AGREEMENT AND PLAN OF MERGER BY AND AMONG THE FIRST AMERICAN CORPORATION, US SEARCH.COM INC., FIRST ADVANTAGE CORPORATION AND STOCKHOLM SEVEN MERGER CORP. Dated as of December 13, 2002
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SECTION 2 |
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SECTION 3 |
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SECTION 6 |
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SECTION 8 |
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SECTION 9 |
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SECTION 11 |
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SECTION 12 |
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COMPANY OPTION AND WARRANT SCHEDULE | ||
EXHIBIT A-1 |
FORM OF COMPANY CERTIFICATE OF MERGER | |
EXHIBIT A-2 |
FORM OF SAFERENT CERTIFICATE OF MERGER | |
EXHIBIT A-3 |
FORM OF SAFERENT AGREEMENT OF MERGER | |
EXHIBIT A-4 |
FORM OF EHP ARTICLES OF MERGER | |
EXHIBIT A-5 |
FORM OF EHP PLAN OF MERGER | |
EXHIBIT A-6 |
FORM OF SAMI ARTICLES OF MERGER | |
EXHIBIT A-7 |
FORM OF SAMI PLAN OF MERGER | |
EXHIBIT A-8 |
FORM OF HIRECHECK ARTICLES OF MERGER | |
EXHIBIT A-9 |
FORM OF HIRECHECK PLAN OF MERGER | |
EXHIBIT A-10 |
FORM OF ADR CERTIFICATES OF APPROVAL | |
EXHIBIT A-11 |
FORM OF ADR AGREEMENT OF MERGER | |
EXHIBIT A-12 |
FORM OF REGISTRY ARTICLES OF MERGER | |
EXHIBIT A-13 |
FORM OF REGISTRY PLAN OF MERGER | |
EXHIBIT B |
PARENT CERTIFICATE OF INCORPORATION | |
EXHIBIT C |
PARENT BYLAWS | |
EXHIBIT D-1 |
FORM OF PROMISSORY NOTE | |
EXHIBIT D-2 |
FORM OF SECURITY AGREEMENT | |
EXHIBIT E |
FORM OF CLOSING CERTIFICATE OF THE COMPANY | |
EXHIBIT F |
FORM OF CLOSING CERTIFICATE OF FACO PARTIES | |
EXHIBIT G |
FORM OF STANDSTILL AGREEMENT | |
EXHIBIT H |
FORM OF SERVICES AGREEMENT | |
EXHIBIT I-1 |
FORM OF TAX CERTIFICATE OF FACO, PARENT AND COMPANY MERGER SUB | |
EXHIBIT I-2 |
FORM OF TAX CERTIFICATE OF THE COMPANY |
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Telephone: |
(000) 000-0000 |
Facsimile: |
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Attention: |
Xxxxxx X. Xxxxxxx |
Xxxxxxx X. XxXxxxxxx |
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(000) 000-0000 |
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(000) 000-0000 |
Attention: |
Xxxx X. Xxxx |
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(000) 000-0000 |
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(000) 000-0000 |
Attention: |
Xxxx X. Xxxx |
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(000) 000-0000 |
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Attention: |
Xxxxx X. Xxxxx |
Xxxxxxx X. Xxxxxxxxx |
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THE FIRST AMERICAN CORPORATION | ||
By: |
/s/ XXXXXXX X.
XXXXXXXXX | |
Name: Xxxxxxx X. Xxxxxxxxx | ||
Title: Vice President |
US XXXXXX.XXX INC. | ||
By: |
/s/ XXXXX X.
XXXXX | |
Name: | ||
Title: |
FIRST ADVANTAGE CORPORATION | ||
By: |
/s/ XXXXXXX X.
XXXXXXXXX | |
Name: Xxxxxxx X. Xxxxxxxxx | ||
Title: Vice President |
STOCKHOLM SEVEN MERGER CORP. | ||
By: |
/s/ XXXXXXX X.
XXXXXXXXX | |
Name: Xxxxxxx X. Xxxxxxxxx | ||
Title: Vice President |
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EXHIBIT A-1
FORM OF COMPANY CERTIFICATE OF MERGER
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CERTIFICATE OF MERGER
OF
STOCKHOLM SEVEN MERGER CORP.
INTO
US XXXXXX.XXX INC.
Pursuant to Title 8, Section 251(c) of the General Corporation Law of the State of Delaware, the undersigned corporation, organized and existing under the laws of Delaware, DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of the constituent corporations of the merger is as follows:
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Stockholm Seven Merger Corp. |
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Delaware |
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US Xxxxxx.xxx Inc. |
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SECOND: That an Agreement of Merger between the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 251 of the General Corporation Law of the State of Delaware.
THIRD: That the name of the surviving corporation of the merger is US Xxxxxx.xxx Inc.
FOURTH: That the certificate of incorporation of US Xxxxxx.xxx, Inc., a Delaware corporation (the “Surviving Corporation”), shall be the certificate of incorporation of the Surviving Corporation.
FIFTH: That the executed Agreement of Merger is on file at the principal place of business of the Surviving Corporation. The address of the principal place of business of the Surviving Corporation is 0000 Xxxxxxxxx Xx., Xxx Xxxxxxx, XX 00000.
SIXTH: That a copy of the Agreement of Merger will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of any constituent corporation.
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EXHIBIT A-2
FORM OF SAFERENT CERTIFICATE OF MERGER
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CERTIFICATE OF MERGER
OF
STOCKHOLM ONE MERGER CORP.
INTO
SAFERENT, INC.
Pursuant to Title 8, Section 251(c) of the General Corporation Law of the State of Delaware, the undersigned corporation, organized and existing under the laws of Delaware, DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of the constituent corporations of the merger is as follows:
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Stockholm One Merger Corp. |
Delaware | |
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SafeRent, Inc. |
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SECOND: That an Agreement of Merger between the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of Section 251 of the General Corporation Law of the State of Delaware.
THIRD: That the name of the surviving corporation of the merger is SafeRent, Inc.
FOURTH: That the certificate of incorporation of SafeRent, Inc., a Delaware corporation (the “Surviving Corporation”), shall be the certificate of incorporation of the Surviving Corporation.
FIFTH: That the executed Agreement of Merger is on file at the principal place of business of the Surviving Corporation. The address of the principal place of business of the Surviving Corporation is 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000.
SIXTH: That a copy of the Agreement of Merger will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of any constituent corporation.
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IN WITNESS WHEREOF, SafeRent, Inc. has caused this Certificate to be signed by __________________, its authorized officer, this __ day of _________________, 2003.
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EXHIBIT A-3
FORM OF SAFERENT AGREEMENT OF MERGER
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AGREEMENT OF MERGER
OF
STOCKHOLM ONE MERGER CORP.
WITH AND INTO
SAFERENT, INC.
This AGREEMENT OF MERGER, dated as of ______________, 2003, is entered into by and between STOCKHOLM ONE MERGER CORP., a Delaware corporation (“Merger Sub”), and SAFERENT, INC., a Delaware corporation (the “Company”), in compliance with 251 of the General Corporation Law of the State of Delaware (the “DGCL”). The Company and Merger Sub are sometimes hereinafter referred to as the “Constituent Corporations.”
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION ONE: THE MERGER
1. Merger. In the Merger, (a) Merger Sub shall be merged with and into the Company, (b) the separate existence of Merger Sub shall thereupon cease and (c) the Company shall be the surviving corporation (the “Surviving Corporation”) and shall continue its corporate existence, with all of its purposes, objects, rights, privileges, powers, immunities and franchises, under the laws of the State of Delaware unaffected and unimpaired by the Merger.
2. The Surviving Corporation. The Surviving Corporation shall succeed to all of the rights, privileges, immunities and franchises of Merger Sub, all of the properties and assets of Merger Sub and all of the debts, choses in action and other interests due or belonging to Merger Sub and shall be subject to, and responsible for, all of the debts, liabilities and obligations of Merger Sub with the effect set forth in the DGCL.
3. Further Action. If at any time after the consummation of the Merger any further action is necessary or desirable to carry out the purposes of this Agreement of Merger or to vest the Surviving Corporation with the full right, title and possession to all assets, property, rights, privileges, immunities, powers and franchises of Merger Sub, the officers and directors of the Surviving Corporation are fully authorized in the name of either or both of the Constituent Corporations or otherwise to take all such action.
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SECTION TWO: CORPORATE GOVERNANCE MATTERS
1. Certificate of Incorporation. Upon the consummation of the Merger, the Certificate of Incorporation of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Certificate of Incorporation of the Surviving Corporation.
2. Bylaws. Upon the consummation of the Merger, the Bylaws of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Bylaws of the Surviving Corporation.
3. Directors. Upon the consummation of the Merger, the directors of the Company immediately prior to the consummation of the Merger shall be the directors of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Certificate of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
4. Officers. Upon the consummation of the Merger, the officers of the Company immediately prior to the consummation of the Merger shall be the officers of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Certificate of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
SECTION THREE: MANNER OF CONVERTING SHARES OF THE CONSTITUENT CORPORATIONS
1. Merger Sub Stock. Upon the consummation of the Merger, each common share of Merger Sub outstanding immediately prior to the consummation of the Merger shall automatically be converted into and become one common share of the Surviving Corporation, and each certificate representing such common shares of Merger Sub shall, without any action on the part of the holder thereof, be deemed to represent the same number of common shares of the Surviving Corporation.
2. Conversion of Company Common Stock. Upon the consummation of the Merger, all common shares of the Company outstanding immediately prior to the consummation of the Merger shall automatically be collectively converted into the right to receive [_____] shares of “Class B” Common Stock, par value $0.001, of [Newco], a Delaware corporation (“Parent”) and the sole shareholder of Merger Sub (the “Merger Consideration”).
3. Closing of the Company’s Stock Ledger. At and after the consummation of the Merger, all holders of certificates representing common shares of the Company that were outstanding immediately prior to the consummation of the Merger shall cease to have any rights as shareholders of the Company. At the close of business on the day the Merger is consummated the stock ledger of the Company shall be closed with respect to all such common shares.
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4. Delivery of Merger Consideration. Upon the consummation of the Merger, Parent will deliver to The First American Corporation, a California corporation (“FACO”) and the sole shareholder of the Company, a certificate or certificates, registered in FACO’s name, representing the Merger Consideration.
SECTION FOUR: MISCELLANEOUS
1. Termination.
(a) Notwithstanding the approval of this Agreement of Merger by the shareholders of the Company and Merger Sub, this Agreement of Merger may be terminated at any time prior to the consummation of the Merger by mutual agreement of the parties to this Agreement of Merger.
(b) Notwithstanding the approval of this Agreement of Merger by the shareholders of the Company and Merger Sub, this Agreement of Merger shall terminate automatically in the event that the Agreement and Plan of Merger, dated as of December __, 2002, among FACO, US XXXXXX.xxx Inc. and Parent, shall be terminated as provided therein.
(c) In the event of the termination of this Agreement of Merger as provided above, this Agreement of Merger shall become void and there shall be no liability on the part of the Company or Merger Sub or the Company’s or Merger Sub’s respective officers or directors.
2. Amendment. This Agreement of Merger may be amended by the parties hereto any time before or after approval hereof by the shareholders of the Company or Merger Sub, but after such approval, no amendment shall be made which by law requires the further approval of such shareholders without obtaining such approval. This Agreement of Merger may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
3. Counterparts. In order to facilitate the filing and recording of this Agreement of Merger, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.
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EXHIBIT A-4
FORM OF EHP ARTICLES OF MERGER
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ARTICLES OF MERGER
OF
STOCKHOLM TWO MERGER CORP.
WITH AND INTO
EMPLOYEE HEALTH PROGRAMS, INC.
Pursuant to the provisions of Section 607.1105 of the Florida 1989 Business Corporation Act (the “Florida Act”), the undersigned hereby certify that:
1. Stockholm Two Merger Corp., a Florida corporation (“Merger Sub”), shall be merged with and into Employee Health Programs, Inc., a Florida corporation (the “Company”), which shall be the surviving corporation (such merger, the “Merger”).
2. The Plan of Merger dated as of ____________, 2003, pursuant to which the Merger was approved and a copy of which is attached hereto, was adopted by Merger Sub and the Company in accordance with Section 607.1101 of the Florida Act, and approved by all of the shareholders of Merger Sub and the Company by respective unanimous written consents dated as of ____________, 2003.
3. The Merger shall become effective on the day that these Articles of Merger have been filed with the Department of State of the State of Florida (the “Effective Date”).
4. The Articles of Incorporation of the Company as in effect on the Effective Date shall remain in effect and be the Articles of Incorporation of the corporation surviving the Merger.
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EXHIBIT A-5
FORM OF EHP PLAN OF MERGER
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PLAN OF MERGER
OF
STOCKHOLM TWO MERGER CORP.
WITH AND INTO
EMPLOYEE HEALTH PROGRAMS, INC.
This PLAN OF MERGER, dated as of ________________, 2003, is entered into by and between Stockholm Two Merger Corp., a Florida corporation (“Merger Sub”), and Employee Health Programs, Inc., a Florida corporation (the “Company”), in compliance with Section 607.1101 of the Florida 1989 Business Corporation Act (the “Florida Act”). The Company and Merger Sub are sometimes hereinafter referred to as the “Constituent Corporations.”
SECTION ONE: THE MERGER
1. Merger. In the Merger, (a) Merger Sub shall be merged with and into the Company, (b) the separate existence of Merger Sub shall thereupon cease and (c) the Company shall be the surviving corporation (the “Surviving Corporation”) and shall continue its corporate existence, with all of its purposes, objects, rights, privileges, powers, immunities and franchises, under the laws of the State of Florida unaffected and unimpaired by the Merger.
2. The Surviving Corporation. The Surviving Corporation shall succeed to all of the rights, privileges, immunities and franchises of Merger Sub, all of the properties and assets of Merger Sub and all of the debts, choses in action and other interests due or belonging to Merger Sub and shall be subject to, and responsible for, all of the debts, liabilities and obligations of Merger Sub with the effect set forth in the Florida Act.
3. Further Action. If at any time after the consummation of the Merger any further action is necessary or desirable to carry out the purposes of this Plan of Merger or to vest the Surviving Corporation with the full right, title and possession to all assets, property, rights, privileges, immunities, powers and franchises of Merger Sub, the officers and directors of the Surviving Corporation are fully authorized in the name of either or both of the Constituent Corporations or otherwise to take all such action.
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SECTION TWO: CORPORATE GOVERNANCE MATTERS
1. Articles of Incorporation. Upon the consummation of the Merger, the Articles of Incorporation of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Articles of Incorporation of the Surviving Corporation.
2. Bylaws. Upon the consummation of the Merger, the Bylaws of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Bylaws of the Surviving Corporation.
3. Directors. Upon the consummation of the Merger, the directors of the Company immediately prior to the consummation of the Merger shall be the directors of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
4. Officers. Upon the consummation of the Merger, the officers of the Company immediately prior to the consummation of the Merger shall be the officers of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
SECTION THREE: MANNER OF CONVERTING SHARES OF THE CONSTITUENT CORPORATIONS
1. Merger Sub Stock. Upon the consummation of the Merger, each common share of Merger Sub outstanding immediately prior to the consummation of the Merger shall automatically be converted into and become one common share of the Surviving Corporation, and each certificate representing such common shares of Merger Sub shall, without any action on the part of the holder thereof, be deemed to represent the same number of common shares of the Surviving Corporation.
2. Conversion of Company Common Stock. Upon the consummation of the Merger, all common shares of the Company outstanding immediately prior to the consummation of the Merger shall automatically be collectively converted into the right to receive [_____] shares of “Class B” Common Stock, par value $0.001, of [Newco], a Delaware corporation (“Parent”) and the sole shareholder of Merger Sub (the “Merger Consideration”).
3. Closing of the Company’s Stock Ledger. At and after the consummation of the Merger, all holders of certificates representing common shares of the Company that were outstanding immediately prior to the consummation of the Merger shall cease to have any rights as shareholders of the Company. At the close of business on the day the Merger is consummated the stock ledger of the Company shall be closed with respect to all such common shares.
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4. Delivery of Merger Consideration. Upon the consummation of the Merger, Parent will deliver to The First American Corporation, a California corporation (“FACO”) and the sole shareholder of the Company, a certificate or certificates, registered in FACO’s name, representing the Merger Consideration.
SECTION FOUR: MISCELLANEOUS
1. Termination.
(a) Notwithstanding the approval of this Plan of Merger by the shareholders of the Company and Merger Sub, this Plan of Merger may be terminated at any time prior to the consummation of the Merger by mutual agreement of the parties to this Plan of Merger.
(b) Notwithstanding the approval of this Plan of Merger by the shareholders of the Company and Merger Sub, this Plan of Merger shall terminate automatically in the event that the Agreement and Plan of Merger, dated as of December __, 2002, among FACO, US XXXXXX.xxx Inc. and Parent, shall be terminated as provided therein.
(c) In the event of the termination of this Plan of Merger as provided above, this Plan of Merger shall become void and there shall be no liability on the part of the Company or Merger Sub or the Company’s or Merger Sub’s respective officers or directors.
2. Amendment. This Plan of Merger may be amended by the parties hereto any time before or after approval hereof by the shareholders of the Company or Merger Sub, but after such approval, no amendment shall be made which by law requires the further approval of such shareholders without obtaining such approval. This Plan of Merger may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
3. Counterparts. In order to facilitate the filing and recording of this Plan of Merger, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.
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EXHIBIT A-6
FORM OF SAMI ARTICLES OF MERGER
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ARTICLES OF MERGER
OF
STOCKHOLM THREE MERGER CORP.
WITH AND INTO
SUBSTANCE ABUSE MANAGEMENT, INC.
Pursuant to the provisions of Section 607.1105 of the Florida 1989 Business Corporation Act (the “Florida Act”), the undersigned hereby certify that:
1. Stockholm Three Merger Corp., a Florida corporation (“Merger Sub”), shall be merged with and into Substance Abuse Management, Inc., a Florida corporation (the “Company”), which shall be the surviving corporation (such merger, the “Merger”).
2. The Plan of Merger dated as of __________________, 2003, pursuant to which the Merger was approved and a copy of which is attached hereto, was adopted by Merger Sub and the Company in accordance with Section 607.1101 of the Florida Act, and approved by all of the shareholders of Merger Sub and the Company by respective unanimous written consents dated as of _____________________, 2003.
3. The Merger shall become effective on the day that these Articles of Merger have been filed with the Department of State of the State of Florida (the “Effective Date”).
4. The Articles of Incorporation of the Company as in effect on the Effective Date shall remain in effect and be the Articles of Incorporation of the corporation surviving the Merger.
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EXHIBIT A-7
FORM OF SAMI PLAN OF MERGER
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PLAN OF MERGER
OF
STOCKHOLM THREE MERGER CORP.
WITH AND INTO
SUBSTANCE ABUSE MANAGEMENT, INC.
This PLAN OF MERGER, dated as of ________________, 2003, is entered into by and between Stockholm Three Merger Corp., a Florida corporation (“Merger Sub”), and Substance Abuse Management, Inc., a Florida corporation (the “Company”), in compliance with Section 607.1101 of the Florida 1989 Business Corporation Act (the “Florida Act”). The Company and Merger Sub are sometimes hereinafter referred to as the “Constituent Corporations.”
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION ONE: THE MERGER
1. Merger. In the Merger, (a) Merger Sub shall be merged with and into the Company, (b) the separate existence of Merger Sub shall thereupon cease and (c) the Company shall be the surviving corporation (the “Surviving Corporation”) and shall continue its corporate existence, with all of its purposes, objects, rights, privileges, powers, immunities and franchises, under the laws of the State of Florida unaffected and unimpaired by the Merger.
2. The Surviving Corporation. The Surviving Corporation shall succeed to all of the rights, privileges, immunities and franchises of Merger Sub, all of the properties and assets of Merger Sub and all of the debts, choses in action and other interests due or belonging to Merger Sub and shall be subject to, and responsible for, all of the debts, liabilities and obligations of Merger Sub with the effect set forth in the Florida Act.
3. Further Action. If at any time after the consummation of the Merger any further action is necessary or desirable to carry out the purposes of this Plan of Merger or to vest the Surviving Corporation with the full right, title and possession to all assets, property, rights, privileges, immunities, powers and franchises of Merger Sub, the officers and directors of the Surviving Corporation are fully authorized in the name of either or both of the Constituent Corporations or otherwise to take all such action.
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SECTION TWO: CORPORATE GOVERNANCE MATTERS
1. Articles of Incorporation. Upon the consummation of the Merger, the Articles of Incorporation of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Articles of Incorporation of the Surviving Corporation.
2. Bylaws. Upon the consummation of the Merger, the Bylaws of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Bylaws of the Surviving Corporation.
3. Directors. Upon the consummation of the Merger, the directors of the Company immediately prior to the consummation of the Merger shall be the directors of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
4. Officers. Upon the consummation of the Merger, the officers of the Company immediately prior to the consummation of the Merger shall be the officers of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
SECTION THREE: MANNER OF CONVERTING SHARES OF THE CONSTITUENT CORPORATIONS
1. Merger Sub Stock. Upon the consummation of the Merger, each common share of Merger Sub outstanding immediately prior to the consummation of the Merger shall automatically be converted into and become one common share of the Surviving Corporation, and each certificate representing such common shares of Merger Sub shall, without any action on the part of the holder thereof, be deemed to represent the same number of common shares of the Surviving Corporation.
2. Conversion of Company Common Stock. Upon the consummation of the Merger, all common shares of the Company outstanding immediately prior to the consummation of the Merger shall automatically be collectively converted into the right to receive [_____] shares of “Class B” Common Stock, par value $0.001, of [Newco], a Delaware corporation (“Parent”) and the sole shareholder of Merger Sub (the “Merger Consideration”).
3. Closing of the Company’s Stock Ledger. At and after the consummation of the Merger, all holders of certificates representing common shares of the Company that were outstanding immediately prior to the consummation of the Merger shall cease to have any rights as shareholders of the Company. At the close of business on the day the Merger is consummated the stock ledger of the Company shall be closed with respect to all such common shares.
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4. Delivery of Merger Consideration. Upon the consummation of the Merger, Parent will deliver to The First American Corporation, a California corporation (“FACO”) and the sole shareholder of the Company, a certificate or certificates, registered in FACO’s name, representing the Merger Consideration.
SECTION FOUR: MISCELLANEOUS
1. Termination.
(a) Notwithstanding the approval of this Plan of Merger by the shareholders of the Company and Merger Sub, this Plan of Merger may be terminated at any time prior to the consummation of the Merger by mutual agreement of the parties to this Plan of Merger.
(b) Notwithstanding the approval of this Plan of Merger by the shareholders of the Company and Merger Sub, this Plan of Merger shall terminate automatically in the event that the Agreement and Plan of Merger, dated as of December __, 2002, among FACO, US XXXXXX.xxx Inc. and Parent, shall be terminated as provided therein.
(c) In the event of the termination of this Plan of Merger as provided above, this Plan of Merger shall become void and there shall be no liability on the part of the Company or Merger Sub or the Company’s or Merger Sub’s respective officers or directors.
2. Amendment. This Plan of Merger may be amended by the parties hereto any time before or after approval hereof by the shareholders of the Company or Merger Sub, but after such approval, no amendment shall be made which by law requires the further approval of such shareholders without obtaining such approval. This Plan of Merger may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
3. Counterparts. In order to facilitate the filing and recording of this Plan of Merger, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.
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EXHIBIT A-8
FORM OF HIRECHECK ARTICLES OF MERGER
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ARTICLES OF MERGER
OF
STOCKHOLM FOUR MERGER CORP.
WITH AND INTO
HIRECHECK, INC.
Pursuant to the provisions of Section 607.1105 of the Florida 1989 Business Corporation Act (the “Florida Act”), the undersigned hereby certify that:
1. Stockholm Four Merger Corp., a Florida corporation (“Merger Sub”), shall be merged with and into HireCheck, Inc., a Florida corporation (the “Company”), which shall be the surviving corporation (such merger, the “Merger”).
2. The Plan of Merger dated as of __________________, 2003, pursuant to which the Merger was approved and a copy of which is attached hereto, was adopted by Merger Sub and the Company in accordance with Section 607.1101 of the Florida Act, and approved by all of the shareholders of Merger Sub and the Company by respective unanimous written consents dated as of _____________________, 2003.
3. The Merger shall become effective on the day that these Articles of Merger have been filed with the Department of State of the State of Florida (the “Effective Date”).
4. The Articles of Incorporation of the Company as in effect on the Effective Date shall remain in effect and be the Articles of Incorporation of the corporation surviving the Merger.
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EXHIBIT A-9
FORM OF HIRECHECK PLAN OF MERGER
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PLAN OF MERGER
OF
STOCKHOLM FOUR MERGER CORP.
WITH AND INTO
HIRECHECK, INC.
This PLAN OF MERGER, dated as of ________________, 2003, is entered into by and between Stockholm Four Merger Corp., a Florida corporation (“Merger Sub”), and HireCheck, Inc., a Florida corporation (the “Company”), in compliance with Section 607.1101 of the Florida 1989 Business Corporation Act (the “Florida Act”). The Company and Merger Sub are sometimes hereinafter referred to as the “Constituent Corporations.”
SECTION ONE: THE MERGER
1. Merger. In the Merger, (a) Merger Sub shall be merged with and into the Company, (b) the separate existence of Merger Sub shall thereupon cease and (c) the Company shall be the surviving corporation (the “Surviving Corporation”) and shall continue its corporate existence, with all of its purposes, objects, rights, privileges, powers, immunities and franchises, under the laws of the State of Florida unaffected and unimpaired by the Merger.
2. The Surviving Corporation. The Surviving Corporation shall succeed to all of the rights, privileges, immunities and franchises of Merger Sub, all of the properties and assets of Merger Sub and all of the debts, choses in action and other interests due or belonging to Merger Sub and shall be subject to, and responsible for, all of the debts, liabilities and obligations of Merger Sub with the effect set forth in the Florida Act.
3. Further Action. If at any time after the consummation of the Merger any further action is necessary or desirable to carry out the purposes of this Plan of Merger or to vest the Surviving Corporation with the full right, title and possession to all assets, property, rights, privileges, immunities, powers and franchises of Merger Sub, the officers and directors of the Surviving Corporation are fully authorized in the name of either or both of the Constituent Corporations or otherwise to take all such action.
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SECTION TWO: CORPORATE GOVERNANCE MATTERS
1. Articles of Incorporation. Upon the consummation of the Merger, the Articles of Incorporation of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Articles of Incorporation of the Surviving Corporation.
2. Bylaws. Upon the consummation of the Merger, the Bylaws of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Bylaws of the Surviving Corporation.
3. Directors. Upon the consummation of the Merger, the directors of the Company immediately prior to the consummation of the Merger shall be the directors of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
4. Officers. Upon the consummation of the Merger, the officers of the Company immediately prior to the consummation of the Merger shall be the officers of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
SECTION THREE: MANNER OF CONVERTING
SHARES OF THE CONSTITUENT
CORPORATIONS
1. Merger Sub Stock. Upon the consummation of the Merger, each common share of Merger Sub outstanding immediately prior to the consummation of the Merger shall automatically be converted into and become one common share of the Surviving Corporation, and each certificate representing such common shares of Merger Sub shall, without any action on the part of the holder thereof, be deemed to represent the same number of common shares of the Surviving Corporation.
2. Conversion of Company Common Stock. Upon the consummation of the Merger, all common shares of the Company outstanding immediately prior to the consummation of the Merger shall automatically be collectively converted into the right to receive [_____] shares of “Class B” Common Stock, par value $0.001, of [Newco], a Delaware corporation (“Parent”) and the sole shareholder of Merger Sub (the “Merger Consideration”).
3. Closing of the Company’s Stock Ledger. At and after the consummation of the Merger, all holders of certificates representing common shares of the Company that were outstanding immediately prior to the consummation of the Merger shall cease to have any rights as shareholders of the Company. At the close of business on the day the Merger is consummated the stock ledger of the Company shall be closed with respect to all such common shares.
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4. Delivery of Merger Consideration. Upon the consummation of the Merger, Parent will deliver to The First American Corporation, a California corporation (“FACO”) and the sole shareholder of the Company, a certificate or certificates, registered in FACO’s name, representing the Merger Consideration.
SECTION FOUR: MISCELLANEOUS
1. Termination.
(a) Notwithstanding the approval of this Plan of Merger by the shareholders of the Company and Merger Sub, this Plan of Merger may be terminated at any time prior to the consummation of the Merger by mutual agreement of the parties to this Plan of Merger.
(b) Notwithstanding the approval of this Plan of Merger by the shareholders of the Company and Merger Sub, this Plan of Merger shall terminate automatically in the event that the Agreement and Plan of Merger, dated as of December __, 2002, among FACO, US XXXXXX.xxx Inc. and Parent, shall be terminated as provided therein.
(c) In the event of the termination of this Plan of Merger as provided above, this Plan of Merger shall become void and there shall be no liability on the part of the Company or Merger Sub or the Company’s or Merger Sub’s respective officers or directors.
2. Amendment. This Plan of Merger may be amended by the parties hereto any time before or after approval hereof by the shareholders of the Company or Merger Sub, but after such approval, no amendment shall be made which by law requires the further approval of such shareholders without obtaining such approval. This Plan of Merger may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
3. Counterparts. In order to facilitate the filing and recording of this Plan of Merger, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.
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EXHIBIT A-10
FORM OF ADR CERTIFICATES OF APPROVAL
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STOCKHOLM FIVE MERGER CORP.
(Disappearing Corporation)
CERTIFICATE OF APPROVAL OF
AGREEMENT OF MERGER
[_______________] and Xxxxxxx X. XxXxxxxxx certify that:
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They are the President and Secretary, respectively, of Stockholm Five Merger Corp., a California corporation (the “Company”). |
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The Agreement of Merger in the form attached hereto was duly approved by the board of directors and sole shareholder of the Company. |
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The Company has one authorized class of shares, designated common shares, of which one (1) share was outstanding and entitled to vote on the principal terms of the Agreement of Merger. |
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The principal terms of the Agreement of Merger were approved by the Company by a vote of the number of shares that equaled or exceeded the vote required. The approval of a majority of the outstanding common shares was required to approve the Agreement of Merger. |
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[Newco], a Delaware corporation and the parent of the Company (“Parent”), will be issuing shares of its equity securities in the merger. No vote of the stockholders of Parent was required to approve the Agreement of Merger. |
We further declare under the penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.
Date: __________, 2003 |
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AMERICAN DRIVING RECORDS, INC.
(Surviving Corporation)
CERTIFICATE OF APPROVAL OF
AGREEMENT OF MERGER
[____________] and Xxxxxxx X. XxXxxxxxx certify that:
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They are the President and Secretary, respectively, of American Driving Records, Inc., a California corporation (the “Company”). |
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The Agreement of Merger in the form attached hereto was duly approved by the board of directors and the sole shareholder of the Company. |
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The Company has one authorized class of shares, designated common shares, of which [_____] shares were outstanding and entitled to vote on the principal terms of the Agreement of Merger. |
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The principal terms of the Agreement of Merger were approved by the Company by a vote of the number of shares that equaled or exceeded the vote required. The approval of a majority of the outstanding common shares was required to approve the Agreement of Merger. |
We further declare under the penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.
Date: __________, 2003 |
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EXHIBIT A-11
FORM OF ADR AGREEMENT OF MERGER
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AGREEMENT OF MERGER
This AGREEMENT OF MERGER, dated as of ___________, 2003 (this “Merger Agreement”), is made and entered into by and among Stockholm Five Merger Corp., a California corporation (“Merger Sub”), and American Driving Records, Inc., a California corporation (the “Company”). The Company and Merger Sub are sometimes hereinafter referred to as the “Constituent Corporations.”
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION ONE: THE MERGER
1. Merger. In the Merger, (a) Merger Sub shall be merged with and into the Company, (b) the separate existence of Merger Sub shall thereupon cease and (c) the Company shall be the surviving corporation (the “Surviving Corporation”) and shall continue its corporate existence, with all of its purposes, objects, rights, privileges, powers, immunities and franchises, under the laws of the State of California unaffected and unimpaired by the Merger.
2. The Surviving Corporation. The Surviving Corporation shall succeed to all of the rights, privileges, immunities and franchises of Merger Sub, all of the properties and assets of Merger Sub and all of the debts, choses in action and other interests due or belonging to Merger Sub and shall be subject to, and responsible for, all of the debts, liabilities and obligations of Merger Sub with the effect set forth in the California Corporations Code.
3. Further Action. If at any time after the consummation of the Merger any further action is necessary or desirable to carry out the purposes of this Merger Agreement or to vest the Surviving Corporation with the full right, title and possession to all assets, property, rights, privileges, immunities, powers and franchises of Merger Sub, the officers and directors of the Surviving Corporation are fully authorized in the name of either or both of the Constituent Corporations or otherwise to take all such action.
1. Articles of Incorporation. Upon the consummation of the Merger, the Articles of Incorporation of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Articles of Incorporation of the Surviving Corporation.
2. Bylaws. Upon the consummation of the Merger, the Bylaws of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Bylaws of the Surviving Corporation.
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3. Directors. Upon the consummation of the Merger, the directors of the Company immediately prior to the consummation of the Merger shall be the directors of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
4. Officers. Upon the consummation of the Merger, the officers of the Company immediately prior to the consummation of the Merger shall be the officers of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
SECTION THREE: MANNER OF CONVERTING SHARES OF THE CONSTITUENT
CORPORATIONS
1. Merger Sub Stock. Upon the consummation of the Merger, each common share of Merger Sub outstanding immediately prior to the consummation of the Merger shall automatically be converted into and become one common share of the Surviving Corporation, and each certificate representing such common shares of Merger Sub shall, without any action on the part of the holder thereof, be deemed to represent the same number of common shares of the Surviving Corporation.
2. Conversion of Company Common Stock. Upon the consummation of the Merger, all common shares of the Company outstanding immediately prior to the consummation of the Merger shall automatically be collectively converted into the right to receive [_____] shares of “Class B” Common Stock, par value $0.001, of [Newco], a Delaware corporation (“Parent”) and the sole shareholder of Merger Sub (the “Merger Consideration”).
3. Closing of the Company’s Stock Ledger. At and after the consummation of the Merger, all holders of certificates representing common shares of the Company that were outstanding immediately prior to the consummation of the Merger shall cease to have any rights as shareholders of the Company. At the close of business on the day the Merger is consummated the stock ledger of the Company shall be closed with respect to all such common shares.
4. Delivery of Merger Consideration. Upon the consummation of the Merger, Parent will deliver to The First American Corporation, a California corporation (“FACO”) and the sole shareholder of the Company, a certificate or certificates, registered in FACO’s name, representing the Merger Consideration.
SECTION FOUR: MISCELLANEOUS
1. Termination.
(a) Notwithstanding the approval of this Merger Agreement by the shareholders of the Company and Merger Sub, this Merger Agreement may be terminated at any
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time prior to the consummation of the Merger by mutual agreement of the parties to this Merger Agreement.
(b) Notwithstanding the approval of this Merger Agreement by the shareholders of the Company and Merger Sub, this Merger Agreement shall terminate automatically in the event that the Agreement and Plan of Merger, dated as of December __, 2002, among FACO, US XXXXXX.xxx Inc. and Parent, shall be terminated as provided therein.
(c) In the event of the termination of this Merger Agreement as provided above, this Merger Agreement shall become void and there shall be no liability on the part of the Company or Merger Sub or the Company’s or Merger Sub’s respective officers or directors.
2. Amendment. This Merger Agreement may be amended by the parties hereto any time before or after approval hereof by the shareholders of the Company or Merger Sub, but after such approval, no amendment shall be made which by law requires the further approval of such shareholders without obtaining such approval. This Merger Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
3. Counterparts. In order to facilitate the filing and recording of this Merger Agreement, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.
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EXHIBIT A-12
FORM OF REGISTRY ARTICLES OF MERGER
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ARTICLES OF MERGER
OF
STOCKHOLM SIX MERGER CORP.
WITH AND INTO
FIRST AMERICAN REGISTRY, INC.
Pursuant to the provisions of Section 92A.200 of the Nevada General Corporation Law (the “Nevada Law”), the undersigned hereby certify that:
1. Stockholm Six Merger Corp., a Nevada corporation (“Merger Sub”), shall be merged with and into First American Registry, Inc., a Nevada corporation (“Registry”), which shall be the surviving corporation (such merger, the “Merger”).
2. The Plan of Merger, dated as of ____________, 2003 pursuant to which the Merger was approved, was adopted by Merger Sub and Registry in accordance with Section 92A.120 of the Nevada Law, and approved by all of the shareholders of Merger Sub and Registry by respective unanimous written consents dated as of _____________, 2003.
3. The Merger shall become effective on the day that these Articles of Merger have been filed with the Secretary of the State of Nevada (the “Effective Date”).
4. The Articles of Incorporation of Registry as in effect on the Effective Date shall remain in effect and be the Articles of Incorporation of the corporation surviving the Merger.
5. The complete executed Plan of Merger is on file at the registered office of Registry. Registry’s current registered office is located at _______________________.
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EXHIBIT A-13
FORM OF REGISTRY PLAN OF MERGER
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PLAN OF MERGER
OF
STOCKHOLM SIX MERGER CORP.
WITH AND INTO
FIRST AMERICAN REGISTRY, INC.
This PLAN OF MERGER, dated as of ________________, 2003, is entered into by and between Stockholm Six Merger Corp., a Nevada corporation with a registered office in the State of Nevada at 000 Xxxx Xxxx Xxxxxx, Xxxx X, Xxxxxx Xxxx, Xxxxxx 00000 (“Merger Sub”), and First American Registry, Inc., a Nevada corporation, located at 0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxxxxxx, XX 00000 (the “Company”), in compliance with Section 92A.100 of the Nevada General Corporation Law (the “Nevada Law”). The Company and Merger Sub are sometimes hereinafter referred to as the “Constituent Corporations.”
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION ONE: THE MERGER
1. Merger. In the Merger, (a) Merger Sub shall be merged with and into the Company, (b) the separate existence of Merger Sub shall thereupon cease and (c) the Company shall be the surviving corporation (the “Surviving Corporation”) and shall continue its corporate existence, with all of its purposes, objects, rights, privileges, powers, immunities and franchises, under the laws of the State of Nevada unaffected and unimpaired by the Merger.
2. The Surviving Corporation. The Surviving Corporation shall succeed to all of the rights, privileges, immunities and franchises of Merger Sub, all of the properties and assets of Merger Sub and all of the debts, choses in action and other interests due or belonging to Merger Sub and shall be subject to, and responsible for, all of the debts, liabilities and obligations of Merger Sub with the effect set forth in the Nevada Law.
3. Further Action. If at any time after the consummation of the Merger any further action is necessary or desirable to carry out the purposes of this Plan of Merger or to vest the Surviving Corporation with the full right, title and possession to all assets, property, rights, privileges, immunities, powers and franchises of Merger Sub, the officers and directors of the Surviving Corporation are fully authorized in the name of either or both of the Constituent Corporations or otherwise to take all such action.
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SECTION TWO: CORPORATE GOVERNANCE MATTERS
1. Articles of Incorporation. Upon the consummation of the Merger, the Articles of Incorporation of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Articles of Incorporation of the Surviving Corporation.
2. Bylaws. Upon the consummation of the Merger, the Bylaws of the Company, as in effect immediately prior to the consummation of the Merger, shall be the Bylaws of the Surviving Corporation.
3. Directors. Upon the consummation of the Merger, the directors of the Company immediately prior to the consummation of the Merger shall be the directors of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
4. Officers. Upon the consummation of the Merger, the officers of the Company immediately prior to the consummation of the Merger shall be the officers of the Surviving Corporation and shall hold office, subject to the applicable provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation, until their respective successors shall be duly elected or appointed and qualified.
SECTION THREE: MANNER OF CONVERTING
SHARES OF THE CONSTITUENT
CORPORATIONS
1. Merger Sub Stock. Upon the consummation of the Merger, each common share of Merger Sub outstanding immediately prior to the consummation of the Merger shall automatically be converted into and become one common share of the Surviving Corporation, and each certificate representing such common shares of Merger Sub shall, without any action on the part of the holder thereof, be deemed to represent the same number of common shares of the Surviving Corporation.
2. Conversion of Company Common Stock. Upon the consummation of the Merger, all common shares of the Company outstanding immediately prior to the consummation of the Merger shall automatically be collectively converted into the right to receive [_____] shares of “Class B” Common Stock, par value $0.001, of [Newco], a Delaware corporation (“Parent”) and the sole shareholder of Merger Sub (the “Merger Consideration”).
3. Closing of the Company’s Stock Ledger. At and after the consummation of the Merger, all holders of certificates representing common shares of the Company that were outstanding immediately prior to the consummation of the Merger shall cease to have any rights as shareholders of the Company. At the close of business on the day the Merger is consummated the stock ledger of the Company shall be closed with respect to all such common shares.
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4. Delivery of Merger Consideration. Upon the consummation of the Merger, Parent will deliver to The First American Corporation, a California corporation (“FACO”) and the sole shareholder of the Company, a certificate or certificates, registered in FACO’s name, representing the Merger Consideration.
SECTION FOUR: MISCELLANEOUS
1. Termination.
(a) Notwithstanding the approval of this Plan of Merger by the shareholders of the Company and Merger Sub, this Plan of Merger may be terminated at any time prior to the consummation of the Merger by mutual agreement of the parties to this Plan of Merger.
(b) Notwithstanding the approval of this Plan of Merger by the shareholders of the Company and Merger Sub, this Plan of Merger shall terminate automatically in the event that the Agreement and Plan of Merger, dated as of December __, 2002, among FACO, US XXXXXX.xxx Inc. and Parent, shall be terminated as provided therein.
(c) In the event of the termination of this Plan of Merger as provided above, this Plan of Merger shall become void and there shall be no liability on the part of the Company or Merger Sub or the Company’s or Merger Sub’s respective officers or directors.
2. Amendment. This Plan of Merger may be amended by the parties hereto any time before or after approval hereof by the shareholders of the Company or Merger Sub, but after such approval, no amendment shall be made which by law requires the further approval of such shareholders without obtaining such approval. This Plan of Merger may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
3. Counterparts. In order to facilitate the filing and recording of this Plan of Merger, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.
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EXHIBIT B
PARENT CERTIFICATE OF INCORPORATION
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FIRST AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
FIRST ADVANTAGE CORPORATION
First Advantage Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify as follows for purposes of amending and restating its Certificate of Incorporation:
1. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on December 12, 2002.
2. The board of directors of the Corporation duly adopted resolutions containing provisions of this First Amended and Restated Certificate of Incorporation, declaring such amendment and restatement to be advisable and called for the approval of the sole stockholder of the Corporation to such amendment and restatement in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware.
3. The sole stockholder of the Corporation, acting by means of written consent in lieu of a meeting pursuant to Section 228(a) of the General Corporation Law of the State of Delaware, adopted and approved this First Amended and Restated Certificate of Incorporation in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware.
4. The text of the Corporation’s Certificate of Incorporation is hereby amended and restated in its entirety to read as follows:
I.
The name of this corporation is First Advantage Corporation.
II.
The address of the registered office of this corporation in the State of Delaware is 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, in the City of Wilmington, County of New Castle 19808, and the name of the registered agent of this corporation in the State of Delaware at such address is Corporation Service Company.
III.
The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law of the State of Delaware (“DGCL”).
IV.
A. This corporation is authorized to issue three classes of stock to be designated, respectively, “Class A Common Stock”, “Class B Common Stock” and “Preferred
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Stock.” The total number of shares of all classes of stock that this corporation is authorized to issue is [__________] shares, consisting of (1) [__________] shares of Class A Common Stock, each having a par value of one-tenth of one cent ($.001); (2) [__________] shares of Class B Common Stock, each having a par value of one-tenth of one cent ($.001); and (3) [__________] shares of Preferred Stock, each having a par value of one-tenth of one cent ($.001). Except as otherwise expressly provided herein, all shares of Class A Common Stock and Class B Common Stock shall be identical and shall entitle the holders thereof to the same rights and privileges.
B. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized, by filing a certificate (a “Preferred Stock Designation”) pursuant to the DGCL, to fix or alter from time to time the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions of any wholly unissued series of Preferred Stock, and to establish from time to time the number of shares constituting any such series or any of them; and to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.
C. Except as otherwise required by applicable law, the holders of Class A Common Stock and Class B Common Stock shall be entitled to notice of any meeting of the stockholders of this corporation in accordance with the Bylaws and shall vote together as a single class as follows:
1. Each share of Class A Common Stock shall entitle the holder thereof to one (1) vote in person or by proxy on all matters submitted to a vote of the stockholders of this corporation on which the holders of the Class A Common Stock are entitled to vote.
2. Each share of Class B Common Stock shall entitle the holder thereof to ten (10) votes in person or by proxy on all matters submitted to a vote of the stockholders of this corporation on which the holders of the Class B Common Stock are entitled to vote.
D. Shares of Class B Common Stock shall be convertible into shares of Class A Common Stock, at a one-to-one conversion ratio, as follows:
1. The holder of any share of Class B Common Stock may elect at any time, and at such holder’s sole option, to convert such share into one fully paid and nonassessable share of Class A Common Stock.
2. If at any time The First American Corporation (“FACO”) and its Affiliates collectively own less than twenty-eight percent (28%) of the total number of issued and outstanding shares of Class A Common Stock of this corporation (after giving effect to the conversion into Class A Common Stock of all shares of Class B Common Stock and any securities of the Corporation convertible into or exchangeable for shares of Class A Common
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Stock), each issued and outstanding share of Class B Common Stock shall be automatically converted into one fully paid and nonassessable share of Class A Common Stock.
3. Upon the transfer of any share of Class B Common Stock to a Person that, at the time of such transfer, is neither FACO nor an Affiliate of FACO, such share shall be automatically converted into one fully paid and nonassessable share of Class A Common Stock.
4. Notwithstanding anything else to the contrary in this Certificate of Incorporation, any transfer of any share of Class B Common Stock that is effected as part of a distribution by FACO of shares of Class B Common Stock to its shareholders under Section 355(a) of the Internal Revenue Code of 1986, as amended, and any subsequent transfer of such shares, shall not cause an automatic conversion of such shares into Class A Common Stock under IV.D of this Certificate of Incorporation.
As used in this Certificate of Incorporation, the following terms shall have the following meanings:
“Affiliate” means any Person directly or indirectly controlling, controlled by, or under common control with, FACO. As used in this definition, the term “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“Person” means and includes any individual, partnership, joint venture, association, joint stock company, corporation, trust, limited liability company, unincorporated organization, a group and a government or other department, agency or political subdivision thereof.
V.
For the management of the business and for the conduct of the affairs of this corporation, and in further definition, limitation and regulation of the powers of this corporation, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:
A. 1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The initial Board of Directors of the Corporation shall consist of 10 members. Such number of directors shall be changed in such manner as provided in the Bylaws.
2. Each director shall serve until his or her successor is duly elected and qualified or until his or her death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
3. (a) Subject to the rights of the holders of any series of Preferred Stock to fill vacancies and newly created directorships on the Board of Directors under
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specified circumstances, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors in accordance with the Bylaws, shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders, and except as otherwise provided by law, be filled either by (i) the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors or (ii) by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of voting stock of this corporation entitled to vote at an election of directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified.
(b) If at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Delaware Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent (10%) of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in offices as aforesaid, which election shall be governed by Section 211 of the DGCL.
B. 1. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors shall have the power to adopt, amend and repeal the Bylaws of this corporation.
2. The directors of this corporation need not be elected by written ballot unless the Bylaws so provide.
3. No action shall be taken by the stockholders of this corporation except at an annual or special meeting of stockholders called in accordance with the Bylaws.
4. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of this corporation shall be given in the manner provided in the Bylaws of this corporation.
VI.
A. No director shall be personally liable to this corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law, (i) for breach of the director’s duty of loyalty to this corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which a director derived an improper personal benefit. If the DGCL is amended after the date of incorporation of this corporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
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B. Any repeal or modification of this Article VI shall be prospective only and shall not affect the rights under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.
VII.
This corporation expressly elects not to be governed by Section 203 of the DGCL.
VIII.
A. This corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in paragraph B of this Article VIII, and all rights conferred upon the stockholders herein are granted subject to this reservation.
B. Notwithstanding any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the voting stock of this corporation required by law, this Certificate of Incorporation or any Preferred Stock Designation, the affirmative vote of the holders of at least the majority of the voting power of all of the then- outstanding shares of the voting stock entitled to vote on such matter, voting together as a single class, shall be required to alter, amend or repeal Articles V or VI or this paragraph B.
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EXHIBIT C
PARENT BY LAWS
Table of Contents
BYLAWS
of
FIRST ADVANTAGE CORPORATION
(a Delaware corporation)
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Executive Vice Presidents, Vice Presidents and Other Officers |
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BYLAWS
of
FIRST ADVANTAGE CORPORATION
(a Delaware corporation)
ARTICLE I
SECTION 1. Place of Meetings. Meetings of stockholders shall be held within or without the State of Delaware at such place or places as the Board of Directors may from time to time determine.
SECTION 2. Annual Meetings. Annual meetings of stockholders, for the purpose of electing directors and transacting such other business as may properly be brought before the meeting in accordance with Section 5 of this Article I, shall be held on such date and at such time as the Board of Directors shall determine.
SECTION 3. Special Meetings. Special meetings of stockholders, for any purpose or purposes prescribed in the notice of the meeting and for the conduct of such business as may properly be brought before the meeting by or at the discretion of the Board of Directors or the chairman of the meeting, may be called by the Chairman of the Board or by a majority of the Board of Directors (either by written instrument signed by such majority or by a resolution duly adopted by the vote of such majority).
SECTION 4. Notice of Stockholder Meetings. Written notice of every meeting of stockholders, annual or special, stating the place, date and time thereof and the purpose or purposes in general terms for which the meeting is called shall, not less than 10 nor more than 60 days before the date on which the meeting is to be held, be given to each stockholder entitled to vote thereat. Such notice shall be delivered either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to each stockholder at such stockholder’s address as it appears upon the stock records of the Corporation or, if such stockholder shall have filed with the Secretary of the Corporation a written request that notices intended for him or her be mailed to some other address, then to the address designated in such request. Notice shall be deemed to have been given when delivered personally or deposited in the mail or sent by telegram or other means of written communication.
(a) Except as otherwise provided by law or by the Certificate of Incorporation, at any meeting of stockholders the presence in person or by proxy of the holders of a majority of the shares of the outstanding capital stock of the Corporation entitled to vote thereat shall constitute a quorum. If two or more classes of stock are entitled to vote as separate classes upon any question, then, in the case of each such class, a quorum for the consideration of
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such question shall, except as otherwise provided by law or by the Certificate of Incorporation, consist of a majority in interest of all stock of that class entitled to vote.
(b) If a quorum should fail to attend any meeting, then either (i) the chairman of the meeting or (ii) the holders of a majority of the shares present in person or represented by proxy and voting shall have the power to adjourn the meeting to another place, date or time in accordance with Section 6 of this Article I. Subject to the requirements of law and the Certificate of Incorporation, on any issue on which two or more classes of stock are entitled to vote separately, no adjournment shall be taken with respect to any class for which a quorum is present unless the chairman of the meeting otherwise directs.
(c) If a quorum is initially present at a meeting, the stockholders may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
SECTION 6. Adjourned Meeting; Notice. When a meeting is adjourned to another place, date or time, unless this Section otherwise requires, notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting the Corporation may transact any business that might have been transacted at the original meeting.
SECTION 7. Proxies and Voting.
(a) At every meeting of stockholders, upon any matter properly brought before the meeting, except as otherwise provided in the Certificate of Incorporation, every stockholder entitled to vote at such meeting shall have one vote for each share of outstanding capital stock of the Corporation entitled to vote which is registered in such stockholder’s name on the books of the Corporation. At each such meeting every stockholder shall be entitled to vote in person or by proxy appointed by an instrument in writing subscribed by such stockholder and bearing a date not more than three years prior to the meeting at which it is offered, unless such instrument provides for a longer period during which it is to remain in force.
(b) All voting, including on the election of directors but excepting where otherwise required by law or by the rules of any stock exchange or quotation system on which securities of the Corporation are listed or quoted, may, at the election of the chairman of the meeting, be by voice vote; provided, however, that upon demand by a stockholder entitled to vote or by his or her proxy, or if the chairman of the meeting shall so determine, the vote for directors or upon any other matter before the meeting shall be taken by ballot.
(c) All elections shall be determined by a plurality of the votes cast and, except as otherwise required by law, by the Certificate of Incorporation or by these Bylaws, all other matters shall be decided by a majority of the votes cast affirmatively or negatively by the
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holders of shares of outstanding capital stock of the Corporation entitled to vote and present in person or represented by proxy at the meeting.
SECTION 8. Stockholder List. A complete list of the stockholders of record entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list of the stockholders of record shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder present at the meeting.
SECTION 9. Inspectors. The Board of Directors may, and to the extent required by law shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Board of Directors may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at the meeting of stockholders, the chairman of the meeting may, and to the extent required by law shall, appoint one or more inspectors at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties.
SECTION 10. Action Without Meeting. Except as required by the Certificate of Incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, and such written consent is filed with the minutes of proceedings of the stockholders. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
SECTION 11. Organization. The Chairman of the Board or, in his or her absence, the Chief Executive Officer or, in his or her absence, the President or, in his or her absence, a Vice President, shall call meetings of the stockholders to order and shall act as chairman thereof. The Secretary of the Corporation, if present, shall act as secretary of all meetings of stockholders and, in his or her absence, the chairman of the meeting may appoint a secretary.
SECTION 12. Conduct of Business. The chairman of any meeting of stockholders shall determine the order of business and the procedures at the meeting, including such matters as the regulation of the manner of voting and the conduct of business. The date and
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time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.
ARTICLE II
SECTION 1. Powers. Except as otherwise required by law or provided by the Certificate of Incorporation or these Bylaws, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
SECTION 2. Number of Directors. The Board of Directors shall consist of one or more members. The exact number of directors constituting the Board of Directors shall be fixed, and may be changed from time to time, by the Board of Directors pursuant to a resolution passed by a majority of the Board of Directors then in office, even if less than a quorum, at a duly held meeting of directors. No reduction in the authorized number of directors shall have the effect of removing any director before that director’s term of office expires. Directors need not be stockholders.
SECTION 3. Term of Office. Except for the initial directors, who shall be elected by the incorporator of the Corporation, and except as otherwise provided in these Bylaws, directors shall be elected at each annual meeting of stockholders. Each director so elected shall hold office until the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal or death.
SECTION 4. Vacancies and Newly Created Directorships. If the office of any director becomes vacant for any reason or if the number of directors shall at any time be increased, the Board of Directors may fill such vacancy or newly created directorship pursuant to a resolution duly adopted by a majority of the directors then in office, even if less than a quorum, and any director so chosen shall hold office until the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal or death. The stockholders may at any duly held meeting of stockholders elect a director to fill a vacancy or newly created directorship not filled by the directors.
SECTION 5. Removal by Stockholders. Unless otherwise restricted by law or by the Certificate of Incorporation, any director or the entire Board of Directors may be removed, with or without cause, at a duly held meeting of stockholders by the holders of a majority of the shares of outstanding capital stock of the Corporation then entitled to vote on the election of directors.
SECTION 6. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such place, within or without the State of Delaware, on such dates and at such times as shall be determined from time to time by the Board of Directors. A regular meeting of the Board may also be held without notice immediately following the annual meeting of stockholders at the place where such meeting is held.
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SECTION 7. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, any two of the directors then in office, the Chief Executive Officer or, if no person holds such office, the President. Notice of the place, date and time of each such special meeting shall be given to each director by whom it is not waived by (i) mailing written notice not fewer than four days before the meeting or (ii) telegraphing, transmitting a facsimile of or personally delivering written notice or giving telephonic notice not fewer than 48 hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.
SECTION 8. Participation by Telephone Conference Call. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or of any such committee, by means of telephone conference or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
SECTION 9. Quorum and Vote Required for Action. Except as may be otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, a majority of the authorized number of directors shall constitute a quorum for the transaction of business, and the affirmative vote of a majority of the directors present at a duly held meeting at which there is a quorum present shall be the act of the Board of Directors. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for the meeting.
SECTION 10. Adjournment. A majority of the directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place, and no further notice thereof need be given other than announcement of the adjournment at the meeting so adjourned. At the adjourned meeting, the Board of Directors may transact any business that might have been transacted at the original meeting.
SECTION 11. Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting, if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or committee.
SECTION 12. Compensation. Directors and members of committees may receive such compensation, if any, for their services and such reimbursement of expenses as may be fixed or determined by resolution of the Board of Directors. This Section shall not be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent, employee or otherwise and receiving compensation for those services.
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ARTICLE III
SECTION 1. Committees of the Board of Directors. The Board of Directors, by vote of a majority of the authorized number of directors, may at any time designate one or more committees, each consisting of two or more directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any such committee who may then replace any absent or disqualified member at any meeting of the committee. In lieu of such action by the Board of Directors, in the absence or disqualification of any member of a committee, the committee members present at any meeting and not disqualified from voting, regardless of whether they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, any such committee, to the extent provided in resolutions duly adopted by the Board of Directors, shall have and may exercise all powers and authority of the Board of Directors in the direction of the management of the business and affairs of the Corporation. Unless otherwise prescribed by the Board of Directors, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the affirmative vote of a majority of the members present at a duly held meeting at which there is a quorum present shall be the act of such committee. Each committee shall determine its own rules for calling and holding meetings and its own methods of procedure, subject to any rules prescribed by the Board of Directors, and shall keep a written record of all actions taken by such committee.
SECTION 2. Term of Office. Each member of a committee shall hold office until the first meeting of the Board of Directors following the annual meeting of stockholders at which such member is not re-elected to the Board of Directors (or until such other time as the Board of Directors may determine, either in the vote establishing the committee or at the election of such member or otherwise) and until his or her successor is duly elected and qualified or until he or she sooner resigns, is removed, dies, is replaced by change of membership or becomes disqualified by ceasing to be a director, or until the committee is sooner abolished by the Board of Directors.
SECTION 3. Audit Committee. Without limiting the generality of the foregoing, the Board of Directors shall designate annually an Audit Committee consisting of not less than three Directors as it may from time to time determine, none of whom shall be an officer or employee of the Corporation. The Audit Committee shall select independent public accountants to audit the books of account and other appropriate corporate records of the Corporation annually and at such other times as the Board of Directors shall determine by resolution, and shall review with such independent accountants the Corporation’s financial statements, basic accounting and financial policies and practices, adequacy of controls, standard and special tests used in verifying the Corporation’s statements of account and in determining the soundness of the Corporation’s financial condition. The Audit Committee shall report to the Board of Directors the results of such reviews, review the policies and practices pertaining to
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publication of quarterly and annual statements to assure consistency with audited results and the implementation of policies and practices recommended by the independent accountants, ensure that suitable independent audits are made of the operations and results of subsidiaries and affiliates and monitor compliance with the Corporation’s code of business conduct. The Audit Committee shall have such other duties, functions and powers as the Board of Directors may from time to time prescribe and as may be required from time to time by the rules of any stock exchange or quotation system on which securities of the Corporation are listed or quoted.
ARTICLE IV
SECTION 1. Officers. The officers of the Corporation shall consist of a Chief Executive Officer or President, or both, a Chief Financial Officer, a Secretary and, in the discretion of the Board of Directors, a Chairman of the Board, a Chief Operating Officer and one or more Executive Vice Presidents, Vice Presidents, Assistant Vice Presidents, Assistant Secretaries and such other officers as the Board of Directors deems necessary or appropriate. Except as may be expressly set forth in a written employment contract between the Corporation and an officer or in a resolution duly adopted by the Board of Directors, each officer shall hold office until his or her successor is duly elected and qualified or until his or her earlier resignation, removal or death. The powers and duties of more than one office may be exercised and performed by the same person.
SECTION 2. Vacancies. Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting.
SECTION 3. Chairman of the Board; Vice Chairman of the Board. The Chairman of the Board of Directors, if there be such an officer, shall be a member of the Board of Directors and shall preside at its meetings. The Chairman of the Board shall advise and counsel with the Chief Executive Officer or, if no person holds such office, the President, and shall perform such duties as from time to time may be assigned to him or her by the Board of Directors or prescribed by these Bylaws. The Board of Directors may also elect a Vice Chairman of the Board who, if there be such an officer, shall be a member of the Board of Directors and may preside at its meetings. Any person occupying the position or having the title of Chairman of the Board or Vice Chairman of the Board shall not, merely in such capacity or because of such title, be either an officer or employee of the Corporation unless the Board duly adopts a resolution with respect to such person subsequent to his or her election to such position specifically designating such position as an officer and/or employee position specifically with respect to such person.
SECTION 4. Chief Executive Officer. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board, if there be such an officer, and subject to the control of the Board of Directors, the Chief Executive Officer of the Corporation, if there be such an officer, shall have general supervision, direction and control of the business and officers of the Corporation. Subject to the Board of Directors, the Chief
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Executive Officer shall be the final arbiter in all differences among the officers of the Corporation and his or her decision as to any matter affecting the Corporation shall be final and binding as among the officers of the Corporation. The Chief Executive Officer shall have the general powers and duties of management usually vested in the office of chief executive officer of a corporation and shall have such other powers and perform such other duties as may be assigned to him or her from time to time by the Board of Directors or prescribed by these Bylaws.
SECTION 5. President. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board and the Chief Executive Officer of the Corporation, if there be such an officer or officers, and subject to the control of the Board of Directors, the President of the Corporation, if there be such an officer, shall have such general powers and duties of management as may be assigned to him or her from time to time by the Board of Directors, the Chairman of the Board or the Chief Executive Officer of the Corporation or prescribed by these Bylaws. If no Chief Executive Officer shall have been elected, the President shall perform all the duties of the Chief Executive Officer and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chief Executive Officer.
SECTION 6. Executive Vice Presidents, Vice Presidents and Other Officers. Each Executive Vice President, Vice President, Assistant Vice President and such other officer as may be duly elected under these Bylaws shall have and exercise such powers and shall perform such duties as from time to time may be assigned to such officer by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President or prescribed by these Bylaws.
SECTION 7. Secretary. The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors in books provided for that purpose, see that all notices are duly given in accordance with the provisions of law and these Bylaws, be custodian of the records and of the corporate seal or seals of the Corporation and see that the corporate seal is affixed to all documents the execution of which, on behalf of the Corporation under its seal, is duly authorized and, when the seal is so affixed, the Secretary may attest the same. In general, the Secretary shall perform all duties incident to the office of secretary of a corporation and such other duties as from time to time may be assigned to him or her by the Board of Directors or the Chairman of the Board or prescribed by these Bylaws.
SECTION 8. Assistant Secretaries. The Assistant Secretaries, if there be any such officers, in order of their seniority shall, in the absence of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors shall assign to them or as from time to time may be assigned to them by the Chairman of the Board or the Secretary.
SECTION 9. Chief Financial Officer. The Chief Financial Officer of the Corporation shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. The books of account shall at all reasonable times be open to inspection by any director. The Chief Financial
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Officer shall deposit all monies and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Chief Financial Officer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the Chief Executive Officer, President and Board of Directors, whenever they request it, an account of all of his or her transactions as Chief Financial Officer and of the financial condition of the Corporation; shall have such other powers and perform such other duties as may be assigned to him or her by the Board of Directors or prescribed by these Bylaws; and shall perform such other duties consistent therewith as may be assigned to him or her by the Chief Executive Officer or, if no person holds such office, the President.
SECTION 10. Subordinate Officers. The Board of Directors may appoint such subordinate officers as the Board may deem desirable. Each such officer shall hold office for such period, have such authority and perform such duties as the Board of Directors may prescribe. The Board of Directors may, from time to time, authorize any officer to appoint and remove subordinate officers and to prescribe the powers and duties thereof.
SECTION 11. Compensation. The Board of Directors shall fix the compensation of all officers of the Corporation. The Board may authorize any officer upon whom the power of appointing subordinate officers may have been conferred to fix the compensation of such subordinate officers.
SECTION 12. Removal. Any officer of the Corporation may be removed, with or without cause, by action of the Board of Directors or the Chief Executive Officer or, if no person holds such office, the President.
SECTION 13. Bonds. The Board of Directors may require any officer of the Corporation to give a bond to the Corporation, conditional upon the faithful performance of his or her duties, with one or more sureties and in such amount as may be satisfactory to the Board of Directors.
SECTION 14. Loans to Directors or Executive Officers. The Corporation may not, directly or indirectly, including through any subsidiary, extend or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the form of a personal loan, to, or for any director or executive officer (or equivalent thereof) in contravention of applicable law (including, without limitation, Section 402 of the Xxxxxxxx-Xxxxx Act of 2002 and any regulations promulgated thereunder).
ARTICLE V
SECTION 1. Form and Execution of Certificates.
(a) The interest of each stockholder of the Corporation shall be evidenced by a certificate or certificates for shares of stock in such form as the Board of Directors may from time to time prescribe. The certificates of stock of each class shall be consecutively numbered and signed by the Chief Executive Officer or the President, and by the Secretary or an Assistant
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Secretary, may be countersigned and registered in such manner as the Board of Directors may by resolution prescribe and shall bear the corporate seal or a printed or engraved facsimile thereof. The signatures of any such officer may be facsimiles, engraved or printed. In case any transfer agent or any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any certificate shall cease to be such transfer agent or officer or officers, whether because of resignation, removal, death or otherwise, before such certificate shall have been issued by the Corporation, such certificate may nevertheless be issued and delivered by the Corporation as though the person or persons who signed such certificate or whose facsimile signature or signatures shall have been used thereon had not ceased to be such transfer agent or officer or officers, and certificates issued and delivered to stockholders prior to such cessation shall not be affected thereby.
(b) In case the corporate seal which has been affixed to, impressed on or reproduced in any such certificate shall cease to be the seal of the Corporation before such certificate shall have been issued and delivered by the Corporation, such certificate may nevertheless be issued and delivered by the Corporation as though the seal affixed thereto, impressed thereon or reproduced therein had not ceased to be the seal of the Corporation, and certificates issued and delivered to stockholders prior to such cessation shall not be affected thereby.
(c) Every certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these Bylaws or any agreement to which the Corporation is a party shall note the restriction conspicuously on the certificate and shall also set forth, on the face or back, either the full text of the restriction or a statement of the existence of such restriction and a statement that the Corporation will furnish a copy of the full text thereof to the holder of such certificate upon written request and without charge.
(d) Every certificate issued when the Corporation is authorized to issue more than one class or series of stock shall set forth on its face or back either (i) the full text or a summary of the preferences, voting powers, qualifications and special and relative rights of the shares of the class or series represented by such certificate or (ii) a statement of the existence of such preferences, voting powers, qualifications and rights and that the Corporation will furnish a copy of the full text or a summary thereof to the holder of such certificate upon written request and without charge.
SECTION 2. Transfer of Shares. The shares of the stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof in person or by his or her attorney lawfully constituted, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto duly executed, with such proof or guaranty of the authenticity of the signature as the Corporation or its agents may reasonably require. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, save as expressly provided by law or by the Certificate of Incorporation. It shall be the duty of each stockholder to notify the Corporation of his or her address.
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(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than 60 nor less than 10 days before the date of any meeting of stockholders nor more than 60 days prior to the time for any other action (if such other action is permitted by the Certificate of Incorporation). Only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to notice of, and to vote at, any such meeting or to receive payment of any such dividend or other distribution, or to receive such allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any record date fixed as aforesaid. If no such record date is so fixed by the Board, the record date shall be determined by applicable law.
(b) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 4. Lost or Destroyed Certificates. In case of the loss or destruction of any certificate of stock, a new certificate may be issued under the following conditions:
(a) The owner of such certificate shall file with the Secretary or any Assistant Secretary of the Corporation an affidavit giving the facts in relation to the ownership and the loss or destruction of such certificate, stating its number and the number of shares represented thereby. Such affidavit shall be in such form and contain such statements as shall satisfy the Chief Executive Officer or, if no person holds such office, the President, the Secretary or any Assistant Secretary that such certificate has been accidentally destroyed or lost and that a new certificate ought to be issued in lieu thereof. Upon being so satisfied, such officer may require such owner to furnish to the Corporation a bond in such form and for such amount as such officer may deem advisable, and with a surety or sureties approved by such officer, to indemnify and save harmless the Corporation from any claim, loss, damage or liability which may be occasioned by the issuance of a new certificate in lieu thereof. Upon such bond being so filed, a new certificate for the same number of shares shall be issued to the owner of the certificate so lost or destroyed and the transfer agent and registrar, if any, of stock shall countersign and register such new certificate upon receipt of a written order signed by such officer, and thereupon the Corporation will save harmless such transfer agent and registrar in the premises. In case of the surrender of the original certificate, in lieu of which a new certificate has been issued, or the surrender of such new certificate, for cancellation, any bond of indemnity given as a condition of the issue of such new certificate may be surrendered.
(b) The Board of Directors may by resolution authorize and direct any transfer agent or registrar of stock of the Corporation to issue and register, respectively, from time to time without further action or approval by or on behalf of the Corporation new certificates of stock to
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replace certificates reported lost, stolen or destroyed upon receipt of an affidavit of loss and bond of indemnity in form and amount and with surety satisfactory to such transfer agent or registrar in each instance or upon such terms and conditions as the Board of Directors may determine.
ARTICLE VI
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on the Corporation’s bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers, or agent or agents, as shall be thereunto authorized from time to time by the Board of Directors which may in its discretion authorize any such signatures to be facsimile.
SECTION 2. Execution of Contracts, Assignments, etc. Unless the Board of Directors, the Chief Executive Officer or, if no person holds such office, the President, shall have otherwise provided generally or in a specific instance, all contracts, agreements, endorsements, assignments or other instruments shall be signed by the Chief Executive Officer, the President or the Chief Financial Officer. The Board of Directors may, however, in its discretion, require any or all such instruments to be signed by any two or more of such officers or may permit any or all of such instruments to be signed by such other officer or officers, agent or agents, as the Board of Directors shall thereunto authorize from time to time.
SECTION 3. Voting of Stock Owned by the Corporation. The Chief Executive Officer, the President, the Secretary or any other officer designated by the Board of Directors may on behalf of the Corporation attend, vote and grant proxies to vote with respect to shares of stock of other companies standing in the name of the Corporation.
ARTICLE VII
SECTION 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the Delaware General Corporation Law, as the same exists or may hereafter be amended (the “DGCL”) (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such
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indemnitee in connection therewith, and such indemnification shall continue as to an indemnitee who has ceased to be a director or officer, and shall inure to the benefit of the indemnitee’s heirs, executors and administrators; provided, however, that, except as provided in Section 2 of this Article VII, with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article VII shall be a contract right and, to the extent not prohibited by applicable law (including, without limitation, Section 402 of the Xxxxxxxx-Xxxxx Act of 2002 and any regulations promulgated thereunder), shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL so requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Article or otherwise.
SECTION 2. Right of Indemnitee to Bring Suit. If a claim under Section 1 of this Article VII is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in the DGCL. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VII or otherwise shall be on the Corporation.
SECTION 3. Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses incurred in defending a proceeding in advance of its final
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disposition conferred in this Article VII shall not be exclusive of any other right which any person may have or hereafter acquire under the Certificate of Incorporation of the Corporation or any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise. The Board of Directors may adopt bylaws from time to time with respect to indemnification to provide at all times the fullest indemnification authorized by the DGCL.
SECTION 4. Indemnification of Employees and Agents. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant to any person serving as an employee or agent of the Corporation and to any person serving at the request of the Corporation as an employee or agent of another corporation or of any partnership, joint venture, trust or other organization or enterprise, including service with respect to employee benefit plans, rights to indemnification and to the advancement of expenses to the fullest extent of the provisions of this Article VII with respect to the indemnification of, and the advancement of expenses to, directors and officers of the Corporation.
SECTION 5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
ARTICLE VIII
SECTION 1. Inspection of Books. The Board of Directors shall determine from time to time whether, and if allowed, to what extent and at what time and places and under what conditions and regulations, the accounts and books of the Corporation (except such as may by law be specifically open to inspection), or any of them, shall be open to the inspection of the stockholders, and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware, unless and until authorized so to do by a duly adopted resolution of the Board of Directors or of the stockholders of the Corporation.
SECTION 2. Fiscal Year. The fiscal year of the Corporation shall be determined from time to time by vote of the Board of Directors. In the absence of such determination, the fiscal year shall be the calendar year.
SECTION 3. Corporate Seal. The corporate seal shall be circular in form and shall contain the name of the Corporation, the year of its creation and words to the effect “CORPORATE SEAL DELAWARE.” Such seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.
SECTION 4. Waiver of Notice. Notice of any meeting of stockholders or directors need not be given to any person entitled thereto (a) who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the
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meeting, or (b) who attends the meeting, except when the person attends the meeting for the express purpose of objecting, at the commencement of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. All such waivers, consents and approvals shall be filed with the corporate records or made part of the minutes of the meeting. Neither the business to be transacted at, nor the purpose of, any such meeting need be specified in any written waiver of notice or in any written consent to the holding of the meeting.
ARTICLE IX
Except as expressly provided by these Bylaws, these Bylaws may be altered, amended, changed or repealed and new Bylaws adopted by the affirmative vote of a majority of the outstanding shares of capital stock of the Corporation entitled to vote or by the Board of Directors, in either case at any meeting called for that purpose at which a quorum shall be present. Any bylaw, whether made, altered, amended, changed or repealed by the stockholders or the Board of Directors may be repealed, amended, changed, further amended, changed, repealed or reinstated, as the case may be, either by the stockholders or by the Board of Directors as herein provided; except that this Article IX may be altered, amended, changed or repealed only by the affirmative vote of a majority of the outstanding shares of capital stock of the Corporation entitled to vote.
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THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of First Advantage Corporation and that the foregoing bylaws were adopted as the bylaws of such corporation as of the ____ day of ________, 2002 by the Board of Directors of such corporation.
Dated as of ___________, 2002 |
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Xxxxxxx X. XxXxxxxxx |
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EXHIBIT D-1
FORM OF PROMISSORY NOTE
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SUBORDINATED SECURED PROMISSORY NOTE
Principal Sum: $1,400,000 |
December [__], 2002 |
Maturity Date: June 30, 2000 |
Xxx Xxxxxxx, Xxxxxxxxxx |
FOR VALUE RECEIVED, the undersigned, US XXXXXX.xxx Inc., a Delaware corporation (“Borrower”), hereby promises to pay to the order of The First American Corporation, a California corporation (together with its successors and assigns, “Lender”), in lawful money of the United States of America in immediately available funds, at 1 Xxxxx Xxxxxxxx Xxx, Xxxxx Xxx, Xxxxxxxxxx 00000, or at such other place as may be designated in writing by Lender to Borrower from time to time, the principal amount of One Million Four Hundred Thousand Dollars ($1,400,000) or, if less, the unpaid principal amount of this subordinated secured promissory note (this “Note”), together with interest on the principal balance at the rate or rates and in the manner hereinafter provided.
1. Defined Terms. As used in this Note, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Borrower Security Agreement” shall mean the Security Agreement dated as of December [__], 2002 between Borrower and Lender. | |
“Business Day” shall mean any day except Saturday, Sunday and any day that is in Los Angeles, California a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close. | |
“Change of Control” means, with respect to Borrower, an event or series of events by which: | |
(a) Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of Borrower or its subsidiaries, or any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person shall be deemed to have “beneficial ownership” of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 25% or more of the equity interests of such Person; provided, however, that no “Change of Control” shall be deemed to have occurred by virtue of the fact that Pequot Capital Management, Inc. and its affiliates are the beneficial owners of not more than 55% of the equity securities of Borrower; or | |
(b) During any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or |
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equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body. | |
“Collateral” shall mean all property (whether real, personal, tangible, intangible, existing or hereafter acquired) of Borrower that is pledged to, or over which a security interest is granted in favor of, Lender under the Security Documents to secure Borrower’s obligations hereunder. | |
“Comerica Facility” shall have the meaning provided in paragraph 6(d) of this Note. | |
“Commitment” shall have the meaning provided in paragraph 2 of this Note. | |
“Debtor Relief Laws” shall means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States of America or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally. | |
“Event of Default” shall have the meaning provided in paragraph 6 of this Note. | |
“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable laws of any jurisdiction), including the interest of a purchaser of accounts receivable. | |
“Loan” shall have the meaning provided in paragraph 2 of this Note. | |
“Maturity Date” shall mean June 30, 2003. | |
“Merger Agreement” shall mean the Agreement and Plan of Merger, dated as of December 13, 2002, among The First American Corporation, US Xxxxxx.xxx Inc., First Advantage Corporation and Stockholm Seven Merger Corp. | |
“Monthly Period” shall mean the period commencing on December [__], 2002 and ending on January 31, 2003 and, thereafter, shall mean for each calendar month the period commencing on the first day of such calendar month and ending on the last day of such calendar month. | |
“Notice of Borrowing” shall have the meaning provided in paragraph 2 of this Note. |
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“Person” shall mean any individual, partnership, limited liability company, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof. | |
“Prime Rate” shall mean, with respect to each Monthly Period, the per annum rate of interest specified as the Prime Rate in the Wall Street Journal (United States edition) published on the first Business Day of such Monthly Period; provided that for any date on which the Wall Street Journal (United States edition) is not published, “Prime Rate” means the per annum rate of interest specified as the Prime Rate in the Wall Street Journal (United States edition) last published before such date. | |
“Security Documents” shall mean the Borrower Security Agreement and each agreement, instrument, certificate, financing statement or other document described therein. | |
“Suspension Event” shall mean the period commencing on the date on which the Borrower receives a Takeover Proposal and ending on the date on which the Borrower’s board of director’s rejects such Takeover Proposal. | |
“Takeover Proposal” shall have the meaning provided in the Merger Agreement. |
2. Commitment. Subject to the terms and conditions contained in this Note, so long as no Suspension Event has occurred and is continuing, Lender agrees to loan Borrower on a non-revolving basis up to one million four hundred thousand dollars ($1,400,000) (the “Commitment”), provided that each such loan (each a “Loan”) shall be in a minimum amount of $100,000; and provided, further, however, that after giving effect to any Loan, the aggregate principal balance of all outstanding Loans shall not exceed the Commitment. In the event Borrower desires to borrow under this Note, Borrower shall execute and deliver to Lender a Notice of Borrowing in the form of Exhibit A (each, a “Notice of Borrowing”) at least two Business Days’ prior to the date on which it wishes to receive good funds. Amounts borrowed and prepaid may not be reborrowed under this Note. The Commitment shall terminate on the earlier of (i) the date on which Lender has advanced $1,400,000 to Borrower, (ii) Maturity Date, (iii) the date on which the Merger Agreement terminates in accordance with its terms, (iv) the date on which Borrower’s board of directors approves a Takeover Proposal and (v) the date on which an Event of Default occurs.
3. Payment. The entire unpaid principal balance of this Note, together with all accrued and unpaid interest thereon, shall be due and payable in full on the Maturity Date, or such earlier date as the entire principal balance of this Note shall be due and payable by acceleration, prepayment or as otherwise provided herein or in the Security Documents.
4. Interest; Late Charges.
(a) Interest on the outstanding unpaid principal balance of this Note shall accrue from the date hereof until such principal balance is paid in full at a rate per annum equal to the lesser of (i) 10.00% and (ii) the Prime Rate plus 4.75%; provided, however, that after maturity of this Note (whether by acceleration, on the Maturity Date or otherwise) or, at the option of the holder hereof, upon the occurrence of any Event of Default, and from and after the date of such Event of
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Default, all outstanding principal and, to the extent permitted by law, accrued interest under this Note shall bear interest at the default rate per annum equal to the lesser of (x) 10.00% and (y) the Prime Rate plus 6.75%.
(b) The accrued and unpaid interest on this Note shall be due and payable on the Maturity Date (or such earlier date as the entire principal balance of this Note shall be due and payable by acceleration or as otherwise provided herein or in the Security Documents) and on each date of prepayment. Interest shall be calculated on the basis of a 365-day year and actual number of days elapsed.
5. Prepayment.
(a) Borrower shall have the right to prepay this Note in full or in part, without penalty or premium, at any time.
(b) Borrower shall prepay this Note in full on the date, if any, on which the Merger Agreement terminates in accordance with its terms.
(c) Borrower shall prepay this Note in full on the date, if any, on which a Change of Control occurs.
(d) Prepayments of this Note shall be applied first to accrued but unpaid interest, and second to the outstanding principal balance then due and owing.
6. Events of Default. Upon the occurrence of any of the following events of default (each, an “Event of Default”), other than an Event of Default of the type described in subparagraph (e) below, Lender may, at its option, declare the entire unpaid principal balance of this Note, together with all accrued but unpaid interest and other charges, to be immediately due and payable, and Lender may proceed to exercise any or all of its rights or remedies under this Note, the Security Documents or at law or in equity:
(a) Borrower shall default in the payment when due of (i) any principal of this Note or (ii) interest on this Note or any other amounts owing hereunder, and such default as described in this clause (ii) shall continue unremedied for three or more Business Days; or | |
(b) Any representation, warranty or statement made by or on behalf of Borrower in this Note or any Security Document or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or | |
(c) Borrower shall default in the due performance or observance of any other term, covenant or agreement contained (whether by incorporation by reference or otherwise) in this Note or the Borrower Security Agreement and such default shall continue unremedied for a period of the lesser of (i) ten Business Days and (ii) the grace period provided for in the Borrower Security Agreement with respect to such default, if any; or |
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(d) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any debt for borrowed money of Borrower under the Loan and Security Agreement, dated September 12, 2001, between Comerica Bank, as successor to Imperial Bank, and Borrower (as the same may be amended, modified, restated or substituted from time to time, the “Comerica Facility”), or a default shall occur in the performance or observance of any obligation or condition with respect to such debt if the effect of such default is to accelerate the maturity of any such debt or such default shall continue unremedied for any applicable period of time sufficient to permit the holder or holders of such debt, or any trustee or agent for such holders, to cause such debt to become due and payable prior to its stated maturity; or | |
(e) Borrower or any of its subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or | |
(f) If, without the express prior written consent of Lender, title to any of the Collateral, or any part thereof or interest therein, shall be (or attempted to be) sold, conveyed, transferred or further encumbered by Borrower in favor of any other Person, firm, corporation or other entity, whether by operation of law, agreement or otherwise, except as expressly permitted by the Security Agreements; or | |
(g) Any judgment or order for the payment of money in excess of $2,000,000 (taking into account any insurance proceeds payable under a policy where the insurer has accepted coverage without reservation) shall be rendered against Borrower and either: | |
(i) Enforcement proceedings shall have been commenced by any creditor upon such judgment or order; or | |
(ii) There shall be any period of fifteen (15) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or | |
(h) The Security Documents or any provision thereof shall cease to be in full force and effect, or shall cease to give Lender the liens, rights, powers and privileges purported to be created thereby, or Borrower or any other Person obligated under any Security Document (other than Lender) shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to such Security Documents, or Borrower or any Person purporting to act by or |
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on behalf of Borrower shall deny or disaffirm Borrower’s obligations under any Security Document. |
Upon the occurrence of an Event of Default of the type described in subparagraph (e) above, the obligation of Lender to advance funds pursuant to this Note shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest thereon shall automatically become due and payable, in each case without further act of Lender.
7. Security. This Note is secured by a security interest in the Collateral pursuant to the terms and conditions of the Borrower Security Agreement
8. Subordination. Lender’s right to payment under this Note and to proceed against the Collateral is subordinated to the obligations of Borrower to Comerica Bank under the Comerica Facility pursuant to the terms of that certain Subordination Agreement of even date herewith between Lender and Comerica Bank.
9. Representations and Warranties. Borrower represents and warrants as of the date hereof the following:
(a) Authority; Enforceability. Borrower has full power and authority to execute and deliver this Note and the Borrower Security Agreement and to perform its obligations hereunder and thereunder. Borrower has duly executed and delivered this Note and the Borrower Security Agreement, and this Note and the Borrower Security Agreement constitutes its legal, valid and binding obligations enforceable in accordance with their terms. | |
(b) Actions, Suits or Proceedings. Except as set forth in Schedule 3.12 to the Merger Agreement, there are no actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against or affecting it or any of its property or the Collateral, or before or by any governmental authority, and, Borrower is not in default with respect to any order, writ, injunction, decree or demand of any court or any governmental authority. | |
(c) No Conflicts. The execution, delivery and performance of this Note and the Borrower Security Agreement will not (i) conflict or be inconsistent with, or result in any breach of, or constitute a default under, or result in the creation or imposition of (or create the obligation to create or impose) any lien or encumbrance (except pursuant to the Security Documents) under any deed of trust, indenture, mortgage, lease, bank loan or credit agreement, or other agreement, contract or instrument to which Borrower is a party or by which it or its property may be bound (other than such conflicts, inconsistencies, breaches or defaults that have been waived in writing by the appropriate party); or (ii) contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality. | |
(d) Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have been obtained or made prior to the date hereof), or exemption by, any governmental or public body or authority, or any subdivision thereof, or any other Person (other than Comerica Bank |
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under the Comerica Facility) is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Note or the Borrower Security Agreement or (ii) the legality, validity, binding effect or enforceability of this Note or the Borrower Security Agreement. | |
(e) Margin Regulations. Neither the making of the Loans hereunder nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation U of the Board of Governors of the Federal Reserve System. |
10. Covenants. Borrower, by this reference, hereby incorporates into this Note the affirmative and negative covenants and agreements made by it in the Comerica Facility, as such covenants and agreements exist from time to time and as modified by waivers obtained from Comerica Bank, as if such covenants and agreements were set forth herein in their entirety together with all defined terms and interpretative provisions necessary for a complete understanding thereof (such enumerated covenants, agreements and defined and interpretative terms, the “Comerica Provisions”; the Comerica Provisions as so incorporated, the “Incorporated Provisions”). The Incorporated Provisions shall be deemed to be made for the benefit of Lender and shall be enforceable against Borrower by Lender. To the extent that any of the Comerica Provisions requires Borrower to deliver or file any information or agreement with Comerica Bank, Borrower shall for purposes of the Incorporated Provisions deliver the same to Lender at the same time. To the extent that any Comerica Provision permits Comerica Bank to waive compliance with such provision or requires that a document, opinion or other instrument be acceptable or satisfactory to Comerica, the Incorporated Provision shall be complied with if the corresponding Comerica Provision is specifically waived by the Comerica Bank in writing and such document, opinion or other instrument shall be acceptable or satisfactory only if it is acceptable or satisfactory to the Comerica Bank which acceptance or satisfaction shall be evidenced by the written approval of the Comerica Bank. A termination of any Comerica Provisions shall result in a termination of the corresponding Incorporated Provisions without the prior written consent of Lender. In the event the Comerica Facility is terminated prior to the payment in full of the Junior Debt, the Incorporated Provisions shall correspond to the Comerica Provisions in effect immediately prior to termination of the Comerica Facility and, following such a termination, references in this Paragraph 10 to “Comerica Bank” shall be changed, without further action, to “Lender”.
11. Usury. It is the intention of Borrower and Lender to conform strictly to the usury laws that are applicable to this Note. This Note and any other agreements between Borrower and Lender are hereby expressly limited so that in no contingency or event whatsoever shall the amount paid or agreed to be paid to Lender exceed the maximum amount permissible under applicable usury laws. If under any circumstances fulfillment of any provision of this Note, or any other agreement between Borrower and Lender, shall involve exceeding the limits of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity.
12. Payment of Expenses, Indemnification, etc.
(a) Borrower shall pay all reasonable out-of-pocket costs and expenses of Lender (including, without limitation, the reasonable fees and disbursements of counsel for Lender) in connection with (i) the preparation, execution and delivery of this Note and the other documents
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and instruments referred to herein (including, without limitation, filing and recording fees required to perfect the liens granted under the Security Documents), (ii) any amendment, waiver or consent relating to this Note or the other documents and instruments referred to herein, and (iii) the enforcement of this Note or the other documents and instruments referred to herein.
(b) In the event this Note is not paid when due, whether at maturity or by acceleration or otherwise, or in the event of any other default under this Note or under the Security Documents, then in addition to principal and accrued interest Lender shall be entitled to collect all costs of collection, including but not limited to reasonable attorneys’ fees incurred in connection with Lender’s collection efforts, whether or not suit on this Note is commenced. All such costs and expenses shall be payable on demand.
(c) Borrower shall indemnify each of Lender, its officers, directors, shareholders, employees and representatives and each of their agents from and hold each of them harmless against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements incurred by them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not Lender is a party thereto) related to the entering into and/or performance of this Note or any Security Document or the use of the proceeds of the funds advanced hereunder or the consummation of any transactions contemplated herein or in any Security Document, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such liabilities, obligations, losses, etc., to the extent incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified as finally determined by a court of competent jurisdiction).
13. No Waiver by Lender. No failure or delay on the part of Lender in exercising any right, power or privilege hereunder or under any Security Document and no course of dealing between the Borrower and Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any Security Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any Security Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which Lender would otherwise have. No notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Lender to any other or further action in any circumstances without notice or demand. The acceptance by Lender of any payment hereunder which is less than payment in full of all amounts due and payable at the time of such payment shall not, unless otherwise expressly agreed to by Lender in writing at such time, constitute a waiver of the right to exercise any of Lender’s rights, remedies, recourses or powers at that time, or any subsequent time, or nullify any prior exercise of any such right, remedy, recourse or power, except as and to the extent otherwise required by applicable law.
14. Amendments. Amendments to this Note may only be made by an agreement in writing, signed by Lender and Borrower.
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15. Waiver by Borrower. Borrower agrees that it will be liable for repayment of amounts due and owing under this Note and hereby waives presentment, protest, demand, diligence and notice of dishonor and of nonpayment. To the extent permitted by applicable law, the statute of limitations is hereby waived by Borrower as a defense to any demand on this Note.
16. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
17. Consent to Jurisdiction and Service of Process. ANY AND ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER OR LENDER ARISING OUT OF OR RELATING TO THIS NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA SITTING IN LOS ANGELES OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF CALIFORNIA, AND EACH OF BORROWER AND LENDER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS NOTE. EACH OF BORROWER AND LENDER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PERSON AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS NOTE BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PERSON. EACH OF BORROWER AND LENDER hereby agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to each such person at its address provided in Section 21, such service being hereby acknowledged by each such person to be sufficient for personal jurisdiction in any action against each such person in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of Borrower or Lender to bring proceedings against the other person in the courts of any other jurisdiction.
18. Waiver of Jury Trial. EACH OF BORROWER AND LENDER HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. Each of Borrower and Lender acknowledges that this waiver is a material inducement for him to enter into a business relationship, that each of Borrower and Lender has already relied on this waiver in entering into this Note and that each will continue to rely on this waiver in their related future dealings. Borrower and Lender further represent and warrant that each has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN
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BY A WRITTEN AMENDMENT TO THIS NOTE WHICH MAKES SPECIFIC REFERENCE TO THIS SECTION), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE. In the event of litigation, this Note may be filed as a written consent to a trial by the court.
19. Severability. In case any provision in or obligation under this Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
20. Survival. All indemnities set forth herein including, without limitation, in Section 12, shall survive the execution and delivery of this Note and the making and repayment of the loan hereunder.
21. Notices. All notices and other communications provided for hereunder shall be in writing (including facsimile) and mailed, telecopied or delivered:
(a) If to Lender, to:
The First
American Corporation
0 Xxxxx Xxxxxxxx
Xxx
Xxxxx Xxx, XX 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxxx X. XxXxxxxxx
(b) If to Borrower, to:
U.S. XXXXXX.xxx
Inc.
0000 Xxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxx
or, as to Borrower or Lender, at such other address as shall be designated by such Person in a written notice to the other Person. All such notices and communications shall, when mailed, telecopied or sent by overnight courier, be effective when deposited in the mails, delivered to the overnight courier, as the case may be, or sent by telecopier upon telephonic confirmation by the sending Person.
22. Extension of Due Date. Notwithstanding any other provision of this Note, if the payment of principal or interest to be made on this Note shall become due on a day other than a Business Day, such payment may be made on the next succeeding Business Day.
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23. Entirety. This Note and the Security Documents represents the final agreement between Lender and Borrower and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements by such Persons. There are no unwritten oral agreements between Lender and Borrower.
24. Assignment. This Note shall be binding upon Borrower and Lender and their respective successors and assigns; provided that Borrower shall not assign its rights and obligations hereunder without the express prior written consent of Lender.
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US XXXXXX.XXX INC. | |||
By: |
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Name: | |||
Title: |
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EXHIBIT A
NOTICE OF BORROWING
Date: ___________
To: The First American Corporation
0 Xxxxx Xxxxxxxx Xxx
Xxxxx Xxx, XX 00000
Attention: ____________________
Ladies and Gentlemen:
Reference is made to that certain Subordinated Secured Promissory Note, dated December __, 2002 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Note;” the terms defined therein being used herein as therein defined), made by U.S. XXXXXX.xxx Inc. in your favor as Lender.
The undersigned hereby requests a Loan in the amount of $_____________ [insert an amount that is a multiple of $100,000] (the “Proposed Loan”) to be made available on _________________ [insert a date that is not more than two Business Days after the date of this Notice of Borrowing]. Please wire transfer the proceeds of the Proposed Loan to _____________________________ [insert wire instructions].
The undersigned hereby certifies that as of the date hereof:
(i) No Suspension Event or Event of Default has occurred and is continuing;
(ii) The aggregate principal balance of all outstanding Loans when added to the principal amount of the Proposed Loan does not exceed the Commitment; and
(iii) The representations and warranties made by the undersigned in the Note are true and correct on the date hereof as if such representations and warranties were made as of the date hereof both before and after giving effect to the funding of the Proposed Loan.
US XXXXXX.XXX INC. | |||
By: |
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Name: | |||
Title: |
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EXHIBIT D-2
FORM OF SECURITY AGREEMENT
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SECURITY AGREEMENT
This SECURITY AGREEMENT is entered into as of December [ ], 2002, by and between US XXXXXX.XXX INC., a Delaware corporation (“Grantor”), and The First American Corporation, a California corporation (“Secured Party”).
1. Defined Terms. Capitalized terms used herein but not defined herein shall have the meanings assigned to them in the Note. As used herein, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Agreement” shall mean this Security Agreement as the same may be modified, supplemented or amended from time to time in accordance with its terms. | |
“Collateral” shall have the meaning assigned in Section 2. | |
“Comerica Facility” shall mean the Loan and Security Agreement dated September 12, 2001 between Comerica Bank, as successor to Imperial Bank, and Grantor. | |
“Contracts” shall have the meaning assigned in Section 2(b). | |
“Equipment” shall have the meaning assigned in Section 2(m). | |
“Event of Default” shall mean any Event of Default under, and as defined in, the Note. | |
“Indemnitee” shall have the meaning assigned in Section 11(a). | |
“Inventory” shall have the meaning assigned in Section 2(l). | |
“Investment Property” shall have the meaning assigned in Section 2(i). | |
“Licenses and Permits” shall have the meaning assigned in Section 2(c). | |
“Lien” shall have the meaning assigned in Section 4(b). |
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“Note” shall have the meaning assigned in the first WHEREAS clause. | |
“Permitted Liens” shall mean (a) liens in favor of Secured Party; (b) liens under and pursuant to the Comerica Agreement; (c) liens of carriers, warehousemen, mechanics, materialmen, vendors, and landlords and other similar liens imposed by law incurred in the ordinary course of business for sums not overdue or being contested in good faith; provided that adequate reserves for the payment thereof have been established in accordance with generally accepted accounting principles; (d) deposits under workers’ compensation, unemployment insurance and social security laws or to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or to secure statutory obligations of surety or appeal bonds or to secure indemnity, performance or other similar bonds in the ordinary course of business, (e) banker’s liens and similar liens (including set-off rights) in respect of bank deposits, (f) liens constituting purchase money security interests, and (g) liens incurred in connection with extensions, renewals or refinancings of the indebtedness secured by liens of the type described above. | |
“Permitted Transaction” shall have the meaning assigned in Section 5(a). | |
“Receivables” shall have the meaning assigned in Section 2(a). | |
“Subordination Agreement” shall mean the Subordination Agreement, dated as of the date hereof, between Comerica Bank and Secured Party. | |
“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction. |
2. Grant of Security Interest. Grantor hereby grants to Secured Party a continuing security interest in all of Grantor’s assets and property, whether tangible or intangible, personal or real, whether now or hereafter existing, in which Grantor now has or hereafter acquires an interest, and wherever the same may be located (all of which being hereinafter collectively referred to as the “Collateral”), including, without limitation:
(a) all rights to the payment of money or other forms of consideration, royalties, tax refunds, accounts, notes, accounts receivable, drafts, documents, chattel paper, chooses in action, claims, causes of action, undertakings, surety bonds, insurance policies, acceptances and all other forms of claims, demands, instruments and receivables, together with all guarantees, security agreements, leases and rights and interests securing the same and all right, title and interest of Grantor which gave or shall give rise thereto, including the right of stoppage in transit, repossession and resale (collectively the “Receivables”); | |
(b) all agreements, contracts, credits, letters of credit, security agreements, licenses indentures, purchase and sale orders, warranty rights and contract rights of any nature, whether written or oral, and all consents or other authorizations relating thereto (collectively the “Contracts”); |
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(c) all licenses, permits, franchises, certificates and other governmental authorizations and approvals of any nature whatsoever, to the extent assignable (collectively the “Licenses and Permits”); | |
(d) all deposit accounts, including without limitation, all demand, time, savings, passbook, custodial, safekeeping, escrow or like accounts maintained by Grantor with any bank, savings and loan association, credit union or like organization, and all money, cash, cash equivalents, investment securities, deposits and prepayments of Grantor in any such deposit account (all of the foregoing being deemed to be in any such account as soon as the same is put in transit to such account by mail or other courier); | |
(e) all trademarks, trade names, trade styles, and service marks (and all prints and labels on which any of the foregoing appear), designs, letters patent of the United States or any other country, other general intangibles, and all registrations, recordings, reissues, extensions, renewals, continuations, continuations-in-part and licenses thereof (including applications for registration and recording); all reissues, extensions or renewals thereof; all income payable under any of the foregoing, including damages or payments for past or future infringements of any of the foregoing; the right to xxx for past, present and future infringements of any of the foregoing; and all rights corresponding to any of the foregoing throughout the world; | |
(f) all copyrights, rights and interests therein, copyright registrations, copyright applications; all renewals of any of the foregoing, all income, royalties, damages and payments now or hereafter due or payable under any of the foregoing including, without limitation, damages for past or future infringement of any of the foregoing; the right to xxx for past, present and future infringements of any of the foregoing; and all rights corresponding to any of the foregoing throughout the world; | |
(g) all patents and patent applications and the inventions and improvements described and claimed therein, and patentable inventions; the reissues, divisions, continuations, renewals, extensions and continuations in part of any of the foregoing; all income, royalties, damages or payments now or hereafter due and payable under any of the foregoing or with respect to any of the foregoing including, without limitation, damages or payments for past or future infringements of any of the foregoing; the right to xxx for past, present and future infringements of any of the foregoing; and all rights corresponding to any of the foregoing throughout the world; | |
(h) all other proprietary rights and confidential information, technology, processes, trade secrets, computer programs, source codes, software, customer lists, sales literature and catalogues, price lists, subscriber information, formulae, goodwill and all applications and registrations relating to any of the foregoing; | |
(i) all stocks, bonds, debentures, securities, financial assets, securities entitlements, securities accounts, commodity contracts, commodities accounts, subscription rights, options, warrants, puts, calls, certificates, partnership interests, joint venture interests, investments and/or brokerage accounts and all rights (including without |
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limitation, voting rights), preferences, privileges, dividends, distributions, redemption payments or liquidation payments with respect thereto (“Investment Property”); | |
(j) all files, correspondence, books and records of Grantor, including without limitation, books of account and ledgers of every kind and nature, all electronically recorded data relating to the Collateral, Grantor or the business thereof, all computer programs, tapes, discs and data processing software containing the same, and all receptacles and containers for such records; | |
(k) all other goods, accounts, general intangibles, documents, instruments, rights, interests and properties of every kind and description, tangible or intangible, real or personal; | |
(l) all inventories and merchandise, all packing materials, supplies and containers relating to or used in connection with the foregoing, all goods in which Grantor has an interest in mass transit or an interest or right as a consignee and all goods which are returned to or repossessed by Grantor, whether used or consumed in Grantor’s business, held for sale or lease, furnished under service contracts, or otherwise, and all bills of lading, warehouse receipts, documents of title or general intangibles relating to any of the foregoing (collectively, the “Inventory”); | |
(m) all goods, equipment, machinery, tooling, molds, dies, furniture, fixtures (whether or not attached to real property), furnishings, trade fixtures, motor vehicles and rolling stock, materials and parts and all other tangible personal property (collectively, the “Equipment”); | |
(n) all rights, remedies, powers and/or privileges of Grantor with respect to any of the foregoing; and | |
(o) all proceeds, products, rents, replacements, additions, accessions, substitutions and profits of or from any and all of the foregoing Collateral and, to the extent not otherwise included, all payments under insurance, or any indemnity, warranty or guaranty payable by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral. For purposes of this Agreement, the term “proceeds” includes whatever is receivable or received when Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary, distributions on account of Collateral, and claims arising out of the loss, nonconformity, or interference with the use of, or defects or infringement of rights in, the Collateral. The inclusion of “proceeds” as a component of the Collateral shall not be deemed a consent by Secured Party to any sale, assignment, transfer, exchange, lease, loan, granting of an option with respect to or disposition of all or any part of the Collateral. |
3. Security for Obligations. This Agreement secures, and the Collateral is collateral security for, the prompt payment or performance in full when due, of all obligations and liabilities of every nature, whether for principal or interest (including, without limitation, interest which, but for the filing of a petition in bankruptcy would accrue on such obligations) or payments of fees, expenses or otherwise, and whether or not from time to time decreased or
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extinguished and later increased, of Grantor now or hereafter existing created or incurred under or arising out of or in connection with the Note and all amendments thereto (all such obligations and liabilities, together with the obligations of Grantor now or hereafter existing under this Agreement, being the “Secured Obligations”). Secured Obligations shall also include payment and reimbursement of all reasonable sums and expenses, including, without limitation reasonable attorneys’ fees, court costs and collection, legal and receivers’ expenses, advanced or incurred by Secured Party in connection with the protection of the security interest herein granted, the preservation or disposition of the Collateral, or any part thereof, or the enforcement by Secured Party of any of the foregoing obligations of Grantor to Secured Party.
4. Representations and Warranties. Grantor hereby represents and warrants as follows:
(a) Binding Agreement. This Agreement has been duly authorized, executed and delivered by Grantor and constitutes the legal, valid and binding obligation of Grantor enforceable against Grantor in accordance with its terms. | |
(b) Title to Collateral. Except for the security interests granted to Secured Party hereby and except for the security interests granted to Comerica Bank pursuant to the Comerica Agreement, (i) Grantor has (or, in the case of after-acquired Collateral, at the time Grantor acquires rights in the Collateral, will have), and will at all times during the term hereof have, good and marketable title to all and every part of the Collateral, free and clear of any mortgage, pledge, lien, security interest, encumbrance, conditional sale contract, lease or other title retention agreement, or any other adverse claim of any nature whatsoever (collectively, “Lien”) and (ii) no other person has (or, in the case of after-acquired Collateral, at the time the Grantor acquires rights therein, will have) a security interest, claim, encumbrance or other right, title or interest (by way of security interest or other lien or charge or otherwise) in, against or to the Collateral. Except for financing statements related to the Permitted Liens, no effective financing statement or other instrument similar in effect covering all or any part of the Collateral is or will be on file in any recording office. | |
(c) Priority. Upon the execution and delivery of this Agreement by Grantor and the filing of appropriate financing statements with the appropriate governmental agencies or, as applicable, upon Secured Party’s taking possession of the Collateral, Secured Party will have a perfected security interest in and to the Collateral having first priority for the full amount of all of the Secured Obligations, subject to the Subordination Agreement and the Permitted Liens. | |
(d) No Litigation. There is no legal, administrative or other proceeding pending or, to Grantor’s knowledge, threatened against Grantor’s title to any material portion of the Collateral or against Grantor’s grant of a security interest therein hereunder, nor does Grantor know of any basis for the assertion of any such claim. |
5. Affirmative Covenants. Grantor covenants that, until such time as all of the Secured Obligations are indefeasibly paid or satisfied in full in cash, unless Secured Party shall otherwise consent in writing:
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(a) Conduct of Business and Maintenance of Assets and Licenses. Grantor shall do all things reasonably necessary to preserve in full force and effect its existence, its corporate powers and authority, its qualifications to carry on business in all applicable jurisdictions, and all rights, interests and assets necessary to the conduct of its business; provided, however, that Grantor may execute, deliver and perform the Merger Agreement and the agreements contemplated thereby, and consummate the transactions contemplated thereby (collectively, the “Permitted Transaction”). | |
(b) Protection of Security and Legal Proceedings. Grantor shall, at its own expense, take any and all actions reasonably necessary to preserve, protect and defend the security interests of Secured Party in the Collateral and the perfection and priority thereof against any and all adverse claims, including appearing in and defending all actions and proceedings which purport to affect any of the foregoing. Grantor shall promptly reimburse Secured Party for any and all reasonable sums, including reasonable costs, expenses and attorneys’ fees, which Secured Party may pay or incur in defending, protecting or enforcing its security interests in the Collateral or the perfection or priority thereof. | |
(c) Payment of Taxes. Grantor shall pay or cause to be paid all taxes, license fees, assessments and governmental charges or levies imposed upon, and all material claims (including claims for labor, materials and supplies) against, the Collateral when the same become due and payable, except to the extent the validity thereof is being contested in good faith and as to which adequate reserves have been established in accordance with general accepted accounting principles. | |
(d) Use and Maintenance of Collateral. Grantor shall (i) comply with all laws, statutes and regulations pertaining to its use and ownership of the Collateral and its conduct of its business; (ii) properly care for and maintain all of the Collateral in good condition, free of misuse, abuse, waste and deterioration, reasonable wear and tear of intended use excepted; (iii) keep accurate and complete books and records pertaining to the Collateral in accordance with generally accepted accounting principles and (v) promptly and completely perform all of its obligations under the Contracts and maintain in full force and effect all of the Licenses and Permits. | |
(e) Insurance. Grantor shall, at its own expense, keep the Collateral insured against risks customarily insured against in Grantor’s line of business. | |
(f) Inspection. Grantor shall give Secured Party and its agents and representatives such information as may be requested concerning the Collateral and shall at all reasonable times and upon reasonable notice permit Secured Party and its agents and representatives to enter upon any premises upon which the Collateral is located for the purpose of inspecting the Collateral. | |
(g) Notification. Grantor shall notify Secured Party in writing upon the occurrence and during the continuation of (i) an Event of Default; (ii) any event which with the giving of notice, the lapse of time or both, could become an Event of Default or (iii) any event which adversely affects the value of the Collateral, the ability of Grantor or |
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Secured Party to dispose of the Collateral or the rights and remedies of Secured Party in relation thereto. | |
(h) Further Assurances. Grantor agrees that at any time and from time to time, at Grantor’s expense, Grantor will promptly make, execute, endorse, acknowledge, file and/or deliver all further instruments and documents, and take all further action, that Secured Party may reasonably deem to be necessary or desirable, or that Secured Party may reasonably request, in order to perfect and protect any security interest granted or purported to be granted by Grantor hereby or to enable Secured Party to exercise and enforce its rights and remedies hereunder with respect to any Collateral. |
6. Negative Covenants. Grantor covenants that, until such time as all of the Secured Obligations are indefeasibly paid or satisfied in full in cash, without the prior written consent of Secured Party:
(a) Sale or Hypothecation of Collateral. Except with respect to the Permitted Transaction, Grantor shall not directly or indirectly, whether voluntarily, involuntarily, by operation of law or otherwise, (i) sell, assign, transfer, exchange, lease, lend, grant any option with respect to or dispose of all or any part of the Collateral (other than items sold or leased in the ordinary course of business), or any of Grantor’s rights therein or (ii) create or permit to exist any Lien on or with respect to any of the Collateral, except for Permitted Liens. | |
(b) Location of Collateral; Changes of Name. Except with respect to the Permitted Transaction, Grantor shall provide written notice to Secured Party if it (i) moves all or a substantial portion of the Collateral outside California, (ii) moves its principal place of business or the location of its books or records; or (iii) changes its name, its trade or fictitious business name(s) or its form of doing business. | |
(c) Preservation of Collateral. Grantor shall not cause or allow anything to be done which might impair, or fail to do anything reasonably necessary in order to preserve, the value of the Collateral and the security interests of Secured Party therein. |
7. Secured Party Appointed Attorney-in-Fact. Without limiting any rights or powers granted by this Agreement to Secured Party, Grantor hereby appoints Secured Party Grantor’s attorney-in-fact, with full authority in the place and stead of Grantor and in the name of Grantor, Secured Party or otherwise, from time to time but only upon the occurrence and during the continuation of an Event of Default, to take any action and to execute any instrument which Secured Party may deem reasonably necessary to accomplish the purposes of this Agreement. Grantor acknowledges that the foregoing grant of power of attorney is coupled with an interest and is irrevocable.
8. Secured Party May Perform. If Grantor fails to perform any agreement or covenant contained herein, Secured Party may itself perform or cause the performance of such agreement or covenant, and the expenses of Secured Party incurred in connection therewith shall be payable by Grantor under Section 11. However, nothing in this Agreement shall obligate Secured Party to act.
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9. Defaults and Remedies. Grantor shall be deemed to be in default under this Agreement upon the occurrence of an Event of Default. Upon the occurrence of any such Event of Default, Secured Party may, at its option, and without notice to or demand on Grantor and in addition to all rights and remedies available to Secured Party under this Agreement and the Note, do any one or more of the following:
(a) Foreclosure. Secured Party may foreclose or otherwise enforce Secured Party’s security interest hereunder in any manner permitted by law, or provided for in this Agreement. | |
(b) Assembly, Etc. Secured Party may require Grantor to assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party, or enter onto property where any Collateral is located and take possession thereof with or without judicial process, or prior to the disposition of the Collateral, store, process, repair or recondition it or otherwise prepare it for disposition in any manner. | |
(c) Notification to Third Parties. Secured Party may (i) open Grantor’s mail and collect any and all amounts due to Grantor from other persons; (ii) notify any account debtor obligated on any of the Receivables or any purchaser of Collateral or any other person of Secured Party’s interest in the Collateral and instruct any such persons to make payments thereon directly to Secured Party; and (iii) notify postal authorities that all mail addressed to Grantor is to be delivered to Secured Party. | |
(d) Compromise of Claims. Secured Party may grant extensions, compromise claims and settle Collateral for less than face value, all without prior notice to Grantor. | |
(e) Use of Trade Names, Etc. Secured Party may use (without charge) in connection with any assembly or disposition of the Collateral, any trademark, trade name, trade style, copyright, patent right, technical process or other proprietary right used or utilized by Grantor. | |
(f) Other Rights Against Grantor Hereunder. Secured Party may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party under the UCC, the Federal Bankruptcy Code and other applicable law, and Secured Party may also without notice except as specified below sell the Collateral or any part thereof in one or more parcels at public or private sale, for cash, on credit or for future delivery, and upon such other terms as Secured Party in its sole and absolute discretion may deem commercially reasonable. Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days’ notice to Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. Secured Party shall not be obligated to make any sale of Collateral regardless of a notice of sale having been given. Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Grantor hereby waives any claims against Secured Party arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale |
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was less than the price which might have been obtained at a public sale, even if Secured Party accepts the first offer received and does not offer such Collateral to more than one offeree, and in all events such sale shall be deemed to be commercially reasonable. At any such public or private sale, Secured Party may be the purchaser of the Collateral. | |
(g) Application of Proceeds. Any cash held by Secured Party as Collateral and all cash proceeds received by Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of Secured Party, be held by Secured Party as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to Secured Party pursuant to Section 11) in whole or in part by Secured Party against all or any part of the Secured Obligations in such order as Secured Party shall elect. | |
(h) Other Rights. Secured Party shall not be obligated to resort to its rights or remedies with respect to any other security for or payment of the Secured Obligations before resorting to its rights and remedies against Grantor hereunder. All rights and remedies of Secured Party shall be cumulative and not in the alternative. |
10. Accommodation Covenants. To the fullest extent permitted by law, Grantor waives (a) any right to require Secured Party to proceed against any other person or to proceed against or exhaust any other security held by Secured Party at any time or to pursue any other remedy in Secured Party’s power before exercising any right or remedy under this Agreement; (b) any defense that may arise by reason of: (i) Secured Party’s failure to proceed against any other party against whom Secured Party might assert a claim, before proceeding against Grantor under this Agreement; (ii) the release, suspension, discharge or impairment of any of Secured Party’s rights against or any other party against whom Secured Party might assert a claim, whether such release, suspension, discharge or impairment is explicit, tacit or inadvertent; (iii) Secured Party’s failure to pursue any other remedies available to Secured Party that would reduce the burden of the indebtedness secured hereby on Grantor’s interests in the Collateral; (iv) any lack of authority of Grantor or any other person with respect to the Secured Obligations or any part thereof; (v) the unenforceability or invalidity of any security or other guaranties for the Secured Obligations or the lack of perfection or continuing perfection or failure of priority of any security for the Secured Obligations or any part thereof; (vi) any act or omission of Secured Party or others that directly, indirectly, by operation of law or otherwise results in or aids the discharge or release of any other debtor or any security or guaranties now or hereafter held for the Secured Obligations or any part thereof; (vii) any law which provides that the obligation of an accommodating party must neither be larger in amount nor in other respects more burdensome than that of the principal or which reduces a surety’s or debtor’s obligation in proportion to the principal obligation; (viii) any failure of Secured Party to file or enforce a claim in any bankruptcy or other proceeding with respect to any person; (ix) the election by Secured Party, in any bankruptcy proceeding of any person, of the application or non-application of Section 1111(b)(2) of the United States Bankruptcy Code; (x) any extension of credit or the grant of any lien under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code; (xi) any use of cash Collateral under Section 363 of the United States Bankruptcy Code; (xii) any agreement or stipulation with respect to the provision of adequate protection in any bankruptcy proceeding of any person; (xiii) the avoidance of any Lien in favor of Secured Party for any reason; (xiv) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution
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proceeding commenced by or against any person, including any discharge of, or bar or stay against collecting, all or any of the Secured Obligations in or as a result of any such proceeding; or (xv) any election of remedies by Secured Party, including without limitation an election to proceed by non-judicial rather than judicial foreclosure, which destroys or otherwise impairs the subrogation rights of Grantor or the right of Grantor to proceed against Contour for reimbursement, or both; and (c) demand, protest and notice of any kind.
11. Indemnity and Expenses.
(a) Grantor agrees to indemnify each of Secured Party, its directors, officers, employees and representatives and each of their agents (each, an “Indemnitee”) from and hold each of them harmless against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements (including without limitation, the reasonable fees and expenses of its counsel and of any experts and agents) incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not Secured Party is a party thereto) in any way relating to, growing out of or resulting from this Agreement and the transactions contemplated hereby (including, without limitation, enforcement of this Agreement), except to the extent such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements result solely from the gross negligence or willful misconduct of the Indemnitee to be indemnified as finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the amount of any and all reasonable costs and expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of Secured Party hereunder, (iv) the failure by Grantor to perform or observe any of the provisions hereof or (v) the defense of any claim under Section 547 of the Bankruptcy Code for the avoidance of the security interest granted hereby, for the avoidance of any of the Secured Obligations or for the recovery of any Collateral.
12. Standard of Care. The powers conferred on Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of Collateral in its possession (if any) and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if such Collateral is accorded treatment substantially equal to that which Secured Party accords its own property.
13. Continuing Security Interest; Assignment of Obligations. This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until payment in full of the Secured Obligations; (b) be binding upon Grantor, its successors and
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assigns and (c) inure, together with the rights and remedies of Secured Party hereunder, to the benefit of Secured Party and its successors, transferees and assigns.
14. Revival of Liens. Secured Party’s rights and security interests hereunder shall be reinstated and revived, and the enforceability of this Agreement shall continue, with respect to any amount at any time paid on account of the Secured Obligations which thereafter shall be required to be restored or returned by Secured Party upon the bankruptcy, insolvency or reorganization of Grantor or any other person, all as though such amount had not been paid.
15. Waiver of Hearing. To the extent permitted by law, Grantor expressly waives any constitutional or other right to a judicial hearing prior to the time Secured Party takes possession or disposes of the Collateral upon default as provided in Section 9 hereof.
16. Amendments; etc. No amendment or waiver of any provision of this Agreement, or consent to any departure by Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by Secured Party (or, in the case of an amendment hereto, by Grantor and Secured Party), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.
17. Notices. All notices and other communications provided for hereunder shall be in writing and mailed, sent by facsimile or delivered:
(a) |
If to Secured Party, to: | |
| ||
The First American Corporation | ||
0 Xxxxx Xxxxxxxx Xxx | ||
Xxxxx Xxx, Xxxxxxxxxx 00000 | ||
Telephone: (000) 000-0000 | ||
Facsimile: (000) 000-0000 | ||
Attention: Xxxxxx X. Xxxxxxx | ||
Xxxxxxx X. XxXxxxxxx | ||
| ||
with a copy (which shall not constitute notice) to: | ||
| ||
White & Case LLP | ||
000 Xxxx Xxxxx Xxxxxx | ||
Xxx Xxxxxxx, Xxxxxxxxxx 00000 | ||
Telephone: (000) 000-0000 | ||
Facsimile: (000) 000-0000 | ||
Attention: Xxxx X. Xxxx | ||
| ||
(b) |
If to Grantor, to: | |
| ||
US XXXXXX.xxx Inc. | ||
0000 Xxxxxxxxx Xxxxxx | ||
Xxx Xxxxxxx, Xxxxxxxxxx 00000 | ||
Telephone: (000) 000-0000 |
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| |||
Facsimile: (000) 000-0000 | |||
Attention: Xxxxx X. Xxxxx | |||
Xxxxxxx X. Xxxxxxxxx | |||
| |||
with a copy (which shall not constitute notice) to: | |||
|
| ||
Xxxxxx & Xxxxxxx | |||
000 Xxxx Xxxxx Xxxxxx | |||
Xxx Xxxxxxx, Xxxxxxxxxx 00000 | |||
Telephone: (000) 000-0000 | |||
Facsimile: (000) 000-0000 | |||
Attention: Xxxxx X. Xxxxxxx |
or, as to Grantor or Secured Party, at such other address as shall be designated by such person in a written notice to the other person. All such notices and communications shall, when mailed, sent via facsimile or sent by overnight courier, be effective when deposited in the mails, delivered to the overnight courier, as the case may be, or sent by facsimile upon telephonic confirmation by the sending person.
18. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of Secured Party in the exercise of any power, right or privilege hereunder shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof or of any other power, right or privilege. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available. No notice to or demand on Grantor in any case shall entitle Grantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Secured Party to any other or further action in any circumstances without notice or demand.
19. Rights of Set-Off. Grantor agrees that Secured Party may exercise its rights of set-off with respect to the Secured Obligations in the same manner as if the Secured Obligations were unsecured.
20. Obligations Absolute. The obligations of Grantor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of Grantor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or the Note; or (c) any amendment to or modification of the Note or any security for any of the Secured Obligations; whether or not Grantor shall have notice or knowledge of any of the foregoing.
21. Severability. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
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22. Headings. Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.
23. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
24. Consent to Jurisdiction and Service of Process. ANY AND ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA SITTING IN LOS ANGELES OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PARTY AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PARTY. EACH PARTY hereby agrees that service of process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to EACH PARTY at its address provided in Section 17, such service being hereby acknowledged by EACH PARTY to be sufficient for personal jurisdiction in any action against SUCH PARTY in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any other manner permitted by law.
25. Waiver of Jury Trial. GRANTOR AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. Each of Grantor and Secured Party acknowledges that this waiver is a material inducement for each of Grantor and Secured Party to enter into a business relationship, that each of Grantor and Secured Party has already relied on this waiver in entering into this Agreement and that each will continue to rely on this waiver in their related future dealings. Grantor and Secured Party further represent and warrant that EACH has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A WRITTEN AMENDMENT TO THIS AGREEMENT WHICH MAKES SPECIFIC REFERENCE TO THIS SECTION), AND
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THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
26. Counterparts. This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.
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US XXXXXX.XXX INC., as Grantor | |||
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EXHIBIT E
FORM OF CLOSING CERTIFICATE OF THE COMPANY
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FORM OF
US XXXXXX.XXX INC.
OFFICER’S CERTIFICATE
I, the undersigned Chief Executive Officer of US XXXXXX.xxx Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”), DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to the Agreement and Plan of Merger dated as of December 13, 2002, (the “Agreement”), among the Company, The First American Corporation, First Advantage Corporation, and Stockholm Seven Merger Corp. Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in the Agreement.
2. I am the duly elected, qualified and acting Chief Executive Officer of the Company.
3. The representations and warranties of the Company contained in the Agreement are true and accurate in all material respects, in each case at and as of the date hereof (except to the extent a representation or warranty speaks specifically as of an earlier date).
4. All of the agreements of the Company to be performed prior to the Closing pursuant to the terms of the Agreement have been duly performed in all material respects.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of ___________, 2003.
US XXXXXX.XXX INC. | |||
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EXHIBIT F
FORM OF CLOSING CERTIFICATE OF FACO PARTIES
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FORM OF
[FACO/PARENT/MERGER SUB/FAST COMPANY]
OFFICER’S CERTIFICATE
I, the undersigned [President][Chief Executive Officer] of [______________], a corporation organized and existing under the laws of the State of [______________] (the “Company”), DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to the Agreement and Plan of Merger dated as of December 13, 2002, (the “Agreement”), among The First American Corporation, US XXXXXX.xxx Inc., First Advantage Corporation, and Stockholm Seven Merger Corp. Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in the Agreement.
2. I am the duly elected, qualified and acting [President] [Chief Executive Officer] of the Company.
3. The representations and warranties of the Company contained in the Agreement are true and accurate in all material respects, in each case at and as of the date hereof (except to the extent a representation or warranty speaks specifically as of an earlier date).
4. All of the agreements of the Company to be performed prior to the Closing pursuant to the terms of the Agreement have been duly performed in all material respects.
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EXHIBIT G
FORM OF STANDSTILL AGREEMENT
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STANDSTILL AGREEMENT
This STANDSTILL AGREEMENT (as the same may be amended, modified and waived from time to time, this “Agreement”) is entered into as of [___________], 2003 (the “Effective Date”) by and between THE FIRST AMERICAN CORPORATION, a California corporation (“FACO”), and FIRST ADVANTAGE CORPORATION, a Delaware corporation (the “Company”).
SECTION 1.
DEFINED TERMS; CONSTRUCTION
1.1 Defined Terms. As used in this Agreement the following terms shall have the following meanings:
“Affiliate” means with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with, such Person.
“Agreement” has the meaning provided in the introductory paragraph.
“Closing” has the meaning provided in the second WHEREAS paragraph.
“Company” has the meaning provided in the introductory paragraph.
“Company Common Stock” means the Company’s Class A Common Stock, par value $0.001 per share, and any new class of common stock of the Company created and outstanding (other than the Company’s Class B Common Stock).
“Company Voting Securities” means, collectively, the Class A Common Stock and Class B Common Stock of the Company, any preferred stock of the Company that is entitled to vote generally for the election of directors and any other securities, warrants or options or rights of any nature (whether or not issued by the Company) that are convertible into, exchangeable for, or exercisable for the purchase of, or otherwise give the holder thereof any rights in respect of
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any class or series of Company securities that is entitled to vote generally for the election of directors.
“Control” means, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“Disinterested Director” means, on any date of determination, any member of the Company’s board of directors who is not as of such date (i) an officer or employee of the Company, (ii) an officer, director or employee of FACO or any Affiliate (excluding the Company) thereof, (iii) a Person who Controls or is under common Control with FACO or any Affiliate thereof or (iv) a Person who otherwise would fail to qualify as an “independent director” under the applicable rules of the Nasdaq National Market as then in effect; provided, however, that a Person designated by Pequot in accordance with the Stockholders Agreement dated as of December 13, 2002, among FACO, Pequot and the Company shall not be deemed to be disqualified as a Disinterested Director by application of section (iv) of this definition.
“Effective Date” has the meaning provided in the introductory paragraph.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“FACO” has the meaning provided in the introductory paragraph.
“Initial Securities” has the meaning provided in Section 3(a).
“Merger Agreement” has the meaning provided in the first WHEREAS paragraph.
“Owner” means, with respect any share of Company Common Stock, the Person whose name appears on the register maintained by the Company’s transfer agent in respect of the Company Common Stock as the registered owner of such share of Company Common Stock.
“Party” or “Parties” has the meaning provided in the third WHEREAS paragraph.
“Pequot” means Pequot Private Equity Fund II, L.P., a Delaware limited partnership.
“Person” means and includes natural persons, corporations, limited liability partnerships, general partnerships, limited liability companies, joint stock companies, joint ventures, associations, companies, divisions, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.
“Tender Offer” has the meaning provided in Section 3(d).
“Transfer” means, as a noun, any transfer, sale, assignment, exchange, charge, pledge, gift, hypothecation, conveyance, encumbrance or other disposition whether direct or indirect, voluntary or involuntary, by operation of law or otherwise and, as a verb, directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, to transfer, sell, assign, exchange, charge, pledge, give, hypothecate, convey, encumber or otherwise dispose of.
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1.2 Construction. The following rules shall apply to the construction of this Agreement unless the context requires otherwise: (a) the singular includes the plural, and the plural the singular; (b) words importing any gender include the other gender and the neuter gender; (c) references to statutes are to be construed as including all statutory provisions consolidating, and all regulations promulgated pursuant to, such statutes; (d) references to “writing” include printing, photocopy, typing, lithography and other means of reproducing words in a tangible visible form; (e) the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; (f) references to the introductory paragraph, recitals or sections (or clauses or subdivisions of sections) are to those of this Agreement unless otherwise indicated; (g) references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments, but only to the extent that such amendments and other modifications are permitted or not prohibited by the terms of this Agreement; (h) section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose; and (i) references to Persons include their respective permitted successors and assigns.
SECTION 2.
REPRESENTATIONS AND WARRANTIES
Each of FACO and the Company hereby represents and warrants with respect to itself only that:
(a) it has the corporate power and authority to enter into this Agreement and to perform its obligations hereunder; | |
(b) this Agreement constitutes its valid and legally binding obligation, enforceable in accordance with the terms hereof except as may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance; | |
(c) neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby by it, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency or court to which it is subject or any provision of its certificate or articles of incorporation, bylaws or other organizational documents 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 material agreement, contract, lease, license, instrument or other material arrangement to which it is a party or by which it is bound or to which any of its material assets is subject (or result in the imposition of any lien, security interest or other encumbrance upon any of its assets); | |
(d) it need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Person not already been obtained in order to consummate the transactions contemplated by this Agreement; |
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(e) in the case of FACO, neither FACO nor any of its Affiliates beneficially owns any shares of Company Voting Securities other than the Initial Securities; and | |
(f) in the case of FACO, except for agreements expressly contemplated in, or entered into for the purpose of consummating the transactions contemplated in, the Merger Agreement, neither FACO nor any of its Affiliates has any agreement, arrangement or understanding with any other Person or group who is not an Affiliate of FACO with respect to acquiring, holding, voting or disposing of Company Voting Securities. |
SECTION 3.
STANDSTILL
FACO shall not, and shall not permit any of its Affiliates to, acquire, offer or propose or agree to acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, by tender or exchange offer, market purchase, privately negotiated purchase, merger or otherwise, any Company Voting Securities other than:
(a) Company Voting Securities issued to FACO pursuant to the Merger Agreement (the “Initial Securities”); | |
(b) as a result of the transfer of beneficial ownership of Company Voting Securities from FACO or an Affiliate thereof to FACO or an Affiliate thereof; | |
(c) Company Voting Securities issuable upon the conversion of Initial Securities; | |
(d) Company Voting Securities issued to FACO or an Affiliate thereof as a result of a capital contribution made by FACO or such Affiliate to the Company and approved by a majority of Disinterested Directors; and | |
(e) pursuant to a tender offer made by FACO or an Affiliate thereof for outstanding shares of Company Common Stock (i) to all holders of Company Common Stock (other than FACO and its Affiliates), (ii) conditioned on at least two-thirds of the outstanding shares of Company Common Stock (other than Company Common Stock beneficially owned by FACO and its Affiliates) being tendered and (iii) in which the same consideration is offered to all holders of Company Common Stock (a “Tender Offer”); provided that the Tender Offer is approved by a special committee of the Company’s board of directors created to consider the Tender Offer and consisting only of Disinterested Directors, after receiving a written opinion from a nationally recognized investment bank to the effect that the Tender Offer is fair to the Company’s stockholders (other than FACO and its Affiliates). |
SECTION 4.
RELATED PARTY TRANSACTIONS
Without the prior written approval of a majority of Disinterested Directors, FACO shall not and shall not cause or permit any of its subsidiaries to engage in any transaction (other
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than such transactions as are expressly contemplated by the Merger Agreement, including the Services Agreement between FACO and the Company entered into thereunder) with the Company or any subsidiary of the Company, except transactions engaged in by the Company or such subsidiary in the ordinary course of business.
SECTION 5.
RESTRICTIONS ON
TRANSFER
5.1 Transfers to Affiliates. FACO shall have the right to transfer shares of its Company Voting Securities to Affiliates of FACO provided that each such Affiliate that shall become the beneficial owner of Company Voting Securities shall, promptly upon becoming such owner, execute and deliver to the Company a joinder agreement, agreeing to be legally bound by this Agreement as an original signatory.
5.2 Transfers to Third Parties. FACO shall not, and shall not permit any of its Affiliates to, Transfer Company Voting Securities to any Person or group (within the meaning of Section 13(d) of the Exchange Act) of Persons, unless such Person or group acquiring such shares agrees in writing to assume all obligations of FACO under this Agreement, if (i) such Transfer would result in such Person or group beneficially owning more than 50% of the issued and outstanding Company Voting Securities (which determination shall be made based upon the number of shares of issued and outstanding Company Voting Securities disclosed in the Company’s most recent filing made with the Securities and Exchange Commission pursuant to the Exchange Act or in the most recent Schedule 13D or 13G filed by any Person or group with the Securities and Exchange Commission) and (ii) either (a) the Transfer is being made to a Person or a group in which FACO or any of its Affiliates has an economic interest (other than an economic interest arising solely from the ownership by FACO and its Affiliates of indebtedness of such Person or group that is registered under the Securities Act of 1933, as amended, or purchased by FACO and its Affiliates in reliance on an exemption therefrom) with a fair market value (or, in the event no fair market value exists, a book value), contingent or otherwise, in excess of $20,000,000; provided, however, that FACO and its Affiliates shall not be deemed to have an economic interest in a Person or a group (1) solely as a result of the right of FACO and its Affiliates to receive proceeds from such Person or group from the sale of Company Voting Securities owned by FACO or its Affiliates or (2) merely because such Person or group is a vendor or customer of FACO and/or its Affiliates or (b) to the extent clause (a) is not applicable, the Company Voting Securities being Transferred, together with any Company Voting Securities previously Transferred by FACO or any of its Affiliates to such Person or group, represent 25% or more of the issued and outstanding Company Voting Securities.
SECTION 6.
MISCELLANEOUS
6.1 Effectiveness. This Agreement shall be effective on the Effective Date and shall terminate on the earlier of (a) the fourth anniversary of the Effective Date and (b) the first date on which FACO no longer Controls the Company.
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6.2 Remedies. Each of FACO and the Company acknowledges and agrees that (a) the provisions of this Agreement are reasonable and necessary to protect the proper and legitimate interests of the Parties and the Owners and (b) the Parties and the Owners would be irreparably damaged in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each of the Parties and, subject to the remainder of this Section 6.2, the Owners shall be entitled to preliminary and permanent injunctive relief to prevent breaches of the provisions of this Agreement by the other Party without the necessity of proving actual damages or of posting any bond, and to enforce specifically the terms and provisions hereof and thereof in any court of the United States or any state thereof having jurisdiction, which rights shall be cumulative and in addition to any other remedy to which the Parties and the Owners may be entitled hereunder or at law or equity. No Owner shall have the right to institute any suit, action or proceeding at law or in equity for the protection or enforcement of any right or remedy under this Agreement, unless such Owner shall have first given to the Parties written notice executed by the Owners of not less than fifty percent (50%) of the issued and outstanding Company Voting Stock not owned by FACO and/or its Affiliates (which determination shall be made based upon the number of shares of issued and outstanding Company Common Stock disclosed in the Company’s most recent filing made with the Securities and Exchange Commission pursuant to the Exchange Act or in the most recent Schedule 13D or 13G filed by any Person or group with the Securities and Exchange Commission) of the act, event or circumstance or purported act, event or circumstance that such Owner believes forms the basis of a suit, action or proceeding at law or in equity for the protection or enforcement of any right or remedy under this Agreement, and the Parties shall have failed to take and complete corrective action within ninety (90) days of the receipt by the Parties of such written notice.
6.3 No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties, their respective successors and permitted transferees and assigns and, subject to Section 6.2, the Owners from time to time of the Company Common Stock. Nothing contained in this Agreement shall preclude any Owner from exercising any right it may have under applicable law to bring a derivative action on behalf of the Company.
6.4 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.
6.5 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted transferees and assigns. Except as contemplated in Section 5, no Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Parties; provided that the Company may assign its rights and obligations under this Agreement to any successor or acquiring entity in connection with any business combination transaction, reorganization or sale of substantially all the assets of the Company.
6.6 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.
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6.7 Governing Law. THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, AND ALL MATTERS RELATING HERETO, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (EXCLUSIVE OF CONFLICTS OF LAWS PRINCIPLES) APPLICABLE TO AGREEMENTS EXECUTED AND TO BE PERFORMED SOLELY WITHIN SUCH STATE.
6.8 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the Parties. 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. Notwithstanding anything to the contrary contained herein, FACO shall not amend, or cause the Company to amend, any of the provisions of this Agreement or terminate this Agreement unless (a) the holders of a majority of the shares of Company Common Stock then outstanding (calculated without reference to any Shares held by FACO and its Affiliates) approve a proposal submitted by the Company’s board of directors authorizing such amendment or (b) a majority of Disinterested Directors shall approve a resolution authorizing such amendment or termination.
6.9 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.
6.10 Enforcement of Agreement. The approval of a majority of the Board of Directors of the Company or a majority of the Disinterested Directors shall be all that is required for the Company to seek to enforce the terms of this Agreement.
6.11 Expenses. Each Party will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.
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THE FIRST AMERICAN CORPORATION | |||
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EXHIBIT H
FORM OF SERVICES AGREEMENT
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SERVICES AGREEMENT
This SERVICES AGREEMENT is entered into as of [ _____________ ] 2003 (this “Agreement”), between THE FIRST AMERICAN CORPORATION, a California corporation (“First American”), and FIRST ADVANTAGE CORPORATION, a Delaware corporation (the “Company”; First American and the Company are each referred to herein as a “Party” and collectively, as the “Parties”).
ARTICLE I.
DEFINITIONS AND CONSTRUCTION
1.1. Definitions. Capitalized terms used herein but not defined herein shall have the meanings assigned to them in the Merger Agreement. For purposes of this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural terms defined):
“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided that, for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; provided, further, that, for the purposes of this definition, the Company and its Subsidiaries shall not be deemed to be Affiliates of First American; provided, further, that, for the purposes of this definition, First American and its Affiliates (excluding the Company and its Subsidiaries) shall not be deemed to be Affiliates of the Company. |
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“Business Services” shall mean those services described in Column A of Schedule I. | |
“Business Services Fee” shall mean, with respect to each of the Business Services set forth in Column A of Schedule I, the fees or the method of determining the fees set forth opposite such Business Services in Column B of Schedule I. | |
“Company” shall have the meaning provided in the introductory paragraph. | |
“Company Common Stock” shall have the meaning provided in the Standstill Agreement. | |
“Company Services” shall have the meaning provided in Section 2.3 hereof. | |
“Confidential Company Information” shall mean any information derived by the First American Entities in connection with the provision of First American Services, except such information which (a) was previously known by First American or its Affiliates and not considered confidential, and/or (b) is or becomes generally available to the public other than as a result of disclosure by First American, its Affiliates or their directors, officers, employees, agents or representatives, and/or (c) is or becomes available to First American or its Affiliates on a non-confidential basis from a source other than the Company and its Subsidiaries. | |
“Confidential FAF Information” shall mean any information derived by the Company or its Affiliates from any of the First American Entities in connection with the provision of Company Services, except such information which (a) was previously known by the Company or US Search and not considered confidential, and/or (b) is or becomes generally available to the public other than as a result of disclosure by the Company or its Affiliates or their directors, officers, employees, agents or representatives, and/or (c) is or becomes available to the Company or its Affiliates on a non-confidential basis from a source other than First American or its Affiliates. | |
“Control” means, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. | |
“Disinterested Director” shall mean, on any date of determination, any member of the Company’s board of directors who is not as of such date (a) an officer or employee of the Company, (b) an officer, director or employee of First American or any Affiliate (excluding the Company) thereof, (c) a Person who Controls or is under common Control with First American or any Affiliate thereof, or (d) a Person who otherwise would fail to qualify as an “independent director” under the applicable rules of the Nasdaq National Market as then in effect; provided, however, that a Person designated by Pequot Private Equity Fund II, L.P. in accordance with the Stockholders Agreement dated as of December 13, 2002, among First American, Pequot Private Equity Fund II, L.P. and the Company shall not be deemed to be disqualified as a Disinterested Director by application of section (d) of this definition. |
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“Effective Date” shall mean the date on which the Effective Time occurs. | |
“Effective Time” shall have the meaning provided in the Merger Agreement. | |
“Entity” shall mean any Person that is not a natural Person. | |
“FAST Companies” shall have the meaning provided in the Merger Agreement. | |
“First American” shall have the meaning provided in the introductory paragraph. | |
“First American Entity” and “First American Entities” shall mean one or more, as applicable, of First American and any Affiliate of First American. | |
“First American Services” shall mean collectively the Business Services and the Overhead Services. | |
“Merger Agreement” shall have the meaning provided in the first WHEREAS clause. | |
“Monthly Period” shall mean, for each calendar month, the period commencing on the first day of such calendar month and ending on the last day of such calendar month. | |
“Overhead Services” shall mean those services described in Schedule II. | |
“Overhead Services Fee” shall mean an amount equal to $50,000 per month plus reasonable out-of-pocket expenses incurred in providing the Overhead Services. | |
“Party” and “Parties” shall have the meaning provided in the introductory paragraph. | |
“Person” shall mean and include a partnership, a joint venture, a corporation, a limited liability company, a limited liability partnership, an incorporated organization, a group and a government or other department, agency or political subdivision thereof. | |
“Prime Rate” shall mean, as of any date of determination, with respect to each Monthly Period, the per annum rate of interest specified as the “Prime Rate” in the Wall Street Journal (United States edition) published on the first Business Day of such Monthly Period; provided that for any date on which the Wall Street Journal (United States edition) is not published, “Prime Rate” means the per annum rate of interest specified as the Prime Rate in the Wall Street Journal (United States edition) last published before such date. |
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“Reset Date” shall have the meaning provided in Section 4.1 hereof. | |
“Standstill Agreement” shall mean the Standstill Agreement, dated as of the date hereof, between First American and the Company. | |
“Subsidiary” and “Subsidiaries” shall mean, with respect to any Person, (a) any |
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corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (b) any Entity (other than a corporation) in which such Person and/or one more Subsidiaries of such Person has more than a 50% equity interest at the time or otherwise controls the management and affairs of such Entity (including the power to veto any material act or decision) | |
“Term” shall have the meaning provided in Section 4.1 hereof. | |
“Termination Date” shall have the meaning provided in Section 4.1 hereof. | |
“US Search” shall have the meaning provided in the first WHEREAS clause. | |
“ZapApp Services” shall mean those services described in Schedule III. | |
“ZapApp Services Fee” shall mean the actual cost to ZapApp India Private Limited of providing the ZapApp Services. |
1.2. Principles of Construction.
(a) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including.”
(c) The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, unless already expressly followed by such phrase or the phrase “but not limited to”.
(d) Article and Section headings and captions used herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
(e) All words importing any gender shall be deemed to include the other gender and the neuter.
(f) Unless otherwise specified, references to agreements and other contractual instruments shall be deemed to include all subsequent amendments, modifications and supplements thereto.
(g) Each Party has reviewed and commented upon this Agreement and, therefore, any rule of construction requiring that any ambiguity be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
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2.1. Appointment. During the Term, the Company appoints, and the Company shall cause its Affiliates to appoint, First American as agent to provide the Company and/or its Affiliates with the Business Services and the Overhead Services, and First American hereby accepts such appointment, on the terms and subject to the conditions set forth herein.
2.2. First American Services. During the Term, First American shall, or shall cause one or more of the other First American Entities to, provide the Company and/or its Affiliates with the Business Services and the Overhead Services.
2.3. Company Services.
(a) During the Term, the Company shall, and shall cause its Affiliates to, provide First American and/or its Affiliates with products and services offered by or through the Company or its Affiliates from time to time during the Term (collectively (but excluding the ZapApp Services), the “Company Services”) at rates and on terms no less favorable than those generally offered by the Company and its Affiliates to third parties.
(b) During the Term, the Company shall, and shall cause its Affiliates to, provide First American and/or its Affiliates with the ZapApp Services.
2.4. Personnel.
(a) During the Term, First American or the other First American Entities shall continue to employ all personnel performing the First American Services directly and shall be solely responsible for and pay all of their salary, benefits, workers’ compensation premiums, unemployment insurance premiums, and all other compensation, insurance and benefits, including participation in employee benefit plans, if applicable. First American and the other First American Entities shall be solely responsible for timely payment, withholding and reporting of all applicable Federal, state, foreign and local withholding, employment and payroll taxes with respect to the personnel that perform the First American Services. First American or the other First American Entities shall maintain workers’ compensation and employers’ liability insurance, in accordance with applicable law, covering the personnel that perform the First American Services.
(b) During the Term, the Company or its Affiliates shall continue to employ all personnel performing the Company Services and the ZapApp Services directly and shall be solely responsible for and pay all of their salary, benefits, workers’ compensation premiums, unemployment insurance premiums, and all other compensation, insurance and benefits, including participation in employee benefit plans, if applicable. The Company and its Affiliates shall be solely responsible for timely payment, withholding and reporting of all applicable Federal, state, foreign and local withholding, employment and payroll taxes with respect to the personnel that perform the Company Services and the ZapApp Services. The Company and its Affiliates shall maintain workers’ compensation and employers’ liability insurance, in accordance with applicable law, covering the personnel that perform the Company Services and the ZapApp Services.
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2.5. Loans. During the Term, First American may make one or more loans to the Company (exclusive of loans incurred in compliance with Section 4 of the Standstill Agreement) on terms mutually agreeable to First American and the Company; provided that (a) such loan or loans bear interest at a rate per annum no greater than the Prime Rate in effect from time to time plus 2.75% and (b) the aggregate amount of all such loans at any date of determination shall not exceed $1,000,000. The note and other documentation evidencing such loan or loans shall otherwise be in form and substance satisfactory to First American and the Company.
2.6. Additional First American Services. During the Term, First American may, and may cause the other First American Entities to, offer to provide the Company and/or its Affiliates, and the Company and/or its Affiliates may purchase, products and services offered by or through the First American Entities from time to time during the Term in the ordinary course of business at rates and on terms then offered by the First American Entities to comparable third parties. Nothing in this Agreement shall change or affect the terms and conditions of any agreement or understanding listed on Schedules 4.9, 4.10, 4,20 and 4.27 to the Merger Agreement. The Company and/or its Affiliates on the one hand, and any First American Entity on the other hand, may renew any such agreement or understanding on terms substantially similar to those in such agreements or understanding.
ARTICLE III.
FEE; PAYMENT
3.1. Fees.
(a) The Company shall pay First American (i) the Business Services Fee in consideration for the Business Services and (ii) the Overhead Services Fee in consideration for the Overhead Services.
(b) Subject to Section 2.3, First American shall pay the Company (i) the ZapApp Services Fee in consideration for the ZapApp Services and (ii) such fees as may be negotiated from time to time with respect to Company Services.
3.2. Payment.
(a) First American shall deliver to the Company an invoice containing a description of the Business Services covered by such invoice and provided during the relevant period and the amount of the Business Services Fee for such period. Each invoice shall be due and payable immediately upon receipt, and payment shall be made no later thirty (30) days after receipt of such invoice. The Business Services Fee shall, where appropriate, accrue during any month (or portion thereof) during the Term.
(b) The Company shall deliver to First American an invoice on a quarterly basis containing a description of the ZapApp Services provided during the relevant period and the amount of the ZapApp Services Fee for such period. Each invoice shall be due and payable immediately upon receipt, and payment shall be made no later thirty (30) days after receipt of such invoice.
(c) The Company shall pay First American the Overhead Fee quarterly on
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March 31, June 30, September 30 and December 31 during the Term, commencing on the Effective Date and ending on the last day of the Term. The Overhead Fee shall accrue during any month (or portion thereof) during the Term.
ARTICLE IV.
TERM
4.1. Term. The term of this Agreement (the “Term”) shall commence on the Effective Date and terminate on the date (the “Termination Date”) that is the one (1) year anniversary of the Effective Date, unless renewed in accordance with the following sentence. The Term will continue, and this Agreement shall be automatically extended, for successive 180-day periods commencing on the first day immediately following the one (1) year anniversary of the Effective Date (such day, and the last day of each 180 day period thereafter, a “Reset Date”), unless either Party advises the other in writing, no later than thirty (30) days prior to a Reset Date, that the Term shall not be so extended. If this Agreement shall be so extended, the “Termination Date” shall mean the then applicable extended “Termination Date”, and the “Term” shall mean the period commencing at the Effective Time and ending on the then applicable extended “Termination Date”.
4.2. Termination. In the event of termination of this Agreement, all outstanding unpaid fees owed by the Company and First American hereunder shall become immediately due and payable. The termination of this Agreement as to any Party shall be without prejudice to any rights or liabilities of the other Party hereunder which shall have accrued prior to such termination and shall not affect any provisions of this Agreement that are expressly or by necessary implication intended to survive such termination.
ARTICLE V.
MISCELLANEOUS
5.1. Cooperation. The Parties will cooperate in good faith to carry out the purposes of this Agreement. Without limiting the generality of the foregoing, each Party will assist the other Party and furnish the other Party with such information and documentation as the other Party may reasonably request.
5.2. No Liability.
(a) In providing the First American Services hereunder, neither First American nor any of its Affiliates shall be liable to the Company or its Affiliates for any error or omission except to the extent that such error or omission results from the gross negligence or willful misconduct of First American or such Affiliate to perform the First American Services required by it hereunder. In no event shall First American or any of its Affiliates be liable to the Company or any of its Affiliates or any third party for any special or consequential damages, including, without limitation, lost profits or injury to the goodwill of the Company or any of its Affiliates, in connection with the performance, misfeasance or nonfeasance hereunder of First American or any of its Affiliates.
(b) In providing the ZapApp Services hereunder, neither the Company nor any of its Affiliates shall be liable to First American or its Affiliates for any error or omission
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except to the extent that such error or omission results from the gross negligence or willful misconduct of the Company or such Affiliate to perform the ZapApp Services required by it hereunder. In no event shall the Company or any of its Affiliates be liable to First American or any of its Affiliates or any third party for any special or consequential damages, including, without limitation, lost profits or injury to the goodwill of First American or any of its Affiliates, in connection with the performance, misfeasance or nonfeasance hereunder of the Company or any of its Affiliates.
5.3. Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person, by mail, postage prepaid, or sent by facsimile, to the Parties, at the following addresses and facsimile numbers:
(a) If to First American, to:
The First American Corporation
0 Xxxxx Xxxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Telephone: (000)
000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxx
Xxxxxxx X. XxXxxxxxx
(b) If to the Company, to:
First Advantage Corporation
805 Executive Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Telephone: [
]
Facsimile:
[ ]
Attention: Xxxx
Xxxx
or to such other Person or address as any Party shall specify by notice in writing to the other Party in accordance herewith. Except for a notice of a change of address, which shall be effective only upon receipt, all such notices, requests, demands, waivers and communications properly addressed shall be effective and deemed received by the applicable Party: (i) if sent by U.S. mail, three business days after deposit in the U.S. mail, postage prepaid; (ii) if sent by Federal Express or other overnight delivery service, one business day after delivery to such service; (iii) if sent by personal courier, upon receipt; and (iv) if sent by facsimile, upon receipt.
5.4. Assignment. This Agreement shall be binding upon and inure to the benefit of the successors of each of the Parties, but shall not be assigned by any Party without the prior written consent of the other Party.
5.5. No Third Parties. Nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any natural person or Person other than First American, its Affiliates, the Company, its Affiliates and their respective successors and
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assignees. Nothing in this Agreement is intended to relieve or discharge the obligations or liability of any third parties to First American, its Affiliates, the Company or its Affiliates. No provision of this Agreement shall give any third party any right of action over or against First American, its Affiliates, the Company or its Affiliates.
5.6. Amendments and Waivers. This Agreement may not be amended, and none of its provisions may be modified, except expressly by a written instrument signed by the Parties hereto. No failure or delay of a Party in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right, or any abandonment or discontinuance of steps to enforce such a power or right, preclude any other or further exercise thereof or the exercise of any other power or right. No waiver by a Party of any provision of this Agreement or consent to any departure therefrom shall in any event be effective unless the same shall be in writing and signed by such Party, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Notwithstanding anything to the contrary contained herein, First American shall not amend, or cause the Company to amend, any of the provisions of this Agreement or terminate this Agreement unless (a) the holders of a majority of the shares of Company Common Stock then outstanding (calculated without reference to any Shares held by First American and its Affiliates (as defined in the Merger Agreement)) approve a proposal submitted by the Company’s board of directors authorizing such amendment or (b) a majority of Disinterested Directors shall approve a resolution authorizing such amendment or termination.
5.7. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE CONFLICT OF LAWS RULES THEREOF.
5.8. Confidentiality.
(a) Confidential Company Information. First American will, and will cause its Affiliates to, hold all Confidential Company Information confidential and will not disclose any such Confidential Company Information to any Person except as may be required to perform the First American Services, as authorized in advance by the Company or its Affiliates in writing or otherwise, or as may be required by law, in which case First American shall promptly provide notice to the Company that such Confidential Company Information has been subpoenaed or otherwise demanded, so that the Company may seek a protective order or other appropriate remedy. First American will, and will cause its Affiliates to, use its reasonable best efforts (but without out-of-pocket costs or expense) to obtain or assist the Company in obtaining such protective order or other remedy.
(b) Confidential FAF Information. The Company will, and will cause its Affiliates to, hold all Confidential FAF Information confidential and will not disclose any such Confidential FAF Information to any Person except as may be required to perform Company Services for First American Entities hereunder, as authorized in advance by First American in writing or otherwise, or as may be required by law, in which case the Company shall promptly provide notice to First American that such Confidential FAF Information has been subpoenaed or otherwise demanded, so that First American may seek a protective order or other appropriate
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remedy. The Company will, and will cause its Affiliates to, use its reasonable best efforts (but without out-of-pocket costs or expense) to obtain or assist First American in obtaining such protective order or other remedy.
5.9. Legal Enforceability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without affecting the validity or enforceability of the remaining provisions hereof. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
5.10. Capacity. Each of the Parties hereto acknowledges and agrees that First American and each of its Affiliates is acting solely as an agent of the Company in rendering the First American Services hereunder and nothing herein contained, express or implied, is intended to create any other relationship, whether as principal or otherwise.
5.11. Counterparts. This Agreement may be executed in several counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
5.12. Complete Agreement. This Agreement, the Merger Agreement and the agreements expressly contemplated hereby and thereby set forth the entire understanding of the Parties with respect to the subject matter hereof and thereof and supersede all prior letters of intent, agreements, covenants, arrangements, communications, representations, or warranties, whether oral or written, by any officer, employee, or representative or any Party relating thereto.
5.13. Affiliates. Each of First American and the Company shall cause each of its relevant Affiliates to comply with its obligations under this Agreement.
5.14. Representations. Each Party hereby represents and warrants to the other Party that (a) it has the corporate power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement has been duly authorized by it, and (c) this Agreement is a valid and binding agreement enforceable against such Party according to its terms, except as may be limited by laws affecting creditors’ rights generally or equitable principles generally.
* * *
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IN WITNESS WHEREOF, each of the Parties has caused its corporate name to be hereunto subscribed by its officer thereunto duly authorized, all as of the day and year first above written.
THE FIRST AMERICAN CORPORATION | |||
By: | |||
|
| ||
Name: |
|
| |
Title: |
|
| |
| |||
FIRST ADVANTAGE CORPORATION | |||
By: | |||
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Name: |
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| |
Title: |
|
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Schedule I
BUSINESS SERVICES
Column A - Service |
|
Column B - Price |
|
|
|
1. Human Resources Systems and Payroll Systems |
$150,000 per year | |
2. Network Services |
$100,000 per year | |
3. Oracle Financial Systems |
$50,000 per year | |
4. 401(k) Expenses |
Actual Cost | |
5. Pension Expenses |
Actual Cost | |
6. Insurance Allocation |
Actual Cost | |
7. Medical Insurance Allocation |
Actual Cost | |
8. Company Car Program |
Actual Cost | |
9. Personal Property Leasing |
Comparable to pricing given to similarly situated |
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Schedule II
OVERHEAD SERVICES
1. Legal support
2. Tax support
3. Strategic planning
4. Corporate communications support
5. Investor relations support
6. Accounting/financial management support
7. Human resources support
8. General management support
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Schedule III
ZAPAPP SERVICES
1. Leasing of real and personal property in India
2. Management support for Indian operations
3. Human resources/payroll support in India
4. Services incidental to the provision of the foregoing services
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EXHIBIT I-1
FORM OF TAX CERTIFICATE OF FACO, PARENT AND COMPANY MERGER SUB
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FORM OF TAX OFFICER’S CERTIFICATE OF
FIRST ADVANTAGE CORPORATION AND STOCKHOLM SEVEN MERGER CORP.
________ __, 0000
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger dated as of December [__], 2002 (the “Agreement”), by and among by and among THE FIRST AMERICAN CORPORATION, a California corporation (“FACO”), US XXXXXX.XXX INC., a Delaware corporation (the “Company”), FIRST ADVANTAGE CORPORATION, a Delaware corporation (“Parent), and STOCKHOLM SEVEN MERGER CORP., a Delaware corporation and a wholly-owned subsidiary of Parent (“Company Merger Sub”). The Agreement provides for the merger (the “Company Merger”) of Company Merger Sub with and into the Company on the terms and conditions set forth therein. The time at which the Company Merger becomes effective is hereinafter referred to as the “Effective Time.” Xxxxxx & Xxxxxxx, counsel to the Company, is required, pursuant to Sections 7.3(i) of the Agreement to render its opinion substantially to the effect that the Company Merger will constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code). Capitalized terms not defined herein have the meanings specified in the Agreement.
A. Statements and Representations.
In connection with such opinion to be rendered by you, and acknowledging that you will rely, with the consent of Parent and Company Merger Sub, upon the statements and representations made in this letter in rendering such opinion, Parent and Company Merger Sub hereby certify and represent to you that the statements and representations stated herein as they relate to Parent and Company Merger Sub are true, correct and complete in all respects as of the date hereof and will be true, correct and complete in all respects as of the Effective Time (as if made as of the Effective Time).
1. The aggregate fair market value of Parent Class A Stock and cash in lieu of fractional shares of Parent Class A Stock received by holders of Company Common Stock (“Company Stockholders”) will be approximately equal to the fair market value of Company Common Stock surrendered in the Company Merger. In connection with the Company Merger, no Company Stockholder will receive in exchange for Company Common Stock, directly or indirectly, any consideration from Parent or Company Merger Sub other than Parent Class A Stock and cash in lieu of fractional shares thereof.
2. Neither Parent nor Company Merger Sub has any plan or intention: (i) to liquidate the Company; (ii) to merge the Company into another corporation; (iii) to sell or otherwise dispose of any the Company Common Stock acquired by Parent pursuant to the Agreement, except for transfers and successive transfers of stock described in Treasury
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Regulation Section 1.368-2(k) or transfers or successive transfers to one or more corporations controlled (within the meaning of Section 368(c) of the Code) in each transfer by the transferor corporation at the time of transfer; or (iv) to cause the Company to sell or otherwise dispose of any of its assets or of any of the assets of Company Merger Sub acquired in the Company Merger, except for (w) dispositions made in the ordinary course of business, (x) transfers and successive transfers of stock and assets described in Treasury Regulation Section 1.368-2(k) or transfers and successive transfers to one or more corporations controlled (within the meaning of Section 368(c) of the Code) in each transfer by the transferor corporation at the time of transfer, (y) dispositions after which the Company would continue to hold the amount of assets set forth in paragraph 3 below following the Effective Time (assuming the correctness of the representation set forth in paragraph 3 below), or (z) transfers to partnerships that satisfy the provisions of Treasury Regulation Section 1.368-1(d)(4)(iii)(B).
3. Following the Effective Time, the Company will hold at least 90 percent of the fair market value of its net assets and at least 70 percent of the fair market value of its gross assets held immediately prior to the Effective Time. For purposes of this representation, amounts paid by the Company or Company Merger Sub to Company Stockholders who receive cash or other property, amounts used by the Company or Company Merger Sub to pay Company Merger expenses, amounts paid by the Company to redeem stock, securities, warrants or options of the Company as part of any overall plan of which the Company Merger is part, amounts paid as cash in lieu of fractional shares in a Permitted Reverse Stock Split, and amounts distributed by the Company to Company Stockholders (except for any regular, normal dividends) as part of an overall plan of which the Company Merger is a part, in each case will be treated as constituting assets of the Company immediately prior to the Company Merger.
4. Company Merger Sub is a corporation newly formed for the purpose of participating in the Company Merger and at no time prior to the Effective Time has had assets (other than nominal assets contributed upon the formation of Company Merger Sub, which assets will be held by the Company following the Company Merger) or business operations.
5. Company Merger Sub will have no liabilities assumed by the Company and will not transfer to the Company any assets subject to liabilities in the Company Merger.
6. Prior to the Company Merger, Parent will be in control of Company Merger Sub within the meaning of Section 368(c) of the Code. Following the Company Merger, Parent will be in control of the Company within the meaning of Section 368(c) of the Code.
7. Parent has no plan or intention to cause the Company, after the Effective Time, to issue additional shares of stock that would result in Parent losing control of the Company within the meaning of Section 368(c) of the Code.
8. Following the Company Merger, neither Parent nor any person related to Parent within the meaning of Treasury Regulation Sections 1.368-1(e)(3), (e)(4) and (e)(5) has any plan or intention to purchase, redeem or otherwise reacquire any Parent Class A Stock issued pursuant to the Agreement.
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9. There is no intercorporate indebtedness existing between Parent and the Company or between Company Merger Sub and the Company that was issued, acquired, or will be settled at a discount.
10. In the Company Merger, Company Common Stock representing control of the Company (within the meaning of Section 368(c) of the Code) will be exchanged solely for “voting stock” of Parent (within the meaning of Sections 368(a)(1)(B) and (2)(E)).
11. Except as provided in Section 12.2 of the Agreement, each of Parent and Company Merger Sub has paid and will pay only their respective expenses, if any, incurred in connection with the Company Merger, and neither Parent nor Company Merger Sub has agreed to assume, nor will either directly or indirectly assume, any expense or other liability, whether fixed or contingent, of any holder of the Company Common Stock. The Company Common Stock acquired by either Parent or Company Merger Sub in the Company Merger will not be subject to any liabilities.
12. As of the Effective Time, neither Parent nor any person related to Parent within the meaning of Treasury Regulation Sections 1.368-1(e)(3), (e)(4) and (e)(5) will own beneficially or of record, or will have owned beneficially or of record, during the five years immediately prior to such time, any stock of the Company, or other securities, options, warrants or instruments giving the holder thereof the right to acquire the Company Common Stock or other securities issued by the Company.
13. Following the Company Merger, the Company or Parent (or a member or members of the “qualified group,” as defined in Treasury Regulation Section 1.368-1(d)(4)(ii), that includes Parent as the “issuing corporation,” as defined in Treasury Regulation Section 1.368-1(b)), will continue the “historic business” of the Company (or, alternatively, if the Company has more than one line of business, will continue at least one significant line of the Company’s “historic business”) or use a “significant portion” (at least 33 1/3% by value) of the Company’s “historic business” assets in a business, as such terms are used in Treasury Regulation Section 1.368-1(d).
14. Neither Parent nor Company Merger Sub is an “investment company” as defined in Sections 368(a)(2)(F)(iii) and (iv) of the Code.
15. Except for cash paid in lieu of fractional shares of Parent Class A Stock and except for cash paid in lieu of fractional shares in connection with a Permitted Reverse Stock Split, 100 percent of Company Common Stock outstanding immediately prior to the Effective Time will be exchanged for Parent Class A Stock. The issuance in the Company Merger of cash in lieu of fractional shares of Parent Class A Stock and the issuance of cash in lieu of fractional shares in connection with a Permitted Reverse Stock Split represent mere mechanical rounding offs solely for the purpose of avoiding the expense and inconvenience of issuing fractional shares and do not represent separately bargained-for consideration. The total cash consideration that will be paid to the Company Stockholders pursuant to the Agreement and pursuant to a Permitted Reverse Stock Split instead of issuing fractional shares will not exceed one percent (1%) of the total consideration that will be issued pursuant to the Agreement to the Company Stockholders in
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exchange for their Company Common Stock. With respect to each of the Merger and a Permitted Reverse Stock Split, the fractional share interests of each Shareholder will be aggregated, and no Shareholder, with the possible exception of Company Stockholders whose holdings are in multiple accounts or with multiple brokers, will receive cash in an amount equal to or greater than the value of one full share of Parent Class A Stock (valued at the average closing price of a share of Company Common Stock, as quoted on the Nasdaq National Market (or, if no longer quoted on the Nasdaq National Market, the Nasdaq SmallCap Market or the then principal exchange or market for the Company Common Stock), for the ten Trading Days ending on the Trading Day that is three Trading Days prior to the date of the Company Shareholders Meeting) and one full share of Company Common Stock (valued as of the time of a Permitted Stock Split), respectively.
16. None of the compensation received by any stockholder-employees of the Company will be separate consideration for, or allocable to, any of their Company Common Stock. None of the Parent Class A Stock received by any stockholder-employees, as part of any overall plan of which the Company Merger is a part, will be separate consideration for, or allocable to, any employment agreement. The compensation paid to any stockholder-employees will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s length for similar services.
17. Each of Parent and Company Merger Sub has a bona fide business reason for engaging in the Company Merger.
18. The terms of the Agreement and all other agreements entered into in connection therewith are the product of arm’s length negotiations.
19. The undersigned are authorized to make all of the representations set forth herein.
B. Reliance by You in Rendering Opinion: Limitations on Your Opinion.
The undersigned recognize and agree that your tax opinion will be based (i) on the statements and representations set forth herein, (ii) on the statements contained in the Agreement and documents related thereto (including, but not limited to, the Proxy Statement/Prospectus), and (iii) on the consummation of the Company Merger in accordance with the terms set forth in the Agreement. The undersigned also recognizes and agrees that your tax opinion will be subject to certain limitations and qualifications including that it may not be relied upon if any such statements or representations are not accurate in all respects.
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Each of Parent and Company Merger Sub undertakes to inform you immediately should any of the foregoing statements or representations become untrue, incorrect or incomplete in any respect on or prior to the Effective Time.
Dated: |
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Very truly yours, | |||||
FIRST ADVANTAGE CORPORATION | |||||
By: | |||||
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Its: | |||||
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STOCKHOLM SEVEN MERGER CORP. | |||||
By: | |||||
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Its: | |||||
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EXHIBIT I-2
FORM OF TAX CERTIFICATE OF THE COMPANY
Table of Contents
FORM OF TAX OFFICER’S CERTIFICATE OF US XXXXXX.XXX INC.
________ __, 0000
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger dated as of December [__], 2002 (the “Agreement”), by and among by and among THE FIRST AMERICAN CORPORATION, a California corporation (“FACO”), US XXXXXX.XXX INC., a Delaware corporation (the “Company”), FIRST ADVANTAGE CORPORATION, a Delaware corporation (“Parent), and STOCKHOLM SEVEN MERGER CORP., a Delaware corporation and a wholly-owned subsidiary of Parent (“Company Merger Sub”). The Agreement provides for the merger (the “Company Merger”) of Company Merger Sub with and into the Company on the terms and conditions set forth therein. The time at which the Company Merger becomes effective is hereinafter referred to as the “Effective Time.” Xxxxxx & Xxxxxxx, counsel to the Company, is required, pursuant to Sections 7.3(i) of the Agreement to render its opinion substantially to the effect that the Company Merger will constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code). Capitalized terms not defined herein have the meanings specified in the Agreement.
A. Statements and Representations.
In connection with such opinion to be rendered by you, and acknowledging that you will rely, with the consent of the Company, upon the statements and representations made in this letter in rendering such opinion, the Company hereby certifies and represents to you that the statements and representations stated herein as they relate to the Company are true, correct and complete in all respects as of the date hereof and will be true, correct and complete in all respects as of the Effective Time (as if made as of the Effective Time).
1. The aggregate fair market value of Parent Class A Stock and cash in lieu of fractional shares of Parent Class A Stock received by holders of Company Common Stock (“Company Stockholders”) will be approximately equal to the fair market value of Company Common Stock surrendered in the Company Merger. In connection with the Company Merger, no Company Stockholder will receive in exchange for Company Common Stock, directly or indirectly, any consideration from Parent or Company Merger Sub other than Parent Class A Stock and cash in lieu of fractional shares of Parent Class A Stock.
2. At the Effective Time, the Company will hold at least 90 percent of the fair market value of its net assets and at least 70 percent of the fair market value of its gross assets held immediately prior to the Effective Time. For purposes of this representation, amounts paid by the Company or Company Merger Sub to Company Stockholders who receive cash or other
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property, amounts used by the Company or Company Merger Sub to pay Company Merger expenses, amounts paid by the Company to redeem stock, securities, warrants or options of the Company as part of any overall plan of which the Company Merger is part, amounts paid as cash in lieu of fractional shares in a Permitted Reverse Stock Split, and amounts distributed by the Company to Company Stockholders (except for any regular, normal dividends) as part of an overall plan of which the Company Merger is a part, in each case will be treated as constituting assets of the Company immediately prior to the Company Merger.
3. Each of the Company and the Company Stockholders has paid and will pay only their respective expenses, if any, incurred in connection with the Company Merger. The Company has not agreed to assume, nor will it directly or indirectly assume, any expense or other liability, whether fixed or contingent, of any Company Stockholders.
4. There is no intercorporate indebtedness existing between Parent and the Company or between Company Merger Sub and the Company that was issued, acquired or will be settled at a discount.
5. The Company has no plan or intention to issue additional shares of its stock after the Effective Time that would result in Parent losing control of the Company within the meaning of Section 368(c) of the Code. At the Effective Time, the Company will not have outstanding any warrants, options, convertible securities, or any other type of right pursuant to which any person could acquire stock in the Company that, if exercised or converted, would affect Parent’s acquisition or retention of control of the Company, as defined in Section 368(c) of the Code.
6. Except for payments of cash in lieu of fractional shares in connection with a Permitted Reverse Stock Split and except for Parent’s acquisition of Company Common Stock in the Merger, neither the Company nor any person related to the Company within the meaning of Treasury Regulation Sections 1.368-1(e)(3), (e)(4), and (e)(5), has purchased, redeemed or otherwise acquired, or made any distributions with respect to, any Company Common Stock prior to or in contemplation of the Company Merger, or otherwise as part of a plan of which the Company Merger is a part.
7. The Company is not an “investment company” as defined in Sections 368(a)(2)(F)(iii) and (iv) of the Code.
8. Except for cash paid in lieu of fractional shares of Parent Class A Stock and except for cash paid in lieu of fractional shares in connection with a Permitted Reverse Stock Split, 100 percent of Company Common Stock outstanding immediately prior to the Effective Time will be exchanged for Parent Class A Stock. The issuance in the Company Merger of cash in lieu of fractional shares of Parent Class A Stock and the issuance of cash in lieu of fractional shares in connection with a Permitted Reverse Stock Split represent mere mechanical rounding offs solely for the purpose of avoiding the expense and inconvenience of issuing fractional shares and do not represent separately bargained-for consideration. The total cash consideration that will be paid to the Company Stockholders pursuant to the Agreement and pursuant to a Permitted Reverse Stock Split instead of issuing fractional shares will not exceed one percent (1%) of the total consideration that will be issued pursuant to the Agreement to the Company Stockholders in
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exchange for their Company Common Stock. With respect to each of the Merger and a Permitted Reverse Stock Split, the fractional share interests of each Shareholder will be aggregated, and no Shareholder, with the possible exception of Company Stockholders whose holdings are in multiple accounts or with multiple brokers, will receive cash in an amount equal to or greater than the value of one full share of Parent Class A Stock (valued at the average closing price of a share of Company Common Stock, as quoted on the Nasdaq National Market (or, if no longer quoted on the Nasdaq National Market, the Nasdaq SmallCap Market or the then principal exchange or market for the Company Common Stock), for the ten Trading Days ending on the Trading Day that is three Trading Days prior to the date of the Company Shareholders Meeting) and one full share of Company Common Stock (valued as of the time of a Permitted Stock Split), respectively.
9. None of the compensation received by any stockholder-employees of the Company will be separate consideration for, or allocable to, any of their Company Common Stock. None of the Parent Class A Stock received by any stockholder-employees, as part of any overall plan of which the Company Merger is a part, will be separate consideration for, or allocable to, any employment agreement. The compensation paid to any stockholder-employees will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s length for similar services.
10. In the Company Merger, Company Common Stock representing control of the Company (within the meaning of Section 368(c) of the Code) will be exchanged solely for “voting stock” of Parent (within the meaning of Sections 368(a)(1)(B) and (2)(E)).
11. The business currently carried on by the Company is its “historic business” within the meaning of Treasury Regulation Section 1.368-1(d), and no assets of the Company have been sold, transferred or otherwise disposed of which would prevent the Company from continuing the “historic business” of the Company or from using a “significant portion” of the Company’s “historic business” assets in a business following the Company Merger, as such terms are used in Treasury Regulation Section 1.368-1(d).
12. At the Effective Time, the fair market value of the Company’s assets will exceed the sum of its liabilities, plus the amount of liabilities, if any, to which the assets are subject.
13. The Company is not under the jurisdiction of a court in title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
14. The Company has a bona fide business reason for engaging in the Company Merger.
15. The terms of the Agreement and all other agreements entered into in connection therewith are the product of arm’s length negotiations.
16. The undersigned is authorized to make all of the representations set forth herein.
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B. Reliance by You in Rendering Opinion: Limitations on Your Opinion.
The undersigned recognizes and agrees that your tax opinion will be based (i) on the statements and representations set forth herein, (ii) on the statements contained in the Agreement and documents related thereto (including, but not limited to, the Proxy Statement/Prospectus), and (iii) on the consummation of the Company Merger in accordance with the terms set forth in the Agreement. The undersigned also recognizes and agrees that your tax opinion will be subject to certain limitations and qualifications including that it may not be relied upon if any such statements or representations are not accurate in all respects.
The Company undertakes to inform each of you immediately should any of the foregoing statements or representations become untrue, incorrect or incomplete in any respect on or prior to the Effective Time.
Dated: |
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Very truly yours, | |||||
US XXXXXX.XXX INC. |
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