Exhibit 10
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STOCK PURCHASE AGREEMENT
by and among
VIAD CORP
and
VIAD SERVICE COMPANIES LIMITED
as Sellers,
and
SAIR GROUP
as Buyer
Dated: May 18, 1999
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . .1
1.2 Other Defined Terms. . . . . . . . . . . . . . . . . . . . . .7
ARTICLE 2 PURCHASE AND SALE OF THE XXXXX SHARES. . . . . . . . . . . . .9
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.2 Sale and Transfer of the Xxxxx Shares. . . . . . . . . . . . .9
2.3 Purchase Price.. . . . . . . . . . . . . . . . . . . . . . . .9
2.4 Deliveries at Closing. . . . . . . . . . . . . . . . . . . . .9
2.5 Purchase Price Adjustment. . . . . . . . . . . . . . . . . . 10
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS. . . . . . . . . . 12
3.1 Organization and Qualification of Sellers. . . . . . . . . . 12
3.2 Authorization of Sellers.. . . . . . . . . . . . . . . . . . 12
3.3 Organization and Qualification of the US Xxxxx Entities;
Subsidiaries.. . . . . . . . . . . . . . . . . . . . . . . . 12
3.3A Organization of the UK Xxxxx Entities; Subsidiaries. . . . . 13
3.4 Capitalization of US Xxxxx Entities; Ownership of Xxxxx
Shares.. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.4A Capitalization of UK Xxxxx Entities; Ownership of Xxxxx
Shares.. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.5 No Conflict or Violation.. . . . . . . . . . . . . . . . . . 16
3.6 US Consents and Approvals. . . . . . . . . . . . . . . . . . 16
3.6A Additional Specific Warranties in Relation to UK Consents
and Approvals. . . . . . . . . . . . . . . . . . . . . . . . 16
3.7 Financial Statements . . . . . . . . . . . . . . . . . . . . 17
3.8 Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . 17
3.9 Absence of Certain Changes or Events.. . . . . . . . . . . . 17
3.10 Real Property -- US and UK.. . . . . . . . . . . . . . . . . 19
3.11 Personal Property. . . . . . . . . . . . . . . . . . . . . . 20
3.12 Contracts and Commitments. . . . . . . . . . . . . . . . . . 21
3.13 Absence of Breaches or Defaults. . . . . . . . . . . . . . . 22
3.14 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.15 Litigation.. . . . . . . . . . . . . . . . . . . . . . . . . 23
3.16 Compliance with Laws.. . . . . . . . . . . . . . . . . . . . 23
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TABLE OF CONTENTS
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PAGE
3.17 US Labor Matters.. . . . . . . . . . . . . . . . . . . . . . 24
3.17A Additional Specific Warranties in Relation to UK Labor
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.18 Employee Plans Other Than UK Pension Plan or GPP.. . . . . . 26
3.18A UK Pension Plans.. . . . . . . . . . . . . . . . . . . . . . 29
3.19 Compliance with Environmental Laws.. . . . . . . . . . . . . 30
3.20 Intellectual Property. . . . . . . . . . . . . . . . . . . . 31
3.21 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . 34
3.21A Additional Specific Warranties in Relation to UK Tax
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.22 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.23 Customers and Suppliers. . . . . . . . . . . . . . . . . . . 38
3.24 Books and Records. . . . . . . . . . . . . . . . . . . . . . 38
3.25 Banking Relationships. . . . . . . . . . . . . . . . . . . . 39
3.26 No Brokers.. . . . . . . . . . . . . . . . . . . . . . . . . 39
3.27 SEC Compliance.. . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . 39
4.1 Organization.. . . . . . . . . . . . . . . . . . . . . . . . 39
4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . 39
4.3 Consents and Approvals.. . . . . . . . . . . . . . . . . . . 40
4.4 No Conflict or Violation.. . . . . . . . . . . . . . . . . . 40
4.5 Litigation.. . . . . . . . . . . . . . . . . . . . . . . . . 40
4.6 Investment Representation. . . . . . . . . . . . . . . . . . 40
4.7 No Brokers.. . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 5 CONDUCT OF BUSINESS PRIOR TO CLOSING . . . . . . . . . . . . 41
5.1 Business in Ordinary Course. . . . . . . . . . . . . . . . . 41
5.2 Investigation by Buyer.. . . . . . . . . . . . . . . . . . . 42
5.3 Consents and Best Efforts. . . . . . . . . . . . . . . . . . 42
5.4 Supplemental Disclosure. . . . . . . . . . . . . . . . . . . 42
5.5 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . 43
5.6 Dormant Entities.. . . . . . . . . . . . . . . . . . . . . . 43
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PAGE
5.7 Sellers' Restructuring.. . . . . . . . . . . . . . . . . . . 43
ARTICLE 6 ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . 44
6.1 Release of Seller Guarantees.. . . . . . . . . . . . . . . . 44
6.2 Arrangements Regarding Employee Plans. . . . . . . . . . . . 44
6.3 Board Approval.. . . . . . . . . . . . . . . . . . . . . . . 48
6.4 GDI Name Change. . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 7 CONDITIONS TO SELLERS' OBLIGATIONS . . . . . . . . . . . . . 48
7.1 Representations and Warranties.. . . . . . . . . . . . . . . 48
7.2 Performance of Obligations.. . . . . . . . . . . . . . . . . 48
7.3 No Proceedings or Litigation.. . . . . . . . . . . . . . . . 48
7.4 HSR and Fair Trading Acts. . . . . . . . . . . . . . . . . . 48
7.5 Board Approval.. . . . . . . . . . . . . . . . . . . . . . . 49
7.6 Opinion of Counsel.. . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 8 CONDITIONS TO BUYER'S OBLIGATIONS. . . . . . . . . . . . . . 49
8.1 Representations and Warranties.. . . . . . . . . . . . . . . 49
8.2 Performance of Obligations.. . . . . . . . . . . . . . . . . 49
8.3 No Proceedings or Litigation.. . . . . . . . . . . . . . . . 49
8.4 HSR and Fair Trading Acts. . . . . . . . . . . . . . . . . . 49
8.5 Board Approval.. . . . . . . . . . . . . . . . . . . . . . . 50
8.6 Opinion of Counsel.. . . . . . . . . . . . . . . . . . . . . 50
8.7 Consents.. . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.8 Restructuring. . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 9 ACTIONS BY SELLERS AND BUYER FOLLOWING THE CLOSING . . . . . 50
9.1 Further Assurances.. . . . . . . . . . . . . . . . . . . . . 50
9.2 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . 50
9.3 Litigation Support.. . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 10 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 54
10.1 General Indemnification. . . . . . . . . . . . . . . . . . . 54
10.2 Special Indemnities. . . . . . . . . . . . . . . . . . . . . 57
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10.3 Limitations on Indemnity.. . . . . . . . . . . . . . . . . . 59
10.4 Special Buyer Indemnities. . . . . . . . . . . . . . . . . . 60
10.5 Exclusive Remedy.. . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 11 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 62
11.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . 62
11.2 Procedure Upon Termination.. . . . . . . . . . . . . . . . . 62
ARTICLE 12 DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . 63
12.1 Appointment of Representatives.. . . . . . . . . . . . . . . 63
12.2 Mediation. . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.3 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . 64
12.4 Equitable Remedies.. . . . . . . . . . . . . . . . . . . . . 65
ARTICLE 13 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . 65
13.1 Survival of Certain Provisions.. . . . . . . . . . . . . . . 65
13.2 Assignment; Binding Effect.. . . . . . . . . . . . . . . . . 66
13.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 66
13.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 67
13.5 Entire Agreement; Amendments and Waivers.. . . . . . . . . . 68
13.6 Disclosure.. . . . . . . . . . . . . . . . . . . . . . . . . 68
13.7 Invalidity.. . . . . . . . . . . . . . . . . . . . . . . . . 68
13.8 Captions.. . . . . . . . . . . . . . . . . . . . . . . . . . 68
13.9 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . 68
13.10 Confidential Information.. . . . . . . . . . . . . . . . . . 68
13.11 Transfer and Similar Taxes.. . . . . . . . . . . . . . . . . 69
13.12 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . 69
13.13 Representation of Counsel; Mutual Negotiation. . . . . . . . 69
13.14 Viad Guarantee.. . . . . . . . . . . . . . . . . . . . . . . 69
13.15 Interpretive Provisions. . . . . . . . . . . . . . . . . . . 69
13.16 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . 70
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made and entered into
as of the 18th day of May, 1999 by and among VIAD CORP, a corporation organized
under the laws of the State of Delaware, United States of America ("VIAD"), VIAD
SERVICE COMPANIES LIMITED, a company organized under the laws of England and
Wales ("VSCL," and collectively with Viad, "SELLERS"), and SAIR GROUP, a company
organized under the laws of Switzerland ("BUYER").
RECITALS:
A. Subject to SCHEDULE 3.4, Viad owns all of the issued and outstanding
shares of capital stock of (i) Greyhound-Xxxxx Incorporated, a Delaware
corporation ("GDI"), which in turn owns, directly or indirectly, all of the
issued and outstanding shares of (a) Xxxxx International Services, Inc., a
Delaware corporation ("DISI"); (b) Xxxxx Houses, Inc., a Delaware corporation
("DHI"); and (c) Xxxxx Houses International, Inc., a Delaware corporation
("XXXXX HOUSES INTERNATIONAL"); which in turn owns all of the issued and
outstanding shares of (d) NAS-Xxxxx Houses Limited, a company organized under
the laws of England and Wales ("NAS-XXXXX").
B. VSCL owns all of the issued and outstanding shares of capital stock of
Xxxxx International (UK) Limited, a company organized under the laws of England
and Wales ("DIL"), which in turn owns all of the issued and outstanding shares
of Xxxxx Houses Limited, a company organized under the laws of England and Wales
("DHL"). GDI, DISI, DHI, Xxxxx Houses International, NAS-Xxxxx, DIL and DHL are
sometimes hereinafter referred to collectively as the "XXXXX ENTITIES."
C. Buyer desires to purchase from Sellers, and Sellers desire to sell to
Buyer, all of the issued and outstanding shares of capital stock of GDI and DIL
(collectively, the "XXXXX SHARES"), upon the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used herein, the following capitalized
terms shall have the respective meanings set forth below:
"Affiliate" shall mean a Person that directly or indirectly, through one or
more intermediaries controls, is controlled by, or is under common control with,
the Person referred to. For purposes of the preceding sentence, the term
"control" shall mean the possession, whether
1
direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person through the ownership of voting securities,
by contract or otherwise.
"Ancillary Agreements" shall mean the Transition Services Agreement,
Intangibles Purchase Agreement and Noncompetition Agreement.
"Associated Company" shall mean any entity which directly or indirectly
owns or controls or is directly or indirectly owned or controlled by or is in
common ownership or control with Buyer to the extent of holding more than 50% of
the shares or stock having the power to vote at a general meeting or equivalent.
"Balance Sheet Date" shall mean January 1, 1999.
"Benefit Arrangement" shall mean any written or oral employment,
consulting, severance or other similar contract, arrangement or policy and each
written plan, arrangement, program, agreement or commitment providing coverage
for disability benefits, dependent care assistance benefits, educational
assistance benefits, cafeteria benefits, vacation benefits, retirement benefits,
life, health or accident benefits (including any "voluntary employees'
beneficiary association" as defined in Section 501(c)(9) of the Code providing
for the same or other benefits) or for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights, stock purchases or other
forms of incentive compensation or post-retirement insurance, compensation or
benefits which (a) is not a Welfare Plan, US Pension Plans, the UK Pension Plan,
the GPP or a Multiemployer Plan, (b) is entered into, maintained, contributed to
or required to be contributed to, as the case may be, by Viad, VSCL or any of
the Xxxxx Entities, and (c) covers any employee or former employee of any of the
Xxxxx Entities (with respect to their employment relationship with any such
entity).
"Business Day" shall mean each weekday that is not a holiday under US
federal or Delaware law.
"Buyer's Auditors" shall mean PricewaterhouseCoopers LLP.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, including regulations and other pronouncements promulgated thereunder.
"Contract" shall mean any agreement, contract, lease, note, loan, evidence
of indebtedness, letter of credit, undertaking, covenant not to compete,
license, instrument, obligation, commitment, purchase and sales order, quotation
or other executory commitment (whether written or oral) to which any of the
Xxxxx Entities is a party or by which any of the Xxxxx Entities or their
respective properties or assets are bound.
"Employee Plans" shall mean all Benefit Arrangements, Multiemployer Plans,
US Pension Plans, the UK Pension Plan, the GPP and Welfare Plans but not
including those portions of the Greyhound-Xxxxx, Inc. Appendix to VCRIP related
solely to former employees of DHI or GDI or their predecessors in interest or
any other plan or arrangement which is not currently maintained, contributed to
or administered by Sellers or any of the Xxxxx Entities.
2
"Employment Claims" shall mean all notices of violation, liens, claims,
demands, suits, arbitrations, unfair labor practice charges, union recognition
petitions, judgments, decrees, orders, or causes of action for violation of any
Laws relating to or connected with the employment or engagement (including
termination of employment or engagement) of employees and/or workers as defined
in such Laws.
"Employment Law (UK)" shall mean all and any laws, common law, statutes, EU
directives that have been implemented in the United Kingdom, regulations,
statutory instruments, judgments, decrees or orders, whether of the European
Community or the United Kingdom and that have the force of law in the United
Kingdom (all as in force at the date of this Agreement, and excluding any
statutory modification, consolidation or reenactment after the date of this
Agreement), governing the employment or engagement (which, for the avoidance of
doubt, shall include termination of employment or engagement) of employees
and/or workers as defined in such relevant laws, common law, statutes, EU
directives which have been implemented in the United Kingdom, regulations,
statutory instruments, judgments, decrees or orders.
"Encumbrance" shall mean any claim, lien, pledge, option, charge, easement,
security interest, deed of trust, mortgage, right-of-way, encroachment, building
or use restriction, encumbrance, or other right of third parties, whether
voluntarily incurred or arising by operation of law or equity, and includes any
agreement to give any of the foregoing in the future, and any contingent or
conditional sale agreement or other title retention agreement or lease in the
nature thereof.
"Environmental Claims" shall mean all allegations, notices of violation,
liens, claims, demands, suits, or causes of action for any damage, including
personal injury, property damage, or lost use of property arising out of
Environmental Conditions or Environmental Laws.
"Environmental Conditions" shall mean the state of the environment,
including natural resources (e.g., flora and fauna), soil, surface water, ground
water, any drinking water supply, subsurface strata or ambient air, relating to
or arising out of the use, handling, storage, treatment, recycling, generation,
transportation, release, spilling, leaking, pumping, pouring, emptying,
discharging, injecting, escaping, leaching, disposal, dumping or threatened
release of Hazardous Substances by (a) any of the Xxxxx Entities, or (b) any of
their respective predecessors or any successors in interest prior to the Closing
Date, or (c) their respective agents, representatives, employees or independent
contractors when acting in such capacity on behalf of any of the Xxxxx Entities.
With respect to Environmental Claims by third parties, Environmental Conditions
also include the exposure of persons to Hazardous Substances at the work place
or the exposure of persons or property to Hazardous Substances migrating from or
otherwise emanating from or located on property currently or formerly owned or
occupied by any of the Xxxxx Entities.
"Environmental Laws" shall mean all currently applicable federal, state,
district and material local laws, all rules or regulations promulgated
thereunder, and all orders, consent orders, judgments, notices, permits or
demand letters issued, promulgated or entered pursuant thereto, relating to
pollution or protection of the environment (including ambient air, surface
3
water, ground water, land surface, or subsurface strata), including (i) laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, industrial materials, wastes of all types
or other similar substances into the environment and (ii) laws relating to the
identification, generation, manufacture, processing, distribution, use,
treatment, storage, disposal, recycling, recovery, transport or other handling
of pollutants, contaminants, chemicals, industrial materials, wastes of all
types or other similar substances. Environmental Laws shall include the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Toxic Substances Control Act, as amended, the Hazardous Materials
Transportation Act, as amended, the Resource Conservation and Recovery Act, as
amended, the Clean Water Act, as amended, the Safe Drinking Water Act, as
amended, the Clean Air Act, as amended, the Atomic Energy Act of 1954, as
amended, and all analogous laws promulgated or issued by any state or other
governmental authority.
"Equity Securities" shall mean (a) shares of capital stock or other equity
securities, (b) subscriptions, calls, warrants, options or commitments of any
kind or character relating to, or entitling any Person to purchase or otherwise
acquire, any capital stock or other equity securities and (c) securities
convertible into or exercisable or exchangeable for shares of capital stock or
other equity securities.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Financial Statements" shall mean the combined unaudited balance sheet of
the Xxxxx Entities for the fiscal year ended January 1, 1999, and the related
statement of income for the 52-week period ending on such date.
"Fixtures and Equipment" shall mean all of the furniture, fixtures,
furnishings, machinery, equipment, spare parts, appliances and vehicles owned by
any of the Xxxxx Entities, wherever located, including all warranty rights with
respect thereto.
"GAAP" shall mean, with respect to any Person, generally accepted
accounting principles in the United States of America, as in effect from time to
time, consistently applied throughout the periods covered.
"GPP" shall mean any personal pension plan to which employees of the UK
Xxxxx Entities contribute or to which the UK Xxxxx Entities contribute on their
behalf.
"Hazardous Substances" shall mean all pollutants, contaminants, chemicals,
wastes, and any other carcinogenic, ignitable, corrosive, reactive, toxic or
other hazardous substances or materials (whether solids, liquids or gases) or
other hazardous substances which are subject to regulation, control or
remediation under Environmental Laws. By way of example only, the term
Hazardous Substances includes petroleum, urea formaldehyde, flammable, explosive
and radioactive materials, PCBs, pesticides, herbicides, asbestos, sludge, slag,
acids, metals, solvents and waste waters.
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"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Laws" means all statutes, laws, ordinances, rules, regulations, orders,
decrees and judgments of any US federal, state, local or non-US governmental or
quasi-governmental body or authority or of any court.
"Leases" shall mean all of the leases or subleases for personal or real
property to which any of the Xxxxx Entities is a party or by which any of the
Xxxxx Entities is bound, including those Leases listed on SCHEDULE 3.10(b) and
SCHEDULE 3.11(b).
"Material Adverse Effect" or "Material Adverse Change" or a similar phrase
shall mean, with respect to any Person, any material adverse effect on or change
with respect to the business, operations, assets, liabilities, financial
condition or results of operations of such Person and its Subsidiaries taken as
a whole.
"Multiemployer Plan" shall mean any "multiemployer plan," as defined in
Section 4001(a)(3) or 3(37) of ERISA, which (a) any of the Xxxxx Entities
maintains, administers, contributes to or is required to contribute to, or under
which any of the Xxxxx Entities may incur any liability and (b) covers any
employee or former employee of any of the Xxxxx Entities (with respect to their
employment relationship with any such entity); and (c) is not the UK Pension
Plan.
"Net Worth" shall mean the amount, if any, by which the assets of the Xxxxx
Entities, as of any particular date, exceed the liabilities of the Xxxxx
Entities as of such date, each as determined in accordance with the accounting
principles and practices used in the preparation of the Financial Statements and
the agreed accounting treatment of specific items set forth on SCHEDULE 2.5.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permits" shall mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, or notifications to, any
governmental authority, whether foreign, federal, state or local, or any other
governmental authorities or bodies, necessary for the present or currently
anticipated conduct of, or relating to the operation of the business of, any of
the Xxxxx Entities.
"Permitted Encumbrances" shall mean (a) liens for Taxes or governmental
charges or claims (i) not yet due and payable or (ii) being contested in good
faith, if a reserve or other appropriate provision, if any, as shall be required
by GAAP shall have been made therefor, (b) statutory liens of landlords, liens
of carriers, warehousepersons, mechanics and materialpersons and other liens
imposed by law incurred in the ordinary course of business for sums (i) not yet
due and payable or (ii) being contested in good faith, if a reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor, (c) liens incurred or deposits made in connection with workers'
compensation, unemployment insurance and other types of social security or to
secure the performance of tenders, statutory obligations, surety and appeal
5
bonds, bids, leases, government contracts, performance and return of money bonds
and similar obligations, in each case in the ordinary course of business,
consistent with past practice, (d) purchase money liens incurred in the ordinary
course of business, consistent with past practice and (e) easements,
rights-of-way, restrictions and other similar charges or encumbrances, in each
case, which do not interfere with the ordinary conduct of business of any of the
Xxxxx Entities and do not materially detract from the value of the property upon
which such encumbrance exists.
"Person" shall mean any natural person, corporation, partnership, limited
liability company, limited liability partnership, joint venture, association or
other legal entity, and any governmental or regulatory authority or body.
"Returns" shall mean any and all returns, computations, notices, reports,
declarations and information statements with respect to Taxes required to be
filed by or on behalf of any of the Xxxxx Entities with any governmental
authority or Tax authority or agency, whether domestic or foreign, including
consolidated, combined and unitary returns and all amendments thereto or
thereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Sellers' Auditors" shall mean Deloitte & Touche, LLP.
"Subsidiary" shall mean, with respect to any of the parties to this
Agreement, any corporation or other business entity, whether or not
incorporated, of which at least fifty percent (50%) of the securities or
interests having, by their terms, ordinary voting power to elect members of the
board of directors, or other persons performing similar functions with respect
to such entity, are held, directly or indirectly, by such party.
"Taxes" shall mean all taxes, estimated taxes, withholding taxes,
assessments, levies, imposts, duties, social security contributions, rates, fees
and other charges, including any interest, penalties, surcharges, fines,
additions to tax or additional amounts that may become payable in respect
thereof, imposed by any foreign, federal, state or local government or taxing
authority, which taxes shall include all income taxes, payroll and employee
withholding taxes, unemployment insurance, social security, sales and use taxes,
value-added taxes, excise taxes, franchise taxes, gross receipts taxes,
occupation taxes, real and personal property taxes, stamp taxes, transfer taxes,
workers' compensation and other obligations of the same or of a similar nature.
"Taxes Act" shall mean the United Kingdom Income and Corporation Taxes Xxx
0000.
"UK Xxxxx Entities" shall mean NAS-Xxxxx, DHL and DIL.
"UK Pension Plan" shall mean the Xxxxx International (UK) Limited Pension
and Life Assurance Scheme established by a Trust Deed dated 19 January 1978.
"US Xxxxx Entities" shall mean GDI, DISI, DHI and Xxxxx Houses
International.
6
"US Pension Plan" shall mean any "employee pension benefit plan" as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan) (a) which Viad or any
of the Xxxxx Entities maintains, administers, contributes to or is required to
contribute to, or under which Viad or any of the Xxxxx Entities may incur any
liability and (b) which covers any employee or former employee of any of the
Xxxxx Entities (with respect to their employment relationship with any such
entity); and (c) shall exclude the UK Pension Plan and the GPP.
"Welfare Plan" shall mean any "employee welfare benefit plan" as defined in
Section 3(1) of ERISA, (a) which Viad or any of the Xxxxx Entities maintains,
administers, contributes to or is required to contribute to, or under which Viad
or any of the Xxxxx Entities may incur any liability and (b) which covers any
employee or former employee of any of the Xxxxx Entities (with respect to their
employment relationship with any such entity); and (c) shall exclude the UK
Pension Plan and the GPP.
"Worker" shall mean any employee or worker as defined in any Employment Law
(UK).
"Worker Representative" shall mean any trade union, staff association,
workers committee or other worker representative who represents or purports to
represent all or any of the employees of Xxxxx Entities.
1.2 OTHER DEFINED TERMS. In addition to the terms defined in the
Preamble and Recitals to this Agreement and in Section 1.1, the following
capitalized terms shall have the meanings ascribed to such terms in the
respective Sections set forth below:
Term Section
---- -------
"AAA". . . . . . . . . . . . . . . . . .12.2
"Actions". . . . . . . . . . . . . . . .3.15
"Adoption Date". . . . . . . . . . . . .6.2(c)(i)
"Arbitrator" . . . . . . . . . . . . . .12.3
"ATAC System". . . . . . . . . . . . . .3.20(d)
"Award". . . . . . . . . . . . . . . . .12.3(g)
"Breaching Party". . . . . . . . . . . .11.2(c)
"Buyer Claim". . . . . . . . . . . . . .10.1(a)
"Buyer Party". . . . . . . . . . . . . .10.1(a)
"Buyer's New Plan" . . . . . . . . . . .6.2(d)
"Buyer's Retirement Plan". . . . . . . .6.2(c)(i)
"Buyer's Threshold". . . . . . . . . . .10.3(c)(ii)
"Claim". . . . . . . . . . . . . . . . .10.1(c)
"Claim Notice" . . . . . . . . . . . . .10.1(c)
"Closing". . . . . . . . . . . . . . . .2.1
"Closing Balance Sheet". . . . . . . . .2.5(a)
"Closing Date" . . . . . . . . . . . . .2.1
"Commercial Software". . . . . . . . . .3.20(d)
"De Minimis Claim" . . . . . . . . . . .10.3(d)
"DHI Shares" . . . . . . . . . . . . . .3.4(c)
7
"DHL Shares" . . . . . . . . . . . . . .3.4A(c)
"DIL Shares" . . . . . . . . . . . . . .3.4A(b)
"DISI Shares". . . . . . . . . . . . . .3.4(b)
"Xxxxx Entities Participants". . . . . .6.2(d)
"Xxxxx Houses International Shares". . .3.4(d)
"Dormant Entities" . . . . . . . . . . .5.6
"GDI SEC Reports". . . . . . . . . . . .3.27
"GDI Shares" . . . . . . . . . . . . . .3.4(a)
"Hearing". . . . . . . . . . . . . . . .12.3
"Intangibles Purchase Agreement" . . . .2.4(e)
"Intellectual Property" . . . . . . . .3.20(a)
"Leased Real Property" . . . . . . . . .3.10(b)
"Leases" . . . . . . . . . . . . . . . .3.10(b)
"License Rights" . . . . . . . . . . . .3.20(a)
"Losses" . . . . . . . . . . . . . . . .10.1(a)
"Malfunction". . . . . . . . . . . . . .3.20(h)
"Marks". . . . . . . . . . . . . . . . .3.20(a)
"Material Contracts" . . . . . . . . . .3.12
"Material Permits" . . . . . . . . . . .3.14
"Mediation". . . . . . . . . . . . . . .12.2
"Mediator" . . . . . . . . . . . . . . .12.2
"NAS-Xxxxx Shares" . . . . . . . . . . .3.4A(a)
"Neutral Auditors" . . . . . . . . . . .2.5(c)
"Notice of Dispute". . . . . . . . . . .2.5(b)
"Noncompetition Agreement" . . . . . . .2.4(f)
"Obligation Amount". . . . . . . . . . .6.2(c)(ii)(C)
"Overfunding". . . . . . . . . . . . . .10.4(c)
"Owned Real Property". . . . . . . . . .3.10(a)
"Patents". . . . . . . . . . . . . . . .3.20(a)
"Purchase Price" . . . . . . . . . . . .2.3
"Real Property". . . . . . . . . . . . .3.10(c)
"Reconciliation Date". . . . . . . . . .6.2(c)(ii)(A)
"Representative" . . . . . . . . . . . .12.1
"Resolution Period". . . . . . . . . . .2.5(b)
"Seller Claim" . . . . . . . . . . . . .10.1(b)
"Seller Guarantees". . . . . . . . . . .6.1
"Seller Party" . . . . . . . . . . . . .10.1(b)
"Sellers' Threshold" . . . . . . . . . .10.3(c)
"Shortfall". . . . . . . . . . . . . . .10.2(h)
"Software" . . . . . . . . . . . . . . .3.20(a)
"Spinoff". . . . . . . . . . . . . . . .6.2(c)(ii)
"Spinoff Assets" . . . . . . . . . . . .6.2(c)(ii)(C)
"Third Party Suppliers". . . . . . . . .3.20(h)
"Third-Party Claim". . . . . . . . . . .10.1(c)(i)
"Transition Services Agreement". . . . .2.4(d)
8
"Vendors". . . . . . . . . . . . . . . .3.20(h)
"VCRIP". . . . . . . . . . . . . . . . .6.2(c)(i)
"Viad 401(k) Plan" . . . . . . . . . . .6.2(d)
"Viad ESOP". . . . . . . . . . . . . . .6.2(d)
"Y2K Compliant". . . . . . . . . . . . .3.20(h)
ARTICLE 2
PURCHASE AND SALE OF THE XXXXX SHARES
2.1 CLOSING. Upon the terms and conditions set forth herein, and
subject to Section 11.1, the closing of the transactions contemplated herein
(the "CLOSING") shall be held at 6:00 a.m. Phoenix, Arizona time (or 9:00
a.m. New York time) on July 1, 1999 (the "CLOSING DATE"), or on such later
date as mutually agreed by the parties. The Closing shall take place at the
offices of Xxxxx Xxxx LLP, Two North Central Avenue, Suite 2200, Phoenix,
Arizona or at such other location as may be mutually agreed by the parties.
2.2 SALE AND TRANSFER OF THE XXXXX SHARES. Upon the terms and conditions
contained herein, at the Closing on the Closing Date, Sellers shall sell,
convey, transfer, assign and deliver to Buyer, and Buyer shall purchase and
accept from Sellers, all of the Xxxxx Shares free and clear of any and all
Encumbrances.
2.3 PURCHASE PRICE. Upon the terms and conditions contained herein, at
the Closing on the Closing Date, as consideration for the purchase of the
Xxxxx Shares, Buyer shall pay to Sellers the aggregate sum of $710,640,000
(the "PURCHASE PRICE"), subject to adjustment in accordance with Section 2.5.
The Purchase Price, as adjusted pursuant to Section 2.5, shall be allocated
among the GDI Shares and the DIL Shares as set forth in SCHEDULE 2.3.
2.4 DELIVERIES AT CLOSING. To effect the sale and purchase of the Xxxxx
Shares, Sellers and Buyer shall, at the Closing on the Closing Date, cause the
following to occur:
(a) SHARE CERTIFICATES. Sellers shall deliver to Buyer stock or
share certificates evidencing all of the Xxxxx Shares, free and clear of any
and all Encumbrances and, in the case of GDI, duly endorsed in blank or
accompanied by stock powers duly executed in blank, in proper form for
transfer, together with evidence of payment of applicable stock transfer
taxes and, in the case of DIL, duly executed stock transfer forms in respect
of the whole of the issued share capital of DIL, and any other documents and
instruments, satisfactory in form and substance to Buyer and its counsel, as
shall be necessary or appropriate to warrant and vest in Buyer marketable
right, title and interest in and to all of the Xxxxx Shares.
(b) CORPORATE RECORDS. Sellers shall deliver to Buyer except with
respect to the Dormant Entities (i) all stock ledgers and other stock records
of each of the Xxxxx Entities, (ii) the minute books and corporate seals of
each of the Xxxxx Entities and (iii) all other books and records, Contracts,
Leases, Permits, policies or other documents pertaining to any of the Xxxxx
Entities that are in the possession of Sellers.
9
(c) PURCHASE PRICE. Buyer shall, against delivery of such
certificates evidencing the Xxxxx Shares and (where appropriate) duly
executed stock transfer forms, deliver to Sellers the Purchase Price in cash
by wire transfer of immediately available funds to the bank account(s)
designated by Sellers in writing one week prior to the Closing Date.
(d) TRANSITION SERVICES AGREEMENT. Viad and DISI shall enter into
a transition services agreement in the form of EXHIBIT A (the "TRANSITION
SERVICES AGREEMENT").
(e) INTANGIBLES PURCHASE AGREEMENT. Sellers and Buyer shall cause
to be delivered at or prior to Closing an executed intangibles purchase
agreement in the form of EXHIBIT B (the "INTANGIBLES PURCHASE AGREEMENT")
which shall have been consummated.
(f) NONCOMPETITION AGREEMENT. Viad and Buyer shall enter into a
noncompetition agreement in the form of EXHIBIT C (the "NONCOMPETITION
AGREEMENT").
(g) OTHER DOCUMENTS. Sellers and Buyer shall take all such other
actions required hereby to be performed by each of them, and shall deliver
all other documents, certificates, opinions of counsel and other items
required to be delivered under this Agreement by each of them, prior to or on
the Closing Date, including delivering the documents and satisfying the
conditions set forth in Articles 7 and 8. All such documents and instruments
delivered to any party pursuant hereto shall be in form and substance, and
shall be executed in a manner, reasonably satisfactory to such party and its
counsel.
2.5 PURCHASE PRICE ADJUSTMENT.
(a) DELIVERY OF CLOSING BALANCE SHEET. As promptly as practicable
following the Closing, but in no event later than sixty (60) days after the
Closing Date, Buyer shall prepare and deliver to Sellers a combined unaudited
balance sheet of the Xxxxx Entities as of the Closing Date (the "CLOSING
BALANCE SHEET"). Except to the extent otherwise disclosed in the Financial
Statements, the Closing Balance Sheet shall be prepared in accordance with
GAAP applied consistently with the accounting policies and procedures used in
the preparation of the Financial Statements. In addition, the accounting
policies and procedures set forth in SCHEDULE 2.5 shall be applied. In the
event of any inconsistencies between GAAP and the policies and procedures on
SCHEDULE 2.5, the policies and procedures on SCHEDULE 2.5 will control.
Sellers and Sellers' Auditor shall furnish or cause to be furnished to Buyer
(and Buyer's Auditor), such information and assistance relating to the Xxxxx
Entities as Buyer reasonably may request in connection with the preparation
of the Closing Balance Sheet.
(b) NOTICE OF DISPUTE. If Sellers dispute any items of the
Closing Balance Sheet, then Sellers shall deliver to Buyer, within sixty (60)
days following Sellers' receipt of the Closing Balance Sheet, a written
notice specifying in reasonable detail all disputed items and the basis
therefor (a "NOTICE OF DISPUTE"). If Sellers deliver a Notice of Dispute,
Buyer and Sellers shall, within sixty (60) days following such notice (the
"RESOLUTION PERIOD"), attempt to resolve their differences, and any
resolution by them as to any disputed amounts shall be in writing, and shall
be final, binding and conclusive. Notwithstanding anything to the contrary
in this Agreement, the parties agree that the items subject to agreed upon
accounting treatment as set
10
forth on SCHEDULE 2.5 shall not be the subject of a Notice of Dispute, any Claim
under Article 10 or any other dispute.
(c) RESOLUTION BY NEUTRAL AUDITORS. In the event that Sellers and
Buyer are unable to resolve all disputes with respect to the Closing Balance
Sheet prior to the expiration of the Resolution Period, issues remaining in
dispute shall be submitted, as soon as practicable, to Ernst & Young, or if
they are unable to serve in such capacity, to another firm of independent
public accountants of internationally recognized standing mutually acceptable
to Sellers and Buyer that is not the regular accounting firm of either
Sellers or Buyer (the "NEUTRAL AUDITORS"). The parties agree to execute a
reasonable engagement letter if requested by the Neutral Auditors. The
Neutral Auditors shall act as an expert and not as an arbitrator to determine
only those issues with respect to the Closing Balance Sheet which are still
in dispute. The Neutral Auditors' determination shall be made within thirty
(30) days after their selection, shall be set forth in a written statement
delivered to Buyer and Sellers and shall be final, binding and conclusive and
enforceable in any court of competent jurisdiction. The fees and expenses of
the Neutral Auditors shall be allocated by the Neutral Auditors between
Buyer, on the one hand, and Sellers on the other hand, in proportion to the
extent that either party did not prevail on its items in dispute; provided
that so long as a party complies in all material respects in good faith with
the procedures of this Section 2.5, such fees shall not include the other
party's outside counsel or accounting fees.
(d) ADJUSTMENT OF PURCHASE PRICE. Immediately upon the expiration
of the 60-day period for delivery of a Notice of Dispute (if no Notice of
Dispute is given and subject to paragraph (e)), or immediately upon the
resolution of disputes, if any, pursuant to Sections 2.5(b) and (c), the
Purchase Price shall be adjusted by the amount (if any) by which the Net
Worth of the Xxxxx Entities as of the Closing Date as shown on the Closing
Balance Sheet is greater than or less than $438,807,000. If the Purchase
Price is increased pursuant to such adjustment, then the amount of such
increase shall be paid to Sellers by Buyer. If the Purchase Price is
decreased pursuant to such adjustment, then the amount of such decrease shall
be paid to Buyer by Sellers. In either case, the amount payable shall be (i)
paid in United States Dollars, in immediately available funds, no later than
five (5) Business Days following the date of determination of the amount due;
and (ii) paid together with interest on the full amount of such payment at
the prime rate of interest as published in The Wall Street Journal (Midwest
Edition) on the Closing Date compounded daily from the period commencing on
the Closing Date and ending on the date of payment.
(e) GOOD FAITH EFFORTS. Sellers and Buyer hereby agree that no party
shall be deemed to be in breach of or default under this Agreement by reason
of such party's technical failure to meet any of the timetables for
performance specified in this Section 2.5, provided that such party shall
have made a good faith effort to meet such timetables and otherwise shall
have complied and shall continue to comply in all material respects with the
other provisions of this Section 2.5.
11
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
As an inducement to Buyer to enter into this Agreement, Sellers hereby
jointly and severally make the following representations and warranties to
Buyer, each of which is true and correct on the date hereof and, except as
otherwise expressly permitted by this Agreement, shall be true and correct on
the Closing Date. Notwithstanding anything to the contrary in this Article 3,
as of the Closing Date and for the purpose of any certificates to be delivered
as of the Closing Date, the term Xxxxx Entities shall exclude the Dormant
Entities assuming consummation of the transactions contemplated by Section 5.6
and the Intangibles Purchase Agreement.
3.1 ORGANIZATION AND QUALIFICATION OF SELLERS.
(a) Viad is duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware and has full corporate power
and authority to conduct its business as it is presently being conducted and
to own and lease its properties and assets. Viad is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is necessary under applicable Law as
a result of the conduct of its business or the ownership of its properties
and assets, except where the failure to be so qualified and in good standing
would not materially and adversely affect Viad.
(b) VSCL is duly incorporated and validly existing under the Laws
of England and Wales and has full corporate power and authority to conduct
its business as it is presently being conducted and to own and lease its
properties and assets.
3.2 AUTHORIZATION OF SELLERS. Except as otherwise provided in this
Section 3.2, each of Sellers has all necessary corporate power and authority
to execute and deliver this Agreement and each Ancillary Agreement to which
such Seller is a party, to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. With the
exception of the approval of the Boards of Directors of Viad and VSCL (it
being acknowledged that execution of this Agreement in no way obligates
either Board of Directors), each of Sellers has taken all corporate action
necessary on its part to authorize the execution, delivery and performance of
this Agreement or any such Ancillary Agreement and the transactions
contemplated hereby and thereby. This Agreement has been, and each Ancillary
Agreement to which either of Sellers is a party will be, duly executed and
delivered by Sellers and constitutes (or will constitute when duly executed
and delivered) a legal, valid and binding obligation of Sellers, enforceable
against Sellers, except as the enforceability thereof may be limited by (a)
applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent
conveyance or similar Laws in effect which affect the enforcement of
creditors' rights generally or (b) general principles of equity, whether
considered in a proceeding at law or in equity.
3.3 ORGANIZATION AND QUALIFICATION OF THE US XXXXX ENTITIES; SUBSIDIARIES.
(a) GDI is duly organized, validly existing and in good standing
under the Laws of the State of Delaware and has full corporate power and
authority to conduct its business as it is
12
presently being conducted and to own and lease its properties and assets. GDI
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is necessary under
applicable Law as a result of the conduct of its business or the ownership of
its properties and assets except where the failure to be so qualified and in
good standing would not materially and adversely affect GDI. Each jurisdiction
in which GDI is qualified to do business as a foreign corporation is listed on
SCHEDULE 3.3. Except for DISI, DHI, Xxxxx Houses International and NAS-Xxxxx,
GDI has no Subsidiaries.
(b) DISI is duly organized, validly existing and in good standing
under the Laws of the State of Delaware and has full corporate power and
authority to conduct its business as it is presently being conducted and to
own and lease its properties and assets. DISI is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is necessary under applicable Law as
a result of the conduct of its business or the ownership of its properties
and assets except where the failure to be so qualified and in good standing
would not materially and adversely affect DISI. Each jurisdiction in which
DISI is qualified to do business as a foreign corporation is listed on
SCHEDULE 3.3. Except for Xxxxx Houses International and NAS-Xxxxx, DISI has
no Subsidiaries.
(c) DHI is duly organized, validly existing and in good standing
under the Laws of the State of Delaware and has full corporate power and
authority to conduct its business as it is presently being conducted and to
own and lease its properties and assets. DHI is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is necessary under applicable Law as
a result of the conduct of its business or the ownership of its properties
and assets except where the failure to be so qualified and in good standing
would not materially and adversely affect DHI. Each jurisdiction in which
DHI is qualified to do business as a foreign corporation is listed on
SCHEDULE 3.3. DHI has no Subsidiaries.
(d) Xxxxx Houses International is duly organized, validly existing
and in good standing under the Laws of the State of Delaware and has full
corporate power and authority to conduct its business as it is presently
being conducted and to own and lease its properties and assets. Xxxxx Houses
International is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which such qualification is
necessary under applicable Law as a result of the conduct of its business or
the ownership of its properties and assets except where the failure to be so
qualified and in good standing would not materially and adversely affect
Xxxxx Houses International. Each jurisdiction in which Xxxxx Houses
International is qualified to do business as a foreign corporation is listed
on SCHEDULE 3.3. Except for NAS-Xxxxx, Xxxxx Houses International has no
Subsidiaries.
3.3A ORGANIZATION OF THE UK XXXXX ENTITIES; SUBSIDIARIES.
(a) NAS-Xxxxx is duly incorporated and validly existing under the
Laws of England and Wales and has full power and authority to conduct its
business as it is presently being conducted and to own and lease its
properties and assets. NAS-Xxxxx has no Subsidiaries.
13
(b) DIL is duly incorporated and validly existing under the Laws
of England and Wales and has full power and authority to conduct its business
as it is presently being conducted and to own and lease its properties and
assets. Except for DHL, DIL has no Subsidiaries.
(c) DHL is duly incorporated and validly existing under the Laws
of England and Wales and has full power and authority to conduct its business
as it is presently being conducted and to own and lease its properties and
assets. DHL has no Subsidiaries.
(d) No order has been made or petition presented or resolution
passed for the winding up of the UK Xxxxx Entities or for an administration
order in respect of any of them and no distress, execution or other process
has been levied on any of their assets. With the exception of DHL, none of
the UK Xxxxx Entities are insolvent or unable to pay its debts for the
purposes of Section 123 of the Insolvency Xxx 0000 and no administrative
receiver or receiver and manager has been appointed for its business or
assets or any part thereof and no power to make any such appointment has
arisen.
(e) The UK Xxxxx Entities do not have and have never had any place
of business or branch or permanent establishment outside the United Kingdom,
nor have any of them carried on any trading activities outside such
jurisdiction.
3.4 CAPITALIZATION OF US XXXXX ENTITIES; OWNERSHIP OF XXXXX SHARES.
(a) GDI's authorized capital stock consists of 1,000 shares of
Common Stock, $.01 par value per share and 1,000 shares of Preferred Stock,
$.01 par value per share of which 1,000 shares of Common Stock and 1,000
shares of Preferred Stock are issued and outstanding (collectively, the "GDI
SHARES"), and are owned beneficially and of record by Viad free and clear of
all Encumbrances except as set forth on SCHEDULE 3.4, provided that Sellers
shall use their commercially reasonably best efforts to remove, prior to the
Closing Date, all such listed Encumbrances (at no cost to the Xxxxx Entities)
and shall indemnify Buyer for any Losses with respect to any such
Encumbrances remaining on and after the Closing Date pursuant to Section
10.2(e). All of the GDI Shares have been duly authorized and validly issued
and are fully paid and non-assessable, were issued and sold in accordance
with federal and applicable state securities Laws and were not issued in
violation of any preemptive or other similar rights.
(b) DISI's authorized capital stock consists of 1,000 shares of
Common Stock, $1.00 par value per share of which 1,000 shares are issued and
outstanding (the "DISI SHARES"), and are owned beneficially and of record by
GDI free and clear of all Encumbrances. All of the DISI Shares have been
duly authorized and validly issued and are fully paid and non-assessable,
were issued and sold in accordance with federal and applicable state
securities Laws and were not issued in violation of any preemptive or other
similar rights.
(c) DHI's authorized capital stock consists of 1,000 shares of
Common Stock, $1.00 par value per share, of which 1,000 shares are issued and
outstanding (the "DHI SHARES") and are owned beneficially and of record by
GDI free and clear of all Encumbrances except as set forth on SCHEDULE 3.4,
provided that that Sellers shall use their commercially reasonably best
efforts to remove, prior to the Closing Date, all such listed Encumbrances
(at no cost to the
14
Xxxxx Entities) and shall indemnify Buyer for any Losses with respect to any
such Encumbrances remaining on and after the Closing Date pursuant to Section
10.2(e). All of the DHI Shares have been duly authorized and validly issued and
are fully paid and non-assessable, were issued and sold in accordance with
federal and applicable state securities Laws and were not issued in violation of
any preemptive or other similar rights.
(d) Xxxxx Houses International's authorized capital stock consists
of 10,000 shares of Common Stock, $1.00 par value per share of which 18
shares are issued and outstanding (the "XXXXX HOUSES INTERNATIONAL SHARES"),
and are owned beneficially and of record by DISI free and clear of all
Encumbrances. All of the Xxxxx Houses International Shares have been duly
authorized and validly issued and are fully paid and non-assessable, were
issued and sold in accordance with federal and applicable state securities
Laws and were not issued in violation of any preemptive or other similar
rights.
(e) Except as set forth in SCHEDULE 3.4, there are no (i)
commitments or obligations of any kind or character for the issuance of
Equity Securities of any of the US Xxxxx Entities or the repurchase,
redemption or other acquisition of any Equity Securities of any of the US
Xxxxx Entities or (ii) shareholder agreements, voting trusts, proxies or
other agreements or understandings with respect to or concerning the
purchase, sale or voting of the Equity Securities of any of the US Xxxxx
Entities.
3.4A CAPITALIZATION OF UK XXXXX ENTITIES; OWNERSHIP OF XXXXX SHARES.
(a) NAS-Xxxxx' authorized share capital consists of 100 ordinary
shares of L1.00 each of which 3 are issued (the "NAS-XXXXX SHARES"). DISI is
the registered owner of one ordinary share and Xxxxx Houses International is
the registered owner of two ordinary shares and the beneficial owner of three
ordinary shares. The three issued NAS-Xxxxx Shares are free from and clear
of any lien, charge, option, right of pre-emption or other Encumbrance or
other third party right whatsoever. All of the NAS-Xxxxx Shares have been
duly authorized and validly issued and are fully paid, were issued in
accordance with the Articles of Association of NAS-Xxxxx and all applicable
companies legislation, and were not issued in violation of any preemptive or
other similar rights.
(b) DIL's authorized share capital consists of 3,200,000 ordinary
shares of L1.00 each of which 3,180,978 are issued (the "DIL SHARES"). VSCL
is the registered and beneficial owner of the entire issued share capital,
which is free from and clear of any lien, charge, option, right of
pre-emption or other Encumbrance or other third party right whatsoever. All
of the DIL Shares have been duly authorized and validly issued and are fully
paid, were issued in accordance with the Articles of Association of DIL and
all applicable companies legislation, and were not issued in violation of any
preemptive or other similar rights.
(c) DHL's authorized share capital consists of 1,000 ordinary
shares of L1.00 each of which 1,000 are issued (the "DHL SHARES"). DIL is
the registered owner of 999 ordinary shares and the beneficial owner of 1,000
ordinary shares and Xxxxx Houses International is the registered owner of one
ordinary share. The issued DHL Shares are free from and clear of any lien,
charge, option, right of pre-emption or other Encumbrance or other third
party right
15
whatsoever. All of the DHL Shares have been duly authorized and validly issued
and are fully paid, were issued in accordance with the Articles of Association
of DHL and all applicable companies legislation, and were not issued in
violation of any preemptive or other similar rights.
(d) Except as set forth in SCHEDULE 3.4A, there are no (i)
commitments or obligations of any kind or character for the issue or
allotment of shares in any of the UK Xxxxx Entities or the repurchase,
redemption or other acquisition of any shares in any of the UK Xxxxx Entities
or (ii) shareholder agreements, voting trusts, proxies or other agreements or
understandings with respect to or concerning the purchase, sale or voting of
the Equity Securities of any of the UK Xxxxx Entities.
3.5 NO CONFLICT OR VIOLATION. Except as set forth in SCHEDULE 3.5, the
execution, delivery and performance by Sellers of this Agreement and the
Ancillary Agreements, and the consummation by Sellers of the transactions
contemplated hereby and thereby, will not (a) violate or conflict with any
provision of the organizational documents of either of Sellers, (b) to Sellers'
knowledge, violate any Law applicable to either of Sellers or (c) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both would constitute a default) under, result in the termination of, or a right
of termination or cancellation under, accelerate the performance required by, or
result in the creation of any Encumbrance upon, any of the properties or assets
of either of Sellers under, any term or provision of any Material Contract or
Material Permit to which either of Sellers is a party or by which any of their
respective assets or properties are bound, which violation, breach or default
would, individually or in the aggregate, have a Material Adverse Effect on
either of Sellers or the right or ability of either of Sellers to consummate the
contemplated transactions.
3.6 US CONSENTS AND APPROVALS. No consent, waiver, agreement,
approval, permit or authorization of, or declaration, filing, notice or
registration to or with, any federal, state, local or foreign governmental or
regulatory authority or body or other Person is required to be made or
obtained by either of Sellers or any of the US Xxxxx Entities in connection
with the execution, delivery and performance of this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby, other than (a) filings pursuant to the provisions of the
HSR Act and (b) those consents, waivers, agreements, approvals,
authorizations, declarations, filings, notices or registrations set forth in
SCHEDULE 3.6, which identifies those of such items that must be obtained
prior to the Closing Date.
3.6A ADDITIONAL SPECIFIC WARRANTIES IN RELATION TO UK CONSENTS AND
APPROVALS.
No consent, waiver, agreement, approval, permit or authorization of, or
declaration, filing, notice or registration to or with, any governmental or
regulatory authority or body or other Person is required to be made or obtained
by either of Sellers or any of the UK Xxxxx Entities in connection with the
execution, delivery and performance of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby, other than filings required to be made pursuant to the provisions of
the Fair Trading Xxx 0000. DIL has not registered any agreements or
arrangements under the Restrictive Trade Practices Act
16
1976 or filed any notification for exemption or application for negative
clearance with the Commission of the European Communities.
3.7 FINANCIAL STATEMENTS. Sellers have delivered to Buyer the Financial
Statements attached to SCHEDULE 3.7. Except as set forth on SCHEDULE 3.7 or as
disclosed in the Financial Statements, the Financial Statements (a) are in
accordance with the books and records of Sellers and the Xxxxx Entities,
(b) have been prepared in accordance with GAAP, consistently applied throughout
the period covered thereby and (c) present fairly and accurately in accordance
with GAAP, consistently applied throughout the period covered, the assets,
liabilities and financial condition of the Xxxxx Entities as of the date thereof
and the statement of operations for the period covered thereby. Except as set
forth on SCHEDULE 3.7 or as disclosed in the Financial Statements, the
accounting and financial records of the Xxxxx Entities have been prepared and
maintained in accordance with GAAP, consistently applied throughout the periods
indicated.
3.8 UNDISCLOSED LIABILITIES. Except as set forth on SCHEDULE 3.8, to
Sellers' knowledge, the Xxxxx Entities do not have any material liabilities,
obligations or commitments of any nature (whether direct or indirect,
absolute or contingent, liquidated or unliquidated, due or to become due,
accrued or unaccrued, matured or unmatured) other than (a) liabilities which
are reflected and reserved against in the Financial Statements (including in
the notes thereto) which have not been paid or discharged since the Balance
Sheet Date, (b) liabilities arising under any Contracts, Permits, and other
commitments which have not arisen as a result of a breach of such Contracts,
Permits and other commitments by any of the Xxxxx Entities, and (c)
liabilities incurred since the Balance Sheet Date in the ordinary course of
business, consistent with past practice.
3.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on
SCHEDULE 3.9, since the Balance Sheet Date (x) each of the Xxxxx Entities has
been operated in the ordinary course of business, consistent with past
practice, and (y) there has been no Material Adverse Change in or with
respect to any of the Xxxxx Entities. Without limiting the generality of the
foregoing, except as set forth on SCHEDULE 3.9, since the Balance Sheet Date,
none of the Xxxxx Entities have:
(a) sold, assigned, leased or transferred any of their respective
properties or assets, which are material individually or in the aggregate, to
any of such Xxxxx Entities, other than assets sold or disposed of in the
ordinary course of business, consistent with past practice;
(b) canceled, terminated, amended, modified or waived any material
term of any Contract to which any of such Xxxxx Entities is a party or by which
it or any of its respective properties or assets are bound providing for
aggregate annual revenues to it in excess of $1,000,000 (except in the ordinary
course of business, consistent with past practice, where the amounts subject to
the cancellation, termination, modification or waiver do not exceed $100,000
individually or $500,000 in the aggregate);
(c) (i) increased the compensation payable or to become payable to
any of its directors or officers, (ii) increased the base compensation payable
or to become payable to any of its employees whose annual base salary is greater
than $100,000, except for normal periodic increases in such base compensation
(not exceeding, in each case, ten percent (10%)) in the
17
ordinary course of business, consistent with past practice, (iii) increased the
sales commission rate payable or to become payable to any of its employees,
except in the ordinary course of business, consistent with past practice, (iv)
granted, made or accrued any loan, bonus, fee, incentive compensation (excluding
sales commissions), service award or other like benefit, contingently or
otherwise, to or for the benefit of any of its employees, except pursuant to the
Employee Plans described on SCHEDULE 3.18, the UK Pension Plan or the GPP, (v)
adopted or amended any Employee Plan, or caused or suffered any addition to or
modification thereof, other than (A) contributions made in the ordinary course
of business, consistent with past practice or (B) the extension of coverage to
any of its employees who became eligible after the date of this Agreement in
accordance with the terms of such Employee Plan, (vi) granted any additional
stock options, performance based stock, performance unit grants or other equity
or equity-based interest, except pursuant to the Employee Plans described in
SCHEDULE 3.18 in amounts disclosed in SCHEDULE 3.18, (vii) entered into any new
employment or consulting agreement or caused or suffered any written or oral
termination, cancellation or amendment thereof (except with respect to any
employee at will without a written agreement), (viii) entered into any
collective bargaining agreement or caused or suffered any termination or
amendment thereof, (ix) with respect to any stockholder, any other Affiliate or
any Affiliate of any stockholder, granted, made or accrued any payment or
distribution or other like benefit, contingently or otherwise, or otherwise
transferred assets, including any payment of principal of or interest on any
debt owed to any such stockholder or Affiliate, or (x) offer or provide any
bonus or other incentives to any officer, director or employee, the payment of
which is tied to the sale of any Xxxxx Entity;
(d) made or committed to make any capital expenditures in excess of
$150,000;
(e) made any payments or given any other consideration to customers
or suppliers, other than payments under, and in accordance with the terms of,
Contracts;
(f) changed its accounting methods, principles or practices,
including any change in the application or interpretation of GAAP, or revalued
any of its assets;
(g) suffered any damage, destruction or loss (whether or not covered
by insurance) affecting its respective business, properties or assets that
exceeded $250,000 in any one instance;
(h) (i) issued or sold, or entered into any agreement obligating it
to issue or sell, (ii) declared, set aside for payment or paid dividends or
distributions in respect of (except as permitted in Section 5.6 or as set forth
in SCHEDULE 3.9), (iii) directly or indirectly redeemed, purchased or otherwise
acquired or retired, or split, combined, reclassified or otherwise adjusted, or
(iv) created or established any new class of, any Equity Securities;
(i) incurred any indebtedness for borrowed money or entered into any
commitment to borrow money from any Person that is not an Affiliate of Sellers,
except as may have been incurred or entered into in the ordinary course of
business, consistent with past practice, not exceeding $1,000,000;
18
(j) amended its certificate of incorporation or bylaws or other
organizational documents;
(k) (i) acquired (by merger, consolidation, acquisition of stock or
assets or otherwise), (ii) made a capital investment in (whether through the
acquisition of an equity interest, the making of a loan or advance or
otherwise), or (iii) guaranteed indebtedness for borrowed money of, any Person;
(l) mortgaged or pledged, or otherwise made or suffered any
Encumbrance (other than any Permitted Encumbrance) on, any material asset or
group of assets that are material in the aggregate;
(m) canceled, waived, compromised or released any right or claim
involving in excess of $100,000 individually or $1,000,000 in the aggregate, or
other than in the ordinary course of business, consistent with past practice; or
(n) entered into any Contract to take any of the actions described in
the foregoing clauses (a) through (m).
3.10 REAL PROPERTY -- US AND UK.
(a) OWNED REAL PROPERTY. SCHEDULE 3.10(a) sets forth a list by
address of each parcel of real property owned by any of the Xxxxx Entities
("OWNED REAL PROPERTY"). With respect to each parcel of Owned Real Property,
except as set forth on SCHEDULE 3.10(a), (i) such entity has fee simple title to
such parcel of real property, and to Sellers' knowledge there are no
Encumbrances, other than Permitted Encumbrances, which materially and adversely
affect the current use or occupancy of such parcel of real property, (ii) there
are no leases, subleases, licenses, options, rights, concessions or other
agreements, written or oral, granting to any Person the right of use or
occupancy of any portion of such parcel of real property, (iii) there are no
outstanding options or rights of first refusal in favor of any other party to
purchase any such parcel of real property or any portion thereof or interest
therein, (iv) no Person (other than such Xxxxx Entity) is in possession of or is
using any such parcel of real property, (v) there is no (A) pending or, to the
knowledge of Sellers, threatened, condemnation proceeding or other Action
relating to such parcel of real property, or (B) other matter affecting the
current use or occupancy of such parcel of real property in any material
respect. None of the Xxxxx Entities holds any option, right of first refusal or
similar right to purchase any additional parcel of real property or any portion
thereof or interest therein except as set forth on SCHEDULE 3.10(a).
(b) LEASED REAL PROPERTY. SCHEDULE 3.10(b) sets forth a list by
address of all leases pursuant to which any of the Xxxxx Entities leases any
real property, true and correct copies of which have been made available to
Buyer ("LEASES"). Except as set forth on SCHEDULE 3.10(b) or in the copies of
the leases which were made available to Buyer, the Xxxxx Entities have valid
leasehold title to, and enjoy peaceful and undisturbed possession of, all real
property leased by any of them as described in such Leases (the "LEASED REAL
PROPERTY"), to Sellers' knowledge, free and clear of any and all Encumbrances
other than Permitted Encumbrances which would not permit the termination of the
Lease therefor by the lessor. With respect to each
19
such parcel of Leased Real Property (i) there are no pending or, to the
knowledge of Sellers, threatened, condemnation proceedings relating to such
Leased Real Property or any portion thereof, and (ii) none of the Xxxxx
Entities, or to the knowledge of Sellers, any third party, has entered into any
sublease, license, option, right, concession or other agreement or arrangement,
written or oral, granting to any Person the right to use or occupy such Leased
Real Property or any portion thereof or interest therein other than in the
ordinary course of business. With respect to each such Lease, except as set
forth in SCHEDULE 3.10(b), (i) there has been no material default under any such
Lease by the Xxxxx Entity which is a party thereto or by any other Person, (ii)
the execution, delivery and performance of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby will not cause a material default under any such Lease, (iii) such Lease
constitutes a valid and binding obligation of the Xxxxx Entity which is a party
thereto, is in full force and effect with respect to such Xxxxx Entity and is
enforceable against such Xxxxx Entity and the new parties and purchasers in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization, or similar laws in effect which affect the enforcement of
creditors' rights generally or by general principles of equity, whether
considered in a proceeding at law or in equity but Sellers have no knowledge of
such matters in respect of any of the Leases or the parties thereto, (iv) no
action has been taken by the Xxxxx Entity which is a party to such Lease and, to
the knowledge of Sellers, no event has occurred which, with notice or lapse of
time or both, would permit termination, modification or acceleration by a party
thereto other than the Xxxxx Entity which is a party to such Lease, without its
consent, under any such Lease, and (v) no party has repudiated in writing any
term thereof or threatened in writing to terminate, cancel or not renew any such
Lease.
(c) The Owned Real Property and the Leased Real Property
(collectively, the "REAL PROPERTY") comprise all the land and buildings owned,
leased or otherwise occupied (except for hotels or other lodging or temporary
storage facilities and buildings) by the Xxxxx Entities.
(d) The Real Properties located in the United Kingdom are not subject
to any unusual outgoings.
3.11 PERSONAL PROPERTY.
(a) OWNED PERSONAL PROPERTY. Each of the Xxxxx Entities has valid
title to all personal property owned by it, free and clear of any and all
Encumbrances other than Permitted Encumbrances. With respect to each such item
of personal property (i) there are no leases, subleases, licenses, options,
rights, concessions or other agreements, written or oral, granting to any party
or parties the right to use any portion of such item of personal property except
to the extent entered into in the ordinary course of business, (ii) there are no
outstanding options or rights of first refusal in favor of any other party to
purchase any such item of personal property or any portion thereof or interest
therein and (iii) there are no parties (other than the respective Xxxxx Entity
or an Affiliate thereof) who are in possession of or who are using any such item
of personal property except for any such use or possession in the ordinary
course of business of such Xxxxx Entity.
20
(b) LEASED PERSONAL PROPERTY. Subject to the terms and conditions of
the Leases for the Leased Real Property, each of the Xxxxx Entities has valid
leasehold title to all Fixtures and Equipment and other tangible personal
property leased by it from third parties, free and clear of any and all
Encumbrances other than Permitted Encumbrances which would not permit the
termination of the lease therefor by the lessor. SCHEDULE 3.11(b) sets forth all
Leases pursuant to which any of the Xxxxx Entities leases any Fixtures and
Equipment or other tangible personal property involving annual payments in
excess of $250,000, true and correct copies of which have been made available to
Buyer and, in each case, includes a general description of the leased items,
term, annual rent and renewal options, as applicable. With respect to each such
Lease (i) there has been no material default under any such Lease by the Xxxxx
Entity which is a party thereto or, to the knowledge of Sellers, by any other
party, (ii) the execution, delivery and performance of this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby will not cause a material default under any such Lease,
(iii) such Lease is a valid and binding obligation of the Xxxxx Entity which is
a party thereto, is in full force and effect with respect to such entity and is
enforceable against such entity in accordance with its terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or similar laws in effect
which affect the enforcement of creditors' rights generally or by general
principles of equity, whether considered in a proceeding at law or in equity,
(iv) no action has been taken by the Xxxxx Entity which is a party to such Lease
and, to the knowledge of Sellers, no event has occurred which, with notice or
lapse of time or both, would permit termination, modification or acceleration by
a party thereto other than the Xxxxx Entity which is a party to such lease,
without its consent, under any such Lease that is material to the Xxxxx Entity
which is a party to such Lease, (v) no party has repudiated in writing any term
thereof or threatened in writing to terminate, cancel or not renew any such
Lease that is material to the Xxxxx Entity which is a party to such Lease, and
(vi) the Xxxxx Entity which is a party to such Lease has not assigned,
transferred, conveyed, mortgaged or encumbered any interest therein or in any
leased property subject thereto (or any portion thereof).
3.12 CONTRACTS AND COMMITMENTS. SCHEDULE 3.12 sets forth a complete
and accurate list of all Contracts in the following categories to which any
of the Xxxxx Entities is a party or by which any of the Xxxxx Entities is
bound ("MATERIAL CONTRACTS"):
(a) Contracts for the furnishing of services by any of the Xxxxx
Entities relating to current or anticipated annual revenues to any of the Xxxxx
Entities of more than $1,000,000;
(b) partnership or joint venture Contracts with, or any other
investment in (whether through the acquisition of an equity interest, the making
of a loan or advance or otherwise), any other Person;
(c) Contracts (i) under which any of the Xxxxx Entities has created,
incurred, assumed or guaranteed (or may create, incur, assume or guarantee)
indebtedness for borrowed money, (ii) constituting capitalized lease
obligations, (iii) under which any of the Xxxxx Entities has granted (or may
grant) a security interest or lien on any of its respective properties or assets
(other than a Permitted Encumbrance), or (iv) under which any of the Xxxxx
Entities has
21
incurred any obligations for any performance bonds, payment bonds, bid bonds,
surety bonds, letters of credit, guarantees or similar instruments;
(d) material license, option or other Contracts relating to the
Intellectual Property (other than computer software subject to shrink wrap
licenses);
(e) Contracts with any Affiliate of any of the Xxxxx Entities or with
any current or former officer, director or employee of any of the Xxxxx
Entities;
(f) Contracts which require payment in excess of $1,000,000 per year
for the purchase of inventory, materials, supplies or equipment, except for open
purchase orders that are cancelable without material penalty, cost or other
liability on not more than thirty (30) days notice;
(g) distribution, franchise, license, sales, commission, consulting,
advertising or marketing Contracts; and
(h) Contracts (other than the Ancillary Agreements), containing
covenants restraining or limiting the freedom of any of the Xxxxx Entities or
any officer, director, shareholder or Affiliate thereof to engage in any line of
business or to compete with any Person including by restraining or limiting the
right to solicit customers.
Sellers have made available to Buyer a true, correct and complete copy of each
written Contract listed in SCHEDULE 3.12 and a complete written description of
each oral Contract listed in SCHEDULE 3.12.
3.13 ABSENCE OF BREACHES OR DEFAULTS. To Sellers' knowledge, except as
set forth on SCHEDULE 3.13, none of the Xxxxx Entities is in default under,
or in breach or violation of, any Material Contract, and no event has
occurred which, with the giving of notice or passage of time or both would
constitute a default under any Material Contract, except for defaults,
breaches, violations or events which, individually or in the aggregate, would
not have a Material Adverse Effect on the respective Xxxxx Entity which is a
party thereto, or constitute a change of control. Other than the Material
Contracts which have terminated or expired in accordance with their terms
(which terminations or expirations are so indicated on SCHEDULE 3.12), each
of the Material Contracts is valid, binding and enforceable (subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and to general equitable principles (whether considered in a
proceeding in equity or at law)), and each of such Material Contracts is in
full force and effect, and, assuming that all consents as set forth on
SCHEDULE 3.6 have been obtained, such Material Contract will continue to be
valid, binding and enforceable and in full force and effect immediately
following the Closing, in each case, except where the failure to be valid,
binding, enforceable and in full force and effect would not, individually or
in the aggregate, have a Material Adverse Effect on the respective Xxxxx
Entity which is a party thereto. No event has occurred which either
entitles, or would, on notice or lapse of time or both, entitle a party to
any such Material Contract (other than the respective Xxxxx Entity) to
accelerate or terminate any such Material Contract (other than the Material
Contracts which have been terminated or expired
22
in accordance with their terms (which terminations or expirations are so
indicated on SCHEDULE 3.12)), except as set forth in SCHEDULE 3.13.
Notwithstanding anything to the contrary herein, no representation or warranty
is made as to the intention, expressed or otherwise, of any party to any
Material Contract to renew or extend any Material Contract on the same or
similar terms, or otherwise.
3.14 PERMITS. Each of the Xxxxx Entities has, and to Sellers' knowledge
at all times has had (to the extent a failure to have had is still
actionable), all material Permits required to own and lease its respective
properties and assets and to conduct its business as currently being
conducted ("MATERIAL PERMITS"). All such Material Permits are listed in
SCHEDULE 3.14 and are valid and in full force and effect, except to the
extent that the failure to be valid and in full force would not have a
Material Adverse Effect. Neither Sellers nor, to Sellers' knowledge, any of
the Xxxxx Entities, has received any notice to the effect that, or otherwise
has any knowledge that, (a) any of the Xxxxx Entities is not currently in
compliance with, or is in violation of, any such Material Permits in any
material respect, or (b) any currently existing circumstances are likely to
result in a failure of any of the Xxxxx Entities to comply with, or in a
violation by any of the Xxxxx Entities of, any such Material Permits in any
material respect. None of the Material Permits requires consent to or
reissuance upon the consummation of this Agreement or the transactions
contemplated hereby, except where the failure to obtain such consent or
reissuance would not materially impair the ability to operate the business of
the Xxxxx Entities as currently conducted following the Closing.
Notwithstanding anything to the contrary herein, no representation or
warranty is made as to the ability to obtain an extension or renewal of any
Material Permit on the same or similar terms, or otherwise; PROVIDED,
HOWEVER, that Sellers have not received notice from any Person that any
extension or renewal of any Material Permit will not be obtained.
3.15 LITIGATION. Except as set forth in SCHEDULE 3.15, there are no
actions, orders, writs, injunctions, judgments or decrees or any claims
(insured or uninsured), suits, litigation, proceedings, labor disputes,
arbitration, governmental audits or investigations (collectively, "ACTIONS")
pending or, to the knowledge of Sellers, threatened, against, related to or
affecting (a) any of the Xxxxx Entities, their respective businesses,
operations or assets or any Employee Plan, or any Person for whose acts or
defaults any of the Xxxxx Entities may be vicariously liable, or (b) the
transactions contemplated hereby. None of the Xxxxx Entities are in default
with respect to any Action and there are no unsatisfied judgments or awards
against any of the Xxxxx Entities or their respective businesses, operations
or assets. None of the Actions set forth on SCHEDULE 3.15, if adversely
determined, could, to Sellers' knowledge, reasonably be expected to have a
Material Adverse Effect on any of the Xxxxx Entities.
3.16 COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 3.16, to
Sellers' knowledge, each of the Xxxxx Entities is and at all times has been
(to the extent a failure to be in material compliance is still actionable),
in material compliance with all applicable Laws relating to its respective
business, operations, properties or assets, or relationships with its
employees, except where the failure to be in such compliance would not have a
Material Adverse Effect on its respective business, operations, properties or
assets or relationships with employees. To Sellers' knowledge, none of the
Xxxxx Entities has received any notice of any violation by it of any
applicable Laws.
23
3.17 US LABOR MATTERS. Except as set forth on SCHEDULE 3.17, none of
the US Xxxxx Entities is a party to any labor contract or collective
bargaining agreement with respect to any of its employees with any labor
organization, union, group or association, and there are no unions or other
Worker Representatives whom any of the US Xxxxx Entities recognize to any
extent for collective bargaining purposes nor, so far as Sellers are aware,
have the US Xxxxx Entities done any act which might be construed as
recognition. There has been no request for recognition of any trade union
and, so far as Sellers are aware, no such request is pending. Except as set
forth on SCHEDULE 3.17, there is not presently, and in the past four years
has not been, any actual or threatened labor organizing activity,
recognitions of labor unions, unfair labor practice charges, actual or
threatened employee strikes, picketing, work-stoppages, industrial actions,
slow-downs, or lockouts against any of the US Xxxxx Entities, and there are
no facts known or which would on reasonable inquiry be known to Sellers which
might indicate that there might be any such labor negotiation, strike,
slow-down or other work stoppage, industrial action or labor disturbance.
Except as set forth on SCHEDULE 3.17, none of the US Xxxxx Entities has
experienced or initiated any Material Adverse Change in relations with
employees, bargaining representatives, or labor unions. Except as set forth
on SCHEDULE 3.17, there is no unfair labor practice charge or complaint
against any of the US Xxxxx Entities pending before or, to the knowledge of
Sellers, threatened by the National Labor Relations Board or any other
domestic or foreign governmental agency arising out of the conduct of their
respective businesses, and, to the knowledge of Sellers, there are no facts
or information which would give rise thereto. Each of the US Xxxxx Entities
is, and at all times has been, in compliance with and is current on all
payments owed pursuant to, all collective bargaining agreements to which any
of the US Xxxxx Entities are parties. Except as set forth in SCHEDULE 3.17,
there are no pending or, to the knowledge of Sellers, threatened, Employment
Claims against any of the Xxxxx Entities, or any other Person for whose
conduct any of the Xxxxx Entities is or may be held responsible.
3.17A ADDITIONAL SPECIFIC WARRANTIES IN RELATION TO UK LABOR MATTERS.
Except as set forth in SCHEDULE 3.17A:
(a) within the preceding period of one year, DIL has not given
notice of any redundancies to the Secretary of State nor started consultations
with any independent trade union or Worker Representatives nor are there any
facts or circumstances which would give rise to any obligation to give such
notice or commence such consultation in relation to any of its Workers;
(b) to Sellers' knowledge, no circumstances have arisen or
exist as at the date of this Agreement under which DIL would likely be required
to pay damages or compensation, to make any contractual or statutory redundancy
payment or to make any other payment under any Employment Law (UK);
(c) DIL has not at the date of this Agreement received any
notice from any employee who wished to return to work after maternity leave or
any order of any court or tribunal of competent jurisdiction to reinstate or
re-engage any existing or former Workers or be required to take corrective
action or to pay any penalty or award under any Employment Law (UK), and there
are no circumstances under which DIL would likely be required by any order of
24
any court or tribunal of competent jurisdiction to reinstate or reengage any
existing or former Workers or take corrective action;
(d) there are no current pending or, to Sellers' knowledge,
threatened claims of any type against DIL by any existing or former Workers or
existing or former directors of or any existing or former consultants to DIL;
(e) there are no existing service or other agreements or
contracts between DIL and any of its directors or executives or Workers which
cannot be lawfully terminated by three calendar months' notice or less without
giving rise to any claim for damages or compensation (other than compensation in
accordance with the Employment Rights Act 1996);
(f) DIL is in material compliance with all material
obligations under all Employment Laws (UK) in connection with its Workers,
directors and consultants and any trade unions and Worker Representatives and
with all collective agreements with respect to trade unions or to Workers of
DIL;
(g) there are no existing or threatened or pending strikes,
industrial actions, industrial or trade disputes involving DIL and any of its
employees and there are no facts known to Sellers which would indicate that any
such strike, industrial action, industrial or trade dispute is likely;
(h) there are no agreements or arrangements between DIL and
any trade union or other Worker Representative or organization concerning or
affecting the Workers of DIL and there are no trade unions or other Worker
Representatives whom DIL recognizes to any extent for collective bargaining
purposes nor, to Sellers' knowledge, has DIL done any act which would likely be
construed as recognition;
(i) there has been no request for recognition of any trade
union and, to Sellers' knowledge, no such request is pending;
(j) DIL is not involved in negotiations (whether with Workers
or any trade union or other Worker Representatives) to vary the terms and
conditions of employment or engagement of any of its Workers, directors or
consultants and has not made any representations, promises, offers or proposals
to any of its Workers, directors or consultants or to any trade union or other
Worker Representatives concerning or affecting the terms and conditions of
employment or engagement of any of its Workers, directors or consultants; and
(k) to Sellers' knowledge, DIL has discharged or accrued its material
obligations in relation to salary, wages, fees, commission, bonuses, overtime
pay, holiday pay, sick pay and all other benefits and emoluments relating to
their Workers, consultants and directors since May 14, 1998.
25
3.18 EMPLOYEE PLANS OTHER THAN UK PENSION PLAN OR GPP.
(a) GENERAL. For purposes of this Section 3.18, Xxxxx Entities shall
mean DISI and DIL. SCHEDULE 3.18 contains a true and complete list of Employee
Plans (other than the UK Pension Plan, the GPP or any other plans covering
solely UK employees). True and complete and accurate copies of each of the
following documents have been made available to Buyer: (i) each Employee Plan
(and, if applicable, related trust agreements, annuity contracts or other
funding instruments) which covers employees or former employees of any of the
Xxxxx Entities and all amendments thereto, all current summary plan
descriptions, summaries of material modifications (as defined in ERISA) and all
written interpretations and descriptions thereof which any of the Xxxxx Entities
has distributed to participants therein; (ii) the most recent determination
letter issued by the Internal Revenue Service and any opinion letter issued by
the Department of Labor with respect to each US Pension Plan and each voluntary
employees' beneficiary association as defined under Section 501(c)(9) of the
Code which covers employees of any of the Xxxxx Entities; (iii) all actuarial
reports prepared for the last two (2) plan years for each US Pension Plan which
covers employees of any of the Xxxxx Entities, excluding those portions of such
actuarial reports related solely to employees of non-Xxxxx Entities; and (iv)
the IRS Form 5500 filed with respect to the two (2) most recent plan years for
each Employee Plan, if applicable.
(b) PENSION PLANS. Each US Pension Plan and each related trust
agreement, annuity contract or other funding instrument which covers or has
covered employees or former employees of any of the Xxxxx Entities which is
intended to be qualified and tax-exempt under the provisions of Code Sections
401(a) and 501(a) is so qualified and tax exempt and has been so qualified and
tax exempt during the period from its adoption to date. Each US Pension Plan
and each related trust agreement, annuity contract or other funding instrument
which covers or has covered employees or former employees of any of the Xxxxx
Entities currently complies in all material respects and has been maintained in
compliance in all material respects with its terms and, both as to form and in
operation, with the requirements prescribed by any and all Laws which are
applicable to such plans, including ERISA and the Code.
(c) WELFARE PLANS. Each Welfare Plan which covers employees or
former employees of any of the Xxxxx Entities has been maintained in material
compliance with its terms and, both as to form and operation, with the
requirements prescribed by any and all Laws which are applicable to such Welfare
Plan, including ERISA and the Code. None of the Xxxxx Entities or any Welfare
Plan has any present or future obligation to make any payment to, or with
respect to any present or former employee of any of the Xxxxx Entities pursuant
to, any retiree medical benefit plans, or other retiree Welfare Plan (other than
retiree life insurance provided under VCRIP) or retiree Benefit Arrangement,
and, to the knowledge of Sellers, no condition exists which would prevent any of
the Xxxxx Entities from amending or terminating any such benefit plans, Welfare
Plan or Benefit Arrangement, subject to any collective bargaining agreement.
Each Welfare Plan which covers employees or former employees of any of the Xxxxx
Entities and which is a "group health plan," as defined in Section 607(1) of
ERISA, presently complies in all material respects with and has been operated in
compliance in all
26
material respects with provisions of Part 6 and Part 7 of Title I, Subtitle B of
ERISA and Sections 162(k) and 4980B and Subtitle K of the Code at all times.
(d) BENEFIT ARRANGEMENTS. Each Benefit Arrangement presently
complies and has been maintained in compliance in all material respects with its
terms and with the requirements prescribed by any and all Laws which are
applicable to such Benefit Arrangement, including the Code. Except as provided
by law or any collective bargaining agreement or in any employment agreement
described on SCHEDULE 3.18, the employment of all Persons presently employed or
retained by any of the Xxxxx Entities is terminable at will.
(e) UNRELATED BUSINESS TAXABLE INCOME; UNPAID CONTRIBUTIONS. To the
knowledge of Sellers, no Employee Plan (or trust or other funding vehicle
pursuant thereto) has incurred any liability under Code Section 511. Neither
Sellers nor any of the Xxxxx Entities has any liability for unpaid contributions
under Section 515 of ERISA with respect to any Employee Plan. All contributions
required to be made to each Multiemployer Plan have been timely made or accrued
for on the Financial Statements.
(f) DEDUCTIBILITY OF PAYMENTS. There is no Benefit Arrangement
covering any employee or former employee of any of the Xxxxx Entities (with
respect to such employee's or former employee's relationship with any of the
Xxxxx Entities) that, individually or collectively, requires the payment by any
of the Xxxxx Entities of any amount (i) that is not deductible under Section
162(a)(1) or 404 of the Code or (ii) that is an "excess parachute payment"
pursuant to Section 280G of the Code, including as a result of any event
connected with the acquisition of the Xxxxx Shares by Buyer or any other
transaction contemplated herein.
(g) FIDUCIARY DUTIES AND PROHIBITED TRANSACTIONS. None of the
Xxxxx Entities or any plan fiduciary of any Welfare Plan or US Pension Plan
has any liability in respect of any transaction in violation of Sections 404
or 406 of ERISA or any "prohibited transaction," as defined in Section
4975(c)(1) of the Code, for which no exemption exists under Section 408 of
ERISA or Section 4975(c)(2) or (d) of the Code, or has otherwise materially
violated the provisions of Part 4 of Title I, Subtitle B of ERISA. To the
knowledge of Sellers, none of the Xxxxx Entities has participated in a
violation of Part 4 of Title I, Subtitle B of ERISA by any plan fiduciary of
any Welfare Plan or US Pension Plan, and none of the Xxxxx Entities has been
assessed any civil penalty under Section 502(l) of ERISA.
(h) INSURANCE CONTRACTS. To the knowledge of Sellers, none of the
Xxxxx Entities or any Employee Plan (other than a Multiemployer Plan) holds
as an asset of any Employee Plan any interest in any annuity contract,
guaranteed investment contract or any other investment or insurance contract
issued by an insurance company that is the subject of bankruptcy,
conservatorship or rehabilitation proceedings.
(i) NO ACCELERATION OR CREATION OF RIGHTS. Except as set forth on
SCHEDULE 3.18, neither the execution and delivery of this Agreement or the
Ancillary Agreements by Sellers nor the consummation of the transactions
contemplated hereby or thereby will result in the acceleration or creation of
any rights of any Person to benefits under any Employee Plan (including the
acceleration of the vesting or exercisability of any stock options, the
acceleration
27
of the vesting of any restricted stock, the acceleration of the accrual or
vesting of any benefits under any US Pension Plan or the acceleration or
creation of any rights under any severance, parachute or change in control
agreement).
(j) NO OTHER MATERIAL LIABILITY. No event has occurred in connection
with which any of the Xxxxx Entities or any Benefit Arrangement, Multiemployer
Plan, US Pension Plan or Welfare Plan, directly or indirectly, could be subject
to any material liability (A) under any Law relating to any Benefit Arrangement,
Multiemployer Plan, US Pension Plan or Welfare Plan, or (B) pursuant to any
obligation of any of the Xxxxx Entities to indemnify any Person against
liability incurred under any such Law as it relates to any Benefit Arrangement,
Multiemployer Plan, US Pension Plan or Welfare Plan.
(k) SEVERANCE ARRANGEMENTS. Except as set forth on SCHEDULE 3.18,
none of the Xxxxx Entities is a party to any severance or similar arrangement
with any of its employees or former employees that will result in any obligation
(absolute or contingent) of any of the Xxxxx Entities or Buyer after the Closing
to make any payment to any of such employees following termination of
employment.
(l) VALIDITY AND ENFORCEABILITY. Except with respect to any related
contracts that are currently under negotiation in the normal course of business,
each Welfare Plan, US Pension Plan, related trust agreement, annuity contract or
other funding instrument and Benefit Arrangement which covers or has covered
employees or former employees of any of the Xxxxx Entities (with respect to its
relationship with such entities) is legal, valid and binding and in full force
and effect.
(m) With respect to any US Pension Plan which is subject to Section
412 of the Code or Section 302 of ERISA, there has been no "accumulated funding
deficiency" within the meaning of Section 302 of ERISA or Section 412 of the
Code (whether or not waived). With respect to the Employee Plans, all
applicable contributions and premium payments for all periods ending prior to
the Closing Date (including periods from the first day of the then current plan
year to the Closing Date) shall be made or accrued prior to the Closing Date in
accordance with past practice and any applicable collective bargaining agreement
and, with respect to each US Pension Plan subject to Title IV of ERISA, the
minimum required contribution in the applicable actuarial report. Except as set
forth on SCHEDULE 3.18, no Employee Plan has any unfunded liability.
(n) None of the Xxxxx Entities presently maintains, contributes to or
has any liability (including current or potentially assessed withdrawal
liability attributable to events occurring on or before the Closing Date) with
respect to any Multiemployer Plan, except as set forth on SCHEDULE 3.18.
(o) All premiums or other amounts due and payable to the PBGC with
respect to any US Pension Plan, or by any of the Xxxxx Entities, have been paid.
No US Pension Plan subject to Title IV of ERISA has been terminated and no
proceeding by the PBGC to terminate any US Pension Plan pursuant to Title IV of
ERISA has been instituted or threatened, no notice
28
of any such termination has been received and no condition exists which presents
a material risk of termination of any US Pension Plan.
(p) Except as set forth on SCHEDULE 3.15, there is no pending, or to
Sellers' knowledge, threatened legal action, proceeding or investigation against
or involving any Employee Plan (other than routine claims for benefits) and, to
the knowledge of Sellers, there is no basis for, any such legal action,
proceeding or investigation.
3.18A UK PENSION PLANS.
(a) GENERAL. True, complete and accurate copies of the following
documents have been made available to Buyer: (i) all trust deeds, rules,
resolutions, announcements and booklets relating to the UK Pension Plan; (ii)
the approval letter for the UK Pension Plan issued by the Pension Schemes Office
of the Inland Revenue; and (iii) all actuarial valuations (whether formal or
otherwise) and accounts prepared for the last two (2) plan years for the UK
Pension Plan. Sellers have disclosed to Buyer details of all benefits payable or
prospectively payable under the UK Pension Plan to or in respect of all active
members, pensioners and deferred pensioners, including all augmentations of
benefits and details of any additional undertakings given (either orally or in
writing, and whether or not legally binding) with regard to the provision of
such benefits. In addition, Sellers have disclosed to Buyer detailed employee
data relating to the participants in the UK Pension Plan.
(b) COMPLIANCE. The UK Pension Plan is approved under Chapter I of
Part XIV of the Taxes Act; has been so approved during the period from its
adoption to date; and there is no reason why such approval should be withdrawn.
The UK Pension Plan complies with and has at all relevant times complied with
the provisions of the Pensions Xxx 0000 and all other applicable legislation and
the requirements of the Pension Schemes Office affecting plans approved under
Chapter I of Part XIV of the Taxes Act. The UK Pension Plan and any employers
participating in that plan have duly complied with their respective obligations
under the trust deeds and rules of the UK Pension Plan.
(c) UNPAID CONTRIBUTIONS. All amounts payable to the UK Pension Plan
or to any insurance company in connection with it have been paid.
(d) OTHER UK PLANS. Other than the UK Pension Plan, there are no
pension, share option, share incentive or similar schemes or arrangements for
employees of any of the UK Xxxxx Entities and the UK Xxxxx Entities have no
obligation (whether legally binding or established by custom) to pay any pension
or make any other payment after retirement or death or otherwise to provide
"relevant benefits" or to make any payment for the purpose of providing
"relevant benefits" within the meaning of Section 612 of the Taxes Act to or in
respect of any employee of the UK Xxxxx Entities and neither of these entities
is party to any scheme or arrangement having as its purpose or one of its
purposes the making of such payments or the provision of such benefits.
(e) UK PENSION PLAN - FUNDING AND SHORTFALL. The market value of the
assets of the UK Pension Plan (which for the avoidance of doubt shall mean the
realizable value of the
29
assets) at the Closing Date shall be at least equal to the value at the Closing
Date of the prospective benefits payable to or in respect of all active members,
pensioners and deferred pensioners which have accrued in consequence of
pensionable service under the UK Pension Plan up to the Closing Date (including
any augmentations to benefits and any benefits due in respect of transfer
payments received by the UK Pension Plan), the calculation of which value shall
be made by the actuary to the UK Pension Plan using the actuarial assumptions
(further detailed in Section 10.2(h)) used in the last formal valuation of the
UK Pension Plan, making allowance (inter alia) for prospective salary increases
and post-retirement pension increases.
(f) PENSIONS LITIGATION. Neither the UK Xxxxx Entities nor the UK
Pension Plan is a party to any litigation or arbitration proceedings in respect
of the UK Pension Plan or the provision of any relevant benefits (as defined in
Section 612 of the Taxes Act), that there are no current submissions or
referrals to the Pensions Ombudsman or to the Occupational Pensions Advisory
Service or notifications to the Occupational Pensions Advisory Service or
notifications to the Occupational Pensions Regulatory Authority in respect of
any of the UK Xxxxx Entities or the UK Pension Plan and there are no outstanding
payments or penalties payable by any of the UK Xxxxx Entities or the UK Pension
Plan in respect of any litigation or arbitration proceedings or determination of
the Pensions Ombudsman or the Occupational Pensions Regulatory Authority.
(g) EMPLOYER-RELATED INVESTMENTS. The UK Pension Plan does not hold
any employer-related investment (within the meaning of Section 40 of the
Pensions Act 1995).
(h) PARTICIPATION. No employers other than DIL participate in the UK
Pension Plan.
(i) WINDING-UP. No retirement benefits scheme (as defined in Section
611 of the UK Taxes Act) in which employees or former employees of the UK Xxxxx
Entities participate or have participated has been or is in the process of being
(or is proposed to be) wound up (in whole or in part) or closed to new entrants
(in whole or in part).
(j) THE GPP. All amounts due to the trustees (if any) of the GPP or
to any employee or to any insurance company in connection with the GPP have been
paid. All contributions paid to the GPP since its establishment have been paid
in accordance with any guarantees, promises, or undertakings given (either
orally or in writing, and whether or not legally binding) to the employees,
directors or officers of the UK Xxxxx Entities.
3.19 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Each of the Xxxxx Entities is in compliance in all respects with
and is not in violation of or liable under any, Environmental Law, including all
Permits required thereunder to conduct its business as currently being
conducted, except where the failure to be in such compliance would not have a
Material Adverse Effect. All such Permits are listed on SCHEDULE 3.14. Neither
Sellers nor any of the Xxxxx Entities has received any notice to the effect that
(i) any Xxxxx Entity is not in compliance with, or is in violation of, any such
Environmental Laws or Permits required thereunder or (ii) any currently existing
circumstances are likely to
30
result in a failure of any of the Xxxxx Entities to comply with, or a violation
by any Xxxxx Entity of, any such Environmental Laws or Permits required
thereunder. Except as set forth in SCHEDULE 3.19, there are no pending or, to
the knowledge of Sellers, threatened, Environmental Claims against any of the
Xxxxx Entities, or any other Environmental Conditions which might trigger an
Environmental Claim.
(b) Except as set forth on SCHEDULE 3.19, no underground tank or
other storage receptacle for Hazardous Substances currently is or has been
located on any property now or formerly owned or leased by any of the Xxxxx
Entities and, except as set forth in SCHEDULE 3.19, there have been no releases
of any Hazardous Substances from any such underground tank receptacle or related
piping, or any other release of Hazardous Substances on, upon or into any
property owned or leased by any of the Xxxxx Entities or any property formerly
owned or leased by any of the Xxxxx Entities whether so owned or leased.
(c) Except as set forth in SCHEDULE 3.19, there are no Hazardous
Substances, including PCBs or asbestos-containing materials, located at or on
any property owned or occupied by any of the Xxxxx Entities that require
remediation or abatement.
(d) Except as set forth in SCHEDULE 3.19, there are no consent
decrees, consent orders, judgments or judicial or administrative orders (other
than Permits) entered into by any governmental authority or quasi-governmental
entity and any of the Xxxxx Entities, or any other Person for whose conduct a
Xxxxx Entity is or may be held responsible, or judgments, judicial or
administrative orders issued by any governmental authority or quasi-governmental
entity against any of the Xxxxx Entities, or any other Person for whose conduct
a Xxxxx Entity is or may be held responsible, or liens on any of the Xxxxx
Entities' respective properties or assets perfected by any governmental
authority or quasi-governmental entity under any Environmental Law which
regulate, obligate or bind any of the Xxxxx Entities.
(e) Notwithstanding those consents listed on SCHEDULE 3.6, there are
no disclosures that need to be made by any of the Xxxxx Entities, or any other
requirements that need to be satisfied pursuant to the Illinois Responsible
Party Transfer Act, the New Jersey Industrial Site Recovery Act, the Indiana
Responsible Property Transfer Law or the Connecticut Transfer of Hazardous Waste
Establishments.
(f) The Xxxxx Entities have filed all registrations and maintained
all records and information required under Environmental Law.
(g) For purposes of this Section 3.19 only, any reference to Xxxxx
Entities shall also include SAPADO II, General Partnership.
3.20 INTELLECTUAL PROPERTY.
(a) SCHEDULE 3.20 lists (i) each trademark, service xxxx, trade name,
and all registrations and applications for any of the foregoing that are owned
by or used in the conduct of the business or operation of any of the Xxxxx
Entities ("MARKS"); (ii) each patent, patent application, invention disclosure
and all applications or registrations in any jurisdiction
31
pertaining to the foregoing, including all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof that are owned by or used
in the conduct of the business or operation of any of the Xxxxx Entities
("PATENTS"), and (iii) all material computer programs, software and databases
(including computer programs that are in the process of being developed that are
not yet in use, but excluding computer programs, software and databases licensed
pursuant to non-exclusive perpetual licenses granted in the ordinary course of
business for commonly available commercial software) that are owned by or used
in the conduct of the business or operations of any of the Xxxxx Entities
("SOFTWARE"). The Marks, Patents, and Software are collectively referred to as
the "INTELLECTUAL PROPERTY". In addition, SCHEDULE 3.20 specifies whether in
each instance the Intellectual Property is owned or has been obtained under a
license or other agreement ("LICENSE RIGHTS"). The parties hereby acknowledge
that certain Intellectual Properties which are the subject of the Intangibles
Purchase Agreement will be sold by the Xxxxx Entities prior to the Closing.
(b) Except for Intellectual Property obtained under License Rights,
the Xxxxx Entities own all rights and title to the Intellectual Property and
they have not granted any rights in the Intellectual Property to any person.
(c) Except as set forth on SCHEDULE 3.20, the Intellectual Property
is all of the intellectual property that is used in the operation of the
businesses of the Xxxxx Entities as they are currently conducted. Except for
the License Rights, the Xxxxx Entities have the right and authority to convey
all rights in the Intellectual Property to any third party. Except as described
in SCHEDULE 3.20, the Xxxxx Entities have the right to use all of the
Intellectual Property and License Rights, without payment to a third party.
(d) Except for the portions of the system described in SCHEDULE 3.20
as the Automated Total Airline Catering System ("ATAC SYSTEM") that are
pre-existing commercially available software that is generally offered for
license to the public ("COMMERCIAL SOFTWARE"), the ATAC System is being
developed pursuant to a contract that gives the Xxxxx Entities ownership of all
right, title and interest in the ATAC System. The Commercial Software is
licensed and the Xxxxx Entities have a valid and enforceable license therefor.
Except for restrictions applicable to the Commercial Software under the
licenses, no agreement exists that would preclude or limit (including the
payment of fees) Buyer or the Xxxxx Entities from (i) making any change to the
ATAC System, or (ii) possessing, using, making, copying, selling, exploiting or
providing others such rights in the ATAC System and all derivative works
thereof.
(e) With respect to each item of License Rights licensed from third
parties: (i) to Sellers' knowledge, the license, sublicense or other agreement
covering such item is legal, valid, binding, enforceable and in full force and
effect with respect to the Xxxxx Entities and to Sellers' knowledge, the
license, sublicense or other agreement covering such item is legal, valid,
binding, enforceable and in full force and effect with respect to the third
party licensor; and (ii) none of the Xxxxx Entities is in material breach or
default thereunder, and, to Sellers' knowledge, no other party to such license,
sublicense or other agreement is in material breach or default thereunder, and,
no event has occurred which with notice or lapse of time would constitute a
32
material breach or default by any of the Xxxxx Entities or permit termination,
modification or acceleration thereunder by the other party thereto.
(f) Except as set forth in SCHEDULE 3.20, to Sellers' knowledge,
without investigation, all of the state, federal and foreign registrations and
applications related to the Intellectual Property are valid and in full force
and effect, have not lapsed, expired or been abandoned and no application or
registration thereof is the subject of any proceeding before any court,
arbitrator, state, local or foreign government agency, regulatory body, or other
governmental entity.
(g) To Sellers' knowledge, without investigation, the conduct of the
businesses of the Xxxxx Entities does not conflict with valid patents,
trademarks, trade secrets, trade names or other intellectual property of others.
To the knowledge of Sellers, there are no conflicts with or infringements of any
of the Intellectual Property and none of the Xxxxx Entities' trade secrets have
been misappropriated by any third party. Except as set forth in SCHEDULE 3.20,
none of the Xxxxx Entities have received any notice of infringement of or
conflict with asserted rights of others with respect to any of the Intellectual
Property and License Rights, and, to the knowledge of Sellers, there is no
claim, action, suit or proceeding pending or threatened against any of the Xxxxx
Entities with respect thereto. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, will neither cause any
of the Xxxxx Entities to be in material violation or default under any License
Rights, nor, except as set forth on SCHEDULE 3.20, terminate nor modify nor
entitle any other party to terminate or modify such License Rights, nor alter in
any material respect the ability of the Xxxxx Entities to conduct their business
or their use of the Intellectual Property.
(h) SCHEDULE 3.20 sets forth a true and accurate summary of the Xxxxx
Entities Year 2000 (Y2K) compliance status. As used herein and where such
representation is made in SCHEDULE 3.20, "Y2K COMPLIANT" means, with respect to
Software other than the Licensed Rights Software that, to Sellers' knowledge,
such Software will not (i) fail accurately to recognize dates falling before,
upon and after the year 2000; (ii) fail accurately to record, store, retrieve
and process data input and date information; (iii) function in a manner that
creates any ambiguity as to century; or (iv) fail accurately to manage and
manipulate single century and multi-century formulae, including leap year
calculations as a result of the date change at the end of the twentieth century;
and (v) it will not be adversely affected by, nor require changes in inputting
or operating practices nor produce invalid or incorrect output or results, nor
cause any abnormal ending scenario or suffer any diminution in functionality or
performance as a result of the date change at the end of the twentieth century
or the input, processing, conversion, storage or use of dates up to and
including 31 December 2001 (collectively, a "MALFUNCTION"). As used herein and
where such representation is made in SCHEDULE 3.20 "Y2K COMPLIANT" means, with
respect to Licensed Rights Software, hardware, telephone equipment and other
equipment owned or used by any of the Xxxxx Entities or used or operated by
third parties on behalf of any of the Xxxxx Entities that was supplied by a
third party ("THIRD PARTY SUPPLIERS"), that Sellers have sought and been given
reasonable assurances from such Third Party Suppliers that such Licensed Rights
Software, hardware, telephone equipment and other equipment will accurately
recognize and process dates falling before upon, and after the Year 2000 and
will not fail to function as a result
33
of the Year 2000 date change. SCHEDULE 3.20 describes the inquiries and
responses received by the Xxxxx Entities regarding the status of their third
party vendors of goods and services (i.e. food stuffs vendors) other than the
Third Party Suppliers on whom the businesses of any of the Xxxxx Entities depend
(the "VENDORS") to promptly perform and continue to perform the Vendor's
obligations to the Xxxxx Entities unaffected by failures and delays attributable
to or arising from a Year 2000 related malfunctions suffered or caused by any
computer software, hardware or equipment operated by or on behalf of such
Vendors. To Sellers' knowledge, the information provided to the Xxxxx Entities
regarding such Suppliers and Vendors state of Year 2000 readiness is accurate in
all material respects. To Sellers' knowledge, without investigation, except as
set forth in SCHEDULE 3.20, the Xxxxx Entities have not made any
representations, warranties or statements on which any person is entitled to
rely regarding the Xxxxx Entities state of Year 2000 readiness or that the Xxxxx
Entities will not experience Malfunctions.
3.21 TAX MATTERS.
(a) FILING OF TAX RETURNS. Except as set forth in SCHEDULE 3.21, all
Returns with respect to each of the Xxxxx Entities have been timely filed with
the appropriate taxing authorities (including information Returns and other
material information and giving effect to any extensions) in respect of Taxes
required to be filed through the date hereof and will be timely filed to the
extent any such Returns are required to be filed on or prior to the Closing Date
(giving effect to any extensions). All such Returns are correct, complete and
accurate in all material respects. Except as set forth in SCHEDULE 3.21, no
extension of time within which to file Returns (including information Returns)
in respect of any Taxes has been requested.
(b) PAYMENT OF TAXES. Except as set forth in SCHEDULE 3.21, all
Taxes for which any of the Xxxxx Entities is or may be liable, in respect of all
periods (or portions thereof) ending on or prior to the Closing Date have been
timely paid, except for Taxes not yet due, except to the extent that any such
Taxes are being contested in good faith or except to the extent an adequate
reserve (in conformity with GAAP) has been established therefor as set forth in
the Financial Statements. Each of the Xxxxx Entities has, within the time and
manner prescribed by applicable Law, rules and regulations withheld and paid
over to the proper governmental authorities Taxes required to be withheld and
paid over.
(c) AUDITS, INVESTIGATIONS OR CLAIMS. Except as set forth in
SCHEDULE 3.21, no material deficiencies for Taxes have been claimed, proposed or
assessed in writing by any taxing or other governmental authority against or
involving any of the Xxxxx Entities which have not been fully paid or settled.
There are no pending or, to Sellers' knowledge, threatened audits,
investigations or claims for or relating to any liability in respect of Taxes
that in the reasonable judgment of Sellers or Sellers' Auditor are likely to
result in a material additional amount of Taxes, and there are no matters under
discussion with any taxing or other governmental authorities with respect to
Taxes that in the reasonable judgment of Sellers or Sellers' Auditor is likely
to result in an additional liability for Taxes with respect to any Xxxxx Entity.
Except as set forth in SCHEDULE 3.21, no extension of a statute of limitations
relating to Taxes is in effect with respect to or involving any of the Xxxxx
Entities.
34
(d) LIENS. Except as set forth in SCHEDULE 3.21, there are no liens
for Taxes on any of the properties or assets of any of the Xxxxx Entities (other
than Permitted Encumbrances).
(e) TAX ELECTION. All material elections with respect to Taxes
affecting any of the Xxxxx Entities as of the date hereof are set forth in
SCHEDULES 3.9, 3.21 and 5.1. Except as set forth on SCHEDULE 3.21, (i) none of
the Xxxxx Entities has consented at any time under Section 341(f)(1) of the Code
to have the provisions of Section 341(f)(2) of the Code (or similar provisions
under state or local law) apply to any disposition of its respective assets and
(ii) none of the Xxxxx Entities has agreed to make, or is required to make, any
adjustment under Section 481(a) of the Code (or similar provisions under state
or local law) by reason of a change in accounting method or otherwise.
(f) TAX SHARING AGREEMENTS. There are no tax sharing agreements or
similar arrangements (whether written or unwritten) with respect to or involving
any of the Xxxxx Entities, except as otherwise specified in SCHEDULE 3.21.
(g) PRIOR CONSOLIDATED LIABILITIES. To Sellers' knowledge, none of
the Xxxxx Entities are liable for any Taxes as a result of being a member of a
consolidated group other than the Viad consolidated group pursuant to Treasury
Regulation Section 1.1502-6 and similar local and foreign provisions, if
applicable.
(h) PRE-ACQUISITION RESTRUCTURING TAX LIABILITY. Except as set forth
in SCHEDULE 3.21, none of the Xxxxx Entities have incurred or will incur tax
liabilities as a result of any actions undertaken pursuant to Section 5.6
hereof.
(i) DEFERRED INTERCOMPANY ITEMS. Except as set forth in SCHEDULE
3.21, no deferred intercompany gain or loss (as defined in Treasury Regulations
Section 1.1502-13) shall be triggered by any action contemplated by this
Agreement.
3.21A ADDITIONAL SPECIFIC WARRANTIES IN RELATION TO UK TAX MATTERS.
(j) Except as provided for in the Financial Statements, there is no
existing contingent or deferred liability for Tax including liability for Tax
which would arise on any of the UK Xxxxx Entities ceasing to trade or on its
ceasing to use or occupy any asset for the purposes of its trade or on its
disposing of any asset at its book value as shown in the Financial Statements or
which might arise as a result of the execution of this Agreement or Closing or
by reason of any of the UK Xxxxx Entities otherwise ceasing to be a member of a
group of companies (but excluding any liability for Tax which arises solely as
the result of any actual or deemed realization by the UK Xxxxx Entities of
trading stock or work in progress in the ordinary course of its business).
(k) None of the UK Xxxxx Entities have ever ceased to be a member of
a group of companies for the purposes of Sections 178 or 179 of the Taxation of
Chargeable Gains Xxx 0000 and none of the UK Xxxxx Entities will be liable to
Tax thereunder by virtue of entering into and completion of this Agreement.
35
(l) Details of all unrelieved Tax losses, management expenses,
charges on income, advance corporation tax or excess franked investment income
available to any of the UK Xxxxx Entities are set forth in SCHEDULE 3.21.
(m) No act or transaction has been or will, on or before Closing, be
effected by any of the UK Xxxxx Entities, Sellers or any other Person (including
the sale of the shares in the UK Xxxxx Entities pursuant to this Agreement) in
consequence of WHICH the UK Xxxxx Entities is are may be held liable for Tax
primarily chargeable against some other Person.
(n) Except as set forth in SCHEDULE 3.21 and except for dividends
paid under a valid Section 247 Taxes Act election (other than dividends paid in
circumstances where a notice could be issued under Section 703 Taxes Act), none
of the UK Xxxxx Entities has made any distribution for Tax purposes within the
last six years.
(o) Since November 27, 1987, none of the UK Xxxxx Entities has
entered into or been engaged in or been a party to any transaction or series of
transactions or scheme or arrangement of which this main purpose or one of the
main purposes was the avoidance or deferral or reduction in the liability to Tax
of any of the Xxxxx Entities.
(p) None of the UK Xxxxx Entities are or have at any time in the
period of six years ending with the date of this Agreement been liable for Tax
in any jurisdiction other than the United Kingdom.
(q) Each of the UK Xxxxx Entities is registered for value added tax
purposes, have complied fully with all statutory requirements, orders,
provisions, directions or conditions relating to the value added tax, maintain
and have at all times maintained complete, correct, and up to date records for
the purposes of such legislation and have preserved such records in such form
and for such periods as are required by the relevant legislation relating to
value added tax.
(r) Except as set forth in SCHEDULE 3.21, none of the UK Xxxxx
Entities are or have ever been treated as members of a group of companies for
Tax purposes (including, without limitation, for the purposes of Section 43 of
the Value Added Tax Act 1994).
(s) Since November 27, 1987, none of the UK Xxxxx Entities has been a
close company within the meaning of Section 414 of the Taxes Act.
(t) All surrenders made or agreed to be made by or to any of the UK
Xxxxx Entities under the provisions of Sections 240 and 402 to 412 of the Taxes
Act and of all payments made or agreed to be made by or to any of the UK Xxxxx
Entities for or in consideration of any such surrenders are set out in SCHEDULE
3.21 and no such surrenders or payments will be made on or prior to Closing.
None of the UK Xxxxx Entities have received any payment in respect of any
surrenders made or agreed to be made under the provisions of Sections 240 and
402 to 412 of the Taxes Act which whether or not as a result of the entry into
and completion of this Agreement may be liable to be refunded.
36
(u) No rents, interest, annual payments, emoluments or other sums of
an income nature paid by or payable by any of the UK Xxxxx Entities or which any
of the UK Xxxxx Entities are under an obligation to pay in the future are or may
be wholly or partially disallowable as deductions or charges in computing
profits or against profits for Tax purposes.
(v) During the period of three years ending with the Balance Sheet
Date and during the period between the Balance Sheet Date and the Closing, there
has been and will be no major change in the nature or conduct of any trade or
business carried on by any of the UK Xxxxx Entities within the meaning of
Sections 245, 768 or 768A of the Taxes Act, Schedule 7A to the Taxation of
Chargeable Gains Xxx 0000 or Regulations 16 or 17 of the Corporation Tax
(Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 1999 nor
has the goal of activities in such a trade become small or negligible.
(w) There is no unsatisfied liability to inheritance tax attached or
attributable to any asset of any of the UK Xxxxx Entities nor are they or any of
them subject to an Inland Revenue charge as mentioned in Sections 237 or 238 of
the Inheritance Tax Xxx 0000 nor is any person liable to inheritance tax
attributable to the value of any of the assets of any of the UK Xxxxx Entities.
Nor has any Person by virtue of Section 212 of the Inheritance Tax Xxx 0000 any
power of sale, mortgage or charge in respect of any assets of any of the UK
Xxxxx Entities and there are no circumstances in existence whereby any such
power could be exercised in relation to any of the UK Xxxxx Entities.
(x) All documents to which any of the UK Xxxxx Entities is a party or
which form part of the title of any of the UK Xxxxx Entities to any asset or in
the enforcement of which any of the UK Xxxxx Entities is or may be interested
which are subject to stamp or similar duty have been duly stamped and
adjudicated.
(y) None of the UK Xxxxx Entities: (i) are liable to make (and none
of them have or ever made) any abnormal or non-routine payment in relation to
value added tax; (ii) have ever been liable for any forfeiture or penalty in the
operation of any penal provision in relation to value added tax; (iii) have ever
been required by the Commissioners of Customs and Excise to give security; (iv)
operate any special value added tax methods or arrangements; or (v) have within
the period of three years ending with the date of this Agreement made exempt
supplies of such amount that has a consequence thereof the company in question
has been unable to obtain credit for any input tax aid or suffered by it.
(z) None of the UK Xxxxx Entities have an interest in any land in
relation to which an election has been made and not revoked by any of the UK
Xxxxx Entities or by any relevant associate (as defined by paragraph 3(7) of
Schedule 10 to the Value Added Tax Act 1994) of any of the UK Xxxxx Entities to
waive exemption from the value added tax under paragraph 2 of that Schedule.
(aa) None of the UK Xxxxx Entities supplies any goods or services
which are exempt from supplies within the meaning of the Value Added Tax Xxx
0000.
37
(bb) None of the UK Xxxxx Entities has or will have any unrelieved
surplus ACT (as defined by regulation 3(1) of the Corporation Tax (Treatment of
Unrelieved Surplus Advance Corporation Tax) Regulations 1999). Regulation 15(2)
of the Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax)
Regulations 1999 will not apply to prevent any unrelieved surplus ACT which any
of the UK Xxxxx Entities is treated as having paid by virtue of Section 240(2)
Taxes Act from being set off against (and so reducing or eliminating) the
liabilities corporations tax of any of the UK Xxxxx Entities.
3.22 INSURANCE. SCHEDULE 3.22 contains a complete list of all policies
for business interruption, fire, liability, worker's compensation, product
liability and errors and omissions insurance maintained by or on behalf of
any of the Xxxxx Entities. All such policies are in full force and effect on
the date hereof and shall be kept in full force and effect through the
Closing Date. Such policies are sufficient for compliance by the Xxxxx
Entities with all requirements of applicable Law and all Material Contracts
to which any of the Xxxxx Entities is a party or by which any of its assets
are bound. To Sellers' knowledge, none of the Xxxxx Entities have failed to
give any notice or to present any material claim under any such policy in a
due and timely fashion, and no insurer has refused, denied or disputed
coverage of any material claim made thereunder or has advised any of the
Xxxxx Entities that it intends to materially reduce coverage materially,
increase any premium or fail to renew any existing policy.
3.23 CUSTOMERS AND SUPPLIERS. SCHEDULE 3.23 sets forth a true and
correct list of (a) the ten (10) largest customers of the Xxxxx Entities as a
group in terms of revenues during the fiscal year ended December 31, 1998,
setting forth for each such customer the total revenues received from each
such customer during such period and (b) the ten (10) largest suppliers of
the Xxxxx Entities as a group by volume of purchases during the fiscal year
ended December 31, 1998 setting forth for each such supplier the total
purchases from each such supplier during such period. Except as set forth on
SCHEDULE 3.23, there exists no actual or, to Sellers' knowledge, threatened
termination, cancellation or limitation of, or modification or change in, the
business relationship of the Xxxxx Entities (i) with any customer or group of
customers set forth on SCHEDULE 3.23, or any customer or group of customers
of the Xxxxx Entities whose purchases individually or in the aggregate are
material to the Xxxxx Entities, as a group or individually, or the operation
of the business of the Xxxxx Entities, or (ii) with any supplier or group of
suppliers set forth on SCHEDULE 3.23, or any supplier or group of suppliers
of the Xxxxx Entities whose sales individually or in the aggregate are
material to the Xxxxx Entities, as a group or individually, or the operation
of the business of the Xxxxx Entities. Except as set forth on SCHEDULE 3.23,
to Sellers' knowledge, neither of Sellers nor any Xxxxx Entity has received
any notice that any customer or supplier currently intends to take action
that would materially and adversely affect their relationship with the Xxxxx
Entities.
3.24 BOOKS AND RECORDS. Each of the Xxxxx Entities has made and kept
books and records and accounts which, in reasonable detail, accurately and
fairly reflect the activities of such entity in all material respects. Except
as set forth on SCHEDULE 3.3, the minute books of each of the Xxxxx Entities
are true, correct and complete and contain copies of the minutes and records
of, and accurately and adequately reflect, all meetings and actions taken by
written consent of the boards of directors and the committees of the boards
of directors of each of the Xxxxx Entities.
38
Except as set forth in SCHEDULES 3.3 and 3.24, the copies of the stock record
books and the stock certificate books of each of the Xxxxx Entities are true,
correct and complete and accurately and adequately reflect all transactions in
connection with the capital stock of each of the Xxxxx Entities through and
including the date hereof.
3.25 BANKING RELATIONSHIPS. Sellers have made available to Buyer, or
shall make available to Buyer prior to Closing, a complete and accurate
description of all arrangements that each of the Xxxxx Entities has with any
banks or other financial institutions providing for any accounts, including
checking accounts, cash contribution accounts, safe deposit boxes, borrowing
arrangements, certificates of deposit or otherwise, indicating in each case
account numbers, if applicable, and the Person or Persons authorized to act
or sign on behalf of each of the Xxxxx Entities in respect of any of the
foregoing.
3.26 NO BROKERS. With the exception of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation and Xxxxxxx, Sachs & Co., neither Sellers nor any of
the Xxxxx Entities, nor any of their respective officers, directors,
employees or Affiliates has employed or made any agreement with any broker,
advisor, finder or investment banker or similar agent or any Person or firm
to pay any advisory, finder's or brokerage fee or commission or similar
payment in connection with the transactions contemplated hereby. None of the
Xxxxx Entities has incurred any obligation or liability, contingent or
otherwise, for any advisory, finder's or brokerage fee or commission or
similar payment in connection with the transactions contemplated hereby.
3.27 SEC COMPLIANCE. GDI (formerly known as CPS, Inc. and later Xxxxxx
Xxxxx Xxxxx & Company Inc.) had filed all reports required to be filed with
the US SEC pursuant to the US Securities Exchange Act of 1934 (such reports
together with all registration statements, prospectuses and information
statements filed by GDI being referred to as the "GDI SEC REPORTS"). As of
their respective dates, all such GDI SEC Reports complied with the applicable
requirements of the US Securities Exchange Act of 1934.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Sellers to enter into this Agreement, Buyer hereby
makes the following representations and warranties to Sellers, each of which is
true and correct on the date hereof and, except as otherwise expressly permitted
by this Agreement, shall be true and correct on the Closing Date.
4.1 ORGANIZATION. Buyer is a company duly organized, validly existing
and in good standing under the laws of Switzerland.
4.2 AUTHORIZATION. Buyer has all necessary organizational power and
authority, and has taken all organizational action necessary on its part, to
execute and deliver this Agreement and each Ancillary Agreement to which it
is a party, and to perform its obligations hereunder and thereunder and
consummate the transactions contemplated hereby and thereby. With the
exception of the approval of the Board of Directors of Buyer, (it being
acknowledged that
39
execution of this Agreement in no way obligates the Board of Directors), no
other organizational proceedings on the part of Buyer are necessary to authorize
the execution, delivery and performance of this Agreement or any such Ancillary
Agreement and the transactions contemplated hereby and thereby. This Agreement
has been, and each Ancillary Agreement to which Buyer is a party will be, duly
executed and delivered by Buyer and constitutes (or will constitute when duly
executed and delivered) a legal, valid and binding obligation of Buyer,
enforceable against Buyer, except as the enforceability thereof may be limited
by (a) applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent
conveyance or similar laws in effect which affect the enforcement of creditors
rights generally or (b) general principles of equity, whether considered in a
proceeding at law or in equity.
4.3 CONSENTS AND APPROVALS. No consent, waiver, agreement, approval,
Permit or authorization of, or declaration, filing, notice or registration to
or with, any US federal, state, local or non-US governmental or regulatory
authority or body or other Person is required to be made or obtained by Buyer
in connection with the execution, delivery and performance of this Agreement
and the Ancillary Agreements to which it is a party and the consummation of
the transactions contemplated hereby and thereby other than (a) filings
required pursuant to the provisions of the XXX Xxx xxx Xxxx Xxxxxxx Xxx 0000
and (b) those consents, waivers, agreements, approvals, authorizations,
declarations, filings, notices or registrations set forth in SCHEDULE 4.3.
4.4 NO CONFLICT OR VIOLATION. The execution, delivery and performance
by Buyer of this Agreement and the Ancillary Agreements to which Buyer is a
party, and the consummation by Buyer of the transactions contemplated hereby
or thereby will not (a) violate or conflict with any provision of the
organizational documents of Buyer, (b) to Buyer's knowledge, violate any Laws
applicable to Buyer or (c) violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, constitute a default (or an
event which, with notice or lapse of time, or both would constitute a
default) under, result in the termination of, or a right of termination or
cancellation under, accelerate the performance required by, or result in the
creation of any Encumbrance upon any of the properties or assets of Buyer
under, any term or provision of any Contract or Permit to which Buyer is a
party or by which any of its assets or properties are bound, which violation,
breach or default would individually or in the aggregate, have a Material
Adverse Effect on Buyer or the right or ability of Buyer to consummate the
transactions contemplated hereby.
4.5 LITIGATION. There is no Action pending or, to the knowledge of
Buyer, threatened (a) against Buyer or any of its Affiliates with respect to
which there is a reasonable likelihood of a determination which would have a
Material Adverse Effect on the ability of Buyer to consummate the
transactions contemplated hereby or (b) which seeks to enjoin or prevent, or
questions the validity or legality of, the consummation of the transactions
contemplated hereby.
4.6 INVESTMENT REPRESENTATION. Buyer is acquiring the Xxxxx Shares for
its own account for investment purposes and with no present intention of
distributing or reselling such shares or any part thereof in any transaction
which would constitute a "distribution" within the meaning of the Securities
Act. Buyer is an "accredited investor" within the meaning of Regulation D
40
promulgated under the Securities Act and acknowledges that the transaction
contemplated hereby is being undertaken in reliance upon such representation
without registration under any federal or state securities law.
4.7 NO BROKERS. With the exception of Warburg Dillon Read, neither
Buyer nor any of its officers, directors, employees, stockholders or other
Affiliates has employed or made any agreement with any broker, finder,
investment banker, advisor or similar agent or any Person or firm to pay any
finder's, advisory or brokerage fee or commission or similar payment in
connection with the transactions contemplated hereby.
ARTICLE 5
CONDUCT OF BUSINESS PRIOR TO CLOSING
5.1 BUSINESS IN ORDINARY COURSE.
(a) From the date hereof through the Closing and except to the extent
set forth on SCHEDULE 5.1 or SCHEDULE 5.6 or as otherwise explicitly set forth
in this Agreement, Sellers shall cause each of the Xxxxx Entities to operate its
respective business in the ordinary course, consistent with past practice, and
to refrain from taking any action inconsistent therewith or with the
consummation of the transactions contemplated hereby. Without limiting the
generality of the foregoing, Sellers shall cause each of the Xxxxx Entities to
(i) use its commercially reasonable efforts to maintain its respective
properties and assets substantially in their current state of repair, ordinary
wear and tear excepted; (ii) maintain its insurance coverage as in effect on the
date hereof; (iii) maintain its current business organization; (iv) use its
commercially reasonable efforts to keep available the services of its current
officers and employees; (v) use its commercially reasonable efforts to preserve
its current business relationships with customers, suppliers, distributors and
others having business dealings with such entity; and (vi) maintain accounting
standards and accruals consistent with past practice. Prior to the Closing,
without the prior written consent of Buyer, the Xxxxx Entities shall not engage
in any practice, take, or fail or omit to take, any action or enter into any
transaction of the kind described in SECTION 3.9, except to the extent set forth
on SCHEDULE 5.1 or SCHEDULE 5.6 or as otherwise explicitly provided by this
Agreement. In addition, the Xxxxx Entities shall not engage in any practice, or
take, or fail or omit to take, any action or enter into any transaction, other
than in the ordinary course of business and consistent with past practices, that
would (y) impair or prevent Sellers from consummating the transactions
contemplated by this Agreement or (z) cause or result in any of the
representations and warranties set forth in Article 3 to be untrue at any time
after the date hereof through the Closing Date.
(b) Buyer shall not engage in any practice, or take, or fail or omit
to take, any action or enter into any transaction that would (i) impair or
prevent Buyer from consummating the transactions contemplated by this Agreement
or (ii) cause or result in any of Buyer's representations and warranties set
forth in Article 4 to be untrue at any time after the date hereof through the
Closing Date.
41
5.2 INVESTIGATION BY BUYER.
(a) Sellers, in their reasonable discretion and at Buyer's sole
expense, shall permit Buyer, its counsel, accountants and other representatives,
during regular business hours upon reasonable notice, without disruption to the
business of the Xxxxx Entities, to make a reasonable inspection of the assets,
business and operations of the Xxxxx Entities, to inspect Contracts, books and
records and all other documents and information reasonably requested by Buyer
and related to the business and operations of the Xxxxx Entities and to meet
with designated senior level personnel of the Xxxxx Entities. Sellers, in their
reasonable discretion, shall furnish to Buyer promptly upon request all
additional documents and information with respect to the business and operations
of any of the Xxxxx Entities; PROVIDED, HOWEVER, that Sellers shall not be
required to provide any information concerning customer profitability by
location.
(b) Buyer acknowledges that, in connection with its investigation and
inspection contemplated by this Section 5.2, Buyer may have access to certain
financial projections and similar information related to the business,
operations and prospects of the Xxxxx Entities. Buyer further acknowledges that
such projections represent only an estimate of future results based upon certain
assumptions which may or not prove to be accurate, and accordingly, that Buyer
has not relied upon and shall not be entitled to rely upon any of such
projections for any purpose whatsoever.
5.3 CONSENTS AND BEST EFFORTS. Each of the parties covenants and
agrees, upon the terms and conditions contained herein, to cooperate with the
other parties and to pursue diligently and in good faith and use all
reasonable best efforts to take, or cause to be taken, all actions necessary
to put Buyer in possession of all of the Xxxxx Shares and to consummate and
make effective the transactions contemplated hereby. Without limiting the
generality of the foregoing, each party shall use all reasonable efforts to
obtain at the earliest practicable date all consents, approvals, permits,
authorizations, exemptions and waivers from federal, state, local and foreign
governmental and regulatory agencies, authorities and bodies and other
persons or entities (including filings pursuant to the HSR Act and Fair
Trading Act 1973) necessary or advisable to authorize, approve or permit the
performance by such party of its obligations hereunder and under each other
agreement and instrument referred to herein or contemplated hereby and (b)
defend and cooperate with each other in defending legal proceedings, whether
judicial or administrative and whether brought derivatively or on behalf of
third parties, challenging this Agreement and/or the Ancillary Agreements or
the consummation of the transactions contemplated hereby or thereby.
5.4 SUPPLEMENTAL DISCLOSURE.
(a) Sellers may, prior to the Closing, by a written notice delivered
in accordance with this Agreement, supplement or amend any Schedule referred to
in Article 3, but only for the purpose of identifying any matter or item which
(i) could otherwise constitute a breach of any representation or warranty
contained in Article 3 or (ii) although not otherwise constituting a breach of
any representation or warranty contained in Article 3, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. No
supplement or amendment
42
to any of Sellers' Schedules shall be deemed to cure any breach for purposes of
Article 8, Article 10 or Article 11, except as provided in this Section 5.4.
(b) If Sellers deliver to Buyer any supplement or amendment to any of
Sellers' Schedules, and the existence of the items or matters disclosed in such
supplement or amendment could reasonably be expected to result in the failure to
satisfy one or more of the conditions set forth in Article 8, then the rights of
the parties shall be governed by Articles 10 and 11.
5.5 NO SOLICITATION.
(a) From the date of this Agreement and until the earlier of
termination of this Agreement pursuant to Section 11.1 or the Closing Date,
neither Sellers nor the Xxxxx Entities shall, or shall permit their respective
employees, officers or agents to, directly or indirectly:
(i) solicit, initiate or encourage any spin-off, sale or
acquisition of any of the stock of any Xxxxx Entity or greater than 15% of the
assets of any Xxxxx Entity, or any merger, consolidation or business combination
with any Xxxxx Entity; or
(ii) with respect to any effort or attempt by any other Person to
do or seek any of the foregoing, (A) participate in any discussion or
negotiations, (B) furnish to any other Person any information with respect to
any of the Xxxxx Entities, or (C) otherwise cooperate in any manner with, or
assist or participate in, or facilitate or encourage such effort.
(b) Sellers and the Xxxxx Entities shall promptly notify Buyer if any
written proposal or offer or substantive discussion with any Person is made with
respect to the foregoing matters set forth in the immediately preceding Section
5.5(a).
5.6 DORMANT ENTITIES. Prior to the Closing, Sellers shall cause the
stock of DHL, Xxxxx Houses International, NAS-Xxxxx and DHI (collectively,
the "DORMANT ENTITIES") and SAPADO II, General Partnership to be liquidated,
sold, distributed and/or dissolved in accordance with the provisions set
forth on SCHEDULE 5.6.
5.7 SELLERS' RESTRUCTURING. In order to enable Buyer to structure the
acquisition of the Xxxxx Entities in an optimal manner, Buyer shall have the
right to request that Sellers cause one or more of the Xxxxx Entities to
undertake a corporate reorganization of itself or in combination with other
Xxxxx Entities and upon such request, Sellers shall in good faith consider
such request, but in no event shall Sellers be obligated to undertake any
such restructuring and in no event shall any such restructuring delay the
Closing.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 RELEASE OF SELLER GUARANTEES. Sellers and Buyer shall use their
commercially reasonable best efforts to obtain, prior to the Closing, the
full, complete and unqualified release of Sellers from any liability under
each of those surety bonds, letters of credit, guarantees and
43
similar instruments listed on SCHEDULE 6.1, pursuant to which either of Sellers
is obligated for the repayment of any obligation or indebtedness of any of the
Xxxxx Entities (collectively, the "SELLER GUARANTEES"). Buyer shall continue to
use its best efforts to obtain such releases following the Closing. Buyer shall
not, without the prior written consent of Sellers, have any authority to extend,
modify or otherwise alter any of the terms or conditions of any of Seller
Guarantees which shall not have been released as of the Closing Date.
6.2 ARRANGEMENTS REGARDING EMPLOYEE PLANS.
(a) XXXXX ENTITIES. For purposes of this Section 6.2, Xxxxx Entities
shall mean DISI and DIL.
(b) CERTAIN EMPLOYEE PLANS.
(i) Except to the extent otherwise provided in this Section 6.2,
as of the Closing Date, all participation of, and continued accrual or provision
of any benefits to, any employee or former employee of any of the Xxxxx Entities
or any covered dependent or beneficiary of any such employee under any Employee
Plan sponsored by Viad or VSCL shall cease. In addition, Viad and VSCL shall
have no liability on or after the Closing Date for any plans sponsored by the
Xxxxx Entities. Except to the extent provided in Section 6.2(c), with respect to
plans assumed by Buyer, or Buyer's Group, Xxxxx Entities shall also cease to be
adopting employers, administrators and fiduciaries with respect to such plans as
of the Closing Date.
(ii) As of the Closing Date, Sellers shall transfer and Buyer
shall assume all of the liabilities and obligations of Sellers in respect of the
Employee Plans listed on SCHEDULE 3.18 (excluding the Viad Corp Omnibus
Incentive Plan) attributable to employees of the Xxxxx Entities and their
beneficiaries and former employees of the Xxxxx Entities and their beneficiaries
whether vested or unvested. As of the Closing Date, Sellers shall be relieved of
all liabilities and obligations arising out of or relating to such Employee
Plans, excluding liabilities and obligations arising from conduct occurring on
or before the Closing Date. Except as otherwise provided herein with respect to
employees or former employees of DISI and DIL, as of the Closing Date, Sellers
shall retain all liabilities and obligations under the Employee Plans sponsored
by Viad or VSCL and shall be responsible for payment of any unpaid employer
contributions (other than salary reduction contributions).
(iii) Except as otherwise provided in this Section 6.2, Buyer has
no claims to any assets in any of Sellers' Employee Plans. Except as otherwise
expressly provided in this Agreement, Buyer hereby waives any and all claims
which Buyer or any of its Affiliates might have to the assets of any Employee
Plan sponsored by Viad or VSCL.
Sellers shall procure that the UK Pension Plan is not placed in full or
partial winding-up before the Closing Date and that no amendments are made to
the UK Pension Plan before the Closing Date (whatever the effective date of such
winding-up or amendment).
(c) VIAD CORP RETIREMENT INCOME PLAN.
44
(i) As soon as practicable after the Closing Date, Buyer shall
establish and formally adopt a defined benefit pension plan intended to be
qualified under Code Section 401(a) containing provisions substantially similar
to the Viad Corp Retirement Income Plan ("VCRIP"), including the provisions
contained in the Appendix for the Greyhound Xxxxx, Inc. Pension Plan as Applied
to Salaried Employees and the Appendix for the Greyhound Xxxxx, Inc. Pension
Plan (as Applied to Hourly Employees) ("BUYER'S RETIREMENT Plan"). Buyer agrees
to submit Buyer's Retirement Plan to the Internal Revenue Service for a
determination letter to the effect that Buyer's Retirement Plan is qualified
under Code Section 401(a) within the time prescribed by the applicable law to
enable Buyer to make any required changes to Buyer's Retirement Plan effective
retroactive to the date of its adoption ("ADOPTION DATE") so that the
determination letter will apply effective as of the Adoption Date. Buyer agrees
to make any amendments to Buyer's Retirement Plan as the Internal Revenue
Service may require as a condition of issuing such determination letter.
(ii) As soon as practicable after the Closing Date, Viad shall
spin off liabilities and assets calculated as of the Closing Date ("SPINOFF")
relating to all current and former employees of the Xxxxx Entities from VCRIP as
of the Closing Date, in accordance with Section 4044 of ERISA and Section 414(l)
of the Code (including Treas. Reg. Section 1.414(l)-1(b)(5)(ii)) to Buyer's
Retirement Plan. The assets to be spun-off to Buyer's Retirement Plan shall
consist solely of cash.
(A) As of the last day of each calendar month after the
Closing Date and through the date that assets and liabilities attributable to
the Spinoff are transferred to Buyer's Retirement Plan, and as of the date that
the assets and liabilities are transferred to Buyer's Retirement Plan if this
date is other than the last day of a calendar month (each such date is
hereinafter referred to as a "RECONCILIATION DATE"), the amount of assets
attributable to the Spinoff shall be adjusted as described in this paragraph.
After the Closing Date and until the instruction to liquidate assets
attributable to the Spinoff has been received and fully executed by the trustee
of VCRIP, assets relating to the Spinoff shall be invested at the discretion of
the trustee of VCRIP. As of each Reconciliation Date after the Closing Date and
through the last day of the calendar month in which such assets are fully
liquidated, earnings or losses on such assets shall be based on the net
aggregate investment return based on the market value of VCRIP during the month,
as determined by the trustee of VCRIP. As of each Reconciliation Date
thereafter, such assets shall be credited with interest at the rate of 5/12th
percent per month. As of each Reconciliation Date and before the adjustment for
the net aggregate investment return or interest allocation for the month has
been applied, the assets shall be reduced to reflect the payment of benefits for
current and former employees of the Xxxxx Entities, such payments to be limited
to benefits accrued through the Closing Date. The final amount of assets to be
transferred to Buyer's Retirement Plan attributable to the Spinoff as adjusted
by this paragraph and fixed on the final Reconciliation Date shall be referred
to as the "SPINOFF ASSETS".
(B) If the Spinoff Assets exceed the Obligation Amount (as
defined in (C) below) on the date of transfer to Buyer's Retirement Plan, then
Buyer shall pay such excess to Viad within five (5) business days of the date of
transfer (or such other time as mutually agreed upon by the parties). If the
Spinoff Assets are less than the Obligation Amount
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(as defined in (C) below) on the date of transfer to Buyer's Retirement Plan,
then Viad shall pay such shortfall to Buyer within five (5) business days of the
date of transfer (or such other time as mutually agreed upon by the parties).
(C) The "OBLIGATION AMOUNT", as of the Closing Date, is
$72,000,000 and shall be further modified by this paragraph for the period
between the Closing Date and the date that the Spinoff Assets are transferred to
Buyer's Retirement Plan. As of each Reconciliation Date after the Closing Date
and through the last day of the calendar month in which the assets attributable
to the Spinoff are fully liquidated, an investment return rate shall be applied
to the Obligation Amount. The investment return rate shall be the rate
determined and calculated to the nearest thousandth of a percentage point equal
to the net aggregate investment return of the VCRIP described in (A) above for
the month that includes the Reconciliation Date. As of each Reconciliation Date
thereafter, the Obligation Amount shall be credited with interest at the rate of
5/12th percent per month. As of each Reconciliation Date and before the
investment return rate or interest allocation for the month has been applied,
the Obligation Amount shall be reduced to reflect the payment of benefits for
current and former employees of the Xxxxx Entities, such payments to be limited
to benefits accrued through the Closing Date.
(D) All of the calculations required under this Section
6.2(c), including, but not limited to the calculations under Section 4044 of
ERISA and Code Section 414(l), the computation of the net investment experience
and the computation of interest, shall be made by Sellers (or advisors
designated by Sellers), subject to review by Buyer (or advisors designated by
Buyer) within thirty (30) days following Buyer's receipt of such calculations.
Any disputes between Sellers and Buyer regarding any calculations required under
this Section 6.2(c) shall be resolved in accordance with Article 12.
(iii) The transfer of assets and liabilities to Buyer's Retirement
Plan contemplated by this Section 6.2(c) shall not take place until as soon as
reasonably practicable after the expiration of the 30-day period following the
date of filing the required IRS Form 5310-A (or any successor form thereto) with
the Internal Revenue Service.
(iv) Except as specifically set forth in this Section 6.2(c), from
and after the date that the Spinoff Assets and liabilities are transferred to
Buyer's Retirement Plan, Viad and VCRIP shall cease to have any liability or
obligation whatsoever with respect to current and former employees of the Xxxxx
Entities under VCRIP, and Buyer and Buyer's Retirement Plan shall assume, and
shall be solely responsible for, all such transferred liabilities and
obligations whatsoever with respect to current and former employees of the Xxxxx
Entities and shall be solely responsible for all liabilities and obligations
whatsoever under Buyer's Retirement Plan.
(d) VIAD CORP CAPITAL ACCUMULATION PLAN AND VIAD CORP EMPLOYEES' STOCK
OWNERSHIP PLAN. Effective as of the Closing Date, Sellers shall cause the assets
held for the benefit of each employee or former employee of the Xxxxx Entities
under the Viad Corp Capital Accumulation Plan ("VIAD 401(K) PLAN") and the Viad
Corp Employees' Stock Ownership Plan ("VIAD ESOP") ("XXXXX ENTITIES
PARTICIPANTS") to be transferred to a new tax-qualified retirement
46
plan to be established by Buyer ("BUYER'S NEW PLAN") within 120 days of the
Closing Date. The assets to be transferred to Buyer's New Plan shall consist of
cash, promissory notes evidencing participant loans, and any common stock of
Viad Corp, the Dial Corporation, the FINOVA Group, Inc. and Xxxxxxx-Xxxxx Squib
held under the Viad 401(k) Plan and the Viad ESOP; provided, Sellers represent
and warrant that any common stock transferred to Buyer's New Plan is
publicly-traded and, subject to applicable law, freely-transferable and not
subject to any restrictions on the transferability of such shares. The amount so
transferred shall consist of each such Xxxxx Entities Participant's account
balance as of the Closing Date, increased by any contributions due for the
periods prior to the Closing Date but not made as of such date to the extent
such contributions are in Sellers' control and possession, reduced by any
benefits paid after the Closing Date but prior to the transfer date, and
increased or decreased for any investment experience. Buyer shall provide
evidence reasonably satisfactory to Sellers that Buyer's New Plan will not
violate Code Section 411(d)(6) or, if applicable, Code Section 4975 with respect
to assets transferred; PROVIDED, that upon receipt of such evidence, Sellers
shall confirm any and all benefits, rights or features which Sellers believe are
subject to the protections of Code Section 411(d)(6) and applicable to the Xxxxx
Entities Participants. Buyer's New Plan shall provide the same vesting schedules
as the Viad 401(k) Plan and the Viad ESOP with respect to the assets so
transferred. Buyer agrees to submit Buyer's New Plan to the Internal Revenue
Service for a determination letter to the effect that Buyer's New Plan is
qualified under Code Sections 401(a) and 401(k) within the time prescribed by
applicable law to enable Buyer to make any required changes to Buyer's New Plan
effective retroactive to the date of its adoption so the determination letter
will apply effective as of the Adoption Date. Buyer agrees to make any
amendments to Buyer's New Plan as the Internal Revenue Service may require as a
condition of issuing such determination letter. If necessary, Sellers shall
amend the Viad 401(k) Plan and any loan agreements to permit the Xxxxx Entities
Participants to continue to pay debt service on any loans from the Viad 401(k)
Plan after the Closing Date until the actual transfer of the assets to Buyer's
New Plan. Until such time as the account balances can be transferred, Sellers
shall instruct the trustee of the Viad 401(k) Plan to continue to accept loan
repayments from the Xxxxx Entities Participants pursuant to and in accordance
with the terms of the loan agreements, as amended pursuant to the preceding
sentence. The outstanding loan balances shall be transferred to Buyer's New Plan
(and Sellers shall cause the promissory notes evidencing such loans to be
assigned to the trustee of Buyer's New Plan) at the same time as the rest of the
account balances of the Xxxxx Entities Participants are transferred. Buyer shall
cause the Xxxxx Entities to reasonably cooperate with Sellers and the trustee of
the Viad 401(k) Plan with respect to loan repayments.
(e) TREATMENT OF CERTAIN EMPLOYEE BENEFITS FOR XXXXX EXECUTIVES.
Certain executives of the Xxxxx Entities shall be entitled to receive benefits
in accordance with SCHEDULE 6.2(e) .
6.3 BOARD APPROVAL. Sellers and Buyer shall submit this Agreement and
the Ancillary Agreements to their respective Boards of Directors for approval
within three (3) Business Days following the date of this Agreement.
47
6.4 GDI NAME CHANGE. Prior to Closing, Viad shall change the corporate
name of GDI to Xxxxx Holdings Inc.
ARTICLE 7
CONDITIONS TO SELLERS' OBLIGATIONS
The obligations of Sellers to consummate the transactions contemplated
hereby on the Closing Date are subject to the satisfaction, on or prior to the
Closing Date, of each of the following conditions, any of which may be waived by
Sellers in accordance with Section 13.5 of this Agreement:
7.1 REPRESENTATIONS AND WARRANTIES. All representations and warranties
of Buyer contained in this Agreement and any Ancillary Agreement to which
Buyer is a party shall be true and correct in all material respects on and as
of the Closing Date as if such representations and warranties were made on
and as of the Closing Date (except to the extent that any such
representations and warranties were made as of a specified date, in which
case such representations and warranties shall continue on the Closing Date
to have been true and correct in all material respects as of such specified
date).
7.2 PERFORMANCE OF OBLIGATIONS. Buyer shall have performed or complied
with in all material respects all obligations and covenants required by this
Agreement to be performed by it prior to or on the Closing Date, including
delivery of each of the documents and instruments required to be delivered by
Buyer pursuant to Section 2.4 and the Intangibles Purchase Agreement shall
have been consummated.
7.3 NO PROCEEDINGS OR LITIGATION. No Actions by any governmental
authority or any other Person shall have been commenced and be continuing for
the purpose of enjoining or preventing, or which question the validity or
legality of, the transactions contemplated hereby or by the Ancillary
Agreements, it being understood that, in any such event, the Closing shall be
postponed until the final settlement, dismissal or other resolution of such
Action, and Sellers hereby agree to use all reasonable efforts to have any
such injunction, order or decree lifted.
7.4 HSR AND FAIR TRADING ACTS. All filings to be made under the XXX Xxx
xxx Xxxx Xxxxxxx Xxx 0000 with respect to this Agreement and the transactions
contemplated hereby shall have been made and the applicable waiting period,
including all extensions thereof, under the XXX Xxx xxx Xxxx Xxxxxxx Xxx 0000
shall have expired or been terminated, and no additional requirements
relating thereto shall be applicable.
7.5 BOARD APPROVAL. This Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby shall have been approved by the
requisite vote (or written consent) of Buyer's Board of Directors.
7.6 OPINION OF COUNSEL. Buyer shall have delivered to Sellers an
opinion of Xxxxx & XxXxxxxx, counsel to Buyer, dated as of the Closing Date
in a form customary for such opinions that is reasonably acceptable to
Sellers and their counsel.
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ARTICLE 8
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to consummate the transactions contemplated hereby
on the Closing Date are subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions, any of which may be waived by Buyer
in accordance with Section 13.5 of this Agreement:
8.1 REPRESENTATIONS AND WARRANTIES. All representations and warranties
of Sellers contained in this Agreement and in any Ancillary Agreement to
which either of Sellers is a party shall be true and correct in all material
respects on and as of the Closing Date as if such representations and
warranties were made on and as of the Closing Date (except to the extent that
any such representations and warranties were made as of a specified date, in
which case such representations and warranties shall continue on the Closing
Date to have been true and correct in all material respects as of such
specified date).
8.2 PERFORMANCE OF OBLIGATIONS. Sellers shall have performed or
complied with in all material respects all obligations and covenants required
by this Agreement to be performed by either of them prior to or on the
Closing Date, including delivery of each of the documents and instruments
required to be delivered by Sellers pursuant to Section 2.4 and the
Intangibles Purchase Agreement shall have been consummated .
8.3 NO PROCEEDINGS OR LITIGATION. No Actions by any governmental
authority or any other Person shall have been commenced and be continuing for
the purpose of enjoining or preventing, or which question the validity or
legality of, the transactions contemplated hereby or by the Ancillary
Agreements, it being understood that, in any such event, the Closing shall be
postponed until the final settlement, dismissal or other resolution of such
Action, and Buyer hereby agrees to use all reasonable efforts to have any
such injunction, order or decree lifted.
8.4 HSR AND FAIR TRADING ACTS. All filings to be made under the XXX Xxx
xxx Xxxx Xxxxxxx Xxx 0000 with respect to this Agreement and the transactions
contemplated hereby shall have been made and the applicable waiting period,
including all extensions thereof, under the XXX Xxx xxx Xxxx Xxxxxxx Xxx 0000
shall have expired or been terminated, and no additional requirements
relating thereto shall be applicable.
8.5 BOARD APPROVAL. This Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby shall have been approved by the
requisite vote (or written consent) of the respective Boards of Directors of
each Seller.
8.6 OPINION OF COUNSEL. Sellers shall have delivered to Buyer an
opinion of Xxxxx Xxxx LLP, or other counsel to Sellers, dated as of the
Closing Date in a form customary for such opinions that is reasonably
acceptable to Buyer and its counsel.
8.7 CONSENTS. Each Consent identified in SCHEDULE 3.6 as required to be
obtained prior to Closing must have been obtained and must be in full force
and effect.
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8.8 RESTRUCTURING. Sellers shall have completed all of Sellers'
restructuring steps identified in SCHEDULE 5.6 prior to the Closing and, upon
Buyer's request, shall present all documentation that is reasonably necessary
to evidence the completion of steps identified in SCHEDULE 5.6.
ARTICLE 9
ACTIONS BY SELLERS AND BUYER FOLLOWING THE CLOSING
9.1 FURTHER ASSURANCES.
(a) Following the Closing, Sellers and Buyer agree to execute such
documents, instruments or conveyances and to take such actions as may be
reasonably requested by either party and otherwise to cooperate in a reasonable
manner with such party, its Affiliates and their respective representatives in
connection with any action that may be necessary or advisable to carry out the
provisions hereof or the transactions contemplated hereby.
(b) Following the Closing, Sellers and Buyer agree to make available
or cause to be made available to each other, upon request, as promptly as
practicable, such information and assistance, including access to all books and
records and employees (without any disruption of employment) retained and
remaining in existence after the Closing Date as is reasonably necessary for any
reasonable business purpose. The party requesting access to any such books and
records or employees shall bear all of the out-of-pocket costs and expenses
(including attorneys' fees, but excluding reimbursement for salaries and
employee benefits) reasonably incurred in connection with providing access to
such books and records and employees.
9.2 TAX MATTERS.
(a) ALLOCATION OF TAX LIABILITY. Viad shall be responsible for, and
shall indemnify and hold Buyer Parties harmless from and against, all Taxes for
periods ending on or prior to Closing Date (or portions thereof) including (i)
all Taxes payable pursuant to Treasury Regulation Section 1.1502-6 (or any
similar provision) by reason of any of the Xxxxx Entities being a member of a
group at any time prior to the Closing, (ii) all Taxes payable as a transferee
or successor, (iii) all Taxes payable by Contract or (iv) Taxes resulting from
the transactions contemplated by this Agreement or the Ancillary Agreements
(including any Taxes pursuant to Treasury Regulation Sections 1.1502-13,
1.1502-14 or 1.1502-19), excluding Taxes for which Sellers are indemnified by
Buyer pursuant to the terms of this Agreement or any Ancillary Agreement and for
which Buyer is responsible pursuant to Section 13.11 and any other provision of
this Agreement or any Ancillary Agreement. Buyer shall be responsible for and
shall indemnify and hold Sellers harmless against all Taxes relating to the
ownership and operations of the Xxxxx Entities for all taxable periods (or
portions thereof) beginning after the Closing Date. In order to apportion
appropriately any income Taxes relating to any taxable year or period that
begins before or on and ends after the Closing Date, the parties hereto shall,
to the extent permitted or not prohibited by applicable Law, elect with the
relevant taxing authority if required or necessary, to terminate the taxable
year as of the Closing Date. In any case where applicable Law does not permit
the Xxxxx Entities to treat such date as the end of a taxable year, then
whenever it is necessary to determine the liability for income Taxes of the
Xxxxx Entities for a
50
portion of a taxable year, such determination shall (unless otherwise agreed to
in writing by Sellers and Buyer) be determined by a closing of books of the
Xxxxx Entities, except that exemptions, allowances or deductions that are
calculated on an annual basis, such as the deduction for depreciation, shall be
apportioned on a time basis. In order to apportion appropriately any Taxes,
other than income Taxes, relating to any taxable year or period that begins
before or on and ends after the Closing Date, (i) ad valorem Taxes (including
real and personal property Taxes) shall be accrued on a daily basis over the
period for which the Taxes are levied, or if it cannot be determined over what
period the Taxes are being levied, over the fiscal period of the relevant taxing
authority, in each case irrespective of the lien or assessment date of such
Taxes, and (ii) franchise and other privilege Taxes not measured by income shall
be accrued on a daily basis over the period to which the privilege relates.
Notwithstanding the foregoing, the parties hereby agree as follows:
(i) Tax liabilities of Xxxxx Entities in the nature of sales and
use tax liabilities, payroll tax liabilities, VAT, withholding tax liabilities,
real and personal property Taxes and other Tax liabilities that will be
satisfied within 30 days of Closing shall be reflected as a liability on the
Closing Balance Sheet. Buyer hereby acknowledges its obligation to remit Tax
payments to satisfy such Tax liabilities to the proper Tax authorities by the
earlier of the due date of such remittance or before the 30th day after Closing;
provided, however, that Buyer will only be obligated to remit such amounts that
are reflected on the Closing Balance Sheet. All other tax liabilities shall be
the sole responsibility of Seller.
(ii) Tax liabilities in the nature of income, gross receipts,
franchise taxes and other franchise taxes based on income shall not be reflected
on the Closing Balance Sheet and shall be the sole responsibility of Seller.
(b) TAX AUDIT ADJUSTMENTS. Sellers shall be responsible for the good
faith representation of the Xxxxx Entities in regard to all present and future
US federal, state, local, and foreign Tax audits, protests and appeals for all
years or periods open for the assessment of Tax deficiencies with respect to any
Tax period ending on or before the Closing Date. Buyer promptly shall inform, or
shall cause the Xxxxx Entities promptly to inform, Sellers of (A) the
commencement of any audit or examination, (B) proposals of deficiencies or
refunds, and (C) the assessment of deficiencies or the agreement to refund an
overpayment of Taxes, with respect to the Xxxxx Entities for any Tax period for
which Sellers have indemnified Buyer pursuant to Section 9.2(a). Buyer shall be
entitled to participate in such audits and any subsequent protests and appeals,
and to review any work papers relating thereto with respect to such Tax periods
at Buyer's expense. Neither Buyer nor the Xxxxx Entities shall settle,
compromise, accept, reject, protest or appeal any adjustment or proposed
adjustment in connection with any Tax audit or examination unless Buyer and the
Xxxxx Entities have first obtained Sellers' written approval with respect to
such
51
adjustment, which approval shall not unreasonably be withheld or delayed, if
such actions would materially and adversely affect the Tax liability of the
Xxxxx Entities or Sellers giving effect to this Agreement. Sellers shall not
settle, compromise, accept, reject, protest or appeal any adjustment or proposed
adjustment in connection with any tax audit or examination unless Sellers have
first obtained Buyer's written approval with respect to such adjustment, which
approval shall not be unreasonably withheld or delayed, if such actions would
materially and adversely affect the tax liability of Buyer giving effect to this
Agreement.
(c) TAX RETURNS. Prior to the Closing Date, Sellers duly and timely
shall file, or shall cause the Xxxxx Entities to file, all Returns required to
be filed by any of them by such time (giving effect to any extensions available
therefor) and shall pay all Taxes due and payable with respect to such Returns,
provided that Sellers or the Xxxxx Entities may contest in appropriate
proceedings any Tax, governmental charge, duty, or assessment in accordance with
the provisions of Section 9.2(b); and Sellers shall cause the Xxxxx Entities to
withhold from each payment made to each of their respective employees, if any,
the amount of all Taxes (including federal income Taxes and the US Federal
Insurance Contribution Act Taxes and state and local income, wage, disability,
unemployment, and similar Taxes) required to be withheld therefrom and shall pay
same, before they become delinquent, to the proper taxing authority. Sellers
duly and timely shall file all Returns and reports for the Xxxxx Entities for
all taxable periods ending on or prior to the Closing Date, and Buyer or the
Xxxxx Entities duly and timely shall file all Returns and reports for the Xxxxx
Entities for all taxable periods ending after the Closing Date.
(i) FEDERAL RETURN. The separate US federal Tax Return of any US
Xxxxx Entities will be included in Viad's US Consolidated income tax return for
Tax periods ended December 1998 and January 1, 1999 to Closing Date.
(ii) STATE AND LOCAL RETURNS. The separate state and local Tax
Returns of any US Xxxxx Entities will be included in Viad's combined or
consolidated state and local Tax Returns that are required to be so included
(consistent with prior practice) for periods beginning before and ending on or
before the Closing Date.
(iii) PRO FORMA RETURN PREPARATION. Buyer agrees to prepare or
cause the US Xxxxx Entities to prepare pro-forma 1998 and short period 1999
(through the Closing Date) returns (including state and local apportionment
data) in a manner consistent with prior practice. Buyer shall itself, and shall
cause the US Xxxxx Entities to, cooperate with Sellers to provide such 1998
Returns within a reasonable time after Closing Date sufficient to enable Sellers
to review and timely file Sellers' 1998 federal and state and local income and
franchise Tax Returns and to provide such pro-forma Return (including state and
local apportionment data) for short period 1999 Returns no later than two (2)
months prior to the date such Return is required to be filed with the applicable
Taxing authority (not giving effect to any extensions) following the Closing
Date.
(iv) FINAL RETURN PREPARATION. With respect to any Tax Returns not
filed prior to the Closing Date, Sellers hereby agree that all Tax Returns filed
after the Closing Date for any period ending prior to or on the Closing Date
shall be prepared in a manner consistent with past practice and that Sellers
shall not make or refrain from making any Tax election that would alter any Tax
attribute of any of the Xxxxx Entities that is not consistent with prior
practice without the prior written consent of Buyer (which may not be
unreasonably withheld). Sellers shall provide copies of all Tax Returns that
will be filed by or relate to any
52
Xxxxx Entity to Buyer for Buyer's review prior to the filing of such Tax Return.
Sellers shall provide copies of all such filed Tax Returns within five (5)
business days of said filing.
(d) MUTUAL ASSISTANCE. Following the Closing, Buyer and Sellers shall
provide, and Buyer shall cause the Xxxxx Entities to provide, such records,
access to employees and assistance (including execution of documents that are
merely ministerial in nature, such as the signing of Returns and other forms
which the requesting party represents to be complete and correct) as reasonably
may be requested in connection with the preparation of any Return, any audit or
other examination by any taxing authority, and any judicial or administrative
proceedings relating to liability for Taxes (including refunds thereof) as
provided pursuant to Section 9.2(a). Buyer agrees to retain, and to cause the
Xxxxx Entities to retain, from and after the Closing Date, Tax records of the
Xxxxx Entities relating to Tax periods for which Sellers has indemnified Buyer
pursuant to Section 9.2(a) until the expiration of any applicable limitations
period (including any extension thereof) with respect to such Tax periods. Buyer
shall use, and shall cause the Xxxxx Entities to use, reasonable efforts to
notify Sellers prior to destroying material Tax records for such Tax periods.
Any such records or other information disclosed pursuant hereto shall be held in
strict confidence and shall not be disclosed to any Person for any reason
whatsoever, except to the extent that such disclosure is required by law or is
necessary in order to effect the intent of this Agreement.
(e) APPLICABLE PERIOD. Notwithstanding Section 10.3 hereof, the
obligations of the parties set forth in this Section 9.2 relating to Taxes
shall, except as otherwise agreed in writing, be unconditional and absolute and
shall remain in effect until thirty (30) days after the expiration of the
applicable statute of limitations governing the Tax to which such obligations
relate (after giving effect to any agreement extending or tolling such statute
of limitations).
(f) CARRYBACKS. Sellers intend that benefits of Tax losses and credits
of the US Xxxxx Entities generated in taxable periods subsequent to the Closing
Date will be utilized in the US Xxxxx Entities' combined or consolidated income
or franchise Tax returns. Buyer or US Xxxxx Entities will elect, where
permitted, to carry forward, rather than carry back, any such unutilized losses
or credits. If the US Xxxxx Entities incur any such unutilized losses or credits
which must be carried back to combined or consolidated Tax Return periods of
Sellers; Buyer or the US Xxxxx Entities must request and obtain Sellers' consent
(which consent will not be unreasonably withheld) to carryback to such period.
Sellers, at Buyers' sole expense, shall file an appropriate carryback (including
any tentative carryback adjustment) claim for refund of any Taxes recoverable.
Upon receipt of any refund Sellers shall promptly pay to the US Xxxxx Entities,
the amount of such refund (including interest) less any Tax detriment (including
interest), to Seller or its subsidiaries resulting from such carryback claim,
including in all cases, the carryback or carryover effects on Tax year(s) other
than those to which directly carried back due to rearrangement of carrybacks or
carryovers caused by applicable Tax rates governing the order of Tax items.
(g) INTEREST ON TAX PAYMENTS. Any payment required to be made between
Buyer or the Xxxxx Entities and Sellers pursuant to this Section 9.2 not made
within such required period shall thereafter bear interest until paid at the
rate of ten percent (10%) per annum.
53
9.3 LITIGATION SUPPORT. In the event and for so long as any party is
actively contesting or defending against any Action in connection with (a)
any transaction contemplated under this Agreement or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction involving any of the Xxxxx
Entities or their respective assets, business or operations, each of the
other parties will cooperate with such party and its counsel in the contest
or defense, make available its personnel and provide such testimony and
access to its books and records as shall be reasonably necessary in
connection with the contest or defense, all at the sole cost and expense of
the contesting or defending party (unless the contesting or defending party
is entitled to indemnification hereunder). The covenant contained in this
Section 9.3 shall not be lieu of or otherwise limit the indemnification
obligations of the parties pursuant to Article 10.
ARTICLE 10
INDEMNIFICATION
10.1 GENERAL INDEMNIFICATION. For purposes of this Article 10,
following the Closing, all of the following references used in this Agreement
and in the Ancillary Agreements, with the exception of those references
contained in this Section 10.1 and in Section 3.16, shall be disregarded when
determining the Losses resulting from the breach of representations,
warranties, covenants or other agreements that are contained in this
Agreement and the Ancillary Agreements: "material" as an adjectival modifier,
including as used in the defined terms "Material Contract," "Material
Permit," "Material Adverse Change," and "Material Adverse Effect," and (ii)
"materially" as an adverbial modifier. Subject to the limitations on
indemnity in Section 10.3 and without limiting the generality of the
foregoing, following the Closing, the indemnification obligations of Buyer
and Sellers under this Article 10 shall be for Losses resulting from the
breaches of such representations, warranties, covenants and other agreements
without consideration of the materiality of such a breach or the materiality
of the underlying Contract, Permit, approval, default, breach, liability,
compliance or property. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with
any covenant or obligation, and the subsequent Closing pursuant to Section
2.1, will not affect the right to indemnification, payment of losses, or
other remedy based on such representations, warranties, covenants, and
obligations. All claims shall be paid in US Dollars and payment of any Claim
denominated in Pound Sterling shall be converted into US Dollars based on the
exchange rate published in The Wall Street Journal (Midwest Edition) on the
Closing Date.
(a) BY VIAD. Subject to the limitations set forth in Section 10.3, if
the Closing shall occur, Viad shall indemnify, save and hold Buyer and its
Affiliates (including the Xxxxx Entities after the Closing), directors,
stockholders, officers, employees, successors, transferees and assignees, and
their respective representatives (each, a "BUYER PARTY"), harmless from and
against any and all costs, losses, charges, liabilities, obligations, damages,
lawsuits, actions, judgments, deficiencies, demands, fees, claims, settlements,
interest, penalties, assessments and expenses (whether arising out of
Third-Party Claims or otherwise) net of any applicable reserves on the Closing
Balance Sheet (collectively, "LOSSES") to the extent incurred in connection
with,
54
arising out of, resulting from or relating or incident to: (i) any breach of any
representation or warranty by either of Sellers in or pursuant to this Agreement
or any Ancillary Agreement to which either of Sellers is a party, or (ii) the
nonfulfillment, nonperformance, nonobservance or other breach of any covenant or
agreement made by either of Sellers in or pursuant to this Agreement or any
Ancillary Agreement to which either of Sellers is a party (each a "BUYER
CLAIM"). ("LOSSES" shall include amounts paid or incurred with respect to
Third-Party Claims for punitive damages, but shall exclude punitive damages
directly claimed by one party vis-a-vis another.) The indemnity provided for in
this Section 10.1(a) is not limited to matters asserted by third parties against
any Buyer Party, but includes Buyer Claims incurred or sustained by any Buyer
Party in the absence of Third-Party Claims.
(b) BY BUYER. Subject to the limitations set forth in Section 10.3, if
the Closing shall occur, Buyer shall indemnify, save and hold Sellers and their
respective Affiliates, directors, stockholders, officers, employees, successors,
transferees and assignees and their respective representatives (each, a "SELLER
PARTY"), harmless from and against any and all Losses to the extent incurred in
connection with, arising out of, resulting from or relating or incident to (i)
any breach of any representation or warranty made by Buyer in or pursuant to
this Agreement or any Ancillary Agreement to which Buyer is a party or (ii) the
nonfulfillment, nonperformance, nonobservance or other breach of any covenant or
agreement made by Buyer in or pursuant to this Agreement or any Ancillary
Agreement (each, a "SELLER CLAIM"). The indemnity provided for in this Section
10.1(b) is not limited to matters asserted by third parties against any Seller
Party, but includes Seller Claims incurred or sustained by any Seller Party in
the absence of Third-Party Claims.
(c) DEFENSE OF CLAIMS. If a claim for Losses (a "CLAIM") is to be made
by a Person entitled to indemnification hereunder, the Person claiming such
indemnification shall give written notice (a "CLAIM NOTICE") to the indemnifying
Person as soon as practicable after the Person entitled to indemnification
becomes aware of any fact, condition or event (including an accounting of all
expenditures credited against applicable reserves and any insurance proceeds
received) which may give rise to Losses for which indemnification may be sought
under this Section 10.1.
(i) The failure of any indemnified Person to give timely notice
hereunder shall not affect such party's rights to indemnification hereunder,
except and only to the extent that, the indemnifying Person demonstrates actual
damage caused by such failure. In the case of a Claim involving the assertion of
a claim by a third party (whether pursuant to a lawsuit or other legal action or
otherwise, a "THIRD-PARTY CLAIM"), if the indemnifying Person shall acknowledge
in writing to the indemnified Person that the indemnifying Person shall be
obligated to indemnify the indemnified Person under the terms of its indemnity
hereunder in connection with such Third-Party Claim, then (A) the indemnifying
Person shall be entitled and, if it so elects, shall be obligated at its own
cost, risk and expense, (1) to take control of the defense and investigation of
such Third-Party Claim and (2) to pursue the defense thereof in good faith by
appropriate actions or proceedings promptly taken or instituted and diligently
pursued, including to employ and engage attorneys of its own choice reasonably
acceptable to the indemnified Person to handle and defend the same, and (B) the
indemnifying Person shall be
55
entitled (but not obligated), if it so elects, to compromise or settle such
Claim, which compromise or settlement shall be made only with the written
consent of the indemnified Person, such consent not to be unreasonably withheld,
conditioned or delayed.
(ii) In the event the indemnifying Person elects to assume control
of the defense and investigation of such lawsuit or other legal action in
accordance with this Section 10.1(c), the indemnified Person may, at its own
cost and expense, participate in the investigation, trial and defense of such
Third-Party Claim; PROVIDED, HOWEVER, that, if the named Persons to a lawsuit or
other legal action include both the indemnifying Person and the indemnified
Person and the indemnified Person has been advised in writing by counsel engaged
by the indemnifying Person that there may be one or more legal defenses
available to such indemnified Person that are different from or additional to
those available to the indemnifying Person, the indemnified Person shall be
entitled, at the indemnifying Person's cost, risk and expense, to separate
counsel of its own choosing.
(iii) If the indemnifying Person fails to assume the defense of
such Third-Party Claim in accordance with this Section 10.1(c) within ten (10)
calendar days after receipt of the Claim Notice, the indemnified Person against
which such Third-Party Claim has been asserted shall (upon delivering notice to
such effect to the indemnifying Person) have the right to undertake, at the
indemnifying Person's cost, risk and expense, the defense, compromise and
settlement of such Third-Party Claim on behalf of and for the account of the
indemnifying Person; PROVIDED, that such Third-Party Claim shall not be
compromised or settled without the written consent of the indemnifying Person,
which consent shall not be unreasonably withheld.
(iv) In the event the indemnifying Person assumes the defense of
the Claim, the indemnifying Person shall keep the indemnified Person reasonably
informed of the progress of any such defense, compromise or settlement, and in
the event the indemnified Person assumes the defense of the Claim, the
indemnified Person shall keep the indemnifying Person reasonably informed of the
progress of any such defense, compromise or settlement. The indemnifying Person
shall be liable for any settlement of any Third-Party Claim effected pursuant to
and in accordance with this Section 10.1 and for any final judgment (subject to
any right of appeal), and the indemnifying Person agrees to indemnify and hold
harmless each indemnified Person from and against any and all Losses by reason
of such settlement or judgment.
(d) LETTER OF CREDIT. Viad shall post an irrevocable letter of credit
from an internationally recognized bank if, as a result of a distribution or
sale of substantially all of its assets, subsidiary sale, spin-off or similar
transaction (other than the transactions contemplated by this Agreement), its
investment rating is adjusted downward to a level below the lowest level
considered "investment grade" by a majority of the rating agencies then rating
Viad's securities, such letter of credit, if any, shall be posted by Viad within
three (3) Business Days after Viad first obtains knowledge that such a downward
adjustment is probable. Viad must obtain the consent of Buyer before Viad
undertakes a liquidation or liquidating dividend (Buyer's consent will be deemed
given upon the posting of such a letter of credit). If the letter of credit is
required to be posted within 21 months of the Closing Date, the amount of the
letter of credit will be $40
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million. If the letter of credit is required to be posted more than 21 months
but less than or equal to 60 months of the Closing Date, the amount of the
letter of credit will be $20 million. No letter of credit will be required in
any event on the date that is 60 months after the Closing Date. The term of any
letter of credit will expire on the fifth anniversary of the Closing Date by its
terms or by operation of this Section 10.1(d).
10.2 SPECIAL INDEMNITIES.
(a) ENVIRONMENTAL INDEMNITY.
(i) Notwithstanding the limitations set forth in Section 10.3(a),
(b), (c) and (d), and notwithstanding the disclosures in SCHEDULE 3.19, if the
Closing shall occur, Viad shall indemnify, save and hold Buyer Parties harmless
from and against any and all Losses incurred by any of Buyer Parties in excess
of the amount reserved by the Xxxxx Entities for environmental losses on the
Closing Balance Sheet in connection with, arising out of, resulting from or
relating to a breach of Section 3.19 or 10.3(b).
(ii) Notwithstanding anything to the contrary in this Agreement,
(A) Viad's obligations under this Section 10.2(a) shall terminate for all
purposes on the fifth (5th) anniversary of the Closing Date; and (B) claims for
Environmental Losses that constitute a breach of Sections 3.8 or 3.16 must be
made under Section 10.2(a) and not under Section 10.1.
(b) UK REDUNDANCY INDEMNITY. Notwithstanding the limitations set forth
in Section 10.3(b), (c) and (d) and notwithstanding the disclosures in SCHEDULE
3.17A, if the Closing shall occur, Sellers shall jointly and severally
indemnify, save and hold Buyer Parties harmless from and against any and all
Losses (net of any applicable reserves on the Closing Balance Sheet), incurred
by any of Buyer Parties pursuant to the Employment Rights Xxx 0000, the Sex
Discrimination Xxx 0000, the Race Relations Xxx 0000, the Disability
Discrimination Xxx 0000, the Transfer of Undertakings (Protection of Employment)
Regulations 1981 or the Trade Union and Labour Relations (Consolidation) Xxx
0000, or at common law all as in force at the Closing Date, and excluding any
statutory modification, consolidation or reenactment after the Closing Date,
connected with or in respect of the termination of employment based upon the
redundancies themselves relating to the loss of the British Midlands Catering
Agreement.
(c) US EMPLOYMENT LAW INDEMNITY. Notwithstanding the limitations set
forth in Section 10.3(b), (c) and (d), and notwithstanding the disclosures in
SCHEDULES 3.16 or 3.17, if the Closing shall occur, Viad shall indemnify, save
and hold Buyer Parties harmless from and against any and all Losses incurred by
any of Buyer Parties in connection with, arising out of, resulting from or
relating to the failure by any of the Xxxxx Entities to obtain legally valid and
binding releases of claims under the terms and requirements of the US Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act in
connection with the terminations and execution of severance and release
agreements with the Persons set forth on SCHEDULE 10.2(C).
(d) INACTIVE COMPANIES INDEMNITY. Notwithstanding the limitations set
forth in Section 10.3 (c) and (d), if the Closing shall occur, Viad shall
indemnify, save and hold Buyer
57
Parties harmless from and against any and all Losses incurred by any of Buyer
Parties in connection with, arising out of, resulting from or relating to any
liabilities and contingent liabilities of GDI, DHI, Xxxxx Houses International,
NAS-Xxxxx and DHL.
(e) GDI AND DHI SHARES INDEMNITY. Notwithstanding the limitations set
forth in Section 10.3(b), (c) and (d), and notwithstanding the disclosures in
SCHEDULE 3.4, if the Closing shall occur, Viad shall indemnify, save and hold
Buyer Parties harmless from and against all Losses incurred by any Buyer Party
in connection with, arising out of, resulting from or relating to any failure by
Sellers to remove all Encumbrances from the GDI Shares and DHI Shares prior to
the Closing pursuant to Sections 3.4(a) and (c).
(f) FOOD POISONING INDEMNITY. Notwithstanding the limitations set
forth in Section 10.3 (c) and (d), Viad shall indemnify, save and hold Buyer
Parties harmless from and against all Losses incurred by any Buyer Party in
connection with, arising out of, resulting from or relating to any material
liabilities, obligations or commitments of any nature relating to food or
beverage adulteration, poisoning or contamination which occur prior to the
Closing; provided that the physical symptoms of such adulteration poisoning or
contamination manifest themselves no later than 72 hours after the Closing.
(g) LIMITED WORKERS COMPENSATION INDEMNITY. Notwithstanding the
limitations set forth in Section 10.3(c) and (d), Viad shall indemnify, save and
hold Buyer Parties harmless from and against all Losses incurred by a Buyer
Party in connection with, arising out of or resulting from or relating to those
certain twenty-two (22) claims for Workers Compensation by Xxxxx Entities
employees transferred from Viad to the Xxxxx Entities in March 1999 as indicated
on SCHEDULE 10.2(g). The parties expressly acknowledge and agree that those
workers compensation claims that are the subject of this Section 10.2(g) are
Third Party Claims.
(h) UK PENSION PLAN - FUNDING AND SHORTFALL INDEMNITY. Notwithstanding
the limitations set forth in Sections 10.3(b), (c) and (d), if the market value
of the assets of the UK Pension Plan at the Closing Date is less than the value
of the prospective benefits calculated by the actuary to the UK Pension Plan in
accordance with Section 3.18(A)(e) (the "SHORTFALL") and certified to Sellers by
the actuary to the UK Pension Plan, Sellers shall pay to Buyer, or, if Buyer so
requests in writing, to the trustees of the UK Pension Plan. Such amount as the
actuary for the UK Pension Plan shall certify to be equal to the Shortfall
(together with interest thereon calculated in accordance with Subsection (iii)):
(i) Such certification by the actuary of the UK Pension Plan shall
be made in accordance with the actuarial assumptions set forth in Appendix 5(a)
Ongoing Basis (attached to this Agreement) used in the last formal valuation of
the UK Pension Plan;
(ii) The Shortfall (and the interest on it) shall be paid to Buyer
or to the trustees of the UK Pension Plan (as appropriate) no later than thirty
(30) Business Days after the receipt by Sellers of the certificate of the
actuary to the UK Pension Plan specifying the value of the Shortfall at the
Closing Date;
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(iii) Sellers shall, in addition, pay interest upon the Shortfall
(or upon such part as shall remain unpaid) from the Closing Date to the date of
actual payment at 2% above National Westminster Bank plc base rate compounded
monthly.
(i) PROCEDURES. Any Claim by a Buyer Party pursuant to this Section
10.2 shall be made in accordance with the provisions of Section 10.1(c).
10.3 LIMITATIONS ON INDEMNITY.
(a) GENERAL. The indemnification obligations of Sellers and Buyer,
respectively, with respect to any breach of any representation, warranty,
covenant or agreement pursuant to Section 10.1 shall be limited to Claims for
Losses made prior to the last date of survival thereof referred to in Section
13.1.
(b) MAXIMUM LIABILITY.
(i) VIAD'S LIABILITY. The maximum aggregate amount of Losses for
which Viad shall be liable pursuant to Sections 10.1(a) and 10.2(d) to all Buyer
Parties hereunder shall be $197,500,000 and shall be adjusted upward or
downward, as the case may be, in an amount equal to twenty-five percent (25%) of
any adjustment to the Purchase Price made pursuant to Section 2.5; PROVIDED,
HOWEVER, that this limitation on Viad's liability shall not apply with respect
to Losses arising out of or relating to (A) a breach of representation or
warranty contained in Section 3.21 (Tax Matters), (B) Section 10.2(a), (b), (c),
(e) and (h) (Certain of the Special Indemnities), (C) Sections 2.2 (Sale and
Transfer of Xxxxx Shares) and 2.4(a) (Delivery of Xxxxx Shares). Notwithstanding
anything to the contrary contained in this Agreement, the maximum aggregate
amount of Losses for which Viad shall be liable to all Buyer Parties pursuant to
Section 10.2(a) (Special Environmental Indemnities) shall be Sixty Million
Dollars ($60,000,000). VSCL shall in no event have any liability to Buyer
Parties for the obligations of Viad, whether pursuant to Article 10 or
otherwise.
(ii) BUYER LIABILITY. The maximum aggregate amount of Losses for
which Buyer shall be liable pursuant to Sections 10.1(b) and 10.4 to all Seller
Parties hereunder shall be $197,500,000 and shall be adjusted upward or
downward, as the case may be, in an amount equal to twenty-five percent (25%) of
any adjustment to the Purchase Price made pursuant to Section 2.5.
(c) THRESHOLD.
(i) SELLERS' THRESHOLD. No Buyer Party shall seek, or be entitled
to, indemnification from Viad pursuant to Sections 10.1(a) until the aggregate
amount of Losses incurred by all Buyer Parties exceeds $5,000,000, and then only
to the extent that such Losses exceed such threshold amount ("SELLERS'
THRESHOLD").
(ii) BUYER THRESHOLD. No Seller Party shall seek, or be entitled
to, indemnification from Buyer pursuant to Section 10.1(b) until the aggregate
amount of Losses
59
incurred by all Seller Parties exceeds $5,000,000, and then only to the extent
that such Losses exceed such threshold amount ("BUYER'S THRESHOLD").
(d) DE MINIMIS CLAIMS. No demand for indemnification under Section
10.1 shall be made with respect to any Claim that is not an amount at least
equal to $10,000 (a "DE MINIMIS CLAIM"), and no De Minimis Claim shall be taken
into account for the purpose of determining whether the aggregate Claims exceed
Sellers' Threshold or Buyer's Threshold.
(e) INSURANCE PROCEEDS. To the extent that any Buyer Claim or Seller
Claim is covered by insurance held by such indemnified Buyer Party or Seller
Party, such indemnified Person shall be entitled to indemnification pursuant to
Section 10.1(a) or (b), as applicable, only with respect to the amount of Losses
that are in excess of the cash proceeds received by such indemnified Person
pursuant to such insurance. If such indemnified Person receives such cash
insurance proceeds prior to the time such Claim is paid, then the amount payable
by the indemnifying Person pursuant to such Claim shall be reduced by the amount
of such proceeds. If such indemnified Person receives such cash insurance
proceeds after such Claim has been paid, then upon the receipt by the
indemnified Person of any cash proceeds pursuant to such insurance in excess of
the amount of any unreimbursed Losses incurred by such indemnified Person with
respect to such Claim, such indemnified Person must repay any portion of such
excess amount which was previously paid by the indemnifying Person to such
indemnified Person in satisfaction of such claim.
(f) CALCULATION OF LOSSES. The amount of any indemnity payments for
Losses under Section 10.1(a) or (b) above shall be determined without taking
into account any Tax savings to the indemnified Person resulting from the
payments giving rise to such indemnity payments or any additional Taxes payable
by such indemnified Person as a result of the receipt of such payments.
(g) NO MULTIPLE RECOVERIES. Notwithstanding the fact that an event,
fact or circumstance may constitute a violation of one or more of the provisions
of this Agreement, in no event shall a party seek or obtain multiple recovery
for the same Loss.
10.4 SPECIAL BUYER INDEMNITIES.
(a) RESTRUCTURING INDEMNITY. Notwithstanding the limitations set forth
in Section 10.3, Buyer shall indemnify, save and hold each Seller Party harmless
from and against all Losses incurred by any such Seller Party in connection
with, arising out of, resulting from or relating to any action requested of any
Seller Party by Buyer pursuant to Section 5.7.
(b) RELEASE OF GUARANTEE INDEMNITY. Notwithstanding the limitations
set forth in Section 10.3 (c) and (d), Buyer shall indemnify, save and hold each
Seller Party harmless from and against all Losses incurred by any such Seller
Party in connection with, arising out of, resulting from or relating to Buyer's
failure to obtain releases for Seller Guarantees pursuant to Section 6.1.
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(c) UK PENSION PLAN OVERFUNDING PAYMENT. Notwithstanding the
limitations set forth in Sections 10.3 (c) and (d), if the market value of the
assets of the UK Pension Plan at the Closing Date is greater than the value of
the prospective benefits calculated by the actuary to the UK Pension Plan in
accordance with Section 3.18(A)(e) (the "OVERFUNDING") and certified to Buyer by
the actuary to the UK Pension Plan, Buyer shall pay to Sellers such amount as
the actuary for the UK Pension Plan shall certify to be equal to the Overfunding
(together with interest thereon calculated in accordance with Subsection (iii)):
(i) Such certification by the actuary of the UK Pension Plan shall
be made in accordance with the actuarial assumptions set forth in Appendix 5(a)
Ongoing Basis (attached to this Agreement) used in the last formal valuation of
the UK Pension Plan;
(ii) The Overfunding (and the interest on it) shall be paid to
Sellers no later than thirty (30) Business Day after the receipt by Buyer of the
certificate of the actuary to the UK Pension Plan specifying the value of the
Overfunding at the Closing Date;
(iii) Buyer shall, in addition, pay interest upon the Overfunding
(or upon such part as shall remain unpaid) from the Closing Date to the date of
actual payment at 2% above National Westminster Bank plc base rate compounded
monthly.
(d) PROCEDURE. Any Claim by a Seller Party pursuant to this Section
10.4 shall be made in accordance with the provisions of Section 10.1(c).
10.5 EXCLUSIVE REMEDY. Except for actions for fraud or securities
fraud, Buyer and Sellers acknowledge and agree that from and after the
Closing, the indemnification provisions in this Article 10 shall be the
exclusive remedy of Buyer Parties and Seller Parties with respect to the
transactions contemplated by, and the certificates delivered in connection
with, this Agreement. With respect to actions for fraud or securities fraud;
(a) the right of a party to be indemnified and held harmless pursuant
to the indemnification provisions in this Agreement shall be in addition to and
cumulative of any other remedy of such party at law or in equity; and
(b) no such party shall, by exercising any remedy available to it
under this Article 10, be deemed to have elected such remedy exclusively or to
have waived any other remedy, whether at law or in equity, available to it.
ARTICLE 11
TERMINATION
11.1 TERMINATION. This Agreement may be terminated as follows:
(a) By mutual written consent of Buyer and Sellers at any time prior
to Closing;
61
(b) By Buyer or Sellers if the Closing shall not have occurred on or
before July 31, 1999;
(c) By Buyer, if any event occurs that is not a result of Buyer's
breach, as a result of which one or more conditions set forth in Article 8 have
not been satisfied or waived by Buyer on and as of the Closing Date, if,
following fifteen (15) days written notice to the other parties setting forth in
reasonable detail the circumstances or upon which the claimed right of
termination is based, the condition remains unsatisfied;
(d) By Sellers, if any event occurs that is not a result of Sellers'
breach, as a result of one or more conditions set forth in Article 7 have not
been satisfied or waived by Sellers on and as of the Closing Date if, following
fifteen (15) days written notice to the other parties setting forth in
reasonable detail the circumstances upon which the claimed right of termination
is based, the condition remains unsatisfied;
(e) By Buyer, if this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby shall not have been approved by the
requisite vote (or written consent) of the respective Board of Directors of each
of Sellers within three (3) Business Days after the date of this Agreement; and
(f) By Sellers, if this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby shall not have been approved by the
requisite vote (or written consent) of the Board of Directors of Buyer within
three (3) Business Days after the date of this Agreement.
11.2 PROCEDURE UPON TERMINATION. In the event of termination of this
Agreement pursuant to Section 11.1:
(a) Each party shall return to the other party all documents, work
papers and other material of the other party relating to the transactions
contemplated hereby, whether obtained before or after the execution hereof;
(b) No confidential information received by either party with respect
to the business of the other party or its Affiliates shall be disclosed to any
third Person, unless required by Law; and
(c) All obligations of the parties hereto under this Agreement shall
terminate, except for the obligations under this Section 11.2 and Sections 13.4,
13.9, 13.10 and 13.12, and no party shall have any liability to any other party;
PROVIDED, HOWEVER, that termination of this Agreement by Buyer or Sellers
pursuant to clause (c) or (d) of Section 11.1, respectively, by reason of
intentional or knowing breaches of this Agreement shall not relieve the
defaulting or breaching party (the "BREACHING PARTY") (whether or not it is the
terminating party) of liability for Losses actually incurred by the other party
as a result of any breach of this Agreement by the Breaching Party.
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ARTICLE 12
DISPUTE RESOLUTION
12.1 APPOINTMENT OF REPRESENTATIVES. If any dispute arises under or
with respect to this Agreement, then at the written request of any party,
each party shall appoint a designated representative (the "REPRESENTATIVE")
to meet for the purpose of resolving the dispute. The Representatives
designated by each party shall meet at a mutually agreeable location within
the Atlanta, Georgia metropolitan area and within twenty (20) days after
delivery of the written request for such a meeting. The Representatives shall
honor reasonable requests to exchange information related to the dispute and
shall make an effort to negotiate a mutually acceptable resolution to the
dispute. Negotiations shall continue until the dispute is resolved or until
any party informs the others in writing that negotiations will not result in
a mutually acceptable resolution and a mediator should be appointed.
12.2 MEDIATION. If the dispute is not resolved under Section 12.1, the
dispute shall be submitted to nonbinding mediation (the "MEDIATION"), unless
the parties to the dispute elect to bypass mediation and to resolve the
dispute through arbitration (as provided in Section 12.3). The parties shall
appoint a mutually agreeable neutral mediator (the "MEDIATOR"). If the
parties are unable to agree on a Mediator within ten (10) days after the
mediation is requested, any party may refer the matter to the Atlanta,
Georgia office of the American Arbitration Association ("AAA") for the
limited purpose of having AAA provide a list of seven (7) names from which
the parties shall select a Mediator. If the parties are unable to agree on a
person on the list, the parties shall alternately strike names from the list
until one name is left on the list. A coin toss shall determine which party
is entitled to strike the first name. Except as otherwise provided in this
Agreement or as the parties may otherwise agree at the time of the Mediation,
the Mediation shall be conducted pursuant to the Commercial Mediation Rules
of the AAA, as amended from time to time. The Mediation shall be conducted
within thirty (30) days after the appointment of the Mediator. The parties
shall share equally the costs of the Mediation, including fees of the
Mediator, the cost, if any, of obtaining a location for the Mediation and any
filing fee. If during the Mediation the parties reach a mutually acceptable
settlement of any or all of their disputes they shall reduce the settlement
to the form of a written settlement agreement which shall be binding upon the
parties. The Mediation may be terminated only after all of the parties have
participated in the Mediation and are unable to agree on a settlement.
Mediation discussions or opinions of the Mediator are confidential and may
not be relied upon, referred to or introduced as evidence in any subsequent
arbitration or other proceeding.
12.3 ARBITRATION. If the dispute is not resolved under Section 12.1 or
Section 12.2, as the case may be, the parties agree that the dispute shall be
resolved by a private arbitration conducted by a single arbitrator selected
by the mutual agreement of the parties (the "ARBITRATOR"). If the parties are
unable to agree on an Arbitrator within ten (10) days following the
termination of negotiations pursuant to Section 12.1 or Mediation, as the
case may be, the parties shall request AAA to provide a list of seven (7)
names from which the parties shall select the Arbitrator. If the parties are
unable to agree on a person on the list, the parties shall alternately strike
names from the list until one (1) name is left on the list. A coin toss shall
determine which party is entitled to
63
strike the first name. The Arbitrator shall not be any person who participated
in the Mediation, any person who is an officer, director or employee or
Affiliate of such party or any person who has a direct or indirect personal or
financial interest in the outcome of the arbitration. The Arbitrator shall set a
hearing date for an arbitration proceeding (the "HEARING") within sixty (60)
days from the date the Arbitrator is selected, unless otherwise agreed by the
parties, or unless otherwise ordered by the Arbitrator at the request of any
party. The Hearing shall be held at a location agreed upon by the parties and
convenient for the Arbitrator, or if the parties cannot agree upon a location,
at a location within the Atlanta, Georgia metropolitan area designated by the
Arbitrator. The Hearing shall be conducted in accordance with the following
procedures:
(a) Unless otherwise agreed, within thirty (30) days prior to the
Hearing, each party shall submit to the Arbitrator, with a copy to the other
parties, a list of all witnesses and exhibits which it intends to present at the
Hearing.
(b) No later than fifteen (15) days prior to the scheduled Hearing,
each party shall provide to the Arbitrator a short (not to exceed five (5)
single-spaced pages or such other page limit as the Arbitrator permits)
statement of its position with regard to the dispute.
(c) At the Hearing, each party shall, unless it waives the
opportunity, make an oral opening statement and an oral closing statement.
(d) The Arbitrator shall not be strictly bound by rules of procedure
or rules of evidence, but shall use the Federal Rules of Evidence as a guideline
in conducting the Hearing.
(e) The Hearing shall be conducted in private. Attendance at the
Hearing shall be limited to the following: (i) the Arbitrator; (ii)
representatives of each party; (iii) each party's attorneys and attorneys'
assistants or advisors, if any, including expert witnesses, if any; (iv) a court
reporter if requested by any party; and (v) any witnesses. The Arbitrator may
sequester witnesses upon the motion of a party.
(f) When testimony is complete and each party has introduced its
exhibits and made a closing statement or waived the opportunity to do so, the
Arbitrator shall declare the Hearing closed; PROVIDED, HOWEVER, that the parties
may submit post-hearing briefs pursuant to an agreed upon schedule or one
formulated by the Arbitrator.
(g) Within thirty (30) days after the close of the Hearing or
submission of the post-hearing briefs, the Arbitrator shall issue a written
opinion and award (the "AWARD"), based on evidence, arguments and post-hearing
briefs, if any. The Award shall resolve the parties' dispute and shall be final
and binding on the parties. The Arbitrator shall have the Award delivered to
each party in accordance with Section 13.3.
(h) Except as otherwise provided in this Agreement, there shall be no
ex-parte communication regarding the subject matter of the Hearing between a
party or its attorneys and the Arbitrator from the time the Arbitrator is
appointed until after the parties receive the Award.
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(i) The parties may agree to submit the dispute to the Arbitrator
without a Hearing, in which event the Arbitrator will render and deliver to the
parties a written opinion and Award within thirty (30) days of being notified
that the parties waive the Hearing.
(j) Notwithstanding any other provision of this Agreement, the
Arbitrator shall have no power to delete from, add to, nor modify the terms of
this Agreement, and may not award any remedy which effectively conflicts
directly or indirectly with any provision of this Article 12.
(k) Sellers, on the one hand, and Buyer, on the other hand, shall
share equally the costs and expenses of the arbitration, including filing fees,
fees of the Arbitrator and costs, if any, of obtaining a location for the
Hearing. Each party shall bear its own attorneys' fees, witness and expert fees,
and copying and travel expenses.
12.4 EQUITABLE REMEDIES. Notwithstanding anything to the contrary in
this Article 12 or Section 10.4, the parties hereby reserve all rights to
obtain injunctive relief and other equitable remedies to enforce their
respective rights under this Agreement. Without limitation of the foregoing,
(a) any party may petition a court of competent jurisdiction to enter a
temporary restraining order or preliminary injunction to preserve the status
quo pending resolution of any arbitration proceeding; and (b) either party
may commence a proceeding in any court of competent jurisdiction to enforce
any arbitration award.
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 SURVIVAL OF CERTAIN PROVISIONS. The representations and warranties
of Sellers contained herein shall survive the Closing until the twenty-first
month anniversary of the Closing Date, without regard to any investigation
made by Buyer, unless Buyer notifies Sellers in writing prior to such date of
any specific claim or claims for alleged breach of any such representation or
warranty, in which case such representation or warranty shall survive with
respect to such claim or claims until the final resolution by settlement,
arbitration, litigation or otherwise of such claim or claims; PROVIDED,
HOWEVER, that (i) the representations and warranties contained in Sections
3.2 (Authorization of Sellers), 3.4 (Capitalization of US Xxxxx Entities;
Ownership of Xxxxx Shares) and 3.4A (Capitalization of UK Xxxxx Entities;
Ownership of Xxxxx Shares) shall survive the Closing indefinitely, (ii) the
representations and warranties contained in Sections 3.18A (Employee Plans
Other Than UK Pension Plan and GPP), 3.18 (UK Pension Plans), 3.21 (Tax
Matters) and 3.21A (Additional Specific Warranties in Relation to UK Tax
Matters) shall survive the Closing through the applicable statute of
limitations period, including any extensions thereof and (iii) the
representations and warranties contained in Section 3.19 (Compliance with
Environmental Laws) and the indemnities contained in Section 10.2 shall
survive the Closing until the fifth anniversary thereof. All representations
and warranties of Buyer shall survive until the first anniversary of the
Closing Date. The covenants and agreements of the parties contained herein
shall survive the Closing in accordance with their respective terms,
PROVIDED, HOWEVER, that the covenants contained in Sections 9.1, 9.2, and 9.3
shall survive indefinitely.
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13.2 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any party's
respective rights or obligations hereunder may be assigned by any party
without the prior written consent of the other parties to this Agreement.
Notwithstanding the foregoing, Sellers hereby consent to the assignment by
Buyer of its rights pursuant to this Agreement, including the delivery of
Share Certificates pursuant to Section 2.4(a), to any Affiliate, Subsidiary
or multiple Affiliates or Subsidiaries of Buyer, (in whole or in part) and
agree to execute any appropriate agreement or instrument that Buyer may
reasonably request in order to effect or evidence such assignment.
Notwithstanding any such consent, Buyer shall remain liable for all of
Buyer's obligations under this Agreement. Sellers hereby consent to the
assignment by Buyer of any of its rights under Article 10 to Gate Gourmet
Holding AG or its Affiliates prior or subsequent to a public float of all or
part of Gate Gourmet Holding AG's shares. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, and no other Person shall
have any right, benefit or obligation hereunder. Each party acknowledges
that, even though it might not have obtained the approval of its board of
directors prior to the execution hereof, such party is fully bound by the
terms of this Agreement unless terminated pursuant to Section 11.
13.3 NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing
and shall be deemed to have been duly given when received. In each case,
notices shall be sent as follows:
If to Sellers, addressed to:
Viad Corp
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Telecopy: (000) 000-0000
With a copy to:
Xxxxx Xxxx LLP
Xxx Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to Buyer, addressed to:
SAir Group
X.X. Xxx
XX-0000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxxx
Attention: Xxxxxxxx Xxxxx
Telecopy: 41-1-812-93-03
66
With a copy to:
Gate Gourmet Holding AG
P. O. Box
CH-8058 Zurich Airport
Zurich, Switzerland
Attention: Xxxxxxx Xxxxxx
Telecopy: 41-1-812-91-19
and
Xxxxx & XxXxxxxx
One Prudential Plaza
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other address and with such other copies as either party may
designate by written notice to the other party.
13.4 GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with the internal laws of the State of Delaware
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware; provided, however, that any matters under this Agreement with
respect to the internal corporate affairs or legal compliance of the UK Xxxxx
Entities shall be governed by, and construed in accordance with, the laws of
England and Wales. Buyer hereby designates Xxxxx & XxXxxxxx (with a copy to
be sent via telefax to Buyer, both of the addresses set forth in Section
13.3), as its agent for service of process, which agent may be substituted at
any time upon ten (10) days' notice to Sellers, but which substitute agent
shall in no event be located outside the United States, and Buyer irrevocably
consents to the service of any and all process in any action or proceeding
arising out of or relating to this Agreement by the delivery of such process
to such agent. Subject to the provisions of Article 12 hereof, the parties
hereto irrevocably submit to the exclusive jurisdiction of the United States
District Court for the District of Delaware for purposes of any judicial
proceeding properly brought pursuant to the terms of this Agreement. THE
PARTIES HERETO WAIVE THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY SUIT,
ACTION OR PROCEEDING SEEKING ENFORCEMENT OF SUCH PARTY'S RIGHTS UNDER THIS
AGREEMENT.
13.5 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement, together
with all Exhibits and Schedules hereto, and the Ancillary Agreements,
constitutes the entire agreement among the parties with respect to the
subject matter hereof and, with the exception of that certain Confidentiality
Agreement, dated February 10, 1999, among the parties hereto, supersedes all
prior agreements, understandings, negotiations and discussions, whether oral
or written, of the parties including the Letter of Intent between Viad and
Buyer's Affiliate dated April 13, 1999;
67
PROVIDED, HOWEVER, that the forms of agreements attached hereto as Exhibits
shall be superseded by the copies of such agreements executed and delivered by
the respective parties thereto, the execution and delivery of such agreements by
the parties thereto to be conclusive evidence of such parties' approval of any
change or modification therein. No amendment, supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
13.6 DISCLOSURE. The disclosures made in any Schedule referenced in
Article 3, and those in any supplement pursuant to Section 5.4, must relate
only to the representations and warranties in the Section of the Agreement to
which they expressly relate and not to any other representation or warranty
in this Agreement.
13.7 INVALIDITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect by a court of competent jurisdiction, then to the maximum extent
permitted by law, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or any other such instrument.
13.8 CAPTIONS. The captions, titles or headings of the Articles and
Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
13.9 PUBLICITY. Neither Sellers nor Buyer shall issue any press release
or make any public statement regarding the transactions contemplated hereby,
without the prior approval of the other party, and the parties hereto shall
issue a mutually acceptable press release as soon as practicable after the
execution and delivery of this Agreement; PROVIDED, HOWEVER, that nothing
herein shall be deemed to prohibit any party from making any disclosure which
its counsel deems necessary in order to fulfill such party's disclosure
obligations imposed by law; and PROVIDED, FURTHER, that each such party
shall, to the extent reasonably practicable, afford the other parties the
opportunity to review and comment on the proposed disclosure.
13.10 CONFIDENTIAL INFORMATION. The parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to consultants, advisors, lenders or other financial sources
and Affiliates, or as required by law, until such time as the parties make a
public announcement regarding the transaction as provided in Section 13.9. In
connection with the negotiation of this Agreement, the preparation for the
consummation of the transactions contemplated hereby, and the performance of
obligations hereunder, each party acknowledges that it will have access to
confidential information relating to the other party. Each party shall treat
such information as confidential, preserve the confidentiality thereof and
not disclose such information, except to its advisors, consultants and other
representatives and to Affiliates in connection with the transactions
contemplated hereby. Sellers acknowledge that they have had access to
confidential information regarding the operations and business of the Xxxxx
Entities and shall after the Closing treat such information as confidential,
preserve the
68
confidentiality thereof and not use or disclose such information, except to its
advisors, consultants and other representatives and to its Affiliates in
connection with the contemplated transactions.
13.11 TRANSFER AND SIMILAR TAXES. All applicable filing fees, transfer
taxes, stamp taxes and similar taxes payable in connection with the
transactions contemplated by this Agreement will be borne by the respective
party in accordance with applicable Law or, in the absence thereof, local
practice.
13.12 FEES AND EXPENSES. Except as otherwise provided in Section 2.5(c),
each party to this Agreement shall bear its own fees, costs and expenses
(including legal fees) arising out of, relating to or incurred in connection
with the evaluation, negotiation and documentation of this Agreement, the
Ancillary Agreements or the transactions contemplated hereby and thereby.
13.13 REPRESENTATION OF COUNSEL; MUTUAL NEGOTIATION. Each party has been
represented by counsel of its choice in negotiating this Agreement. This
Agreement shall therefore be deemed to have been negotiated and prepared at
the joint request, direction and construction of the parties, at arm's
length, with the advice and participation of counsel, and will be interpreted
in accordance with its terms without favor to any party.
13.14 VIAD GUARANTEE. In partial consideration for Buyer's entering into
this Agreement, Viad irrevocably, absolutely and unconditionally guarantees
(as primary obligor and not as surety only) to Buyer all of VSCL's
performance of its obligations under this Agreement.
13.15 INTERPRETIVE PROVISIONS.
(a) Except as otherwise provided herein, whenever used in this
Agreement the phrases "to the knowledge of Sellers," "to Sellers' knowledge,"
and words or phrases of similar import shall mean the actual knowledge of those
persons listed on SCHEDULE 13.15(a), after reasonable inquiry.
(b) Whenever used in this Agreement, the phrases "to the knowledge of
Buyer," "to Buyer's knowledge" and words or phrases of similar import shall mean
the actual knowledge of those persons listed on SCHEDULE 13.15(b) after
reasonable inquiry.
(c) The words "hereof," "herein," "hereby" and "hereunder" and words
of similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision hereof.
(d) The terms "include" or "including" shall indicate examples of a
foregoing general statement and not a limitation on that general statement.
(e) Except as otherwise provided herein, accounting terms used but
not otherwise defined herein shall have the meanings given to such terms under
GAAP.
69
13.16 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their respective behalf, by their respective officers thereunto
duly authorized, as of the date and year first above written.
SELLERS:
VIAD CORP
By: /s/ XXXXX X. XXXXX
-----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------
Title: Vice President
--------------------------------
VIAD SERVICE COMPANIES LIMITED
By: /s/ XXXXX X. XXXXX
-----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------
Title: Director
--------------------------------
BUYER:
SAIR GROUP
By: /s/ XXXXXXXX XXXXX
-----------------------------------
Name: Xxxxxxxx Xxxxx
---------------------------------
Title: President & CEO, SAir Relations
--------------------------------
By: /s/ XXXXXXX XXXXXX
-----------------------------------
Name: Xxxxxxx Xxxxxx
---------------------------------
Title: President & CEO, Gate Gourmet
--------------------------------
70
LIST OF EXHIBITS
Exhibit A - Form of Transition Services Agreement
Exhibit B - Form of Intangibles Purchase Agreement
Exhibit C - Form of Noncompetition Agreement
LIST OF SCHEDULES
Schedule 2.3 - Allocation of Purchase Price
Schedule 2.5 - Agreed Accounting Treatment
Schedule 3.3 - Organization and Qualification of the Xxxxx Entities;
Subsidiaries
Schedule 3.4 - Capitalization of US Xxxxx Entities; Ownership of Xxxxx
Shares
Schedule 3.4A - Capitalization of UK Xxxxx Entities; Ownership of Xxxxx
Shares
Schedule 3.5 - No Conflict or Violation
Schedule 3.6 - US Consents and Approvals
Schedule 3.7 - Financial Statements
Schedule 3.8 - Undisclosed Liabilities
Schedule 3.9 - Absence of Certain Changes or Events
Schedule 3.10(a) - Owned Real Property
Schedule 3.10(b) - Leased Real Property
Schedule 3.11(b) - Leased Personal Property
Schedule 3.12 - Contracts and Commitments
Schedule 3.13 - Absences of Breaches or Defaults
Schedule 3.14 - Permits
Schedule 3.15 - Litigation
Schedule 3.16 - Compliance with Laws
Schedule 3.17 - US Labor Matters
Schedule 3.17A - Additional Specific Warranties in Relation to UK Labor
Matters
Schedule 3.18 - Employee Plans Other Than UK Pension Plan or GPP
Schedule 3.19 - Compliance With Environmental Laws
Schedule 3.20 - Intellectual Property
Schedule 3.21 - Tax Matters
Schedule 3.22 - Insurance
Schedule 3.23 - Customers and Suppliers
Schedule 3.24 - Books and Records
Schedule 4.3 - Consents and Approvals
Schedule 5.1 - Business in Ordinary Course
Schedule 5.6 - Dormant Entities/Restructuring
Schedule 6.1 - Release of Seller Guarantees
Schedule 6.2(e) - Treatment of Certain Employee Benefits for Xxxxx
Executives
Schedule 10.2(c) - US Employment Law Indemnity
Schedule 10.2(g) - Limited Workers Compensation Indemnity
Schedule 13.15(a) - Persons Having "Knowledge" on Behalf of Sellers
Schedule 13.15(b) - Persons Having "Knowledge" on Behalf of Buyer
Appendix 5 - Valuation Assumptions (referenced in Section 10.2(h))
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AMENDMENT NO. 1
TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1, dated as of July 1, 1999 (this "AMENDMENT"), to that
certain Stock Purchase Agreement, dated as of May 18, 1999 (the "AGREEMENT"), by
and among VIAD CORP, a corporation organized under the laws of the State of
Delaware, United States of America ("VIAD"), VIAD SERVICE COMPANIES LIMITED, a
company organized under the laws of England and Wales ("VSCL", and collectively
with Viad, "SELLERS"), and SAir GROUP, a company organized under the laws of
Switzerland ("BUYER") is made by and among Sellers and Buyer. Capitalized terms
used but not otherwise defined in this Amendment shall have the meanings
ascribed thereto in the Agreement.
RECITALS:
A. Section 6.4 of the Agreement sets forth an agreement of Sellers and
Buyer with respect to the change of the corporate name of GDI prior to the
Closing.
X. Xxxxxxx and Buyer desire to amend the Agreement to provide for the
change of corporate name of GDI on or immediately following the Closing.
C. Section 10.2(a)(i) of the Agreement inadvertently contains references
to Sections 10.3(a) and (b).
X. Xxxxxxx and Buyer desire to amend the Agreement to remove such
mistaken references in Section 10.2(a)(i).
E. Section 10.4 of the Agreement sets forth certain special Buyer
indemnities.
X. Xxxxxxx and Buyer desire to amend Section 10.4 of the Agreement to
provide for additional special indemnities by Buyer relating to (i) the
previously contemplated sale of certain real property owned by DISI and located
in Miami, Florida, and (ii) action taken prior to the Closing by the Board of
Directors of DISI at the request of Buyer with respect to the establishment of a
line of credit with Bank of America.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree to amend the Agreement pursuant to Section 13.5
thereof as follows:
1. AMENDMENT TO SECTION 6.4. Section 6.4 of the Agreement is hereby
amended and restated in its entirety to read as follows:
"On or immediately following the Closing Date, Viad shall change the
corporate name of GDI to Xxxxx Holdings Inc."
2. AMENDMENT OF SECTION 10.2(a)(i). Section 10.2(a)(i) of the Agreement
is hereby amended and restated in its entirety to read as follows:
"Notwithstanding the limitations set forth in Section 10.3(c) and (d),
and notwithstanding the disclosures in SCHEDULE 3.19, if the Closing shall
occur, Viad shall indemnify, save and hold Buyer Parties harmless from and
against any and all Losses incurred by any of Buyer Parties in excess of
the amount reserved by the Xxxxx Entities for environmental losses on the
Closing Balance Sheet in connection with, arising out of, resulting from or
relating to a breach of Section 3.19."
3. AMENDMENT TO SECTION 10.4. Section 10.4 of the Agreement is hereby
amended by the addition of the following new clauses "(e)"and "(f)":
"(e) SALE OF MIAMI PROPERTY INDEMNITY. Notwithstanding the
limitations set forth in Section 10.3(c)(ii), Buyer shall indemnify, save
and hold each Seller Party harmless from and against any and all Losses
incurred by any such Seller Party in connection with, arising out of,
resulting from or relating or incident to, the commencement of any Action
against any Seller Party arising out of or relating to the failure by DISI
to enter into a contract with DO & CO Restaurants and Catering AG with
respect to the sale of the property located at 0000 X. X. 00xx Xxxxxx,
Xxxxx, Xxxxxxx and to consummate such sale."
"(f) DISI LINE OF CREDIT INDEMNITY. Notwithstanding the limitations
set forth in Section 10.3(c)(ii), Buyer shall indemnify, save and hold each
Seller Party harmless from and against any and all Losses incurred by any
such Seller Party in connection with, arising out of, resulting from or
relating or incident to, action taken prior to the Closing by the Board of
Directors of DISI at the request of Buyer to authorize the establishment of
a $25,630,000.00 line of credit with Bank of America."
4. REFERENCE TO AND EFFECT ON THE AGREEMENT.
(a) Upon effectiveness this Amendment, on and after the date of this
Amendment, each reference in the Agreement to "the Agreement", "this Agreement",
"hereunder", "hereof", "herein" or words of like import shall mean and be a
reference to the Agreement as amended hereby.
(b) Except as specifically amended above, the Agreement shall remain in
full force and effect and is hereby ratified and confirmed.
-2-
5. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed on their respective behalf, by their respective officers thereunto
duly authorized, as of the date and year first above written.
SELLERS:
VIAD CORP
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------------
Title: President & CEO
--------------------------------
VIAD SERVICE COMPANIES LIMITED
By: /s/ XXXXX X. XXXXX
-----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------
Title: Director
--------------------------------
BUYER:
SAIR GROUP
By: /s/ XXXXXXX XXXXXX
-----------------------------------
Name: Xxxxxxx Xxxxxx
---------------------------------
Title: Attorney in Fact
--------------------------------
By: /s/ XXXXX XXXXXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxxxxx
---------------------------------
Title: Attorney in Fact
--------------------------------
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