Exhibit 99.1
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
HUEVOS HOLDINGS, INC.
AND
AHL SERVICES, INC.,
XXXXX X. XXXXXXXXXXX, XX.,
XXXXXXXX X. XXXXXXXXXXX,
XXXXXXXXXXX PARTNERS, L.P.,
XXXXXXX X. XXXXXXXXXXX, XX. CHARITABLE REMAINDER TRUST,
A. XXXXXXX XXXXXXX,
AND
CALEDONIA INVESTMENTS PLC
Dated as of March 28, 2003
TABLE OF CONTENTS
Page
Article 1 TRANSACTIONS AND TERMS OF MERGER ................................... 2
1.1 Merger ............................................................ 2
1.2 Time and Place of Closing ......................................... 2
1.3 Effective Time .................................................... 2
Article 2 TERMS OF MERGER .................................................... 2
2.1 Amended and Restated Articles of Incorporation .................... 2
2.2 Bylaws ............................................................ 3
2.3 Directors and Officers ............................................ 3
Article 3 MANNER OF CONVERTING SHARES ........................................ 3
3.1 Conversion of Shares .............................................. 3
3.2 Cancellation of Stock Options ..................................... 4
3.3 Dissenting Shareholders ........................................... 4
Article 4 EXCHANGE OF SHARES ................................................. 5
4.1 Exchange Procedures ............................................... 5
4.2 Rights of Former Company Shareholders ............................. 6
Article 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY ...................... 6
5.1 Organization, Standing, and Power of the Company .................. 6
5.2 Authority of Company; No Breach By Agreement ...................... 7
5.3 Capital Stock of the Company ...................................... 8
5.4 Company Subsidiaries .............................................. 9
5.5 SEC Filings; Financial Statements ................................. 10
5.6 Proxy Statement ................................................... 11
5.7 Absence of Undisclosed Liabilities ................................ 11
5.8 Absence of Certain Changes or Events .............................. 11
5.9 Tax Matters ....................................................... 12
5.10 Assets ............................................................ 15
5.11 Intellectual Property ............................................. 16
5.12 Environmental Matters ............................................. 17
5.13 Compliance with Laws .............................................. 18
5.14 Labor Relations ................................................... 20
5.15 Employee Benefit Plans ............................................ 21
5.16 Material Contracts ................................................ 24
5.17 Real Property ..................................................... 26
5.18 Legal Proceedings ................................................. 27
5.19 Unclaimed or Abandoned Property; Escheat .......................... 27
5.20 Reports ........................................................... 27
5.21 Regulatory Matters ................................................ 27
5.22 State Takeover Laws ............................................... 28
5.23 Required Vote ..................................................... 28
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5.24 Financial Advisors ............................................... 28
5.25 Board Recommendation ............................................. 28
Article 6 REPRESENTATIONS AND WARRANTIES OF THE RE-INVESTING SHAREHOLDERS .... 29
6.1 Authority of Re-Investing Shareholders ........................... 29
6.2 Ownership of Company Common Stock by Re-Investing Shareholders ... 29
6.3 Investment and Securities Matters ................................ 29
6.4 Statements True and Correct ...................................... 31
Article 7 REPRESENTATIONS AND WARRANTIES OF PURCHASER ........................ 31
7.1 Organization, Standing, and Power ................................ 31
7.2 Authority; No Breach By Agreement ................................ 31
7.3 Compliance with Laws ............................................. 32
7.4 Legal Proceedings ................................................ 33
7.5 Statements True and Correct; Proxy Statement ..................... 33
7.6 Regulatory Matters ............................................... 33
7.7 Financing ........................................................ 33
7.8 Status of Purchaser .............................................. 34
7.9 No Other Representations ......................................... 34
Article 8 CONDUCT OF BUSINESS PENDING CONSUMMATION ........................... 34
8.1 Affirmative Covenants of Company ................................. 34
8.2 Negative Covenants of Company .................................... 34
8.3 Covenants of Purchaser ........................................... 37
8.4 Adverse Changes in Condition ..................................... 37
8.5 Reports .......................................................... 37
Article 9 ADDITIONAL AGREEMENTS .............................................. 38
9.1 Proxy Statement and Schedule 13E-3; Shareholder Approval ......... 38
9.2 Other Offers ..................................................... 40
9.3 Antitrust Notification; Consents of Regulatory Authorities ....... 41
9.4 Filings with State Offices ....................................... 43
9.5 Agreement as to Efforts to Consummate ............................ 43
9.6 Investigation and Confidentiality ................................ 43
9.7 Press Releases ................................................... 44
9.8 State Takeover Laws .............................................. 44
9.9 Employee Benefits ................................................ 44
9.10 Indemnification .................................................. 44
9.11 Votes of the Re-Investing Shareholders ........................... 46
9.12 Purchaser Financing .............................................. 46
9.13 Shareholders' Agreement .......................................... 47
9.14 Release of Claims ................................................ 47
9.15 Company Financial Advisor ........................................ 48
Article 10 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE ................. 48
10.1 Conditions to Obligations of Each Party .......................... 48
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10.2 Conditions to Obligations of Purchaser ........................... 49
10.3 Conditions to Obligations of Company ............................. 50
Article 11 TERMINATION ....................................................... 51
11.1 Termination ...................................................... 51
11.2 Effect of Termination. ........................................... 53
11.3 Non-Survival of Representations and Covenants .................... 53
Article 12 MISCELLANEOUS ..................................................... 53
12.1 Definitions ...................................................... 53
12.2 Expenses ......................................................... 66
12.3 Transfer Taxes ................................................... 67
12.4 Brokers and Finders .............................................. 68
12.5 Entire Agreement ................................................. 68
12.6 Amendments ....................................................... 68
12.7 Waivers .......................................................... 68
12.8 Assignment ....................................................... 69
12.9 Notices .......................................................... 69
12.10 Governing Law .................................................... 71
12.11 Counterparts ..................................................... 71
12.12 Captions; Articles and Sections .................................. 71
12.13 Interpretations .................................................. 72
12.14 Enforcement of Agreement ......................................... 72
12.15 Severability ..................................................... 72
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EXHIBIT INDEX
Description Exhibit
----------- -------
Amended and Restated Articles of Incorporation ...................... A
Amended and Restated Bylaws ......................................... B
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of March 28, 2003, by and among HUEVOS HOLDINGS, INC. ("Purchaser"), a
Georgia corporation, AHL SERVICES, INC. (the "Company"), a Georgia corporation
and Xxxxx X. Xxxxxxxxxxx, Xx., Xxxxxxxx X. Xxxxxxxxxxx, Xxxxxxxxxxx Partners,
L.P., Xxxxxxx X. Xxxxxxxxxxx, Xx. Charitable Remainder Trust, A. Xxxxxxx Xxxxxxx
and Caledonia Investments plc (Messrs. Xxxxxxxxxxx and Perfall, Xx. Xxxxxxxxxxx,
Xxxxxxxxxxx Partners, L.P., Xxxxxxx X. Xxxxxxxxxxx, Xx. Charitable Remainder
Trust, and Caledonia Investments plc are hereinafter collectively referred to as
the "Re-Investing Shareholders").
Preamble
WHEREAS, the respective Boards of Directors of Purchaser and the Company
(in the case of the Company, acting on the recommendation of a special committee
appointed by the Board of Directors of the Company (the "Special Committee"))
have approved the merger of Purchaser with and into the Company, upon the terms
and subject to the conditions set forth in this Agreement, whereby at the
Effective Time of such Merger, each issued and outstanding share of Company
Common Stock, other than the Rollover Shares, shall be converted into the right
to receive a cash payment from the Surviving Corporation.
WHEREAS, the Re-Investing Shareholders are presently the beneficial owners
of 8,968,873 shares of Company Common Stock (the "Rollover Shares").
WHEREAS, at the Effective Time of the Merger, the Rollover Shares shall be
canceled and in exchange therefore, the Re-Investing Shareholders will receive
shares of Surviving Corporation Series B Participating Preferred Stock.
WHEREAS, the Re-Investing Shareholders have agreed to vote the Rollover
Shares beneficially owned by them in favor of the approval and adoption of this
Agreement.
WHEREAS, the transactions described in this Agreement are subject to the
approval (i) of CGW, the sole shareholder of the Purchaser, (ii) by a majority
of all shares of Company Common Stock entitled to vote at the Shareholders'
Meeting (the "Company Shareholder Approval") and (iii) by a majority of all
shares of Company Common Stock not held by the Re-Investing Shareholders and
entitled to vote at the Shareholders' Meeting (the "Disinterested Shareholder
Approval").
Certain capitalized terms used in this Agreement are defined in Section
12.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
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ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time, Purchaser shall be merged with and into the Company in accordance with the
provisions of Section 14-2-1101 of the Georgia Business Corporation Code
("GBCC") and with the effect provided in Section 14-2-1106 of the GBCC (the
"Merger"). The Company shall be the Surviving Corporation resulting from the
Merger and shall continue to be governed by the Laws of the State of Georgia.
The Merger shall be consummated pursuant to the terms of this Agreement, which
has been approved and adopted by the respective Boards of Directors of the
Company and Purchaser and by CGW, as the sole shareholder of Purchaser.
1.2 Time and Place of Closing.
The closing of the transactions contemplated hereby (the "Closing") will
take place at 5:00 P.M., Eastern Standard Time, on the date that the Effective
Time occurs, or at such other time as the Parties, acting through their
authorized officers, may mutually agree. The Closing shall be held at such
location as may be mutually agreed upon by the Parties.
1.3 Effective Time.
The Merger and other transactions contemplated by this Agreement shall
become effective on the date and at the time the Certificate of Merger
("Certificate of Merger") reflecting the Merger shall become effective with the
Secretary of State of the State of Georgia (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the authorized officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on or before the second
business day following the last to occur of (i) the effective date (including
expiration of any applicable waiting period) of the last required Consent of any
Regulatory Authority having authority over and approving or exempting the
Merger, and (ii) the date on which the Company Shareholder Approval and the
Disinterested Shareholder Approval are obtained.
ARTICLE 2
TERMS OF MERGER
2.1 Amended and Restated Articles of Incorporation.
The Company shall adopt and file with the Secretary of State of the State
of Georgia, immediately following the Company Shareholder Approval and the
Disinterested Shareholder Approval and prior to the Closing, the Amended and
Restated Articles of Incorporation, substantially in the form attached hereto as
Exhibit A. The
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Amended and Restated Articles of Incorporation shall be the Amended and Restated
Articles of Incorporation of the Surviving Corporation until duly amended or
repealed.
2.2 Bylaws.
The Board of Directors of the Company shall adopt and file with the
Secretary of the Company the Amended and Restated Bylaws, substantially in the
form attached hereto as Exhibit B, which shall become effective as of the
Effective Time. The Amended and Restated Bylaws shall be the Amended and
Restated Bylaws of the Surviving Corporation until duly amended or repealed.
2.3 Directors and Officers.
The directors of Purchaser in office immediately prior to the Effective
Time, together with such additional persons as may thereafter be elected, shall
serve as the directors of the Surviving Corporation from and after the Effective
Time in accordance with the Amended and Restated Bylaws of the Surviving
Corporation. The officers of the Company in office immediately prior to the
Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Amended and Restated Bylaws of the
Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares.
Subject to the provisions of this Article 3, at the Effective Time, by
virtue of the Merger and without any action on the part of the Purchaser, the
Company or the shareholders of any of the foregoing, the shares of the
constituent corporations shall be converted as follows:
(a) Each share of Purchaser Common Stock issued and outstanding immediately
prior to the Effective Time shall cease to be outstanding and shall be converted
into .0625 shares of Surviving Corporation Common Stock and one (1) share of
Surviving Corporation Series B Participating Preferred Stock.
(b) Each share of Company Common Stock (excluding the Rollover Shares, the
Treasury Shares and the shares held by shareholders who perfect their statutory
dissenters' rights as provided in Section 3.3) issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and shall
be converted into and exchanged for the right to receive from the Surviving
Corporation a cash payment in the amount of $1.50, without interest (less any
required withholding of Taxes, the "Cash Payment"), upon surrender of the
Certificates in the manner provided by Section 4.1.
(c) Each of the Rollover Shares shall automatically be canceled and retired
and shall cease to exist, and in exchange for such cancellation the Re-Investing
Shareholders
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shall receive 1.5 shares of Surviving Corporation Series B Participating
Preferred Stock (the "Stock Payment") for each Rollover Share held by them.
(d) Each share of Company Common Stock that is owned by the Company or any
Subsidiary of the Company (the "Treasury Shares") shall automatically be
canceled and retired and shall cease to exist, and no cash or other treasury
stock consideration shall be delivered or deliverable in exchange therefore.
(e) Each share of Company Preferred Stock issued and outstanding following
the adoption of the Amended and Restated Articles of Incorporation and prior to
the Closing shall remain issued and outstanding.
3.2 Cancellation of Stock Options.
Each outstanding option or other Equity Right to purchase shares of Company
Common Stock ("Company Options") granted by the Company or any of its
Subsidiaries under the 1997 Stock Incentive Plan, or otherwise (other than under
the Employee Stock Purchase Plan), shall become fully vested and exercisable
immediately prior to the Effective Time, whether or not otherwise vested or
exercisable. Holders of such Company Options shall be given the opportunity to
exercise their Company Options effective immediately prior to the Effective
Time. In addition, the Company shall take all action necessary to terminate the
Employee Stock Purchase Plan and each Company Option outstanding thereunder
prior to the Effective Time. Any Company Option issued under the 1997 Stock
Incentive Plan, or otherwise, which is outstanding immediately prior to the
Effective Time and is not exercised pursuant to this Section 3.2 shall be
canceled in accordance with the terms of the Company Stock Plans and applicable
Law, and shall become null and void, and, except for those Company Options
described in Section 5.3(d) of the Company Disclosure Memorandum, no
consideration shall be exchanged in lieu thereof. At the Effective Time, no
Company Options, or rights with respect to Company Options, shall remain
outstanding.
3.3 Dissenting Shareholders.
Any holder of shares of Company Common Stock who perfects such holder's
dissenters' rights in accordance with and as contemplated by Section 14-2-1302
of the GBCC shall be entitled to receive from the Surviving Corporation the
value of such shares in cash as determined pursuant to such provision of Law;
provided, that no such payment shall be made to any dissenting shareholder
unless and until such dissenting shareholder has complied with the applicable
provisions of the GBCC and surrendered to the Company the certificate or
certificates representing the shares for which payment is being made. In the
event that after the Effective Time a dissenting shareholder of the Company
fails to perfect, or effectively withdraws or loses, such holder's right to
appraisal of and payment for such holder's shares, the Surviving Corporation
shall issue and deliver the consideration to which such holder of shares of
Company Common Stock is entitled under this Article 3 (without interest) upon
surrender by such holder of the certificate or certificates representing the
shares of Company Common Stock held by such holder. If and to the extent
required by applicable Law, the Surviving Corporation
4
will establish (or cause to be established) an escrow account with an amount
sufficient to satisfy the maximum aggregate payment that may be required to be
paid to dissenting shareholders. Upon satisfaction of all claims of dissenting
shareholders, the remaining escrow amount, reduced by payment of the fees and
expenses of the escrow agent, will be returned to the Surviving Corporation.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures.
(a) Promptly after the Effective Time, Purchaser and the Company shall
cause the Surviving Corporation's transfer agent or another agent selected by
Purchaser (the "Exchange Agent") to mail to each holder of record of a
certificate or certificates which represented shares of Company Common Stock
immediately prior to the Effective Time (the "Certificates") appropriate
transmittal materials and instructions (which shall specify that delivery shall
be effected, and risk of loss and title to such Certificates shall pass, only
upon proper delivery of such Certificates to the Exchange Agent). The
Certificate or Certificates of Company Common Stock so delivered shall be duly
endorsed as the Exchange Agent may require. In the event of a transfer of
ownership of shares of Company Common Stock represented by Certificates that is
not registered in the transfer records of the Company, the Cash Payment provided
by Section 3.1(b) may be issued to a transferee if the Certificates representing
such shares are delivered to the Exchange Agent, accompanied by all documents
required to evidence such transfer and by evidence satisfactory to the Exchange
Agent that any applicable stock transfer taxes have been paid. If any
Certificate shall have been lost, stolen, mislaid or destroyed, upon receipt of
(i) an affidavit of that fact from the holder claiming such Certificate to be
lost, mislaid, stolen or destroyed, (ii) such bond, security or indemnity as
Purchaser and the Exchange Agent may reasonably require and (iii) any other
documents necessary to evidence and effect the bona fide exchange thereof, the
Exchange Agent shall issue to such holder the consideration into which the
shares represented by such lost, stolen, mislaid or destroyed Certificate shall
have been converted. The Exchange Agent may establish such other reasonable and
customary rules and procedures in connection with its duties as it may deem
appropriate. The Surviving Corporation shall pay all charges and expenses,
including those of the Exchange Agent, in connection with the distribution of
the Cash Payment.
(b) After the Effective Time, each holder of shares of Company Common Stock
(other than shares to be canceled pursuant to Section 3.1(d) or as to which
statutory dissenters' rights have been perfected as provided in Section 3.3)
issued and outstanding at the Effective Time shall surrender the Certificate or
Certificates representing such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange therefore the Cash Payment or the
Stock Payment, as applicable. The Surviving Corporation shall not be obligated
to deliver the Cash Payment or the Stock Payment, as applicable, to which any
former holder of Company Common Stock is
5
entitled as a result of the Merger until such holder surrenders such holder's
Certificate or Certificates for exchange as provided in this Section 4.1.
(c) Each of the Surviving Corporation and the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Common Stock such
amounts, if any, as it is required to deduct and withhold with respect to the
making of such payment under the Internal Revenue Code or any provision of
state, local or foreign Tax Law. To the extent that any amounts are so withheld
by the Surviving Corporation or the Exchange Agent, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made by the Surviving Corporation or
the Exchange Agent, as the case may be.
(d) Any other provision of this Agreement notwithstanding, none of the
Surviving Corporation or the Exchange Agent shall be liable to a holder of
Company Common Stock for any amounts paid or property delivered in good faith to
a public official pursuant to any applicable abandoned property, escheat or
similar Law.
4.2 Rights of Former Company Shareholders.
At the Effective Time, the stock transfer books of the Company shall be
closed as to holders of Company Common Stock immediately prior to the Effective
Time and no transfer of Company Common Stock by any such holder shall thereafter
be made or recognized. Until surrendered for exchange in accordance with the
provisions of Section 4.1, each Certificate theretofore representing shares of
Company Common Stock (other than shares to be canceled pursuant to Section
3.1(d) or as to which statutory dissenters' rights have been perfected as
provided in Section 3.3) shall from and after the Effective Time represent for
all purposes only the right to receive the Cash Payment or the Stock Payment, as
applicable, in exchange therefore.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser as follows:
5.1 Organization, Standing, and Power of the Company.
The Company is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Georgia, and has the corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its Assets. Section 5.1 of the Company Disclosure Memorandum sets forth
those states of the United States and foreign jurisdictions where the Company is
duly qualified or licensed to transact business as a foreign corporation. The
Company is duly qualified or licensed to transact business as a foreign
corporation in good standing in the states of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
6
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect. The minute book for the Company and the Company's restated and
amended articles of incorporation (the "Company Articles of Incorporation") and
bylaws (the "Company Bylaws") have been made available to Purchaser for its
review and are true and complete in all material respects as of the date of this
Agreement and accurately reflect in all material respects all amendments thereto
and all proceedings of the Board of Directors (including any committees of the
Board of Directors) and shareholders thereof.
5.2 Authority of Company; No Breach By Agreement.
(a) The Company has the corporate power and authority necessary to execute,
deliver, and, other than with respect to the Merger and the filing of the
Amended and Restated Articles of Incorporation, perform this Agreement, and with
respect to the Merger and the filing of the Amended and Restated Articles of
Incorporation, upon the approval of this Agreement, the Amended and Restated
Articles of Incorporation and the Merger by the Company's shareholders in
accordance with this Agreement and Georgia Law and subject to filing the
Certificate of Merger and the Amended and Restated Articles of Incorporation
with the Georgia Secretary of State in accordance with the GBCC, to perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of the Company, subject to receipt of the Company
Shareholder Approval and the Disinterested Shareholder Approval as contemplated
by Section 9.1. Subject to such requisite shareholder approval, this Agreement
represents a legal, valid, and binding obligation of the Company, enforceable
against the Company in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
(b) Except as disclosed in Section 5.2(b) of the Company Disclosure
Memorandum, neither the execution and delivery of this Agreement by the Company,
nor the consummation by the Company of the transactions contemplated hereby, nor
compliance by the Company with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of the Company Articles of
Incorporation or the Company Bylaws or the articles of incorporation or bylaws
or other organizational documents of any Company Subsidiary, or (ii) constitute
or result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any Company Entity under, any Contract
or Permit of any Company Entity or, (iii) except as provided in Section 5.2(c)
and subject to receipt of the requisite Consents referred to in Section 10.1(c),
constitute or result in a Default under, or require any Consent pursuant to, any
Law or Order applicable to any Company Entity or any of their respective
material Assets, except in the case of clauses (ii) and (iii), for any Default
or Lien, or the
7
absence of any Consent, that would not reasonably be expected to have
individually or in the aggregate a Company Material Adverse Effect.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and the rules
of The Nasdaq Stock Market, and other than notices to or filings with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation with
respect to any employee benefit plans, or under the HSR Act or similar Antitrust
Laws of the Federal Republic of German (the "German Antitrust Laws"), no notice
to, filing with, or Consent of, any Regulatory Authority is necessary for the
consummation by the Company of the Merger and the other transactions
contemplated in this Agreement, except for any notice, filing or Consent the
absence of making or obtaining would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
5.3 Capital Stock of the Company.
(a) The authorized capital stock of the Company consists of (i) 50,000,000
shares of Company Common Stock, of which 17,427,392 shares are issued and
outstanding as of the date of this Agreement, and (ii) 5,000,000 shares of
preferred stock, no par value per share, none of which are issued and
outstanding. As of the date of this Agreement, 2,180,600 Treasury Shares are
held in the treasury of the Company. All of the issued and outstanding shares of
capital stock of the Company are duly and validly issued and outstanding and are
fully paid and nonassessable. All of the issued Treasury Shares are duly and
validly issued and are fully paid and nonassessable. None of the outstanding
shares of capital stock of the Company has been issued in violation of any
preemptive rights of the current or any past shareholders of the Company. Except
as disclosed in Section 5.3(a) of the Company Disclosure Memorandum, all
outstanding shares of capital stock have been issued by the Company in
compliance with the Securities Laws, except where the failure to comply would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) Except as set forth in Sections 5.3(a) or 5.3(d), there are no shares
of capital stock or other equity securities of the Company outstanding and,
except as specifically contemplated by this Agreement or as disclosed in Section
5.3(b) of the Company Disclosure Memorandum, the Company is not a party to and,
to the Knowledge of the Company no Person has, any Contract or any Equity Right
for the purchase, subscription or issuance of any securities of the Company or
for the registration of the securities pursuant to the Securities Laws.
(c) Except as contemplated by this Agreement, there are no shareholder
agreements, voting trusts or other agreements or understandings to which the
Company or any Company Subsidiary is a party or by which it is bound relating to
the issued or unissued capital stock of the Company (including any such
agreements or understandings that may limit in any way the solicitation of
proxies by or on behalf of the Company from, or the casting of votes by, the
shareholders of the Company with respect to this Agreement and the Merger) and
granting to any person or group of persons the right to
8
elect, or to designate or nominate for election, a director to the Company's
Board of Directors.
(d) Section 5.3(d) of the Company Disclosure Memorandum identifies the
number of shares of Company Common Stock which are reserved and subject to the
Company Stock Plans or which have otherwise been granted by the Company either
within or outside of a Company Stock Plan. Section 5.3(d) of the Company
Disclosure Memorandum also indicates the holder of the option, the
optionholder's country of residence, the name of the Company Stock Plan (if
granted pursuant to a Company Stock Plan), the type of stock option granted, the
date of the grant, the number of shares subject to the option granted, and the
exercise price thereof (each option holder who is a resident of the Federal
Republic of Germany, as identified on the Company Disclosure Memorandum, is
referred to as a "German Optionholder"). As of the date hereof, options to
purchase 2,830,000 shares of Company Common Stock were outstanding, of which
2,500,000 options had been granted under the Company Stock Plans and 330,000
options had been granted by the Company outside of the Company Stock Plans. None
of the outstanding Company Options are exercisable at an exercise price below
$1.50 per share of Company Common Stock. Except with respect to the Company
Options held by German Optionholders as disclosed in Section 5.3(d) of the
Company Disclosure Memorandum, all outstanding Company Options granted by the
Company under the 1997 Stock Incentive Plan or options granted outside the 1997
Stock Incentive Plan may be accelerated and cancelled by the Company's Board of
Directors prior to the Effective Time, in its sole discretion and without the
consent of any optionholders. The Employee Stock Purchase Plan and any purchase
period thereunder may be terminated by the Company's Board of Directors at any
time, in its sole discretion and without the consent of any participants in the
Employee Stock Purchase Plan. The actions to be taken in Sections 3.2 and 9.9(b)
hereof with respect to all outstanding Company Options are permissible under the
terms of such options without any further action on the part of the Company, the
Purchaser or the holders of such options, except as contemplated by this
Agreement.
5.4 Company Subsidiaries.
The Company has disclosed in Section 5.4 of the Company Disclosure
Memorandum each of the Company Subsidiaries that is a corporation (identifying
its jurisdiction of incorporation, each jurisdiction in which it is qualified
and/or licensed to transact business, the number of shares owned, the par value
of such shares, which Company Entity holds such shares and the percentage
ownership interest represented by such share ownership) and each of the Company
Subsidiaries that is a general or limited partnership, limited liability
company, other non-corporate entity or other corporate entity formed pursuant to
the Law of a foreign jurisdiction (identifying the foreign jurisdiction which
such entity is organized, each jurisdiction in which it is qualified and/or
licensed to transact business, the amount and nature of the ownership interest
therein and which Company Entity holds such interests). A Company Entity owns
all of the issued and outstanding shares of capital stock (or other equity
interests) of each Company Subsidiary. Except as disclosed in Section 5.4 of the
Company Disclosure Memorandum, (i) no capital stock (or other equity interest)
of any Company Subsidiary is
9
or may become required to be issued (other than to another Company Entity) by
reason of any Equity Rights, and there are no Contracts by which any Company
Subsidiary is bound to issue (other than to another Company Entity) additional
shares of its capital stock (or other equity interests) or Equity Rights or by
which any Company Entity is or may be bound to transfer any shares of the
capital stock (or other equity interests) of any Company Subsidiary (other than
to another Company Entity); (ii) there are no Contracts to which any Company
Entity, or to the Knowledge of the Company any other Person, is a party relating
to the rights of any Company Entity to vote or to dispose of any shares of the
capital stock (or other equity interests) of any Company Subsidiary; and (iii)
all of the shares of capital stock (or other equity interests) of each Company
Subsidiary held by a Company Entity are fully paid and nonassessable, were
issued or acquired in accordance with all applicable Laws and are owned by the
Company Entity free and clear of any Lien and, with respect to shares of capital
stock of a German Company Entity, there has been no open or disguised repayment
of any capital contribution. Except as disclosed in Section 5.4 of the Company
Disclosure Memorandum, none of the German Company Entities is a party to a
profit and loss pooling agreement or domination agreement. Each Company
Subsidiary is duly organized, validly existing, and (as to corporations) in good
standing under the Laws of the jurisdiction in which it is incorporated or
organized, and has the power and authority necessary for it to own, lease, and
operate its Assets and to carry on its business as now conducted. Each Company
Subsidiary is duly qualified or licensed to transact business as a foreign
entity in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect. The minute book and other organizational documents for each
Company Subsidiary have been made available to Purchaser for its review and are
true and complete in all material respects as in effect as of the date of this
Agreement and accurately reflect in all material respects all amendments thereto
and all proceedings of the Board of Directors, or other governing body, and
shareholders thereof.
5.5 SEC Filings; Financial Statements.
(a) Except as disclosed in Section 5.5 of the Company Disclosure
Memorandum, the Company has timely filed or furnished all SEC Documents required
to be filed or furnished by the Company since December 31, 1999 (the "Company
SEC Reports"). Except as disclosed in Section 5.5 of the Company Disclosure
Memorandum, the Company SEC Reports (i) at the time filed or furnished, complied
in all material respects as to form with the applicable requirements of the
Securities Laws and (ii) did not, at the time they were filed or furnished (or,
if amended or superseded by a filing prior to the date of this Agreement, then
on the date of such filing or, in the case of registration statements, at the
effective date thereof) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such Company SEC Reports or
necessary in order to make the statements in such Company SEC Reports, in light
of the circumstances under which they were made, not misleading. No Company
Subsidiary is required to file any SEC Documents.
10
(b) Except as disclosed in Section 5.5 of the Company Disclosure
Memorandum, each of the Company Financial Statements (including, in each case,
any related notes) contained in the Company SEC Reports, including any Company
SEC Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP (except as may be indicated in the notes to such financial statements or,
in the case of unaudited interim statements, as permitted by Form 10-Q of the
SEC), and fairly presented in all material respects the consolidated financial
position of the Company and its Subsidiaries as at the respective dates and the
consolidated results of operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount or effect.
5.6 Proxy Statement.
None of the information supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement to be sent to the Company's
shareholders in connection with the Shareholders' Meeting, and the Schedule
13E-3, as of the date the Proxy Statement is first mailed to the shareholders of
the Company and at the time of the Shareholders' Meeting, will contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Insofar as they
relate to the Company or its Subsidiaries or the information supplied by the
Company for inclusion therein, the Proxy Statement and the Schedule 13E-3 will,
when filed with the SEC, comply as to form in all material respects with the
applicable provisions of the Exchange Act and the SEC rules and regulations
promulgated thereunder.
5.7 Absence of Undisclosed Liabilities.
Except as disclosed in Section 5.7 of the Company Disclosure Memorandum, no
Company Entity has any Liabilities that are reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect, except
Liabilities which (i) are accrued or reserved against in, or described in the
notes to, the consolidated balance sheets of the Company as of September 30,
2002, contained in the Company SEC Reports filed prior to the date of this
Agreement or reflected in the notes thereto, (ii) incurred in the ordinary
course of business consistent with past business practice, (iii) incurred in
connection with the transactions contemplated by this Agreement, or (iv) are
accrued or reserved against in, or described in the notes to, the draft of the
consolidated balance sheets of the Company as of December 31, 2002 delivered to
Purchaser on the date of this Agreement.
5.8 Absence of Certain Changes or Events.
Since September 30, 2002, except as disclosed in Section 5.8 of the Company
Disclosure Memorandum, there have been no events, changes, or occurrences which
have
11
had, or are reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
5.9 Tax Matters.
(a) Except as disclosed in Section 5.9 of the Company Disclosure
Memorandum, all Company Entities have timely filed with the appropriate
Regulatory Authorities all Tax Returns in all jurisdictions in which Tax Returns
are required to be filed, and such Tax Returns are correct and complete in all
respects except where such failure would not reasonably be expected to have a
Company Material Adverse Effect. Except as disclosed in Section 5.9 of the
Company Disclosure Memorandum, none of the Company Entities is the beneficiary
of any extension of time within which to file any Tax Return. All material Taxes
due and owing by the Company Entities (whether or not shown on any Tax Return)
have been fully and timely paid or are being contested in good faith in
appropriate proceedings as disclosed in Section 5.9 of the Company Disclosure
Memorandum. There are no Liens for any Taxes (other than a Lien for current real
property or ad valorem Taxes not yet due and payable) on any of the Assets of
any of the Company Entities. Except as disclosed in Section 5.9 of the Company
Disclosure Memorandum, no written claim has ever been received by a Company
Entity from an authority in a jurisdiction where such Company Entity does not
file a Tax Return that such Company Entity may be subject to Taxes by that
jurisdiction.
(b) Except as disclosed in Section 5.9 of the Company Disclosure
Memorandum, none of the Company Entities has received any written notice of
assessment or proposed assessment in connection with any Taxes, and there are no
pending, or the Knowledge of the Company, threatened disputes, claims, audits or
examinations regarding any Taxes of any Company Entity or the assets of any
Company Entity exclusive of the standard audits of tax matters required for
German filings. No officer or employee responsible for Tax matters of any
Company Entity expects any Regulatory Authority to assess any material amount of
additional Taxes for any period for which Tax Returns have been filed. Except as
disclosed in Section 5.9 of the Company Disclosure Memorandum, none of the
Company Entities has waived any statute of limitations in respect of any Taxes
or agreed to a Tax assessment or deficiency except to the extent such Tax
assessment or deficiency has been paid.
(c) Each Company Entity has complied in all material respects with all
applicable Laws, rules and regulations relating to the withholding of Taxes and
the payment thereof to appropriate authorities, including Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee
or independent contractor, and Taxes required to be withheld and paid pursuant
to Sections 1441 and 1442 of the Internal Revenue Code or similar provisions
under foreign Law.
(d) The unpaid Taxes of each Company Entity (i) did not, as of the date of
the most recent Company Financial Statements filed with the SEC, exceed the
reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the face of the most recent balance sheet (rather than in any notes thereto)
included in such Company Financial
12
Statements for such Company Entity and (ii) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance with
past custom and practice of the Company Entities in filing their Tax Returns
(disregarding for purposes of this representation any cancellation of
indebtedness income recognized by the Company after the date of this Agreement).
(e) Except as disclosed in Section 5.9 of the Company Disclosure
Memorandum, none of the Company Entities is a party to any Tax allocation or
sharing agreement and none of the Company Entities has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than a
group the common parent of which was Company); none of the Company Entities will
have a liability to any third party on or after the Effective Time under any Tax
allocation or sharing agreement; and none of the Company Entities has any Tax
Liability of any Person under Treasury Regulation Section 1.1502-6 or any
similar provision of state, local or foreign Law (other than the other members
of the consolidated group of which Company is parent), or as a transferee or
successor, by contract or otherwise.
(f) During the five-year period ending on the date hereof, none of the
Company Entities was a distributing corporation or a controlled corporation in a
transaction intended to be governed by Section 355 of the Internal Revenue Code.
(g) Except as disclosed in Section 5.9 of the Company Disclosure
Memorandum, none of the Company Entities has made any payments, is obligated to
make any payments, or is a party to any contract that could obligate it to make
any payments that could be disallowed as a deduction under Section 280G or
162(m) of the Internal Revenue Code, under Section 8a of the German
Korperschaftsteuergesetz or Section 4 paragraph 4a of the German
Einkommensteuergesetz. The Company is not and has not at any time during the
5-year period ending on the date of the Closing been a United States real
property holding corporation within the meaning of Section 897(c) of the
Internal Revenue Code. None of the Company Entities has been or will be required
to include any adjustment in taxable income for any Tax period (or portion
thereof) pursuant to Section 481 of the Internal Revenue Code or any comparable
provision under state or foreign Tax Laws as a result of transactions or events
occurring prior to the Closing. The net operating losses and net built-in losses
of the Company Entities are not subject to any limitation on their use under the
provisions of Sections 382, 384 or 269 of the Internal Revenue Code or any other
provisions of the Internal Revenue Code or the Treasury Regulations dealing with
the utilization of net operating losses or net built-in losses other than any
such limitations as may arise as a result of the consummation of the
transactions contemplated by this Agreement. The losses of the German Company
Entities are not subject to any limitation on their use under the provisions of
Section 8 paragraph 4 of the German Korperschaftsteuergesetz, under Section 12
paragraph 3 of the German Umwandlungsteuergesetz, under Section 15a of the
German Einkommensteuergesetz or any other provisions of German tax law dealing
with the utilization of losses other than any such limitations as may arise as a
result of the consummation of the transactions contemplated by this Agreement.
13
(h) Since January 1, 2000, each of the Company Entities has been in
substantial compliance with, and its records contain (or the Company Entities
have access to) all information and documents (including properly completed IRS
Forms W-9) necessary to comply in all material respects with, all applicable
information reporting and Tax withholding requirements under federal, state,
local or any foreign Tax Laws, and such records identify with reasonable
specificity all accounts subject to backup withholding under Section 3406 of the
Internal Revenue Code.
(i) None of the Company Entities has filed a consent pursuant to the
provisions of Section 341(f) of the Internal Revenue Code (or any corresponding
provision of state, local, or foreign income tax law) or agreed to have Section
341(f)(2) of the Internal Revenue Code (or any corresponding provision of state,
local, or foreign income tax law) apply to any disposition of any asset owned by
it.
(j) The Company Entities comply in all material respects with the
requirements of Section 482 of the Internal Revenue Code and the regulations
thereunder as well as the income allocation rules under Section 8 paragraph of
the German Korperschaftsteuergesetz, Section 1 of the German
Au(beta)ensteuergesetz and Section 4 paragraph 4 of the German
Einkommensteuergesetz as they apply to transfer pricing between controlled
entities, including the contemporaneous documentation requirements regarding
transfer pricing policies.
(k) None of the German Company Entities has or had any positive balance
(positiver Endbetrag) in the meaning of Section 38 paragraph 1 sentence 1 of the
German Korperschaftsteuergesetz.
(l) None of the Company Entities owns any real property (Grundstucke within
the meaning of the Grunderwerbsteuergesetz) situated in the Federal Republic of
Germany.
(m) Section 50c of the German Einkommensteuergesetz was not and is not
applicable on any share in any of the German Company Entities including any of
such entity's predecessors.
(n) Except as disclosed in Section 5.9 of the Company Disclosure
Memorandum, Section 21 of the German Umwandlungsteuergesetz is not applicable on
any share in any of the German Company Entities. None of the shares in any of
the German Company Entities have been acquired directly or indirectly from an
individual at a value below fair market value. Except as disclosed in Section
5.9 of the Company Disclosure Memorandum, none of the shares in any of the
German Company Entities have been written off with tax effect.
(o) Except as disclosed in Section 5.9 of the Company Disclosure
Memorandum, each German Company Entity is and always has been entitled to a full
deduction of input VAT.
14
(p) During the five-year period ending on the date hereof, none of the
German Company Entities was directly or indirectly participating in a
transaction intended to be governed by Section 15 of the German
Umwandlungsteuergesetz.
(q) None of the German Company Entities maintains a reserve (Rucklage)
established under Section 6b of the German Einkommensteuergesetz or under
chapter (Abschnitt) 35 paragraph 4 of the German Einkommensteuerrichtlinien.
(r) During the five-year period ending on the date hereof, none of the
German Company Entities has received investment grants (Investitionszulage) or
investment subsidies (Investitionszuschusse) or has claimed accelerated
depreciation allowances pursuant to Section 2 of the German Fordergebietsgesetz.
5.10 Assets.
(a) Except as disclosed in Section 5.10 of the Company Disclosure
Memorandum, as disclosed or reserved against in the Company Financial Statements
or as disclosed in the Company SEC Reports, the Company Entities have good and
marketable title, free and clear of all Liens, to all of their respective Assets
owned by them, except for any such Liens or other defects of title which are not
reasonably likely to have a Company Material Adverse Effect. All tangible
properties used in the businesses of the Company Entities are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with the Company's past practices.
(b) Except as disclosed in Section 5.10 of the Company Disclosure
Memorandum, the accounts receivable of the Company Entities as set forth on the
most recent balance sheet included in the Company Financial Statements filed
with the SEC prior to the date of this Agreement or arising since the date
thereof are valid and genuine; have arisen solely out of bona fide sales and
deliveries of goods, performance of services and other business transactions in
the ordinary course of business consistent with past practice; are not subject
to valid defenses, set-offs or counterclaims subject to the recorded allowance
for collection losses on such balance sheet or recorded since the date thereof.
The allowance for collection losses on such balance sheet has been determined in
accordance with GAAP and, to the Knowledge of the Company, are sufficient to
provide for any losses which may be sustained on realization of the accounts
receivable shown on such balance sheet.
(c) Except as disclosed in Section 5.10 of the Company Disclosure
Memorandum, the unbilled services and reimbursable customer expenses as set
forth on the most recent balance sheet included in the Company Financial
Statements filed with the SEC prior to the date of this Agreement or arising
since the date thereof are valid and genuine; have arisen solely out of bona
fide sales and deliveries of goods, performance of services and other business
transactions in the ordinary course of business consistent with past practice
and such amounts have been determined in accordance with GAAP.
(d) All Assets which are material to the Company's business on a
consolidated basis, held under leases or subleases by any of the Company
Entities, are held under valid
15
Contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect.
(e) Section 5.10(e) of the Company Disclosure Memorandum lists all
insurance policies maintained by the Company Entities. Such insurance policies
will remain in full force and effect through the Closing Date. Except as set
forth in Section 5.10(e) of the Company Disclosure Memorandum, none of the
Company Entities has received notice from any insurance carrier that (i) any
policy of insurance will be canceled or that coverage thereunder will be reduced
or eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased. There are presently no claims for amounts
exceeding in any individual case $250,000 pending under such policies of
insurance and no notices of claims in excess of such amounts have been given by
any Company Entity under such policies.
(f) The Assets of the Company Entities include all Assets required to
operate the business of the Company Entities as presently conducted.
5.11 Intellectual Property.
(a) Except as disclosed in Section 5.11 of the Company Disclosure
Memorandum, each Company Entity owns or has a license to use all of the
Intellectual Property used by such Company Entity in the ordinary course of its
business, free and clear of all Liens, except where such failure to own or
license such Intellectual Property or such Lien would not reasonably be expected
to have individually or in the aggregate have a Company Material Adverse Effect
(collectively, the "Company Intellectual Property"). Each Company Entity is the
owner of or has a license to any Company Intellectual Property sold, distributed
or licensed by such Company Entity in connection with such Company Entity's
current business operations. Section 5.11 of the Company Disclosure Memorandum
lists all trademark, trade name, patent, service xxxx, brand xxxx, brand name,
industrial design and copyright registered and owned by each Company Entity,
identified by its owner (collectively, the "Identified Intellectual Property,"
and along with all other Intellectual Property owned by each Company Entity
which is used in the ordinary course of its business will be collectively
referred to as the "Owned Intellectual Property"). Section 5.11 of the Company
Disclosure Memorandum lists all the material third party Intellectual Property
used, accessed, licensed, sold or sublicensed by each Company Entity, identified
by such party, in its current or proposed business (collectively, the "Licensed
Intellectual Property"). All Owned Intellectual Property is valid and has been
obtained and maintained in material compliance with all Laws.
(b) No Company Entity has distributed or disclosed any Owned Intellectual
Property without a written agreement which protects and preserves each Company
Entity's ownership rights therein. To the Knowledge of the Company, no party to
a permission, license, agreement or sublicense to use any Owned Intellectual
Property is in
16
Default. No Company Entity or, to the Knowledge of the Company, any third party
licensor is in Default under any agreement, permission, license or sublicense to
use, sell, distribute or access any Licensed Intellectual Property. No Company
Entity has sold, distributed, granted access to or sublicenses to use any
Licensed Intellectual Property without the consent of the applicable third party
owner, when required to do so.
(c) No proceedings have been instituted, or are pending or, to the
Knowledge of Company, are threatened, which challenge the rights of any Company
Entity with respect to the Company Intellectual Property used, accessed, sold or
licensed by such Company Entity, nor has any person claimed or alleged any
rights to such Company Intellectual Property.
(d) To the Knowledge of the Company, no third party Intellectual Property
infringes on any Owned Intellectual Property.
(e) Each Company Entity has complied, in all material respects, with all
privacy regulations as mandated by Law and/or as required by third parties. Each
Company Entity has complied in all material respects with all privacy
regulations set forth within such Company Entity's privacy policy and/or Company
Entity websites. No software or process of any Company Entity has manifested
significant operating problems, other than such problems that have been
adequately corrected or are correctable in the ordinary course of business. Such
software or process operating problems will not, in the aggregate, result in a
material amount of losses or expenses to such Company Entity.
(f) To the Knowledge of the Company, the conduct of the business of the
Company Entities, including without limitation, the use, sale, license and/or
distribution of the Owned Intellectual Property, does not infringe any
Intellectual Property of any other person.
(g) No Company Entity is obligated to pay any recurring royalties to any
Person with respect to any Company Intellectual Property.
(h) Since January 1, 2001, every current or former officer or director of
any Company Entity is a party to a Contract which requires such officer or
director to assign any interest in any Owned Intellectual Property to a Company
Entity and to keep confidential any trade secrets, proprietary data, customer
information, or other business information of a Company Entity. Except as
disclosed in Section 5.11 of the Company Disclosure Memorandum, to the Knowledge
of the Company, no officer, director or employee of any Company Entity is party
to any Contract which restricts or prohibits such officer, director or employee
from engaging in activities competitive with any Person, including any Company
Entity.
5.12 Environmental Matters.
(a) Each Company Entity has been in compliance in all material respects
with all Environmental Laws. No Company Entity has received notice of an alleged
violation of any Environmental Law from any Regulatory Authority and, to the
Knowledge of the
17
Company, no such notice of a violation is being threatened from any Regulatory
Authority.
(b) During the period of any Company Entity's ownership or operation of any
of their respective current properties, to the Knowledge of the Company, there
have been no Releases of Hazardous Material in, on, under, from, adjacent to, or
affecting (or potentially affecting) such properties and no Hazardous Materials
have been used by any Company Entity except as necessary to the conduct of the
business and in compliance with all applicable Laws and all material health and
safety permits required under all applicable Environmental Laws have been
obtained.
5.13 Compliance with Laws.
Each Company Entity has in effect all Permits necessary for it to own,
lease, or operate its material Assets and to carry on its business as now
conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, a Company Material Adverse
Effect, and there has occurred no Default under any such Permit, other than
Defaults which could not reasonably be anticipated to have, individually or in
the aggregate, a Company Material Adverse Effect. Except as disclosed in Section
5.13 of the Company Disclosure Memorandum or as disclosed in the Company SEC
Reports, none of the Company Entities:
(a) is in Default under any of the provisions of its articles of
incorporation or bylaws (or other governing instruments);
(b) is in Default under any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for Defaults which could
not reasonably be anticipated to have, individually or in the aggregate, a
Company Material Adverse Effect;
(c) since January 1, 2000, has received any notification or communication
from any agency or department of federal, state, local or foreign government or
any Regulatory Authority or the staff thereof (i) asserting that any Company
Entity is not, or may not be, in compliance with any Laws or Orders, (ii)
threatening to revoke any Permits, or (iii) requiring any Company Entity to
enter into or consent to the issuance of a cease and desist order, injunction,
formal agreement, directive, commitment, or memorandum of understanding, or to
adopt any board resolution or similar undertaking, which restricts materially
the conduct of its business or in any manner relates to its employment
decisions, its employment or safety policies or practices, or its management;
(d) since January 1, 2000, has effectuated (i) a "plant closing" (as
defined in the Worker Adjustment and Retraining Notification Act (the "WARN
Act")) affecting any site of employment or one or more facilities or operating
units within any site of employment or facility of any Company Entity; or (ii) a
"mass layoff" (as defined in the WARN Act) affecting any site of employment or
facility of any Company Entity; and no Company Entity has engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar Law. Except as set forth in Section 5.13 of the Company Disclosure
Memorandum, none of any Company Entity's employees has
18
suffered an "employment loss" (as defined in the WARN Act) since six months
prior to the Closing Date.
(e) Pursuant to that Acquisition Agreement, dated December 14, 2000, by and
among Securicor PLC, Securicor Georgia, Inc., AHL Services, Inc, Xxxxxxxxxxx
Holdings Limited, Xxxxxxxxxxx, Inc., Xxxxxxxxxxx Security, Inc., The ADI Group
Limited, and AHL Europe Limited, Securicor plc and Xxxxxxxxxxx Security, Inc.
have agreed to indemnify and hold the Company harmless from any breach by
Xxxxxxxxxxx Security of that certain Guilty Plea Agreement dated April 14, 2000
by and between Xxxxxxxxxxx Holdings Limited and the United States Attorney for
the Eastern District of Pennsylvania (the "Plea"). No Litigation related to the
facts and circumstances giving rise to the Plea is pending against a Company
Entity or, to the Knowledge of the Company, threatened against a Company Entity.
No Permit necessary for operating the business, as currently conducted, of the
Company was or, to the Knowledge of the Company, will be revoked because of the
Plea or the actions of Xxxxxxxxxxx Security, Inc. giving rise to the Plea.
(f) All persons classified as independent contractors of each Company
Entity meet the standards under all applicable Laws (including Treasury
Regulations under the Internal Revenue Code and federal, state and foreign labor
and employment Laws) as independent contractors and no such Person is an
employee of any Company Entity under any applicable Law.
(g) Copies of all reports, and notices relating to any inspection, audit,
monitoring or other form of review or enforcement action commenced since January
1, 2000 by a Regulatory Authority have been made available to Purchaser, except
for any reports or notices relating to any inspections, audits, monitorings,
reviews or enforcement actions, which, if adversely determined against any
Company Entity would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.
(h) All Permits required under the Laws of the Federal Republic of Germany
for the conduct of the business of the German Company Entities, including but
not limited to the temporary staffing business, have been obtained, are
unconditional and are not subject to any limitations on applicability. No such
Permit is, or to the Knowledge of the Company Entities has been threatened to
be, the subject of a proceeding for revocation or invalidation, and the Company
Entities know of no reason why such Permits should not be re-issued upon their
expiration. Reviews of the business of the German Company Entities by Regulatory
Authorities in the Federal Republic of Germany have not resulted in any action
by such Regulatory Authority, the effect of which could reasonably be expected
to result in a Company Material Adverse Effect. All filings required by any
Regulatory Authority in the Federal Republic of Germany, including but not
limited to filings with the labor offices, the social security institutions and
social insurance institutions for occupational accidents but excluding those
filings and disclosures required by Section 325 of the German Commercial Code,
have been timely submitted, and when filed did not contain any untrue statement
of material fact or omit to state a material fact necessary to make the
statements therein not misleading. None of the German Company Entities have
provided temporary staffing personnel to any entity
19
engaged in the business of construction (to be defined within the activities
prohibited under the temporary staffing regulations) in the Federal Republic of
Germany.
5.14 Labor Relations.
(a) No Company Entity is the subject of any Litigation asserting that it or
any other Company Entity has committed a violation of Law or breached a
collective bargaining agreement with respect to current or former applicants for
employment, employees, independent contractors, or employment practices and
policies or with respect to any labor organization or seeking to compel it or
any other Company Entity to bargain with any labor organization or other
employee representative as to wages or conditions of employment, nor is any
Company Entity subject to any bargaining order, injunction or other Order
relating to such entity's relationship or dealings with its employees, any labor
organization or any other employee representative. Except as set forth in
Section 5.14(a) of the Company Disclosure Memorandum, no employee of a Company
Entity is represented by a labor organization and no Company Entity is party to
any collective bargaining agreement, shop agreement or similar agreement with
any labor organization, or subject to any generally binding customs,
betriebliche Ubungen, in the Federal Republic of Germany. There is no strike,
slowdown, lockout or other job action or labor dispute involving any Company
Entity pending or, to the Knowledge of the Company, threatened and there have
been no such actions or disputes in the past five years. To the Knowledge of the
Company and except as set forth in Section 5.14(a) of the Company Disclosure
Memorandum, in the past five years, there has not been any attempt by any
Company Entity employees or any labor organization or other employee
representative to organize or certify a collective bargaining unit or to engage
in any other union organization activity with respect to the workforce of any
Company Entity.
(b) Except as set forth in Section 5.14(b) of the Company Disclosure
Memorandum, the employment of each employee, other than those employees who are
employed in Canada, Mexico or the Federal Republic of Germany, and the
engagement of each independent contractor of each Company Entity is terminable
at will by the relevant Company Entity without any penalty, liability or
severance obligation incurred by any Company Entity. With regards to employees
resident in Canada, Mexico or Germany or otherwise subject to Canadian, Mexican
or German labor laws, there are no restrictions to their termination other than
those provided for by applicable Laws or collective bargaining agreements.
(c) Except as disclosed in Section 5.14(c) of the Company Disclosure
Memorandum, all employees who at any time were employed by a Canadian Company
Entity or a German Company Entity and were terminated, were terminated in
accordance with all applicable Laws.
(d) The Company Entities have received necessary written documentation from
each employee employed in the United States identifying such employee as either
a United States citizen or as being legally entitled to work in the United
States under the Immigration Reform and Control Act of 1986, as amended, other
United States
20
immigration Laws and the Laws related to the employment of non-United States
citizens applicable in the state in which the employees are employed.
(e) The Company has made all payments owed and fulfilled all obligations
pursuant to the certain settlement agreement entered into in the United States
District Court for the District of Massachusetts in the matter of Xxxxxx Xxxx x.
XXX Services, Inc., Xxxxxxxxxxx, Inc., and Gage Merchandising Services, Inc.
regarding unpaid overtime wages allegedly owed by the Company.
5.15 Employee Benefit Plans
(a) Section 5.15 of the Company Disclosure Memorandum sets forth a list of
(i) each Employee Benefit Plan and all amendments thereto currently adopted,
maintained by, sponsored in whole or in part by, or contributed to by any
Company Entity or ERISA Affiliate thereof for the benefit of employees, former
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries or under which employees, retirees, former employees,
dependents, spouses, directors, independent contractors, or other beneficiaries
are eligible to participate, whether any of the foregoing individuals is or was
employed by such Company Entity or ERISA Affiliate in the United States, Canada
or the Federal Republic of Germany (collectively, the "Company Benefit Plans")
and (ii) each Employee Benefit Plan that is not identified in (i) above (e.g.,
former Employee Benefit Plans) but for which the Company Entity or ERISA
Affiliate has any Liability. Copies of all such Company Benefit Plans and
Employee Benefit Plans have been delivered or made available to Purchaser. Any
of the Company Benefit Plans which is an "employee pension benefit plan," as
that term is defined in ERISA Section 3(2), and which is maintained solely or
primarily for current or former employees who are or were employed in the United
States, is referred to herein as a "Company ERISA Plan." Each Company ERISA Plan
which is also a "defined benefit plan" (as defined in Internal Revenue Code
Section 414(j)) is referred to herein as a "Company Pension Plan. Each Company
Benefit Plan maintained by a Company Entity solely or primarily for current or
former employees who are or were employed in the United States is referred to
herein as a "US Company Benefit Plan." Each Company Benefit Plan maintained by a
Company Entity solely or primarily for current or former employees who are or
were employed in Canada is referred to herein as a "Canadian Benefit Plan."
(b) The Company has delivered to Purchaser prior to the execution of this
Agreement (i) all trust agreements or other funding arrangements for all Company
Benefit Plans, (ii) all determination letters, rulings, opinion letters,
information letters, advisory opinions, written approvals or written notices
issued by the United States Internal Revenue Service ("IRS"), the United States
Department of Labor ("DOL") or the Pension Benefit Guaranty Corporation or any
Regulatory Authority of Canada or the Federal Republic of Germany with respect
to a Company Benefit Plan during this calendar year or any of the preceding
three calendar years, (iii) any filing or documentation (whether or not filed
with the IRS) where corrective action was taken in connection with the IRS EPCRS
program set forth in Revenue Procedure 2002-47 (or its predecessor or successor
rulings), (iv) annual reports or returns, audited or unaudited financial
statements, actuarial reports and valuations prepared for any Company Benefit
21
Plan for the current plan year and the three preceding plan years, and (v) the
most recent summary plan descriptions and any material modifications thereto for
any Company Benefit Plan.
(c) Except as disclosed in Section 5.15 of the Company Disclosure
Memorandum, each Company Benefit Plan is in compliance with the terms of such
Company Benefit Plan and in compliance with all applicable Laws, including,
where the Company Benefit Plan is a US Company Benefit Plan, all applicable
requirements of the Internal Revenue Code and ERISA, the breach or violation of
any of which would have, individually or in the aggregate, a Company Material
Adverse Effect. Each Company ERISA Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the IRS that is still in effect and applies to the
Company ERISA Plan, or the Company is within the time permitted under Internal
Revenue Code Section 401(b) to apply for a favorable determination letter which
when issued will apply retroactively to the Company ERISA Plan as amended and as
administered. To the Knowledge of the Company, there are no circumstances likely
to result in revocation of any such favorable determination letter. The Company
has not received any communication (written or unwritten) from any government
agency questioning or challenging the compliance of any Company Benefit Plan
with applicable Laws as of the Effective Time. No Company Benefit Plan is
currently being audited by a governmental agency for compliance with applicable
Laws or has been audited within the past five years with a determination by the
governmental agency that the Employee Benefit Plan failed to comply with
applicable Laws.
(d) There has been no oral or written representation or communication with
respect to any aspect of the Company Benefit Plans made to employees of the
Company which is not in accordance with the written or otherwise preexisting
terms and provisions of such plans which individually or in the aggregate would
have a Company Material Adverse Effect. Neither the Company nor, to the
Knowledge of the Company, any administrator or fiduciary of any Company Benefit
Plan (or any agent of any of the foregoing) has engaged in any transaction, or
acted or failed to act in any manner, which would subject the Company or
Purchaser to any Liability (by indemnity or otherwise) for breach of any
fiduciary, co-fiduciary or, in the case of a US Company Benefit Plan, any other
duty under part 4 of Title I of ERISA. There are no material unresolved claims
or disputes under the terms of, or in connection with, the Company Benefit Plans
other than claims for benefits which are payable in the ordinary course of
business and no action, proceeding, prosecution, hearing or investigation has
been commenced with respect to any Company Benefit Plan.
(e) Except as disclosed in Section 5.15(e) of the Company Disclosure
Memorandum, all Company Benefit Plan annual reports or returns, audited or
unaudited financial statements, actuarial valuations, summary annual reports,
and summary plan descriptions issued with respect to the Company Benefit Plans
are correct and complete, have been timely filed, where applicable, with the
IRS, the DOL, the Canada Customs and Revenue Agency or distributed to
participants of the Company Benefit Plans (to the extent required by Law). The
Company has filed the registration statement required to be filed by the DOL
within 120 days of the Company's adoption of the Company's AHL
22
Services Non-Qualified Plan and the ADISTRA Corporation Non-Qualified Plan (the
"Non-Qualified Deferred Compensation Plans") or, prior to the Closing, the
Company will have completed the DOL's Delinquent Filer Voluntary Compliance
Program with respect to the Non-Qualified Deferred Compensation Plans.
(f) To the Knowledge of Company, no "party in interest" (as defined in
ERISA Section 3(14)) or "disqualified person" (as defined in Internal Revenue
Code Section 4975(e)(2)) of any US Company Benefit Plan has engaged in any
nonexempt "prohibited transaction" (described in Internal Revenue Code Section
4975(c) or ERISA Section 406).
(g) Neither the Company nor any of its ERISA Affiliates has any Liability
under Title IV of ERISA.
(h) Except as disclosed in Section 5.15 of the Company Disclosure
Memorandum, no Company Entity has any Liability for retiree health and life
benefits under any of the Company Benefit Plans and there are no restrictions on
the rights of such Company Entity to amend or terminate any such retiree health
or benefit Plan without incurring any Liability thereunder except to the extent,
if applicable, required under Part 6 of Title I of ERISA or Internal Revenue
Code Section 4980B. No Taxes, penalties or fees which would have, individually
or in the aggregate, a Company Material Adverse Effect are owing in respect of
any Company Benefit Plans, including, without limitation, under Internal Revenue
Code Sections 4980B or 5000 with respect to any US Company Benefit Plan, and, to
the Knowledge of the Company, no circumstance exists which could give rise to
such Taxes.
(i) Section 5.15 of the Company Disclosure Memorandum sets forth the
payments (including, without limitation, severance and change of control
payments) that will be made by the Company at the Effective Time as a result of
the consummation of the transactions contemplated by this Agreement, stating to
whom such payments are owed, under what agreement and a description of the
amount owed. Except as disclosed in Section 5.15 of the Company Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any Company Entity
from any Company Entity under any Company Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any Company Benefit Plan, or (iii)
result in any acceleration of the time of payment or vesting of any such
benefit. The Employment Agreement dated October 1, 2001 by and between the
Company and A. Xxxxxxx Xxxxxxx has been amended to provide that if the Merger is
consummated, Xx. Xxxxxxx will receive 1.9 million shares of restricted Surviving
Corporation Series B Participating Preferred Stock in lieu of any cash payment
otherwise owed to him under the terms of such agreement.
(j) The assets held under each trust maintained by the Company or its ERISA
Affiliates with respect to the Non-Qualified Deferred Compensation Plans equal
the accrued benefits under such Non-Qualified Deferred Compensation Plans as of
the
23
Closing Date. The actuarial present values of all other accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any Company Entity and their respective beneficiaries have
been fully reflected on the Company Financial Statements to the extent required
by and in accordance with GAAP.
(k) All individuals who render services to any Company Entity and who are
authorized to participate in a Company Benefit Plan pursuant to the terms of
such Company Benefit Plan are in fact eligible to and authorized to participate
in such Company Benefit Plan. All individuals participating in (or eligible to
participate in) any Company Benefit Plan are common-law employees of a Company
Entity.
(l) All bonuses which any employee has a nonforfeitable right to be paid by
the Company or any Company Subsidiary have been fully paid to eligible
recipients or are fully reflected on the Company Financial Statements to the
extent required by and in accordance with GAAP as of the Closing Date.
(m) All payments, contributions or premiums required as of the Effective
Time to be remitted or paid to or in respect to each Company Benefit Plan have
been remitted and paid in a timely fashion in accordance with the terms thereof,
any contract with respect thereto and applicable Laws. Except as disclosed in
Section 5.15 of the Company Disclosure Memorandum, none of the Company Entities
maintains or contributes to a registered pension plan in Canada. All of the
Canadian Company Benefit Plans are registered and administered in accordance
with applicable Laws where required to be so registered and administered. Except
as disclosed in Section 5.15 of the Company Disclosure Memorandum, none of the
Company Benefit Plans maintained solely or primarily for individuals who are or
were employed in Germany provide for pension benefits or entitlements.
5.16 Material Contracts.
(a) Except as disclosed in Section 5.16 of the Company Disclosure
Memorandum or as disclosed in the Company SEC Reports, none of the Company
Entities nor any of their respective Assets, businesses, or operations, is a
party to, or is bound or affected by, or receives benefits under:
(i) any employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any calendar
year in excess of $50,000, provided however, that this amount shall be
$100,000 with respect to any Person employed by a German Company Entity;
(ii) any Contract relating to the borrowing of money by any Company
Entity or the guarantee by any Company Entity of any such obligation (other
than Contracts evidencing trade payables and Contracts relating to
borrowings or guarantees made in the ordinary course of business);
24
(iii) any Contract which prohibits or restricts any Company Entity
from engaging in any business activities in any geographic area, line of
business or otherwise in competition with any other Person;
(iv) any Contract between or among Company Entities, or between and
among a Company Entity and an Affiliate of a Company Entity;
(v) any partnership, joint venture, strategic alliance or
cooperation agreement (or any agreement similar to the foregoing);
(vi) any brokerage or finders fee agreements;
(vii) any license or sublicense of Owned Intellectual Property or
Licensed Intellectual Property (other than Contracts entered into in the
ordinary course with customers and "shrink-wrap" software licenses);
(viii) any Contract relating to the provision of data processing,
network communication, or other technical services to or by any Company
Entity;
(ix) any Contract relating to the purchase or sale of any goods or
services by or to any Company Entity (other than Contracts entered into in
the ordinary course of business and involving payments under any individual
Contract not in excess of one percent (1%) of the consolidated gross
revenues for the Company for the year ended December 31, 2002;
(x) any contract for the purchase or sale of a real property
interest for which such sale or purchase is pending;
(xi) all contracts and agreements that by their terms provide
indemnification rights or obligations of any Company Entity, which provide
for potential payments after the Effective Time to any Person in excess of
$250,000; and
(xii) any other Contract or amendment thereto that would be required
to be filed as an exhibit to a Form 10-K filed by the Company with the SEC
as of the date of this Agreement (together with all Contracts referred to
in Sections 5.11, 5.15(a) and 5.17(a), the "Company Contracts").
With respect to each Company Contract: (A) the Contract is in full force and
effect; (B) no Company Entity is in Default thereunder except for any Default
that would not reasonably be expected to have a Company Material Adverse Effect;
(C) no Company Entity has repudiated or waived any material provision of any
such Contract; and (D) no other party to any such Contract is, to the Knowledge
of the Company, in Default in any respect or has repudiated or waived any
material provision thereunder. Except as disclosed in Section 5.16 of the
Company Disclosure Memorandum, all of the indebtedness of any Company Entity for
money borrowed is prepayable at any time by such Company Entity without penalty
or premium.
25
(b) Except as disclosed in Section 5.16 of the Company Disclosure
Memorandum, since January 1, 2003, no material licensor, vendor, supplier,
licensee, customer or client of any Company Entity has canceled or otherwise
modified (in a manner materially adverse to the Company) its relationship with
the Company Entity and (i) no such Person has notified any Company Entity of its
intention to do so and (ii) to the Knowledge of the Company, the consummation of
the transactions contemplated by this Agreement will not affect any of such
relationships in a manner that would result in a Company Material Adverse
Effect.
(c) Attached as Section 5.16(c) of the Company Disclosure Memorandum is a
true and complete copy of the Seventh Amendment to the Credit Agreement. To the
Knowledge of the Company, there exists no facts or circumstances regarding the
Company Entities that are reasonably likely to cause a Default (under and as
defined in the Credit Agreement) prior to August 29, 2003.
5.17 Real Property.
(a) Section 5.17 of the Company Disclosure Memorandum sets forth a complete
list of all real property leased by the Company Entities or otherwise used by
the Company Entities in the conduct of their business or operations
(collectively, together with all buildings, structures and other improvements
and fixtures located on or under the land described in this Section 5.17 and all
easements, right and other appurtenances thereto, means the "Real Property").
Except as set forth in Section 5.17 of the Company Disclosure Memorandum, the
Company has provided to Purchaser a true, correct and complete copy of each
lease agreement related to the Real Property, as amended if applicable, and
effective as of the date hereof (a "Real Property Lease"). No Company Entity
owns any Real Property. Each Company Entity has good leasehold interests in the
leased Real Property, free and clear of all Liens. There are no proceedings,
claims, disputes or conditions affecting any Real Property that would reasonably
be expected to curtail or interfere with the current use and operation of such
property.
(b) No Company Entity or, to the Knowledge of the Company, any landlord
under a Real Property Lease, is in violation of any applicable building, zoning,
health or other Law, contractual restriction, covenant or easements in respect
of the use or occupation of the Real Property or structures or their operations
thereon except where such violations would not reasonably be expected to have a
Company Material Adverse Effect. To the Knowledge of Company, no improvements
located on the Real Property are in violation of any applicable building,
zoning, health or other Law, contractual restriction, covenant or easement.
(c) Each Real Property Lease is in full force and effect and there is no
existing Default or event of Default, real or claimed, or event which with
notice or lapse of time or both would constitute a default thereunder by the
applicable Company Entity, or to the Knowledge of Company, any other party to
such Real Property Leases.
26
(d) Neither the Company nor any Company Entity has in its possession any
studies or reports which indicate any defects in the design or construction of
any improvements located on the Real Property.
5.18 Legal Proceedings.
There is no Litigation instituted or pending, or, to the Knowledge of
Company, threatened against any Company Entity, or against any director, officer
or employee in their capacities as such, or against any Employee Benefit Plan of
any Company Entity, or against any Asset, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Company
Material Adverse Effect. Section 5.18 of the Company Disclosure Memorandum
contains a summary of all Litigation instituted and pending or, to the Knowledge
of the Company, threatened as of the date of this Agreement to which any Company
Entity is a party and which names a Company Entity as a defendant or
cross-defendant or for which any Company Entity has any potential Liability.
Section 5.18 of the Company Disclosure Memorandum contains a summary of all
Orders to which any Company Entity is subject.
5.19 Unclaimed or Abandoned Property; Escheat.
Except as disclosed in Section 5.19 of the Company Disclosure Memorandum,
(a) each Company Entity is in compliance with the Laws of the various states
dealing with abandoned or unclaimed property or escheat, except where the
failure to be in compliance would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect; and (b) no
amounts which are, or would be, or would become, unclaimed property or presumed
abandoned under state Laws dealing with abandoned or unclaimed property have
been written off, written or reversed to income, or otherwise removed or
excluded from the latest balance sheet included in the Company Financial
Statements.
5.20 Reports.
Since January 1, 2000 or the date of organization if later, each Company
Entity has timely filed all reports and statements, together with any amendments
required to be made with respect thereto, that it was required to file with
Regulatory Authorities except where the failure to file such report or statement
would not reasonably be expected to have a Company Material Adverse Effect. As
of its respective date (or if amended or superseded by a later filing, then on
the date of such filing), each such report and document did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading.
5.21 Regulatory Matters.
No Company Entity or any Affiliate thereof has taken or agreed to take any
action or has any Knowledge of any fact or circumstance that is reasonably
likely to materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section
27
10.1(b) or result in the imposition of a condition or restriction imposed upon
any Company Entity by a Regulatory Authority.
5.22 State Takeover Laws.
The Company and the Special Committee have taken all necessary action to
comply with or, if applicable, exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability of,
any applicable "fair price," "business combination," "control share," or other
anti-takeover Laws, including Sections 14-2-1111 and 14-2-1132 of the GBCC
(collectively, "Takeover Laws").
5.23 Required Vote.
The affirmative vote of a majority of all shares of Company Common Stock
entitled to vote at the Shareholders' Meeting is required to approve and adopt
this Agreement, the Amended and Restated Articles of Incorporation and approve
the Merger. No other vote of the shareholders of the Company is required by law,
the Company Articles of Incorporation or the Company Bylaws or otherwise in
order for the Company to consummate the Merger.
5.24 Financial Advisors.
The Special Committee has received the opinion of the Special Committee
Financial Advisor, dated as of or earlier than the date of this Agreement, to
the effect that the consideration to be received in the Merger by the holders of
Company Common Stock (other than the Re-Investing Shareholders) is fair, from a
financial point of view, to such holders, a signed copy of which has been
delivered to Purchaser.
5.25 Board Recommendation.
The Board of Directors of the Company, at a meeting duly called and held,
has by unanimous vote of the directors present (who constituted all of the
directors then in office) and upon the unanimous recommendation of the Special
Committee (i) adopted this Agreement and determined that this Agreement and the
transactions contemplated hereby, including the Merger, the Amended and Restated
Articles of Incorporation and the transactions contemplated thereby, taken
together, are fair to and in the best interests of the Company's shareholders
and (ii) resolved to recommend that the holders of the shares of Company Common
Stock approve this Agreement, the Merger and the Amended and Restated Articles
of Incorporation.
28
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE RE-INVESTING SHAREHOLDERS
The Re-Investing Shareholders severally represent and warrant to Purchaser
as follows:
6.1 Authority of Re-Investing Shareholders.
Each Re-Investing Shareholder has the full power, capacity and authority
necessary to enter into and perform his or its obligations under this Agreement
and to consummate the transactions contemplated hereby. With respect to
Caledonia Investments plc, Xxxxxxxxxxx Partners, L.P and the Xxxxxxx X.
Xxxxxxxxxxx, Xx. Charitable Remainder Trust, the execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein by each such Re-Investing Shareholder, have been duly and
validly authorized by all necessary corporate, limited partnership and trust
action, as applicable, in respect thereof on the part of each such Re-Investing
Shareholder.
6.2 Ownership of Company Common Stock by Re-Investing Shareholders.
Each Re-Investing Shareholder is the owner of all right, title and interest
(legal and beneficial) in and to that number of shares of Company Common Stock
set forth next to his or its name in Section 6.2 of the Re-Investing
Shareholders Disclosure Memorandum, free and clear of all Liens, except for
those Liens described in Section 6.2 of the Re-Investing Shareholders Disclosure
Memorandum.
6.3 Investment and Securities Matters.
(a) Each Re-Investing Shareholder acknowledges and understands that (i) the
issuance of the Surviving Corporation Series B Participating Preferred Stock
will not be registered under the Securities Act or any other applicable
Securities Laws; (ii) the issuance of the Surviving Corporation Series B
Participating Preferred Stock is intended to be exempt from registration under
the Securities Act and any other applicable Securities Laws by virtue of certain
exemptions thereunder, including Section 4(2) of the Securities Act and the
provisions of Regulation D promulgated thereunder, and, therefore, the Surviving
Corporation Series B Participating Preferred Stock cannot be resold unless
registered under the Securities Act and any other applicable Securities Laws or
unless an exemption from registration is available.
(b) Such Re-Investing Shareholder acknowledges that Purchaser and its
advisors will rely on the representations and warranties of such Re-Investing
Shareholder contained in this Section 6.3 for purposes of determining whether
the issuance of the Surviving Corporation Series B Participating Preferred Stock
is exempt from registration under the Securities Act and any other applicable
Securities Laws.
29
(c) Such Re-Investing Shareholder understands that the Surviving
Corporation Series B Participating Preferred Stock will be characterized as
"restricted securities" under the Securities Act. In this connection, such
Re-Investing Shareholder represents that such Re-Investing Shareholder is
familiar with Rule 144 promulgated under the Securities Act.
(d) Such Re-Investing Shareholder is acquiring the Surviving Corporation
Series B Participating Preferred Stock solely for his or its own account for
investment purposes and not with a view toward any distribution, except as
permitted under applicable Securities Laws.
(e) Such Re-Investing Shareholder has reviewed the Company SEC Reports.
(f) Such Re-Investing Shareholder (i) has the financial ability to bear the
economic risk of the investment in the Surviving Corporation Series B
Participating Preferred Stock, (ii) has adequate means for providing for his or
its current needs and contingencies, (iii) has no need for liquidity with
respect to the investment in the Surviving Corporation Series B Participating
Preferred Stock, and (iv) can afford a complete loss of the investment in the
Surviving Corporation Series B Participating Preferred Stock at this time and in
the foreseeable future.
(g) Such Re-Investing Shareholder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Surviving Corporation Series B Participating
Preferred Stock and of making an informed investment decision with respect
thereto.
(h) Such Re-Investing Shareholder is an "accredited investor" as that term
is defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
Without in any way limiting the representations set forth above, such
Re-Investing Shareholder further agrees not to make any disposition of all or
any portion of the Surviving Corporation Series B Participating Preferred Stock
unless and until: (i) there is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or (ii) otherwise in compliance
with the Shareholders' Agreement.
(i) Such Seller acknowledges and agrees that the certificates representing
the Surviving Corporation Series B Participating Preferred Stock shall bear
substantially the following legend:
The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or under any
other applicable securities laws in reliance upon various exemptions
therefrom. These shares have been acquired for investment and may not be
offered for sale, sold, transferred, or otherwise disposed of, nor will any
assignee or transferee thereof be recognized by the Corporation as having
any interest in such shares, in the absence of (i) an effective
registration statement with respect to the shares under the Securities Act
or (ii) an
30
opinion of holder's counsel, which opinion of holder's counsel shall be
reasonably satisfactory to the Corporation, to the effect that the
transaction by which such shares will be offered for sale, sold,
transferred, or otherwise disposed of is exempt from or otherwise in
compliance with the registration requirements of the Securities Act and any
other applicable securities laws.
6.4 Statements True and Correct.
None of the information supplied or to be supplied by any Re-Investing
Shareholder in writing to the Company or Purchaser for inclusion in the Proxy
Statement or Schedule 13E-3 will, at the respective time such documents are
filed with the SEC and first published or sent or given to the Company's
shareholders, and in the case of the Proxy Statement, at the time that it or any
amendment or supplement thereto is mailed to the Company's shareholders, at the
time of the Shareholders' Meeting or at the Effective Time, contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company as follows:
7.1 Organization, Standing, and Power.
Purchaser is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Georgia, and has the corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its material Assets. Purchaser is duly qualified or licensed to transact
business as a foreign corporation in good standing in the states of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Purchaser
Material Adverse Effect. The authorized capital stock of Purchaser consists of
15,000,000 shares of Purchaser Common Stock, all of which are validly issued and
outstanding, fully paid and nonassessable and are owned by CGW free and clear of
any Liens.
7.2 Authority; No Breach By Agreement.
(a) Purchaser has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized and adopted by all
necessary corporate action in respect thereof on the part of Purchaser,
including, without limitation, the approval thereof by CGW. This Agreement
represents a legal, valid, and binding obligation of Purchaser,
31
enforceable against Purchaser in accordance with its terms (except in all cases
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
(b) Neither the execution and delivery of this Agreement by Purchaser, nor
the consummation by Purchaser of the transactions contemplated hereby, nor
compliance by Purchaser with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of Purchaser's Articles of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any Purchaser under, any Contract or Permit of any Purchaser or, (iii)
subject to receipt of the requisite Consents referred to in Section 10.1(c),
constitute or result in a Default under, or require any Consent pursuant to, any
Law or Order applicable to Purchaser or any of its respective material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and other than
Consents required from Regulatory Authorities, or under the HSR Act or the
German Antitrust Laws, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Purchaser Material Adverse Effect, no notice to, filing with,
or Consent of, any public body or authority is necessary for the consummation by
Purchaser of the Merger and the other transactions contemplated in this
Agreement.
7.3 Compliance with Laws.
Purchaser has in effect all Permits necessary for it to own, lease or
operate its material Assets and to carry on its business as now conducted,
except for those Permits the absence of which are not reasonably likely to have,
individually or in the aggregate, a Purchaser Material Adverse Effect, and there
has occurred no Default under any such Permit, other than Defaults which could
not reasonably be anticipated to have, individually or in the aggregate, a
Purchaser Material Adverse Effect. Purchaser is not:
(a) in Default under its articles of incorporation or bylaws; or
(b) in Default under any Laws, Orders or Permits applicable to its business
or employees conducting its business; or
(c) since the date of its formation, received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i) asserting that
Purchaser is not, or may not be, in compliance with any Laws or Orders, (ii)
threatening to revoke any Permits, or (iii) requiring Purchaser to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment or memorandum of understanding, or to
32
adopt any board resolution or similar undertaking, which restricts materially
the conduct of its business.
7.4 Legal Proceedings.
There is no Litigation instituted or pending, or, to the Knowledge of
Purchaser, threatened against Purchaser, or against any director, employee or
employee benefit plan of Purchaser, or against any Asset, interest, or right of
any of them, that is reasonably likely to have, individually or in the
aggregate, a Purchaser Material Adverse Effect, nor are there any Orders
outstanding against Purchaser, that is reasonably likely to have, individually
or in the aggregate, a Purchaser Material Adverse Effect.
7.5 Statements True and Correct; Proxy Statement.
None of the information supplied or to be supplied by Purchaser in writing for
inclusion in the Proxy Statement or Schedule 13E-3 will, at the respective time
such documents are filed with the SEC and first published or sent or given to
the Company's shareholders, and in the case of the Proxy Statement, at the time
that it or any amendment or supplement thereto is mailed to the Company's
shareholders, at the time of the Shareholders' Meeting or at the Effective Time,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Schedule 13E-3 will, when filed by Purchaser with the SEC,
comply as to form in all material respects with the provisions of the Exchange
Act and the SEC's rules and regulations promulgated thereunder.
7.6 Regulatory Matters.
Purchaser has not taken or agreed to take any action or has any Knowledge
of any fact or circumstance that is reasonably likely to materially impede or
delay receipt of any Consents of Regulatory Authorities referred to in Section
10.1(b) or result in the imposition of a condition or restriction of the type
referred to in the last sentence of such Section.
7.7 Financing.
Purchaser has provided the Company with complete and correct copies of (a)
a commitment letter dated March 27, 2003, from CGW pursuant to which CGW has
committed to the Company, subject to the terms and conditions set forth therein,
to provide an aggregate amount of up to $26.1 million to repay amounts owed to
the Senior Lenders and certain other holders of indebtedness of the Company, as
well as to pay fees and expenses in connection with the Merger; (b) a
subscription agreement from CGW to purchase, subject to the terms and conditions
set forth therein, up to 10 million shares of Purchaser Common Stock for an
aggregate amount of up to $10 million from CGW to provide the necessary funds
for the Cash Payment; (c) a term sheet dated March 12, 2003, from Xxxxxxx Xxxxx
Capital pursuant to which it has indicated its interest, subject to the terms
and conditions set forth therein, to provide an aggregate amount of $27.5
33
million to repay amounts owed to the Senior Lenders of the Company (the "Senior
Financing"); and (d) a term sheet dated March 27, 2003, from American Capital
pursuant to which it has indicated its interest, subject to the terms and
conditions set forth therein, to provide an aggregate amount of $15 million to
repay amounts owed to the Senior Lenders of the Company (the "Subordinated
Financing")(collectively the arrangements described in (a) through (d) of this
Section, the "Financing Arrangements"). As of the date hereof, the Financing
Arrangements have not been withdrawn and, to Purchaser's knowledge, no
circumstances exist which would reasonably be likely to cause any of the terms
or conditions of any of Financing Arrangements to not be satisfied.
7.8 Status of Purchaser.
Purchaser is a newly formed entity, has no operating history and has not
entered into any contracts or other agreements other than as contemplated
pursuant to the Agreement. Purchaser was formed solely for the purpose of
engaging in the transactions contemplated by the Agreement.
7.9 No Other Representations.
Notwithstanding anything to the contrary contained in the Agreement,
Purchaser acknowledges and understands that the Company is making no
representation or warranty whatsoever, express or implied, beyond those
expressly given in this Agreement.
ARTICLE 8
CONDUCT OF BUSINESS PENDING CONSUMMATION
8.1 Affirmative Covenants of Company.
From the date of this Agreement until the earlier of the Effective Time or
the termination of this Agreement, unless the prior written consent of Purchaser
shall have been obtained, and except as otherwise expressly contemplated herein,
the Company shall, and shall cause each of its Subsidiaries to, (a) operate its
business only in the usual, regular, and ordinary course, (b) preserve intact
its business organization and Assets and maintain its rights and franchises, and
(c) take no action which would (i) adversely affect the ability of any Party to
obtain any Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of any type on any Company Entity, or
(ii) adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement.
8.2 Negative Covenants of Company.
From the date of this Agreement until the earlier of the Effective Time or
the termination of this Agreement, unless the prior written consent of Purchaser
shall have been obtained, and except as otherwise expressly contemplated herein,
the Company covenants and agrees that it will not do or agree or commit to do,
or permit any of its Subsidiaries to do or agree or commit to do, any of the
following:
34
(a) amend the articles of incorporation, bylaws or other governing
instruments of any Company Entity;
(b) incur any additional debt obligation or other obligation for borrowed
money (other than indebtedness of a Company Entity to another Company Entity)
except in the ordinary course of the business of the Company Entities consistent
with past practices, or impose, or suffer the imposition, on any Asset of any
Company Entity of any Lien or permit any such Lien to exist (other than in
connection with Liens in effect as of the date hereof that are disclosed in the
Company Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under Employee Benefit Plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of any Company Entity, or declare or pay any dividend or make any
other distribution in respect of the Company's capital stock;
(d) except for this Agreement, or for the issuance of Company Preferred
Stock to the Senior Lenders and CGW in connection with the Financing, or
pursuant to the exercise of stock options outstanding as of the date hereof and
pursuant to the terms thereof in existence on the date hereof, or as disclosed
in Section 8.2(d) of the Company Disclosure Memorandum, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue, sell,
pledge, encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of Company Common Stock or any other capital
stock of any Company Entity, or any stock appreciation rights, or any option,
warrant, or other Equity Right;
(e) adjust, split, combine or reclassify any capital stock of any Company
Entity or issue or authorize the issuance of any other securities in respect of
or in substitution for shares of Company Common Stock, or sell, lease, mortgage
or otherwise dispose of or otherwise encumber (i) any shares of capital stock of
any Company Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Company Entity) or (ii) any Asset other than in the
ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Treasury securities or U.S. Government
agency securities, which in either case have maturities of three years or less,
purchase any securities or make any material investment, either by purchase of
stock of securities, contributions to capital, Asset transfers, or purchase of
any Assets, in any Person other than a wholly owned Company Subsidiary, or
otherwise acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business or (ii) the
creation of new wholly owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement;
(g) grant any material increase in compensation or benefits to the
employees or officers of any Company Entity, except in accordance with past
practice or as disclosed in Section 8.2(g) of the Company Disclosure Memorandum
or as required by Law or by the collective bargaining agreements currently under
negotiation in the Xxxxxxx Xxxxxxxx
00
xx Xxxxxxx between the trade unions and the employers' associations of the
temporary staffing industry (the "German Collective Bargaining Agreements"); pay
any severance or termination pay or any bonus other than pursuant to written
policies or written Contracts in effect on the date of this Agreement and
disclosed in Section 8.2(g) of the Company Disclosure Memorandum; enter into or
amend any severance agreements with officers of any Company Entity; grant any
material increase in fees or other increases in compensation or other benefits
to directors of any Company Entity except in accordance with past practice or as
disclosed in Section 8.2(g) of the Company Disclosure Memorandum or; except as
provided in Section 3.2, waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of any Equity Rights or restricted stock, or
reprice Equity Rights granted under the Company Stock Plans or authorize cash
payments in exchange for any Equity Rights;
(h) enter into or amend any employment Contract between any Company Entity
and any Person (unless such amendment is required by Law or the German
Collective Bargaining Agreements) that the Company Entity does not have the
unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any Company Entity or terminate
or withdraw from, or make any material change in or to, any existing Employee
Benefit Plans of any Company Entity other than any such change that is required
by Law or that, in the opinion of counsel, is necessary or advisable to maintain
the tax qualified status of any such plan, or make any distributions from such
employee benefit plans, except as required by Law, the terms of such plans or
consistent with past practice;
(j) make any significant change in any Tax or accounting methods or systems
of internal accounting controls, except as may be appropriate to conform to
changes in Tax Laws or regulatory accounting requirements or GAAP;
(k) commence any Litigation other than in accordance with past practice or
settle any Litigation involving any Liability of any Company Entity for material
money damages or restrictions upon the operations of any Company Entity;
(l) except in the ordinary course of business, enter into, modify, amend or
terminate any material Contract or waive, release, compromise or assign any
material rights or claims; provided, however, in no event shall the Company
amend the Credit Agreement in a manner, take any other action, or fail to take
any action, (i) which would result in the Expiration Date (under and as defined
in the Credit Agreement) or the maturity of the Credit Agreement occurring prior
to July 31, 2003, (ii) which could cause the full and final payment of the
Obligations (under and as defined in the Credit Agreement) to become due before
such date or (iii) which would result in a Default under the Credit Agreement;
or
(m) except in the ordinary course of business, abandon, cancel, sell or
transfer any Owned Intellectual Property.
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8.3 Covenants of Purchaser.
From the date of this Agreement until the earlier of the Effective Time or
the termination of this Agreement, unless the prior written consent of the
Company shall have been obtained, and except as otherwise expressly contemplated
herein, Purchaser covenants and agrees that it shall take no action which would
(i) materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction, or (ii) materially adversely affect the ability of any
Party to perform its covenants and agreements under this Agreement.
8.4 Adverse Changes in Condition.
(a) Each Party agrees to give written notice promptly to the other upon
becoming aware of the occurrence or impending occurrence of any event or
circumstance, describing such event or circumstance in reasonable detail,
relating to it or any of its Subsidiaries which (i) is reasonably likely to
have, individually or in the aggregate, a Company Material Adverse Effect or a
Purchaser Material Adverse Effect, as applicable, or (ii) would cause or
constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
(b) Upon Purchaser's receipt of a notice from the Company pursuant to
Section 8.4(a) relating to the Company Financial Statements for the years ended
December 31, 2000, 2001 and 2002, as audited by the Company's independent
auditors, Purchaser shall have ten (10) business days in which to notify the
Company in writing of its intention to terminate the Agreement. To the extent
Purchaser does not so notify the Company within such time period, Purchaser
shall thereafter be precluded from asserting that the event or circumstance
specified in such Notice constitutes a Company Material Adverse Effect or
grounds for termination of the Agreement.
8.5 Reports.
Each Party and their Subsidiaries shall file all reports required to be
filed by it with Regulatory Authorities between the date of this Agreement and
the Effective Time and shall deliver to the other copies of all such reports
promptly after the same are filed. All such reports will comply as to form in
all material respects with the provisions of applicable Law. If financial
statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the entity
filing such statements as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity, and cash flows for the periods then
ended in accordance with GAAP (subject in the case of interim financial
statements to normal recurring year-end adjustments that are not material). As
of their respective dates, such reports filed with the SEC will comply in all
material respects with the Securities Laws and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Any financial
37
statements contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.
ARTICLE 9
ADDITIONAL AGREEMENTS
9.1 Proxy Statement and Schedule 13E-3; Shareholder Approval.
(a) As promptly as practicable after the execution of this Agreement, the
Company and Purchaser shall cooperate and promptly prepare and file with the SEC
a proxy statement relating to the meeting of the Company's shareholders to be
held in connection with the Merger (together with any amendments thereof or
supplements thereto, the "Proxy Statement"), a joint Rule 13e-3 Transaction
Statement on Schedule 13E-3 (together with any amendments thereof or supplements
thereto, the "Schedule 13E-3") with respect to the Merger. The respective
parties shall cause the Proxy Statement and the Schedule 13E-3 to comply as to
form in all material respects with the applicable provisions of the Exchange
Act, including Regulation 14A and Rule 13e-3. The respective Parties, after
consultation with the other, will use all reasonable efforts to respond to any
comments made by the SEC with respect to the Proxy Statement and the Schedule
13E-3. Each of the Purchaser and the Company shall furnish to each other all
information concerning it and the holders of its capital stock as the other may
reasonably request in connection with such actions and the preparation of the
Proxy Statement and the Schedule 13E-3.
(b) No amendment or supplement to the Proxy Statement, the Schedule 13E-3
or any other SEC Document will be made by the Company without the reasonable
approval of Purchaser. The Company will advise Purchaser, promptly after it
receives notice thereof, of any request by the SEC for amendment of the Proxy
Statement or any other SEC Document or comments thereon and responses thereto or
requests by the SEC for additional information.
(c) Each of the Parties agrees to use its reasonable efforts to cooperate
and to provide each other with such information as any of such parties may
reasonably request in connection with the preparation of the Proxy Statement and
the Schedule 13E-3. Each Party agrees promptly to supplement, update and correct
any information provided by it for use in the Proxy Statement and the Schedule
13E-3 to the extent that it is or shall have become incomplete, false or
misleading. If at any time prior to the Effective Time, any event or
circumstance relating to Purchaser or its officers and directors, should be
discovered by Purchaser which should be set forth in an amendment or supplement
to the Proxy Statement or the Schedule 13E-3, Purchaser shall promptly inform
the Company. If at any time prior to the Effective Time, any event or
circumstance relating to the Company, or its officers or directors, should be
discovered by the Company which should be set forth in an amendment or a
supplement to the Proxy Statement or the Schedule 13E-3, the Company shall
promptly inform Purchaser.
(d) As promptly as practicable after the clearance of the Proxy Statement
and the Schedule 13E-3 by the SEC, the Company shall mail the Proxy Statement to
its
38
shareholders (or, if the SEC chooses not to review the Proxy Statement and the
Schedule 13E-3, within 10 days after the date that the SEC notifies the Company
that it will not review the Proxy Statement). Subject to Sections 9.1(h) and
9.2, the Proxy Statement shall include the recommendation of the Board of
Directors of the Company and the Special Committee thereof that approval of this
Agreement, the Merger and the Amended and Restated Articles of Incorporation by
the Company's shareholders is advisable and that the Board of Directors of the
Company and the Special Committee have determined that the Merger and the
Amended and Restated Articles of Incorporation is fair to, and in the best
interests of, the Company's shareholders.
(e) In accordance with the Company Articles of Incorporation and Company
Bylaws, the Company shall duly call, give notice of, convene and hold a
Shareholders' Meeting, to be held as promptly as practicable after execution of
this Agreement, on a date reasonably acceptable to Purchaser, for the purpose of
voting upon approval of this (i) Agreement, (ii) the Amended and Restated
Articles of Incorporation and (iii) the Merger by the Company's shareholders and
such other related matters as it deems appropriate. The Company shall use its
reasonable efforts to hold the Shareholders' Meeting as promptly as practicable
after the date on which the Proxy Statement is cleared by the SEC.
(f) The Company shall use its best efforts to obtain the Company
Shareholder Approval and the Disinterested Shareholder Approval, subject to the
terms of Section 9.1(h) and 9.2.
(g) In connection with the Merger, the Company shall furnish Purchaser with
mailing labels containing the names and addresses of all record holders of
shares of Company Common Stock and with security position listings of shares of
Company Common Stock held in stock depositories, each as of a recent date, and
of those persons becoming record holders subsequent to such date. The Company
shall furnish Purchaser with all such additional information (including, but not
limited to, updated lists of holders of shares of Company Common Stock and their
addresses, mailing labels and lists of security positions) and such other
assistance as Purchaser or its agents may reasonably request in soliciting
proxies and communicating the Merger to the record and beneficial owners of
shares of Company Common Stock. Subject to the requirements of applicable law,
and except for such steps as are necessary to disseminate the Proxy Statement
and any other documents necessary to consummate the Merger, Purchaser shall hold
in confidence the information contained in such labels, listings and files, and
shall use such information only in connection with the Merger. If this Agreement
is terminated, Purchaser will deliver to the Company all copies of such
information (and extracts and summaries thereof) then in its or its agent's or
advisor's possession.
(h) Neither the Board of Directors of the Company nor any committee thereof
shall, except as expressly permitted by this Section 9.1(h), (i) withdraw,
qualify or modify, or propose publicly to withdraw, qualify or modify, in a
manner adverse to Purchaser, the approval or recommendation of such Board of
Directors of this Agreement, the Amended and Restated Articles of Incorporation
or the Merger, (ii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition
39
Proposal, or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar agreement (each,
an "Acquisition Agreement") related to any Acquisition Proposal. Notwithstanding
the foregoing, in the event that, prior to obtaining the Disinterested
Shareholder Approval, the Special Committee determines in good faith, after it
has received a Superior Proposal and after receipt of advice from outside
counsel, that the failure to do so would result in a reasonable possibility that
the Board of Directors of the Company would breach its fiduciary duties to the
Company's shareholders under applicable Law, the Board of Directors of the
Company may (subject to this sentence) inform the Company's shareholders that it
no longer believes that the Merger is advisable and no longer recommends
approval and may (subject to this sentence) approve or recommend a Superior
Proposal (and in connection therewith withdraw or modify its approval or
recommendation of this Agreement, the Amended and Restated Articles of
Incorporation or the Merger) (a "Subsequent Determination"), but only at a time
that is after the second business day following Purchaser's receipt of written
notice advising Purchaser that the Board of Directors of the Company has
received a Superior Proposal specifying the material terms and conditions of
such Superior Proposal (and including a copy thereof with all accompanying
documentation, if in writing), identifying the person making such Superior
Proposal and stating that it intends to make a Subsequent Determination.
Notwithstanding any other provision of this Agreement, the Company shall submit
this Agreement and the Amended and Restated Articles of Incorporation to its
shareholders at its Shareholders' Meeting even if the Board of Directors of the
Company determines at any time after the date hereof that it is no longer
advisable or recommends that the Company's shareholders reject it.
9.2 Other Offers.
(a) No Company Entity shall, nor shall it authorize or permit any of its
Affiliates or Representatives to, directly or indirectly (i) solicit, initiate,
encourage or induce the making, submission or announcement of any Acquisition
Proposal, (ii) participate in any discussions or negotiations regarding, or
furnish to any Person or "Group" (as such term is defined in Section 13(d) under
the Exchange Act) any nonpublic information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any Acquisition Proposal,
(iii) approve, endorse or recommend any Acquisition Proposal, or (iv) enter into
any agreement contemplating or otherwise relating to any Acquisition
Transaction. Notwithstanding the foregoing, this Section 9.2(a) shall not
prohibit a Company Entity from furnishing nonpublic information regarding any
Company Entity to, or entering into a confidentiality agreement or discussions
or negotiations with, any Person or Group in response to a bona fide unsolicited
written Acquisition Proposal submitted by such Person or Group (and not
withdrawn) if all of the following conditions are met: (A) no Company Entity or
Representative or Affiliate thereof shall have solicited, initiated, encouraged
or induced the making, submission or announcement of any Acquisition Proposal,
(B) the Special Committee determines in its good faith judgment (based on, among
other things, the advice of the Special Committee Financial Advisor or any other
financial advisor of nationally recognized reputation) that such Acquisition
Proposal constitutes a Superior Proposal or is reasonably likely to lead to a
Superior Proposal, (C)
40
the Special Committee concludes in good faith, after consultation with its
outside legal counsel, that the failure to take such action would be
inconsistent with its fiduciary duties, as such duties would exist in the
absence of this Section 9.2, to the shareholders of the Company under applicable
Law, (D) (1) prior to furnishing any such nonpublic information to, or entering
into discussions or negotiations with, such Person or Group, the Company gives
Purchaser written notice of the identity of such Person or Group and of the
Company's intention to furnish nonpublic information to, or enter into
discussions or negotiations with, such Person or Group, and (2) the Company
receives from such Person or Group an executed confidentiality agreement
containing terms no less favorable to the disclosing party than the terms of the
Confidentiality Agreement and (E) contemporaneously with furnishing any such
nonpublic information to such Person or Group, the Company furnishes such
nonpublic information to Purchaser (to the extent such nonpublic information has
not been previously furnished by the Company to Purchaser).
(b) In addition to the obligations of the Company set forth in Section
9.2(a), as promptly as practicable, and in any event within one business day
after any of the executive officers of the Company become aware thereof, the
Company shall advise Purchaser of any request received by the Company for
nonpublic information which the Company reasonably believes could lead to an
Acquisition Proposal or of any Acquisition Proposal, the material terms and
conditions of such request or Acquisition Proposal, and the identity of the
Person or Group making any such request or Acquisition Proposal. The Company
shall keep Purchaser informed promptly of material amendments or modifications
to any such request or Acquisition Proposal.
(c) The Company and its Subsidiaries shall immediately cease any and all
existing activities, discussions or negotiations with any Persons conducted
heretofore with respect to any Acquisition Proposal and will use their
respective reasonable best efforts to enforce any confidentiality or similar
agreement relating to any Acquisition Proposal. Without limiting the foregoing,
it is agreed that any violation of the restrictions set forth in this Section
9.2, by any Affiliate or Representative of any Company Entity shall be deemed to
be a breach of this Section 9.2 by the Company.
(d) Nothing contained in this Agreement shall prevent a Party or its board
of directors from complying with Rule 14d-9 and Rule 14e-2 under the Exchange
Act with respect to an Acquisition Proposal.
9.3 Antitrust Notification; Consents of Regulatory Authorities.
(a) To the extent required by the HSR Act and the German Antitrust Laws,
each of the Parties will, within a reasonable period of time, file with the
United States Federal Trade Commission ("FTC"), the United States Department of
Justice ("DOJ") and the appropriate Regulatory Authority in the Federal Republic
of Germany the notification and report form required for the transactions
contemplated hereby, will promptly file any supplemental or additional
information which may reasonably be requested in connection therewith pursuant
to the HSR Act or the German Antitrust Laws, and will comply in all material
respects with the requirements of the HSR Act and the German Antitrust Laws.
41
Each Party shall use its reasonable efforts to resolve objections, if any, which
may be asserted with respect to the Merger under the HSR Act, the Xxxxxxx Act,
as amended, the Xxxxxxx Act, as amended, the Federal Trade Commission Act, as
amended, the German Antitrust Laws and any other federal, state or foreign Law
or, regulation or decree designed to prohibit, restrict or regulate actions for
the purpose or effect of monopolization or restraint of trade (collectively
"Antitrust Laws"). In the event any Litigation is threatened or instituted
challenging the Merger as violative of Antitrust Laws, each Party shall use its
reasonable efforts to avoid the filing of, or resist or resolve such Litigation.
Each Party shall use its reasonable efforts to take such action as may be
required by: (i) the DOJ and/or the FTC and/or any Regulatory Authority in the
Federal Republic of Germany in order to resolve such objections as any of them
may have to the Merger under the Antitrust Laws, or (ii) any federal or state
court of the United States, or similar court of competent jurisdiction in any
foreign jurisdiction, in any suit brought by any Regulatory Authority or any
other Person challenging the Merger as violative of the Antitrust Laws, in order
to avoid the entry of any Order (whether temporary, preliminary or permanent)
which has the effect of preventing the consummation of the Merger and to have
vacated, lifted, reversed or overturned any such Order. Reasonable efforts shall
not include the willingness of Purchaser to accept an Order agreeing to the
divestiture, or the holding separate, of any Assets of any Affiliate of
Purchaser or any Company Entity which Purchaser reasonably determines to be
material to Purchaser or to the benefits of the transaction for which it has
bargained for hereunder. Purchaser shall be entitled to direct any proceedings
or negotiations with any Regulatory Authority relating to any of the foregoing,
provided that it shall afford the Company a reasonable opportunity to
participate therein. Notwithstanding anything to the contrary in this Section,
no Affiliate of Purchaser shall be required to divest any of its businesses,
product lines or Assets, or to take or agree to take any other action or agree
to any limitation, that is reasonably likely to have a Material Adverse Effect
on Purchaser or on Purchaser combined with the Company after the Effective Time.
(b) The Parties hereto shall cooperate with each other and use their
reasonable efforts to promptly prepare and file all necessary documentation, to
effect all applications, notices, petitions and filings (which shall include the
filings pursuant to subsection (a) above), and to obtain as promptly as
practicable all Consents of all Regulatory Authorities and other Persons which
are necessary or advisable to consummate the transactions contemplated by this
Agreement (including the Merger). The Parties agree that they will consult with
each other with respect to the obtaining of all Consents of all Regulatory
Authorities and other Persons necessary or advisable to consummate the
transactions contemplated by this Agreement and each Party will keep the other
apprised of the status of matters relating to contemplation of the transactions
contemplated herein. Each Party also shall promptly advise the other upon
receiving any communication from any Regulatory Authority whose Consent is
required for consummation of the transactions contemplated by this Agreement
which causes such Party to believe that there is a reasonable likelihood that
any requisite Consent will not be obtained or that the receipt of any such
Consent will be materially delayed.
42
9.4 Filings with State Offices.
Upon the terms and subject to the conditions of this Agreement, the Company
shall execute and file the Certificate of Merger and the Amended and Restated
Articles of Incorporation with the Secretary of State of the State of Georgia in
connection with the Closing.
9.5 Agreement as to Efforts to Consummate.
Subject to the terms and conditions of this Agreement, each Party agrees to
use, and to cause its Subsidiaries to use, its reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper, or advisable under applicable Laws to consummate and make
effective, as soon as reasonably practicable after the date of this Agreement,
the transactions contemplated by this Agreement, including using its reasonable
efforts to lift or rescind any Order adversely affecting its ability to
consummate the transactions contemplated herein and to cause to be satisfied the
conditions referred to in Article 10; provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement.
9.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, the Company shall keep Purchaser advised
of all material developments relevant to its business and to consummation of the
Merger and shall permit Purchaser to make or cause to be made such investigation
of the business and properties of the Company and its Subsidiaries and of their
respective financial and legal conditions as Purchaser reasonably requests,
provided that such investigation shall be reasonably related to the transactions
contemplated hereby and shall not interfere unnecessarily with the normal
operations of the Company. No investigation by a Party shall affect the ability
of such Party to rely on the representations and warranties of the other Party.
(b) In addition to Purchaser's obligations under the Confidentiality
Agreement, which is hereby reaffirmed and adopted, and incorporated by reference
herein Purchaser shall, and shall cause its advisers and agents to, maintain the
confidentiality of all confidential information furnished to it by the Company
concerning the Company and its Subsidiaries' businesses, operations, and
financial positions and shall not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement. If this
Agreement is terminated prior to the Effective Time, Purchaser shall promptly
return or certify the destruction of all documents and copies thereof, and all
work papers containing confidential information received from Company.
(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant or agreement of the other Party or which
has had or is reasonably likely to have a Company Material Adverse Effect or a
Purchaser Material Adverse Effect, as applicable.
43
9.7 Press Releases.
Prior to the Effective Time, the Company and Purchaser shall consult with
each other as to the form and substance of any press release or other public
disclosure materially related to this Agreement or any other transaction
contemplated hereby; provided, that nothing in this Section 9.7 shall be deemed
to prohibit any Party from making any disclosure which its counsel deems
necessary or advisable in order to satisfy such Party's disclosure obligations
imposed by Law.
9.8 State Takeover Laws.
Each Company Entity shall take all necessary steps to comply with or exempt
the transactions contemplated by this Agreement from, or if necessary to
challenge the validity or applicability of, any applicable Takeover Law.
9.9 Employee Benefits.
(a) Except as may otherwise be required by the German Collective Bargaining
Agreements, Purchaser agrees that, for a period of 12 months following the
Effective Time, the Surviving Corporation shall provide generally to officers
and employees of the Company Entities employee benefits under employee benefit
and welfare plans, on terms and conditions which when taken as a whole are
substantially similar to those currently provided by the Company Entities to
their similarly situated officers and employees. Purchaser also shall cause the
Surviving Corporation to honor in accordance with their terms all provisions for
vested benefits or other vested amounts earned or accrued through the Effective
Time under the Company Benefit Plans.
(b) The Company's Board of Directors shall take all action required and
necessary (i) to accelerate and cancel all outstanding Company Options whether
under the 1997 Stock Incentive Plan or otherwise (other than under the Employee
Stock Purchase Plan), prior to the Effective Time, (ii) in connection with the
foregoing, to obtain the consent of each German Optionholder to the acceleration
and cancellation of all Company Options held by him or her prior to the
Effective Time and (iii) to terminate the Employee Stock Purchase Plan, any
purchase period thereunder and all Company Options thereunder, prior to the
Effective Time. The Company shall return to each participant in the Employee
Stock Purchase Plan the balance of his or her plan account prior to the
Effective Time.
9.10 Indemnification.
(a) For a period of six years after the Effective Time, Purchaser shall,
and shall cause the Surviving Corporation to, indemnify, defend and hold
harmless the present and former directors, officers, employees and agents of the
Company Entities (each, an "Indemnified Party") against all Liabilities arising
out of actions or omissions arising out of the Indemnified Party's service or
services as directors, officers, employees or agents of the Company or, at the
Company's request, of another corporation, partnership, joint venture, trust or
other enterprise occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement) to the fullest extent permitted
under
44
Georgia Law and the Company Articles of Incorporation and Company Bylaws as in
effect on the date hereof, including provisions relating to advances of expenses
incurred in the defense of any Litigation and whether or not Purchaser is
insured against any such matter. Without limiting the foregoing, in any case in
which approval by the Surviving Corporation is required to effectuate any
indemnification, the Surviving Corporation shall direct, at the election of the
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Purchaser and the Indemnified
Party.
(b) Purchaser shall, or shall cause the Surviving Corporation to, use its
reasonable efforts (and the Company shall cooperate prior to the Effective Time
in these efforts) to maintain in effect for a period of six years after the
Effective Time the Company's existing directors' and officers' liability
insurance policy (provided that Purchaser or the Surviving Corporation may
substitute therefor (i) policies of at least $5 million of coverage containing
terms and conditions which are substantially no less advantageous or (ii) with
the consent of the Company given prior to the Effective Time, any other policy)
with respect to claims arising from facts or events which occurred prior to the
Effective Time and covering persons who are currently covered by such insurance;
provided, that neither Purchaser nor the Surviving Corporation shall be
obligated to make aggregate annual premium payments for such six-year period in
respect of such policy (or coverage replacing such policy) which exceed, for the
portion related to Company's directors and officers, 150% of the annual premium
payments on the Company's current policy in effect as of the Effective Time (the
"Maximum Amount"). If the amount of the premiums necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount, Purchaser or the
Surviving Corporation shall use its best efforts to maintain the most
advantageous policies of directors' and officers' liability insurance obtainable
for a premium equal to the Maximum Amount.
(c) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section 9.10, upon learning of any such Liability or Litigation,
shall promptly notify the Surviving Corporation thereof. In the event of any
such Litigation (whether arising before or after the Effective Time), (i) the
Surviving Corporation shall have the right to assume the defense thereof and the
Surviving Corporation shall not be liable to such Indemnified Parties for any
legal expenses of other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof, except that if
the Surviving Corporation elects not to assume such defense or counsel for the
Indemnified Parties advises that there are substantive issues which raise
conflicts of interest between the Surviving Corporation and the Indemnified
Parties, the Indemnified Parties may retain counsel satisfactory to them, and
the Surviving Corporation shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; provided, that Surviving Corporation shall be obligated pursuant to
this paragraph (c) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction; (ii) the Indemnified Parties will cooperate in the
defense of any such Litigation; and (iii) the Surviving Corporation shall not be
liable for any settlement effected without its prior written consent; and
provided further that the Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent
45
jurisdiction shall determine, and such determination shall have become final,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable Law.
(d) If the Surviving Corporation or any successors or assigns shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving Person of such consolidation or merger or shall transfer all or
substantially all of its assets to any Person, then and in each case, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation shall assume the obligations set forth in this Section 9.10.
(e) The provisions of this Section 9.10 are intended to be for the
benefit of and shall be enforceable by, each Indemnified Party and their
respective heirs and representatives.
9.11 Votes of the Re-Investing Shareholders.
Each of the Re-Investing Shareholders agrees to vote all shares of
Company Common Stock beneficially owned by him, her or it and identified on
Section 6.2 of the Re-Investing Shareholders Disclosure Memorandum for the
approval and adoption of this Agreement, the Amended and Restated Articles of
Incorporation and the Merger.
9.12 Purchaser Financing.
Purchaser shall use its best efforts to obtain financing commitments (the
"Commitment Letters") on or prior to April 30, 2003, that are reasonably
satisfactory to the Company and that provide for an amount sufficient to fund
the Cash Payment, pay amounts owed to the Senior Lenders under the Credit
Agreement (giving effect to the terms of the Senior Lender/CGW Agreement), fund
$5 million owed by the Company to Xxxxx X. Xxxxxxxxxxx, Xx., fund up to $8
million of fees associated with the consummation of the transactions
contemplated by this Agreement, and fund up to (euro)10 million to satisfy the
working capital requirements of the Company's German business (the "Financing").
The Purchaser shall seek to obtain the Commitment Letters on substantially the
same terms contemplated by the Financing Arrangements or shall seek Commitment
Letters for alternative financing on terms that are not materially less
favorable from the Financing Arrangements, or with lenders substantially similar
to those indicated in Section 7.7 as providing the Financing Arrangements, and
will use its best efforts to satisfy any conditions to obtaining such Commitment
Letters as detailed in the Financing Arrangements. In addition, Purchaser and
the Company shall use their reasonable efforts to negotiate and finalize
definitive agreements with respect to the Financing prior to the mailing of the
Proxy Statement, which obligation shall in no way (i) restrict the conditions
that may be imposed in such definitive agreements with respect to the closing of
such Financing or (ii) alter the Company's obligation to mail the Proxy
Statement to its shareholders at the earliest practicable time. For the
avoidance of doubt, obtaining Financing shall not require Purchaser to pay
materially greater financing or other fees than as set forth in the Financing
Arrangements or require Purchaser to issue any equity to any source of Financing
in an amount that is materially more than what is
46
contemplated by the Financing Arrangements. Purchaser shall, for each Commitment
Letter, provide the Company with written notice (each a "Commitment Letter
Notice") when the negotiation of such Commitment Letter has been completed and
the Purchaser is prepared to accept and execute such Commitment Letter.
The Company may request, by written notice (each a "Delay Notice") that
the Purchaser delay the acceptance and execution of any Commitment Letter for up
to 72 hours following the receipt by the Purchaser of the related Delay Notice,
if the Company believes in good faith that such additional period is reasonably
necessary for the Company to adequately consider any Acquisition Proposal,
notice of which has been made and delivered to the Purchaser in accordance with
this Agreement. The Purchaser agrees to comply with such Delay Notice and
refrain from the acceptance and execution of the related Commitment Letter
unless such delay would, in the good faith belief of the Purchaser, result in
the withdrawal of such Commitment Letter by the lender thereunder, or unless
such delay would otherwise cause the Purchaser to breach any of its obligations
under this Agreement or would cause any of the conditions in this Agreement not
to be met.
9.13 Shareholders' Agreement.
Each of the Re-Investing Shareholders agrees to enter into a
shareholders' agreement with CGW (who together with the Re-Investing
Shareholders will hold all of the outstanding shares of Surviving Corporation
Series B Participating Preferred Stock) containing customary terms and
conditions (the "Shareholders' Agreement"). Each of the Re-Investing
Shareholders, other than Xx. Xxxxxxxxxxx with respect to 3,450,000 shares of
Surviving Corporation Series B Participating Preferred Stock representing
Company Common Stock currently pledged by Xx. Xxxxxxxxxxx, also agree to pledge
their shares of Series B Participating Preferred Stock to Xxxxxxx Xxxxx Capital
as security for amounts provided by Xxxxxxx Xxxxx Capital to repay the Senior
Lenders in the event CGW also pledges its shares of Surviving Corporation Series
B Participating Preferred Stock.
9.14 Release of Claims.
In consideration of the transactions contemplated by this Agreement and
effective upon the Effective Time, the Re-Investing Shareholders each agree, on
behalf of themselves and their successors and assigns, now and forever, to
release and discharge the Company and its Affiliates, officers, directors,
stockholders, employees, agents, attorneys, successors and assigns from any and
all liabilities, claims, charges, allegations, actions, causes of action, sums
of money due, suits, debts, contracts, agreements, promises and demands
whatsoever, in law or in equity, whether known or unknown, which any of the
Re-Investing Shareholders may now have or may later claim to have had arising
out of anything that has occurred up through the Effective Time, as a result of
such Re-Investing Shareholders' relationship with the Company as a director,
officer or shareholder of the Company.
47
9.15 Company Financial Advisor.
The Company agrees to terminate the Engagement Letter dated October 24,
2000 (as amended on February 25, 2002 and July 31, 2002) between Deutsche Bank
and the Company, on or prior to the date the Proxy Statement is first mailed to
the shareholders of the Company, and provide Purchaser with a copy of such
termination notice.
ARTICLE 10
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
10.1 Conditions to Obligations of Each Party.
The respective obligations of each Party to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 12.7:
(a) Shareholder Approval. The Company Shareholder Approval and the
---------------------
Disinterested Shareholder Approval shall have been obtained at the Shareholders'
Meeting for the approval and adoption of the Agreement, the Amended and Restated
Articles of Incorporation and the Merger.
(b) Regulatory Approvals. All Consents of, filings and registrations
---------------------
with, and notifications to, all Regulatory Authorities required for consummation
of the Merger shall have been obtained or made and shall be in full force and
effect and all waiting periods required by Law shall have expired.
(c) Consents and Approvals. Each Party shall have obtained any and all
-----------------------
Consents required for consummation of the Merger (other than those referred to
in Section 10.1(b)) or for the preventing of any Default under any Contract or
Permit of such Party which, if not obtained or made, is reasonably likely to
have, individually or in the aggregate, a Company Material Adverse Effect or a
Purchaser Material Adverse Effect, as applicable.
(d) Legal Proceedings. No court or governmental or Regulatory Authority
------------------
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any Law or Order (whether temporary, preliminary or permanent) or taken
any other action which prohibits, restricts in a material and fundamental manner
or makes illegal the consummation of the transactions contemplated by this
Agreement.
(e) Purchaser Financing. Purchaser shall have obtained the Financing on
--------------------
terms contemplated by the Commitment Letters or alternative financing on terms
that, in the reasonable judgment of the Board of Directors of Purchaser,
exercised in good faith, satisfy the standards set forth in Section 9.12, or
with lenders substantially similar to those indicated in Section 7.7 as
providing the Financing Arrangements (the "Alternative Financing"), unless the
failure to obtain the Financing or Alternative Financing was the result of a
failure by Purchaser to perform any covenant or condition contained therein or
herein or the inaccuracy of any representation or warranty of Purchaser. CGW
shall have
48
exchanged the Securicor Notes for shares of Series A Preferred Stock in the
Surviving Corporation, unless the failure to exchange was the result of a
failure by CGW or the Purchaser to perform any covenant or agreement required to
be performed in the Securicor Agreement.
(f) Fairness Opinion. The Special Committee shall have received from the
-----------------
Special Committee Financial Advisor a letter, dated after the date the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2002, has been
filed with the SEC and prior to the date of the Proxy Statement, to the effect
that, in the opinion of such firm, the consideration to be received by the
holders of the Company Common Stock (other than the Re-Investing Shareholders)
in connection with the Merger is fair, from a financial point of view, to such
shareholders as of the date of this Agreement.
10.2 Conditions to Obligations of Purchaser.
The obligations of Purchaser to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Purchaser pursuant to
Section 12.7(a):
(a) Representations and Warranties. For purposes of this Section
-------------------------------
10.2(a), the accuracy of the representations and warranties of the Company and,
as applicable, the Re-Investing Shareholders set forth in this Agreement shall
be assessed as of the date of this Agreement and as of the Effective Time with
the same effect as though all such representations and warranties had been made
on and as of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such date). The
representations and warranties set forth in Section 5.3 (other than in Section
5.4(d)) and 6.2 shall be true and correct in all respects. There shall not exist
inaccuracies in the representations and warranties of the Company and, as
applicable, the Re-Investing Shareholders set forth in this Agreement (including
the representations and warranties set forth in Section 5.3) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to have, a
Company Material Adverse Effect; provided that, for purposes of this sentence
only, those representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" shall be deemed not to include such
qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
----------------------------------------
agreements and covenants of the Company and the Re-Investing Shareholders to be
performed and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly performed
and complied with in all material respects.
(c) Certificates.
-------------
(i) The Company shall have delivered to Purchaser (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions set forth in Sections 10.1,10.2(a) and
10.2(b), as such conditions relate to the Company, have
49
been satisfied, (ii) certified copies of resolutions duly adopted by the
Company's Board of Directors and the Special Committee and the Company's
shareholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated hereby, all in such
reasonable detail as Purchaser and its counsel shall request, and (iii) a
certificate, in form and substance satisfactory to Purchaser, duly
executed by the chief financial officer of the Company and certifying
that the Company is not as of the date of the Closing and has not been at
any time during the 5-year period ending on such date a United States
real property holding corporation within the meaning of Section 897(c)(2)
of the Internal Revenue Code.
(ii) Each Re-Investing Shareholder shall have delivered to
Purchaser a certificate, dated as of the Effective Time and signed by
such Re-Investing Shareholder, to the effect that the conditions set
forth in Sections 10.2(a) and 10.2(b), as such conditions relate to the
Re-Investing Shareholder, have been satisfied.
(d) Agreement with Senior Lenders. The Agreement dated February 25, 2003,
------------------------------
by and among CGW and the Senior Lenders (the "Senior Lender/CGW Agreement")
shall be in full force and effect and shall not have been terminated by any of
the Senior Lenders, unless any such termination was the result of a failure by
CGW or the Purchaser to perform any covenant or agreement in the Senior
Lender/CGW Agreement.
(e) Agreement with Securicor. The Agreement dated March 28, 2003, by and
-------------------------
among CGW and Securicor (the "Securicor Agreement"), pursuant to which CGW has
agreed to purchase from Securicor all of its rights, title and interest in
certain obligations of the Company to Securicor (the "Securicor Notes"), shall
be in full force and effect and shall not have been terminated by Securicor,
unless any such termination was the result of a failure by CGW or the Purchaser
to perform any covenant or agreement in the Securicor Agreement.
(f) Seventh Amendment to Credit Agreement. The Seventh Amendment to the
--------------------------------------
Credit Agreement, attached as Section 5.16(c) of the Company Disclosure
Memorandum, shall be in full force and effect and shall not have been terminated
by any of the parties thereto.
10.3 Conditions to Obligations of Company.
The obligations of the Company to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Company pursuant to
Section 12.7(b):
(a) Representations and Warranties. For purposes of this Section
-------------------------------
10.3(a), the accuracy of the representations and warranties of Purchaser set
forth in this Agreement shall be assessed as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of
50
the Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). There shall not
exist inaccuracies in the representations and warranties of Purchaser set forth
in this Agreement such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Purchaser Material Adverse Effect; provided that,
for purposes of this sentence only, those representations and warranties which
are qualified by references to "material" or "Material Adverse Effect" shall be
deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
----------------------------------------
agreements and covenants of Purchaser to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(c) Certificates. Purchaser shall have delivered to the Company (i) a
-------------
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that the
conditions set forth in Section 10.1 as such conditions relate to Purchaser and
in Sections 10.3(a) and 10.3(b) have been satisfied, and (ii) certified copies
of resolutions duly adopted by Purchaser's Board of Directors and sole
stockholder evidencing the taking of all corporate action necessary to authorize
the execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, all in such reasonable detail as the
Company and its counsel shall request.
(d) Exchange Agent Certification. The institution selected by Purchaser
-----------------------------
to serve as Exchange Agent shall have delivered to the Company a certificate,
dated as of the Effective Time, to the effect that Purchaser has deposited with
the Exchange Agent sufficient funds to make the Cash Payments.
(e) Xxxxxxxxxxx Funding. Purchaser shall have funded the $5 Million owed
--------------------
by the Company to Xxxxx X. Xxxxxxxxxxx, Xx.
ARTICLE 11
TERMINATION
11.1 Termination.
Notwithstanding any other provision of this Agreement, and
notwithstanding the approval of this Agreement by the shareholders of the
Company, this Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time:
(a) By mutual written agreement of Purchaser and the Company; or
(b) By the Company or Purchaser (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by any
other Party or, with respect to Purchaser's right to terminate, a material
breach by any Re-Investing Shareholder, of any representation or warranty
contained in this Agreement which cannot
51
be or has not been cured within 10 days after the giving of written notice to
the breaching Party of such breach; or
(c) By the Company or Purchaser (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by any
other Party or, with respect to Purchaser's right to terminate, a material
breach by any Re-Investing Shareholder, of any covenant or agreement contained
in this Agreement which cannot be or has not been cured within 10 days after the
giving of written notice to the breaching Party of such breach; or
(d) By the Company or Purchaser (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event (i) any Consent of any
Regulatory Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final nonappealable
action of such authority or if any action taken by such authority is not
appealed within the time limit for appeal, (ii) any Law or Order permanently
restraining, enjoining or otherwise prohibiting the consummation of the Merger
shall have become final and nonappealable, or (iii) that the Company Shareholder
Approval and the Disinterested Shareholder Approval is not obtained at the
Shareholders' Meetings; or
(e) By the Company or Purchaser in the event that the Merger shall not
have been consummated by October 31, 2003, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by any
breach of this Agreement by the Party electing to terminate pursuant to this
Section 11.1(e); or
(f) By Purchaser in the event that (i) the Board of Directors of the
Company, shall have failed to reaffirm its approval upon Purchaser's request for
such reaffirmation of the Merger and the transactions contemplated by this
Agreement (to the exclusion of any other Acquisition Proposal), or shall have
resolved not to reaffirm the Merger, or (ii) the Board of Directors of the
Company shall have failed to include in the Proxy Statement its recommendation,
without modification or qualification, that the Company shareholders give the
Company Shareholder Approval or shall have withdrawn, qualified or modified, or
proposed publicly to withdraw, qualify or modify, in a manner adverse to
Purchaser, the recommendation of such Board of Directors to the Company
shareholders that they give the Company Shareholder Approval, or (iii) the Board
of Directors of the Company shall have affirmed, recommended or authorized
entering into any Acquisition Transaction other than the Merger or, within ten
business days after commencement of any tender or exchange offer for any shares
of Company Common Stock, the Board of Directors of the Company shall have failed
to recommend against acceptance of such tender or exchange offer by its
shareholders or takes no position with respect to the acceptance of such tender
or exchange offer by its shareholders; or
(g) By the Company, if prior to the giving of the Company Shareholder
Approval, the Board of Directors of the Company has made a Subsequent
Determination in accordance with Section 9.1(h); provided, however, that (A)
prior to any such
52
termination, the Company shall, and shall cause its advisors to, negotiate with
Purchaser to make such adjustments in the terms and conditions of this Agreement
as would enable the Company to proceed with the transactions contemplated herein
on such adjusted terms, and (B) following such termination the Company shall
tender to Purchaser payment in full of the amount specified in Section 12.2(b)
on the date specified in 12.2(b).
(h) By the Company or Purchaser (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event that any of the conditions
precedent to the obligations of such Party to consummate the Merger cannot be
satisfied or fulfilled by October 31, 2003.
(i) By the Company or Purchaser in the event the Purchaser does not
obtain Commitment Letters for the Financing on or prior to May 31, 2003.
11.2 Effect of Termination.
In the event of the termination and abandonment of this Agreement
pursuant to Section 11.1, this Agreement shall become void and have no effect,
except that (i) the provisions of this Section 11.2, Section 9.6(b), and Article
1 and Article 12, shall survive any such termination and abandonment, and (ii)
no such termination shall relieve the breaching Party from Liability resulting
from any breach by that Party of this Agreement.
11.3 Non-Survival of Representations and Covenants.
The respective representations, warranties, obligations, covenants, and
agreements of the Parties shall not survive the Effective Time except this
Section 11.3, Sections 9.9 and 9.10 and Article 1, Article 2, Article 3, Article
4 and the definitions contained in Article 12 that are used in such Sections or
Articles.
ARTICLE 12
MISCELLANEOUS
12.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
"Acquisition Agreement" has the meaning set forth in Section
9.1(h).
"Acquisition Proposal" means any proposal (whether communicated
to the Company or publicly announced to the Company's shareholders) by
any Person (other than Purchaser or any of its Affiliates) for an
Acquisition Transaction involving the Company or any of its present or
future consolidated Subsidiaries, or any combination of such
Subsidiaries, the assets of which
53
constitute ten percent (10%) or more of the consolidated assets of the
Company as reflected on the Company's Financial Statements.
"Acquisition Transaction" means any transaction or series of
related transactions (other than the transactions contemplated by this
Agreement) involving: (i) any acquisition or purchase from the Company by
any Person or "Group" (other than Purchaser or any of its Affiliates) of
5% or more in interest of the total outstanding voting securities of the
Company or any of its Subsidiaries, or any tender offer or exchange offer
that if consummated would result in any Person or "Group" (other than
Purchaser or any of its Affiliates) beneficially owning 5% or more in
interest of the total outstanding voting securities of the Company or any
of its Subsidiaries, or any merger, consolidation, business combination
or similar transaction involving the Company pursuant to which the
shareholders of the Company immediately preceding such transaction hold
less than 95% of the equity interests in the surviving or resulting
entity (which includes the parent corporation of any constituent
corporation to any such transaction) of such transaction; (ii) any sale
or lease (other than in the ordinary course of business), or exchange,
transfer, license (other than in the ordinary course of business),
acquisition or disposition of 5% or more of the Assets of the Company; or
(iii) any liquidation or dissolution of the Company. For purposes of this
definition, "Group" shall have the meaning given to it in Section 13(d)
of the Exchange Act.
"Affiliate" of a Person means: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person; (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other
Person for which a Person described in clause (ii) acts in any such
capacity.
"Agreement" has the meaning set forth in the Introductory
paragraph.
"Alternative Financing" has the meaning set forth in Section
.10.1(e)
"Amended and Restated Articles of Incorporation" means that
certain form of amended and restated articles of incorporation of the
Company attached hereto as Exhibit A.
"Amended and Restated Bylaws" means that certain form of amended
and restated bylaws of the Company attached hereto as Exhibit B.
"Antitrust Laws" has the meaning set forth in Section 9.3.
"Assets" of a Person means all of the assets, properties and
rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or
contingent, or utilized in such Person's business, directly or
indirectly, in whole or in part, whether or not carried on the
54
books and records of such Person, and whether or not owned in the name
of such Person or any Affiliate of such Person and wherever located.
"Canadian Benefit Plan" has the meaning set forth in Section
5.15(a).
"Cash Payment" has the meaning set forth in Section 3.1(b).
"Certificates" has the meaning set forth in Section 4.1(a).
"Certificate of Merger" has the meaning set forth in Section
1.3.
"CGW" means CGW Southeast Partners IV, L.P.
"Closing" has the meaning set forth in Section 1.2.
"Closing Date" means the date on which the Closing occurs.
"Company" has the meaning set forth in the Introductory
paragraph.
"Company Articles of Incorporation" has the meaning set forth
in Section 5.1.
"Company Benefit Plans" has the meaning set forth in Section
5.15(a).
"Company Bylaws" has the meaning set forth in Section 5.1.
"Company Common Stock" means the $0.01 par value per share,
common stock of the Company.
"Company Contracts" has the meaning set forth in Section
5.16(a).
"Company Disclosure Memorandum" means the written information
entitled "AHL Services, Inc. Disclosure Memorandum" delivered prior to
the date of this Agreement to Purchaser describing in reasonable detail
the matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made. Information disclosed with respect
to one Section shall be deemed to be disclosed for purposes of any
other Section for which such disclosure is applicable, only if such
applicability is clear in the specific context and cross-referenced to
the appropriate Sections.
"Company Entities" means, collectively, the Company and all
Company Subsidiaries and "Company Entity" means, any of the Company or
a Company Subsidiary.
"Company ERISA Plan" has the meaning set forth in Section
5.15(a).
"Company Financial Advisor" means CIBC World Markets Corp.
55
"Company Financial Statements" means (i) the consolidated
balance sheets (including related notes and schedules, if any) of the
Company as of December 31, 2000 and 2001, and the related statements of
operations, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) for the two fiscal years ended
December 31, 2000 and 2001, and as filed by the Company in SEC
Documents, and (ii) the consolidated balance sheets of the Company
(including related notes and schedules, if any) and related statements
of operations, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) included in SEC
Documents filed with respect to all periods ended on or subsequent to
December 31, 2002.
"Company Intellectual Property" has the meaning set forth in
Section 5.11(a).
"Company Material Adverse Effect" means an event, change or
occurrence which, individually or together with any other event, change
or occurrence, has a material adverse impact on (i) the financial
condition, business, or results of operations of Company and its
Subsidiaries, taken as a whole, or (ii) the ability of Company to
perform its obligations under this Agreement or to consummate the
Merger or the other transactions contemplated by this Agreement;
provided that the following shall not constitute a Company Material
Adverse Effect:
(a) declines in the price or trading volume of the Company
Common Stock,
(b) adverse effects resulting from changes in the global
economy, the United States or European economies, or
the respective capital or financial markets of such
economies generally,
(c) adverse effects attributable to any mandatory change in
accounting requirements or principles
(d) adverse effects attributable to war, other military
action or any terrorist activity, except for the war or
military action underway as of the date of this
Agreement in and around the Republic of Iraq, or
(e) adverse effects attributable to changes negotiations in
the Federal Republic of Germany relating to taxes,
tariffs or other levies on the temporary staffing
industry.
"Company Options" has the meaning set forth in Section 3.2.
"Company Pension Plan" has the meaning set forth in Section
5.15(a).
"Company Preferred Stock" means the series of preferred
stock of the Company designated by the Amended and Restated Articles of
Incorporation.
56
"Company SEC Reports" has the meaning set forth in Section
5.5(a).
"Company Shareholder Approval" has the meaning set forth in
the Preamble.
"Company Stock Plans" means the Company's 1997 Stock Incentive
Plan, as amended and in effect on the date hereof (the "1997 Stock
Incentive Plan"), and the Company's Amended and Restated Employee Stock
Purchase Plan USA, as amended and in effect on the date hereof (the
"Employee Stock Purchase Plan").
"Company Subsidiary" means a Subsidiary of the Company, which
shall include the Company Subsidiaries described in Section 5.4 and any
corporation, limited liability company, limited partnership or other
organization and held as a Subsidiary by the Company at the Effective
Time.
"Confidentiality Agreement" means that certain Confidentiality
Agreement, dated July 15, 2002, between the Company and CGW.
"Consent" means any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"Contract" means any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
license, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital
stock, Assets or business, and shall include, without limitation, the
Credit Agreement.
"Credit Agreement" means that certain Third Amended and
Restated Credit Agreement dated as of April 12, 2002, by and among the
Company and certain of its subsidiaries, the Senior Lenders and
Wachovia Bank, National Association, as Administrative Agent, as
amended.
"Default" means (i) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or
Permit, (ii) any occurrence of any event that with the passage of time
or the giving of notice or both would constitute a breach or violation
of, default under, contravention of, or conflict with, any Contract,
Law, Order, or Permit, or (iii) any occurrence of any event that with
or without the passage of time or the giving of notice would give rise
to a right of any Person to exercise any remedy or obtain any relief
under, terminate or revoke, suspend, cancel, or modify or change the
current terms of, or renegotiate, or to accelerate the maturity or
performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit.
"Disinterested Shareholder Approval" has the meaning set forth
in the Preamble.
57
"DOJ" has the meaning set forth in Section 9.3(a).
"DOL" has the meaning set forth in Section 5.15(b).
"Effective Time" has the meaning set forth in Section 1.3.
"Employee Benefit Plan" means each pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock
ownership, share purchase, severance pay, vacation, bonus, retention,
change in control or other incentive plan, medical, vision, dental or
other health plan, any life insurance plan, flexible spending account,
cafeteria plan, vacation, holiday, disability or any other employee
benefit plan or fringe benefit plan, including any "employee benefit
plan," as that term is defined in Section 3(3) of ERISA and any other
plan, fund, policy, program, practice, custom understanding or
arrangement providing compensation or other benefits, whether or not
any of the foregoing is or is intended to be (i) covered or qualified
under the Internal Revenue Code, ERISA or any other applicable Law,
(ii) written or oral, (iii) funded or unfunded, (iv) actual or
contingent or (v) arrived at through collective bargaining or
otherwise.
"Environmental Laws" means all Federal, state, local and
foreign Laws relating to pollution or protection of human health or the
environment (including ambient air, soil, surface water, ground water,
wetlands, land surface, or subsurface strata), including, without
limitation, Laws which are administered, interpreted, or enforced by
the United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect
of, pollution or protection of the environment, including the
Comprehensive Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and
other Laws relating to emissions, discharges, Releases, or threatened
Releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of any Hazardous Material.
"Equity Rights" means all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person is or
may be bound to issue additional shares of its capital stock or other
Equity Rights.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means any entity which together with a
Company Entity would be treated as a single employer under Code Section
414.
58
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" has the meaning set forth in Section 4.1(a).
"Exhibits" A through B, inclusive, means the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument
or document without being attached hereto.
"Expenses" has the meaning set forth in Section 12.2(b).
"Financing" has the meaning set forth in Section 9.12.
"Financing Arrangements" has the meaning set forth in Section
7.7.
"FTC" has the meaning set forth in Section 9.3(a).
"GAAP" means generally accepted accounting principles in the
United States, consistently applied during the periods involved.
"GBCC" means the Georgia Business Corporation Code.
"German Antitrust Laws" has the meaning set forth in Section
5.2(c).
"German Collective Bargaining Agreements" has the meaning set
forth in Section 8.2(g).
"German Company Entities" means, collectively, the Company and
any and all Company Subsidiaries organized in, conducting business in,
or qualified to do business in, and subject to the Laws of the Federal
Republic of Germany.
"German Optionholder" has the meaning set forth in Section
5.3(d).
"Hazardous Material" means (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws and including words of similar import under any Environmental Law)
and (ii) any chemicals, pollutants, contaminants, petroleum, petroleum
products, or oil, asbestos-containing materials, any polychlorinated
biphenyls, flammable explosives, radioactive material and urea
formaldehyde foam insulation.
"HSR Act" means Section 7A of the Xxxxxxx Act, as added by
Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
59
"Identified Intellectual Property" has the meaning set forth
in Section 5.11(a).
"Intellectual Property" means the tangible and intangible
rights or interests and intellectual property rights evidenced by,
embodied in, or associated with: (i) any idea, algorithms, design,
concept, technique, methodology, process, invention, discovery or
improvement, whether or not patentable, including all United States and
foreign patents, patent applications, patent license rights, industrial
design registrations, patentable inventions and certificates of
invention, and all continuations, continuations in part, re-issues and
re-examinations relating thereto; (ii) any works of authorship or
expression which includes but is not limited to software, databases and
business plans, whether or not copyrightable, including moral rights
and copyrights recognized by law, together with any renewal or
extension thereof; (iii) any logos, trademarks, domain names, service
marks, trade names and trade dress, and all goodwill relating thereto;
(iv) any trade secrets, technology licenses, confidential information,
shop rights and other intellectual property rights owned or claimed and
embodied therein, or associated therewith, or similar rights
protectable under any laws or international conventions throughout the
world, and (v) in each case of the foregoing items (i) through (iv),
the right to apply for registrations, certificates, or renewals with
respect thereto and the right to prosecute, enforce, obtain damages
relating to, settle or release any past, present, or future
infringement thereof.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
"IRS" has the meaning set forth in Section 5.15(b).
"Knowledge" as used with respect to a Person, other than the
Company, (including references to such Person being aware of a
particular matter) means those facts that are known or should
reasonably have been known after due inquiry by the chairman,
president, chief financial officer, chief accounting officer, chief
operating officer, general counsel, any assistant or deputy general
counsel, or any senior, executive or other vice president of such
Person. "Knowledge" as used with respect to the Company means those
facts that are known or should reasonably have been known after due
inquiry by Xxxxx Xxxxxxxxxxx, Xxxx Xxxxxxx, Xxxxx Xxxxx, Xx
Xxxxxxxxxxxx, Xxxxx Xxxxxxxxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxxx, Xxxx
Xxxxx, Xxxxx Jackwerth, Xxx Xxxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxxxxx, Xxxx
Xxxxxxxxxxx or Xxxxxxx XxXxxxxxx.
"Law" means any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute
applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"Liability" means any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or
expense (including costs of
60
investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes,
bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or
otherwise.
"LIBOR" means the one-year London Interbank Offered Rate as
reported in the Wall Street Journal as the same may be changed from
time to time.
"Licensed Intellectual Property" has the meaning set forth in
Section 5.11(a).
"Lien" means any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (ii) Liens which do
not materially impair the use of or title to the Assets subject to such
Lien.
"Litigation" means any action, arbitration, cause of action,
lawsuit, claim, complaint, criminal prosecution, administrative
proceeding, governmental or, to the Knowledge of the Company, other
examination or investigation, audit (other than regular audits of
financial statements by outside auditors), compliance review or
inspection relating to or affecting a Party, its business, its records,
its policies, its practices, its compliance with Law, its actions, its
Assets (including Contracts related to it), or the transactions
contemplated by this Agreement.
"Losses" means any and all demands, claims, actions or causes
of action, assessments, losses, diminution in value, damages (including
special and consequential damages), liabilities, costs, and expenses,
including interest, penalties, cost of investigation and defense, and
reasonable attorneys' and other professional fees and expenses.
"Merger" has the meaning set forth in Section 1.1.
"Non-Qualified Deferred Compensation Plans" has the meaning
set forth in Section 5.15(e).
"Order" means any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"Owned Intellectual Property" has the meaning set forth in
Section 5.11(a).
61
"Party" means any of the Company or Purchaser, and "Parties"
means the Company and Purchaser.
"Permit" means any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"Person" means a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, limited liability partnership, trust, business
association, group acting in concert, or any person acting in a
representative capacity.
"Plea" has the meaning set forth in Section 5.13(e).
"Proxy Statement" has the meaning set forth in Section 9.1.
"Purchaser" has the meaning set forth in the Introductory
paragraph.
"Purchaser Common Stock" means the common stock, no par value
per share, of Purchaser.
"Purchaser Material Adverse Effect" means an event, change or
occurrence which, individually or together with any other event, change
or occurrence, has a material adverse impact on the ability of
Purchaser to perform its obligations under this Agreement; provided
that adverse effects resulting from changes in the global economy, the
United States economy, or any other economy in which Purchaser
operates, or the respective capital or financial markets of such
economies generally shall not constitute a Purchaser Material Adverse
Effects.
"Real Property" has the meaning set forth in Section 5.17(a).
"Real Property Lease" has the meaning set forth in Section
5.17(a).
"Regulatory Authorities" means, collectively, the SEC, the
Nasdaq Stock Market, The National Association of Securities Dealers,
the FTC, the DOJ, and all other federal, state, county, local, foreign
or other governmental or regulatory agencies, authorities (including
taxing and self-regulatory authorities), instrumentalities,
commissions, boards, institutions administering social security
contributions and levies or bodies having jurisdiction over the Parties
and their respective Subsidiaries.
"Re-Investing Shareholders" has the meaning set forth in the
Introductory paragraph.
"Re-Investing Shareholders Disclosure Memorandum" means the
written information entitled "Re-Investing Shareholders Disclosure
62
Memorandum" delivered prior to the date of this Agreement to the
Company and Purchaser describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which
such disclosure is being made. Information disclosed with respect to
one Section shall be deemed to be disclosed for purposes of any other
Section for which such disclosure is applicable, only if such
applicability is clear in the specific context and cross-referenced to
the appropriate Sections.
"Representative" means any investment banker, financial
advisor, attorney, accountant, consultant, or other representative by a
Person.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air,
soil, surface water, groundwater, wetlands, land or subsurface strata.
"Rollover Shares" has the meaning set forth in the Preamble.
"Schedule 13E-3" has the meaning set forth in Section 9.1.
"SEC" means the United States Securities and Exchange
Commission.
"SEC Documents" means all forms, proxy statements,
registration statements, reports, schedules, and other documents filed
or furnished, or required to be filed or furnished, by a Party or any
of their Subsidiaries with any Regulatory Authority pursuant to the
Securities Laws.
"Securicor" means Securicor plc, a company incorporated under
the laws of England and Wales.
"Securicor Agreement" has the meaning set forth in Section
10.2(e).
"Securicor Notes" has the meaning set forth in Section
10.2(e).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Laws" means the Securities Act, the Exchange Act,
the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated thereunder.
"Senior Financing" has the meaning set forth in Section 7.7.
"Senior Lenders" means Wachovia Bank, National Association;
Wachovia Bank, National Association, London Branch; SunTrust Bank; Bank
of America, N.A.; Fleet National Bank; DZ Bank AG Deutsche
Zentral-Genossenschaftsbank, Frankfurt AM Main, New York Branch; The
Bank of Nova
63
Scotia; ScotiaBank Europe plc; Salomon Brothers Holding Company, Inc.;
Bank One, NA; Sovereign Bank; Bank Austria Creditanstalt Corporate
Finance Inc.; Mizuho Corporate Bank, Limited; Bank Leumi Le-Israel,
B.M., New York Agency; and U.S. Bank National Association.
"Senior Lender/CGW Agreement" has the meaning set forth in
Section 10.2(d).
"Shareholders' Agreement" has the meaning set forth in Section
9.13.
"Shareholders' Meeting" means the meeting of the shareholders
of Company to be held pursuant to Section 9.1, including any
adjournment or adjournments thereof.
"Special Committee" has the meaning set forth in the Preamble.
"Special Committee Financial Advisor" means Xxxxxxx Xxxxx &
Associates, Inc.
"Stock Payment" has the meaning set forth in Section 3.1(c).
"Subordinated Financing" has the meaning set forth in Section
7.7.
"Subsidiaries" means all those corporations, partnerships,
limited liability companies, associations, or other business entities
of which the entity in question either (i) owns or controls 50% or more
of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its
parent (provided, there shall not be included any such entity the
equity securities of which are owned or controlled in a fiduciary
capacity), (ii) in the case of partnerships, serves as a general
partner, (iii) in the case of a limited liability company, serves as a
managing member, or (iv) otherwise has the ability to elect a majority
of the directors, trustees or managing members thereof.
"Subsequent Determination" has the meaning set forth in
Section 9.1(h).
"Superior Proposal" means any Acquisition Proposal (on its
most recently amended or modified terms, if amended or modified) (i)
involving the acquisition of the entire equity interest in, or all or
substantially all of the assets and liabilities of, the Company
Entities and (ii) with respect to which the Board of Directors of the
Company (A) determines in good faith that such Acquisition Proposal, if
accepted, is reasonably likely to be consummated on a timely basis,
taking into account all legal, financial, regulatory and other aspects
of the Acquisition Proposal and the Person or Group making the
Acquisition Proposal, and (B) determines in its good faith judgment
(based on, among other things, the advice of a financial advisor of
nationally recognized reputation) to be more favorable to Company's
shareholders (other than the Re-Investing Shareholders)
64
than the Merger taking into account all relevant factors (including
whether, in the good faith judgment of the Board of Directors of
Company, after obtaining the advice of a financial advisor of
nationally recognized reputation, the Person or Group making such
Acquisition Proposal is reasonably able to finance the transaction,
and any proposed changes to this Agreement that may be proposed by
Purchaser in response to such Acquisition Proposal).
"Surviving Corporation" means the Company as the surviving
corporation resulting from the Merger.
"Surviving Corporation Series B Participating Preferred Stock"
means the Series B Participating Preferred Stock of the Surviving
Corporation having the rights and preferences set forth in the Amended
and Restated Articles of Incorporation.
"Surviving Corporation Common Stock" means the no par value
per share, of common stock of the Surviving Corporation having the
rights and preferences set forth in the Amended and Restated Articles
of Incorporation.
"Takeover Laws" has the meaning set forth in Section 5.22.
"Tax" or "Taxes" means any federal, state, county, local, or
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, recording license, payroll, franchise, net worth,
severance, documentary, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties,
capital stock, paid-up capital, profits, withholding, Social Security,
single business, unemployment, disability, wage (Lohnsteuer), church
(Kirchensteuer), investment grants and subsidies, real property,
personal property, registration, ad valorem, value added, alternative
or add-on minimum, estimated, or other tax or governmental fee of any
kind whatsoever, imposed or required to be withheld or collected by the
United States or any state, county, local or foreign government or
subdivision or agency thereof or similar institution (including
institutions administering social security contributions and levies),
including any interest, penalties, and additions imposed thereon or
with respect thereto.
"Tax Return" means any report, return, information return, or
other information required to be supplied to a Regulatory Authority in
connection with Taxes, including any return of an affiliated or
combined or unitary group that includes a Party or its Subsidiaries.
"Transfer Taxes" has the meaning set forth in Section 12.3.
"Treasury Shares" has the meaning set forth in Section 3.1(d).
"US Company Benefit Plan" has the meaning set forth in Section
5.15(a).
00
"XXXX Xxx" has the meaning set forth in Section 5.13(d).
(b) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
12.2 Expenses.
(a) Except as otherwise provided in Sections 12.2 and 12.3 of this
Agreement, each of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration and application fees, printing fees,
and fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that the Company shall be responsible
for all costs and expenses payable in connection with (i) the printing of the
Proxy Statement and Schedule 13E-3 and the solicitation of the requisite
shareholder approval and (ii) all filings required to be made by the Parties
pursuant to the HSR Act or the German Antitrust Laws.
(b) Notwithstanding the foregoing,
(i) if the Company or Purchaser terminates this Agreement
pursuant to Section 11.1(d)(iii), 11.1(e) or 11.1(h), and there has
been publicly announced and not withdrawn another Acquisition Proposal;
or
(ii) Purchaser shall terminate this Agreement pursuant to
11.1(f); or
(iii) Company shall terminate this Agreement pursuant to
Section 11.1(g)
then (x) if such termination is effective prior to the time at
which the Purchaser enters into Commitment Letters sufficient to
provide the Financing, the Company shall reimburse the Purchaser
and CGW for fees and expenses of Xxxxxx & Bird LLP (U.S. counsel),
Deloitte & Touche (U.S. and German accountants), Flick Xxxxx
Schaumburg (German counsel), Fraser Xxxxxx Casgrain LLP (Canadian
counsel), and Gaiatech (environmental consultants) (the
"Pre-Commitment Expenses") up to an aggregate of $1,250,000, and
shall grant the Purchaser an option to purchase 1,000,000 shares of
Company Common Stock at an exercise price of $1.50 per share, or
(y) if such termination is effective on or after the time of which
the Purchaser enters into Commitment Letters sufficient to provide
the Financing, the Company shall pay to Purchaser an amount equal
to $750,000, and in addition shall reimburse the Purchaser and CGW
for breakup or termination fees or reimbursement obligations
relating to the Financing Arrangements or Commitment Letters, as
applicable, and fees and expenses of Xxxxxx & Bird LLP (U.S.
counsel), Deloitte & Touche (U.S. and German accountants), Flick
Xxxxx Schaumburg (German counsel), Fraser Xxxxxx Casgrain LLP
(Canadian counsel), and Gaiatech (environmental consultants) (the
"Post-Commitment Expenses"), up to an aggregate amount of
$2,500,000. The Company hereby waives any right
66
to set-off or counterclaim against such amount. The termination fee
required by this Section 12.2(b) shall be payable in same-day funds
on the date of consummation of any such Acquisition Transaction.
(c) If this Agreement is terminated by the Company or Purchaser
pursuant to Section 11.1(h) because (i) the condition set forth in Section
10.2(d) cannot be satisfied as a result of the termination of or breach under
the Senior Lender/CGW Agreement by the Senior Lenders, or (ii) the Purchaser has
not obtained Commitment Letters prior to May 31, 2003, then the Company shall
reimburse the Purchaser for its reasonable Pre-Commitment Expenses up to an
aggregate of $400,000.
(d) If this Agreement is terminated by the Purchaser pursuant to
Section 11.1(b) or 11.1(c), then (i) if such termination is effective prior to
the date on which the Purchaser obtains Commitment Letters sufficient to provide
the Financing, the Company shall reimburse the Purchaser for its reasonable
Pre-Commitment Expenses up to an aggregate of $400,000, or (ii) if such
termination is effective on or after the date on which the Purchaser obtains
Commitment Letters sufficient to provide the Financing, the Company shall
reimburse the Purchaser for its reasonable Post-Commitment Expenses up to an
aggregate of $1,750,000.
(e) If Purchaser terminates this Agreement pursuant to Section 11.1(c),
and within twelve months of such termination Company shall enter into an
agreement with respect to an Acquisition Transaction (but changing the
references to the 5% and 95% amounts in the definition of Acquisition
Transaction to 50%), upon consummation of such Acquisition Transaction the
Company shall reimburse the Purchaser for its reasonable Post-Commitment
Expenses up to an aggregate of $1,750,000.
(f) The Parties acknowledge that the agreements contained in paragraphs
(b), (c), (d) and (e) of this Section 12.2 are an integral part of the
transactions contemplated by this Agreement, and that without these agreements,
they would not enter into this Agreement; accordingly, if the Company fails to
pay promptly any fee payable by it pursuant to this Section 12.2, then the
Company shall pay to Purchaser, its costs and expenses (including attorneys'
fees) in connection with collecting such fee, together with interest at a rate
equal to LIBOR from the date such payment was due under this Agreement until the
date of payment.
(g) Nothing contained in this Section 12.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by the Company of
the terms of this Agreement or otherwise limit the rights of Purchaser.
12.3 Transfer Taxes.
All sales, use, transfer, recording, documentary, stamp and other
similar non-income taxes, including any Taxes imposed by virtue of the change in
ownership of the Company Entities, whether directly or indirectly, pursuant to
the transactions contemplated by this Agreement (collectively, the "Transfer
Taxes"), shall be borne by Purchaser. The Purchaser, Company Entities, and
Re-Investing Shareholders shall (i) file
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all necessary Tax Returns and other documents required to be filed with respect
to all such Transfer Taxes and (ii) cooperate to the extent reasonably necessary
to prepare such filings or Tax Returns as may be required.
12.4 Brokers and Finders.
Except for (i) the Company Financial Advisor as to the Company, (ii)
the Special Committee Financial Advisor as to the Special Committee and (iii) an
Affiliate of CGW as to the Purchaser, each of the Parties represents and
warrants that neither it nor any of its officers, directors, employees, or
Affiliates has employed any broker or finder or incurred any Liability for any
financial advisory fees, investment bankers' fees, brokerage fees, commissions,
or finders' fees in connection with this Agreement or the transactions
contemplated hereby. In the event of a claim by any broker or finder based upon
such broker's representing or being retained by or allegedly representing or
being retained by the Company or by Purchaser, each of the Company and
Purchaser, as the case may be, agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
12.5 Entire Agreement.
Except as otherwise expressly provided herein, this Agreement
(including the documents and instruments referred to herein) constitutes the
entire agreement between the Parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or understandings
with respect thereto, written or oral (except, as to Section 9.6(b), for the
Confidentiality Agreement). Other than pursuant to Section 9.10(e), nothing in
this Agreement expressed or implied, is intended to confer upon any Person,
other than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement.
12.6 Amendments.
To the extent permitted by Law, this Agreement or the Amended and
Restated Articles of Incorporation may be amended by a subsequent writing signed
by each of the Parties upon the approval of each of the Parties, whether before
or after shareholder approval of this Agreement has been obtained; provided,
that after any such approval by the holders of Company Common Stock, there shall
be made no amendment that requires further approval by such shareholders.
12.7 Waivers.
(a) Prior to or at the Effective Time, Purchaser, acting through its
Board of Directors, shall have the right to waive any Default in the performance
of any term of this Agreement by the Company, to waive or extend the time for
the compliance or fulfillment by the Company of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to the
obligations of Purchaser under this Agreement, except any condition which, if
not satisfied, would result in the violation of
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any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Purchaser.
(b) Prior to or at the Effective Time, the Company, acting through its
Special Committee, shall have the right to waive any Default in the performance
of any term of this Agreement by Purchaser, to waive or extend the time for the
compliance or fulfillment by Purchaser of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of the Company under this Agreement, except any condition which, if
not satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of the Company.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
12.8 Assignment.
Except as expressly contemplated hereby, neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any Party
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other Party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the Parties
and their respective successors and assigns.
12.9 Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, or by courier
or overnight carrier, to the persons at the addresses set forth below (or at
such other address as may be provided hereunder), and shall be deemed to have
been delivered as of the date so delivered:
Company: AHL Services, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: A. Xxxxxxx Xxxxxxx
69
Copy to Counsel: King & Spalding LLP
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Purchaser: Huevos Holdings, Inc.
Twelve Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxx Xxxx
Copy to Counsel: Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxx X. XxXxxxx, Esq.
Re-Investing Shareholders c/o:
Xxxxx X. Xxxxxxxxxxx, Xx.
c/o Air Serv Corporation
0000 Xxxxxxxxx Xxxx XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxxx, Xx.
Copy to Counsel: Arnall Golden & Xxxxxxx LLP
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
70
A. Xxxxxxx Xxxxxxx
AHL Services, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: A. Xxxxxxx Xxxxxxx
Caledonia Investments plc
Xxxxxx Xxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxx XX0X 0XX
Facsimile Number: 011-44-207-802-4860
Attention: The Company Secretary
12.10 Governing Law.
Regardless of any conflict of law or choice of law principles that
might otherwise apply, the Parties agree that this Agreement shall be governed
by and construed in all respects in accordance with the laws of the State of
Georgia. As to any dispute, claim, or litigation arising out of or relating in
any way to this Agreement or the transaction at issue in this Agreement, the
Parties hereto hereby agree and consent to be subject to the exclusive
jurisdiction of the United States District Court for the Northern District of
Georgia. If jurisdiction is not present in federal court, then the Parties
hereby agree and consent to the exclusive jurisdiction of the state courts of
Xxxxxx County, Georgia. Each Party hereto hereby irrevocably waives, to the
fullest extent permitted by Law, (a) any objection that it may now or hereafter
have to laying venue of any suit, action or proceeding brought in such court,
and (b) any claim that any suit, action or proceeding brought in such court has
been brought in an inconvenient forum.
12.11 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
12.12 Captions; Articles and Sections.
The captions contained in this Agreement are for reference purposes
only and are not part of this Agreement. Unless otherwise indicated, all
references to particular Articles or Sections shall mean and refer to the
referenced Articles and Sections of this Agreement.
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12.13 Interpretations.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against any Party, whether under any rule of construction
or otherwise. No Party to this Agreement shall be considered the draftsman. The
Parties acknowledge and agree that this Agreement has been reviewed, negotiated,
and accepted by all Parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all Parties hereto.
12.14 Enforcement of Agreement.
The Parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement was not performed in
accordance with its specific terms or was otherwise breached. It is accordingly
agreed that the Parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
12.15 Severability.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement 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.
[Signatures Continue on Following Page]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
HUEVOS HOLDINGS, INC.
By: /s/ Xxxxx X. XxXxxxxx
------------------------------
President
AHL SERVICES, INC.
By: /s/ Wyck X. Xxxx, Xx.
------------------------------
Chairman, Special Committee
XXXXX X. XXXXXXXXXXX, XX.
By: /s/ Xxxxx X. Xxxxxxxxxxx, Xx.
------------------------------
A. XXXXXXX XXXXXXX
By: /s/ A. Xxxxxxx Xxxxxxx
------------------------------
XXXXXXXXXXX PARTNERS, L.P.
By: Xxxxx X. Xxxxxxxxxxx, Xx.
General Partner
/s/ Xxxxx X. Xxxxxxxxxxx
---------------------------------------------
Xxxxx X. Xxxxxxxxxxx, Xx.
XXXXXXX X. XXXXXXXXXXX, XX.
CHARITABLE REMAINDER TRUST
By: Xxxxxxx X. Xxxxxxxxxxx, Xx., Trustee
/s/ Xxxxx X. Xxxxxxxxxxx, Xx.
---------------------------------------------
Xxxxx X. Xxxxxxxxxxx, Xx.
XXXXXXXX X. XXXXXXXXXXX
/s/ Xxxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Xxxxxxxx X. Xxxxxxxxxxx
CALEDONIA INVESTMENTS PLC
By: /s/ X. X. Xxxxxxxxxx
--------------------------------------
Name: Xxxxxxxx Xxxxx Xxxxxxxxxx
--------------------------------------
Title: Director
--------------------------------------
