
subleasing to Purchaser, or under which Sellers would enforce for the benefit of
Purchaser, with Purchaser assuming Sellers' obligations and any and all rights
of Sellers against a third party thereto.
Section 8.08 Releases. Sellers shall use reasonable efforts to
obtain all Releases on or before the Closing Date.
Section 8.09 Assignment of Contracts.
(a) To the extent that third party consents relating to any
contract or agreement relating to the US Business or UK Business have not been
obtained by Sellers as of the Closing (the "Non-Assigned Contracts"), Sellers
shall, during the remaining term of such Non-Assigned Contracts, use all
commercially reasonable efforts to (i) to obtain the consents of the applicable
third party, (ii) make the benefit of such Non-Assigned Contracts available to
Purchaser and (iii) enforce, at the request and expense of Purchaser and for the
account of Purchaser, any rights of Sellers arising from such Non-Assigned
Contracts against the other party or parties thereto (including the right to
elect or terminate any such Non-Assigned Contracts in accordance with the terms
thereof). With respect to any such Non-Assigned Contracts as to which the
necessary
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approval or consent for the assignment or transfer to Purchaser is obtained
following the Closing, Seller shall transfer such Non-Assigned Contracts to
Purchaser by execution and delivery of an instrument of conveyance, in a form
reasonably acceptable to Purchaser, within three (3) business days following
receipt of such approval or consent.
(b) Holdings shall, at its option and at its sole expense, as soon
as practicable following the date hereof, either (i) cause Xxxxxxxxxxx to assign
to Xxxxxxxxxxx Security the licenses for the Xxxxxx and Oracle software used in
connection with the US Business and to obtain the consent of the licensors to
such assignments or (ii) obtain for Xxxxxxxxxxx Security licenses to such
software that are substantially equivalent and upon substantially equivalent
terms and conditions to the licenses held by Xxxxxxxxxxx on the date hereof.
Purchaser agrees that performance by Holdings of the covenant set forth in this
Section shall not be a condition to Purchaser's or Securicor Georgia's
obligations to effect the US Closing or the UK Closing. Holdings agrees that its
covenant set forth in this Section shall survive the Closing.
Section 8.10 Leased Real Property. Holdings shall cause any Real
Property Leases with respect to which any Xxxxxxxxxxx Entity is not the valid
tenant to be assigned to Xxxxxxxxxxx Security at or prior to Closing. Except as
expressly required by this Agreement, from the date hereof until the Closing
Date, Holdings will not and will not permit any Xxxxxxxxxxx Entity or Affiliate
to amend, modify, or terminate any Real Property Lease prior to obtaining the
prior written consent of Purchaser in each instance (which consent shall not be
unreasonably withheld or delayed).
Section 8.11 Licenses and Performance Bonds. Holdings shall file
in each appropriate state all documents necessary to effect the transfer of all
Licenses to Xxxxxxxxxxx Security and to cause each License to be issued in the
name of Xxxxxxxxxxx Security on or before the Closing Date.
Section 8.12 Use of US Trade Names. To the extent that the
"XXXXXXXXXXX" trade name and/or any other trade name, trademark, service xxxx,
logo, domain name or other means of identification used in the US Business
including, but not limited to, the logo which depicts the unicorn and rider (the
"Xxxxxxxxxxx Logo") is used by Sellers, or any of them, or any of their
respective Affiliates on stationery, signage, invoices, forms, advertising
and/or other like materials existing on the Closing Date (the "US Marked
Materials"), such user may use such US Marked Materials after the Closing for a
period of sixty (60) days. Any Sellers and any affiliate of any Seller utilizing
the "XXXXXXXXXXX" name shall remove the word, "XXXXXXXXXXX," from its corporate
name within thirty (30) days following Closing. Neither Seller nor any of its
Affiliates shall use the name, "XXXXXXXXXXX," or the Xxxxxxxxxxx Logo after
Closing in any other matter without the prior written consent of Purchaser which
consent shall not be unreasonably withheld or delayed.
Section 8.13 Use of European Trade Names. To the extent that the
"ADI," "Aviation Defence International," "EAS," "Executive Aircraft Services,"
"BAGHS" or "BA Ground Handling Services" trade names and/or any other trade
name, trademark, service xxxx, logo, domain name or other means of
identification used in the UK Business is used by the Sellers, or
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any of them, or any of their respective Affiliates, on stationery, signage,
invoices, forms, advertising and/or other like materials existing on the Closing
Date (the "European Marked Materials"), such user may use such European Marked
Materials after the closing for a period of sixty (60) days. Any Seller and any
Affiliate of any Seller using any of the names referred to in this clause shall
remove such words from its corporate name within ninety (90) days following
Closing. Neither Sellers nor any of their respective Affiliates shall use the
names referred to above after Closing in any other manner without the prior
written consent of the Purchaser (which consent shall not be unreasonably
withheld or delayed).
Section 8.14 Use of Sellers' Trade Names. To the extent that the
"AHL" trade name and/or any other trade name, trademark, service xxxx, logo,
domain name or other means of identification used in Sellers' business
immediately after Closing is used by Xxxxxxxxxxx Security or any member of the
European Group, or any of their respective Affiliates on stationery, signage,
invoices, forms, advertising and/or other like materials existing on the Closing
Date (the "Sellers' Marked Materials"), such user may use such Sellers' Marked
Materials after the Closing for a period of sixty (60) days. Any of Xxxxxxxxxxx
Security and the European Group any of their Affiliates using the names set out
in this clause shall remove such words from its corporate name within ninety
(90) days following Closing. Neither Xxxxxxxxxxx Security nor the European Group
nor any of their Affiliates shall use the names set out above after Closing in
any other matter without the prior written consent of Sellers (which consent
shall not be unreasonably withheld or delayed).
Section 8.15 Supplements to Disclosure. From time to time prior to
the Closing Date, Sellers will promptly supplement or amend the US Disclosure
Memorandum, the European Disclosure Memorandum and the US Tax Disclosure
Memorandum (collectively, the "Disclosure Memoranda" and each a "Disclosure
Memorandum") that they have delivered pursuant to this Agreement with respect
to: (i) any matter arising after the date of this Agreement that, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in any Disclosure Memorandum; or (ii) any matter that arose
prior to the date of this Agreement which was not previously set forth in any
Disclosure Memoranda. If the cumulative effect of any supplements or amendments
to the US Disclosure Memorandum and/or the European Disclosure Memorandum could
result in a Material Adverse Effect or in the aggregate constitute a breach of
Section 8.01 or 8.02 of this Agreement, Purchaser shall have the right to
terminate this Agreement; provided, further, that no supplement or amendment to
any such Disclosure Memorandum pursuant to (ii) above shall have any effect for
the purpose of determining satisfaction of the conditions set forth in Article
15 nor prevent Purchaser from being entitled to damages for breach of warranty
notwithstanding such supplemental disclosure. If Purchaser elects not to
terminate this Agreement as a result of any such supplement or amendment to any
Disclosure Memorandum with respect to any matter occurring after the date hereof
(which did not exist on the date hereof), such supplement or amendment shall not
form the basis of a claim for misrepresentation or breach of a representation,
warranty, covenant or agreement hereunder.
Section 8.16 Restriction On Distributions. AHL acknowledges that,
as of the Closing Date, it is the sole owner of all of the shares of capital
stock of Holdings. AHL agrees that it
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shall not, so long as it has any obligations pursuant to Article 2, Article 4
and with respect to Article 16 for a period of two (2) years (i) declare or pay
any dividend on, or in respect of, any shares of any class of capital stock of
AHL, (ii) purchase, redeem or otherwise retire any shares of the capital stock
of AHL either directly or indirectly through a Subsidiary of AHL or (iii) make
any other distribution on, or in respect of, any shares of any capital stock of
AHL to the extent such actions would prevent AHL from performing such
obligations.
Section 8.17 Philadelphia Settlement Agreement. On and after
Closing, Holdings shall fully cooperate, at the request of Xxxxxxxxxxx Security
from time to time, with Purchaser and Xxxxxxxxxxx Security in respect of
Xxxxxxxxxxx Security's compliance after Closing with the Philadelphia Settlement
Agreement.
ARTICLE 9
Covenants of Purchaser
Purchaser agrees that:
Section 9.01 Confidentiality Agreement. All information provided
to Purchaser pursuant to Section 8.03 hereof shall be held by Purchaser in
accordance with and subject to the terms of the Confidentiality Agreement dated
as of October 6, 2000 between AHL and Purchaser (the "Confidentiality
Agreement").
Section 9.02 Access. Purchaser will cause each of Xxxxxxxxxxx
Security and ADI, on and after the Closing Date, (i) to afford promptly to
Sellers and their agents reasonable access during normal business hours to its
offices, properties, books, records, employees and auditors and (ii) to furnish
such financial and operating data and other information relating to the US
Business and the UK Business as such persons may reasonably request, in each
case to the extent necessary to permit Sellers to determine any matter relating
to its rights and obligations hereunder or to any period ending on or before the
Closing Date; provided that any such access by Sellers or any of their
representatives shall not unreasonably interfere with the UK Business or the US
Business. Sellers, and each of them, will hold, and will cause their respective
Affiliates, officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence indefinitely all Trade Secrets and,
for a period of two (2) years after disclosure, all Confidential Information
provided to Sellers pursuant to this Section 9.02. Notwithstanding the
foregoing, Sellers may disclose such confidential documents and information if
compelled to disclose by judicial or administrative process or by other
requirements of law provided that Sellers provide notice to Purchaser prior to
such disclosure in order to provide Purchaser with the opportunity to protect
the confidential nature of such documents and information.
Section 9.03 Financing. Purchaser shall use its reasonable efforts
(including without limitation the timely payment of any and all fees required
pursuant to the loan commitment letters provided to the Sellers on December 12,
2000) to take or cause to be taken all actions under, do or cause to be done all
things required pursuant to, and to comply with the terms and
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conditions of such loan commitment letters and to cause the consummation of the
loans contemplated thereby.
ARTICLE 10
Covenants of Purchaser and Sellers
Purchaser and Sellers agree that:
Section 10.01 Best Efforts; Further Assurances. Subject to the
terms and conditions of this Agreement, Purchaser and Sellers will use their
respective reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary or desirable under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement.
Section 10.02 Certain Filings. Sellers (and each of them) and
Purchaser shall reasonably cooperate with one another (a) in determining whether
any action by or in respect of, or filing with, any governmental body, agency,
official or authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (b) in taking such actions or making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such actions, consents, approvals or waivers.
Section 10.03 Public Announcements. The parties hereto will not
(and will cause their respective Affiliates not to) issue any press release or
make any public statement with respect to this Agreement or the transactions
contemplated hereby without the consent of each other party hereto, except as
may be required by applicable law or any listing agreement with any securities
exchange.
Section 10.04 [Intentionally omitted]
Section 10.05 Intercompany Accounts. All intercompany account
balances shall be canceled as of the Closing Date without the payment of any
amount by Purchaser, Xxxxxxxxxxx Security or any of its Subsidiaries or the
European Group.
Section 10.06 Philadelphia Settlement Agreement. Each of Purchaser
and Xxxxxxxxxxx Security, acknowledges that the operation of the US Business is,
and following Closing will continue to be, subject to that certain Guilty Plea
Agreement dated April 14, 2000 by and between Holdings and the United States
Attorney for the Eastern District of Pennsylvania obligating Holdings and its
Subsidiaries and Affiliates to, among other things, meet certain operational and
reporting requirements with respect to the US Business (the "Philadelphia
Settlement Agreement"). A true and complete copy of the Philadelphia Settlement
Agreement and any amendments, supplements or other modifications thereto has
been provided to Purchaser. Following Closing, each of Purchaser and Xxxxxxxxxxx
Security shall indemnify and hold AHL, Holdings and each of their directors,
officers, employees, Subsidiaries and Affiliates harmless from any breach by or
failure of Xxxxxxxxxxx Security to comply, to the extent
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compliance therewith is required following Closing, with the provisions of the
Philadelphia Settlement Agreement as it applies to Xxxxxxxxxxx Security
following Closing.
Section 10.07 HSR Filing.
(a) Purchaser and Sellers acknowledge and confirm that each filed,
on November 28, 2000 with the United States Federal Trade Commission (the "FTC")
and with the United States Department of Justice (the "DOJ"), the notification
and report forms required pursuant to the provisions of the HSR Act or the rules
promulgated thereunder (collectively the "Premerger Rules") and that Sellers
have paid all fees associated therewith (the "HSR Fees"). Notwithstanding any
provision in this Agreement to the contrary, such HSR Fees shall be allocated
among the parties as set forth in Section 18.03 hereof. Each of the Sellers,
Purchaser, and Securicor Georgia shall use its reasonable commercial efforts to
complete the FTC and DOJ review process as expeditiously as possible. Nothing
contained in this Section 10.07 shall prejudice the right of Purchaser to rely
on the condition in Section 15.03(c).
(b) Each of the Sellers, Purchaser and Securicor Georgia shall
promptly notify the other parties of any request by the FTC, the DOJ or other
governmental agencies for additional information with respect to such filings.
The party who receives such request shall promptly respond thereto and the other
party shall reasonably cooperate in supplying any information required to enable
the responding party to so comply.
(c) All analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted on behalf of either party
hereto in connection with the proceedings under or relating to the Premerger
Rules or any laws concerning antitrust or fair trade shall be subject to the
joint approval or disapproval and the joint control of Purchaser and Sellers,
acting on the advice of their respective counsel, it being the intent of the
foregoing that the parties hereto will consult and cooperate with one another,
and consider in good faith the views of one another, in connection with any such
analysis, presentation, memorandum, brief, argument, opinion, or proposal.
Nothing herein shall prevent either party or their respective Affiliates from
independently making or submitting any such analysis, appearance, presentation,
memorandum, brief, argument, opinion or proposal in response to a subpoena or
other legal process or as otherwise required by law or submitting factual
information to the FTC, DOJ, any other governmental agency or any court or
administrative law judge in response to requests therefor or as otherwise
required by law.
Section 10.08 Release of Guarantees and Indemnities.
(a) The Sellers will use reasonable efforts to obtain the release
of Xxxxxxxxxxx Security and its Subsidiaries and each member of the European
Group prior to Closing from all guarantees and indemnities for the benefit of
any Xxxxxxxxxxx Entity (with the exception of Xxxxxxxxxxx Security), AHL Europe,
Right 4 Staff Limited (and its Subsidiaries) and Draefern Holdings Limited (and
its Subsidiaries) and their Affiliates and indemnify Xxxxxxxxxxx Security and
its Subsidiaries and each member of the European Group from all liabilities
arising under any such guarantee or indemnity. AHL and the Sellers, jointly and
severally, hereby indemnify
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and agree to defend and hold harmless Xxxxxxxxxxx Security and its Subsidiaries
and each member of the European Group from and against all liabilities arising
from or in respect of any such guarantee or indemnity. Purchaser and Securicor
Georgia acknowledge and agree that such release shall not be a condition to
their obligations to effect the Closing. Sellers' obligation pursuant to this
Section shall survive the Closing.
(b) The Purchaser will use reasonable efforts to obtain the
release of AHL, Holdings, Xxxxxxxxxxx, AHL Beta, AHL Delta, AHL Europe, Right 4
Staff Limited (and its Subsidiaries), Draefern Holdings Limited (and its
Subsidiaries) and their Affiliates (other than Xxxxxxxxxxx Security and its
Subsidiaries and other than the European Group) as soon as reasonably
practicable following Closing from all guarantees and indemnities for the
benefit of Xxxxxxxxxxx Security and its Subsidiaries and each member of the
European Group and their Affiliates and the Purchaser will indemnify such
parties from all liabilities arising from any such guarantee or indemnity which
is not released in accordance with this Section. Sellers agree that such release
shall not be a condition to their obligation to effect the Closing. Purchaser's
obligation pursuant to this Section shall survive the Closing.
ARTICLE 11
Tax Matters Relating to the US Business
The tax matters provisions relating to the US Business are set forth in
Annex XI attached hereto.
ARTICLE 12
European Tax Warranties Relating to the UK Business
The European Tax Warranties relating to the UK Business are set forth
in Annex XII attached hereto.
ARTICLE 13
Employee Benefits Relating To The US Business
Section 13.01 AHL Services Group 401(k) Plan. Neither Xxxxxxxxxxx
Security, Purchaser, nor Securicor Georgia shall be obligated to assume any
liabilities of or obligations to the 401(k) Plan. AHL shall maintain any
accounts of all US Transferred Employees until such time as said accounts are
distributable to such US Transferred Employees under the provisions of the
401(k) Plan and Section 401(k)(2)(B) of the Code. No rollovers from the 401(k)
Plan to a qualified plan currently sponsored or subsequently adopted by
Xxxxxxxxxxx Security, Purchaser, or Securicor Georgia will be accepted unless
and until AHL has provided Xxxxxxxxxxx Security, Purchaser, or Securicor
Georgia, as applicable, with acceptable evidence, as determined solely in the
discretion of Xxxxxxxxxxx Security, Purchaser, or Securicor Georgia, as
applicable, of the qualified status of the 401(k) Plan.
Section 13.02 AHL Services, Inc. Nonqualified Deferred Compensation
Plan. AHL and Sellers shall, at the request of the Purchaser from time-to-time
following Closing, take all
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reasonable and necessary steps and shall cooperate in good faith to assist
Purchaser and Xxxxxxxxxxx Security in their efforts to transition funds
maintained in trust for US Transferred Employees pursuant to their participation
in the AHL Services, Inc. Nonqualified Deferred Compensation Plan for funding of
similar benefits for such US Transferred Employees in a nonqualified plan to be
established, at either Purchaser's or Xxxxxxxxxxx Security's sole discretion, as
applicable, prior to the Closing Date, subject to the assumption of liability
with respect to such US Transferred Employees' account balances by the
Purchaser.
Section 13.03 AHL Services, Inc. Flexible Benefits Plan. The
appropriate employees or representatives of the Xxxxxxxxxxx Entities shall, at
the request of the Purchaser from time-to-time following Closing, take all
reasonable and necessary steps and shall cooperate in good faith to assist
Purchaser and Xxxxxxxxxxx Security in their efforts to enroll all US Transferred
Employees who so elect in a Code Section 125 flexible benefits plan (designed to
provide substantially the same benefits offered in the AHL Services, Inc.
Flexible Benefits Plan) to be established by either Xxxxxxxxxxx Security,
Purchaser, or Securicor Georgia prior to Closing. Any elections for the 2001
plan year under the AHL Services, Inc. Flexible Benefits Plan submitted by US
Transferred Employees prior to the Closing Date will be transferred to
Purchaser.
Section 13.04 Xxxxxxxxxxx Holdings Limited Health and Welfare
Benefits.
(a) The appropriate employees or representatives of the
Xxxxxxxxxxx Entities shall take all reasonable and necessary steps and shall
cooperate in good faith to assist Purchaser in its efforts to negotiate with the
insurance providers and administrators of all insured Benefit Arrangements or
Employee Plans to continue the insurance coverage and administrative services
provided under such Benefit Arrangements or Employee Plans for all US
Transferred Employees at least until the earlier of (i) April 30, 2001 and (ii)
such time after the Closing Date as Xxxxxxxxxxx Security, Purchaser, or
Securicor Georgia shall establish replacement coverage or administrative
services.
(b) The appropriate employees or representatives of the
Xxxxxxxxxxx Entities shall take all reasonable and necessary steps and shall
cooperate in good faith to assist Purchaser in its efforts to negotiate with any
third-party insurance providers (specifically including reinsurance or stop-loss
insurance providers) and administrators of all self-insured Group Health Plans
to continue the insurance coverage and administrative services provided under
such self-insured Group Health Plans for all US Transferred Employees at least
until the earlier of (i) April 30, 2001 or (ii) such time after the Closing Date
as Xxxxxxxxxxx Security, Purchaser, or Securicor Georgia shall establish
replacement coverage or administrative services.
(c) AHL, Sellers and any Group Health Plan, jointly and severally,
shall be solely responsible for, and shall pay all claims relating to treatment
received by any participant in such Group Health Plan and their beneficiaries
incurred on or prior to the Closing Date, but only to the extent such claims are
payable under such Group Health Plan. AHL, Sellers and any Group Health Plan
shall be solely responsible for providing continuation coverage as provided
under Section 4980B of the Code and its Regulations ("COBRA") applicable to any
"qualifying event"
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(as therein defined) that occurs on or prior to the Closing Date. Xxxxxxxxxxx
Security and any group health plan adopted by Xxxxxxxxxxx Security after the
Closing Date shall be solely responsible for, and shall pay all claims relating
to any treatment received by any participant in such a group health plan and
their beneficiaries incurred after the Closing Date, but only to the extent such
claims are payable under such plan. Xxxxxxxxxxx Security and any group health
plan adopted by Xxxxxxxxxxx Security after the Closing Date shall be solely
responsible for providing continuation coverage as provided under Section 4980B
of the Code and its Regulations ("COBRA") applicable to any "qualifying event"
(as therein defined) applicable to such a group health plan that occurs after
the Closing Date.
(d) In the event an insurance provider of a Benefit Arrangement,
Employee Plan or Group Health Plan that is not self-insured and is subject to
the provisions of COBRA shall fail to extend insurance coverage to either
Xxxxxxxxxxx Security, Purchaser, or Securicor Georgia for the US Transferred
Employees pursuant to Section 13.04(a), AHL and Sellers shall offer continuation
coverage under COBRA, if applicable, for the US Transferred Employees under such
Benefit Arrangement, Employee Plan or Group Health Plan, as applicable.
(e) In the event an insurance provider of a self-insured Group
Health Plan subject to the provisions of COBRA shall fail to extend insurance
coverage to either Xxxxxxxxxxx Security, Purchaser, or Securicor Georgia for the
US Transferred Employees pursuant to Section 13.04(b), Sellers shall offer such
coverage equivalent to and on the same terms and conditions as provided in the
applicable self-insured Group Health Plan as of the date hereof for the US
Transferred Employees under such self-insured Group Health Plan, provided that
Purchaser shall be responsible for the cost of all claims of such US Transferred
Employees under any such self-insured Group Health Plan who elect to participate
in any such self-insured Group Health Plan to the extent such claims are not
covered or reimbursable by reinsurance or stop-loss insurance.
Section 13.05 Contribution and Premium Payments. With respect to
each Employee Plan or Benefit Arrangement, AHL, Sellers and each of them
represent and warrant that all contributions and insurance premiums accrued as
of the Closing Date have been or will be paid.
ARTICLE 14
[This Article is intentionally omitted.]
ARTICLE 15
Conditions To Closing
Section 15.01 Conditions to Obligations of Purchaser and Sellers.
The obligations of Purchaser and Sellers to consummate the Closing are subject
to the satisfaction of the following conditions:
(a) Any applicable waiting period under the HSR Act or the
Exon-Xxxxxx Amendment relating to the transactions contemplated hereby shall
have expired or been terminated; and
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(b) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
transactions contemplated herein or the transactions contemplated herein or the
Closing.
(c) The Secretary of State for Trade and Industry not having
referred the transactions contemplated hereby or matters arising therefrom to
the Competition Commission in exercise of his powers under the FTA.
(d) The proposed transaction shall have been duly notified with
the German Federal Cartel Office according to Section 35, 39 of the act against
restraints of competition (Gesetzgegen Wettbewerbsbeschrankungen/GWB) and the
Federal Cartel Office shall have issued a clearance decision or clearance shall
have been otherwise obtained by the mere lapse of the statutory periods for
investigation.
(e) Purchaser shall purchase from the Sellers, and the Sellers
shall sell to the Purchasers, the US Shares and the ADI Shares simultaneously.
Section 15.02 Satisfaction of Conditions in Section 15.01(c) and
Section 15.01(d).
(a) Purchaser shall use reasonable endeavors to procure that the
conditions in Sections 15.01(c) and 15.01(d) are satisfied not later than the
Closing Date and the AHL Europe shall use reasonable endeavors to procure that
the conditions in Sections 15.01(c) and 15.01(d) are satisfied unless waived by
the Purchaser not later than that date; and no party is entitled to withdraw
from this Agreement before that date unless any of the conditions in Sections
15.01 become incapable of fulfillment.
(b) The Purchaser has the right to waive the conditions in Section
15.01(c) and 15.01(d).
Section 15.03 Conditions to Obligation of Purchaser. The obligation
of Purchaser to consummate the Closing is subject to satisfaction of the
following further conditions:
(a) (i) Sellers shall have performed in all material respects all
of their respective obligations hereunder required to be performed by them on or
prior to the Closing Date, (ii) the representations and warranties of Sellers
contained in this Agreement, in any Annex and in any certificate or other
writing delivered by Sellers pursuant hereto, disregarding all qualifications
and exceptions contained therein relating to materiality or Material Adverse
Effect, shall be true at and as of the Closing Date, as if made at and as of
such date (other than representations and warranties made as of a specific date,
which shall continue to be true and correct as of such date) with only such
exceptions as would not in the aggregate reasonably be expected to have a
Material Adverse Effect and (iii) Purchaser shall have received a certificate
signed by the chief executive officer and the chief financial officer of
applicable Seller to the foregoing effect.
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(b) Purchaser shall have obtained the financing necessary to
consummate the transactions contemplated by this Agreement on substantially the
terms set forth in the commitment letter provided to Sellers.
(c) There shall not be threatened, instituted or pending any
action or proceeding by any court, government or governmental authority or
agency, domestic or foreign, (i) seeking to restrain, prohibit or otherwise
interfere with the ownership or operation by Purchaser or any of its Affiliates
of all or any material portion of the US Business, the US Assets or the UK
Business or the UK Assets or to compel Purchaser or any of its Affiliates to
dispose of all or any material portion of the US Business or the US Assets or
the UK Business or the UK Assets, (ii) seeking to impose or confirm limitations
on the ability of Purchaser or any of its Affiliates or the UK Business
effectively to exercise full rights of ownership of the Assets, including
without limitation, the right to vote any of the US Shares or the ADI Shares or
(iii) seeking to require divestiture by Purchaser or any of its Affiliates of
the any of the Assets.
(d) Purchaser's obligation to purchase the US Shares shall be
contingent upon the purchase of the ADI Shares, and Purchaser's obligation to
purchase the ADI Shares shall be contingent upon the purchase of the US Shares;
(e) Purchaser shall have received an opinion of King & Spalding,
counsel to Sellers, dated the Closing Date in form and substance reasonably
acceptable to Purchaser as to the transactions contemplated hereby with respect
to matters of Georgia and United States law. In rendering such opinion, such
counsel may rely upon certificates of public officers, and, as to matters of
fact, upon the representations and warranties contained herein and upon
certificates of officers of applicable Sellers, copies of which certificates
shall be contemporaneously delivered to Purchaser.
(f) Purchaser shall have received all consents, authorizations or
approvals from the governmental agencies, referred to in Section 7.03, in each
case in form and substance reasonably satisfactory to Purchaser, and no such
consent, authorization or approval shall have been revoked.
(g) Purchaser shall have received all such documents as it may
reasonably request relating to the existence of Xxxxxxxxxxx Security and ADI and
the authority of the Xxxxxxxxxxx Entities and AHL Europe to enter into this
Agreement, all in form and substance reasonably satisfactory to Purchaser.
(h) There shall not have occurred a Material Adverse Effect.
(i) Purchaser shall have received a certificate issued by the
Secretary of State of Georgia for Xxxxxxxxxxx Security, and a certificate from
each state in which Xxxxxxxxxxx Security and/or its Subsidiaries are qualified
as a foreign corporation, as of a recent date, as to the good standing,
non-dissolution or foreign qualification, as applicable, of Xxxxxxxxxxx Security
and its Subsidiaries in such state(s).
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(j) Xxxxxxxxxxx Security shall have entered into the Employment
Agreements with the following individuals: Xxxx Xxxxxxx, Xxx Xx Xxxxxx, Xxxxxxx
Xxxxxxxxxxx, Xxxx Xxxxxx and Xxx Xxxxxxx.
(k) Holdings, AHL Europe, Securicor Georgia and Purchaser shall
have entered into the Transition Services Agreements substantially in the forms
of Exhibits B and C attached hereto.
(l) Holdings shall have obtained all consents required under the
Credit Facility, the Security Agreement, the Pledge Agreement and the
Intercompany Subordination Agreement required to consummate this Agreement and
shall have no further obligations under any such documents.
(m) Xxxxxxxxxxx Security shall have received a release from all
Intercompany Debt Documents, and ADI shall not be subject to any debt obligation
with respect to any Affiliate of AHL following the Closing Date.
(n) The Service Contract of the managing director of Rights
Associates shall have been novated to a company other than any member of the
European Group at least two (2) days prior to Closing.
(o) Purchaser shall have received confirmation reasonably
satisfactory to it that Xxxxx X. Xxxxxxxxxxx, Xx. shall continue to constitute a
qualifying person for Xxxxxxxxxxx Security in respect to the US Business such
that the security licenses of Xxxxxxxxxxx Security shall continue in effect
after Closing.
Section 15.04 Conditions to Obligation of Sellers. The obligation of
Sellers to consummate the Closing is subject to the satisfaction or waiver by
Sellers of the following further conditions:
(a) (i) Purchaser shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior to
the Closing Date, (ii) the representations and warranties of Purchaser contained
in this Agreement and in any certificate or other writing delivered by Purchaser
pursuant hereto shall be true in all material respects at and as of the Closing
Date, as if made at and as of such date and (iii) Sellers shall have received a
certificate signed by an officer of Purchaser to the foregoing effect.
(b) Holdings' obligation to sell the US Shares shall be contingent
upon the purchase and sale of the ADI Shares, and AHL Europe's obligation to
sell the ADI Shares shall be contingent upon the purchase and sale of the US
Shares.
(c) Sellers shall have received all consents, authorizations or
approvals from governmental agencies referred to in Section 7.03, in each case
in form and substance reasonably satisfactory to Sellers, and no such consent,
authorization or approval shall have been revoked.
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(d) Holdings shall have received all documents it may reasonably
request relating to the existence of Purchaser and the authority of Purchaser
and Securicor Georgia to enter into this Agreement and to consummate the
transactions contemplated hereby, all in form and substance reasonably
satisfactory to Holdings.
(e) There shall not be threatened, instituted or pending any
action or proceedings by any court, government, or governmental authority or
agency, domestic or foreign, (i) seeking to restrain, prohibit or otherwise
interfere with the ownership or operation by Purchaser or any of its Affiliates
of all or any material portion of the US Business, the US Assets or the UK
Business or the UK Assets or to compel Purchaser or any of its Affiliates to
dispose of all or any material portion of the US Business or the US Assets or
the UK Business or the UK Assets, (ii) seeking to impose or confirm limitations
on the ability of Purchaser or any of its Affiliates or the UK Business
effectively to exercise full rights of ownership of the Assets, including
without limitation, the right to vote any of the US Shares or the ADI Shares or
(iii) seeking to require divestiture by Purchaser or any of its Affiliates of
the any of the Assets herein.
ARTICLE 16
Survival; Indemnification
Section 16.01 Survival. The representations and warranties of the
parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall survive the
Closing until two (2) years after the Closing Date; provided, that (i) the
European Environmental Warranties, the European Tax Warranties and the Tax Deed
shall survive the Closing until seven (7) years following the Closing Date, (ii)
the representations and warranties contained in Section 5.27 with respect to
employee benefit matters, Section 5.28 with respect to environmental matters and
in Annex XI with respect to tax matters, shall survive until expiration of the
statute of limitations relative to the liability relating to such
representations and warranties (giving effect to any waiver, mitigation or
extension thereof), if later and (iii) the representations and warranties
contained in Section 5.02, Section 5.05, Section 5.06, Section 5.17(a), Section
7.02 and Article 13 shall survive indefinitely. Notwithstanding the preceding
sentence, any representation or warranty in respect of which indemnity or
recovery for breach of warranty may be sought under this Agreement shall survive
the time at which it would otherwise terminate pursuant to the preceding
sentence, if notice of the inaccuracy or breach thereof giving rise to such
right of indemnity or recovery for breach of warranty shall have been given to
the party against whom such indemnity or recovery for breach of warranty may be
sought prior to such time. The covenants and agreements contained in this
Agreement shall survive indefinitely.
Section 16.02 Indemnification.
(a) AHL and Sellers, jointly and severally, hereby indemnify
Purchaser and its Affiliates and, effective at the Closing, without duplication,
Xxxxxxxxxxx Security, ADI and their respective Subsidiaries, against and agree
to hold each of them harmless from and against any and all damage, loss,
liability and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with any
action, suit or
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proceeding) ("Damages") incurred or suffered by Purchaser, any Affiliate of
Purchaser, Xxxxxxxxxxx Security, ADI or any of their respective Subsidiaries
arising out of any misrepresentation or breach of any representation, warranty,
covenant or agreement made or to be performed by Sellers, or any of them,
pursuant to this Agreement other than contained in the European Warranties and
the Tax Deed (determined without regard to any materiality qualification
contained in any representation, warranty or covenant giving rise to a claim for
indemnity hereunder); provided, that AHL and Sellers shall not be liable under
this Section 16.02(a) unless the aggregate amount of Damages (with any Damages
which are in British Pounds Sterling being converted to the Dollar Equivalent of
such amount of Damages) with respect to all matters referred to in this Section
16.02(a), together with Relevant Claims under the European General Warranties
and European Environmental Warranties referred to in Section 16.01 of Annex XVI
attached hereto (determined without regard to any materiality qualification
contained in any representation, warranty or covenant giving rise to the claim
for indemnity hereunder), exceeds US $750,000 (the "Basket"), in which event AHL
and Sellers shall be liable for the entire amount of such Damages. In no event
shall the aggregate amount of all payments made by AHL and Sellers for all
Damages pursuant to their indemnification obligations set forth in this Section
16.02(a) and all payments made by the Sellers for any Damages arising out of any
breach of the European Warranties exceed US $85,000,000 (the "Cap"). In
addition, AHL and Sellers shall not be liable to pay for any Damages resulting
from their indemnification obligations set forth in this Section 16.02(a) or
from their warranty obligations pursuant to the European General Warranties and
European Environmental Warranties unless the amount of any single claim or the
aggregate amount of any group of related claims exceeds US $15,000 (the
"Excluded Claims"), and all Damages related to such Excluded Claims shall not
count against or be included in the Basket. Notwithstanding the foregoing,
nothing contained herein shall limit the liability of AHL and Sellers under this
Agreement to the extent such liability results from fraud or willful misconduct
of AHL and Sellers, or any of them. In addition, notwithstanding the foregoing,
AHL and Sellers acknowledge and agree that (i) the indemnification obligations
set forth in Section 16.02(c), Section 16.05 and on the Annex XI attached hereto
are not subject to the Basket or the Cap and shall not be considered Excluded
Claims, regardless of the amount of any such claim and (ii) claims under the
European Tax Warranties are not subject to the Basket, shall not be considered
Excluded Claims regardless of the amount of any such claims but are subject to
the Cap; and (iii) Claims under the Tax Deed are not subject to the Basket,
shall not be considered Excluded Claims regardless of the amount of any such
claims, are not subject to the Cap detailed in Section 16.02(c) but are subject
to a cap on liability equal to the consideration payable for the ADI Shares as
stated in clause 3.4 of the Tax Deed.
(b) Purchaser hereby indemnifies Sellers and their Affiliates
against and agrees to hold each of them harmless from any and all damage, loss,
liability and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with any
action, suit or proceeding (the "Purchaser Damages")) incurred or suffered by
AHL, Holdings or any of their respective Affiliates arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by Purchaser or Securicor Georgia pursuant to this Agreement;
provided, that (i) Purchaser shall not be liable under this Section 16.02(b)
unless the aggregate amount of Purchaser Damages with respect to all matters
referred to in this Section 16.02(b) (determined without regard to any
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materiality qualification contained in any representation, warranty or covenant
giving rise to the claim for indemnity hereunder) exceeds US $750,000 (the
"Purchaser Basket") in which event Purchaser shall be liable for the entire
amount of such Purchaser Damages; (ii) in no event shall the aggregate amount of
all payments made by Purchaser for all Purchaser Damages pursuant to its
indemnification obligation under this Agreement exceed US $85,000,000 (the
"Purchaser Cap"); and (iii) Purchaser shall not be liable to pay any Purchaser's
Damages unless the amount of any single claim or the aggregate amount of any
group of related claims of such Damages exceeds $15,000 (the "Purchaser Excluded
Claims"), and the Purchaser Damages related to such Purchaser Excluded Claims
shall not count against the Purchaser Basket. Notwithstanding the foregoing,
nothing contained herein shall limit the liability of Purchaser under this
Agreement to the extent such liability results from fraud or willful misconduct
of Purchaser. In addition, notwithstanding the foregoing, Purchaser acknowledges
and agrees that the indemnification obligations set forth in Section 10.06 are
not subject to the Purchaser Basket or the Purchaser Cap and shall not be
considered Purchaser Excluded Claims, regardless of the amount of any such
claim.
(c) Notwithstanding anything to the contrary in this Agreement,
AHL and Sellers, jointly and severally, hereby indemnify and agree to hold
harmless Purchaser, its Affiliates, and their respective directors, officers and
employees, including, effective at the Closing, without duplication, Xxxxxxxxxxx
Security, ADI and their respective Subsidiaries and Affiliates and each of their
respective directors, officers and employees, from and against:
(i) any and all damages, liabilities, losses and expenses
which relate to or arise out of any assets, liabilities, properties or
business of any Xxxxxxxxxxx Entity or any member of the European Group
which does not represent a part of the US Business and/or the UK
Business;
(ii) any and all damages specific to litigation such as
the Philadelphia case U. S. District Court for the E. D. Pa. Criminal
No. 000-194 which relates to or arises out of any breach by or the
failure of Holdings or Xxxxxxxxxxx Security to comply with or to
perform their obligations prior to the Closing Date pursuant to the
Philadelphia Settlement Agreement or pursuant to the judgment in a
criminal case entered by Judge Xxxxxx Xxxx of the U. S. District Court
for the Eastern District of Pennsylvania on or about October 20, 2000.
(iii) any and all Purchaser Damages which relate to or
arise out of all lawsuits filed against an Xxxxxxxxxxx Entity with
respect to the US Business after October 24, 2000, to the extent that
the aggregate amount of such damages exceeds the sum of (A) the
aggregate amount of insurance proceeds received by the relevant
Xxxxxxxxxxx Entity with respect to such lawsuits and (B) the litigation
reserve included in the US Balance Sheet;
(iv) any and all Purchaser Damages which relate to or
arise out of the failure of Holdings to obtain, at its sole expense, or
to cause Xxxxxxxxxxx to assign to Xxxxxxxxxxx Security the licenses for
the Xxxxxx and Oracle software used in connection with the US Business
and/or the UK Business and to obtain the consent of the licensors to
such
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assignments or obtain, at its sole expense, for Xxxxxxxxxxx Security
licenses with Xxxxxx or Oracle that are substantially equivalent to the
licenses held by Xxxxxxxxxxx on the date hereof;
(v) any and all Purchaser Damages (excluding
consequential or incidental damages) which relate to or arise out of
(A) the exercise of a change of control provision or failure to obtain
the necessary consents for the assignment of such contract, agreement
or license to Xxxxxxxxxxx Security by the counterparty of any of the US
Assumed Contracts and/or the European Assumed Contracts; (B) the
failure to obtain a consent required as a consequence of the change of
control of Xxxxxxxxxxx Security with respect to any Real Property
Leases; (C) the exercise of a change of control provision or failure to
obtain the necessary consents for the assignment to Xxxxxxxxxxx
Security of the Licenses on or before Closing and/or for the assignment
to ADI of any licenses used in respect of the UK Business on or before
Closing; and/or (D) the failure to have in force any special security
clearances required by any US Assumed Contracts and/or European Assumed
Contracts; and
(vi) Purchaser Damages pertaining to any Employee Plan or
Benefit Arrangement which relate to adoption or operation of such
Employee Plan or Benefit Arrangement.
(d) Notwithstanding anything else in this Agreement to the
contrary, the parties hereto acknowledge and agree to report any payment made in
respect of Damages as an adjustment to the Purchase Price for accounting, Tax
and all other purposes.
Section 16.03 Procedures. The party seeking indemnification or recovery
for breach of warranty under Section 16.02 and/or Section 16.05 (the
"Indemnified Party") agrees to give prompt notice to the party against whom
indemnity is sought (the "Indemnifying Party") of the assertion of any claim, or
the commencement of any suit, action or proceeding in respect of which indemnity
may be sought under such Section, provided, however, that the failure to notify
the Indemnifying Party will not relieve the Indemnifying Party of any liability
to the Indemnified Party except to the extent that the Indemnifying Party
demonstrates that the defense of such action is prejudiced by the Indemnified
Party's failure to give such notice. The Indemnifying Party shall at the request
of the Indemnified Party participate in and/or control the defense of any such
suit, action or proceeding at its own expense. The Indemnifying Party shall not
be liable under Section 16.02 and/or Section 16.05 for any settlement effected
without its consent of any claim, litigation or proceeding in respect of which
indemnity may be sought hereunder.
Section 16.04 Waiver of Rights. The rights and remedies of the
Purchaser or Sellers in respect of the representations and warranties contained
in this Agreement (US representations and warranties), Section 16.05 of this
Agreement (specific European indemnities), the European Warranties and the Tax
Deed shall not be affected by Completion, by the giving of any time or other
indulgence by the Purchaser to any person, by the Purchaser rescinding or not
rescinding this Agreement, or by any other cause whatsoever except a specific
waiver or release by the
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Purchaser in writing, and any such waiver or release shall not prejudice or
affect any remaining rights or remedies of the Purchaser.
Section 16.05 Specific European Indemnities.
(a) AHL Europe hereby indemnifies the Purchaser (for itself and on
behalf of all group companies) against all costs, expenses, damages,
compensation, fines and other liabilities arising out of or in connection with
(regardless of whether such claim has been disclosed to the Purchaser in the
European Disclosure Memorandum or otherwise):
(i) any liabilities or obligations which ADI and/or the
Purchaser (or any company within the Purchaser's group) and/or the
trustees of the ADI Management Pension Scheme may incur as a result of
fines or penalties (whether criminal or civil) which the Occupational
Pensions Regulatory Authority may impose as a result of the matters
reported to it by letter dated November 12, 1999 from the trustees of
the ADI Management Pension Scheme and Xxxxxx Xxxxxxxx or resulting from
matters previously reported to it;
(ii) any liabilities or obligations to make additional
contributions or payments which ADI and/or the Purchaser (or any
company within the Purchaser's group) may reasonably incur as a result
of the value of the funds held on behalf of such member of the
Disclosed Schemes named in Appendix B to the letter dated May 11, 1998
from XX Xxxxx of Xxxxxx Xxxxx to Xx. X. Xxxxxx of ADI Group ("Appendix
B") being insufficient to provide any of the benefits which have been
promised or indicated to such members prior to Completion provided that
such sufficiency or insufficiency shall be calculated on the basis that
contributions due and payable after Completion are made in accordance
with Appendix B as relevant to the member concerned, and provided that
such contributions have been invested in funds similar to the funds in
which contributions have been invested prior to Completion. Such
liability or obligation shall be limited to that proportion of total
insufficiency attributable to the number of months service with ADI
(plus, in the case of a member who transfers accrued benefits from the
Local Government Pension Scheme ("LGPS") to the Disclosed Schemes,
service whilst a member of the LGPS) prior to Completion relative to
the number of months service post Completion, but based on final
pensionable salary and final pensionable earnings; and
(iii) any liabilities or losses arising out of or in
connection with the exercise by British Airways Plc of the change of
control provisions contained in the Shareholder Agreement in respect of
BA Ground Handling Services Limited dated April 25, 1996.
(b) Any claim under the above clauses of this Section 16.05 shall
be without prejudice to any claim which the Purchaser or any member of its group
may have under the European Warranties provided always that the Purchaser shall
not recover damages more than once in respect of the same loss.
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ARTICLE 17
Termination
Section 17.01 Grounds for Termination. This Agreement may be terminated
at any time prior to the Closing:
(a) By mutual written agreement of Holdings and Purchaser;
(b) By written notice from Holdings to Purchaser, if (i) Purchaser
shall fail to perform in any material respect any of its agreements contained
herein required to be performed by it on or prior to the Closing Date or (ii)
any of the representations, warranties or covenants of Purchaser contained
herein are found in any material respect to be untrue or incorrect when made or
have since become incorrect in any material respect; and such breach is not
cured by Purchaser within ten (10) days after Holdings has notified Purchaser of
its intent to terminate this Agreement pursuant to this Section 17.01(b);
(c) By written notice from Purchaser to Holdings, if (i) Holdings
shall fail to perform in any material respect any of its agreements contained
herein required to be performed by it on or prior to the Closing Date or (ii)
any of the representations, warranties or covenants of Holdings contained herein
are found in any respect to be untrue or incorrect when made or have since
become incorrect; and such breach is not cured by Holdings within ten (10) days
after Purchaser has notified Holdings of its intent to terminate this Agreement
pursuant to this Section 17.01(c) or (iii) Purchaser shall exercise its
termination rights pursuant to Section 8.15; or
(d) By either Holdings or Purchaser if the Closing shall not have
been consummated on or before January 31, 2001.
The party desiring to terminate this Agreement pursuant to Section
17.01(b), (c) or (d) shall give notice of such termination to the other party.
Section 17.02 Effect of Termination. If this Agreement is terminated as
permitted by Section 17.01, such termination shall be without liability of
either party (or any stockholder, director, officer, employee, agent, consultant
or representative of such party) to the other party to this Agreement; provided,
that if such termination shall result from the (i) willful failure of either
party to fulfill a condition to the performance of the obligations of the other
party, (ii) failure to perform a covenant of this Agreement or (iii) breach by
either party hereto of any representation or warranty or agreement contained
herein, such party shall be fully liable for any and all Damages incurred or
suffered by the other party as a result of such failure or breach. The
provisions of Sections 8.03, 9.01, 17.01, 17.02 and 18.03 shall survive any
termination hereof pursuant to Section 17.01.
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ARTICLE 18
Miscellaneous
Section 18.01 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to Purchaser, to:
Securicor plc
Xxxxxx Xxxx Xxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx SMI 4LD
England
Attention: Xxxxx Xxxxxxxxx
Fax: 000 00 00 0000 0000
with a copy to:
Xxxxxxx Xxxxx
Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Attention: Xxxxxxx Xxxxxxx
Fax: 000 00 00 0000 0000
and:
Xxxxxxxx Xxxxxxx LLP
Bank of America Plaza
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx, Esq.
Fax: (000) 000-0000
if to Holdings, to:
Xxxxxxxxxxx Holdings Limited
0000 Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
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with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
and:
Xxxxxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx ECIA 4EJ
Attention: Xxxxx Xxxxx
Fax: 000 00 00 0000 0000
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to
5:00 p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding business day in the place of
receipt.
Section 18.02 Amendments and Waivers.
(a) Any provision of this Agreement may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed, in the case
of an amendment, by each party to this Agreement, or in the case of a waiver, by
the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 18.03 Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
Sellers shall use their reasonable best efforts to secure as promptly as
possible following the date hereof the return of the $45,000 filing fee paid by
Sellers with Sellers' filing under the HSR Act in respect of the transactions
contemplated by this Agreement and, upon receipt of the return of such fee and
notwithstanding the immediately preceding sentence, shall pay Purchaser one-half
of such amount as reimbursement of one-half of the filing fee paid by Purchaser
with its filing in respect of such transactions.
Section 18.04 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, that no party may assign, delegate
or otherwise transfer any of its rights or
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obligations under this Agreement without the consent of each other party hereto,
except that Purchaser may transfer or assign, in whole or from time to time in
part, to one or more of its Affiliates, the right to purchase all or a portion
of the Shares or the US Transportation Assets, but no such transfer or
assignment will relieve Purchaser of its obligations hereunder.
Section 18.05 Governing Law. Subject to the following sentence, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Georgia, without regard to the conflicts of law rules of such state.
Annexes VI, XXII, and XVI and Schedules 3.04(a) and 8.06 shall be governed by
and construed in accordance with the laws of England and Wales without regard to
the conflicts of law rules of such jurisdictions.
Section 18.06 Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Northern District of Georgia
or any other Georgia state court and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Parties seeking to enforce any rights
under Annexes VI, XXII and XVI and Schedules 3.04(a) and 8.06 shall be free to
bring such action in the High Court of Justice in England and Wales. Process in
any such suit, action or proceeding whether in the state of Georgia or in the
United Kingdom may be served on any party anywhere in the world, whether within
or without the jurisdiction of any such court. Without limiting the foregoing,
each party agrees that service of process on such party as provided in Section
18.01 shall be deemed effective service of process on such party.
Section 18.07 Waiver Of Jury Trial. Each of the parties hereto except
as appropriate hereby irrevocably waives any and all right to trial by jury in
any legal proceeding arising out of or related to this agreement or the
transactions contemplated hereby.
Section 18.08 Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
Section 18.09 Entire Agreement. This Agreement (including the Exhibits,
the Schedules and the Annexes attached hereto and incorporated herein by
reference), the Confidentiality Agreement and the Transaction Documents
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter
hereof and thereof.
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Section 18.10 Severability. If any provision of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected, impaired or
invalidated and so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
parties. Upon such a determination, the unenforceable term, provision, covenant
or restriction shall be deemed to be modified as necessary so as to effect the
original intent of the parties as closely as possible in an enforceable manner
in order that the transactions contemplated hereby shall be consummated as
originally contemplated to the fullest extent possible.
Section 18.11 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 18.12 Guaranty of Payment and Performance. AHL hereby
irrevocably guarantees to the Purchaser the full and punctual payment and
performance when due of the obligations of Holdings and AHL Europe hereunder,
including, without limitation, any obligation to indemnify the Purchaser
pursuant to this Agreement (the "Obligations"). This guaranty is an absolute,
unlimited, independent, unconditional and continuing guaranty of the full and
punctual payment and performance of the Obligations and not of their
collectability only. The foregoing guaranty of AHL shall not in any way limit
the obligations, covenants, agreements, representations and warranties of
Holdings and AHL Europe, or any of them, under this Agreement (including any of
the foregoing relating to indemnification), or any of the Purchaser's rights or
remedies with respect thereto. Should Holdings and AHL Europe, or any of them,
default in the payment or performance of any Obligation, the obligation of AHL
hereunder with respect to payment and performance of such Obligation shall
become immediately due and payable to the Purchaser, upon written demand by the
Purchaser. Payments and/or performance by AHL hereunder may be required by the
Purchaser on any number of occasions.
Section 18.13 Governing Agreement. In the event that the terms of this
Agreement conflict in any way with the terms of any attached Annex, Exhibit or
Schedule, the terms of this Agreement shall govern.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
"PURCHASER"
SECURICOR PLC
By:
------------------------------------------
At:
------------------------------------------
Name: Xxxxxxxxxxx Xxxxxxxxxxx
Title: Director
"SECURICOR GEORGIA"
SECURICOR GEORGIA, INC.
By:
------------------------------------------
At:
------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
[Signatures continued on next page.]
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[Signatures continued from previous page.]
"AHL"
AHL SERVICES, INC.
By:
------------------------------------------
At:
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and Chief
Financial Officer
"SELLERS"
XXXXXXXXXXX HOLDINGS LIMITED
By:
------------------------------------------
At:
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and Chief
Financial Officer
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AHL EUROPE LIMITED
By:
------------------------------------------
At: London, England
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer European
Operations
"XXXXXXXXXXX SECURITY"
XXXXXXXXXXX SECURITY, INC.
By:
------------------------------------------
At: Atlanta, Georgia
Name: Xxxxx X. Xxxxxxxxxxx, Xx.
Title: President
"ADI"
THE ADI GROUP LIMITED
By:
------------------------------------------
At: London, England
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer European
Operations
"XXXXXXXXXXX"
XXXXXXXXXXX, INC.
By:
------------------------------------------
At: Atlanta, Georgia
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and Chief
Financial Officer
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ANNEX VI
EUROPEAN WARRANTIES
Warranties of AHL Europe Relating To the UK Assets
Section 6.01. Terms Governing the European Warranties.
(a) AHL Europe warrants to the Purchaser in the terms of the
European Warranties as set out in this Annex VI and Annex XII. The provisions as
stated therein of Article 16 of the Agreement and Annex XVI shall take effect in
relation to the European General Warranties and European Environmental
Warranties. The provisions as stated therein of Article 16 of the Agreement and
(to the extent specified in the Tax Deed) the Tax Deed shall take effect in
relation to the European Tax Warranties.
(b) AHL Europe acknowledges that, in entering into this Agreement,
the Purchaser has relied upon the terms of the European Warranties.
(c) AHL Europe shall not (in the event of any claim being made
against it in connection with the sale of the ADI Shares to the Purchaser) make
any claim against ADI or any of the European Subsidiaries or against any
director or employee of ADI or any of the European Subsidiaries on whom AHL
Europe may have relied before agreeing to any term of this Agreement or of the
Tax Deed or authorizing any statement in the European Disclosure Memorandum.
(d) Each of the European Warranties shall be construed as a
separate warranty and is given subject to the matters which are fairly disclosed
in the European Disclosure Memorandum and European Disclosure Documents,
provided in addition in the case of the European Disclosure Documents that all
such information only qualifies the European Warranties to the extent that each
matter to be disclosed is reasonably clear from the face of each document, but
(save as expressly provided to the contrary) shall not be otherwise limited or
restricted by reference to or inference from the terms of any other European
Warranty or any other term of this Agreement.
(e) References in any of the European Warranties to any English
legal term, concept, statute, regulation, court or official (but excluding, for
the avoidance of doubt, currency) shall in respect of any jurisdiction other
than England be deemed to include what most closely approximates in that
jurisdiction to such English term, concept, statue, regulation, court or
official.
Section 6.02. Accounts
(a) General. The European Accounts (copies of which have been
delivered to the Purchaser):
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(i) Have been prepared under the historical cost
convention and in accordance with generally accepted accounting
practice commonly adopted by companies carrying on businesses similar
to those carried on by the respective members of the European Group and
in accordance with all applicable Statements of Standard Accounting
Practice and Financial Reporting Standards (or their equivalent for
companies incorporated outside of England and Wales);
(ii) Show a true and fair view of the affairs of the
European Group as at the Accounts Date and of its results for the
accounting reference period ended on that date;
(iii) Comply with the requirements of the Companies Act (or
the equivalent law for companies incorporated outside of England and
Wales);
(iv) Are prepared on consistent bases and policies of
accounting which are the same as those adopted in preparing the
Previous European Accounts and, since the Accounts Date, have continued
to be adopted by the European Group without alteration; and
(v) (Save as the Accounts expressly disclose) are not
affected by any material unusual or non-recurring items.
(b) Rate of Depreciation. The rate of depreciation adopted in the
European Accounts is sufficient for the value of each of the fixed assets of the
European Group to be written down to nil by the end of its useful working life.
(c) Profits. The profits shown in the European Accounts have not
to a material extent been affected (except as disclosed in those accounts) by
any extraordinary or exceptional event or circumstance.
(d) Application of Warranties to ADI's Accounts. Each of the
statements in Sections 6.02(a) through Section 6.02(c) would be true and
accurate in relation to the accounts of ADI if:
(i) For references to the European Accounts there were
substituted references to the audited balance sheet of ADI as at the
Accounts Date and the audited profit and loss account of ADI for the
accounting reference period ended on that date; and
(ii) For references to the European Group there were
substituted references to ADI.
(e) Position Since Accounts Date. Since the Accounts Date:
(i) Apart from the dividends provided for in the European
Accounts or in this Agreement, no dividend or other distribution (as
defined for the purposes of section 209 or 210 of the Taxes Act or any
equivalent law for companies incorporated outside of England and Wales)
has been declared, paid or made by ADI;
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(ii) The business of ADI has been carried on in the
ordinary course and so as to maintain it as a going concern;
(iii) There has been no material adverse change in the
financial or trading position of ADI and the Sellers are not aware of
any circumstances which would give rise to the same;
(iv) There has been no material reduction in the value of
the net tangible assets of the European Group on the basis of the
valuations adopted in the European Accounts;
(v) ADI has not acquired or disposed of or agreed to
acquire or dispose of any business or any material asset other than
trading stock in the ordinary course of business;
(vi) ADI has not paid any service or management charges to
any other person or incurred any liability to make such a payment in
excess of (pound)50,000; and
(vii) There has been no (i) employment, deferred
compensation, severance or retirement agreement entered into with any
director, officer or Senior Employee (being an employee with a basic
salary in excess of (pound)50,000 per annum) relating to the UK
Business (or any amendment to any such existing agreement), (ii) grant
of any severance or termination pay to any director, officer or Senior
Employee relating to the UK Business or (iii) change in compensation or
other benefits payable to any director, officer or Senior Employee
relating to the UK Business pursuant to any severance or retirement
plans or policies thereof.
(viii) No terms of trade with any customer of the European
Group have been the subject of any material adverse change and there
are currently no negotiations in process to amend such terms or trade
which would have a material adverse change.
(f) Intercompany Accounts. Since the Accounts Date there has not
been any accrual of liability by ADI or any of the European Subsidiaries to any
Xxxxxxxxxxx Entity or their Affiliates or other transaction between ADI and any
Xxxxxxxxxxx Entity or their Affiliates, except in the ordinary course of the UK
Business consistent with past practice, and thereafter as provided in Section
6.02(f) of the European Disclosure Memorandum.
(g) Management Accounts. The ADI Group Monthly Reporting Pack
Period 10 for the 44 weeks ended 3 November 2000 being European Disclosure
Document 18.38 ("Management Accounts") have been prepared in good faith and are
based upon reasonable assumptions, and AHL Europe is not aware of any fact or
set of circumstances that would lead it to believe that such Management Accounts
are incorrect or misleading in any material respect.
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Section 6.03. Assets.
(a) Title to Assets. The assets included in the European Accounts
or acquired by ADI since the Accounts Date (other than trading stock disposed of
since that date in the ordinary course of business) and all other assets used or
employed by ADI are the absolute property of ADI free from any mortgage, charge,
xxxx, xxxx of sale or other encumbrance and are not the subject of any leasing,
hiring or hire-purchase agreement or agreement for payment on deferred terms or
assignment or factoring or other similar agreement, and all such assets are in
the possession or under the control of ADI.
(b) So far as the Sellers are aware there are no developments
affecting any such assets pending or, to the knowledge of AHL Europe threatened,
which might materially detract from the value, materially interfere with any
present or intended use or materially adversely affect the marketability of the
UK Assets.
(c) The UK Assets constitute all of the assets used or held for
use in connection with the UK Business.
(d) Condition of Plant Machinery and Equipment. All material,
plant, machinery, office equipment, computer systems and vehicles used by ADI
are in a reasonable state of repair, and are in satisfactory working order, and
the vehicles are duly licensed and suitable for the purposes for which they are
used.
(e) Fixed Asset Registers. ADI has included in the European
Disclosure Memorandum up-to-date fixed asset registers showing a complete and
accurate record of the material fixed assets owned or used by it.
(f) Control of Records and Information. All records and
information belonging to ADI (whether or not held in written form) are in its
possession and under its direct control.
(g) Acquisition at Arm's Length. ADI has not within the period of
twelve (12) months ending on the date hereof, acquired any asset on terms which
were not by way of bargain at arm's-length.
(h) Nature of Debts. ADI is not owed any money other than trade
debts incurred in the ordinary course of business and cash at bank.
Section 6.04. Borrowings, Grants and Loans to Directors.
(a) Borrowings.
(i) ADI does not have outstanding any obligation for the
payment or repayment of money, in respect of: (A) monies borrowed or
raised, (B) any recourse to a company selling or discounting
receivables in respect of receivables sold or discounted, (C) moneys
raised under any bond, note, stock, or other security, (D) moneys
raised
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under or in respect of acceptance credit and documentary credit
facilities, (E) the acquisition cost of assets or services to the
extent payable after the time of acquisition or possession, (F) rental
payments under leasing and hire purchase agreements other than
agreements entered in the ordinary course or (G) any guarantee,
indemnity or other assurance against or intended to limit loss in
respect of any obligation for the payment or repayment of money
described in (A) to (F) of this paragraph or any such obligation being
referred to below as a "Borrowing";
(ii) ADI does not have subsisting over the whole or any
part of its present or future revenues or any encumbrance, mortgage,
charge, pledge, lien or other security interest or any other agreement
or arrangement having a similar effect;
(iii) No Borrowing of ADI has become or is now due and
payable, or capable so far as the Sellers are aware of being declared
due and payable, before its normal or originally stated maturity and no
demand or other notice requiring the payment or repayment of money
before its normal or originally stated maturity has been received by
ADI;
(iv) So far as the Sellers are aware no event or
circumstance has occurred such as to entitle any person to require the
payment or repayment of any Borrowing before its normal or originally
stated maturity or which is or shall be such as to terminate, cancel or
render incapable of exercise any entitlement to draw money or otherwise
exercise the rights of ADI under an agreement relating to Borrowing;
(v) All sums payable to British Airways plc in connection
with the agreement between British Airways plc and Executive Aircraft
Services Limited dated 31 March 1997 have been settled; and
(vi) All loan notes in favor of Xxxx Xxxxxx (and any
assignee of such loan notes) have been satisfied in full.
(b) Grants and Subsidies. So far as Sellers are aware, ADI has not
done or agreed to do anything as a result of which:
(i) Any investment grant or other grant or any subsidy in
excess of(pound)25,000 received by ADI is or may be liable to be
refunded wholly or partly; or
(ii) Any application made by ADI for such a grant or
subsidy shall or may be refused wholly or partly; and
(iii) Neither the signature nor the performance of this
Agreement shall have any such result.
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(c) Loans to Directors and Connected Persons. There is not
outstanding:
(i) Any loan made by ADI to, or debt owing to ADI by, any
Xxxxxxxxxxx Entity, AHL Europe or any director of ADI or any person
connected with any of them;
(ii) Any agreement or arrangement to which ADI is a party
and in which any of the Xxxxxxxxxxx Entities, AHL Europe or any
director of ADI or any person connected with any of them is interested;
or
(iii) Any agreement or arrangement between ADI and any
company of which it is a subsidiary or another subsidiary of any such
company (including, but not limited to, any such agreement or
arrangement under which ADI is, or may in the future become, liable to
pay any service, management or similar charge or to make any payment of
interest or in the nature of interest).
Section 6.05. European Properties.
(a) Interest. The European Properties comprise all the land and
buildings owned by ADI or used or occupied by it or in which it has any other
interest, right or liability.
(b) Title. In the case of each of the Non-Certified Properties:
(i) ADI is the sole legal and beneficial owner and has a
good title to it and has in its possession or under its control free of
any lien all relevant original title deeds and documents necessary to
prove the title of ADI;
(ii) As far as AHL Europe is aware the information
contained in the summaries contained in Disclosure Documents 13.31,
13.32, 13.34, 13.36 of the European Disclosure Memorandum as to tenure
and the principal terms of the lease or license held by ADI is true and
accurate in all respects;
(iii) ADI is in possession of, owns, uses and occupies it
free from any mortgage or charge; and
(iv) So far as AHL Europe is aware, ADI does not by its
use or occupation of the Non-Certified Properties pursuant to the
relevant lease, license or tenancy contravene any requirement or
restriction having the force of law and as far as AHL Europe is aware
ADI has not received notice of any breach of any covenants, conditions,
restrictions, limitations and other matters binding on it.
(c) Statutory Obligations, Notices and Orders. In the case of each
of the Non-Certified Properties:
(i) As far as AHL Europe is aware, no notice, order,
proposal, application, request or schedule of dilapidations affecting
or relating to any of the Non-Certified
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Properties have been received by ADI and, so far as the AHL Europe is
aware, there are no circumstances which are likely to result in any
being received;
(ii) As far as AHL Europe is aware, ADI has not received
notice of any breach of any applicable statutory and by-law
requirements with respect to the Non-Certified Properties or with
respect to the employment of persons or the use of any machinery or
chattels therein; and
(iii) Where a fire certificate has been issued in respect
of any of the Non-Certified Properties, as far as AHL Europe is aware,
ADI has not received notice of any breach of any conditions attaching
thereto or any recommendations or requirements of the local fire
authority which have not been implemented or which are outstanding.
(d) Rates, Taxes and Other Outgoings. In respect of each of the
Non-Certified Properties:
(i) None of the Non-Certified Properties is subject to
the payment of any outgoings other than non-domestic or water rates
(and in the case of leaseholds, sums reserved by the relevant lease,
license or tenancy) and so far as AHL Europe is aware all outgoings
have been duly paid to date, and so far as AHL Europe is aware none is
in dispute.
(e) Claims and Disputes. In the case of each of the Non-Certified
Properties:
(i) So far as AHL Europe is aware no action, claim,
proceeding, demand, dispute or liability (contingent or otherwise) in
respect of any of the Non-Certified Properties is outstanding or
anticipated; and
(ii) ADI has not had occasion to make any claim or
complaint in relation to any neighboring property of its use or
occupation.
(f) Planning and Development Matters. In the case of each of the
Non-Certified Properties:
(i) The current use of each of the Non-Certified
Properties is as stated in the summaries contained in Disclosure
Documents 13.31, 13.32, 13.34 and 13.26 of the European Disclosure
Memorandum.
(ii) As far as AHL Europe is aware, ADI has not received
any notice to the effect that the existing use of any of the
Non-Certified Properties is an unlawful use under any applicable town,
country, state or federal legislation or regulation;
(iii) As far as AHL Europe is aware no construction on or
change of use to the Non-Certified Properties has taken place without
the necessary license or permits.
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(iv) As far as AHL Europe is aware no preemptive right has
been claimed by any local authority with respect to the Non-Certified
Properties; no procedures have been initiated as far as AHL Europe is
aware to remand any urban renewal plans or other plans affecting the
Non-Certified Properties. As far as AHL Europe is aware there are no
proposals for an urban renewal or other plans of the type referred to
in the preceding sentence involving the expropriation or the major
termination of any lease agreements in relation to the Non-Certified
Properties.
(g) Leasehold Properties. In relation to those of the
Non-Certified Properties which are leaseholds:
(i) Each such Non-Certified Property is held under the
terms of the lease, license or tenancy which is summarized in
Disclosure Documents 13.31, 13.32, 13.34 and 13.36 of the European
Disclosure Memorandum;
(ii) The rent referred to in Disclosure Documents 13.31,
13.32, 13.34 and 13.36 of the European Disclosure Memorandum is the
current rent payable under the relevant lease, license or tenancy;
(iii) As far as AHL Europe is aware, ADI has paid the rent
and all other sums payable under the lease, license or tenancy on the
due dates for payment and, so far as AHL Europe is aware, the last
demand for rent was unqualified and, as far as AHL Europe is aware,
each lease, license or tenancy is valid and in full force;
(iv) As far as AHL Europe is aware, ADI has not received
notice of any breach of any covenants on the part of the tenant
contained in such leases, licenses or tenancies; and
(v) As far as AHL Europe is aware, no notices of an
adverse nature have been received by ADI in respect of any such leases,
licenses or tenancies.
(h) Tenancies. None of the Non-Certified Properties is subject to
any lease, underlease, agreement, license or other right of occupation.
(i) Other Involvement in Relation to Property. As far as AHL
Europe is aware, ADI has not at any time:
(i) Had vested in it (whether as an original tenant or
undertenant or as an assignee, transferee or otherwise) any freehold or
leasehold property other than the European Properties or given any
covenant or entered into any agreement, deed or other document (whether
as a tenant or undertenant or as an assignee, transferee, guarantor or
otherwise) in respect of any freehold or leasehold property in respect
of which any contingent or potential liability remains with ADI other
than those disclosed to the Purchaser in writing in relation to the
European Properties.
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(ii) The Certified English Properties. In relation to each
of the Certified English Properties, the information contained in the
Certificates of Title is true and accurate in all respects.
(j) The Other European Property Interests: So far as AHL Europe is
aware, the information relating to the Other European Property Interests set out
in the summary contained in Disclosed Document 13.35 of the European Disclosure
Memorandum is true and accurate in all material respects.
(k) Condition of Properties. The European Properties are in good
operating condition and repair.
Section 6.06. Environment.
(a) So far as AHL Europe is aware ADI has in the last 5 years
complied in all material respects with Environmental Law.
(b) So far as AHL Europe is aware, ADI has not received in the
last 5 years from any regulatory authority or third party:
(i) any written notice alleging any breach of
Environmental Law by ADI;
(ii) any written notification of any actual or threatened
civil, criminal, administrative or other action, claim, suit, complaint,
proceeding or investigation against ADI in relation to any liability or
obligation under Environmental Law; or
(iii) any written notification of any legal action or
request for any investigation or remediation of the Environment at the European
Properties (excluding the English Certified Properties) or any property formerly
in the ownership of ADI where in each case as at Completion (A) such notice or
communication remains outstanding or (B) there is an outstanding material
liability for ADI.
(c) So far as AHL is aware, ADI has obtained, and there are in
full force and effect and ADI is complying with, all Environmental Permits
necessary for the business of ADI as now carried on. As far as AHL Europe is
aware, ADI has not received any written notification from any regulatory
authority of any actual or threatened revocation, cancellation, suspension,
modification, variation or alteration of such Permits.
(d) Copies of all environmental reports, assessments and audits
prepared in the last two years in respect of ADI or any of the European
Properties (excluding the Certified English Properties) in the possession or
control of AHL Europe or ADI have been disclosed to the Purchaser.
(e) No warranties in Annex VI or XII other than this Section 6.06
of Annex VI shall apply or relate to any matter or liability arising under or
relating to Environmental Law, any
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Environmental Permit, any investigation or remediation of the Environment and/or
any matter or liability relating to human health and safety.
(f) So far as AHL Europe is aware ADI has not received, generated,
handled, used, stored, treated, transported, kept, deposited or disposed of
Waste at, on, or under the European Properties (excluding the Certified English
Properties) and has not permitted any third party to do so in circumstances
which at the relevant time constituted a breach of Environmental Law.
(g) So far as AHL Europe is aware ADI has not received any written
communication from the Health and Safety Executive, local authority or other
competent authority in the last three years, failure to comply with which at the
relevant time would constitute a breach of the Health and Safety at Work etc.
Act of 1974 or any legally binding requirements imposed under that Act or any
other law relating to health and safety.
Section 6.07. UK Intellectual Property Rights.
(a) Interests.
(i) Complete and accurate details of: (A) all Registered
Intellectual Property Rights and (B) all other UK Intellectual Property
Rights material to the UK Business that ADI owns are set out in Section
6.07(a) of the European Disclosure Memorandum;
(ii) ADI is the sole legal and beneficial owner of all the
Intellectual Property Rights, and the sole registered proprietor of all
the Registered Intellectual Property Rights, required to be set out
under Section 6.07(a)(i);
(iii) Complete and accurate details are set out in Section
6.07(a)(iii) of the European Disclosure Memorandum of: (A) all licenses
of UK Intellectual Property Rights granted to ADI and all material
licenses of UK Intellectual Property Rights granted by ADI to third
parties, (B) all material agreements for the provision or acquisition
of any Know-how or technical assistance to which ADI is a party, (C)
all material agreements for the prohibition or restriction of the
disclosure of any Know-how to which ADI is a party and (D) all other
agreements to which ADI is a party relating to any UK Intellectual
Property Rights owned by ADI or owned by third parties;
(iv) So far as AHL Europe is aware, all UK Intellectual
Property Rights required by ADI to conduct the UK Business at the date
of Completion are owned by or licensed to ADI;
(v) None of the UK Intellectual Property Rights required
to be set out under Section 6.07(a)(i) is subject to any legal or
equitable charge, mortgage or encumbrance, right, interest or, so far
as AHL Europe is aware, claim by any person; and
(vi) So far as AHL Europe is aware, none of the licenses
of UK Intellectual Property Rights to ADI required to be set out under
Section 6.07(a)(iii) is subject to any
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legal or equitable charge, mortgage or encumbrance, right, interest or
claim by any person.
(b) Validity and Title
(i) So far as AHL Europe is aware, all the UK
Intellectual Property Rights required to be set out under Section
6.07(a)(i) are subsisting and enforceable;
(ii) No claims which have been notified to ADI,
proceedings or actions exist or, so far as AHL Europe is aware, exist
or are threatened, and nothing has been done or omitted to be done by
ADI and, so far as AHL Europe is aware, no circumstances exist which
might give rise to any proceedings, actions or claims, in relation to
which: (A) any of the UK Intellectual Property Rights required to be
set out under Section 6.07(a)(i), or the title to, validity of or
enforceability of any of them, may be opposed, attacked or impugned,
(B) any third party may use or seek to be permitted to use any of the
UK Intellectual Property Rights required to be set out under Section
6.07(a)(i) and in particular by way of compulsory license or Crown use
(or any similar or analogous use in any jurisdiction), (C) any person
may be entitled to assert any moral or similar right in respect of any
UK Intellectual Property Right required to be set out under Section
6.07(a)(i), (D) ADI may be liable to pay any royalty or any sum in the
nature of a royalty or any other payment in respect of any UK
Intellectual Property Right or (E) ADI may be liable to pay
compensation in relation to any UK Intellectual Property Right required
to be set out under Section 6.07(a)(i) pursuant to any applicable
legislation (including for the avoidance of doubt any claim by any
employee pursuant to sections 40 and 41 of the Patents Xxx 0000 or any
equivalent legislation anywhere in the world);
(iii) So far as AHL Europe is aware, nothing has been done
or omitted to be done and no circumstances exist whereby: (A) any
person will be able to seek the revocation, cancellation, rectification
or modification of the registration of any of the Registered
Intellectual Property Rights required to be set out under Section
6.07(a)(i) or (B) any application for registration required to be set
out under Section 6.07(a)(i) might not proceed to grant, or might not
proceed to grant without amendment;
(iv) All reasonable steps, including the payment of all
fees, necessary for the registration, administration, maintenance and
protection of the Registered Intellectual Property Rights required to
be set out under Section 6.07(a)(i) have been taken; and
(v) So far as AHL Europe is aware, all the UK
Intellectual Property Rights required to be set out under Section
6.07(a)(i) that are capable of registration have been registered.
(c) Infringement and Breach.
(i) So far as AHL Europe is aware, no person has
infringed, is infringing or is threatening to infringe and nothing has
been done or is being done and so far as AHL
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Europe is aware, no circumstances exist which give rise to infringement
of: (A) any UK Intellectual Property Rights owned by ADI or (B) any UK
Intellectual Property Rights that are material to the UK Business that
are licensed to ADI;
(ii) Nothing done or omitted to be done by ADI has
materially infringed, or is materially infringing upon, any UK
Intellectual Property Rights owned by third parties; and
(iii) ADI has not materially breached, nor is it in
material breach of, any agreement or license required to be set out
under Section 6.07(a)(iii). So far as AHL Europe is aware, no other
person has breached or is in breach of any agreement or license
required to be set out under Section 6.07(a)(iii). So far as AHL Europe
is aware, nothing has been done by ADI or omitted to be done by ADI and
no circumstances exist which may give rise to grounds for termination
of any agreement or license required to be set out under Section
6.07(a)(iii). So far as AHL Europe is aware, each agreement or license
required to be set out under Section 6.07(a)(iii) is subsisting and
enforceable in accordance with its terms.
(d) Confidentiality.
(i) Nothing done or omitted to be done by ADI has
breached, or is breaching, any material right of any person to
confidence; and
(ii) No confidential information relating to the business
of ADI has been disclosed or permitted to be disclosed to any person
(except in the ordinary and normal course of business and under an
obligation of confidence) and ADI has not undertaken or arranged to
disclose to any person any confidential information relating to the
business of ADI.
Section 6.08. Information Technology.
(a) Rights.
(i) All Company Information Technology Systems are
licensed from third parties and are in the possession or under the
control of ADI;
(ii) Details of all agreements and arrangements relating
to Company Information Technology Systems, including without limitation
all license, lease, development, maintenance, support, escrow,
security, disaster recovery, management, utilization and service
agreements and arrangements, are set out in Section 6.08 of the
European Disclosure Memorandum; and
(iii) ADI has all the rights necessary to use Company
Information Technology Systems in the manner in which they are used in
the UK Business.
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(b) Infringement and Breach.
(i) ADI has not materially breached, nor is in material
breach of, any agreement or arrangement required to be set out under
Section 6.08(a)(ii). So far as AHL Europe is aware, no other person has
breached or is in breach of any agreement or arrangement required to be
set out under Section 6.08(a)(ii). So far as AHL Europe is aware,
nothing has been done or omitted to be done and no circumstances exist
which may give rise to grounds for termination of any agreement or
arrangement required to be set out under Section 6.08(a)(ii). Each
agreement or arrangement required to be set out under Section
6.08(a)(ii) is subsisting and enforceable in accordance with its terms;
(ii) Company Information Technology Systems: (A) are
fulfilling the present requirements of ADI, (B) are in satisfactory
working order and are fit for the purpose for which they are being
used, (C) are fully effective and operational, (D) have adequate
security, back-ups, duplication, disaster recovery arrangements,
hardware and software support and maintenance (including emergency
cover) and technically competent and trained employees to ensure
insofar as possible: (x) that breaches of security, errors, breakdowns
and failures are kept to a minimum and (y) that no material disruption
will be caused to ADI or any material part of the business of ADI in
the event of a breach of security, error, breakdown or failure and (E)
are maintained to minimize the effects of bugs, viruses, logic bombs or
other contaminants, including without limitation, worms and Trojan
horses;
(iii) ADI holds the source code to all software comprised
within Company Information Technology Systems (other than Shrink-wrap
Software) and has made appropriate arrangements to ensure adequate
security of such source code. Other than in the ordinary course of
business, there has been no disclosure of the source code. ADI holds
all documents necessary to allow a reasonably skilled programmer to
make modifications to or enhancements of such software; and
(iv) In respect of Company Information Technology Systems,
there has not, in the last six (6) months, been: (A) any error,
breakdown or failure which has caused any material disruption to the
business of ADI or (B) any breach of security (whether or not resulting
in damage to Company Information Technology Systems).
(c) Effect of Agreement.
(i) The transactions contemplated by this Agreement shall
not affect the rights of ADI to have full and unrestricted access to
use each element of Company Information Technology Systems in the
manner in which such element has been used prior to Completion. Such
rights of access shall not be subject to the grant of any additional
rights or the use of any element of Company Information Technology
Systems on a shared basis with any person; and
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(ii) The transactions contemplated by this Agreement shall
not be a breach of any agreement or arrangement required to be set out
under Section 6.08(a)(ii).
(d) Nothing in this Section 6.08 excludes or limits the
application of any other warranty in Annex 6 to any element of Company
Information Technology Systems (including without limitation, any software).
Section 6.09. Commercial Arrangements and Conduct.
(a) Material Contracts. Set out at Section 6.09 of the European
Disclosure Memorandum are details of the following contracts:
(i) Any contract of guarantee, indemnity or suretyship or
any contract to secure any obligation of any person;
(ii) Any agreement between ADI and a major distributor,
supplier or customer (representing more than 10% of services per annum)
of ADI;
(iii) Any joint venture, consortium or partnership
agreement to which ADI is a party;
(iv) Any sale or purchase option affecting any material
assets owned by ADI;
(v) Any contract a term of which is enforceable by a
person who is not a party to that contract;
(vi) Any agreement relating to the acquisition or
disposition of any business (whether by merger, sale of stock, sale of
assets or otherwise);
(vii) Any agreement the consideration for which is fixed by
reference to any index of any kind; or
(viii) Any agreement not made in the ordinary course of
business that is material to the UK Business or is of a long-term
nature (or being of a term greater than 12 months or incapable of
termination by it in accordance with its terms on six months notice or
less); and
(b) European Assumed Contracts.
(i) Each material European Assumed Contract is a valid
and binding agreement and so far as AHL Europe is aware is in full
force and effect, and to the knowledge of ALH Europe no party thereto
is in default or breach in any material respect under the terms of any
such material European Assumed Contract. Section 6.09(b) of the
European Disclosure Memorandum contains an accurate description of any
and all material disputes arising under or with respect to the material
European Assumed
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Contracts which are known to AHL Europe and which could reasonably be
expected to result in a customer's termination of that material
European Assumed Contract.
(ii) AHL Europe has not received any written notice or, so
far as the Sellers are aware, any oral notice that any of the clients
under any of the material European Assumed Contracts wish to terminate
such material European Assumed Contracts.
(c) Restrictive Agreements and Anti-competitive Behavior
(i) ADI is not, and has not been, at any time in the 12
month period up to and including the Closing Date, party to any
agreement between undertakings, decision by any association of
undertakings or concerted practice which in any material respect
infringes or infringed Article 81(1) EC Treaty (ex Article 85(1))
(other than one which is or was exempted under Article 81(3) EC Treaty
(ex Article 85(3)) in any respect which would result in a material
provision of that agreement being unenforceable or would expose ADI to
the risk of financial penalties;
(ii) ADI is not party to any agreement which should have
been registered under the RTPA and as a result a material provision of
which agreement is unenforceable under that Act;
(iii) ADI is not, and has not been, at any time in the 12
month period up to and including the Closing Date, party to any
conduct, course of conduct, arrangement, action or omission which
constitutes an abuse of a dominant position under Article 82 EC Treaty
(ex Article 86);
(iv) ADI does not infringe and has not, at any time in the
12 month period up to and including the Closing Date, infringed in any
material respect any legislation applicable in France or Germany or any
other jurisdiction in which ADI carried on business prior to the
Closing Date relating to anti-competitive agreements or practices or
behavior or any similar matter, similar in extent to Articles 81 or 82
EC Treaty, in any respect with would result in a material provision of
an agreement being unenforceable or would expose ADI to the risk of
financial penalties;
(v) Neither ADI, nor AHL Europe in relation to ADI, is
bound by, or party to, any order or decision made by or undertakings
(binding or not) given to the European Commission, European Court of
Justice, European Court of First Instance, the Office of Fair Trading,
the Secretary of State for Trade and Industry, any utility or similar
statutory regulatory body, the Restrictive Practices Court, the
Competition Commission or any other court, tribunal or similar
authority in France or Germany or any other jurisdiction in which ADI
carried on business prior to the Closing Date;
(vi) ADI is not, and has not been, party to any agreement
between undertakings, decision by any association of undertakings or
concerted practice which infringes or infringed the Chapter I
prohibition of the Competition Xxx 0000 ("the 1998
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Act") in any material respect (other than an agreement, decision or
practice exempted or excluded under the 0000 Xxx) in any respect which
would result in a material provision of that agreement being
unenforceable or would result in a material provision of that agreement
being unenforceable or would expose ADI to the risk of financial
penalties, and has not, in respect of any such agreement, decision or
practice, received or made any notification seeking early guidance,
guidance or a final decision from the Director General of Fair Trading;
(vii) ADI is not, and has not been, party to any conduct,
course of conduct, arrangement, action or omission which constitutes an
abuse of a dominant position under Chapter II of the 1998 Act and has
not at any time made a notification for guidance or decision under
Section 21 and/or 22 of the 1998 Act;
(viii) The Director General of Fair Trading has not, in
relation to ADI, imposed or threatened to impose any fine or penalty
upon AHL Europe or ADI including infringement of the Chapter I
prohibition or the Chapter II prohibition of the 1998 Act;
(ix) The Commission has not, in relation to ADI, imposed
or threatened to impose any fine or penalty upon AHL Europe or ADI for
infringement of the competition rules, including infringement of
Regulation 17, Regulation 4064/89 or Articles 81 or 82 of the EC
Treaty; and
(x) Neither ADI, nor AHL Europe in relation to ADI, have
within the last two years been party to any merger which was capable of
review by any anti-trust or similar authorities in any jurisdiction,
nor was subject to review by any authority in Germany, France or the UK
responsible for the control of such acquisitions.
(d) Notice of Official Action. ADI is not aware of any process,
notice or communication, formal or informal, by or on behalf of the Office of
Fair Trading, the Secretary of State for Trade and Industry, the Competition
Commission, the European Commission or any other authority of any country having
jurisdiction in anti-trust matters, in relation to any aspect of the business of
ADI or the conduct of ADI or any agreement or arrangement to which ADI is or
was, or is alleged to be or have been, a party, and so far as AHL Europe or ADI
are aware, ADI is not likely to receive any such process, notice or
communication;
(e) Certain Business Practices. Neither ADI or the European
Subsidiaries nor any of their respective directors, officers, employees and
agents has made, offered to make or authorized the unlawful payment or giving
anything of value to any governmental authority, political party or candidate
for political office or any other Person for purposes of (a) influencing or
affecting any act, decision or omission of a governmental authority, political
party or official or political candidate or (b) assisting ADI and/or any of the
European Subsidiaries in obtaining or retaining business for or with, or
directing business to, any Person. No funds or assets of ADI or the UK Business
have been used for illegal or improper purposes. No unrecorded fund or asset of
ADI or the UK Business has been established for any purpose which would violate
any law, rule or regulation. No accumulation or use of any funds of ADI or the
UK Business which would
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violate any law, rule or regulation has been made without being accounted for in
the books and records of ADI or the UK Business. No false or artificial entry
has been made in the books and records of ADI or the UK Business with advance
knowledge and understanding that any party of such payment would be used for any
purpose which could violate any local law, rule or regulation.
Section 6.10. Litigation, Defaults and Insurance.
(a) Legal Proceedings. Apart from normal debt collection, ADI is
not engaged or proposing to engage in any litigation, arbitration, prosecution
or other legal proceeding, and there are no claims or actions (whether criminal
or civil) in an amount in excess of (pound)35,000 in progress, or outstanding
against ADI, any of its assets or any of its directors or in respect of which
ADI is liable to indemnify any party concerned. The current insurance maintained
by or on behalf of ADI is reasonably regarded as adequate against risks normally
insured against by companies carrying on similar businesses. ADI has given all
required notice of such claims to its appropriate insurance carrier(s) and/or
all such claims have been properly reserved for in the European Accounts.
(b) Unlawful Acts by ADI. Neither ADI nor any of its officers or
employees has by any act or default committed:
(i) Any criminal or unlawful act in connection with the
business of ADI, other than minor road traffic offenses;
(ii) Any breach of trust in relation to the business or
affairs of ADI; or
(iii) Any breach of contract or statutory duty or any
tortious act which could entitle any third party to terminate any
contract to which ADI is a party or could lead to a claim against ADI
for damages, compensation or an injunction.
(c) Disputes. No dispute is outstanding between any member of the
European Group and the Purchaser of Silverwing Transport Services business under
the Agreement between ADI UK Limited and Air Links and the Airport Coach Company
Limited dated June 18, 1999, and the terms of such agreement relating to the
novation of specified contracts have been satisfied.
(d) Official Investigations. So far as the Sellers are aware no
governmental or official investigation or inquiry concerning ADI is in progress
or threatened.
(e) Policies. All policies of insurance and fidelity bonds taken
out in connection with the business or assets of ADI have been disclosed to the
Purchaser, are written in the name of ADI and so far as the Sellers are aware
are in full force and effect and ADI has not done or omitted to do anything
which would render any of those policies void or voidable. AHL Europe is not
aware of any threatened termination of, premium increase with respect to, or
material alteration of coverage under any such policies or bonds.
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(f) Liability Insurance. To the extent that ADI is required to
meet any of its obligations to its customers with due care, ADI has in place and
maintains insurance policies in respect of any contractual or tortious liability
due to failure to meet this standard, and such liability insurance policies:
(i) operate on a claims arising basis;
(ii) will remain in place until closing;
(iii) will be available to the Purchaser after Closing in
respect of periods up to Closing; and
(iv) Are not capable of being terminated on account of
non-disclosure or otherwise.
(g) Claims. No claim under any policy of insurance or fidelity
bonds taken out in connection with the business or assets of ADI is outstanding
and, so far as the AHL Europe is aware, there are no circumstances likely to
give rise to such a claim.
Section 6.11. Corporate Organization and Business.
(a) Corporate Existence and Power. ADI is duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all corporate powers and approvals required to carry on
its business as now conducted. AHL Europe has delivered to Purchaser true and
complete copies of the certificate of incorporation and any certificate of
incorporation on change of name for the European Group.
(b) Corporate Authorization. The execution, delivery and
performance by ADI of this Agreement and the consummation of the transactions
contemplated hereby are within ADI's corporate powers and have been duly
authorized by all necessary corporate action on the part of ADI and no other
corporate or other approval (including that of ADI's shareholders) is required
in connection therewith. This Agreement has been duly executed and delivered by
ADI and constitutes a legal, valid and binding agreement of ADI enforceable
against it in accordance with its terms.
(c) Governmental Authorization. The execution, delivery and
performance by ADI of this Agreement and the consummation of the transactions
contemplated hereby requires no action by or in respect of, or filing with, any
governmental body, agency or official other than those contemplated by Section
7.03 of the Purchase Agreement.
(d) Memorandum and Articles. The copies of the memorandum and
articles of association of ADI delivered to the Purchaser are true and complete
copies, having attached to them copies of all resolutions and agreements
referred to in Section 380(2) of the Companies Xxx 0000, and ADI has complied
with all the provisions of its memorandum and articles of association and, in
particular, has not entered into any ultra xxxxx transaction.
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(e) Register of Members. The register of members of ADI contains a
complete and accurate record of the members of ADI and ADI has not received any
notice of any application or intended application for rectification.
(f) Statutory Books and Registers. The statutory books and
registers of ADI and all current books of account are written up to date.
(g) Compliance with Companies Act. ADI and its officers have
complied with the provisions of the Companies Act, including the provisions as
to filing of returns, particulars, resolutions and other documents with the
Registrar of Companies. So far as the Sellers are aware, all legal requirements
have been complied with in connection with the formation of ADI and with issues
of its shares and other securities.
(h) Issued Shares. All the issued shares of ADI are fully paid up
and ADI has not exercised or purported to exercise or claimed any lien over any
of them.
(i) Conduct in Relation to Capital. ADI has not at any time:
(i) Repaid or redeemed or agreed to repay or redeem any
shares of any class of its share capital or otherwise reduced or agreed
to reduce any class of its issued share capital or purchased any of its
own shares or carried out any transaction having the effect of a
reduction of capital;
(ii) Made or resolved or agreed to make any issue of
shares or other securities by way of capitalization of profits or
reserves; or
(iii) Given any financial assistance in contravention of
Section 151 of the Companies Xxx 0000.
(j) Conversion Rights, Etc. No person has the right to call for
the issue of any share or loan capital of ADI by reason of any conversion rights
or under any option or other agreement.
(k) Powers of Attorney. There are no powers of attorney given by
ADI except any given incidental to and for the purposes only of enforcement of
any security.
(l) Licenses Permissions or Consents. All material licenses,
permissions and consents required for the carrying on of the business of ADI
have been obtained by it, are detailed in the European Disclosure Memorandum,
and are in full force and effect and AHL Europe is not aware of any
circumstances indicating that any of those licenses, permissions or consents is
likely to be revoked or not renewed in the ordinary course.
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(m) Other aspects of Carrying on Business. ADI:
(i) Does not use on its stationery or vehicles or
otherwise carry on business under any name other than its corporate
name;
(ii) Does not have any branch outside England or any
permanent establishment outside the United Kingdom; and
(iii) Has complied in all material respects with all legal
requirements applicable to its business, whether in the United Kingdom
or in any other country.
(n) Existence of Subsidiaries. ADI does not have any subsidiary
other than the European Subsidiaries.
(o) Particulars of the European Group. The particulars of the
European Group set out in Section 6.11(o) of the European Disclosure Memorandum
are correct and the share capital of each member of the European Group is
beneficially owned as shown there, validly issued and fully paid.
(p) Interests in Shares. Other than the shareholdings of ADI in
certain of the European Subsidiaries, ADI has no interest in the share capital
or other securities of any other body corporate.
(q) Domicile
(i) ADI Germany's domicile, registered office and
management are located in the UK. The management of ADI Germany makes
its business decisions within the UK.
(ii) The management of ADI Germany has filed the
establishment of a branch with the competent German Commercial
Register; all registrations as established by German law have been
filed; the current entry in the Commercial Register is correct and
complete, and all applications have been filed; all publications, if
required by applicable law, have been made.
Section 6.12. Employees.
(a) Disclosure of Material Facts
(i) All material facts and matters relating to the
employment of all employees of ADI (including, but not limited to their
respective salaries, ages, length of service, notice periods, terms and
conditions of employment, employment or benefits policies, share
incentive schemes, share option schemes or profit-share schemes and
entitlements under these schemes, all rights, and any other agreement
or arrangement relating to their employment) have been disclosed to the
Purchaser; and
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(ii) All material facts and matters relating to all
collective agreements, arrangements or other understandings with any
trade union, staff association or other body representing the employees
of ADI have been disclosed to the Purchaser.
(b) Compliance with Requirements. In this sub-section 6.12(b), in
relation to ADI Germany only, and with the exception of 6.12(b)(ii), "employee"
shall include employees, management employees, and agents. ADI has in relation
to each of its employees and to each of its former employees:
(i) Complied with its obligations under the Employment
Rights Xxx 0000, The Trade Union and Labour Relations (Consolidation)
Xxx 0000, The Sex Discrimination Xxx 0000, The Race Relations Xxx 0000,
Article 141 EC Treaty (ex Article 119), The Equal Treatment Directive,
The Disability Discrimination Act 1995 and all other statutes and
regulations relevant to its relations with the employee and with any
recognized trade union representing him and all collective agreements
from time to time in force relating to such relations or the conditions
of service of the employee and has maintained adequate and suitable
records regarding the service of the employee, discharged fully its
obligations to pay all salaries, wages, commissions, bonuses, overtime
pay, holiday pay, sick pay accrued entitlement under incentive schemes
PAYE and national insurance contributions and other benefits of or
connected with employment up to the date of this Agreement; and
(ii) Without prejudice to Section 6.12(b)(i) complied with
its obligations under the Employment Rights Xxx 0000, The Trade Union
and Labor Relations (Consolidation) Xxx 0000, The Sex Discrimination
Xxx 0000, The Race Relations Xxx 0000, Article 141 EC Treaty (ex
Article 119), The Equal Treatment Directive, The Disability
Discrimination Act 1995 and all other statutes and regulations relevant
to its relations with the employee and with any recognized trade union
representing him and all collective agreements from time to time in
force relating to such relations or the conditions of service of the
employee and has maintained adequate and suitable records regarding the
service of the employee above, complied in all material respects with
all its obligations under statute and other legal requirements
concerning the health and safety at work of each of the employees and
has not incurred any liability to any employee in respect of any
accident or injury which is not fully covered by insurance.
(c) Agreements. ADI has not entered into:
(i) Any agreement or arrangement to make any payments
(other than emoluments) to or on behalf of any of its directors or
employees;
(ii) Any contract of service with any employee which is
not terminable by ADI by three months' notice or less without payment
of compensation (except as provided by statute);
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(iii) Any agreement or arrangement for the provision of
services by a consultant;
(iv) Any agreement imposing an obligation on ADI to
increase the rates of remuneration of, or to make any bonus or
incentive payments or any benefits in kind or any payments under a
profit-sharing scheme to or on behalf of, any of its employees at any
future date;
(v) Negotiation for a change in the emoluments or other
terms of engagement of any grade of any of ADI's employees and no
change, negotiation or request for such a change is due or expected
within 6 months from the date of this Agreement; or
(vi) Any agreement or arrangement for the provision of
compensation on the termination of employment of any employee of ADI
beyond the minimum required by law.
(d) Disputes.
(i) No dispute has arisen within the last two (2) years
between ADI and a material number or category of its employees or
former employees and there are no present circumstances which are
likely to give rise to any such dispute;
(ii) There are no complaints pending or threatened against
ADI of any nature whatsoever in relation to any of its employees or
former employees and there is no industrial action or dispute
threatened or existing or anticipated in respect of or concerning any
of ADI's employees or former employees;
(iii) So far as AHL Europe is aware, no employee or former
employee has any right to ownership of any UK Intellectual Property
Rights and/or US Intellectual Property Rights in any invention or
improvement made or discovered by him in the course of employment with
ADI or otherwise any compensation or payment in respect of or right to
use any such invention or improvement;
(iv) There are no inquiries or investigations existing,
pending or threatened affecting ADI by the Equal Opportunities
Commission or Commission for Racial Equality;
(v) No employee has given notice of termination of his
contract of employment or is under notice of dismissal;
(vi) ADI has not offered any contract of employment
pursuant to which base salary of over (pound) 50,000 is payable to any
person, which offer remains outstanding; and
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(vii) There is no person employed or previously employed by
ADI who is on leave, absent on grounds of disability or illness or
other leave of absence and have a statutory or contractual right to
return to work for ADI.
(e) Industrial Relations
(i) ADI Germany is not party to any contract, agreement
or arrangement with any trade union or other body or organization
representing any of its employees; and
(ii) At the Closing Date no person will be employed by the
European Group whose duties as an employee or director do not wholly or
mainly relate to the business carried on by the European Group.
Section 6.13. Pensions.
(a) With the exception of the Disclosed Schemes and the GPP, there
are no agreements or arrangements for the provision of any relevant benefits (as
defined in Section 612(1) of the Income and Corporation Taxes Act 1988 with the
omission of the exception in that definition) for any employee or officer or
former employee or officer of ADI or for any spouse or dependent of any such
person nor has any proposal been announced to establish any such agreement or
arrangement.
(b) Full particulars of any arrangements for the provision of
medical, sickness, permanent health or similar cover for employees or officers
or former employees or officers of ADI or for any spouse or dependent of any
such person have been provided to the Purchaser.
(c) ADI has no obligation to contribute to any personal pension
scheme (as defined in Section 630 of the Taxes Act) in respect of any employee
or officer or former employee or officer of ADI.
(d) True and complete copies of the trust deeds and rules and
other documents containing the provisions currently governing the Disclosed
Schemes and full particulars of the benefits and entitlements under the
Disclosed Schemes (including any discretionary practices) and the contributions
payable to the Disclosed Schemes have been provided to the Purchaser and there
is no obligation to provide benefits under the Disclosed Schemes other than as
revealed in such documents and particulars nor is there anything contained in
any announcement or other communication to any members of the Disclosed Schemes
which is inconsistent with the information given in such documents and
particulars.
(e) No change in the benefits under the Disclosed Schemes has been
announced or is under consideration.
(f) ADI is not providing and has not at any time provided or
promised to provide ex gratia pensions or other benefits in respect of any
person.
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(g) True and complete copies of all material announcements and
other communications that have been issued to current and former members of the
Disclosed Schemes have been provided to the Purchaser.
(h) No discretion or power has been exercised under the Disclosed
Schemes to:
(i) Augment benefits;
(ii) Admit to membership anyone not otherwise eligible for
admission; or
(iii) Pay a contribution or provide a benefit which would
not otherwise be paid or provided.
(i) True and complete copies of all agreements relating to the
provision of any services in connection with the Disclosed Schemes have been
provided to the Purchaser.
(j) True and complete copies of any schedule of contributions
maintained in relation to the Disclosed Schemes, the letters of appointment of
all professional advisers, and all actuarial certificates issued or members'
written consents given in relation to any amendments that have been made to the
provisions of the Disclosed Schemes have been provided to the Purchaser.
(k) ADI has duly complied with its obligations under the Disclosed
Schemes and all amounts due to be paid to the Disclosed Schemes have been paid
when due.
(l) None of the current or former trustees of the Disclosed
Schemes have been disqualified from acting as such pursuant to the Pensions Xxx
0000.
(m) All death in service benefits under the Disclosed Schemes are
fully insured at normal rates for persons in good health and true and complete
copies of the insurance policies or agreements in question have been provided to
the Purchaser and all premiums by way of insurance which are payable in respect
of the Disclosed Schemes by ADI or any other current or former participating
employer in the Disclosed Schemes or by the trustees or other administrators of
the Disclosed Schemes have been duly paid to the relevant insurance company and
the rates at which such premiums are payable and any discrepancy in the amounts
currently payable in respect of individual members of the Disclosed Schemes have
been disclosed to the Purchaser.
(n) The Disclosed Schemes are approved as exempt approved schemes
(within the meaning of Chapter I of Part XIV of the Taxes Act ) and there is no
reason why such approval will or may cease.
(o) The Disclosed Schemes have at all times been administered in
accordance with the trusts powers and provisions of the Disclosed Schemes and
the requirements of legislation (including without limitation Article 141 EC
Treaty (ex Article 119) and of the Pension Schemes Office and with due regard to
the general requirements of trust law).
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(p) The membership data relating to the Disclosed Schemes that has
been disclosed to the Purchaser is complete and accurate in all material
respects.
(q) Full details of all indemnities provided to the trustees of
the Disclosed Schemes or to any other person in relation to the Disclosed
Schemes have been disclosed to the Purchaser.
(r) Full details of the current procedures for the appointment of
trustees of the Disclosed Schemes and of all steps that have been taken with a
view to complying with the statutory requirements relating to member-nominated
trustees or directors (whether by establishing alternative arrangements or
otherwise) have been disclosed to the Purchaser.
(s) There are not in respect of the Disclosed Schemes or the
benefits thereunder any claims or actions (including without limitation any
complaints made under any internal disputes procedure maintained in respect of
the Disclosed Schemes and any references made to the Pensions Ombudsman or the
Occupational Pensions Advisory Service) in progress, pending, threatened or
anticipated (other than routine claims for benefits).
(t) Full particulars of the assets of the Disclosed Schemes have
been disclosed to the Purchaser by reference to the categories listed in
Schedule 3 to the Occupational Pension Schemes (Disclosure of Information)
Regulations 1996 and none of the assets are employer-related investments (within
the meaning of those Regulations).
(u) The assets of the Disclosed Schemes are free of all charges
and encumbrances and are in the possession or control of the trustees or a duly
appointed custodian.
(v) No company or employer other than ADI participates or has
participated in the Disclosed Schemes.
(w) No payment of assets from the Disclosed Schemes has at any
time been made to the European Group or any other current or previous
participating employer in the Disclosed Schemes.
(x) All material details of the arrangements for the
administration and management of the Disclosed Schemes have been disclosed to
the Purchaser.
(y) All actuarial, consultancy, legal and other fees, charges or
expenses in respect of the Disclosed Schemes payable by ADI or the Trustees of
the Disclosed Schemes have been paid and no services have been provided in
respect of the Disclosed Schemes in respect of which an account or other invoice
has not been rendered.
(z) None of the current or former advisers to the Disclosed
Schemes have at any time had cause to report any wrongdoing or irregularity to
the Occupational Pensions Regulatory Authority ("OPRA"), and there are not and
have not at any time been any circumstances which might require such a report to
be made.
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(aa) None of the current or former trustees of the Disclosed
Schemes nor ADI nor any other current or former participating company in the
Disclosed Scheme nor any current or former adviser to the Disclosed Schemes have
at any time corresponded with OPRA on any issue which might lead to sanctions
being imposed in relation to the Disclosed Schemes or on any person or body in
relation to the Disclosed Schemes.
(bb) No civil or criminal penalties, fines or other sanctions have
been imposed on any of the current or former trustees of the Disclosed Schemes
or on ADI or on any of the current or former companies participating in the
Disclosed Schemes and there is no reason why OPRA should seek to wind up the
Disclosed Schemes.
(cc) Save as disclosed in the European Disclosure Memorandum, no
member of the European Group is under any obligation to provide any pension to
any of their respective employees.
(dd) ADI has not given any promise or assurance (whether legally
binding or otherwise) to any person that his or her benefits under the Disclosed
Schemes and/or the GPP will equate to any particular level.
Section 6.14. Insolvency.
(a) No order has been made and no resolution has been passed for
the winding up of, or a provisional liquidator to be appointed in respect of,
ADI and no petition has been presented and no meeting has been convened for the
purpose of winding up ADI.
(b) No administration order has been made and no petition for such
an order has been presented in respect of ADI.
(c) No receiver (which expression shall include an administrative
receiver) has been appointed in respect of ADI.
(d) ADI is not insolvent or unable to pay its debts within the
meaning of Section 123 of the Insolvency Xxx 0000 and ADI has not stopped paying
its debts as they fall due.
(e) No voluntary arrangement has been proposed under Section 1 of
the Insolvency Xxx 0000 in respect of ADI.
(f) No event analogous to any of the foregoing has occurred in any
jurisdiction outside England.
(g) No unsatisfied judgment for an amount in excess
of (pound) 10,000 is outstanding against ADI.
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Section 6.15. Data Protection.
(a) Registration. Each company within the European Group is
registered under, or has made notification under, any applicable data protection
legislation (including, where relevant, the Data Protection Act 1998) in respect
of all personal data processed by it. The details contained in the registration
or notification are correct and suitable for the purposes for which each company
within the European Group processes personal data. Accurate and complete
particulars of the registration or notification are set out in Section 6.16(a)
of the European Disclosure Memorandum.
(b) Notices and Enforcements. No company within the European Group
has received an Enforcement Notice under any applicable data protection
legislation or any draft of such a notice, nor any other communication from any
data protection officer indicating any breach or alleged breach of any
applicable data protection legislation.
(c) Compensation. No individual has been awarded compensation from
any company in the European Group under any applicable data protection
legislation.
(d) Access. Each company in the European Group has either complied
in all material respects with requests under any applicable data protection
legislation from data subjects for access or changes to or deletions of personal
data or has validly refused such requests on the basis of an exemption under any
applicable data protection legislation and no such requests are outstanding.
(e) Compliance with Legislation. Each company in the European
Group has complied in all material respects with all relevant requirements of
all applicable data protection legislation.
Section 6.16. Recitals and Disclosures. The recitals and Schedules to
the Agreement are true and accurate and all information and documents listed in
Schedule 2 of the European Disclosure Memorandum is true and accurate in all
material respects and are not misleading in any material respect:
Section 6.17. Application of Warranties to the Subsidiaries. Each of
the statements in this Article 6 (other than the statements in Section 6.02 (d),
"Application of Warranties to ADI's Accounts" and in Section 6.11 (o),
"Particulars of the European Group") could be true and accurate in relation to
each of the European Subsidiaries if:
(a) For references to ADI or to the European Group (except in the
expression "any company in the European Group") there were substituted
references to that European Subsidiary;
(b) In Section 6.11(n) the words "other than the European
Subsidiaries" were omitted; and
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(c) In Section 6.11(p) the words "other than the shareholdings of
ADI in certain of the European Subsidiaries," were omitted.
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ANNEX XI
US TAX MATTERS ANNEX
This US Tax Matters Annex XI (the "Annex XI") is attached to, is a part
of, and is incorporated by reference in that certain Acquisition Agreement among
Securicor plc, Securicor Georgia, Inc., and AHL Services, Inc., Xxxxxxxxxxx
Holdings, Ltd., Xxxxxxxxxxx, Inc., Xxxxxxxxxxx Security, Inc., the ADI Group
Limited, and AHL Europe Limited, of even date herewith (the "Agreement"). To the
extent the Agreement and this Annex XI conflict, this Annex XI shall govern.
Section 11.01. Definitions
For purposes of this Annex XI, the capitalized terms listed below shall
have the meanings indicated. Capitalized terms not listed below and not
otherwise defined in this Annex XI shall have the meanings specified in the
Agreement.
"Affiliated Group" means (a) an affiliated group within the meaning of
Section 1504(a) of the Code, or any similar group defined under a similar
provision of state, local or foreign law, or (b) any group of Persons that files
a Tax Return, or is liable for the Taxes of each other, on an affiliated,
consolidated, combined or unitary basis.
"Allocation Statement" means that written document which allocates the
Purchase Price and liabilities of Xxxxxxxxxxx Security and its Subsidiaries
among the US Assets, including the US Transportation Assets and the assets of
Xxxxxxxxxxx Security and its Subsidiaries. The Allocation Statement shall also
show the "adjusted grossed-up basis" amount (as determined under Treasury
Regulation ss. 1.338-5T) and the "aggregate deemed sale price" (as determined
under Treasury Regulation ss. 1.338-4T) with respect to the sale and purchase of
the stock of Xxxxxxxxxxx Security herein, and allocate such amounts among the
assets of Xxxxxxxxxxx Security and its Subsidiaries pursuant to Treasury
Regulations ss. 1.338-6T and -7T.
"Deferred Intercompany Transaction" has the meaning set forth in
Treasury Regulation ss. 1.1502-13.
"Excess Loss Account" has the meaning set forth in Treasury Regulation
ss. 1.1502-19.
"Post-Closing Tax Period" means (i) any Tax period beginning after the
Closing Date, and (ii) with respect to a Tax period that begins on or before the
Closing Date and ends after the Closing Date, the portion of such Tax period
beginning after the Closing Date.
"Pre-Closing Tax Period" means (i) any Tax period ending on or before
the Closing Date, and (ii) with respect to a Tax period that begins on or before
the Closing Date and ends after the Closing Date, the portion of such Tax period
ending on the Closing Date.
"Purchaser Indemnitees" means Purchaser, its Affiliates and, effective
upon the Closing Date, Xxxxxxxxxxx Security and its Subsidiaries.
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"Section 338(h)(10) Election" has the meaning set forth in Section
11.03 of this Annex XI.
"Tax" means (i) any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A of
the Code), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Asset" means any net operating loss, net capital loss, investment
Tax credit, foreign Tax credit, charitable deduction or any other credit or Tax
attribute which could reduce Taxes including, without limitation, deductions and
credits related to alternative minimum Taxes).
"Tax Authority" means any governmental authority, agency or
instrumentality (whether federal, state, local, or foreign) responsible for the
imposition of any Tax.
"Tax Return" means any report, estimate, declaration of estimated Tax,
information statement, return or other document required to be filed in
connection with any Taxes, including but not limited to original (or amended)
returns and filings, requests for extensions of time, requests for a change in
method of accounting, information statements and reports, claims for refund, all
documents required to be filed in connection with any claim, audit, action,
suit, proceeding, or investigation relating to Taxes, and any amendments to the
foregoing.
"Tax Sharing Agreement" means any existing Tax sharing agreements or
arrangements (whether or not written) binding any of Xxxxxxxxxxx Security or its
Subsidiaries that provide for the allocation, apportionment, sharing or
assignment of any Tax liability or benefit, or the transfer or assignment of
income, revenues, receipts, or gains for the principal purpose of determining
any Person's Tax liability.
"Treasury Regulation" or "Treasury Regulations" shall mean a permanent
or temporary regulation of the Department of Treasury under the Code, as such
regulation may be amended from time to time.
"US Sellers" shall mean Holdings and AHL (in its capacity as common
parent of the Affiliated Group that includes Holdings and Xxxxxxxxxxx Security).
"US Tax Disclosure Memorandum" shall mean the disclosure memorandum
delivered by Holdings as of the date of the execution of the Agreement relating
to Tax matters of the US Business, the sections of which shall correspond to the
sections of this Annex XI.
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Section 11.02. Tax Representations
Holdings represents and warrants to Purchaser as of the date hereof and
as of the Closing Date that, except as set forth on the US Tax Disclosure
Memorandum:
(a) Each of Xxxxxxxxxxx Security and its Subsidiaries has filed
all Tax Returns that it was required to file and all such Tax Returns were
correct and complete in all material respects.
(b) All Taxes owed by any of Xxxxxxxxxxx Security and its
Subsidiaries (whether or not shown on any Tax Return) have been paid.
(c) There are no liens for Taxes upon any of the assets of any of
Xxxxxxxxxxx Security and its Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Tax, excluding liens for Taxes which are
not yet due and payable.
(d) Xxxxxxxxxxx Security and its Subsidiaries have withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party, and complied with all information reporting
and backup withholding requirements.
(e) The charges, accruals and reserves for Taxes with respect to
Xxxxxxxxxxx Security and its Subsidiaries for any Pre-Closing Tax Period
(including any Pre-Closing Tax Period for which no Tax Return has yet been
filed) reflected on the books of Xxxxxxxxxxx Security and its Subsidiaries
(excluding any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) are adequate to cover such Taxes. All
information set forth in the notes to such books relating to Tax matters is true
and complete. None of Xxxxxxxxxxx Security and its Subsidiaries currently is the
beneficiary of any extension of time within which to file any Tax Return.
(f) None of Xxxxxxxxxxx Security and its Subsidiaries (or any
member of any Affiliated Group of which Xxxxxxxxxxx Security or any of its
Subsidiaries is or has been a member) has granted any extension or waiver of the
statute of limitations period in respect of any Taxes or agreed to any extension
of time with respect to a Tax assessment or deficiency.
(g) There is no claim, audit, action, suit, proceeding, or
investigation concerning any Tax or Tax Asset of Xxxxxxxxxxx Security or its
Subsidiaries either (A) claimed or raised by any Tax Authority in writing or (B)
as to which any of the following Persons has knowledge based upon personal
contact with any agent of such authority: the US Sellers, the directors and
officers of Xxxxxxxxxxx Security or its Subsidiaries, and the employees
responsible for Tax matters of Xxxxxxxxxxx Security or its Subsidiaries.
(h) As far as the US Sellers are aware, no claim has ever been
made by an authority in a jurisdiction where any of Xxxxxxxxxxx Security and its
Subsidiaries does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction.
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(i) There are no requests for rulings or determinations in respect
of any Tax or Tax Asset pending between any of Xxxxxxxxxxx Security or its
Subsidiaries and any Tax Authority. None of Xxxxxxxxxxx Security or its
Subsidiaries is a lessee under any arrangement that would be treated as a
financing for United States federal income Tax purposes.
(j) None of the US Sellers, Xxxxxxxxxxx Security, any Subsidiary
of Xxxxxxxxxxx Security, or any other Person on behalf of Xxxxxxxxxxx Security
or any of its Subsidiaries, has entered into nor will it enter into any
agreement or consent pursuant to Section 341(f) of the Code.
(k) None of Xxxxxxxxxxx Security and its Subsidiaries has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(l) None of Xxxxxxxxxxx Security and its Subsidiaries is a party
to any understanding or arrangement described in Section 6111(d)(2) of the Code.
(m) None of Xxxxxxxxxxx Security and its Subsidiaries has made any
payments, is obligated to make any payments, or is a party to any agreement that
under certain circumstances could obligate it to make any payments that will not
be deductible under Sections 280G or 162(m) of the Code.
(n) None of Xxxxxxxxxxx Security and its Subsidiaries is or has
been a member of any Affiliated Group other than one of which Holdings or AHL
was the common parent.
(o) None of Xxxxxxxxxxx Security and its Subsidiaries is a party
to any Tax Sharing Agreement.
(p) The US Tax Disclosure Memorandum lists all federal, state,
local, and foreign income Tax Returns filed with respect to any of Xxxxxxxxxxx
Security and its Subsidiaries for Tax periods ended on or after December 26,
1997, indicates those Tax Returns that have been audited, indicates those Tax
Returns that currently are the subject of audit, and indicates for each Tax
Return whether the applicable period for assessment under applicable law, after
giving effect to extensions or waivers, has expired.
(q) The US Tax Disclosure Memorandum contains a list of all
jurisdictions (whether state, local or foreign) to which any material amount of
Tax is properly payable by Xxxxxxxxxxx Security or any of its Subsidiaries.
(r) The US Sellers have delivered to Purchaser correct and
complete copies of all federal income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by any of Xxxxxxxxxxx
Security and its Subsidiaries since December 26, 1997.
(s) None of Xxxxxxxxxxx Security and its Subsidiaries is currently
under any contractual obligation to pay any of the following: (i) any liability
for the payment of any Tax as a result of being a member of an Affiliated Group,
or being a party to any agreement or
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arrangement as a result of which the liability of Xxxxxxxxxxx Security or any of
its Subsidiaries to a Tax Authority is determined or taken into account with
reference to the liability of any other Person; and (ii) any liability for the
payment of any amount as a result of being party to any Tax Sharing Agreement or
with respect to the payment of any Tax or any amount of the type described in
clause (i) as a result of any express or implied obligation (including, but not
limited to, an indemnification obligation).
(t) Each Affiliated Group has filed all Tax Returns that it was
required to file for each Tax period during which any of Xxxxxxxxxxx Security
and its Subsidiaries was a member of the group and all such Tax Returns were
correct and complete in all material respects.
(u) All Taxes owed by any Affiliated Group (whether or not shown
on any Tax Return) have been paid for all Tax periods during which any of
Xxxxxxxxxxx Security and its Subsidiaries was a member of such group.
(v) Except as provided on the US Tax Disclosure Memorandum, no
Affiliated Group has waived any statute of limitations in respect of any Taxes
or agreed to any extension of time with respect to an Tax assessment or
deficiency for any Tax period during which any of Xxxxxxxxxxx Security and its
Subsidiaries was a member of such group.
Section 11.03. Section 338(h)(10) Election
(a) The US Sellers and Purchaser shall take all steps necessary to
make a timely, effective and irrevocable election under Section 338(h)(10) of
the Code and under any comparable statutes in any other jurisdiction with
respect to each of Xxxxxxxxxxx Security and its Subsidiaries (collectively, the
"Section 338(h)(10) Election") arising out of the purchase and sale of the stock
of Xxxxxxxxxxx Security herein, and to file such election in accordance with all
applicable laws.
(b) The Section 338(h)(10) Election shall properly reflect the
Allocation Statement. The US Sellers and Purchaser agree to act in accordance
with the Allocation Statement in the preparation, filing and audit of any Tax
Return relating to the Section 338(h)(10) Election.
(c) For the avoidance of all doubt and notwithstanding anything
else in this Agreement to the contrary, the US Sellers will pay any federal,
state, local, domestic or foreign Tax attributable to the making of the Section
338(h)(10) Election and will indemnify the Purchaser Indemnitees against any
Taxes, Tax Losses or Damages arising out of any failure to pay such Tax.
Section 11.04. Other Covenants
(a) Without the prior written consent of Purchaser, none of the US
Sellers, their Affiliates, Xxxxxxxxxxx Security, or any Subsidiaries of
Xxxxxxxxxxx Security shall, to the extent it may affect or relate to the
liability for Taxes other than federal income Taxes of any of Xxxxxxxxxxx
Security or its Subsidiaries, make or change any Tax election (other than making
the Section 338(h)(10) Election pursuant to Section 11.03 of this Annex XI,
above), change any
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annual Tax accounting period, adopt or change any method of Tax accounting, file
any amended Tax Return, enter into any closing agreement, settle any Tax claim
or assessment, surrender any right to claim a Tax refund, consent to any
extension or waiver of the limitations period applicable to any Tax claim or
assessment or take or omit to take any other action, if any such action or
omission would have the effect of increasing the Tax liability or reducing any
Tax Asset of Xxxxxxxxxxx Security, any of its Subsidiaries, Purchaser or any
Affiliate of Purchaser for any Post-Closing Tax Period.
(b) The parties shall negotiate in good faith to prepare a
mutually agreeable Allocation Statement. If the parties mutually agree upon an
Allocation Statement within ninety-five (95) days after the Closing Date, then
the US Sellers, Purchaser, Xxxxxxxxxxx Security and the Subsidiaries of
Xxxxxxxxxxx Security shall file all Tax Returns in a manner consistent with such
Allocation Statement.
(c) The US Sellers will include the income of Xxxxxxxxxxx Security
and its Subsidiaries (including any deferred income triggered into income by
Treasury Regulations ss. 1.1502-13 and -14 and any Excess Loss Accounts taken
into income under Treasury Regulation ss. 1.1502-19) on the consolidated United
States federal income Tax Returns of AHL or Holdings (as appropriate) for all
Pre-Closing Tax Periods and pay any United States federal income Taxes
attributable to such income. Xxxxxxxxxxx Security and its Subsidiaries will
furnish Tax information to the US Sellers for inclusion in AHL's consolidated
United States federal income Tax Return for the Pre-Closing Tax Period ending on
the Closing Date in accordance with Xxxxxxxxxxx Security's past custom and
practice. Except as otherwise contemplated in Section 11.03, the US Sellers will
take no position on such returns that relate to Xxxxxxxxxxx Security or its
Subsidiaries that would adversely affect Xxxxxxxxxxx Security and its
Subsidiaries after the Closing Date. The income of Xxxxxxxxxxx Security and its
Subsidiaries will be apportioned to the period up to and including the Closing
Date and the period after the Closing Date by closing the books of Xxxxxxxxxxx
Security and its Subsidiaries as of the end of the Closing Date.
(d) The Purchaser will allow the US Sellers and their counsel to
participate at their own expense in any audits of Tax Returns of Xxxxxxxxxxx
Security for Pre-Closing Tax Periods to the extent the outcome of the audit
could cause the US Sellers to be liable for any amount under this Annex XI. The
Purchaser will not settle any such audit in a manner which would adversely
affect the US Sellers after the Closing Date without the prior written consent
of the US Sellers.**
(e) The US Sellers will immediately pay to the Purchaser any Tax
refund (or reduction in Tax liability) resulting from a carryback of a
Post-Closing Period Tax Asset of Xxxxxxxxxxx Security or any of its Subsidiaries
(excluding for this purpose Tax Assets with respect to federal income Taxes)
into any Tax Return of an Affiliated Group of which a US Seller is a member when
such refund or reduction is realized by such Affiliated Group. The US Sellers
will cooperate with Xxxxxxxxxxx Security and its Subsidiaries in obtaining such
refunds (or reductions in Tax liability), including through the filing of
amended Tax Returns or refund claims. The Purchaser agrees to indemnify the US
Sellers for any Taxes resulting from the disallowance of such Post-Closing
Period Tax Asset on audit or otherwise. In all other cases, the
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Purchaser will immediately pay to the US Sellers the amount of any Tax refund or
credit received by Xxxxxxxxxxx Security or any of its Subsidiaries with respect
to any Pre-Closing Tax Period, unless the amount of such refund or credit was
included as an asset of Xxxxxxxxxxx Security or one of its Subsidiaries on the
Closing Balance Sheet.
(f) The US Sellers shall prepare (or cause to be prepared) and
file (or cause to be filed) all Tax Returns for Xxxxxxxxxxx Security and its
Subsidiaries for all Tax periods ending on or prior to the Closing Date and
which are filed after the Closing Date. The US Seller shall permit the Purchaser
to review and comment on each such Tax Return described in the preceding
sentence (other than income Tax Returns with respect to periods for which a
consolidated, unitary or combined income Tax Return of the US Sellers will
include the operations of Xxxxxxxxxxx Security and its Subsidiaries) prior to
filing. The US Sellers shall pay all Taxes of Xxxxxxxxxxx Security and its
Subsidiaries with respect to such Tax periods, or shall reimburse Purchaser
within fifteen (15) days after payment by Purchaser or Xxxxxxxxxxx Security and
its Subsidiaries of such Taxes, to the extent such Taxes are not reflected in
the reserve for Tax liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) shown on
the face of the Closing Balance Sheet.
(g) Purchaser shall prepare (or cause to be prepared), in a manner
consistent with past custom and practice, and file (or cause to be filed) all
Tax Returns of Xxxxxxxxxxx Security and its Subsidiaries for Tax periods which
begin before the Closing Date and end after the Closing Date. Purchaser shall
permit the US Sellers to review and comment on each such Tax Return by providing
copies of such Tax Returns (or of such portions of such Tax Returns that relate
to US Sellers), upon receipt of which US Sellers shall have thirty (30) days to
complete such review and comment. The US Sellers shall pay to Purchaser within
fifteen (15) days after the date on which Taxes are paid with respect to such
Tax periods an amount equal to the portion of such Taxes which relates to the
Pre-Closing Tax Period to the extent such Taxes are not reflected in the reserve
for Tax liability (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) shown on the face of the
Closing Balance Sheet. For these purposes, in the case of any Taxes that are
imposed on a periodic basis and are payable for a Tax period that includes (but
does not end on) the Closing Date, the portion of such Tax which relates to the
Pre-Closing Tax Period shall be determined in accordance with Section 11.07(c)
of this Annex XI.
(h) Purchaser shall have received prior to Closing, an affidavit
from each US Seller in the form of Schedule 11.04(h), signed by a responsible
officer of such US Seller under penalties of perjury that to the officer's
knowledge and belief such US Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Code and Income Tax Regulations).
Section 11.05. Termination of Existing Tax Sharing Agreements
Any and all existing Tax Sharing Agreements to which Xxxxxxxxxxx
Security or any of its Subsidiaries is a party (a) shall be terminated as of the
date hereof, (b) shall have no further effect for any Tax period (whether a
current, future or past period), and (c) after the date hereof,
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Xxxxxxxxxxx Security and its Subsidiaries shall not be bound thereby or have any
liability thereunder. This Agreement shall be the sole Tax sharing agreement
relating to Xxxxxxxxxxx Security or any of its Subsidiaries for all Pre-Closing
Tax Periods.
Section 11.06. Cooperation on Tax Matters
(a) Purchaser and the US Sellers shall cooperate fully, as and to
the extent reasonably requested by the other party, in connection with the
preparation and filing of any Tax Return (including any report required to be
filed as a result of the transactions contemplated herein), any audit,
litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Xxxxxxxxxxx Security, its Subsidiaries and the US
Sellers agree (i) to retain all books and records with respect to Tax matters
pertinent to Xxxxxxxxxxx Security and its Subsidiaries relating to any
Pre-Closing Tax Period, and to abide by all record retention agreements entered
into with any Tax Authority until the expiration of the statute of limitations
(and, to the extent notified by Purchaser or the US Sellers, any extensions
thereof) of the respective Tax periods, and to abide by all record retention
agreements entered into with any Tax Authority, and (ii) to give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if the other party so requests, Xxxxxxxxxxx
Security, its Subsidiaries or the US Sellers, as the case may be, shall allow
the other party to take possession of such books and records.
(b) Purchaser and the US Sellers further agree, upon request, to
use all reasonable efforts to obtain any certificate or other document from any
governmental authority or customer of Xxxxxxxxxxx Security or any of its
Subsidiaries thereof or any other person as may be necessary to mitigate, reduce
or eliminate any Tax that could be imposed (including but not limited to with
respect to the transactions contemplated herein).
(c) Purchaser and the US Sellers further agree, upon request, to
provide the other party with all information that either party may be required
to report pursuant to applicable law with respect to the transactions
contemplated herein.
Section 11.07. Indemnification for Taxes
(a) The US Sellers hereby indemnify each Purchaser Indemnitee
against, and agree to hold each Purchaser Indemnitee harmless from, without
duplication, any and all of the following amounts (such amounts hereinafter
referred to as "Purchaser Tax Losses"):
(A) any Tax of Xxxxxxxxxxx Security or its Subsidiaries
imposed with respect to a Pre-Closing Tax Period to the extent such Tax
is not paid prior to the Closing Date nor reflected in the reserve for
Tax liability (rather than any reserve for deferred Taxes established
to reflect timing differences between book and Tax income) shown on the
face of the Closing Balance Sheet;
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(B) any Tax of Xxxxxxxxxxx Security or its Subsidiaries
incurred as a result of the Section 338(h)(10) Election;
(C) any liability of Xxxxxxxxxxx Security or any of its
Subsidiaries for the payment of any Tax as a result of being a member
of an Affiliated Group in any Pre-Closing Tax Period, or being a party
to any agreement or arrangement in any Pre-Closing Tax Period as a
result of which liability of Xxxxxxxxxxx Security or any of its
Subsidiaries to a Tax Authority is determined or taken into account
with reference to the liability of any other Person;
(D) any liability of Xxxxxxxxxxx Security or any of its
Subsidiaries for the payment of any amount as a result of being party
to any Tax Sharing Agreement in any Pre-Closing Tax Period or with
respect to the payment of any Tax or any amount of the type described
in clause (C) as a result of any express or implied obligation
(including, but not limited to, an indemnification obligation);
(E) any Tax of Xxxxxxxxxxx Security or its Subsidiaries
resulting from a breach of any of the provisions of this Annex XI by
the US Sellers, and
(F) any liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' and
accountants' fees and expenses), losses, damages, assessments,
settlements or judgments arising out of or incident to the imposition,
assessment or assertion of any Tax described in this paragraph (a)
(including this clause (F)).
(b) The Purchaser hereby indemnifies the US Sellers against, and
agrees to hold each US Seller harmless from, without duplication, any and all of
the following amounts (such amounts hereinafter referred to as "US Seller Tax
Losses"):
(A) any Tax of Xxxxxxxxxxx Security or its Subsidiaries
imposed with respect to a Post-Closing Tax Period,
(B) any Tax of a US Seller, Xxxxxxxxxxx Security or its
Subsidiaries resulting from a breach of any of the provisions of this
Annex XI by the Purchaser, and
(C) any liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' and
accountants' fees and expenses), losses, damages, assessments,
settlements or judgments arising out of or incident to the imposition,
assessment or assertion of any Tax described in this paragraph (b)
(including this clause (C)).
(c) For purposes of this Section, in the case of any Taxes that
are imposed on a periodic basis and are payable for a Tax period that includes
(but does not end on) the Closing Date, the portion of such Tax related to a
Pre-Closing Tax Period shall (i) in the case of any Taxes, other than gross
receipts, sales or use Taxes and Taxes based upon or related to income, be
deemed to be the amount of such Tax for the entire Tax period multiplied by a
fraction the
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numerator of which is the number of days in the Tax period ending on and
including the Closing Date and the denominator of which is the number of days in
the entire Tax period, and (ii) in the case of any Tax based upon or related to
income and any gross receipts, sales or use Tax, be deemed equal to the amount
which would be payable if the relevant Tax period ended on and included the
Closing Date. The portion of any credits relating to a Tax period that begins
before and ends after the Closing Date shall be determined as though the
relevant Tax period ended on and included the Closing Date. All determinations
necessary to give effect to the foregoing allocations shall be made in a manner
consistent with prior practice of Xxxxxxxxxxx Security and its Subsidiaries. In
the case of an interest in an entity that is fiscally transparent for Tax
purposes, items shall be deemed to flow through on a daily basis rather than at
the close of the entity's Tax year.
(d) Upon payment by any Purchaser Indemnitee of any Purchaser Tax
Loss, the US Sellers shall discharge their obligation to indemnify the Purchaser
Indemnitee against such Tax Loss by paying to Purchaser an amount equal to the
amount of such Purchaser Tax Loss; provided, however, that if Purchaser provides
the US Sellers with written notice of a Purchaser Tax Loss at least thirty (30)
days prior to the date on which the relevant Purchaser Tax Loss is required to
be paid by any Purchaser Indemnitee, the US Sellers shall discharge their
obligation to indemnify the Purchaser Indemnitee against such Purchaser Tax Loss
by paying an amount equal to the amount of such Purchaser Tax Loss to the
relevant Tax Authority or Purchaser, as directed by Purchaser.
(e) Any payment pursuant to this Section shall be made not later
than thirty (30) days after receipt by the indemnifying party of written notice
from the indemnified party in accordance with the proviso in Section 11.07(d) of
this Annex XI or stating that any Purchaser or US Seller Tax Loss has been
incurred and the amount thereof and of the indemnity payment requested.
(f) Notwithstanding anything else in this Annex XI or in the
Agreement to the contrary, the computation and payment of any amounts under this
Section 11.07 shall not be limited in any way by caps, baskets, thresholds, or
other limitations on amounts payable under indemnification provisions elsewhere
in the Agreement.
(g) No investigation by Purchaser or any of its Affiliates at or
prior to the Closing Date shall relieve the US Sellers of any liability under
this Section. Any claim of any Purchaser Indemnitee (other than Purchaser) under
this Section may be made and enforced by Purchaser on behalf of such Purchaser
Indemnitee.
Section 11.08. Purchase Price Adjustment and Interest
Any amount paid under Section 11.07 of this Annex XI will be treated as
an adjustment to the Purchase Price. Any payment required to be made under
Section 11.07 of this Annex XI that is not made when due shall bear interest at
the rate per annum determined, from time to time, under the provision, of
Section 6621(a)(2) of the Code for each day until paid.
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Section 11.09. Survival
Notwithstanding anything in this Annex XI or in the Agreement to the
contrary, the provisions of this Annex XI shall survive for the full period of
all applicable statutes of limitations (giving effect to any waiver, mitigation
or extension thereof).
Section 11.10. Arbitration Procedures
In the event any disagreement between the parties under this Annex XI
cannot be resolved by the parties, the dispute shall be referred to an
accounting firm (the "Auditor") which is mutually acceptable to the parties for
resolution. The Auditor shall issue a written report which sets forth a final
decision with respect to the disputed issue. Fees and expenses of the Auditor
shall be shared equally by the US Sellers, on the one hand, and Purchaser,
Xxxxxxxxxxx Security and its Subsidiaries, on the other.
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ANNEX XII
EUROPEAN TAX REPRESENTATIONS AND WARRANTIES
Section 12.01. Tax Warranties.
(a) ADI has no liability in respect of taxation (whether actual or
contingent) or any liability for interest, penalties or charges imposed in
relation to any taxation arising in any part of the world that is not adequately
disclosed or provided for in full in the European Accounts.
(b) The amount of the provision for deferred taxation contained in
the European Accounts was, at the date the European Accounts were prepared,
adequate and fully in accordance with accountancy practices generally accepted
in the United Kingdom and commonly adopted by companies carrying on businesses
similar to those carried on by ADI.
(c) Since the Accounts Date, ADI has not been involved in any
transaction outside the ordinary course of business which has given or may give
rise to a liability to taxation on ADI (or would have given or might give rise
to such a liability but for the availability of any relief, allowance, deduction
or credit arising or relating to any period after Closing) and no accounting
period of ADI has ended save as provided by Section 3.04(b)(iv) of the
Agreement. No payment has been made to ADI to which Section 601 of the Taxes Act
applies (pension scheme surpluses: payments to employers).
Section 12.02. Returns, Disputes, Records, Claims, Clearances.
(a) ADI has within the time limits prescribed by the relevant
legislation duly paid all tax, made all returns, given all relevant notices,
supplied all other information required to be supplied to the Inland Revenue,
Customs & Excise and any other governmental authority (including any
governmental authority of a foreign jurisdiction) and all such information was
and remains complete and accurate in all material respects and all such returns
and notices were and remain complete and accurate in all material respects and
were made on a proper basis and do not, nor, to the best of the knowledge,
information and belief of the AHL Europe, having made due and careful inquiry,
are likely to, reveal any transactions which may be the subject of any dispute
with the Inland Revenue or other appropriate authorities and ADI is not and has
not in the last six (6) years been the subject of a back duty investigation or
other dispute regarding tax or duty recoverable from ADI and so far as AHL
Europe is aware there are no facts which are likely to cause such an
investigation to be instituted or such a dispute to arise and all returns made
by ADI are agreed with the Inland Revenue or other appropriate authority.
(b) Neither ADI nor any director or officer of ADI (in his
capacity as such) has paid or become liable to pay, and so far as AHL Europe is
aware, there are no circumstances by reason of which it is or they are likely to
become liable to pay, any penalty, fine, surcharge or interest whether charged
by virtue of the provisions of the Taxes Management Xxx 0000, the Customs and
Excise Management Xxx 0000 or the Value Added Tax Xxx 0000 or otherwise.
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(c) ADI has duly submitted all claims and disclaimers which have
been assumed to have been made for the purpose of the European Accounts.
(d) All clearances obtained by ADI have been properly obtained and
all information supplied to the Inland Revenue or other appropriate authority in
connection with such clearances was complete and accurate in all respects and
any transaction for which such clearance was obtained has been carried out only
in accordance with the terms of the clearance given therefore and the
application on which the clearance was based.
(e) All material and/or unusual arrangements, agreements or
undertakings, between ADI and the Inland Revenue, H.M. Customs & Excise or any
foreign tax authorities regarding or affecting the taxation treatment of ADI
have been disclosed in Section 12.02 of the European Disclosure Memorandum and
so far AHL Europe is aware no such arrangement disclosed in Section 12.02 of the
European Disclosure Memorandum is liable to be withdrawn for any reason.
Section 12.03. Non Deductible Revenue Outgoings. As far as the AHL
Europe is aware, all sums payable under any obligation incurred by ADI prior to
Completion and which will continue to bind ADI after Completion have been and
will continue to be deductible for corporation tax purposes, either in computing
the profits of ADI as the case may be or in computing the corporation tax
chargeable on ADI and such sums payable by ADI shall include, without
limitation, all remuneration and other sums (including any payments made
directly or indirectly in consideration or in consequence of, or otherwise in
connection with, the termination of the holding of any office or employment)
paid or payable and all benefits provided or agreed to be provided to employees
or officers of ADI and all interest, rent, royalties, annuities and other annual
payments paid or payable by ADI under any loan agreement, lease, contract,
covenant or other commitment or arrangement.
Section 12.04. Deductions or Withholdings. ADI has duly complied with
all requirements to deduct or withhold taxation from any payments it has been
made and has accounted in full to the appropriate authorities for all amounts so
deducted or withheld.
Section 12.05. Employee Schemes. ADI has not adopted nor operates nor
is part of any scheme approved, or for which approval has been or is to be
sought, under Section 202 of the Taxes Act (Charities: Payroll Deduction
Scheme).
Section 12.06. Capital Gains.
(a) ADI has not within the last six years acquired any asset from
any other company (including another member of the European Group) which was, at
the time of such acquisition, a member of the same group of companies as ADI for
the purposes of any tax.
(b) Nothing has been done in circumstances such that Section 30
Taxation of Chargeable Gains Xxx 0000 (value shifting) has or will have effect
in relation to the disposal of an asset by ADI;
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(c) The sum which would be allowed as a deduction from the
consideration under Section 38 TCGA 1992 (acquisition and disposal costs, etc.)
of each asset of ADI (other than trading stock) if disposed of on the date of
this Agreement would not be treated or deemed for the purposes of Taxation to
have been reduced by reason of any claim made under Sections 152 (roll-over
relief), 153 (assets only partly replaced) 154 or 165 (relief for gifts of
business assets) TCGA 1992 or by reason of the operation of Section 17
(disposals and acquisitions treated as made at market value), or Sections 126 to
140 TCGA 1992 (re-organization of share capital, conversion of securities,
etc.); and
(d) No election has been made under Section 171A TCGA which
affects any member of the European Group.
Section 12.07. Capital Expenditure.
(a) All capital expenditure on plant and machinery incurred by ADI
or which may be incurred under any continuing obligation has qualified or will
qualify for capital allowances (if not deductible as a trading expense of the
trade carried on by ADI):
(i) ADI has not since the Accounts Date done or omitted
to do or agreed to do, or permitted to be done, any act as a result of
which there may be made a balancing charge under the Capital Xxxxxxxxxx
Xxx 0000 or a withdrawal of first year allowances or recovery of excess
relief within Section 46 or Section 47 Capital Allowances Xxx 0000.
(b) ADI has incurred no expenditure on the provision of machinery
or plant for leasing (the meaning of which is, for this purpose, as extended by
Section 50 of the Capital Allowances Act 1990).
(c) ADI has not made any election under Section 37 Capital
Allowances Act 1990 (short life assets) nor is taken to have made such an
election under Subsection (8)(c) thereof.
Section 12.08. Reliefs.
(a) The European Disclosure Memorandum gives details of all
surrenders or claims made within the last 6 years for any advance corporation
tax under the provisions of Section 240 of the Taxes Act (surrender of advance
corporation tax) or any amount by way of group relief under the provisions of
Sections 402 to 413 (inclusive) of the Taxes Act (group relief) and of any
special arrangement with respect to group relief made pursuant to Inland Revenue
Statement of Practice SP10/93.
Section 12.09. Close Companies.
(a) ADI has been neither a close company nor a close investment
company for the purposes of the Taxes Act in the last six (6) years.
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Section 12.10. Distributions.
(a) ADI has not been concerned in any exempt distribution within
Section 213 to the Taxes Act within the period of six (6) years preceding
Completion.
(b) ADI has not issued any share capital which is of a relevant
class as defined in Section 249(2) of the Taxes Act (stock dividends) nor does
ADI own any such share capital.
(c) The European Disclosure Memorandum contains details of any
elections made under Section 247 of the Taxes Act within the last six (6) years
which have been made by ADI.
(d) ADI has not issued any security (within the meaning of Section
254(1) of the Taxes Act) outstanding on Completion in circumstances such that
any interest or other payment payable in respect of it may be treated as a
distribution under Section 209 of the Taxes Act.
Section 12.11. Anti-avoidance Provisions. ADI has neither been a party
to nor otherwise involved in any transaction, scheme or arrangement the main
purpose or object or one of the main purposes or objects of which was to avoid
or reduce a liability to tax.
Section 12.12. Residence. The country which is given in Section 12.12
of the European Disclosure Memorandum as the tax residence of ADI is the only
country whose tax authorities seek to charge tax on the world-wide profits or
gains of ADI and ADI has not paid tax on income, profits or gains to any tax
authority in any country except as is mentioned in Section 12.12 of the European
Disclosure Memorandum.
Section 12.13. Value Added Tax.
(a) ADI is treated as a member of a group of companies for the
purposes of the Value Added Tax Xxx 0000 of which the representative member is
The ADI Group Limited (the "Representative Member") and has never been
registered for such purposes otherwise than as a part of such group and no
company (other than a member of the European Group) is or has ever been a member
of such group.
(b) The Representative Member has complied with and observed in
all material respects the terms of the Value Added Tax Xxx 0000 and Section 10
of the Finance Xxx 0000 and all regulations made or notices issued thereunder
and has maintained and obtained full, complete, correct and up-to-date records,
invoices and other records (as the case may be) appropriate or requisite for the
purposes thereof and is not in arrears with any payments or returns or
notifications under such legislation, regulations or notices or liable to any
abnormal or no-routing payment or any forfeiture or penalty or interest or
surcharge provisions contained therein.
(c) ADI neither is nor has agreed to become, an agent, manager or
factor (for the purposes of Section 47 of the Value Added Tax Act 1994) of any
person who is not resident in the United Kingdom.
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ADI holds no interest in any buildings or land in respect of which ADI
or any other person has made an election to waive the exemption to value added
tax in accordance with the provisions of paragraph 2 of Schedule 10 to the Value
Added Tax Xxx 0000, nor is ADI contractually committed (contingently or
otherwise) to receive any supply in respect of which such an election has been
made.
Section 12.14. Stamp Duty. All documents (to which ADI is party) in the
possession or under the control of ADI or to the production of which ADI is
entitled which are necessary to establish the title of ADI to any asset and
which, in the United Kingdom or elsewhere, attract either stamp duty or require
to be stamped with a particular stamp denoting that no duty is chargeable or
that the document has been produced to the appropriate authority and on which
ADI may reasonably need to rely, have been properly stamped; and no such
documents which are outside the United Kingdom would attract stamp duty if they
were brought into the United Kingdom.
Section 12.15. Miscellaneous Taxes.
(a) Neither the shares of ADI, nor any property owned by ADI, are
subject to any charge imposed by a taxing authority.
(b) No circumstances exist such that a power of sale could be
exercised in relation to any shares, securities or other assets of ADI pursuant
to Section 212 of the Inheritance Tax Act 1984 (contingent liability of
transferee for unpaid capital transfer tax or inheritance tax).
Section 12.16. Loan Relationships, Forex and Financial Instruments.
(a) No liability to taxation other than tax interest or non
trading deficit would arise for ADI from the loan relationships to which it is
party being repaid to the extent of the amounts shown in respect of such loan
relationships in the European Accounts.
(b) ADI operates an authorized method in relation to its loan
relationships being an authorized accruals basis of accounting and has operated
the same authorized accounting method consistently in each of its accounting
periods ended after April 1, 1996.
(c) All borrowings by or advances by ADI reflected in the European
Accounts constitute loan relationships of ADI and are not relationships to which
Sections 92 (Convertible Securities), 93 (Relationships linked to chargeable
assets), 94 (Indexed Gilts), 95 (Gilt Strips) or 96 (Other Gilts) of Finance Xxx
0000 apply.
(d) No interest or other amounts treated as a credit or claimed as
a debit by ADI including imputed interest under Sections 770 to 773 Taxes Act)
remains unpaid and no such debits, save where they relate to unpaid interest,
are prevented from being deducted in computing the taxable profits of ADI for
whatever reason, including, without limitation because a relationship is for an
unallowable purpose as defined in paragraph 13 of Schedule 9 to the Finance Xxx
0000.
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(e) No loan relationship of ADI constitutes a relevant discounted
security as defined in paragraph 3 of Schedule 13 to the Finance Xxx 0000.
(f) Since the Accounts Date, ADI had not held any qualifying
assets nor been a party to any currency contact for the purposes of Chapter II
of Part II of the Finance Xxx 0000 (Exchange Gains and Losses) or party to a
qualifying contract for the purposes of Chapter II of Part IV of Finance Xxx
0000 (Interest Rate and Currency Contracts and Options).
(g) No "matching election" or "local currency election" under SI
1994 No 3227 or SI 1994 No 3230 has been made by ADI.
(h) No release of any liability of ADI (as referred to in section
85(3)(e) Finance Act 1996) has occurred and so far as AHL Europe is aware there
are no arrangements for any such release to occur.
Section 12.17. Foreign Connections.
(a) ADI has not, nor has it had within the last 6 years any
interest in:
(i) A controlled foreign company within the meaning of
Section 747 of the Taxes Act (imputation of chargeable profits and
creditable tax of controlled foreign companies); and
(ii) A material interest in an offshore fund within the
meaning of Chapter V of Part XVII of the Taxes Act.
(b) ADI has not entered into any transaction to which the
provisions of Section 770 or 770A of the Taxes Act (sales, etc., at undervalue
or overvalue) have been or could be applied.
(c) No transaction described in:
(i) Section 765 (1) of the Taxes Act (migration, etc., of
companies);
(ii) Section 765A of the Taxes Act (movements of capital
between residents of Member States); and
(iii) Sections 140, 140A or 140C TCGA 1992 (international
asset transfers); has been carried out by ADI.
(d) No company over which ADI had control or which was a member of
the same group of companies as ADI has ceased to be resident in the United
Kingdom in circumstances such that a notice might be served on ADI under Section
132 of the Finance Xxx 0000.
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Section 12.18. In relation to tax chargeable by the Federal Republic of
Germany, no assets have been written down to a lower going concern value in
accordance with German Law (Keine Teilwertabschreibung). Therefore, there will
be no obligation in the future to write up the assets (Keine
Zuschreibungspflicht in der Zukunft).
Section 12.19. Application of Tax Warranties to the UK Subsidiaries.
Each of the statements in Section 12.01 through 12.18 would be true and accurate
in relation to each of the European Subsidiaries which is registered in the UK
if for references to ADI there were substituted references to that European
Subsidiary.
Section 12.19. Application of Tax Warranties to the European
Subsidiaries. Each of the statements in Sections 12.01, 12.02, 12.03, 12.04,
12.11, 12.12, 12.13, 12.14 and 12.18 would be true and accurate in relation to
each of the European Subsidiaries which is registered outside the UK if for
references to ADI there were substituted references to that European Subsidiary.
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ANNEX XVI
UK LIMITATION OF LIABILITY
Section 16.01. Limitation of Liability.
(a) Definitions
(i) In this Annex XVI, "Relevant Claim" means a claim in
respect of any of the European Warranties other than the European Tax
Warranties, to which the provisions (to the extent specified in the Tax
Deed) of the Tax Deed apply;
(ii) In addition to this Annex XVI the provisions of
Article 16 of this Agreement shall apply to limit the liability of the
Seller under any Relevant Claim;
(b) Qualifications
(i) The Sellers shall not be liable in respect of a
Relevant Claim if it would not have arisen (or where it would have been
reduced the Sellers shall not be liable for the amount by which it
would have been reduced) but for anything voluntarily done or omitted
to be done after Completion by the Purchaser or ADI or any of the
European Subsidiaries in the knowledge that the same would or would be
likely to give rise to a breach of a European Warranty and excluding
any act: (A) carried out pursuant to a legally binding obligation of
any of ADI or any of the European Subsidiaries, (B) pursuant to an
obligation imposed by law, regulation or requirement having the force
of law, (C) taking place with the written approval of AHL Europe or
pursuant to this Agreement or any agreement executed pursuant to this
Agreement or (D) occurring in the ordinary course of business of ADI or
any of the European Subsidiaries.
(ii) Where the Purchaser or ADI or any of the European
Subsidiaries (or any assignee or successor in title thereof) is
entitled to recover from some other person any sum in respect of any
matter or event which could give rise to a Relevant Claim, the person
so entitled shall (subject to that party being indemnified in advance
in respect of reasonable costs and expenses by AHL Europe) take all
appropriate steps to recover that sum either before or after making the
Relevant Claim, and any sum recovered (whether by payment, discount,
credit, set-off or otherwise) will reduce the amount of the Relevant
Claim (and, in the event of the recovery being delayed until after the
Relevant Claim has been satisfied by the AHL Europe, shall be paid as
soon as reasonably practicable to AHL Europe, after deduction of all
reasonable costs and expenses of the recovery).
(iii) The Purchaser shall procure that each of the European
Subsidiaries shall accept and comply with Subsection (ii) above as if
each such person were a party to and bound by this Agreement.
(iv) Any Relevant Claim, to the extent remediable, shall
not entitle the Purchaser to compensation unless AHL Europe is given
written notice of such Relevant
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Claim and the matter or breach giving rise to the Relevant Claim is not
remedied within 30 days after the date such notice is served.
(v) The Purchaser shall not be entitled to recover
damages or otherwise obtain reimbursement or restitution under this
Agreement or the Tax Deed more than once in respect of the same loss.
(vi) Any amount paid by AHL Europe to the Purchaser in
respect of a Relevant Claim shall be treated as a reduction pro-rata in
the purchase consideration paid by the Purchaser for the ADI Shares.
(vii) The Sellers shall not be liable for any Relevant
Claim to the extent that:
(a) It is provided for or reserved in the
European Accounts and/or in the European Completion Accounts;
(b) Such Relevant Claim results from or is
increased or extended by the change in the accounting
reference date of ADI or any of the European Subsidiaries on
or after Completion or arises as a result of any changes after
Completion in the accounting policies of ADI or any of the
European Subsidiaries or the Purchaser save for changes
required by UK GAAP.
(c) Such liability results from the sale of
shares in ADI or any of the European Subsidiaries after
Completion;
(d) Such Relevant Claim arises or is increased
as a consequence of a change in any legislation or a change or
withdrawal of any previously published practice or concession
of any tax authority affecting ADI or any of the European
Subsidiaries made after the date of this Agreement or as a
result of the retrospective imposition of taxation or increase
in the rates of taxation after the date of this Agreement;
(e) Of the value of any benefit certified by the
relevant company's auditors (at the request and expense of the
Sellers) (including taxation benefit) accruing to the
Purchaser or ADI or any of the European Subsidiaries as a
consequence of the relevant breach or the matter or event
giving rise to such Relevant Claim.
(viii) The effect of the application of Section (vii) above
shall first be taken into account for the purposes of determining the
amount of liability for the purposes of Article 16 of the Agreement.
(ix) If any Relevant Claim shall arise by reason of some
liability which at the time that the Relevant Claim shall be notified
to AHL Europe shall be contingent only then AHL Europe shall not be
under any obligation to make any payment to the
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Purchaser or ADI or any of the European Subsidiaries in respect of such
Relevant Claim until such time as such contingent liability ceases to
be so contingent.
(x) This paragraph applies to any Relevant Claim where
the loss or damage giving rise to such Relevant Claim is recoverable
from insurers by ADI or any of the European Subsidiaries or by the
Purchaser. The Purchaser shall not seek to pursue any such Relevant
Claim against AHL Europe without first claiming or procuring ADI or the
relevant European Subsidiary to claim against its insurers for
compensation for the loss or damage suffered. The Purchaser shall
pursue or shall procure ADI or the relevant European Subsidiary to
pursue such claim for compensation. Any Relevant Claim to which this
paragraph applies shall be limited (in addition to all other
limitations on AHL Europe's liability elsewhere in this Annex) to the
amount by which the amount of the Relevant Claim shall exceed the
insurance proceeds received (after deducting costs and expenses
reasonably incurred in pursuing the insurance claim).
(xi) The Purchaser confirms to AHL Europe in respect of
the proposed purchase of the ADI Shares only that in entering into this
Agreement it has not relied on any representation, warranty or
undertaking except as expressly set out in this Agreement. The
Purchaser irrevocably and unconditionally waives any right it may have
to claim damages for any misrepresentation whether or not contained in
this Agreement or for breach of warranty in connection with the
acquisition of the ADI Shares not contained in this Agreement unless
such misrepresentation or warranty was made fraudulently.
(xii) The provisions of this Annex shall remain in force
and be fully applicable in all circumstances and in particular shall
not be discharged by any breach of this Agreement whatever its nature
or consequence nor by any termination or rescission by the Purchaser of
the whole or any part of this Agreement.
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EXHIBIT A
EMPLOYMENT AGREEMENTS
[Intentionally Omitted]
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EXHIBIT B
TRANSITION SERVICES AGREEMENT
[Intentionally Omitted]
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EXHIBIT C
INTERIM EQUIPMENT ACCESS AGREEMENT
[Intentionally Omitted]
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EXHIBIT D
BUDGET
[Intentionally Omitted]
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SCHEDULE 2.01
EARNOUT CONSIDERATION AND PURCHASE PRICE REDUCTION
1. Terms. Capitalized terms used herein and not otherwise defined in this
Schedule 2.01 shall have the respective meanings assigned to them in
the Agreement. The following terms, as used in this Schedule, shall
have the following meanings:
(a) "Budget" means the financial forecast for Xxxxxxxxxxx Security
and its Subsidiaries for the Fiscal Year 2001 which is
attached as Exhibit D to this Agreement.
(b) "Closing Purchase Price" means the Purchase Price paid by
Purchaser to Holdings on the Closing Date pursuant to Section
2.01 of the Agreement, as adjusted pursuant to Section 4.02,
but prior to any adjustment pursuant to this Schedule.
(c) "Earnout Consideration" shall have the meaning ascribed to it
in Section 4(c)(iii) of this Schedule.
(d) "2001 EBIT" means the consolidated net income of Xxxxxxxxxxx
Security and its Subsidiaries before interest expense and
federal and state income or similar taxes (but after the
deduction of any sales, use, gross receipts or similar taxes)
for Fiscal Year 2001, as determined in accordance with United
States generally accepted accounting principles applied on a
basis consistent with Xxxxxxxxxxx Security's past accounting
practices, with United States generally accepted accounting
principles to control in the event of any conflict between
such principles and past practices, with the following
adjustments:
(i) (A) Any extraordinary, nonrecurring items of income,
gain, loss or expense and (B) all results from
businesses acquired by Xxxxxxxxxxx Security after
Closing shall be excluded from the computation;
(ii) Any charges paid or accrued by Purchaser or its
Affiliates to Xxxxxxxxxxx Security and/or its
Subsidiaries or any costs, expenses or amounts paid
or accrued to Purchaser or its Affiliates by
Xxxxxxxxxxx Security or any of its Subsidiaries shall
be included in the calculation of 2001 EBIT to the
extent that (A) such goods and services provided for
or related to such charges, expenses, payments or
costs directly relate to the operations and revenues
of the US Business during the Fiscal Year 2001 and
(B) such charges, expenses, payments or costs do not
exceed the amounts which would be charged by a third
party provider of such goods or services following
arm's length negotiations;
(iii) Any depreciation or amortization in excess of amounts
shown on the Budget resulting from (A) goodwill
associated with, or resulting from, the
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transactions contemplated by the Agreement, (B) any
revaluation of any of the assets of the US Business
following the Closing Date or (C) any changes in the
method, timing, or rate of depreciation or
amortization of any assets of the US Business
following the Closing Date shall be excluded from
this computation.
(e) "EBIT Ceiling" means an amount equal to US $19,199,999.98.
(f) "EBIT Equilibrium" means an amount equal to US $15,985,714.28.
(g) "EBIT Floor" means an amount equal to US $14,700,000.
(h) "EBIT Reconciliation Date" means the date the 2001 EBIT is
determined pursuant to Section 5 of this Schedule.
(i) "Final Purchase Price" means the Purchase Price paid by
Purchaser to Holdings and AHL Europe as increased or decreased
pursuant to Section 4 of this Schedule.
(j) "Fiscal Year 2001" means the fiscal year commencing on
December 30, 2000 and ending December 28, 2001.
(k) "Maximum Earnout Consideration" means an amount equal to US
$25,000,000, which is the maximum amount of Earnout
Consideration which may be earned by Holdings hereunder.
(l) "Maximum Purchase Price Reduction" means an amount equal to US
$10,000,000 which is the maximum amount of Purchase Price
Reduction which may be refunded by Holdings to Purchaser
hereunder.
(m) "PPAF" means the purchase price adjustment factor or an amount
equal to 7.777777778.
(n) "Purchase Price Reduction" shall have the meaning ascribed to
such term in Section 4(c)(ii) of this Schedule.
2. Earnout Consideration and Purchase Price Reduction. Pursuant to Section
2.01 of the Agreement, based upon the 0000 XXXX, Xxxxxxxxx shall pay to
Holdings as additional consideration for the sale of the US Shares the
Earnout Consideration calculated in accordance with Section 4(c)(iii)
of this Schedule, or Holdings shall refund to Purchaser as a purchase
price reduction the Purchase Price Reduction with respect to the US
Shares as calculated in accordance with Section 4(c)(ii) of this
Schedule. Payments by Holdings or Purchaser, as the case may be, shall
be made in cash within five (5) Business Days after the EBIT
Reconciliation Date, provided that any amounts payable by Purchaser to
Holdings shall be subject to any outstanding claims under the Tax Deed,
claims pursuant to the European Warranties, and indemnity claims of
Purchaser in accordance with Section 16.02(a) and 16.02(c) of the
Agreement and that any amounts payable by Holdings to Purchaser shall
be subject to any outstanding indemnity claims of Holdings in
accordance with Section 16.02(b) of the Agreement. Any payment of
Earnout Consideration or Purchase Price Reduction shall
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bear interest payable to Holdings or Purchaser, as the case may be, at
the rate equal to LIBOR as of the Closing Date accruing from the
Closing Date until the date of such payment.
3. Calculation of 2001 EBIT. Without restricting Purchaser's day-to-day
ability to manage the business of Xxxxxxxxxxx Security and its
Subsidiaries, Purchaser hereby agrees to use its reasonable endeavors
(a) to conduct the business of Xxxxxxxxxxx Security and its
Subsidiaries in full accordance with all applicable laws and
regulations and (b) to carry on the business of Xxxxxxxxxxx Security
and its Subsidiaries (i) in the ordinary course, consistent with past
practice (provided that Xxxxxxxxxxx Security shall accrue all sales,
use, gross receipts and similar taxes (including interest and
penalties)) and (ii) with a view to maximizing sales in accordance with
the Budget. Purchaser shall not make any material change to the nature
or scope of the business of Xxxxxxxxxxx Security or its Subsidiaries.
Purchaser shall isolate the business of Xxxxxxxxxxx Security and its
Subsidiaries from Purchaser's other business activities and Purchaser
shall provide incentives to employees of Xxxxxxxxxxx Security and its
Subsidiaries which are consistent with (i) the Budget and/or (ii) the
maximization of 2001 EBIT. For purposes of calculating 2001 EBIT,
appropriate adjustments shall be made for the departure by Purchaser
from the items listed above.
4. Computation. The Final Purchase Price shall be determined as follows:
(a) If 2001 EBIT is an amount less than the EBIT Floor, then
Holdings shall pay to Purchaser the Maximum Purchase Price
Reduction, and the Final Purchase Price shall equal
$175,000,000.
(b) If 2001 EBIT is an amount greater than the EBIT Ceiling, then
Purchaser shall pay to Holdings the Maximum Earnout
Consideration, and the Final Purchase Price shall equal
$210,000,000.
(c) If 2001 EBIT is an amount between the EBIT Ceiling and the
EBIT Floor (inclusive of the EBIT Ceiling and the EBIT Floor),
then the Final Purchase Price shall be determined as follows:
(i) If 2001 EBIT equals the EBIT Equilibrium, then the
Final Purchase Price shall be an amount equal to the
Closing Purchase Price, and neither party shall pay
any additional amounts to the other party.
(ii) If 2001 EBIT is less than the EBIT Equilibrium, then
Holdings shall pay to Purchaser an amount ("Purchase
Price Reduction") equal to (A) the difference
obtained when 2001 EBIT is subtracted from the EBIT
Equilibrium multiplied by (B) PPAF and the Final
Purchase Price shall be an amount equal to the
difference obtained when the Purchase Price Reduction
is subtracted from the Closing Purchase Price.
(iii) If 2001 EBIT is greater than the EBIT Equilibrium,
then Purchaser shall pay to Holdings an amount
("Earnout Consideration") equal to (A) the
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difference obtained when the EBIT Equilibrium is
subtracted from 2001 EBIT multiplied by (B) PPAF and
the Final Purchase Price shall be an amount obtained
when the Closing Purchase Price is added to the
Earnout Consideration.
5. Delivery of Computation of 2001 EBIT.
(a) As soon as may be practicable after December 28, 2001, but not
later than February 28, 2002, Purchaser will deliver to
Holdings a statement setting forth in reasonable detail its
calculation of 2001 EBIT (including the amounts excluded from
such calculation) and the amount of any Earnout Consideration
to be paid by Purchaser to Holdings or the amount of any
Purchase Price Reduction to be paid by Holdings to Purchaser.
(b) If Holdings disagrees with Purchaser's calculation of 2001
EBIT derived pursuant to Section 5(a) above, Holdings may,
within thirty (30) days after delivery of the calculation of
2001 EBIT by Purchaser to Holdings, deliver a notice to
Purchaser disagreeing with such calculation and setting forth
Holdings' calculation of such amount. During such thirty (30)
day period, upon not less than three (3) days' prior notice,
Purchaser shall allow Holdings and its representatives access
to the books and records relating to the US Business and
personnel of Xxxxxxxxxxx Security and the Purchaser related to
the US Business in order to determine the accuracy of the
calculation provided by Purchaser pursuant to Section 5(a) of
this Schedule. Any notice of disagreement sent by Holdings
pursuant to Section 5(b) of this Schedule shall specify those
items or amounts as to which Holdings disagrees and the
reasons for such disagreement, and Holdings shall be deemed to
have agreed with all other items and amounts contained in
Purchaser's calculation of 2001 EBIT.
(c) If a notice of disagreement shall be duly delivered pursuant
to Section 5(b) above, Purchaser and Holdings shall, during
the fifteen (15) days following such delivery, use their best
efforts to reach agreement on the disputed items or amounts in
order to determine, as may be required, the amount of Earnout
Consideration or Purchase Price Reduction, if any, as may be
required. If, during such period, Purchaser and Holdings are
unable to reach such agreement, they shall promptly cause PWC
to review this Schedule and the disputed items or amounts for
the purpose of calculating 2001 EBIT. In making this
calculation, PWC shall consider only those items or amounts in
the calculation of 2001 EBIT as to which Holdings has
disagreed. PWC shall deliver to Purchaser and Holdings, as
promptly as practicable and in no event later than sixty (60)
days following submission of such dispute to PWC, a report
setting forth this calculation. Such report shall be final and
binding upon Purchaser and Holdings. The cost of this review
and report shall be borne: (i) by Holdings if PWC's
calculation of 2001 EBIT is closer to the Purchaser's
calculation of 2001 EBIT
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than to Seller's calculation of 2001 EBIT delivered pursuant
to Section 5(b), (ii) by Purchaser if PWC's calculation of
2001 EBIT is closer to Seller's calculation of 2001 EBIT
delivered pursuant to Section 5(b) than to Purchaser's
calculation of 2001 EBIT or (iii) equally by both parties if
PWC's calculation of 2001 EBIT is halfway between the
calculation by Purchaser of 2001 and the calculation by
Holdings of 2001 EBIT delivered pursuant to Section 5(b).
6. Reporting Requirements. Purchaser will prepare, or cause to be
prepared, and shall furnish to Holdings within thirty (30) days after
the end of each month, unless such month is the last month of Fiscal
Year 2001 the following information: (a) an unaudited balance sheet
together with an income statement for the previous month reflecting the
results of operations for the month then ended and the year to date
period then ended, (b) an unaudited calculation of EBIT dated as of the
last accounting day of such month and (c) a reconciliation of actual
expenses and revenues during such month as compared with the Budget.
7. Management by Purchaser. While Purchaser has accepted in good faith all
the standards and requirements set forth herein for purposes of
measuring 2001 EBIT, and is bound thereby, such acceptance is based on
Purchaser's desire to establish a fair system of measurement of EBIT.
Subject to Section 3 of this Schedule, nothing contained herein is
intended to restrict Purchaser in the following respects:
(a) the ability of Purchaser's or Xxxxxxxxxxx Security's
management to carry on the business of Xxxxxxxxxxx Security
and its Subsidiaries in a manner consistent with its overall
corporate objectives and standards;
(b) to make independent management decisions as to corporate
organization, services, markets, pricing and technology; and
(c) to manage and operate Xxxxxxxxxxx Security and its
Subsidiaries in any manner consistent with the best long-term
interest of Purchaser's and Xxxxxxxxxxx Security's
shareholders.
Holdings acknowledges and agrees that Holdings shall not be
entitled to exercise any influence, control or power of restraint over
the actions of the management of Xxxxxxxxxxx Security and its
Subsidiaries after the closing of the transactions contemplated by the
Agreement; provided that Purchaser and Holdings acknowledge and agree
that the costs and expenses incurred or associated with deviations from
the 2001 Budget set forth in Section 7 shall not be considered in the
calculation of 2001 EBIT.
8. Violation of Covenant Not To Compete. Holdings hereby acknowledges and
agrees that Purchaser shall not be obligated to pay to Holdings Earnout
Consideration in the event of
134
140
a breach by the Xxxxxxxxxxx Entities of the covenant not to compete
provisions in Section 8.06(a) of the Agreement.
135
141
SCHEDULE 3.04(A)
TAX DEED
[Intentionally Omitted]
136
142
SCHEDULE 3.04(B)
PERSONNEL SUPPLY AGREEMENT
[Intentionally Omitted]
137
143
SCHEDULE 4.02(A)
EUROPEAN NET WORKING CAPITAL
[Intentionally Omitted]
138
144
SCHEDULE 4.02(B)
US NET WORKING CAPITAL
[Intentionally Omitted]
139
145
SCHEDULE 8.06
NON COMPETITION PROVISIONS RELATING TO THE UK BUSINESS
(a) AHL Europe agrees that for a period of two (2) full years form
the Closing Date, neither it nor any of its Affiliates shall, either directly or
indirectly, (i) engage, either as a principal or for its own account or solely
or jointly with others, or as shareholders in any company or joint venture
association (other than the ownership of less than three percent (3%) of the
equity interest of any company listed on the London Stock Exchange or on any
other body which is a recognized investment exchange for the purposes of the
Financial Services Act 1986), in any business anywhere in the United Kingdom,
France, Germany, or Greece that is involved in the provision of the same
services provided as part of the UK Business up to and including the Closing
Date or (ii) hire, solicit or induce any employee of the UK Business to become
an employee of AHL Europe or any of its Affiliates.
(b) If any provision contained in this Section shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section, but this Section shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein. It is the intention
of the parties that if any of the restrictions or covenants contained herein is
held to cover a geographic area or to be for a length of time which is not
permitted by applicable law, or in any way construed to be too broad or to any
extent invalid, such provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable law, a court of competent jurisdiction shall construe and interpret
or reform this Section to provide for a covenant having the maximum enforceable
geographic area, time period and other provisions (not greater than those
continued herein) as shall be valid and enforceable under such applicable law.
AHL Europe and its Affiliates acknowledge that Purchaser would be irreparably
harmed by any breach of this Section and that there would be no adequate remedy
at law or in damages to compensate Purchaser for any such breach. AHL Europe and
its Affiliates agree that Purchaser shall be entitled to injunctive relief
requiring specific performance by the AHL Europe and its Affiliates of this
Section, and AHL Europe and its Affiliates consent to the entry thereof.
140
146
SCHEDULE 11.04
NON-FOREIGN STATUS AFFIDAVIT PURSUANT TO SECTION 1445 OF THE CODE
AND TREASURY REGULATION SECTION 1.1445-2(B)
[Intentionally Omitted]
141
147
SCHEDULE 15.03(E)
OPINION OF KING & SPALDING
[Intentionally Omitted]
142
