EXHIBIT 10.17
STOCK PURCHASE AND SALE AGREEMENT
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THIS STOCK PURCHASE AND SALE AGREEMENT, dated as of June 30, 2002, is
by and between PERFORMANCE HOLDINGS, INC., a Delaware corporation currently
having an address at 0000 Xxxxxx Xxx, Xxxxxxxxxx, Xxxxx 00000 (the "Purchaser"),
and SPAR INCENTIVE MARKETING, INC., a Delaware corporation currently having an
address at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Seller").
RECITALS
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SPAR PERFORMANCE GROUP, INC., a Delaware corporation currently having
an address at 0000 Xxxxxx Xxx, Xxxxxxxxxx, Xxxxx 00000 ("SPG"), is a wholly
owned subsidiary of the Seller and is currently engaged in the business of
incentive merchandising services, including program design, communications
(including communications via telephone, internet, etc.), merchandise
fulfillment (which includes providing retail certificates, debit or cash cards
or merchandise as rewards in incentive programs), travel fulfillment (which
provides travel as rewards in incentive programs) and travel, travel related and
meeting registration services, including registration via telephone, internet,
etc., but excluding the SPAR eTraining Business as hereinafter defined
(collectively, the "SPG Business"). The Texas based management of SPG has formed
the Purchaser in order to buy from the Seller all of the common stock issued by
SPG (the "SPG Stock"), and following such purchase intends to cause all of the
stock of the Purchaser to be held by an employee stock benefit plan created for
the benefit of the employees of the Purchaser and SPG (referred to as the ESOP
Plan below). To enable such transaction, the Seller has agreed to finance such
purchase pursuant to the Term Loan Agreement (as hereinafter defined).
Accordingly, the Seller has agreed to sell all of its SPG Stock to the
Purchaser, and the Purchaser has agreed to buy the SPG Stock and refrain from
engaging in any aspect of the SPAR Business (as hereinafter defined), all upon
the terms and provisions and subject to the conditions hereinafter set forth.
AGREEMENT
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In consideration of the foregoing, the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration (the receipt
and adequacy of which is hereby acknowledged by the Purchaser), the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
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Section 1.01. Certain Defined Terms. As used in this Agreement, the
following capitalized terms and non-capitalized words and phrases shall have the
meanings respectively assigned to them below:
"Affiliate" of a referenced Person shall mean (a) any other Person
controlling, controlled by or under common control with such referenced Person,
(b) any other Person beneficially owning or controlling ten percent (10%) or
more of the outstanding voting securities or rights or of the interest in the
capital, distributions or profits of the referenced Person, provided that the
Seller shall not under any circumstance be deemed an Affiliate of the Purchaser
or any of its subsidiaries as a result of any securities pledge or otherwise,
(c) any other Person operating the business or substantially all of the property
of the referenced Person, or vice versa, or (d) any director or officer if the
referenced Person is a corporation, any manager, general partner or member if
the referenced person is a partnership, limited liability company or joint
venture, or any other similar executive in the referenced Person or such other
Person. If the referenced Person in clause (a) or (b) of this definition is an
individual, then the term "Affiliate" also shall include members of the
immediate family (including parents, spouse and children) of such individual and
any "Affiliate" of one or more of those family members. The terms "control",
"controlling", "controlled" and the like shall mean the direct or indirect
possession of the power to direct or cause the direction of the management or
policies of a Person or the disposition of its assets or properties, whether
through ownership, by contract, arrangement or understanding, or otherwise.
"Agreement" shall mean this Stock Purchase and Sale Agreement,
together with all schedules and exhibits hereto, as the same may be
supplemented, modified, amended, restated or replaced from time to time in the
manner provided herein.
"Applicable Law" shall mean any applicable law, including (without
limitation) any: (a) federal, state, territorial, county, municipal or other
governmental or quasi-governmental law, statute, ordinance, rule, regulation,
requirement or use or disposal classification or restriction, whether domestic
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or foreign; (b) judicial, administrative or other governmental or
quasi-governmental order, injunction, writ, judgment, decree, ruling,
interpretation, finding or other directive, whether domestic or foreign; (c)
common law or other legal or quasi-legal precedent; (d) arbitrator's, mediator's
or referee's decision, finding, award or recommendation; or (e) charter, rule,
regulation or other organizational or governance document of any national
securities exchange or market or other self-regulatory or governing body or
organization.
"Authority" shall mean any governmental or quasi-governmental
authority, including (without limitation) any federal, state, territorial,
county, municipal or other government or governmental or quasi-governmental
agency, board, branch, bureau, commission, court, department or other
instrumentality or political unit or subdivision, whether domestic or foreign,
or any national securities exchange or market or other self-regulatory or
governing body or organization.
"Bankruptcy Proceeding" shall have the meaning assigned to it in the
Term Loan Agreement.
"Books and Records", "Books" and "Records" each shall mean all of the
referenced Person's books and records, including (without limitation) any and
all (i) corporate, partnership or limited liability company books and minutes or
other records of proceedings, stock, partner or membership books and transfer
ledgers, (ii) other instruments, indentures, agreements, charters, by-laws,
certificates or other documents or statutory equivalents respecting the
referenced Person or its organization, governance or operation, (iii) financial
books, ledgers, bills and other invoices, canceled checks and check registers,
and other receipt, disbursement or financial records and data, (iv) customer and
vendor lists, rent rolls, and computer and other data bases, (v) bills of sale,
contracts, invoices, and other evidence of sales, leases or other dispositions
and purchases, leases or other acquisitions, (vi) tax returns, registrations,
reports and other filings with Authorities, (vii) leases, contracts and other
agreements, (viii) insurance policies, (ix) correspondence, memoranda, notes,
files and folders, and (x) other documents, papers, data and other collections
of information; in each case whether on paper, film or other tangible copy,
stored on disc or tape, in computer memory or other electronic storage or in
some other storage medium, whether transmitted or received by email, internet or
other transmission method or medium, and whether or not in the possession of
such Person or a third party service provider, and as each has been and
hereafter may be supplemented, renewed, extended, modified, amended, restated or
replaced from time to time, and in each case whether now existing or hereafter
acquired, created, executed, modified or otherwise existing (including, without
limitation, during the pendency of any Bankruptcy Proceeding).
"Business Day" shall mean any day during which the Senior Lender is
open for business in New York, New York, other than any Saturday, Sunday or
other applicable legal holiday.
"Cash Purchase Price" shall have the meaning assigned to it in Section
2.05 hereof.
"Closing Date" shall mean June 30, 2002.
"Continuing Liability" and "Continuing Liabilities" shall have the
meanings respectively assigned to them in Section 2.03 hereof.
"Conveyance Instruments" shall mean the deeds, bills of sale,
assignments and other documents required by Section 2.08 hereof.
"ESOP Plan" shall mean the Performance Holdings, Inc. Employee Stock
Ownership Plan established pursuant to the ESOP Plan Declaration.
"ESOP Plan Declaration" shall mean the document entitled Performance
Holdings, Inc. Employee Stock Ownership Plan dated as of July 1, 2002, together
with all schedules and exhibits thereto, as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.
"ESOP Related Document" and "ESOP Related Documents" shall
respectively mean any one or more of the ESOP Plan Declaration, the ESOP Trust
Agreement, the ESOP Trustee Indemnity Agreement and the ESOP Trustee Retention
Agreement, and the various assignments, agreements, instruments and other
documents executed by the requisite Person(s) pursuant to or in connection with
any of the foregoing and accepted or delivered by the ESOP Trustee or Purchaser,
as applicable (whether prior to, on or from time to time after the Closing
Date), and any and all waivers, consents, agreements, reports, statements,
certificates, schedules and other documents executed by the requisite Person(s)
pursuant to or in connection with any of the foregoing and accepted or delivered
by the ESOP Trustee or Purchaser, as
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applicable (whether prior to, on or from time to time after the Closing Date),
as each may have been and hereafter may be supplemented, modified, amended,
restated or replaced from time to time in the manner provided therein.
"ESOP Trust" shall mean the Performance Holdings, Inc. Employee Stock
Ownership Trust (under which the ESOP Trustee is the trustee) established
pursuant to the ESOP Plan Declaration and the ESOP Trust Agreement.
"ESOP Trust Agreement" shall mean the Trust Agreement between the
Purchaser and the ESOP Trustee dated as of July 1, 2002, together with all
schedules and exhibits thereto, as the same may be supplemented, modified,
amended, restated or replaced from time to time in the manner provided therein.
"ESOP Trustee" shall mean GREATBANC TRUST COMPANY, and its successors,
permitted assigns and legal Representatives, not in its corporate capacity, but
in its capacity as trustee under the ESOP Trust. [NEED ASSIGNMENT AND ASSUMPTION
OF TRUSTEESHIP BETWEEN HSBC AND GREAT BANK]
"ESOP Trustee Indemnity Agreement" shall mean the Indemnification
Agreement between SPG and the ESOP Trustee dated as of July 1, 2002, together
with all schedules and exhibits thereto, as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.
"ESOP Trustee Retention Agreement" shall mean the retention letter
agreement between SPG and the ESOP Trustee dated as of July 1, 2002, together
with all schedules and exhibits thereto, as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.
"event" shall include (without limitation) any event, occurrence,
circumstance, condition or state of facts.
"Excluded Asset" and "Excluded Assets" shall have the meanings
respectively assigned to them in Section 2.02 hereof.
"Excluded Liability" and "Excluded Liabilities" shall have the
meanings respectively assigned to them in Section 2.04 hereof.
"hereunder", "herein", "hereof" and other words and phrases of like
import shall refer to each and every term and provision of this Agreement.
"Lien" and "Liens" shall respectively refer to any one or more of the
following to which the referenced or relevant Person is a party or by which the
referenced or relevant Person, any of its assets or properties or any other
referenced assets or properties may be bound or subject: (a) any assignment,
pledge, mortgage, hypothecation or security interest (irrespective of whether
the referenced Person is personally obligated with respect to any obligation
thereby secured); (b) any filed financing statement (other than as secured
party); (c) any consignment, finance lease, conditional sale contract or other
title retention agreement; (d) any assignment, pledge or other transfer,
restriction or encumbrance of any right to receive any income or other
distributions or proceeds; (e) any sale/leaseback transaction in which the
referenced Person is the seller/lessee; (f) any lien, charge, claim or other
encumbrance arising under any Applicable Law, whether in favor of an Authority
or otherwise, including (without limitation) liens for taxes, assessments and
other governmental charges and liens of mechanics, carriers, warehouses,
suppliers and laborers; (g) any restrictive covenant, lease, license, right of
use, possession or first refusal, infringement, community property or other
joint ownership interest, limitation or restriction on use or transfer,
exception to title, or other limitation or restriction on the extent, exercise
or enforcement of any right or interest respecting any asset or property; (h)
with respect to any Real Estate, any easement, right-of-way, servitude,
encroachment, restrictive covenant, reservation, or other exception to title;
(i) any counterclaim, setoff, right of recoupment, abatement, reduction,
community property right or other claim or determination, including (without
limitation) any right of set off or other claim against assets in the possession
of the claimant (whether or not intended as collateral); (j) any other lien,
encumbrance or adverse right or claim of any nature in, to or against any asset
or property, or (k) any covenant or agreement with any other Person to a
"Negative Pledge" (i.e., that the referenced or relevant Person will not (A) do
or permit any one or more of the things specified in the preceding clauses of
this definition or (B) sell, lease, sublease, transfer, exchange, abandon or
otherwise dispose of, surrender management, physical possession or control of,
physically alter or relocate all or any portion of its assets or properties).
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"Loan" and "Loans" shall have the meanings respectively assigned to
them in the Term Loan Agreement.
"Loss" and "Losses" shall respectively mean each and every loss,
damage, injury, harm, detriment, decline in value, lost opportunity, liability,
exposure, claim, demand, action, suit, investigation, proceeding, settlement,
judgment, award, fine, penalty, tax, fee, charge, cost or expense (including any
disbursement, expense or reasonable fee or other reasonable amount paid to any
attorney or other professional advisor and any costs of investigation).
"Material Adverse Effect" shall mean: (a) in the case of the Seller,
any material and adverse effect, whether individually or in the aggregate, (i)
upon the assets and properties, business and financial condition of the Seller
and (as the same are known to the Seller) SPG that would be material to the
Seller and SPG taken as a whole, other than as would be reasonably likely to
result from the events specified in Schedule 1.01MAE hereto, or (ii) the ability
of the Seller to sell the SPG Stock to the Purchaser as and when required
hereunder; and (b) in the case of the Purchaser, any material and adverse
effect, whether individually or in the aggregate, (i) upon the assets and
properties, business and financial condition of the Purchaser that would be
material to the Purchaser, or (ii) the ability of the Purchaser to purchase the
SPG Stock from the Seller as and when required hereunder.
"Material Document" shall mean any instrument, indenture, agreement,
document, arrangement or other obligation that: (a) in the case of the Seller,
are material to the Seller and SPG taken as a whole and either (i) to which the
Seller is a party; or (ii) by which the Seller or SPG Stock is bound or subject;
and (b) in the case of the Purchaser, are material to the Purchaser and either
(i) to which the Purchaser is a party; or (ii) by which the Purchaser is bound
or subject; in each case as each may have been supplemented, modified, amended,
restated or replaced from time to time.
"Organizational Document" shall mean any articles or certificate of
incorporation, charter, by-laws, limited liability company certificate or
agreement, partnership certificate or agreement, or other instrument, agreement
or document or any statutory equivalent in whole or in part respecting the
organization, governance, power or authority of the referenced Person, or of any
direct or indirect general partner, manager, trustee or similar principal of the
referenced Person that is not a natural Person, as applicable, including
(without limitation) (i) the Certificate of Incorporation or By-Laws of the
referenced Person; (ii) any resolution with continuing effect adopted by the
Board of Directors, the management or other applicable committee of directors,
the managers, or the shareholders or members of a referenced Person, or of any
direct or indirect general partner, manager, trustee or similar principal of the
referenced Person, that is a corporation, limited liability company or similar
entity, or (iii) any agreement, trust or arrangement among any of its equity
holders respecting the securities issued by or any of the beneficiaries of the
referenced Person, or of any direct or indirect general partner, manager,
trustee or similar principal of the referenced Person, that is not a natural
Person; in each case as and when executed, adopted, filed or otherwise
effectuated (as applicable) from time to time (whether before, as of or after
the date hereof), and irrespective of whether reduced to writing, and as each
has been and hereafter may be supplemented, renewed, extended, modified,
amended, restated or replaced from time to time.
"Party" and "Parties" shall respectively mean any one or more of the
Purchaser or Seller and to the extent of their limited agreements and
obligations hereunder, SPG and SGRP.
"Person" shall include (without limitation) any manner of association,
business trust, company, corporation, estate, governmental or other Authority,
group (including one under Section 13(d)(3) of the Securities Exchange Act),
joint venture, limited liability company, natural Person (i.e., human being),
partnership, syndicate, trust or other entity.
"Purchase Document" and "Purchase Documents" shall respectively mean
any one or more of this Agreement, the Conveyance Instruments, the various other
assignments, instruments and other documents creating or evidencing the sale,
assignment or other transfer or delivery of any asset of SPG or assumption of
any Continuing Liability, the SPAR Confidentiality Agreement, the Trademark
Agreement, the SPAR eTraining Agreement, the Transitional Services Agreement,
and all other agreements and documents and all waivers, consents, reports,
statements, certificates and schedules executed by the requisite Person(s)
pursuant to or in connection with any of the foregoing and accepted or delivered
by the Purchaser (whether prior to, on or from time to time after the Closing
Date), as each may be supplemented, modified, amended or restated from time to
time in the manner provided therein.
"Purchase Price shall have the meaning assigned to it in Section 2.05
hereof.
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"Purchaser" shall have the meaning assigned to it in the Introduction.
"Representative" and "Representatives" shall respectively mean any or
all of: (a) in the case of any referenced Person (including, without limitation,
the Seller), such referenced Person's Affiliates, directors, officers,
employees, attorneys, agents and other Representatives; and (b) in addition in
the case of the Seller or any other financial institution, such referenced
Person's participants, correspondents, confirming banks, custodians and
designees and their respective Affiliates, directors, officers, employees,
attorneys, agents and other Representatives.
"Revolving Credit Loan" and "Revolving Credit Loans" shall have the
meanings respectively assigned to them in the Revolving Credit Agreement.
"Revolving Credit Agreement" shall mean the Revolving Credit, Guaranty
and Security Agreement among SPG (as borrower), the Purchaser (as guarantor) and
the Seller (as lender) dated as of June 30, 2002, together with all schedules
and exhibits thereto, as the same may be supplemented, modified, amended,
restated or replaced from time to time in the manner provided therein.
"Revolving Credit Document" and "Revolving Credit Documents" shall
respectively mean any one or more of the Revolving Credit Agreement, Revolving
Credit Notes and other "Loan Instruments" (as defined in the Revolving Credit
Agreement), as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein.
"Revolving Credit Note" and "Revolving Credit Notes" shall have the
meanings respectively assigned to them in the Revolving Credit Agreement.
"securities" of any Person shall mean any and all equity securities
and debt securities, general or limited partnership interests, limited liability
company memberships or interests, investment contracts, and any other instrument
or interest commonly understood to be a security issued by that Person.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any corresponding provisions of any Applicable Law in any state or foreign
jurisdiction, or any corresponding or succeeding provisions of Applicable Law,
and the rules and regulations promulgated thereunder; in each case as the same
may have been and hereafter may be supplemented, modified, amended, restated or
replaced from time to time.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any corresponding provisions of any Applicable Law in any
state or foreign jurisdiction, or any corresponding or succeeding provisions of
Applicable Law, and the rules and regulations promulgated thereunder; in each
case as the same may have been and hereafter may be supplemented, modified,
amended, restated or replaced from time to time.
"Seller" shall have the meaning assigned to it in the Introduction.
"Senior Borrower" and "Senior Borrowers" shall respectively mean any
one or more of the borrowers under the Senior Loan Documents, and the
successors, assigns and legal Representatives of each, and any and all
additional or replacement borrower(s) under any Senior Loan Document. The Senior
Borrowers currently include the Seller, SGRP and most of its Affiliates.
"Senior Lender" shall mean IBJ WHITEHALL BUSINESS CREDIT CORPORATION,
its successors, assigns and legal Representatives, and any and all additional or
replacement lender(s) under any restated or replacement Senior Loan Document.
"Senior Loan" and "Senior Loans" shall respectively mean the principal
amounts outstanding from time to time (including future advances) respecting any
and all of advances, loans, letter of credit advances and the other amounts
advanced from time to time to or on behalf of one or more of the Senior
Borrowers by the Senior Lender thereunder or its designee pursuant to any Senior
Loan Document (including, without limitation, during the pendency of any
Bankruptcy Proceeding).
"Senior Loan Agreement" the Second Amended and Restated Revolving
Credit, Term Loan and Security Agreement dated as of September 22, 1999, among
the Senior Borrowers and the Senior Lender, together with all schedules and
exhibits thereto, as each may have been and hereafter may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.
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"Senior Loan Document" and "Senior Loan Documents" shall respectively
mean any one or more of the Senior Loan Agreement, each and every note, letter
of credit application, security agreement, guaranty, hypothecation or other
instrument, agreement or document with or issued or given by any borrower or
surety thereunder in direct or indirect support (in whole or in part) of any of
the Senior Loan Obligations or related surety's obligations, the various
mortgages, assignments, agreements, guaranties, instruments and other documents
creating, evidencing, perfecting, governing or supporting any of the Senior Loan
Obligations or any related surety's obligations or any interest of the Senior
Lender in any collateral securing or intended to secure any of the Senior Loan
Obligations or related surety's obligations, and all waivers, consents,
agreements, reports, statements, certificates, schedules and other documents
executed by the requisite Person(s) pursuant to or in connection with any of the
foregoing and accepted or delivered by the Senior Lender (whether prior to, on
or from time to time after the Closing Date), as each may have been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided therein.
"Senior Loan Obligations" as of any date shall mean any and all of the
obligations of the Senior Borrowers (i) to repay the balance of the Senior Loans
then outstanding (including future advances), including accrued and unpaid
interest thereon, (ii) to pay or otherwise perform or satisfy all of the other
amounts to be paid and obligations to be performed or otherwise satisfied by any
Senior Borrower under any Senior Loan Document (whether individually, jointly,
severally or otherwise), (iii) to pay or otherwise perform or satisfy all of the
other amounts to be paid and obligations to be performed or otherwise satisfied
by any Senior Borrower under any interest rate protection, foreign currency
exchange, or other interest or exchange rate swap or hedging agreement or
arrangement (whether individually, jointly, severally or otherwise) with the
Senior Lender or any of its Affiliates, and (iv) to pay or otherwise satisfy any
and all overdrafts of any Senior Borrower honored by the Senior Lender (in its
sole and absolute discretion) and other indebtedness, liabilities or obligations
(whether under any note, guaranty or other instrument or document or otherwise)
now or hereafter owed to the Senior Lender by any Senior Borrower (whether
individually, jointly, severally or otherwise), together with accrued and unpaid
interest thereon; in each case including, without limitation, any and all
interest, fees and other amounts accrued, accruing or otherwise applicable
during the pendency of any Bankruptcy Proceeding, irrespective of whether such
interest, fees and other amounts are allowed or allowable as claims in any such
proceeding.
"SGRP" shall mean SPAR Group, Inc., a Delaware corporation and
ultimate parent of the Seller.
"Significant Shareholder" shall mean either Xxxxxx X. Xxxxx or Xxxxxxx
X. Xxxxxxx.
"SPAR Business" shall mean any and all of the projects, products,
services or business of the SPAR Group, including (without limitation) in-store
and other merchandising and marketing services, product sampling, mystery
shopping, internet training, database marketing, teleservices, marketing
research, internet-based applications and software, the SPAR eTraining Business
and the other business described in SGRP's annual report on Form 10-K for the
year ended December 31, 2001, as filed with the Securities and Exchange
Commission.
"SPAR Confidentiality Agreement" shall mean the Confidentiality and
Non-Compete Agreement among the Purchaser, SPG, and SGRP dated as of June 30,
2002, respecting (among other things) confidential treatment of information
pertaining to the SPAR Business and non-competition therewith by SPG and the
Purchaser, as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein.
"SPAR eTraining Agreement" shall mean that certain SPG Agreement among
SPG and SGRP dated as of January 11, 2002, together with all schedules and
exhibits thereto, including, without limitation, the "SPAR Standard Terms and
Provisions Exhibit" and the "SPAR Supplemental Terms and Provisions Exhibit", as
the same may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided therein.
"SPAR eTraining Business" shall mean (a) any and all training and
related services, including (without limitation) any and all related program
development, programming, access, registration and other communication,
training, testing, incentive and other awards, redemptions, reporting, support
and web hosting, whether via telephone, internet or otherwise, and (b) anything
covered by U.S. Patent Application No. 09/951,321 (continuing and incorporating
provisional application No. 60/240,328) titled "Incentive Based Training System
and Method", or any derivative or related application, whether or not described
in clause (a), irrespective of whether any such patent or other right or
protection has been or can be sought, issued or obtained; in each case whether
now existing or hereafter acquired, licensed, created, executed, modified or
otherwise existing.
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"SPAR eTraining Intellectual Property" shall mean any and all (a)
patents, copyrights and copyrighted materials, logos, service marks, trademarks,
trade names, domain names, computer programs and other know how and intellectual
properties pertaining to the SPAR eTraining Business, including (without
limitation) any and all applications, invention disclosures and pending items,
any and all designs, discoveries, formulae, ideas, inventions, products,
programs, software and firmware (whether in source code, object code or
otherwise, and including (without limitation) all "shrink-wrap" licenses that
accompanied any item of equipment or software when obtained), specifications,
styles, techniques, and other trade secrets and works of authorship for the
current and intended business, products and prospects, any and all license
royalties and other payment intangibles, the proceeds of infringement suits and
other proceeds, the right to xxx for past, present and future infringement, all
rights corresponding thereto throughout the world, and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof, and the
good will of the business to which each of them relates, (b) Books and Records
evidencing or pertaining to any of the foregoing, and (c) anything covered by
U.S. Patent Application No. 09/951,321 (continuing and incorporating provisional
application No. 60/240,328) titled "Incentive Based Training System and Method",
or any derivative or related application, whether or not described in clause
(a), irrespective of whether any such patent or other right or protection has
been or can be sought, issued or obtained; in each case whether now existing or
hereafter acquired, licensed, created, executed, modified or otherwise existing
(including, without limitation, during the pendency of any Bankruptcy
Proceeding), and irrespective of whether any patent, copyright, trademark or
other right or protection has been or can be sought, issued or obtained in
connection therewith.
"SPAR Group" shall mean SGRP., each of its direct and indirect
subsidiaries (including, without limitation, SPAR Acquisition, Inc., SPAR
Marketing, Inc., SPAR/Xxxxxxxx Retail Services, Inc., SPAR, Inc., SPAR Marketing
Force, Inc., STMI, SPAR Group International, Inc., SPAR/PIA Retail Services,
Inc., SPAR Technology Group, Inc., Retail Resources, Inc., Pivotal Field
Services, Inc., PIA Merchandising Co., Inc., Pacific Indoor Display d/b/a Retail
Resources, Pivotal Sales Company, and PIA Merchandising Ltd.), its affiliates
(including, without limitation, SPAR Marketing Services Inc., SPAR Management
Services, Inc., and SPAR InfoTech, Inc.), and each other entity under the
control of or common control with any of the foregoing entities. However, SPAR
Group shall not include SPG or the Purchaser.
"SPG" shall have the meaning assigned to it in the Recitals, above.
"SPG Business" shall have the meaning assigned to it in the Recitals.
"SPG Confidentiality Agreement" shall mean the Confidentiality and
Non-Compete Agreement among the Purchaser, SPG, and SGRP dated as of June 30,
2002, respecting (among other things) confidential treatment of information
pertaining to the SPG Travel Business (as defined therein) and non-competition
therewith by SGRP and its subsidiaries, as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.
"SPG Stock" shall have the meaning assigned to it in the Recitals,
above..
"STMI" shall mean SPAR Trademarks, Inc., a Delaware corporation and
indirect subsidiary of SGRP.
"subsidiary" shall mean any corporation or other entity in respect of
which a Person at the time shall own directly, or indirectly (through one or
more corporations, nominees or other Persons or otherwise), at least one-half of
the aggregate voting interests of such corporation or other entity, whether
owned or held (i) of record or beneficially or (ii) individually, jointly or
otherwise.
"Tax" shall mean any tax, drug tax, poll tax (including any income
tax, franchise tax, capital gains tax, gross receipts tax, value-added tax,
surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, inventory tax, occupancy tax, withholding tax, payroll tax, gift
tax, estate tax or inheritance tax), levy, assessment, tariff, impost,
imposition, toll, duty (including any customs duty), deficiency or fee, and any
related charge or amount (including any fine, penalty or interest), imposed,
assessed or collected by or for any authority or payable pursuant to any
tax-sharing agreement or pursuant to any agreement, arrangement or understanding
relating to the sharing or payment of any such tax, levy, assessment, tariff,
impost, imposition, toll, duty, deficiency or fee.
"Tax Code" shall mean the United States Internal Revenue Code of 1986,
as amended, any corresponding Applicable Law of any state or foreign
jurisdiction, or any corresponding or succeeding provisions of Applicable Law,
in each case as the same may have been and hereafter may be supplemented,
modified, amended, restated or replaced from time to time.
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"Term Loan" and "Term Loans" shall have the meanings respectively
assigned to them in the Term Loan Agreement.
"Term Loan Agreement" shall mean the Term Loan, Guaranty and Security
Agreement among the Purchaser (as borrower), SPG (as guarantor) and the Seller
(as lender) dated as of June 30, 2002, together with all schedules and exhibits
thereto, as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein.
"Term Loan Document" and "Term Loan Documents" shall respectively mean
any one or more of the Term Loan Agreement, Term Notes and other "Loan
Instruments" (as defined in the Term Loan Agreement), as the same may be
supplemented, modified, amended, restated or replaced from time to time in the
manner provided therein.
"Term Note" and "Term Notes" shall have the meanings respectively
assigned to them in the Term Loan Agreement.
"Trademark Agreement" shall mean Trademark License Agreement between
SPG and STMI dated as of June 30, 2002, together with all schedules and exhibits
thereto, as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein. "Transition Services
Agreement" shall mean Transition Services Agreement among SPG, the Seller and
SGRP dated as of June 30, 2002, together with all schedules and exhibits
thereto, as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein.
Section 1.02. Certain Definitions in Other Purchase Documents.
Capitalized terms used and not otherwise defined in this Agreement shall have
the meanings respectively assigned to them in the other applicable Purchase
Documents or in the Term Loan Agreement, as applicable.
Section 1.03. Singular and Plural Terms. Each definition in this
Agreement or any other Purchase Document using a singular capitalized term or
other word or phrase also shall apply to the plural form of such term, word or
phrase, and vice versa, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and vice versa, in each case as the
context may permit or require.
Section 1.04. Pronouns. Each use in this Agreement or any other
Purchase Document of a neuter pronoun shall be deemed to include references to
the masculine and feminine variations thereof, and vice versa, and a singular
pronoun shall be deemed to include a reference to the plural variation thereof,
and vice versa, in each case as the context may permit or require.
Section 1.05. Including. The term "including" shall mean "including
(without limitation)", whether or not so stated. The terms "including",
"including, but not limited to", "including (without limitation)" and similar
phrases (i) mean that the items specifically listed after such term are examples
of the provision preceding such term and are not intended to be all inclusive,
(ii) shall not in any way limit (or be deemed or construed to limit) the
generality of the provision preceding such term, and (iii) shall not in any way
preclude (or be deemed or construed to preclude) any other applicable item
encompassed by the provision preceding such term.
Section 1.06. Section and Other Headings. The table of contents and
section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
ARTICLE II
PURCHASE OF STOCK; PAYMENT
--------------------------
Section 2.01. Stock to be Transferred. Upon the terms and subject to
the conditions set forth in this Agreement, the Seller hereby sells, assigns,
transfers, conveys and delivers to the Purchaser, and the Purchaser hereby
purchases and accepts from the Seller, all right, title and interest of the
Seller in and to all of the SPG Stock, effective as of 11:59 p.m. New York City
time, June 30, 2002 (the "Effective Time").
Section 2.02. Excluded Assets. At the Closing the assets and
properties of SPG shall not include any of the following assets and properties
(individually, an "Excluded Asset", and collectively, the "Excluded Assets"),
irrespective of whether SPG may have had any right, title or interest therein or
lease, license or other right to the exploitation or use thereof:
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(a) any right, title or interest in the SPAR eTraining Business or other SPAR
Business or any Intellectual Property of the SPAR Group, including (without
limitation) the SPAR eTraining Intellectual Property, the name "SPAR" and
their other trademarks and tradenames, and the SPAR accounting, email and
payroll systems;
(b) any right to participate, or for the employees of SPG to participate, in
any pension, welfare or benefit plan, insurance or other SPAR Group benefit
or coverage, and any administrative or other service directly or indirectly
provided to or for the benefit of SPG by any member of the SPAR Group or
their Affiliates;
(c) any federal, state, local or foreign income or franchise tax benefit or
refund of SPG or the Seller attributable to periods on or before the
Closing Date;
(d) any and all of SPG's Books and Records at any SPAR Group location other
than Texas, provided that the Seller shall deliver to SPG an electronic
copy of SPG's accounting data stored on SGRP's "Solomon" computer system
such time as SPG ceases to use such computer system pursuant to the
Transition Services Agreement;
(e) any and all assets of the Seller or any other member of the SPAR Group used
at any time or from time to time by SPG and not located on the premises of
the SPG, including (without limitation) the computers and accounting and
other software of the SPAR Group ;
(f) any liability or other obligations owed to SPG by the Seller, any Affiliate
of the Seller or any Significant Shareholders (other than any that may be
owed to SPG under the Purchase Documents, Revolving Credit Documents or
Term Loan Documents);
(g) any right, power, privilege, remedy or interest of the Seller or any other
member of the SPAR Group under any Purchase Document, Revolving Credit
Document, Term Loan Document or Senior Loan Document; and
(h) any other asset or property listed on Schedule 2.02 hereto.
SPG acknowledges and agrees that any right, title or interest in, lease or
license of or other right to exploit or use any and all Excluded Assets that SPG
has or may have (whether known or unknown) (i) will terminate as of June 30,
2002, and (ii) will be separately sold, assigned, conveyed and transferred at
the Closing to the Seller or its designee, all without any further
consideration; provided that in the event any such right, title or interest is
not so separately sold, assigned, conveyed and transferred, SPG hereby sells,
assigns, conveys and transfers it to the Seller and its succesors and assigne
forever effective as of the Effective Time, all without any further
consideration.
Section 2.03. Continuing Liabilities. At the Closing the obligations
and liabilities of SPG shall include (without limitation), and to the extent not
previously owed directly or assumed by SPG, SPG shall expressly assume and agree
to be solely responsible for such obligations and liabilities, and shall
thereafter pay, satisfy and discharge as and when due (and uncontested), all of
the liabilities and obligations of SPG and the SPG Business on the Closing Date
(other than any Excluded Liability), including (without limitation) the
following liabilities and obligations of the Seller to the extent the same shall
exist on the Closing Date (individually, a "Continuing Liability", and
collectively, the "Continuing Liabilities"):
(a) any and all unpaid liabilities and obligations of SPG to landlords,
lessors, suppliers, vendors and other trade Persons (other than loans and
advances owed to the Seller, any Affiliate of the Seller or any Significant
Shareholder);
(b) any and all liabilities and obligations of SPG under all customer and sales
contracts, purchase orders and other contracts, agreements, instruments and
other documents;
(c) any and all direct or indirect liabilities and obligations of SPG under the
Purchase Documents, Revolving Credit Documents or Term Loan Documents; and
(d) any and all Taxes with respect to SPG other than as expressly excluded in
Section 2.04() hereof.
Section 2.04. Liabilities Not Continuing with SPG. At the Closing the
obligations and liabilities of SPG shall not include, and to the extent not
previously extinguished or assumed by the Seller or any of its Affiliates, the
Seller shall extinguish or cause to be extinguished, or the Seller or SGRP shall
expressly assume and agree to be solely responsible for (in each case pursuant
to such option as the Seller
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may elect), and if so assumed, the Seller or such Affiliate (as the case may be)
shall thereafter pay, satisfy and discharge as and when due (and uncontested),
any of the following listed liabilities and obligations of the Seller to the
extent the same shall exist at the Effective Time (each, an "Excluded
Liability", and collectively, the "Excluded Liabilities"), including (without
limitation) the following:
(a) any liability or other obligation for any action, suit or proceeding to the
extent, and limited as provided, in Schedule 2.04 hereto with respect to
Xxxx Xxxx and Xxxx Xxxxxxx;
(b) any liability or other obligation of SPG under any employment agreement or
in respect of any pension, benefit or other welfare plan of the SPAR Group;
(c) any liability or other obligation of the Seller for any income or franchise
Tax arising out of the transactions contemplated by this Agreement;
(d) any liability or other obligations owed by SPG to the Seller, any Affiliate
of the Seller or any Significant Shareholders (other than any direct or
indirect liabilities and obligations of SPG under the Purchase Documents,
Revolving Credit Documents or Term Loan Documents);
(e) any federal, state, local or foreign income or franchise tax liability or
obligation of SPG attributable to periods before the Closing Date,
provided, however, that such liabilities and obligations shall be
Continuing Liabilities, rather than Excluded Liabilities, if SPG shall not
have upon request fully and timely cooperated with the SPAR Group as
contemplated in Section 2.11 hereof;
(f) any liabilities and obligations of SPG under the Senior Loan Documents on
the date hereof; or
(g) any Reserve for Disposal Costs (which will have been transferred from the
Books of SPG to those of the Seller or SGRP on or before the Closing Date).
Section 2.05. Purchase Price and Payment. The aggregate purchase price
for the Assets (the "Purchase Price") shall be an amount equal to the sum of (i)
a cash purchase price (the "Cash Purchase Price") equal to $6,000,000, plus (ii)
the total amount of all Continuing Liabilities. The Cash Purchase Price shall be
paid at the completion of the Closing by the Purchaser through the issuance and
delivery to the Seller of the Term Notes and Term Loan Agreement, which shall be
paid as provided therein.
Section 2.06. Allocation of Purchase Price. The Purchase Price shall
be allocated as provided in Schedule 2.06 hereto. The Purchaser shall, and shall
cause SPG to, execute and deliver to the Seller a 338(h)(10) election under the
Tax Code if the Seller so requests. The Seller and the Purchaser agree to
report, pursuant to Section 1060 of the Code, an allocation of such Aggregate
Purchase Price in accordance with such schedule and agree to act in accordance
therewith in the preparation and filing of all income tax returns.
Section 2.07. Taxes. The Purchaser shall be responsible for the
payment of any and all Taxes relating to the transactions contemplated
hereunder, excluding, however, such Taxes as are imposed on the Seller by the
United States of America or the jurisdiction of its organization or chief
executive office (or any political subdivision thereof) with respect to the
income or franchise of the Seller.
Section 2.08. Instruments of Conveyance. (a) In order to effectuate
the transfer of the Excluded Assets contemplated by Section 2.02 hereof, upon
the request of the Seller, SPG will execute and deliver, dated on or as of the
Closing Date, all such bills of sale and other documents or instruments of
assignment, transfer or conveyance as the Seller shall deem necessary or
appropriate to vest in or confirm to the Seller good and marketable title to the
Excluded Assets, in each case free and clear of all Liens.
(b) In order to effectuate the transfer of the Excluded Liabilities
contemplated by Section 2.04 hereof, upon the request of SPG, the Seller or its
designated Affiliate will execute and deliver, dated on or as of the Closing
Date, all such assumption agreements and other documents or instruments of
assumption, transfer or conveyance as SPG shall deem necessary or appropriate to
vest in or confirm to SPG that the Seller has assumed full and complete
liability for the Excluded Liabilities.
(c) In executing any of the foregoing, no Party shall be required to
assume any greater duty, obligation or liability than is already required of it
under this Agreement and the other Purchase Documents.
Section 2.09. Investment Intent, Independent Decision, Etc. The
Purchaser hereby represents and warrants to the Seller, and acknowledges,
understands and agrees with the Seller, that: (a) the
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SPG Stock is not currently being registered under the Securities Act; (b) the
purchase and sale of the SPG Stock hereunder is intended to be exempt from
registration under the Securities Act by virtue of Section 4(1) of the
Securities Act based, in part, upon the representations, warranties and
agreements of the Purchaser contained herein; (c) the Purchaser is a
sophisticated and knowledgeable investor, both generally and with respect to the
SPG Stock and the SPG Business, and has such knowledge and experience in
financial, tax and business matters so as to enable Purchaser to utilize the
information made available to it in connection with Purchaser's purchase of the
SPG Stock to evaluate the merits and risks of an investment in the SPG Stock and
to make an informed investment decision with respect thereto; (d) as the
management of the Purchaser is the same as the current management of SPG
continuing in such capacities following the Closing Date, the Purchaser is fully
familiar with all aspects of SPG and the SPG Business, including (without
limitation) SPG's assets, business, capitalization, equipment, expenses,
financial condition, inventory, liabilities, loans, management, operations,
properties, prospects, working capital, and other matters, and has had access to
all documents and information with respect thereto deemed necessary or desirable
by the Purchaser to make its investment decision; (e) the Purchaser does not
require any other documents or information prior to completing its purchase of
the SPG Stock; (h) the Purchaser has reviewed, and evaluated all financial and
other information necessary or prudent to make the Purchaser's investment
decision; (i) the Purchaser is acquiring the SPG Stock solely for its own
account for investment and not with a view to resale or distribution of any of
the SPG Stock; (j) the Purchaser may be required to bear the economic risk of
the investment indefinitely because none of the SPG Stock may be sold,
hypothecated or otherwise disposed of unless subsequently registered under the
Securities Act or an exemption from registration is available; (k) neither
Seller nor SPG is obligated to register the SPG Stock under the Securities Act;
and (l) the certificates evidencing the SPG Stock have legends placed on the
back thereof to the effect that such shares of common stock have not been
registered under the Securities Act.
Section 2.10. No Representations, Warranties or Liability Respecting
SPG, Etc. (a) The Purchaser hereby represents and warrants to the Seller, and
acknowledges, understands and agrees with the Seller, that the Purchaser is
acquiring the SPG Stock without any representation or warranty respecting any
aspect of SPG or the SPG Business whatsoever, including (without limitation)
without any representation or warranty with respect to any of the following:
(i) the past, present or future financial condition of SPG or any financial
statements or projections pertaining thereto;
(ii) any past, present or future assets, business, capitalization, equipment,
expenses, inventory, loans, management, operations, properties, prospects,
or working capital, or except as otherwise expressly provided in Article
III hereof, any past, present or future liabilities or other matters;
(iii)the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any contract or other document to which SPG is or may be a
party;
(iv) the willingness, ability or likelihood of SPG to perform its obligations
under any Term Loan Document or Revolving Credit Document.
(b) The Purchaser hereby represents and warrants to the Seller, and
acknowledges, understands and agrees with the Seller, that, except as expressly
and specifically provided in this Agreement: (a) none of the Seller, the SPAR
Group or any of their respective Representatives shall have any liability,
obligation or responsibility whatsoever for any acts or omissions of any
officer, employee or agent of SPG or any of its Representatives; and (b) neither
the Seller nor any of its Representatives has, or shall be deemed or construed
to have, any agreement, duty or obligation to inform the Purchaser of any matter
relating to any aspect of SPG or the SPG Business or to furnish to the Purchaser
any information pertaining thereto.
(c) Without limiting any of the foregoing, the Purchaser hereby
represents and warrants to the Seller, and acknowledges, understands and agrees
with the Seller, that, except as expressly and specifically provided in this
Agreement, none of the Seller, the SPAR Group and their respective
Representatives has (and none of them shall be deemed or construed to have) (i)
made any representation or warranty, (ii) offered any advice or analysis, (iii)
made any assumption of any liability or responsibility, (iv) made any guaranty
or assurance or (v) assumed any other recourse whatsoever, whether orally or
otherwise, and whether express or implied, with respect to any matter
whatsoever, including (without limitation) respecting any of the matters in the
other subsections of this Section or any other aspect of SPG or the SPG
Business.
Section 2.11. Tax Audits, Further Assurances. Notwithstanding anything
to the contrary in this Agreement or any other Purchase Document, the Seller and
the SPAR Group shall have the sole and exclusive right at their own cost and
expense to manage, conduct, defend and conclude each and every audit,
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inquiry, proceeding, lawsuit or claim respecting any federal, state, local or
foreign income or franchise tax liability or obligation of SPG attributable to
any period ending on or before the Closing Date. The Purchaser and SPG each
shall provide (as, when and within the timeframes requested) such access,
information and assistance, do such further acts and things, and execute and
deliver such statements, assignments, agreements, instruments and other
documents as the Seller or its Representatives from time to time reasonably may
request in connection therewith, each in such form and substance as may be
reasonably acceptable to the Seller; provided, however, that notwithstanding
anything in this Agreement to the contrary, SPG shall be liable for the
applicable costs, expenses and Taxes if it does not timely and fully comply with
this Section in connection therewith. Neither the Purchaser, nor SPG nor any of
their respective Representatives shall take any action with respect thereto
other than pursuant to and in accordance with the express written request or
instructions of the Seller.
Section 2.12. SPAR eTraining Business and Technology, Further
Assurances. Notwithstanding anything to the contrary in this Agreement or any
other Purchase Document, the Purchaser and SPG each acknowledge and agree that
the Seller and the SPAR Group have and shall have the sole and exclusive
ownership of the SPAR eTraining Business and the SPAR eTraining Intellectual
Property. To the extent SPG has or may have any right, title or interest in or
to the SPAR eTraining Business and the SPAR eTraining Intellectual Property
(whether known or unknown, and irrespective of whether any patent, copyright,
trademark or other right or protection has been or can be sought, issued or
obtained in connection therewith), SPG hereby sells, assigns, conveys and
transfers to SGRP and its successors and assigns forever each and every such
right, title, and interest, all without any further consideration and effective
as of the Effective Time. The Purchaser and SPG each shall provide (as, when and
within the timeframes requested) such access, information and assistance, do
such further acts and things, and execute and deliver such statements,
assignments, agreements, instruments and other documents as the Seller or its
Representatives from time to time reasonably may request in connection therewith
to confirm the SPAR Groups ownership thereof, to assist in their prosecution of
any patent, copyright, trademark or other right or protection with respect
thereto, and to transfer and relinquish any residual right or development with
respect thereto, each in such form and substance as may be reasonably acceptable
to the Seller. Neither the Purchaser, nor SPG nor any of their respective
Representatives shall take any action with respect thereto other than (i)
pursuant to and in accordance with the express written request or instructions
of SGRP or (ii) as licensee under, pursuant to and in accordance with the
express terms of the SPAR eTraining Agreement.
Section 2.13. Liability of Certain Officers. Notwithstanding anything
to the contrary in this Agreement, the Parties do not intend that Mr. Xxxxxx
Xxxxxx have, and each Party agrees that he will not have, any personal liability
for the obligations of SPG or Holdings under this Agreement, in each case except
to the extent occasioned by his own acts or omissions amounting to willful
breach of duty or contract, gross negligence or willful misconduct. However,
nothing in the foregoing is intended, or shall be deemed or construed, to in any
way limit the personal liability (if any) that such Person may have under any
agreement, certificate, instrument or other document to which he is a signatory
(other than where his expressly signing for SPG or Holdings), whether such
personal liability may arise under the terms thereof or Applicable Law.
Section 2.14. Release of Former SPG/SGRP Representatives and
Stockholders. The Purchaser and SPG, for itself and its successors and assigns,
each hereby forever expressly, unconditionally and irrevocably releases, acquits
and discharges (i) each Representative of SGRP or any other member of the SPAR
Group who at any time previously severed (whether formally or informally and
whether directly or indirectly) as a Representative of SPG, and (ii) each prior
direct or indirect stockholder of SPG (except for the express obligations and
liabilities of the Seller and SGRP under this Agreement), from any and all
claims, actions, causes, debts, contracts, damages, demands and Losses
whatsoever (whether at law, in equity or otherwise, and whether known or
unknown) arising from any representation or services rendered by or any other
act or omission of any such Person (whether to or on behalf of SPG or otherwise)
at any time up to the conclusion of the Closing hereunder.
Section 2.15. Excluded Wile and Whitney Litigation, Further
Assurances. Notwithstanding anything to the contrary in this Agreement or any
other Purchase Document, the Seller and the SPAR Group shall have the sole and
exclusive right at their own cost and expense to manage, conduct, defend and
conclude each and every aspect of any arbitration, proceeding, lawsuit or claim
respecting any aspect of the Excluded Liabilities respecting Xxxx Xxxxxxx and
Xxxx Xxxx. The Purchaser and SPG each shall provide (as, when and within the
timeframes requested) such access, information and assistance, do such further
acts and things, and execute and deliver such statements, assignments,
agreements, instruments and other documents as the Seller or its Representatives
from time to time reasonably may request in connection therewith, each in such
form and substance as may be reasonably acceptable to the Seller; provided,
however, that notwithstanding anything in this Agreement to the contrary, SPG
shall be liable for the applicable costs, expenses and Losses if it does not
timely and fully comply with this Section in
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connection therewith. Neither the Purchaser, nor SPG nor any of their respective
Representatives shall take any action with respect thereto other than pursuant
to and in accordance with the express written request or instructions of the
Seller.
Section 2.16. Continuing Liabilities for kForce Litigation, Further
Assurances. Notwithstanding anything to the contrary in this Agreement or any
other Purchase Document, the Purchaser and SPG shall have the sole and exclusive
right at their own cost and expense to manage, conduct, defend and conclude each
and every aspect of any arbitration, proceeding, lawsuit or claim respecting any
aspect of the Continuing Liabilities respecting kForce. The Seller and SGRP each
shall provide (as, when and within the timeframes reasonably requested) such
access, information and assistance, do such further acts and things, and execute
and deliver such statements, assignments, agreements, instruments and other
documents as SPG or its Representatives from time to time reasonably may request
in connection therewith (at the sole cost and expense of SPG), each in such form
and substance as may be reasonably acceptable to the Seller; provided, however,
that notwithstanding anything in this Agreement to the contrary, the Seller
shall be liable for the applicable costs, expenses and Losses if it does not
comply in all material respects with this Section in connection therewith.
Neither the Seller, nor SGRP nor any of their respective Representatives shall
take any action with respect thereto other than pursuant to and in accordance
with the express written request or instructions of the Purchaser or SPG.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
--------------------------------------------
To induce the Purchaser to enter into this Agreement and the other
Purchase Documents to which it is a party and to purchase the SPG Stock, the
Seller represents and warrants to the Purchaser that:
Section 3.01. Organization, Powers, Etc. The Seller: (a) is duly
organized, validly existing and in good standing under the laws of its state of
incorporation, which state is correctly set forth in the Introduction hereto
(i.e., first paragraph of this Agreement); (b) has the power and authority to
carry on its business as now conducted and to own or hold under lease the assets
and properties it purports to own or hold under lease; (c) is duly qualified,
licensed or registered to transact its business and in good standing in every
jurisdiction in which it purports to or carries on its business or holds under
lease any of its assets and properties and the failure to do so would be
reasonably likely to have a Material Adverse Effect; and (d) has the corporate
power and authority to execute and deliver this Agreement and each of the other
Purchase Documents to which it is or will be a party and to perform all of its
obligations hereunder and thereunder.
Section 3.02. Consents, Etc. Except as already obtained, no consent,
approval or authorization of, or registration, declaration or filing with, any
Authority or other Person (including, without limitation, the shareholders of
the Seller) is required as a condition precedent, concurrent or subsequent to or
in connection with the due and valid execution, delivery and performance by the
Seller of this Agreement or any other Purchase Document to which the Seller is
or will be a party or the legality, validity, binding effect or enforceability
of any of their respective representations, warranties, covenants and other
terms and provisions.
Section 3.03. Authorization, Conflicts and Validity. The execution and
delivery by the Seller of this Agreement and each of the other Purchase
Documents to which it is or will be a party and the performance by the Seller of
all of its obligations hereunder and thereunder: (a) have been duly authorized
by all requisite corporate action; (b) will not violate or be in conflict with
any term or provision of (i) any Applicable Law, (ii) any judgment, order, writ,
injunction, decree or consent of any court or other judicial Authority, or (iii)
any Organizational Document of the Seller; (c) will not violate, be in conflict
with, result in a breach of or constitute a default (with or without the giving
or receipt of notice, the acquisition of knowledge or the passage of time or any
combination thereof) under any term or provision of any Organizational Document
or other Material Document; and (d) except as specifically contemplated by this
Agreement or any other Purchase Document, will not result in the creation or
imposition of any Lien of any nature upon any of its assets and properties.
Section 3.04. Enforceable Agreement. This Agreement is, and the other
Purchase Documents to which the Seller is or will be a party when executed and
delivered will be, legal, valid and binding obligations of the Seller,
enforceable in accordance with their respective terms and provisions, except as
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization and other laws affecting the rights or remedies of creditors
generally and (b) rules of equity affecting the enforcement of obligations
generally (whether at law or in equity).
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Section 3.05. Litigation. Except as set forth in Schedule 3.05 hereto,
to the knowledge of the Seller, there are no actions, suits, investigations or
proceedings (whether or not purportedly on behalf of the Seller) pending or, to
the best knowledge of the Seller, threatened or contemplated at law, in equity,
in arbitration or by or before any other Authority involving or affecting: (a)
the Seller that, if adversely determined, could have a Material Adverse Effect
on the Seller; (b) any alleged criminal act or activity on the part of the
Seller or (to the knowledge of the Seller) any of its Representatives; (c) any
ESOP Related Document, Senior Loan Document, or any Organizational Document of
the Seller; (d) any Material Document that, if adversely determined, could have
a Material Adverse Effect on the Seller; or (e) any of the transactions
contemplated in this Agreement and the other Purchase Documents; nor, to the
knowledge of the Seller, is there any reasonable basis for the institution of
any such action, suit, investigation or proceeding.
Section 3.06. No Defaulted Judgments, Etc. The Seller is not in
default with respect to any judgment, order, writ, injunction, decree or consent
of any court or other judicial Authority, which default could have or has had a
Material Adverse Effect.
Section 3.07. SPG Stock. SPG is authorized to issue 2,500 shares of
common stock with no par value, of which 72 shares are currently issued and
outstanding. The Seller is the record and beneficial owner of all such
outstanding shares of SPG Stock. Except for the normal restrictions on public
offerings and the like under the Securities Act, except for the pledges of the
SPG Stock to the Seller (as lender) under the Revolving Credit Documents and
Term Loan Documents to be made at the conclusion of the Closing, and except for
the pledges being released (at the conclusion of the Closing) of the SPG Stock
to the Senior Lender under the Senior Loan Documents, none of those outstanding
securities: (i) is subject to any warrant, option, put, call or other right to
acquire, redeem, sell, transfer or encumber it; (ii) is governed by or otherwise
subject to any shareholders agreement, voting trust or similar agreement or
arrangement; and (iii) is limited or otherwise restricted in any way respecting
assignability, transferability or any voting, dividend, distribution or other
ownership right (whether or not reflected on the face of the certificate, in any
Organizational Document, or otherwise). Each of the outstanding shares of SPG
Stock (a) was duly authorized and validly issued, is fully paid and
non-assessable, and is not and will not be subject to any preemptive or similar
right or restriction, and (b) was acquired from the issuer in a transaction in
compliance with and exempt from registration under the Securities Act and other
Applicable Law.
Section 3.08. Certain SPG Liabilities. To the knowledge of Seller and
SGRP, no officer of SGRP (whether in his capacity as an officer of SGRP or of
SPG) has created any continuing contractual liability on the part of SPG,
excluding, however, any liability that either (a) has been extinguished or
assumed as contemplated hereunder, (b) has been identified in any of the
financial statements of SPG, this Agreement or any other Purchase Document, (c)
is known by or has been disclosed to (or the underlying obligations, claims or
facts that may reasonably be expected to give rise thereto are known by or have
been disclosed to) any past or present SPG officer (other than one who is also a
SGRP officer), or (d) was created by or with the assistance of (or the
underlying obligations or facts that may reasonably be expected to give rise
thereto were created by or with the assistance of ) any past or present SPG
officer (other than one who is also a SGRP officer).
Section 3.09. Senior Loan Agreement Amendment. All of the "Conditions
to Effectiveness" set forth in Section 5 of that certain Consent, Release and
Amendment No. 6 to the Senior Loan Agreement have been satisfied or waived as of
the date of execution and delivery thereof by the Senior Lender, and such
Amendment has taken effect as of the date hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
To induce the Seller to enter into this Agreement and the other
Purchase Documents to which it is a party and to sell the SPG Stock, the
Purchaser represents and warrants to the Seller that:
Section 4.01. Organization, Powers, Etc. The Purchaser: (a) is duly
organized, validly existing and in good standing under the laws of its state of
incorporation, which state is correctly set forth in the Introduction hereto
(i.e., first paragraph of this Agreement); (b) has the power and authority to
carry on its business as now conducted and to own or hold under lease the assets
and properties it purports to own or hold under lease; (c) is duly qualified,
licensed or registered to transact its business and in good standing in every
jurisdiction in which it purports to or carries on its business or holds under
lease any of its assets and properties and the failure to do so would be
reasonably likely to have a Material Adverse Effect; and (d) has the corporate
power and authority to execute and deliver this Agreement and each of the other
Purchase Documents to which it is or will be a party and to perform all of its
obligations hereunder and thereunder.
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Section 4.02. Consents, Etc. Except as already obtained, no consent,
approval or authorization of, or registration, declaration or filing with, any
Authority or other Person (including, without limitation, the shareholders of
the Purchaser) is required as a condition precedent, concurrent or subsequent to
or in connection with the due and valid execution, delivery and performance by
the Purchaser of this Agreement or any other Purchase Document to which the
Purchaser is or will be a party or the legality, validity, binding effect or
enforceability of any of their respective representations, warranties, covenants
and other terms and provisions.
Section 4.03. Authorization, Conflicts and Validity. The execution and
delivery by the Purchaser of this Agreement and each of the other Purchase
Documents to which it is or will be a party and the performance by the Purchaser
of all of its obligations hereunder and thereunder: (a) have been duly
authorized by all requisite corporate action; (b) will not violate or be in
conflict with any term or provision of (i) any Applicable Law, (ii) any
judgment, order, writ, injunction, decree or consent of any court or other
judicial Authority, or (iii) any Organizational Document of the Purchaser; (c)
will not violate, be in conflict with, result in a breach of or constitute a
default (with or without the giving or receipt of notice, the acquisition of
knowledge or the passage of time or any combination thereof) under any term or
provision of any Organizational Document or other Material Document; and (d)
except as specifically contemplated by this Agreement or any other Purchase
Document, will not result in the creation or imposition of any Lien of any
nature upon any of its assets and properties.
Section 4.04. Enforceable Agreement. This Agreement is, and the other
Purchase Documents to which the Purchaser is or will be a party when executed
and delivered will be, legal, valid and binding obligations of the Purchaser,
enforceable in accordance with their respective terms and provisions, except as
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization and other laws affecting the rights or remedies of creditors
generally and (b) rules of equity affecting the enforcement of obligations
generally (whether at law or in equity).
Section 4.05. Litigation. Except as set forth in Schedule 3.05 hereto,
there are no actions, suits, investigations or proceedings (whether or not
purportedly on behalf of the Purchaser) pending or, to the best knowledge of the
Purchaser, threatened or contemplated at law, in equity, in arbitration or by or
before any other Authority involving or affecting: (a) the Purchaser that, if
adversely determined, could have a Material Adverse Effect on the Purchaser; (b)
any alleged criminal act or activity on the part of the Purchaser or (to the
knowledge of the Purchaser) any of its Representatives; (c) any ESOP Related
Document, Term Loan Document, or any Organizational Document of the Purchaser;
(d) any Material Document that, if adversely determined, could have a Material
Adverse Effect on the Purchaser; or (e) any of the transactions contemplated in
this Agreement and the other Purchase Documents; nor, to the knowledge of the
Purchaser, is there any reasonable basis for the institution of any such action,
suit, investigation or proceeding. Section 4.06. No Defaulted Judgments, Etc.
The Purchaser is not in default with respect to any judgment, order, writ,
injunction, decree or consent of any court or other judicial Authority, which
default could have or has had a Material Adverse Effect.
ARTICLE V
INDEMNIFICATION AND CERTAIN OTHER CONTINUING OBLIGATIONS
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Section 5.01. Indemnification by the Seller. The Purchaser, its
Affiliates and their respective accountants, attorneys and Representatives
(individually, a "Purchaser's Indemnified Person", and collectively, the
"Purchaser's Indemnified Persons") each shall be indemnified, reimbursed and
held harmless by the Seller upon demand, and (at the request of the Purchaser)
defended at the expense of the Seller with counsel selected by the Seller and
reasonably acceptable to the Purchaser, from and against any and all claims,
liabilities, expenses (including, without limitation, the disbursements,
expenses and reasonable fees of their respective attorneys) and other Losses
that may be imposed upon, incurred by or asserted against any Purchaser's
Indemnified Person resulting from, arising out of or directly or indirectly
related to: (a) any Excluded Liability; (b) any inaccuracy in or omission from
any representation, warranty or other information contained in this Agreement or
any other Purchase Document; or (c) any default (whether in whole or in part) in
the due or timely observance, performance or satisfaction of any covenant or
other term or provision of this Agreement or any other Purchase Document by the
Seller or any other Person (other than the ESOP Trustee, the Purchaser or SPG).
Section 5.02. Indemnification by the Purchaser. The Seller, its
Affiliates and their respective accountants, attorneys and Representatives
(individually, a "Seller's Indemnified Person", and collectively, the "Seller's
Indemnified Persons") each shall be indemnified, reimbursed and held harmless by
the Purchaser upon demand, and (at the request of the Seller) defended at the
expense of the Purchaser with
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counsel selected by the Purchaser and reasonably acceptable to the Seller, from
and against any and all claims, liabilities, expenses (including, without
limitation, the disbursements, expenses and reasonable fees of their respective
attorneys) and other Losses that may be imposed upon, incurred by or asserted
against any Seller's Indemnified Person resulting from, arising out of or
directly or indirectly related to: (a) SPG, the SPG Business or any Continuing
Liability; (b) any inaccuracy in or omission from any representation, warranty
or other information contained in this Agreement or any other Purchase Document;
or (c) any default (whether in whole or in part) in the due or timely
observance, performance or satisfaction of any covenant or other term or
provision of this Agreement or any other Purchase Document by the Purchaser,
SPG, the ESOP Trustee or any other Person (other than the Seller).
Section 5.03. Brokerage Disclaimer and Indemnity. Each Party
represents and warrants to the other that neither such Party nor any of its
Representatives has any contact or dealings regarding the Business or the Assets
or any part thereof or any communication in connection with the subject matter
of the transactions contemplated herein with any finder, agent or broker,
whether or not licensed herein as such, and each Party covenants and agrees to
hold the other harmless with respect thereto as hereinafter provided. In the
event that any finder, agent or broker perfects a claim for a commission or
finder's fee based upon such contracts, dealings or communication, the Party
whose acts gave rise to such claim shall indemnify, hold harmless and defend the
other Party from and against said claim, and all costs, expenses and other
liabilities (including reasonable attorneys' fees) incurred by the other Party
in defending against the same.
Section 5.04. Access to Books and Records. (a) From and after the
Closing Date, at all reasonable times and as often as the Seller reasonably may
request, on at least one Business Days prior notice, the Purchaser shall, and
shall cause SPG and each of its Affiliates to, permit the Seller (and its
accountants, other Representatives or attorneys), to have complete and
unrestricted access to all Books and Records retained by SPG or received by the
Purchaser relating to SPG or the SPG Business as the Seller may reasonably
require, and to make copies and excerpts from them and to discuss with them the
Purchaser's officers, directors, employees, accountants and agents, in
connection with (i) the preparation, filing or audit of the federal, state,
local or foreign income or other tax returns of the Seller or any Affiliate of
the Seller, or with respect to any dispute, refund, claim or litigation relating
to those returns and the taxes due pursuant to those returns, (ii) the
initiation, prosecution or defense of any other litigation by the Seller or any
Affiliate of the Seller, (iii) compliance by the Seller or any of its Affiliates
with any legal or regulatory obligation of those entities, (iv) any Excluded
Asset, (v) the assumption or defense of any Excluded Liability or any Lien, or
(vi) the administration, enforcement or adjudication of this Agreement and the
other Purchase Documents. The Purchaser shall maintain all retained Books and
Records for at least six years following the Closing Date, except that the
Purchaser from time to time at its cost and expense may deliver portions thereof
to the Seller.
(b) From and after the Closing Date, at all reasonable times and as
often as the Purchaser or SPG reasonably may request, on at least one Business
Days prior notice, the Seller shall, and shall cause SPG and each of its
Affiliates to, permit the Purchaser or SPG (and its accountants, other
Representatives or attorneys), to have complete and unrestricted access to all
accounting records of SPG retained by SGRP as the Purchaser or SPG may
reasonably require, and to make copies and excerpts from them and to discuss
with them the Seller's officers, directors, employees, accountants and agents,
in connection with (i) the preparation, filing or audit of the federal, state,
local or foreign income or other tax returns of the Purchaser or SPG with
respect to any period after the date hereof, or with respect to any dispute,
refund, claim or litigation relating to those returns and the taxes due pursuant
to those returns, (ii) the collection of any account receivable, (iii) the
initiation, prosecution or defense of any other litigation by the Purchaser or
SPG, (iv) compliance by the Purchaser or SPG with any legal or regulatory
obligation of those entities, (v) the assumption or defense of any Continuing
Liability or any Lien, or (vi) the administration, enforcement or adjudication
of this Agreement and the other Purchase Documents. The Seller shall maintain
all such retained accounting Books and Records for at least six years following
the Closing Date, except that the Seller from time to time may deliver an
electronic copy or other portions thereof to the Purchaser.
Section 5.05. Further Assurances. Each Party agrees to do such further
acts and things and to execute and deliver such statements, assignments,
agreements, instruments and other documents as the other Party from time to time
reasonably may request (a) in order to evidence or confirm (i) the transfer of
any Excluded Asset, the retention of any non-Excluded Asset or enforcement of
any transferred or retained right, power, privilege, remedy or interest, (ii)
the assumption of any liability expressly assumed hereunder, (iii) the
continuation of any liability not expressly assumed hereunder, or (iv) the
release of any Excluded Liability or any Lien, or (b) in connection with the
administration, enforcement or adjudication of this Agreement and the other
Purchase Documents, in order to effectuate the purpose and the terms and
provisions of this Agreement and the other Purchase Documents, each in such form
and substance as may be reasonably acceptable to the Parties; provided that in
connection with the foregoing no Party shall be required to limit or relinquish
any retained asset, right, power, privilege, remedy or interest or assume any
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greater duty, obligation or liability than is already required of it under this
Agreement and the other Purchase Documents.
ARTICLE VI
OTHER REMEDIES, ETC.
--------------------
Section 6.01. Enforcement, Etc. Any Party, in its sole and absolute
discretion, may proceed to exercise or enforce any right, power, privilege,
remedy or interest that such Party may have under this Agreement, any other
Purchase Document or Applicable Law: (a) at law, in equity, in rem or in any
other forum available under Applicable Law; (b) without notice except as
otherwise expressly provided herein; (c) without pursuing, exhausting or
otherwise exercising or enforcing any other right, power, privilege, remedy or
interest that such Party may have against or in respect of the other Party or
any other Person or thing; and (d) without regard to any act or omission of such
Party or any other Person. Any Party may institute one or more proceedings
(which may be separate proceedings) with respect to this Agreement and each of
the other Purchase Documents in such order and at such times as such Party may
elect in its sole and absolute discretion. This Agreement and the other Purchase
Documents may be enforced with respect to the other Party (Parties) without the
presence or participation of any other Person (other than such other Party or
Parties), whether through lack of jurisdiction, venue or service or otherwise,
and no Party will raise, and each Party hereby forever expressly,
unconditionally and irrevocably waives, any objection or defense respecting the
need for any such presence or participation.
Section 6.02. Consent to Jurisdiction, Waiver of Personal Service,
Etc. The Parties each hereby consents and agrees that the Supreme Court of the
State of New York for the County of Westchester and the United States District
Court for the Southern District of New York (Westchester Division) each shall
have exclusive personal jurisdiction and proper venue with respect to any
dispute between the Parties under any Purchase Document. In any dispute, no
Party will raise, and each Party hereby forever expressly, unconditionally and
irrevocably waives, any objection or defense to any such jurisdiction as an
inconvenient forum. Without in any way limiting the preceding consents to
jurisdiction and venue, the Parties agree to submit to the jurisdiction of such
New York courts in accordance with Section 5-1402 of the General Obligations Law
of the State of New York or any corresponding or succeeding provisions thereof.
The Purchaser hereby forever expressly, unconditionally and irrevocably waives
personal service of any summons, complaint or other process, which may be
delivered by any of the means permitted for notices under Section 7.01 hereof.
In addition to (and without limitation of) any such delivery or any other
delivery permitted under Applicable Law, the Purchaser agrees to execute an
deliver to the Seller a Designation of Agent for Service appointing CT
CORPORATION SYSTEM as the agent of the Purchaser for service in the State of New
York, which the Purchaser hereby irrevocably authorizes the Seller to date with
such date (if undated) and file with the appropriate Authority at such time as
the Seller in its sole and absolute discretion may elect. Within thirty (30)
days after service of process, the Purchaser agrees to appear or answer any
summons or complaint of the Seller, and should the Purchaser fail to appear or
answer within said thirty-day period, the Purchaser shall be deemed in default
under that action and judgment may be requested by the Seller and entered in
favor of the Seller against the Purchaser for the relief demanded in any
complaint so served. Each Party acknowledges and agrees that a final judgment in
any such action, suit or proceeding shall be conclusive and binding upon the
Parties and may be enforced against the applicable Party or any of its assets or
properties in any other appropriate jurisdiction selected by the prevailing
Party (in its sole and absolute discretion) by an action, suit or proceeding in
such other jurisdiction. To the extent that any Party may be entitled to
immunity (whether by reason of sovereignty or otherwise) from suit in any
jurisdiction, from the jurisdiction of any court or from any other legal
process, such Party hereby forever expressly, unconditionally and irrevocably
waives such immunity.
Section 6.03. Waiver of Setoff, Special Damages, Etc. (a) The
Purchaser hereby forever expressly, unconditionally and irrevocably waives, and
agrees that it will not exercise, any and all rights of setoff, recoupment,
abatement or reduction respecting any payment due (whether as scheduled or
required, upon acceleration or as sought in any action, suit or proceeding by
the Seller) under this Agreement, any other Purchase Document or any other
agreement, facility or relationship with the Seller that may now or hereafter be
accorded to the Purchaser under Applicable Law or otherwise. To the extent not
required as a compulsory counterclaim in any related ongoing proceeding, the
Purchaser (i) shall pursue separate exercise and enforcement of any right,
power, privilege, remedy or interest retained (and not waived) by the Purchaser
under this Agreement, the other Purchase Documents, any other agreement,
facility or relationship with the Seller and Applicable Law, and (ii) shall not
seek to exercise or enforce any such right, power, privilege, remedy or interest
in any proceeding instituted by the Seller under or in respect of any Purchase
Document,
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whether through joinder, consolidation, setoff, recoupment, abatement,
reduction, counterclaim, defense or otherwise.
(b) In any dispute with the Seller, each Party covenants and agrees
that it will not seek, recover or retain any, and each Party hereby forever
expressly, unconditionally and irrevocably waives any and all, special,
exemplary, punitive, statutory and/or consequential damages (whether through
action, suit, counterclaim or otherwise and whether in contract, tort, strict
liability or otherwise) to the extent waiver is not limited under Applicable
Law.
Section 6.04. Relationship of the Purchaser and the Seller, Etc. (a)
The Parties acknowledges and agrees that: (i) the Seller is acting solely in the
capacity of a seller respecting this Agreement and the other Purchase Documents;
(ii) the sole relationship of the Seller with the Purchaser under the Purchase
Documents is that of arm's-length seller and purchaser, respectively, and no
term or provision of this Agreement or any other Purchase Document is intended
to create, nor shall any such term or provision be deemed or construed to have
created, any joint venture, partnership, trust, agency or other fiduciary or
advisory relationship with the Purchaser, any of its subsidiaries, or any of
their respective Affiliates; (iii) the Purchaser is experienced in the
ownership, operation and financing of its current and contemplated business,
assets and properties; (iv) the Purchaser has independently and fully reviewed
and evaluated the Purchase Documents, the transactions contemplated thereunder
and the potential effects of such transactions on the assets, business,
operations, properties and condition (financial or otherwise) of each of the
Purchaser, SPG and the subsidiaries and Affiliates of the Purchaser (if any),
which review and evaluation was made together with counsel and (to the extent
deemed prudent by the Purchaser) financial and other advisors to the Purchaser;
and (v) neither the Purchaser nor any of its Affiliates is relying upon (A) the
expertise, business acumen or advice of the Seller in connection with any aspect
of the ownership, operation or financing of its business, assets or properties
or its condition (financial or otherwise), or (B) any oral or written advice,
analysis or assurance of any kind whatsoever from the Seller.
(b) The Purchaser acknowledges and agrees that the Seller, its
Affiliates and its Representatives may be providing debt financing, equity
capital or other services (including SPAR Business services) to other companies
or Persons in respect of which the Purchaser may have conflicting interests
regarding the transactions described herein and otherwise. The Purchaser also
acknowledges and agrees that neither the Seller nor any of its Affiliates or
Representatives has any obligation to use in connection with the transactions
contemplated by any Purchase Document, or to advise the Purchaser of, or furnish
to the Purchaser, any confidential or other information obtained by the Seller
or any of their Affiliates or Representatives from or with respect to other
transactions, companies or Persons.
Section 6.05. Reliance. (a) The Seller shall be entitled to rely upon
any notice, consent, certificate, affidavit, statement, paper, document, writing
or other communication (which to the extent permitted hereunder may be by
telecopy or telephone) reasonably believed by the Seller to be genuine and to
have been signed, sent or made by the proper Person or Persons, and upon
opinions and advice of legal counsel (including counsel for the Purchaser),
independent public accountants and other experts selected by the Seller. The
Seller shall be entitled to rely, and in entering into this Agreement and the
other Purchase Documents in fact has relied, upon the representations,
warranties and other information respecting the Purchaser contained in this
Agreement and the other Purchase Documents notwithstanding any investigation,
analysis or evaluation that may have been made or from time to time may be made
by the Seller or its designees of all or any part of the assets, business,
operations, properties or condition (financial or otherwise) of the Purchaser or
any other Person.
(b) The Purchaser shall be entitled to rely upon any notice, consent,
certificate, affidavit, statement, paper, document, writing or other
communication (which to the extent permitted hereunder may be by telecopy or
telephone) reasonably believed by the Purchaser to be genuine and to have been
signed, sent or made by the proper Person or Persons, and upon opinions and
advice of legal counsel (including counsel for the Seller), independent public
accountants and other experts selected by the Purchaser. The Purchaser shall be
entitled to rely, and in entering into this Agreement and the other Purchase
Documents in fact has relied, upon the representations, warranties and other
information respecting the Seller contained in this Agreement and the other
Purchase Documents notwithstanding any investigation, analysis or evaluation
that may have been made or from time to time may be made by the Purchaser or its
designees of all or any part of the assets, business, operations, properties or
condition (financial or otherwise) of the Seller or any other Person.
Section 6.06. Exculpation. (a) Except to the extent otherwise
expressly provided in this Agreement or any other Purchase Document, no Seller's
Indemnified Person shall incur any liability or Loss for acts and omissions
resulting from, arising out of or related directly or indirectly to this
Agreement, any other Purchase Document, SPG's assets or liabilities or the SPG
Business; and the Purchaser and SPG each
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hereby forever expressly, unconditionally and irrevocably waives any and all
claims, actions and Losses against each and every Seller's Indemnified Person
resulting from, arising out of or related directly or indirectly to any and all
of the foregoing acts, omissions and circumstances; in each case except to the
extent occasioned by such Seller's Indemnified Person's own acts or omissions
breaching a duty owed to the Purchaser and amounting to gross negligence or
willful misconduct as finally determined pursuant to Applicable Law by a
governmental authority having jurisdiction; provided, however, that nothing in
this subsection is intended, or shall be deemed or construed, to release any
Party from its express representations, warranties, covenants, obligations and
agreements under this Agreement and the other Purchase Agreement.
(b) Except to the extent otherwise expressly provided in this
Agreement or any other Purchase Document, no Purchaser's Indemnified Person
shall incur any liability or Loss for acts and omissions resulting from, arising
out of or related directly or indirectly to this Agreement (but not any other
Purchase Document or any Revolving Credit Document or Term Loan Document), and
the Seller and SGRP each hereby forever expressly, unconditionally and
irrevocably waives any and all claims, actions and Losses against each and every
Purchaser's Indemnified Person resulting from, arising out of or related to any
and all of the foregoing acts, omissions and circumstances; in each case except
to the extent occasioned by such Purchaser's Indemnified Person's own acts or
omissions breaching a duty owed to the Seller and amounting to breach of duty or
contract, negligence or willful misconduct as finally determined pursuant to
Applicable Law by a governmental authority having jurisdiction; provided,
however, that nothing in this subsection is intended, or shall be deemed or
construed, to release any Party from its express representations, warranties,
covenants, obligations and agreements under this Agreement and the other
Purchase Agreement.
Section 6.07. Sole Discretion of the Seller. Wherever pursuant to this
Agreement (a) the Seller exercises any right given to it to approve or
disapprove, (b) any arrangement or term is to be satisfactory to the Seller, or
(c) any other decision or determination is to be made by the Seller, the
decision of the Seller to approve, disapprove or make such determination shall
be in the sole and absolute discretion of the Seller, except as may be otherwise
expressly and specifically provided in this Agreement.
ARTICLE VII
MISCELLANEOUS
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Section 7.01. Notices, Etc. Except as otherwise expressly provided,
any notice, request, demand or other communication permitted or required to be
given under this Agreement or any other Purchase Document shall be in writing,
shall be signed by the party giving it, shall be sent by one of the following
means to the addressee at the address set forth in [Exhibit C] hereto (or at
such other address as shall be designated hereunder by notice to the other
parties and Persons receiving copies, effective upon actual receipt) and shall
be deemed conclusively to have been given: (i) on the first Business Day
following the day timely deposited for next Business Day delivery with Federal
Express (or other equivalent national overnight courier) or United States
Express Mail for overnight delivery, in either case designated for next Business
Day delivery and with the cost of such delivery prepaid or for the account of
the sender; (ii) on the fifth Business Day following the day duly sent by
certified or registered United States mail, postage prepaid and return receipt
requested; or (iii) when otherwise actually received by the addressee on a
Business Day (or on the next Business Day if received after the close of normal
business hours or on any non-Business Day). If a certificate, signed notice or
other signed item is expressly required by another provision of this Agreement
or any other Purchase Document, a manually signed original must be delivered by
the party giving it; any other notice, request, demand or other communication
instead may be sent by telecopy, with the cost of transmission prepaid or for
the account of the sender, and shall (except as otherwise specified in this
Agreement or any other Purchase Document) be deemed conclusively to have been
given on the first Business Day following the day duly sent. Refusal to accept
delivery of any item shall be deemed to be receipt of such item by the refusing
party. Copies of notices to Persons specified in Exhibit C hereto (if any) may
be sent by regular first-class mail, postage prepaid, to such Persons, but any
failure or delay in sending copies shall not affect the validity of any such
notice, request, demand or other communication so given to a party.
Section 7.02. Expenses of the Seller. The Purchaser shall pay or
reimburse on demand any and all costs and expenses incurred by the Seller,
whether directly or indirectly, in connection with (a) the preparation,
execution and delivery of the Seller's term sheet, (b) the preparation,
execution and closing of this Agreement and the other Purchase Documents, and
all waivers, releases, discharges, satisfactions, modifications and amendments
thereof and approvals and consents with respect thereto, (c) all mortgage
recording, documentary, transfer, intangible, note or other similar Taxes and
revenue stamps, and all filings and recordings, and (d) the administration,
maintenance, enforcement and adjudication of this Agreement,
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the other Purchase Documents and the Seller's rights, powers, privileges,
remedies and other interests thereunder and under Applicable Law, in each case
including (without limitation) the disbursements, expenses and fees of counsel
to the Seller (including, without limitation, the allocated costs of in-house
counsel), currently Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP, and the
disbursements, expenses and fees of any local or special counsel retained by the
Seller or its counsel.
Section 7.03. Interpretation. The Parties acknowledge and agree that:
each Party and its counsel have reviewed and negotiated the terms and provisions
of this Agreement (excluding schedules) and have contributed to its revision;
the normal rule of construction, to the effect that any ambiguities are resolved
against the drafting Party, shall not be employed in the interpretation of it;
and its terms and provisions shall be construed fairly as to all Parties hereto
and not in favor of or against any Party, regardless of which Party was
generally responsible for the preparation of this Agreement.
Section 7.04. Governing Law. This Agreement and the other Purchase
Documents: (a) have been executed and delivered in the State of New York; and
(b) shall be governed by and construed in accordance with the Applicable Law
pertaining in the State of New York (other than those conflict of law provisions
that would defer to the substantive laws of another jurisdiction). Without in
any way limiting the preceding choice of law, the Parties elect to be governed
by New York law in accordance with, and are relying (at least in part) on,
Section 5-1401 of the General Obligations Law of the State of New York.
Section 7.05. Severability. In the event that any term or provision of
this Agreement or any other Purchase Document shall be finally determined to be
superseded, invalid, illegal or otherwise unenforceable pursuant to Applicable
Law by an Authority having jurisdiction and venue, that determination shall not
impair or otherwise affect the validity, legality or enforceability (a) by or
before that Authority of the remaining terms and provisions of this Agreement
and the other Purchase Documents, which shall be enforced as if the
unenforceable term or provision were deleted, or (b) by or before any other
Authority of any of the terms and provisions of this Agreement and the other
Purchase Documents.
Section 7.06. Survival of Representations, Etc. Each of the payment
obligations, collateral grants, representations and warranties (as of the
date(s) made or deemed made), covenants, waivers and other agreements of the
Purchaser contained in this Agreement and the other Purchase Documents: (a)
shall be absolute, irrevocable and unconditional, irrespective of (among other
things) the validity, legality, binding effect or enforceability of any of the
other terms and provisions of this Agreement or any other Purchase Document or
any other act, event or circumstance described in this Section; (b) shall
survive the execution and delivery of this Agreement and the other Purchase
Documents, provided, however, that the representations and `warranties set forth
in (i) Articles III hereof and Article IV hereof shall remain in full force and
effect only through the fifth anniversary of the Closing Date, and provided
further that the expiration of such periods shall not affect any pending claim
duly made prior thereto; (c) shall remain and continue in full force and effect
without regard (i) to whether the applicable obligations are now or hereafter
existing, acquired or created, (ii) to any extension or change in the time,
manner, place and other terms and provisions of payment or performance of any
one or more of the applicable obligations, (iii) to any waiver, modification,
extension, renewal, consolidation, spreading, amendment or restatement of any
other term or provision of any Purchase Document (except as and to the extent
expressly modified by the terms and provisions of any such waiver, modification,
extension, renewal, consolidation, spreading, amendment or restatement), (iv) to
any acceptance by the Seller of (A) any partial or late payment, which shall not
constitute a satisfaction or waiver of the full amount then due or the resulting
default, or (B) any payment during the continuance of a default, which shall not
constitute a waiver or cure thereof; and the Seller may accept or reject any
such payment without affecting any of its rights, powers, privileges, remedies
and other interests under this Agreement, the other Purchase Documents and
Applicable Law; (v) to any full, partial or non-exercise of any of the rights,
powers, privileges, remedies and interests of the Seller under any Purchase
Document or Applicable Law, against the Purchaser, or any other Person or with
respect to any of the obligations, any other obligations or any collateral or
security interest therein, which exercise or enforcement may be delayed,
discontinued or otherwise not pursued or exhausted for any or no reason
whatsoever, or which may be waived, omitted or otherwise not exercised or
enforced (whether intentionally or otherwise), (vi) to any surrender,
repossession, sequestration, foreclosure, conveyance or assignment (by deed in
lieu or otherwise), sale, lease or other realization, dealing, liquidation or
disposition respecting any collateral or setoff respecting any account or other
asset in accordance with the Purchase Documents or Applicable Law (except as and
to the extent the applicable obligations have been permanently reduced by the
application of the net proceeds thereof), (vii) to the perfected or
non-perfected status or priority of any mortgage or other security interest in
any such collateral, which may be held without recordation, filing or other
perfection (whether intentionally or otherwise), (viii) to any release,
settlement, adjustment, subordination or impairment of all or any part of the
applicable obligations, any other obligations or any collateral or any security
interest therein, whether intentionally or otherwise (except as and to the
extent expressly modified by the terms and provisions of any such release,
settlement or adjustment), (ix) to any extension, stay,
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moratorium or statute of limitations or similar time constraint under any
Applicable Law, (x) to any investigation, analysis or evaluation by the Seller
or its designees of the assets, business, operations, properties or condition
(financial or otherwise) of the Purchaser, or any other Person, (xi) to any
application to any obligations of the Purchaser of (A) any payments from such
Person not specifically designated for application or (B) any proceeds of
collateral from such Person, (xii) to any sale, conveyance, assignment,
participation or other transfer by the Seller (in whole or in part) to any other
Person of any one or more of this Agreement and the other Purchase Documents or
any one or more of the rights, powers, privileges, remedies or interests of the
Seller herein or therein, (xiii) to any act or omission on the part of the
Seller or any other Person or (xiv) to any other act, event, or circumstance
that otherwise might constitute a legal or equitable counterclaim, defense or
discharge of a borrower, co-obligor, indemnitor, guarantor, pledgor or surety;
in each case in such manner and order, upon such terms and provisions and
subject to such conditions as the Seller may deem necessary or desirable in its
sole and absolute discretion, and without notice to or further assent from the
Purchaser (except for such notices as may be expressly required to be given to
such party under the applicable Purchase Document); (d) shall not be subject to
any defense, counterclaim, setoff, right of recoupment, abatement, reduction or
other claim or determination that the Purchaser may have against the Seller or
any other Person; (e) shall not be diminished or qualified by the death,
disability, dissolution, reorganization, insolvency, bankruptcy, custodianship
or receivership of the Purchaser or any other Person, or the inability of any of
them to pay its debts or perform or otherwise satisfy its obligations as they
become due for any reason whatsoever; and (f) shall remain and continue in full
force and effect without regard to any of the foregoing acts, events or
circumstances (A) until all of the applicable obligations have been fully paid
and satisfied and (B) thereafter with respect to acts, events or circumstances
occurring prior to such payment and satisfaction.
Section 7.07. Counterparts. This Agreement or any other Purchase
Document may be executed in two or more counterpart copies of the entire
document or of signature pages to the document, each of which may be executed by
one or more of the parties hereto or thereto, but all of which, when taken
together, shall constitute a single agreement binding upon all of the parties
hereto or thereto (as the case may be).
Section 7.08. Successors and Assigns; Assignment. Whenever in this
Agreement or any other Purchase Document reference is made to any Party, such
reference shall be deemed to include the successors, assigns, heirs and legal
Representatives of such party, and, without limiting the generality of the
foregoing, all representations, warranties, covenants and other agreements made
by or on behalf of the Purchaser in this Agreement and the other Purchase
Documents shall inure to the benefit of the successors and assigns of the
Seller; provided, however, that nothing herein shall be deemed to authorize or
permit the Purchaser or SPG to assign any of its rights or obligations under
this Agreement or any other Purchase Document to any other Person (whether or
not an Affiliate of the Purchaser), and the Purchaser covenants and agrees that
it shall not make any such assignment. The Seller from time to time: (a) may
assign or sell aall or any portion(s) of the rights, powers, privileges,
remedies and interests of and/or the obligations owed to the Seller under this
Agreement or any other Purchase Document to any Person; (b) may furnish and
disclose financial statements, documents and other information pertaining to the
Purchaser to any potential assignee or participant permitted hereunder; and (c)
may take any and all other actions that the Seller may determine (in its sole
and absolute discretion) to be necessary or appropriate in connection with any
such assignment or participation; in each case without notice to or consent of
the Purchaser or any other Person. Without in any way limiting the foregoing,
each Party acknowledges and agrees that (A) the Seller and SGRP may assign any
and all of the rights, powers, privileges, remedies and interests of and/or the
obligations owed to the Seller and/or SGRP under this Agreement or any other
Purchase Document to the Senior Lender pursuant to the Senior Loan Documents,
(B) the Senior Lender shall be entitled to exercise or enforce any of the
rights, powers, privileges, remedies and interests of and/or the obligations
owed to the Seller and/or SGRP under this Agreement or any other Purchase
Document in accordance with the Purchase Documents, the Senior Loan Documents
and/or Applicable Law, and (C) the Senior Lender shall not be responsible or
liable for any of the acts, omissions, duties, liabilities or obligations of the
Seller or SGRP.
Section 7.09. No Third Party Rights. The representations, warranties
and other terms and provisions of this Agreement and the other Purchase
Documents are for the exclusive benefit of the Parties hereto, and, except as
otherwise expressly provided herein or therein, no other Person, including
creditors of any Party hereto, shall have any right or claim against any party
by reason of any of those terms and provisions or be entitled to enforce any of
those terms and provisions against any party.
Section 7.10. No Waiver by Action, Etc. Any waiver or consent
respecting any representation, warranty, covenant or other term or provision of
this Agreement or any other Purchase Document shall be effective only in the
specific instance and for the specific purpose for which given and shall not be
deemed, regardless of frequency given, to be a further or continuing waiver or
consent. The failure or delay of a Party at any time or times to require
performance of, or to exercise its rights with respect
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to, any representation, warranty, covenant or other term or provision of this
Agreement or other Purchase Document in no manner (except as otherwise expressly
provided herein) shall affect its right at a later time to enforce any such
provision. No notice to or demand on any Party in any case shall entitle such
Party to any other or further notice or demand in the same, similar or other
circumstances. The acceptance by any Party of (a) any partial or late payment
shall not constitute a satisfaction or waiver of the full amount then due or the
resulting Event of Default or (b) any payment during the continuance of an Event
of Default shall not constitute a waiver or cure thereof; and any Party may
accept or reject any such payment without affecting any of its rights, powers,
privileges, remedies and other interests under this Agreement, the other
Purchase Documents and Applicable Law. All representations, warranties,
covenants and agreements of the Purchaser and all rights, powers, privileges,
remedies and other interests of each Party hereunder are cumulative and not
alternatives, and they are in addition to and shall not limit (except as
otherwise expressly provided herein) any other right, power, privilege, remedy
or other interest of such Party under this Agreement, any other Purchase
Document or Applicable Law.
[END OF PAGE]
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Section 7.11. Waiver of Jury Trial. In any action, suit or proceeding
in any jurisdiction arising out of or related directly or indirectly to this
Agreement or any other Purchase Document, whether brought by the Seller against
the Purchaser, or the Purchaser against the Seller, the Purchaser and the Seller
each hereby forever expressly, unconditionally and irrevocably waives trial by
jury.
Section 7.12. Modification, Amendment, Etc. Except as otherwise
expressly provided in a particular Purchase Document with respect thereto, each
and every supplement or amendment to or modification or restatement of this
Agreement or any other Purchase Document shall be in writing and signed by all
of the Parties hereto or the respective parties thereto, as the case may be, and
each and every waiver of, or consent to any departure from, any representation,
warranty, covenant or other term or provision of this Agreement or any other
Purchase Document shall be in writing and signed by each affected party hereto
or thereto, respectively.
Section 7.13. Entire Agreement. This Agreement and the other Purchase
Documents contain the entire agreement of the Parties and supersede all other
representations, warranties, agreements and understandings (including, without
limitation, all previous discussion letters and term sheets from the Seller),
oral or otherwise, among the Parties with respect to the matters contained
herein and therein.
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IN WITNESS WHEREOF, the Parties hereto have executed and delivered
this Agreement as of the date first written above.
PERFORMANCE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: CEO
SPAR INCENTIVE MARKETING, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: CEO
SPAR PERFORMANCE GROUP, INC., HEREBY JOINS IN
THOSE PROVISIONS THAT EXPRESSLY INCLUDES IT BY NAME
(I.E., SPG) OR AS A "PARTY".
SPAR PERFORMANCE GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: CEO
SPAR GROUP, INC., HEREBY GUARANTIES THE PERFORMANCE BY
SPAR INCENTIVE MARKETING, INC., OF ITS OBLIGATIONS UNDER THE
FOREGOING AGREEMENT AND HEREBY JOINS IN THOSE PROVISIONS THAT
EXPRESSLY INCLUDES IT BY NAME (I.E., SGRP) OR AS A "PARTY".
SPAR GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: CEO
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XXXXX XX XXX XXXX )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of June in the year 2002 before me, the undersigned,
a Notary Public in and for said State, personally appeared Xxxxxx X. Xxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., SPAR INCENTIVE MARKETING, INC.) executed the instrument.
(Signature and office of individual taking acknowledgment.)
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of June in the year 2002 before me, the undersigned,
a Notary Public in and for said State, personally appeared Xxxxxx X. Xxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., PERFORMANCE HOLDINGS, INC.) executed the instrument.
On this 30th day of June in the year 2002 before me, the undersigned,
a Notary Public in and for said State, personally appeared Xxxxxx X. Xxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., SPAR INCENTIVE MARKETING, INC.) executed the instrument.
(Signature and office of individual taking acknowledgment.)
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