MERGER AGREEMENT
By and Among
ITI HOLDINGS, INC.
THE PRINCIPAL STOCKHOLDERS OF
ITI HOLDINGS, INC.
and
APAC TELESERVICES, INC.
and
ITI MARKETING ACQUISITION CORP.
dated as of
April 30, 1998
MERGER AGREEMENT
Merger Agreement (the "Agreement") entered into as of April 30, 1998, by
and among ITI Holdings, Inc., a Delaware corporation (the "Company"), each of
the individuals and entities set forth under the heading "Principal
Stockholders" on the signature pages hereto (each, a "Principal Stockholder" and
collectively, the "Principal Stockholders"), APAC TeleServices, Inc., an
Illinois corporation ("APAC"), and ITI Marketing Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of APAC ("Newco"). The Company, the
Principal Stockholders, APAC and Newco are referred to collectively herein as
the "Parties."
The Principal Stockholders own approximately 96% of the Class A Shares and
94% of the Class B Shares of the Company outstanding on the date hereof and,
simultaneously with the execution of this Agreement, those Principal
Stockholders identified on Exhibit A attached hereto have executed an amendment
to his or her employment agreement and a non-competition agreement.
This Agreement contemplates a transaction in which, through a merger of
Newco into the Company, APAC will acquire all of the outstanding capital stock
of the Company and the Stockholders will receive cash for all of such capital
stock.
Now, therefore, in consideration of the premises and the actual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
Section 1. Definitions.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, complaints, claims, demands, injunctions, judgments, orders,
decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in
settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and fees,
including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliate Officer" has the meaning set forth in Section2(h)(ii).
"Affiliated Group" means any affiliated group within the meaning of Code
Sec. 1504.
"Aggregate Closing Merger Consideration" has the meaning set forth in
Section2(d)(v).
"Aggregate Post-Closing Merger Consideration" has the meaning set forth in
Section2(e).
"Agreement" has the meaning set forth in the preface above.
"APAC" has the meaning set forth in the preface above.
"Business" means the business of the Company and the Subsidiaries as
presently conducted and taken as a whole.
"Certificate of Merger" has the meaning set forth in Section2(c).
"Claim" has the meaning set forth in Section2(h).
"Class A Shares" means the shares of Class A Common Stock, $.01 par value
per share, of the Company.
"Class B Shares" means the shares of Class B Common Stock, $.01 par value
per share, of the Company.
"Closing" has the meaning set forth in Section2(b).
"Closing Date" has the meaning set forth in Section2(b).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preface above.
"Company Indemnified Parties" has the meaning set forth in Section2(h).
"Controlled Group of Corporations" means a controlled group of corporations
under Code Sec. 414(b) and trades or businesses under common control under Code
Sec. 414(c).
"Deferred Intercompany Transaction" has the meaning set forth in Treas.
Reg. Section1.1502-13.
"Disclosure Schedule" has the meaning set forth in Section3.
"Effective Time" has the meaning set forth in Section2(d)(i).
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), (d) Employee Welfare Benefit Plan, or (e) any bonus,
incentive, severance, stock option, stock purchase, short-term disability plan
or other material fringe benefit plan, program or arrangement, including
policies concerning holidays, vacations and salary continuation during short
absences for illness or otherwise.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec.
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec.
3(1).
"Environmental, Health, and Safety Requirements" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, the Clean Air Act, the Federal Water
Pollution Control Act, the Safe Drinking Water Act, the Toxic Substance Control
Act, the Emergency Planning and Community Right-to-Know Act of 1986, the
Hazardous Material Transportation Act, and the Occupational Safety and Health
Act of 1970, each as amended and in effect as of the date hereof, together with
all other laws (including rules, regulations, codes, injunctions, judgments,
orders, decrees, and rulings) of federal, state and local governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials (including
petroleum products and asbestos) or wastes into ambient air, surface water,
ground water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials
or wastes, in each case as in effect on the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Financial Statements" has the meaning set forth in Section3(h).
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Insurance Licenses" has the meaning set forth in Section3(k).
"Intellectual Property" means (a) all trade secrets and confidential
business information (including customer and supplier lists), (b) all
trademarks, service marks, trade dress, logos, trade names, and corporate names
and goodwill associated therewith, (c) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, (d) all
copyrightable works and all copyrights, (e) all mask works, (f) all computer
software (including data and related documentation), and (g) all other
proprietary rights, in each case, used in the Business.
"Knowledge" as it applies to the Company, means the actual knowledge of
Xxxxx X. Xxxx, Xxxx X. Xxxx, Xxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxx, Xxxxxxx X. Xxxx, Xxxxx X. Lines, Xxxxx X. Xxxxxx, Xxxxxxxxxxx X. Xxxxxxx
and L. Xxxxx Xxxxxx.
"Liability" means any liability (whether known or unknown, whether asserted
or unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.
"Material Adverse Effect" means an adverse effect upon the business or the
financial condition, operations and results of operations of the Company and its
Subsidiaries taken as a whole which results in at least $250,000 of Adverse
Consequences.
"Merger" has the meaning set forth in Section 2(a).
"Merger Consideration" has the meaning set forth in Section 2(d)(v).
"Most Recent Balance Sheet" means the balance sheet contained within the
Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in
Section 3(h).
"Most Recent Fiscal Month End" has the meaning set forth in Section 3(h).
"Most Recent Fiscal Year End" has the meaning set forth in Section 3(h).
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Newco" has the meaning set forth in the preface above.
"Operating Subsidiary" means ITI Marketing Services, Inc.
"Options or Warrants" means all options, warrants and other securities
exercisable or convertible into or exchangeable for Shares, together with all
other purchase rights, subscription rights, conversion rights, exchange rights
or other contracts or commitments that could require the Company to issue, sell
or otherwise cause to become outstanding any of its capital stock.
"Outstanding Indebtedness" means all indebtedness for borrowed money other
than the Payoff Indebtedness and excludes all capitalized leases.
"Party" has the meaning set forth in the preface above.
"Payoff Indebtedness" means all indebtedness for borrowed money identified
on Exhibit B which will be paid-off at the Closing
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a limited liability company or partnership, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Principal Stockholders" has the meaning set forth in the preface above.
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406 and
Code Sec. 4975.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Representative" has the meaning set forth in Section 2(g).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any lien, encumbrance, mortgage, pledge, or other
security interest, other than (a) mechanics, materialmen's and similar liens,
(b) liens for Taxes not yet due and payable or that the taxpayer is contesting
in good faith through appropriate proceedings, (c) purchase money liens securing
rental payments under capital lease arrangements and (d) other liens arising in
the ordinary course of business and not incurred in connection with the
borrowing of money.
"Shares" means the Class A Shares and Class B Shares.
"Stockholders" means all of the holders of the Shares, Options and
Warrants.
"Stockholder Notes" means all indebtedness, including accrued interest, of
any Stockholder to the Company incurred in connection with such Stockholder's
acquisition of Class A Shares or Class B Shares.
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.
"Surviving Corporation" has the meaning set forth in Section 2(a).
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Sec. 59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including interest, penalty, or
additions thereto, whether disputed or not, and whether or not accrued on the
Financial Statements.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"USPS" has the meaning set forth in Section 2(e).
Section 2. Basic Transaction.
(a) The Merger. On and subject to the terms and conditions of this
Agreement, Newco will merge with and into the Company (the "Merger") at the
Effective Time. The Company shall be the corporation surviving the Merger (the
"Surviving Corporation").
(b) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of XxXxxxxxx,
Will & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
commencing at 9:00 a.m. local time on the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby set forth in Section6 below
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as the Parties may mutually determine
(the "Closing Date").
(c) Actions at the Closing. At the Closing, subject to and on the
terms and conditions set forth in this Agreement,
(i) the Company and Newco will file with the Secretary of State
of the State of Delaware a Certificate of Merger in the form acceptable to
the Parties (the "Certificate of Merger");
(ii) Newco will deliver to the Representative, on behalf of the
Stockholders, the Aggregate Closing Merger Consideration in the manner
provided in Section 2(f) below;
(iii) APAC and Newco will deliver to the Representative (A)
certified copies of resolutions duly adopted by the boards of directors of
each of APAC and Newco authorizing the execution, delivery and performance
of this Agreement, (B) certified copies of each of APAC's and Newco's
articles or certificate of incorporation and bylaws, (C) a short-form
certificate of good standing of each of APAC and Newco, certified by the
Secretary of State of Illinois or Delaware, respectively, as of a date not
more than three business days prior to the Closing Date, and (D) all other
certificates, instruments, and documents referred to in Section6(b) below;
(iv) The Company shall deliver or cause to be delivered to APAC
and Newco (A) certified copies of resolutions duly adopted by the board of
directors and Stockholders of the Company authorizing the execution,
delivery and performance of this Agreement, (B) certified copies of the
certificate of incorporation and by-laws of the Company and each
Subsidiary, (C) a short-form certificate of good standing of the Company
and each Subsidiary, in each case certified by the Secretary of State of
the State of such entity's incorporation as of a date not more than three
business days prior to the Closing Date, (D) certificates representing the
number of Shares, Options or Warrants set forth opposite each Principal
Stockholder's name on Section3(b) of the Disclosure Schedule together with
appropriate stock powers executed in blank, and (E) all other certificates,
instruments, and documents referred to in Section6(a) below.
(d) Effect of Merger.
(i) General. The Merger shall become effective at the time (the
"Effective Time") the Company and Newco file the Certificate of Merger with
the Secretary of State of the State of Delaware. The Merger shall have the
effect set forth in the Delaware General Corporation Law. The Surviving
Corporation may, at any time after the Effective Time, take any action
(including executing and delivering any document) in the name and on behalf
of either the Company or Newco in order to carry out and effectuate the
transactions contemplated by this Agreement.
(ii) Certificate of Incorporation. Subject to Section 2(h)(ii)
hereof, the Certificate of Incorporation of the Surviving Corporation shall
be amended and restated at and as of the Effective Time to read as did the
Certificate of Incorporation of Newco immediately prior to the Effective
Time (except that the name of the Surviving Corporation will remain
unchanged).
(iii) Bylaws. Subject to Section 2(h)(ii) hereof, the Bylaws
of the Surviving Corporation shall be amended and restated at and as of the
Effective Time to read as did the Bylaws of Newco immediately prior to the
Effective Time (except that the name of the Surviving Corporation will
remain unchanged).
(iv) Directors and Officers. The directors and officers of Newco
shall become the directors and officers of the Surviving Corporation at and
as of the Effective Time (retaining their respective positions and terms of
office) until their respective successors are duly elected and qualified.
(v) Conversion of Shares.
(A) At and as of the Effective Time, each Class A Share and
Class B Share issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive an amount in cash (the
"Merger Consideration") equal to the sum of (A) such portion of the
Aggregate Closing Merger Consideration as is allocated to such Share in
accordance with Exhibit C attached hereto, plus (B) such portion of the
Aggregate Post-Closing Merger Consideration (as determined in accordance
with Section 2(e)) as is allocated to such Share in accordance with
Exhibit C. For purposes of this Agreement, the "Aggregate Closing Merger
Consideration" shall mean an amount equal to the sum of (i) $81,232,246,
plus (ii) the Stockholder Notes, less (iii) any prepayment penalties,
breakage fees and lender's legal fees paid at or prior to the Closing with
respect to the Payoff Indebtedness, less (iv) the amount of all special
bonuses paid to the Company's employees from the date hereof until or at
the Closing, as reflected on a schedule delivered to APAC upon the signing
of this Agreement, which bonuses will not exceed $1,250,000 in the
aggregate, less (v) all legal fees and expenses of Xxxxxxxx and Xxxxx
incurred and/or paid by the Company in connection with the transactions
contemplated hereby.
(B) As reflected on Exhibit C the Merger Consideration
payable to any individual Stockholder at the Closing shall be reduced
by the principal of and accrued and unpaid interest on such
Stockholder's Stockholder Note, if any.
(C) No Shares shall be deemed to be outstanding or to have any
rights other than those set forth above in this Section 2(d)(v) after the
Effective Time.
(D) All Shares that immediately prior to the Effective Time are
owned by the Company or its Subsidiaries shall automatically be canceled
and retired without payment of any consideration therefor and shall cease
to exist.
(vi) Conversion of Capital Stock of Newco. At and as of the
Effective Time, each outstanding share of the capital stock of Newco shall
be converted into one share of common stock of the Surviving Corporation.
(e) Determination of Post-Closing Consideration. Prior to the date
hereof, each of the Operating Subsidiary and APAC has submitted a bid to the
United States Postal Service (the "USPS") to provide in-bound customer service
operations to the USPS at call centers dedicated to such operations. In the
event that, in connection with such bids currently identified by Solicitation
No. 102590-98-A-0059 and Request No. 98-3267, prior to the first anniversary of
the date hereof, (i) the USPS awards APAC and/or the Operating Subsidiary two or
more call centers, collectively or individually, or (ii) the USPS awards the
Operating Subsidiary at least one call center and awards no call centers to
APAC, then APAC shall be obligated to pay to the Representative, on behalf of
the Stockholders, additional Merger Consideration in an aggregate amount (the
"Aggregate Post-Closing Merger Consideration") equal to the sum of (A)
$6,225,000, which shall be paid upon the First Taking of Calls (as defined
below), plus (B) in the event that the USPS renews its contract as to the call
center(s) initially awarded for a first renewal period, $3,112,500 (the "First
Renewal Payment"), which shall be paid within 15 days after the beginning of the
first renewal period, plus (C) in the event that the USPS renews its contract as
to the call center(s) initially awarded for a second renewal period, $3,112,500
(the "Second Renewal Payment"), which shall be paid within 15 days after the
beginning of the second renewal period. For purposes of this Agreement, the
"First Taking of Calls" shall mean (i) in the event that (A) APAC is awarded two
or more call centers and the Operating Subsidiary is awarded no call centers or
(B) APAC and/or the Operating Subsidiary, collectively or individually, are
awarded two or more call centers and the entity to which such call centers are
awarded is not determinable, the first taking of calls at the second call center
awarded, (ii) in the event that the Operating Subsidiary is awarded at least one
call center and APAC is awarded fewer than two call centers, the first taking of
calls at any call center awarded to the Operating Subsidiary, or (iii) in the
event that the Operating Subsidiary is awarded at least one call center and APAC
is awarded two or more call centers, the earlier of (A) the first taking of
calls at any call center awarded to the Operating Subsidiary or (B) the first
taking of calls at the second call center awarded to APAC. Notwithstanding the
above, in the event that (i) the USPS does not renew its contract as to the call
center(s) initially awarded but APAC and/or the Operating Subsidiary continues
to operate under such contract as to such call center(s) for a period of one
year following the end of the initial term thereof, then APAC shall pay the
First Renewal Payment at the end of such one-year period and/or (ii) the USPS
does not renew its contract as to the call center(s) initially awarded or renews
such contract for one renewal period but not for a second renewal period but
APAC and/or the Operating Subsidiary continues to operate under such contract as
to such call center(s) for a period of two years following the end of the
initial term thereof or for a period of one year following the end of the first
renewal term thereof, then APAC shall pay the Second Renewal Payment at the end
of such two-year period.
(f) Payment of Merger Consideration. At the Effective Time, APAC
shall deliver to the Representative, on behalf of the Stockholders, by wire
transfer of immediately available funds, an amount equal to the Aggregate
Closing Merger Consideration, less the principal amount of and any accrued
interest on the Stockholder Notes and the Representative shall deliver a letter
of transmittal (with instructions for its use) to each record holder of
outstanding Shares (other than the Principal Stockholders who shall have
delivered to APAC and Newco at the Closing, pursuant to Section2(c)(iv), all
certificates representing the Shares owned thereby) for each such Stockholder to
use in surrendering the certificates which represented his or its Shares against
payment of the Merger Consideration. Upon receipt from a Stockholder of
properly endorsed certificates representing his or its Shares, together with
appropriate stock powers executed in blank, the Representative shall distribute
the applicable portion of the Aggregate Closing Merger Consideration to such
Stockholder in accordance with Exhibit C. At the times specified in
Section2(e), APAC shall deliver to the Representative, on behalf of the
Stockholders, by wire transfer of immediately available funds, the Aggregate
Post-Closing Merger Consideration and the Representative shall distribute the
applicable portion of the Aggregate Post-Closing Merger Consideration to the
Stockholders in accordance with Exhibit C. The Representative shall make all
distributions to Stockholders required by this Section2(f) as soon as
practicable. Notwithstanding anything to the contrary contained herein, the
Representative hereby agrees that it shall not release any funds with respect to
the Merger Consideration to a given Stockholder until the Representative has
received from such Stockholder a duly endorsed certificate representing the
Shares owned by such Stockholder, together with an appropriate stock power
executed in blank. In no event shall any Stockholder be entitled to receive
interest on any of the funds to be received in the Merger. APAC may cause the
Representative to pay over to the Surviving Corporation any portion of the
Merger Consideration (and any earnings thereon) remaining 180 days after the
later of the Effective Date or the final payment to the Representative of any
Post-Closing Merger Consideration in accordance with Section2(e), and thereafter
all former Stockholders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat, and other similar laws) as general
creditors thereof with respect to the cash payable upon surrender of their
certificates. After the close of business on the Closing Date, transfers of
Shares outstanding prior to the Effective Time shall not be made on the stock
transfer books of the Surviving Corporation.
(g) Appointment of Representative. Each Principal Stockholder (other
than Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx) hereby appoints Golder, Thoma,
Xxxxxxx, Xxxxxx Fund IV, L.P. (the "Representative") the attorney-in-fact of
such Principal Stockholder, with full power and authority, including power of
substitution, acting in the name of and for and on behalf of such Principal
Stockholder to amend or waive any provision of this Agreement, to terminate this
Agreement pursuant to the provisions of Section7, in its sole discretion, and to
do all other things and to take all other actions under or related to this
Agreement which, in its discretion, it may consider necessary or proper to
effectuate the transactions contemplated hereunder and to resolve any dispute
with APAC over any aspect of this Agreement and on behalf of such Stockholder,
to enter into any agreement to effectuate any of the foregoing which shall have
the effect of binding such Stockholder as if such Stockholder had personally
entered into such agreement; provided, however, that all actions taken or
decisions made by the Representative on behalf of the Stockholders shall be
taken or made in a manner which is ratably and equitably amongst all
Stockholders. This appointment and power of attorney shall be deemed as coupled
with an interest and all authority conferred hereby shall be irrevocable and
shall not be subject to termination by operation of law, whether by the death,
incapacity, liquidation, or dissolution of any Stockholder or the occurrence of
any other event or events, and the Representative may not terminate this power
of attorney with respect to any Stockholder or such Stockholder's successors or
assigns without the consent of APAC. Each Principal Stockholder (other than
Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx) agrees to hold the Representative
harmless from any and all loss, damage, or liability and expenses (including
legal fees) which such Stockholder may sustain as a result of any action taken
in good faith by the Representative. In the event this Agreement is terminated
pursuant to Section7 prior to Closing, the appointment contemplated by this
Section2(g) shall immediately terminate and the Representative shall promptly
return such certificates and related stock powers to the Stockholders.
(h) Stockholder Consent and Release; Indemnification.
(i) In accordance with Section 251 of the Delaware General
Corporation Law each Principal Stockholder hereby consents to the Merger
and approves the execution and delivery of this Agreement and the
transactions contemplated hereby. Effective as of the Closing, each
Principal Stockholder hereby releases the Company from any and all claims
(other than employee compensation, claims under employment compensation
agreements and related benefits accrued through the Closing Date) of such
Principal Stockholder whether arising before or after the Closing against
the Company or Liabilities or obligations of the Company to the Principal
Stockholder as a result of the Principal Stockholder having served as a
stockholder, director, officer, employee, or agent of the Company prior to
the Closing.
(ii) Notwithstanding anything to the contrary in this Agreement:
(A) the Certificate of Incorporation and Bylaws of the Surviving
Corporation shall contain the provisions with respect to indemnification
and limitation of liability set forth in the Certificate of Incorporation
and Bylaws of the Company on the date of this Agreement, which provisions
shall not be amended, repealed or otherwise modified for a period of six
years after the Closing in any manner that would adversely affect the
rights thereunder of persons who were directors, or either (i) persons who
were employees, officers or directors of the Representative or any of its
Affiliates and were officers of the Company or (ii) Xxxxxx X. Xxxxxxx and
Xxxxx X. Xxxxxxx (collectively, the "Affiliate Officers"), and who at any
time prior to the Closing were prospective indemnitees under the
Certificate of Incorporation or Bylaws of the Company in respect of actions
or omissions occurring at or prior to the Closing (including the
transactions contemplated by this Agreement), unless such modification is
required by law; and (B) from and after the Closing, the Surviving
Corporation shall indemnify, defend and hold harmless the present and
former directors and Affiliate Officers of the Company (collectively, the
"Company Indemnified Parties") against all Adverse Consequences arising in
settlement of, or otherwise in connection with, any claim, action, suit,
proceeding or investigation (a "Claim"), based in whole or in part on the
fact that such Person is or was such a director or Affiliate Officer and
arising out of actions or omissions occurring at or prior to the Closing
(including the transactions contemplated by this Agreement), in each case
to the fullest extent permitted under Delaware law (and shall pay expenses
in advance of the final disposition of any such action or proceeding to
each Company Indemnified Party to the fullest extent permitted under
Delaware law) (it being understood that APAC guarantees the Surviving
Corporation's obligations under this Section 2(h)(ii)). This
Section 2(h)(ii) is intended to be for the benefit of, and shall be
enforceable by, Company Indemnified Parties, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
respective successors and assigns.
Section 3. Representations and Warranties Concerning the Company. Each
of the Principal Stockholders, other than Xxxxxx X. Xxxxxxx and Xxxxx X.
Xxxxxxx, represents and warrants (on a several and not a joint basis) to APAC
and Newco that the statements contained in this Section3 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section3, except for
representations and warranties that speak as of a specific date or time, which
need only be true and correct as of such date) except as set forth in the
Disclosure Schedule accompanying this Agreement (the "Disclosure Schedule").
Each of Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx severally warrants (but does not
represent) to APAC and Newco that the statements contained in this Section3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section3,
except for warranties that speak as of a specific date or time, which need only
be true and correct as of such date) except as set forth in the Disclosure
Schedule. The Disclosure Schedule will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs contained in this Section3.
(a) Organization, Qualification, and Corporate Power. Each of the
Company and its Subsidiaries is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation and
in the respective jurisdictions set forth under each entity's name on
Section 3(a) of the Disclosure Schedule. Each of the Company and its
Subsidiaries has requisite power and authority and, except as set forth on
Section 3(a) of the Disclosure Schedule, all licenses, permits, and
authorizations necessary to carry on the businesses in which it is presently
engaged and to own and use the properties presently owned and used by it, other
than those licenses, permits and authorizations the lack of which, individually
or in the aggregate, would not have a Material Adverse Effect. Section 3(a) of
the Disclosure Schedule lists the directors and officers of each of the Company
and its Subsidiaries. The Company has made available to APAC correct and
complete copies of the charter and bylaws of each of the Company and its
Subsidiaries (as amended to date). Except as set forth on Section 3(a) of the
Disclosure Schedule, the minute books (containing the records of meetings of the
stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of each of
the Company and its Subsidiaries are correct and complete in all material
respects. None of the Company and its Subsidiaries is in default under or in
violation of any provision of its charter or, in any material respects, its
bylaws.
(b) Capitalization. Except for Class A Shares or Class B Shares
issuable upon exercise of outstanding Options or Warrants disclosed on
Section 3(b) of the Disclosure Schedule, Section 3(b) of the Disclosure
Schedule sets forth for the Company the amount of its authorized capital stock,
the amount of its issued and outstanding capital stock and the record owners of
its outstanding capital stock. Except as set forth on Section3(b) of the
Disclosure Schedule, all of the issued and outstanding shares of capital stock
of the Company have been duly authorized, are validly issued, fully paid, and
nonassessable and are held of record by the Stockholders as set forth in
Section 3(b) of the Disclosure Schedule. Except as set forth in Section 3(b)
of the Disclosure Schedule, there are no outstanding or authorized Options or
Warrants. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or similar rights with respect to the Company.
Except as set forth in Section 3(b) of the Disclosure Schedule, there are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of the Company to which the Company is a party
or, to the Company's Knowledge, to which any Stockholder, but not the Company,
is a party.
(c) Authorization. The Company has requisite power and authority
(including requisite corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement by the Company have been duly authorized and
approved by its Board of Directors and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement constitutes the valid and
legally binding obligation of the Company, enforceable in accordance with its
terms and conditions, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect affecting
creditors' rights generally.
(d) Noncontravention. Except as set forth in Section 3(d) of the
Disclosure Schedule, neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby will (i) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, or other restriction of any government, governmental agency, or
court to which any of the Company and its Subsidiaries is subject, or any
provision of the charter or bylaws of any of the Company and its Subsidiaries,
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement set forth on Section 3(m)(ii) or
Section 3(p) of the Disclosure Schedule (or result in the imposition of any
Security Interest upon any of the Company's or a Subsidiary's assets), or (iii)
require the Company and its Subsidiaries to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, other than any such violations,
conflicts, breaches, defaults, accelerations, terminations, modifications,
cancellations or notices of or with respect to any of the foregoing that,
individually or in the aggregate, would not have a Material Adverse Effect, and
other than any such notices, filings, consents, authorizations or approvals
required under the Xxxx-Xxxxx-Xxxxxx Act or that may be required solely by
reason of APAC's regulatory status and participation in the transactions
contemplated hereby (other than breaches or defaults that may result solely from
a change of control of the Company).
(e) Broker's Fees. Except as set forth in Section 3(e) of the
Disclosure Schedule, none of the Company and its Subsidiaries has any Liability
or obligation to pay any fees, expenses, or commissions to any professional
representative, attorney, consultant, broker, finder, or agent with respect to
the transactions contemplated by this Agreement.
(f) Title to Assets. Except as set forth on Section 3(f) of the
Disclosure Schedule or as would not, individually or in the aggregate, have a
Material Adverse Effect, the Company and its Subsidiaries have good and
marketable title to, or a valid leasehold interest in, the tangible assets used
by them, located on their premises, or shown on the Most Recent Balance Sheet or
acquired after the date thereof, free and clear of all Security Interests
(except as set forth in Section 3(f) of the Disclosure Schedule), other than
those tangible assets disposed of in the ordinary course of business since the
date of such Most Recent Balance Sheet. This Section 3(f) does not relate to
real property or interests in real property, it being the intent of the Parties
that such items are the subject of Section 3(m).
(g) Subsidiaries. Section 3(g) of the Disclosure Schedule sets
forth for each Subsidiary of the Company (i) its name and jurisdiction of
incorporation, (ii) the number of shares of authorized capital stock of each
class of its capital stock, (iii) the number of issued and outstanding shares of
each class of its capital stock, the names of the holders thereof, and the
number of shares held by each such holder, and (iv) the number of shares of its
capital stock held in treasury. All of the issued and outstanding shares of
capital stock of each Subsidiary of the Company have been duly authorized and
are validly issued, fully paid, and nonassessable. Except as set forth on
Section 3(g) of the Disclosure Schedule, one of the Company and its
Subsidiaries holds of record and owns beneficially all of the outstanding
shares of each Subsidiary of the Company, free and clear of any restrictions
on transfer (other than restrictions under the Securities Act and state
securities laws), Taxes, Security Interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands. Except as set
forth on Section 3(g) of the Disclosure Schedule, there are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could require
any of the Company and its Subsidiaries to sell, transfer, or otherwise dispose
of any capital stock of any of its Subsidiaries or that could require any
Subsidiary of the Company to issue, sell, or otherwise cause to become
outstanding any of its own capital stock. There are no outstanding stock
appreciation, phantom stock, profit participation, or similar rights with
respect to any Subsidiary of the Company. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting
of any capital stock of any Subsidiary of the Company. Except as set forth
on Section 3(g) of the Disclosure Schedule, none of the Company and its
Subsidiaries has any direct or indirect equity participation in any corporation,
partnership, trust, or other business association which is not a Subsidiary of
the Company. The Company has made available to APAC correct and complete
copies of the formation documents of each such entity.
(h) Financial Statements. Set forth on Section 3(h) of the
Disclosure Schedule are the following financial statements (collectively,
the "Financial Statements"): (A) audited consolidated balance sheets as of
December 31, 1995, December 31, 1996 and December 31, 1997 and audited
consolidated statements of operations, stockholders' deficit, and cash flows
for the four months ended December 31, 1995 and the years ended December 31,
1996 and December 31, 1997 (the "Most Recent Fiscal Year End") for the
Company and its Subsidiaries, and (C) unaudited balance sheet and statements
of operations, stockholders' deficit, and cash flows (the "Most Recent
Financial Statements") as of and for the two months ended February 28, 1998
(the "Most Recent Fiscal Month End") for the Company and its Subsidiaries.
The Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP (except as otherwise indicated in the notes thereto)
applied on a consistent basis throughout the periods covered thereby, and
present fairly in all material respects the financial condition of the
Company and its Subsidiaries as of such dates and the results of operations
of the Company and its Subsidiaries for such periods; provided, however, that
the Most Recent Financial Statements are subject to normal year-end
adjustments and lack footnotes and other presentation items.
(i) Events Subsequent to Most Recent Fiscal Year End. Since the Most
Recent Fiscal Year End, there has not been any occurrence that has had or
reasonably would be expected to have a material adverse effect on the business,
financial condition, operations or results of operations of the Company and its
Subsidiaries taken as a whole. APAC acknowledges that there may be a disruption
to the Business as a result of the execution of this Agreement, the announcement
by APAC of its intention to purchase the Company or the announcement by the
Principal Stockholders or the Company of such intended sale, and the
consummation of the transactions contemplated hereby, and APAC agrees that such
disruptions do not and shall not constitute a breach of this Section 3(i) or of
Section 3(y) hereof. Without limiting the generality of the foregoing, since the
Most Recent Fiscal Year End, except as set forth on Section 3(i) of the
Disclosure Schedule or as would not, individually or in the aggregate, have a
material adverse effect upon the business, financial condition, operations and
results of operations of the Company and its Subsidiaries taken as a whole which
results in at least $500,000 of Adverse Consequences:
(i) none of the Company and its Subsidiaries has sold, leased,
transferred, or assigned any of its assets, tangible or intangible, outside
the ordinary course of business;
(ii) none of the Company and its Subsidiaries has entered into
any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) outside the ordinary course of
business;
(iii) no party (including any of the Company and its
Subsidiaries) has accelerated, terminated, modified, or canceled any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) which is set forth on Section 3(m)(ii) or
Section 3(p) of the Disclosure Schedule and which involves in excess of
$100,000 per annum to which any of the Company and its Subsidiaries is a
party or by which any of them is bound;
(iv) none of the Company and its Subsidiaries has imposed any
Security Interest upon any of its assets, tangible or intangible;
(v) [intentionally omitted];
(vi) none of the Company and its Subsidiaries has made any
capital investment in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital investments,
loans, and acquisitions);
(vii) none of the Company and its Subsidiaries has issued any
note, bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or capitalized lease
obligation;
(viii) none of the Company and its Subsidiaries has delayed or
postponed the payment of accounts payable and other Liabilities outside the
ordinary course of business or accelerated the collection of accounts,
notes or other receivables outside the ordinary course of business;
(ix) none of the Company and its Subsidiaries has canceled,
compromised, waived, or released any right or claim (or series of related
rights and claims) outside the ordinary course of business;
(x) none of the Company and its Subsidiaries has granted any
license or sublicense of any rights under or with respect to any
Intellectual Property outside the ordinary course of business;
(xi) there has been no change made or authorized in the charter
or bylaws of any of the Company and its Subsidiaries;
(xii) none of Company and its Subsidiaries has issued, sold,
or otherwise disposed of any of its capital stock, or granted any options
(including options granted to employees), warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or exercise) any
of its capital stock;
(xiii) none of the Company and its Subsidiaries has declared,
set aside, or paid any dividend or made any distribution with respect to
its capital stock (whether in cash or in kind) or redeemed, purchased, or
otherwise acquired any of its capital stock;
(xiv) none of the Company and its Subsidiaries has
experienced any single occurrence of damage, destruction, or loss in an
amount in excess of $100,000 (whether or not covered by insurance) to its
property;
(xv) none of the Company and its Subsidiaries has made any loan
to, or entered into any other transaction with, any of its directors,
officers, and employees outside the ordinary course of business.
(xvi) none of the Company and its Subsidiaries has entered
into any employment contract or collective bargaining agreement, written or
oral, or modified the terms of any existing such contract or agreement;
(xvii) none of the Company and its Subsidiaries has granted
any increase in the base compensation of any of its directors, officers,
and employees outside the ordinary course of business;
(xviii) none of the Company and its Subsidiaries has adopted,
amended, modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the benefit of any of
its directors, officers, and employees (or taken any such action with
respect to any other Employee Benefit Plan);
(xix) none of the Company and its Subsidiaries has made any
other change in employment terms for any of its directors, officers, and
key employees or, outside the ordinary course of business, for any of its
other employees; and
(xx) none of the Company and its Subsidiaries had made or pledged
to make any charitable or other capital contribution outside the ordinary
course of business.
(j) Undisclosed Liabilities. Except as set forth on Section 3(j) of
the Disclosure Schedule, none of the Company and its Subsidiaries has any
Liability, except for (i) Liabilities set forth on the Most Recent Balance
Sheet, (ii) Liabilities which have arisen after the Most Recent Fiscal Month End
in the ordinary course of business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of law), and (iii) Liabilities
which, individually or in the aggregate, would not have a Material Adverse
Effect.
(k) Legal Compliance. Except as set forth on Section 3(k) of the
Disclosure Schedule, each of the Company, its Subsidiaries and their respective
predecessors has complied with all applicable laws (including rules,
regulations, codes, injunctions, judgments, orders, decrees, and rulings of
federal, state, local, and foreign governments (and all agencies thereof)),
including but not limited to the Federal Telephone Consumer Protection Act of
1991, the Federal Telemarketing and Consumer Fraud and Abuse Protection Act of
1994 and any and all amendments thereto and rules and regulations promulgated
thereunder by the Federal Communications Commission and the Federal Trade
Commission, and no action, suit, proceeding, hearing, complaint, claim, demand,
notice or investigation has been filed or commenced, or to the Knowledge of the
Company, threatened against the Company alleging any failure so to comply,
except to the extent any instances of noncompliance would not, individually or
in the aggregate, have a Material Adverse Effect. Section 3(k) of the
Disclosure Schedule sets forth a list of all consent agreements which have
been entered into between the Company or any Subsidiary and any federal, state,
local or foreign government (or any agency thereof) and copies of each such
consent agreement has been made available to APAC. The Company, its
Subsidiaries and their respective telephone representatives who sell
insurance-related products possess such certificates, authorities, permits,
licenses, approvals, consents and other authorizations (collectively,
"Insurance Licenses") issued by the appropriate state, federal, local or
foreign regulatory agencies or bodies necessary to conduct the Business,
the Company, its Subsidiaries and their respective telephone representatives
who sell insurance-related products are in compliance with the terms and
conditions of all such Insurance Licenses, all of the Insurance Licenses are
valid and in full force and effect, and neither the Company nor any of its
Subsidiaries has received any notice of proceeding relating to the revocation
or modification of any such Insurance Licenses, except as would not,
individually or in the aggregate, have a Material Adverse Effect.
(l) Tax Matters.
(i) Each of the Company and its Subsidiaries has filed all
income Tax Returns and all other material Tax Returns it was required to
file. All such Tax Returns were correct and complete in all material
respects. All Taxes owed by any of the Company and its Subsidiaries
(whether or not shown on any Tax Return) have been paid, except where a
failure to pay such Taxes will not, individually or in the aggregate, have
a Material Adverse Effect and except with respect to Taxes being contested
in good faith by the Company and/or its Subsidiaries. Except as set forth
on Section 3(l) of the Disclosure Schedule, none of the Company and its
Subsidiaries currently is the beneficiary of any extension of time within
which to file any Tax Return. No claim is currently pending by an
authority in a jurisdiction where any of the Company and its Subsidiaries
do not file Tax Returns that any of the Company or its Subsidiaries is or
may be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of any of the Company and its Subsidiaries
that arose in connection with any failure (or alleged failure) to pay any
Tax, except for such Security Interests which would not, individually or in
the aggregate, have a Material Adverse Effect.
(ii) Each of the Company and its subsidiaries has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party, except where a failure to withhold or
pay such Taxes will not, individually or in the aggregate, have a Material
Adverse Effect.
(iii) To the Company's Knowledge, no applicable authority
will assess any additional Taxes against the Company or its Subsidiaries
for any period for which Tax Returns have been filed. Except as set forth
on Section3(l) of the Disclosure Schedule, there is no dispute or claim
concerning any Tax Liability of any of the Company and its Subsidiaries
either (A) claimed or raised by any authority in writing or (B) to the
Company's Knowledge. Section 3(l) of the Disclosure Schedule lists all
federal, state, local, and foreign income Tax Returns filed with respect to
any of the Company and its Subsidiaries for taxable periods ended on or
after August 31, 1995, indicates those Tax Returns that have been audited,
and indicates those Tax Returns that currently are the subject of audit.
The Company has made available to APAC correct and complete copies of all
federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by any of the Company and its
Subsidiaries since August 31, 1995.
(iv) Other than with respect to dispute or claims set forth in
Section 3(l) of the Disclosure Schedule, none of the Company and its
subsidiaries has waived any statute of limitations (except in connection
with disputes or claims listed in Section 3(l) of the Disclosure Schedule)
in respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency.
(v) None of the Company and its Subsidiaries has made any
payments, is obligated to make any payments, or is a party to any agreement
that under certain circumstances could obligate it to make any payments
that will not be deductible under Code Sec. 280G. None of the Company and
its Subsidiaries has been a United States real property holding corporation
within the meaning of Code Sec. 897(c)(2) during the applicable period
specified in Code Sec. 897(c)(1)(A)(ii). Each of the Company and its
Subsidiaries has disclosed on its federal income Tax Returns all positions
taken therein that, to the Company's Knowledge, could give rise to a
substantial understatement of federal income Tax within the meaning of Code
Sec. 6662. None of the Company and its Subsidiaries is a party to any Tax
allocation or sharing agreement. None of the Company and its Subsidiaries
(A) has been a member of an Affiliated Group filing a consolidated federal
income Tax Return (other than a group the common parent of which was the
Company) and (B) has any Liability for the Taxes of any Person under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.
(vi) The unpaid Taxes of the Company and its Subsidiaries (A) did
not, as of the Most Recent Fiscal Month End, exceed the reserves and
accruals for such Taxes excluding any reserve for deferred taxes and (B) to
the Company's Knowledge, do not exceed the reserves and accruals as
adjusted for the passage of time through the Closing Date in accordance
with GAAP consistent with past practice.
(m) Real Property.
(i) None of the Company and its Subsidiaries owns any real
property.
(ii) Section 3(m)(ii) of the Disclosure Schedule lists and
describes briefly all real property leased or subleased to any of the
Company and its Subsidiaries. The Company has made available to APAC
correct and complete copies of the leases and subleases listed in
Section 3(m)(ii) of the Disclosure Schedule (as amended to date). With
respect to each lease and sublease listed in Section 3(m)(ii) of the
Disclosure Schedule:
(A) except as set forth in Section 3(m) of the Disclosure
Schedule, the lease or sublease is legal, valid, binding, enforceable,
and in full force and effect, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect affecting creditors' rights generally;
(B) except as set forth in Section 3(m) of the Disclosure
Schedule, the lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby,
except as limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect affecting
creditors' rights generally;
(C) except as set forth in Section 3(m) of the Disclosure
Schedule, none of the Company and its Subsidiaries, nor to the
Company's Knowledge any other party, is in breach or default under the
lease or sublease, and, to the Company's Knowledge, no event has
occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification or acceleration
thereunder, except for any such breaches or defaults which would not,
individually or in the aggregate, have a Material Adverse Effect;
(D) except as set forth in Section 3(m) of the Disclosure
Schedule, none of the Company and its Subsidiaries, nor to the
Company's Knowledge, any other party to the lease or sublease, has
repudiated any provision thereof; and
(E) to the Company's Knowledge, there are no disputes, oral
agreements, or forbearance programs in effect as to the lease or
sublease other than those which would not individually or in the
aggregate, have a Material Adverse Effect.
(n) Intellectual Property. Except as set forth on Section 3(n) of
the Disclosure Schedule, each of the Company and its Subsidiaries owns or has
the right to use pursuant to license, sublicense, agreement, or permission all
Intellectual Property except as would not, individually or in the aggregate,
have a Material Adverse Effect. Except as set forth on Section 3(n) of the
Disclosure Schedule, no licenses, sublicenses or agreements pertaining to any of
the Intellectual Property have been granted or entered into by any of the
Company and its Subsidiaries. To the Knowledge of the Company, each of the
trademarks and service marks included among the Intellectual Property are valid
and enforceable. To the Company's Knowledge and except as set forth on
Section 3(n) of the Disclosure Schedule, neither the Company nor any of its
Subsidiaries has received any notices of, nor are aware of any facts which
indicate a likelihood of, any infringement by any third party with respect to
those trademarks and service marks included among the Intellectual Property.
Except as set forth on Section 3(n) of the Disclosure Schedule, the Company and
its Subsidiaries have or will receive pursuant to the transactions contemplated
by this Agreement the right to use, without payment to any other party other
than maintenance and transfer fees, all Software currently in use by the Company
and its Subsidiaries that are material to the Business.
(o) Tangible Assets. Except as set forth on Section 3(o) of the
Disclosure Schedule and except as would not, individually or in the aggregate,
have a Material Adverse Effect, the Company and its Subsidiaries own or lease
all equipment and other tangible assets reasonably necessary for the conduct of
the Business. Except as set forth on Section 3(o) of the Disclosure Schedule
and except as would not, individually or in the aggregate, have a Material
Adverse Effect, all material tangible assets have been maintained in accordance
with normal industry practice and are in good operating condition and repair
(subject to normal wear and tear).
(p) Contracts. Section 3(p) of the Disclosure Schedule lists the
following contracts and other agreements to which the Company or any of its
Subsidiaries is a party:
(i) any agreement (or group of related agreements) for the
furnishing of inbound or outbound call center services, the performance of
which will extend over a period of more than one year, that would result in
a loss to the Company if terminated, or that involves consideration, in
excess of $500,000 per annum;
(ii) any agreement (or group of related agreements) for the lease
of personal property to or from any Person which has a future liability in
excess of $200,000 per annum;
(iii) any agreement (or group of related agreements), other
than those identified pursuant to (i) above, for the purchase or sale of
supplies, products or other personal property, or for the furnishing or
receipt of services, the performance of which will extend over a period of
more than one year, that would result in a loss to the Company if
terminated, or that involves consideration, in excess of $500,000 per
annum;
(iv) any agreement constituting a partnership or joint venture;
(v) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of $50,000
or under which it has expressly imposed a Security Interest on any of its
assets, tangible or intangible;
(vi) any covenant not to compete that materially impairs the
Business;
(vii) any agreement with any of the Stockholders and their
Affiliates (other than the Company and its Subsidiaries);
(viii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors, officers,
and employees;
(ix) any employee collective bargaining agreement;
(x) any written agreement for the employment of any individual
on a full-time, part-time, consulting, or other basis that has a future
liability in excess of $100,000 per annum;
(xi) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, or Stockholders, other than
advances made in the ordinary course of business; or
(xii) any written agreement with a sales broker (provided
that Section 3(p) of the Disclosure Schedule also sets forth a list of all
sales brokers who have provided services to the Company or any Subsidiary
since January 1, 1997).
The Company has made available to APAC a correct and complete copy of each
written agreement listed in Section 3(p) of the Disclosure Schedule (as amended
to date). With respect to each such agreement, except as set forth on
Section 3(p) of the Disclosure Schedule and except as would not, individually,
or in the aggregate, have a Material Adverse Effect, (A) the agreement is
legal, valid, binding, enforceable, and in full force and effect, except as
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect affecting creditors' rights generally; (B) there
shall be no breach or other violation resulting from the consummation of the
transactions contemplated hereby; (C) none of the Company and its Subsidiaries,
nor to the Knowledge of the Company any other party, is in breach or default,
and, to the Knowledge of the Company, no event has occurred which with notice
or lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) none of the Company
and its Subsidiaries, nor to the Knowledge of the Company any other party, has
repudiated any provision of the agreement.
(q) Notes and Accounts Receivable. All notes and accounts receivable
of the Company and its Subsidiaries have arisen from bona fide transactions
requiring, to the Company's Knowledge, no further performance by the Company or
its Subsidiaries and, to the Company's Knowledge, subject to no setoff or
counterclaims, subject only to the reserve for bad debts set forth on the face
of the Most Recent Balance Sheet (rather than in any notes thereto) as adjusted
for the passage of time through the Closing Date in accordance with the past
custom and practice of the Company and its Subsidiaries. Set forth on
Section 3(q) of the Disclosure Schedule is the Company's accounts receivable
aging schedule as of April 20, 1998.
(r) Insurance. Each of the Company and its Subsidiaries is covered
(subject to applicable deductibles, self-insurance provisions and other
limitations on coverage) by valid insurance policies issued in favor of the
Company or its Subsidiaries. Neither the Company nor any Subsidiary has
received any notices of cancellation or non-renewal with respect to any such
policies, all premiums due thereon have been paid and the Company and its
Subsidiaries have complied with the provisions of such policies (except for
notices of cancellation or nonrenewal, failures to pay premiums and to comply
which, individually or in the aggregate, would not have a Material Adverse
Effect).
(s) Litigation. Section 3(s) of the Disclosure Schedule sets forth
each instance in which any of the Company and its Subsidiaries (except as would
not, individually or in the aggregate, have a Material Adverse Effect): (i) is
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge or (ii) is a party or, to the Company's Knowledge, is threatened to be
made a party to any action, suit, proceeding, hearing, or investigation of, in,
or before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator. To the
Company's Knowledge, none of the actions, suits, proceedings, hearings, and
investigations set forth in Section 3(s) of the Disclosure Schedule is likely,
individually or in the aggregate, to result in any Material Adverse Effect.
(t) Employees.
(i) Section 3(t) of the Disclosure Schedule sets forth a list
of all employees of the Company or any of its Subsidiaries who receive
compensation in excess of $50,000 per year.
(ii) To the Knowledge of the Company, no Principal Stockholder or
any employee who reports directly to any Principal Stockholder has any
plans to terminate employment with any of the Company and its Subsidiaries.
(iii) Except as set forth on Section 3(t) of the Disclosure
Schedule, (A) none of the Company and its Subsidiaries is a party to any
collective bargaining agreement or similar agreement with respect to its
employees; (B) there is no labor strike, slowdown, work stoppage, or
lockout in effect or, to the Knowledge of the Company, threatened against
or otherwise affecting or involving the Business, nor has any such labor
strike, slowdown, work stoppage, or lockout occurred since September 1,
1995; (C) there is no current, written, unresolved grievance which,
individually or in the aggregate, is likely to have a Material Adverse
Effect and no arbitration proceeding is pending or, to the Knowledge of the
Company, threatened and no claim therefor has been asserted; (D) there is
no unfair labor practice charge or complaint pending or, to the Knowledge
of the Company, threatened relating to the Business; (E) no representation
question has been brought to the attention of the Company respecting any of
the employees of any of the Company and its Subsidiaries since September 1,
1995, nor to the Company's Knowledge, are any campaigns being conducted to
solicit cards from any of the employees of any of the Company and its
Subsidiaries to authorize representation by any labor organization; (F) no
collective bargaining agreement relating to any of the employees of any of
the Company and its Subsidiaries is being negotiated; (G) payment in full
to all of the employees of the Company and its Subsidiaries of all wages,
salaries, commissions, bonuses, benefits, and other compensation lawfully
due and owing to such employees or otherwise arising under any policy,
practice, agreement, plan, program, statute, or other law has been made,
except where a failure to make such payment will not, individually or in
the aggregate, have a Material Adverse Effect; and (H) no facility of any
of the Company and its Subsidiaries has been closed, there have not been
any layoffs of any of its employees sufficient to require notification
under the Workers Adjustment and Retraining Notification Act of 1988, as
amended, or implementations of any early retirement, separation, or window
program since September 1, 1995 with respect to any of the Company and its
Subsidiaries, nor, other than in connection with or as a result of the
transactions contemplated hereby, are there any plans or announcements of
any such action or program for the future.
(u) Employee Benefits.
(i) Section 3(u) of the Disclosure Schedule lists each Employee
Benefit Plan that any of the Company and its Subsidiaries maintains or to
which any of the Company and its Subsidiaries contributes which affects or
covers any Principal Stockholder or any ten or more employees of the
Company or any Subsidiary. Except as set forth in Section3(u) of the
Disclosure Schedule:
(A) Each such Employee Benefit Plan (and each related
trust) complies in form and in operation in all material respects with
its terms and with the applicable requirements of ERISA, the Code, and
other applicable laws, except where the failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect.
(B) All contributions (including all employer contributions
and employee salary reduction contributions) which are due have been
paid with respect to each such Employee Benefit Plan which is an
Employee Pension Benefit Plan.
(C) The only Employee Benefit Plan of the Company or its
Subsidiaries which is an Employee Pension Benefit Plan is the
Company's 401(k) plan. The Company has established its 401(k) plan by
adoption of a standardized prototype plan and the sponsor of such
prototype plan has received a favorable determination or approval
letter from the Internal Revenue Service that the form of prototype
plan qualifies under Code Sec. 401(a) and the Company has taken all
steps necessary for the Company to rely on such letter.
(D) The Company has made available to APAC correct and
complete copies of the plan documents and summary plan descriptions,
the most recent determination letter received from the Internal
Revenue Service, the most recent Form 5500 Annual Report, and all
related trust agreements, insurance contracts, and other funding
agreements which implement each such Employee Benefit Plan.
(ii) Except as set forth in Section 3(u) of the Disclosure
Schedule, with respect to each Employee Benefit Plan (other than any
Multiemployer Plan) that any of the Company and its Subsidiaries and the
Controlled Group of Corporations which includes the Company maintains, ever
has maintained, or to which any of them contributes, ever has contributed,
or ever has been required to contribute:
(A) No such Employee Benefit Plan which is an Employee
Pension Benefit Plan has been completely or partially terminated or
been the subject of a Reportable Event as to which notices would be
required to be filed with the PBGC. No proceeding by the PBGC to
terminate any such Employee Pension Benefit Plan has been instituted
or, to the Company's Knowledge, threatened.
(B) To the Company's Knowledge, there have been no
Prohibited Transactions with respect to any such Employee Benefit
Plan. To the Company's Knowledge, no Fiduciary (as defined in ERISA
Section 3(21)) has any Liability for breach of fiduciary duty or any
other failure to act or comply in connection with the administration
or investment of the assets of any such Employee Benefit Plan. Except
as set forth on Section3(u) of the Disclosure Schedule, no action,
suit, proceeding, hearing, or investigation with respect to the
administration or the investment of the assets of any such Employee
Benefit Plan (other than any Multiemployer Plan), other than routine
claims for benefits, is pending or, to the Company's Knowledge,
threatened. The Company has no Knowledge of any basis for any such
action, suit, proceeding, hearing, or investigation.
(C) None of the Company and its Subsidiaries has incurred,
nor, to the Company's Knowledge, expects has any reason to expect that
any of the Company and its Subsidiaries will incur, with respect to
the period prior to the Closing, any Liability to the PBGC (other than
PBGC premium payments) or otherwise under Title IV of ERISA or under
the Code with respect to any such Employee Benefit Plan which is an
Employee Pension Benefit Plan.
(iii) None of the Company and its Subsidiaries and the other
members of the Controlled Group of Corporations that includes the Company
and its Subsidiaries contributes to, ever has contributed to, or ever has
been required to contribute to any Multiemployer Plan or has any Liability
(including withdrawal Liability) under any Multiemployer Plan.
(iv) None of the Company and its Subsidiaries maintains or
contributes to any Employee Welfare Benefit Plan providing medical, health,
or life insurance or other welfare-type benefits for current or future
retired or terminated employees, their spouses, or their dependents (other
than in accordance with Code Sec. 4980B).
(v) Guaranties. None of the Company and its Subsidiaries is a
guarantor or otherwise is liable for any Liability or obligation (including
indebtedness) of any Person (other than the Company and its Subsidiaries) which
has outstanding principal amount of future liability in excess of $150,000.
(w) Environment, Health, and Safety. Except as set forth on
Section3(w) of the Disclosure Schedule, (A) since August 31, 1995, none of the
Company and its Subsidiaries has received any written communication from a
governmental authority that alleges that any Company or any Subsidiary is not in
compliance, in all material respects, with any applicable Environmental, Health
and Safety Requirements, including the rules and regulations relating thereto,
and (B) to the Company's Knowledge, the Company and its Subsidiaries hold, and
are in compliance with, all material permits, licenses and governmental
authorizations required for the Company and its Subsidiaries to operate under
applicable Environmental, Health and Safety Requirements, and are in compliance
with all applicable Environmental, Health and Safety Requirements, except for
failures to have such permits, licenses or authorizations and instances of
noncompliance which, individually or in the aggregate, would not have a Material
Adverse Effect.
(x) Certain Business Relationships with the Company and its
Subsidiaries. Except as set forth in Section3(x) of the Disclosure Schedule and
other than ordinary course employment relationships, none of the Stockholders
and their Affiliates has been involved in any business arrangement or
relationship with the Company and its Subsidiaries within the past 12 months,
and none of the Stockholders and their Affiliates owns any material asset,
tangible or intangible, which is used in the Business.
(y) Clients. Section 3(y) of the Disclosure Schedule sets forth an
accurate, correct and complete list as of February 28, 1998 of the 10 largest
clients of the Company and its Subsidiaries, with respect to each of the inbound
and outbound call center operations performed by the Company and its
Subsidiaries, together with the revenues received from each such client for each
of the last two fiscal years and for the six months ending February 28, 1998.
The Company has no Knowledge that any specific client will cease to do business
with the Company or any Subsidiary after, or as a result of, the consummation of
any transactions contemplated hereby or that any client is threatened with
bankruptcy or insolvency.
(z) Bank Accounts. Section 3(z) of the Disclosure Schedule sets
forth all the bank accounts of any of the Company and its Subsidiaries.
(aa) Indebtedness. The Payoff Indebtedness and the Outstanding
Indebtedness set forth on Exhibit B includes, with respect to the Company and
its Subsidiaries, all outstanding indebtedness for borrowed money as of the date
hereof. All Payoff Indebtedness is identified with an asterisk ("*") on Exhibit
B.
(bb) Election under Section 341(f) of the Code. Neither the Company
nor any Subsidiary has made an election under Section 341(f) of the Code.
Section 4. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of APAC and Newco. Each of APAC
and Newco, jointly and severally, represents and warrants to the Principal
Stockholders and the Company that the statements contained in this Section 4(a)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 4(a)), except as set forth in the Disclosure Schedule. The Disclosure
Schedule will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section 4(a).
(i) Organization. Each of APAC and Newco is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) Authorization of Transaction. Each of APAC and Newco has
requisite power and authority (including requisite corporate power and
authority) to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of each of APAC and Newco, enforceable in accordance
with its terms and conditions, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect
affecting creditors' rights generally.
(iii) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, or other
restriction of any government, governmental agency, or court to which APAC
or Newco is subject or any provision of the charter or bylaws of either
APAC or Newco or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right
to accelerate, terminate, modify, or cancel, or require any notice under
any agreement, contract, lease, license, instrument, or other arrangement
to which APAC or Newco is a party or by which either is bound or to which
any of their assets is subject which conflict, breach, default,
acceleration or right would have a material adverse effect on the business,
operations or financial condition of APAC or Newco or otherwise adversely
affect APAC's or Newco's ability to consummate the transactions
contemplated hereby. Except as set forth in Section4(a)(iii) of the
Disclosure Schedule, neither APAC nor Newco needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
(iv) Actions and Proceedings, etc. There are no outstanding
judgments, orders, writs, injunctions or decrees of any court, governmental
agency or arbitration tribunal against APAC or Newco which have or could
have a material adverse effect on the ability of APAC or Newco to
consummate the transactions contemplated hereby or actions, suits, claims
or legal, administrative or arbitration proceedings or investigations
pending or, to the knowledge of APAC or Newco, threatened against APAC or
Newco, which have or could have a material adverse effect on the ability of
APAC or Newco to consummate the transactions contemplated hereby.
(v) Availability of Funds. APAC has received, and has furnished
to the Representative copies of, a financing commitment letter from Xxxxxx
Bank dated April 30, 1998. Neither APAC nor Newco has any reason to
believe that Xxxxxx Bank will not fund pursuant to such commitment letter.
(vi) No Knowledge of Misrepresentations or Omissions. Neither
APAC nor Newco has any knowledge that the representations and warranties of
the Principal Stockholders in this Agreement and the Disclosure Schedule
are not true and correct in all material respects and neither APAC nor
Newco has any knowledge of any material errors in, or material omissions
from, the Disclosure Schedule.
(vii) Facility Closings and Mass Layoffs. APAC shall bear
all Adverse Consequences, and shall indemnify each Stockholder for any
Adverse Consequences which he or it may suffer, arising pursuant to the
Workers Adjustment and Retraining Notification Act of 1988, as amended, as
a result of any facility closings, reductions in work force or terminations
which APAC, Newco or any of their Affiliates may cause or initiate on or
after the Closing Date with respect to the Business.
(b) Representations and Warranties of the Principal Stockholders.
Each of the Principal Stockholders severally and not jointly represents and
warrants to APAC and Newco that the statements contained in this Section 4(b)
are correct and complete as to himself or itself (and, with respect to the
first sentence of Section 4(b)(iv) below only, generally) as of the date of
this Agreement and will be correct and complete as to himself or itself (and,
with respect to the first sentence of Section 4(b)(iv) below only, generally)
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4(b)), except
as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 4(b).
(i) Organization of Certain Stockholders. If the Principal
Stockholder is a trust, corporation, partnership, limited liability company
or other entity, the Principal Stockholder is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
formation.
(ii) Authorization of Transaction. Such Principal Stockholder has
requisite power and authority to execute and deliver this Agreement and to
perform his or its obligations hereunder. This Agreement constitutes the
valid and legally binding obligation of such Stockholder, enforceable in
accordance with its terms and conditions, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect affecting creditors' rights generally.
(iii) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, or other
restriction of any government, governmental agency, or court to which such
Principal Stockholder is subject or, if the Principal Stockholder is a
trust, corporation, partnership, limited liability company or other entity,
any provision of its formation documents or arrangements or (B) except as
set forth on Section 4(b)(iii) of the Disclosure Schedule, conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which the Principal
Stockholder is a party or by which he or it is bound or to which any of his
or its assets is subject, other than any such violations, conflicts,
breaches, defaults, accelerations, terminations, modifications,
cancellations or notices that, individually or in the aggregate, would not
have a Material Adverse Effect or would not impair the ability of the
Principal Stockholders to consummate the transactions contemplated by this
Agreement, and other than any such notices, filings, consents,
authorizations or approvals required under the Xxxx-Xxxxx-Xxxxxx Act or
that may be required solely by reasons of APAC's regulatory status and
participation in the transactions contemplated hereby (other than breaches
or defaults that may result from a change of control of the Company).
(iv) Shares. Section 3(b) of the Disclosure Schedule sets forth
the amount of issued and outstanding capital stock, Options and Warrants
of the Company and no Person holds any shares of capital stock or any
Options or Warrants, other than as set forth in Section 3(b) of the
Disclosure Schedule. Except as set forth on Section 4(b)(iv) of the
Disclosure Schedule, each Principal Stockholder holds of record and owns
beneficially the number of Shares, Options and Warrants set forth next to
his or its name in Section 3(b) of the Disclosure Schedule, free and clear
of any restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, Security Interests,
options, warrants, purchase rights, contracts, commitments, equities, and
claims, other than any restrictions and Security Interests imposed as a
result of the pledge of such Shares to the Company in connection with the
Stockholder Notes, which restrictions and Security Interests shall be
released at the Closing upon payment in full of the Stockholder Notes.
Except as set forth on Section 3(b) of the Disclosure Schedule, such
Principal Stockholder is not a party to any option, warrant, purchase
right, or other contract or commitment that could require such Principal
Stockholder to sell, transfer, or otherwise dispose of any capital stock of
the Company (other than this Agreement). Except as set forth on
Section3(b) of the Disclosure Schedule, such Principal Stockholder is not a
party to (x) any voting trust, proxy, or other agreement or understanding
with respect to the voting of any capital stock of the Company, or (y) any
other agreement between or among any of the other Stockholders with respect
to the Company.
(v) Tax Status. Such Principal Stockholder is not a "nonresident
alien individual" or "foreign corporation" for purposes of Code Sec.
897(a)(1).
Section 5. Pre-Closing Covenants. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable best
efforts to take all action within his or its control and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section6 below).
(b) Notices and Consents. Each of the Parties will give any notices
to, make any filings with, and use its reasonable efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Section3(d) above or set forth in
Section3(d) of the Disclosure Schedule. Without limiting the generality of the
foregoing, APAC, Newco and the Representative shall each file or cause to be
filed with the Federal Trade Commission and/or the United States Department of
Justice any notifications required to be filed under the Xxxx-Xxxxx-Xxxxxx Act
with respect to the transactions contemplated hereby and APAC, Newco and the
Company shall bear the costs and expenses of their respective filings and any
filings required to be made by or on behalf of the Principal Stockholders;
provided, however, that APAC shall pay the filing fee in connection therewith.
APAC, Newco and the Representative shall use their respective best efforts to
make such filings as soon as practicable following the date hereof (but in any
event no later than five business days following the execution and delivery of
this Agreement), to respond to any requests for additional information made by
either of such agencies and to cause the waiting periods under the Xxxx-Xxxxx
Xxxxxx Act to terminate or expire at the earliest possible date and to resist in
good faith, at each of their respective costs and expenses (including the
institution or defense of legal proceedings), any assertion that the
transactions contemplated hereby constitute a violation of the antitrust laws,
all to the end of expediting consummation of the transactions contemplated
hereby. Each of APAC, Newco and the Representative shall consult with the
others prior to any meetings, by telephone or in person, with the staff of the
Federal Trade Commission and the United States Department of Justice, and each
of APAC, Newco and the Representative shall have the right to have a
representative present at any such hearing.
(c) Operation of Business. Except (i) as contemplated by this
Agreement, (ii) as set forth on Section5(c) of the Disclosure Schedule, or (iii)
so long as prior written notice is provided to APAC, in respect of any actions
taken to cure any events of default under loan or other credit documents to
which the Company and/or its Subsidiaries are parties or to refinance any funded
indebtedness of the Company and/or its Subsidiaries, from the date hereof to the
Closing, the Company will not, without the prior written consent of APAC, which
shall not be unreasonably withheld, engage in any practice, take any action, or
enter into any transaction outside the ordinary course of business. Without
limiting the generality of the foregoing, except (i) as contemplated by this
Agreement, (ii) as set forth on Section 5(c) of the Disclosure Schedule, (iii)
with the prior written consent of APAC, which shall not be unreasonably
withheld, or (iv) so long as prior written notice is provided to APAC, in
respect of any actions taken to cure any events of default under loan or other
credit documents to which the Company and/or its Subsidiaries are parties or to
refinance any funded indebtedness of the Company and/or its Subsidiaries, none
of the Company and its Subsidiaries will:
(i) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock (whether in cash or in kind)
or redeem, purchase, or otherwise acquire any of its capital stock;
(ii) sell, lease, transfer, or assign any of its assets, tangible
or intangible, to any third party (including any intercompany transfer)
outside the ordinary course of business;
(iii) enter into any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and licenses) outside
the ordinary course of business;
(iv) accelerate, terminate, cancel, or, outside the ordinary
course of business, modify any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses) to which the
Company is a party or by which it is bound;
(v) other than in the ordinary course of business, impose any
Security Interest upon any of its assets, tangible or intangible;
(vi) make any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other Person (or series of
related capital investments, loans, and acquisitions);
(vii) issue any note, bond or other debt security or incur,
assume or guarantee any indebtedness for borrowed money or capitalized
lease obligation;
(viii) delay or postpone the payment of accounts payable and
other Liabilities;
(ix) accelerate the collection of accounts, notes, or other
receivables;
(x) cancel, compromise, waive, or release any right or claim (or
series of related rights and claims) outside the ordinary course of
business;
(xi) grant any license or sublicense of any rights under or with
respect to any Intellectual Property;
(xii) change or authorize a change in the charter or bylaws
of any of the Company or its Subsidiaries;
(xiii) issue, sell or otherwise dispose of any of its capital
stock, or grant any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of its
capital stock;
(xiv) make any loan to, or enter into any other transaction
with, any of its directors, officers, and employees;
(xv) adopt, amend, modify, or terminate any Employee Benefit
Plan;
(xvi) enter into any employment contract or collective
bargaining agreement, written or oral, or modify the terms of any existing
such contract or agreement;
(xvii) grant any increase in the compensation (including base
salary and bonus) of any of its directors, officers, and employees;
(xviii) make any other change in employment terms for any of
its directors, officers, and employees;
(xix) make or pledge to make any charitable or other capital
contribution outside the ordinary course of business; and
(xx) make any payments of principal with respect to any
indebtedness for borrowed money of the Company or any Subsidiary, other
than scheduled payments as reflected on the cash flow statement of the
Company attached hereto as Exhibit D.
(d) Preservation of Business. Subject to the terms and conditions of
this Agreement, the Company will, and will cause each Subsidiary to, use
commercially reasonable efforts to keep the Business substantially intact,
including its present operations, physical facilities, working conditions, and
relationships with lessors, licensors, suppliers, customers, and employees.
(e) Full Access. Prior to the Closing, the Company will permit
representatives of APAC at reasonable times (during normal business hours) and
upon reasonable notice to have reasonable access to the premises, properties,
personnel, books, records (including Tax records), contracts, and documents of
or pertaining to the Company and its Subsidiaries and, only together with an
authorized representative of the Company, to the clients of the Company which
are identified on Section 3(y) of the Disclosure Schedule.
(f) Notice of Developments.
(i) The Principal Stockholders will give prompt written notice
to APAC, and APAC will give prompt written notice to the Representative, on
behalf of the Principal Stockholders, of any breach of any of their
respective representations and warranties in Section 3 and Section 4(b)
above of which they become aware. No disclosure by any Party pursuant
to this Section 5(f), however, shall be deemed to amend or supplement the
Disclosure Schedule or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant;
(ii) Prior to the Closing, APAC shall promptly notify Principal
Stockholders if APAC obtains knowledge that the representations and
warranties of Principal Stockholders in this Agreement, as modified by the
Disclosure Schedule, are not true and correct in all material respects, or
if APAC obtains knowledge of any material errors in, or omissions from, the
Disclosure Schedule.
(g) Exclusivity. The Principal Stockholders and the Company will not
(i) solicit, initiate, or encourage the submission of any proposal or offer from
any Person relating to the acquisition of any capital stock or other voting
securities, or any substantial portion of the assets, of the Company and its
Subsidiaries (including any acquisition structured as a merger, consolidation,
or share exchange), or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing. The Principal Stockholders will not vote their Shares in
favor of any such acquisition structured as a merger, consolidation, or share
exchange. The Principal Stockholders will notify APAC immediately if any Person
makes any bona fide written offer with respect to any of the foregoing.
(h) Satisfaction of All Obligations Under Payoff Indebtedness. The
Company shall have obtained from the lenders under all obligations included in
Payoff Indebtedness and delivered to APAC each of the following (all in form and
substance reasonably acceptable to APAC) effective as of the Closing: (i)
general releases of the Company and its Subsidiaries completely releasing the
Company and its Subsidiaries from any and all claims under, in connection with
the arising from such obligations, and (ii) payoff letters, UCC-3 termination
statements, mortgage releases and any other releases necessary to release any
collateral given to any lender under any such obligation as security for the
Company's or any of its Subsidiary's obligations thereunder.
(i) Repayment of All Obligations Under Payoff Indebtedness. Upon
satisfaction of all of the conditions to the obligations of APAC and Newco
provided in Section6(a) hereof, APAC shall cause all of the Payoff Indebtedness
to be repaid in full.
Section 6. Conditions to Obligation to Close.
(a) Conditions to Obligation of APAC and Newco. The obligation of
APAC and Newco to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction (or waiver by APAC) of
the following conditions:
(i) the representations and warranties set forth in Section3 and
Section4(b) above shall be true and correct in all respects at and as of
the Closing Date, except: (A) to the extent of changes resulting from
developments or occurrences relating to or affecting United States or
foreign economies in general or the industry of the Company and its
Subsidiaries generally, (B) for breaches of such representations and
warranties that are the results of the execution of this Agreement or
actions taken by APAC prior to the Closing Date or as contemplated herein,
(C) for breaches of such representations and warranties that would not in
the aggregate have an adverse effect upon the business, financial
condition, operations or results of operations of the Company and its
Subsidiaries taken as a whole which results in at least $2,500,000 of
Adverse Consequences to the Company or its Subsidiaries, and (D) for
representations and warranties that speak as of a specific date or time
(which need only be true and correct as of such date or time);
(ii) each of the Principal Stockholders and the Company shall
have performed and complied in all material respects with all of his or its
covenants hereunder through the Closing;
(iii) the Company and its Subsidiaries shall have provided
all of the third party consents marked with an asterisk (*) on Section 3(d)
of the Disclosure Schedule;
(iv) except as otherwise disclosed in the Disclosure Schedule, no
action, suit, or proceeding shall be pending before any court or quasi-
judicial or administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable injunction, judgment, order, decree, or
ruling initiated by a state or federal governmental agency or authority, or
initiated by a party other than a federal or state governmental agency or
authority which would be reasonably likely to be issued, which, in any
event, would: (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or
(C) affect materially and adversely the right of APAC to own the Company
Shares and to control the Company, or (D) affect adversely and materially
the right of the Company to own its assets and to operate its businesses
(and no such injunction, judgment, order, decree, or ruling shall be in
effect);
(v) each officer and director of the Company and its
Subsidiaries shall have resigned; all management, consultant or advising
agreements between Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P. or any of
its Affiliates or Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx or any of their
Affiliates and the Company and any Subsidiary shall have been terminated
and the Company and its Subsidiary shall have been released from all
obligations and Liabilities under such agreements;
(vi) all stockholder agreements among the Stockholders or between
any Stockholder and the Company and its Subsidiaries shall have been
terminated;
(vii) all of the Company's and its Subsidiaries' equity
incentive plans, and all rights thereunder, shall have been terminated;
(viii) each outstanding Option and Warrant shall have been
exercised prior to the Closing;
(ix) holders of at least 98% of the issued and outstanding Class
A Shares as of the Closing and at least 96% of the issued and outstanding
Class B Shares as of the Closing shall have consented to the Merger and the
execution, delivery and performance of this Agreement;
(x) the Representative shall have delivered to Newco a
certificate of the Company to the effect that each of the conditions
specified above in Section 6(a)(i)-(ix) is satisfied;
(xi) all applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Act shall have expired or otherwise been terminated; and
(xii) APAC and Newco shall have received the opinions of
Xxxxxxxxx Xxxxxxx Xxxxxxx Weary & Xxxxxxxx LLP and Xxxxxxxx & Xxxxx
addressed to APAC and Newco and dated the Closing Date in the forms
attached to this Agreement as Exhibits E-1 and E-2.
APAC and Newco shall be deemed to have waived any condition specified in this
Section6(a) if either executes a writing so stating at or prior to the Closing.
The disclosure of any matter prior to the Closing shall not be deemed to amend
or supplement the Disclosure Schedule or to have caused APAC or Newco to have
waived any condition specified in this Section 6(a) or any representation,
warranty, or covenant.
(b) Conditions to Obligation of the Principal Stockholders. The
obligation of the Principal Stockholders to consummate the transactions to be
performed by them in connection with the Closing is subject to satisfaction (or
waiver by the Representative) of the following conditions:
(i) the representations and warranties set forth in Section
4(a) above shall be true and correct in all material respects at and as
of the Closing Date, except (A) to the extent of changes or developments
contemplated by the terms of this Agreement and (B) for representations and
warranties that speak as of a specific date or time (which need only be
true and correct as of such date or time);
(ii) each of APAC and Newco shall have performed and complied
with all of its covenants hereunder in all material respects through the
Closing;
(iii) no action, suit, or proceeding shall be pending before
any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction wherein an unfavorable injunction, judgment,
order, decree, or ruling initiated by a state or federal governmental
agency or authority, or initiated by a party other than a federal or state
governmental agency or authority which would be reasonably likely to be
issued, which, in any event, would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect materially and adversely the right of APAC to
own the capital stock of, and to control, the Surviving Corporation (and no
such injunction, judgment, order, decree, or ruling shall be in effect);
(iv) APAC and Newco shall have delivered to the Representative,
on behalf of the Stockholders, a certificate to the effect that each of the
conditions specified above in Section 6(b)(i)-(iii) is satisfied; and
(v) all applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Act shall have expired or otherwise been terminated.
The Principal Stockholders shall be deemed to have waived any condition
specified in this Section6(b) if the Representative and Xxxxxx X. Xxxxxxx each
executes a writing so stating at or prior to the Closing.
Section 7. Termination.
(a) Termination of Agreement. APAC and the Representative may
terminate this Agreement as provided below:
(i) APAC and the Representative may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) APAC may terminate this Agreement by giving written notice
to the Representative at any time prior to the Closing in the event any of
the conditions set forth in Section 6(a) shall have become incapable of
fulfillment and shall not have been waived by APAC; and
(iii) the Representative may terminate this Agreement by
giving written notice to APAC at any time prior to the Closing in the event
any of the conditions set forth in Section 6(b) shall have become
incapable of fulfillment and shall not have been waived by the
Representative.
(iv) APAC or the Representative may terminate this Agreement if
the Closing has not occurred on or prior to the thirty-second day following
the filing by APAC, Newco and the Stockholders of all notifications
required to be filed under the Xxxx-Xxxxx-Xxxxxx Act with respect to the
transactions contemplated hereby; provided, however, that if the consents
required by Section 6(a)(iii) have not been obtained on or prior to such
thirty-second day, the Company and the Principal Stockholders shall have an
additional 30 days to obtain such consents.
(b) Effect of Termination. If APAC or the Representative terminates
this Agreement pursuant to Section 7(a) above, all rights and obligations of
the Parties hereunder shall terminate without any Liability of any Party, except
for any Liability of any Party then in breach of any covenant (but not any
representation or warranty contained in this Agreement) or as provided in
Section 7(c) below.
(c) Specific Performance. Notwithstanding anything in this Agreement
to the contrary, if, prior to the termination of this Agreement, APAC (i) has
complied with all of the conditions to Closing contained in Section 6(b), (ii)
has notified the Representative of its intention to consummate the transactions
contemplated under this Agreement, and (iii) is ready and able to deliver the
Merger Consideration and furnishes evidence to that effect to the
Representative, and if the Closing does not then occur due to the refusal of any
of the Principal Stockholders to so consummate the transactions contemplated
under this Agreement, APAC will be entitled to specifically enforce the terms of
this Agreement in a court of competent jurisdiction, it being acknowledged that
monetary damages due APAC in such case cannot be adequately determined at law.
Section 8. Survival and Indemnification.
(a) Survival of Representations and Warranties. All of the
representations, warranties, covenants, and agreements contained in this
Agreement have been relied upon and shall terminate upon the Closing, provided,
that any representation and warranty contained in Section 4(b)(iv) shall
survive indefinitely.
(b) Indemnification Provisions for the Benefit of APAC and Newco. In
the event of a misrepresentation or breach (or in the event any third party
alleges facts that, if true, would mean a misrepresentation or breach) of
Section 4(b)(iv), then each Principal Stockholder (pro rata in accordance with
his or its stock ownership shown on Section 3(b) of the Disclosure Schedule and
in no event in an aggregate amount greater than the aggregate Merger
Consideration allocated to such Principal Stockholder (as calculated prior to
the deduction of any amounts relating to his or its Stockholder Note)) agrees to
indemnify APAC and Newco from and against any Adverse Consequences APAC or Newco
actually suffers through and after the date of the claim for indemnification
resulting from, arising out of, relating to, in the nature of, or caused by such
misrepresentation or breach (or alleged breach).
(c) Limitation on Liability. Notwithstanding anything to the
contrary contained herein, no Stockholder shall be liable to APAC or Newco with
respect to any Adverse Consequences suffered by APAC or Newco in connection with
this Agreement in an aggregate amount greater than the aggregate Merger
Consideration allocated to such Principal Stockholder (as calculated prior to
the deduction of any amounts relating to his or its Stockholder Note).
Section 9. Miscellaneous.
(a) Confidentiality; Publicity. Except as may be required by law or
legal or administrative process or as otherwise permitted or expressly
contemplated herein, no Party or their respective Affiliates, employees, agents
and representatives shall disclose to any third party this Agreement, the
subject matter or terms hereof or any confidential information or other
proprietary knowledge concerning the business or affairs of any other Party
which it may have acquired from such Party in the course of pursuing the
transactions contemplated by this Agreement, without the prior consent of the
other Parties; provided, however, that any information that is otherwise
publicly available, without breach of this provision, or has been obtained from
a third party without a breach of such third party's duties, shall not be deemed
confidential information. The Parties further agree that, from and the date
hereof through the Closing Date, no public release or announcement concerning
the transactions contemplated hereby shall be issued or made by any Party
without the prior consent of the other Parties (which consent shall not be
unreasonably withheld), except (i) for such releases or announcements which may
be required by law or the rules or regulations of the United States Securities
and Exchange Commission, the National Association of Securities Dealers or
NASDAQ, in which case the Party required to make the release or announcement
shall allow the other Parties reasonable time to comment on such release or
announcement in advance of its issuance, and (ii) that each of the
Representative and the Company may make such an announcement to their respective
employees and partners, provided, that the Company may make no such
announcements without the allowing APAC reasonable time to comment on such
announcement in advance of its issuance to the Company's employees.
Notwithstanding the foregoing, APAC and the Principal Stockholders shall
cooperate to prepare joint press releases to be issued (A) promptly following
the execution of this Agreement and (B) on the Closing Date.
(b) No Third-Party Beneficiaries. Except as set forth in
Section 2(h)(ii) above, this Agreement shall not confer any rights or remedies
upon any Person other than the Parties and their respective successors and
permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors, assigns, distributees, heirs, and grantors of any revocable trusts a
party hereto. No Party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other Party; provided, however, that APAC may (i) assign any or all of its
rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder (in
any or all of which cases APAC nonetheless shall remain responsible for the
performance of all of its obligations hereunder).
(e) Counterparts This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given upon receipt
if it is sent by facsimile, or reputable express courier, and addressed or
otherwise sent to the intended recipient as set forth below:
If to the Company, until the Closing:
Xxxxxxx X. Xxxx
ITI Marketing Services, Inc.
000 Xxxxx 00xx Xxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Copy to:
Xxxx X. Xxxxxx
Xxxxxxxxx Xxxxxxx Xxxxxxx Weary & Xxxxxxxx LLP
Suite 1100
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
W. Xxxxxxx Xxxxxxxxx
Betterman & Perry
000 Xxxxxxx Xxxxxxx #000
Xxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
If to the Representative:
Xxx Xxxxxxxx
Xxxxxx, Thoma, Cressey, Xxxxxx Fund IV, L.P.
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Copy to:
Xxxxx X. Xxxxxxx
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
If to APAC, and, after the Closing, the Company:
Xxxx X. Xxxxx
APAC TeleServices, Inc.
Xxx Xxxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Copy to:
Xxxxxxx X. Xxxxxx
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
email: xxxxxxx@xxx.xxx
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address or facsimile number set forth
above using any other means (including personal delivery, messenger service,
ordinary mail, or electronic mail), but no such notice, request, demand, claim,
or other communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any party may change the
address or facsimile number to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (EITHER OF THE STATE
OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by APAC,
the Company, Xxxxxx X. and Xxxxx X. Xxxxxxx and the Representative, on behalf
of the other Stockholders. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Except as set forth herein, each party hereto will
bear its own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby. The
costs and expenses of Xxxxxxxx and Xxxxx incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the Company
at or prior to the Closing and shall reduce the Merger Consideration. All costs
and expenses of the Company incurred in connection with this Agreement and the
transactions contemplated hereby shall become the exclusive obligation of the
Surviving Corporation and shall in no circumstances reduce the Merger
Consideration.
(l) Construction. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule identifies
the exception with reasonable particularity.
(m) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules (including the Disclosure Schedule) identified in this Agreement are
incorporated herein by reference and made a part hereof.
(n) Cooperation. APAC and the Principal Stockholders shall cooperate
with each other and shall cause their respective officers, employees, agents and
representatives to cooperate with each other for a period of sixty (60) days
after the Closing to provide for an orderly transition of the Company and its
Subsidiaries to APAC and to minimize the disruption resulting from the
transactions contemplated hereby. Other than as specified in Section 9(k)
above, each Party shall be responsible for its own reasonable out-of-pocket
costs and expenses incurred in assisting the other pursuant to this
Section 9(n). No Party shall be required by this Section 9(n) to take any
action that would unreasonably interfere with the conduct of its business. In
addition, from time to time, as and when requested by any Party, any other Party
shall execute and deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be taken, all such further
or other actions (subject to any limitations set forth in this Agreement), as
such other Party may reasonably deem necessary or desirable to consummate the
transactions contemplated by this Agreement.
* * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
APAC TELESERVICES, INC.
By:
Name:
Title:
ITI HOLDINGS, INC.
By:
Name:
Title:
ITI MARKETING ACQUISITION CORP.
By:
Name:
Title:
PRINCIPAL STOCKHOLDERS:
GOLDER, THOMA, XXXXXXX, XXXXXX FUND IV, L.P.
By: GTCR IV, L.P.
Its: General Partner
By: Golder, Thoma, Cressey, Rauner, Inc.
Its: General Partner
By:
Name:
Title:
Xxxxx X. Xxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxx, both individually
and as trustee of the Xxxxxxx X. Xxxx
Trust dated 9/24/87
Xxx X. Xxxx
Xxxxx X. Lines
Xxxxx X. Xxxxxx
Xxx X. Xxxx
Xxxx X. Xxxx
X. Xxxxx Xxxxxx
Xxxxxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxxx
Exhibits:
Exhibit A: Agreements Executed Upon Signing of Merger Agreement
Exhibit B: ITI Marketing Services, Inc. Total Company Indebtedness
(May 31, 1998)
Exhibit C: ITI Marketing Services, Inc. Aggregate Closing Merger Consideration
Exhibit D: ITI Marketing Services, Inc. Cash Requirement
Exhibit E-1: Form of Opinion of Xxxxxxxxx Xxxxxxx Xxxxxxx Weary & Xxxxxxxx LLP
Exhibit E-2: Form of Opinion of Xxxxxxxx & Xxxxx
Disclosure Schedules:
3(a): States Where Company and Subsidiaries are Incorporated and Authorized
to do Business
3(b): Capital Stock, Record Owners
3(d): Notices/Consents Required
3(e): Broker's Fees
3(f): Assets used by ITI Marketing Services, Inc. Which it Does Not Lease or
Own
3(g): Subsidiaries
3(h): Financial Statements
3(i): Events Since Most Recent Fiscal Year End
3(j): Undisclosed Liabilities
3(k): Compliance with Applicable Laws
3(l): Tax Issues
3(m)(ii): Leased Property
3(n): Licenses
3(o): Tangible Assets
3(p): Material Contracts
3(q): Accounts Receivable
3(s): Litigation
3(t): Employees
3(u): Employee Benefit Plans
3(w): Environmental
3(x): Business Relationship with the Company and its Subsidiaries
3(y): Clients
3(z): Bank Accounts
4(a)(iii): Consents
4(b)(iv): Capital Stock
5(c): Operation of Business
