ASSET PURCHASE AGREEMENT
BY AND AMONG
TELETECH HOLDINGS, INC.
AND
TELETECH CUSTOMER CARE MANAGEMENT (COLORADO), INC.
AND
BOSTON COMMUNICATIONS GROUP INC.
AND
CELLULAR EXPRESS, INC.
AND
WIRELESS TELESERVICES CORP.
DATED AS OF OCTOBER 11, 2000
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of October 11, 2000 (the
"Agreement"), by and among TeleTech Holdings, Inc., a Delaware corporation
("Parent"), TeleTech Customer Care Management (Colorado), Inc., a Colorado
corporation and wholly-owned subsidiary of Parent ("Purchaser"), Boston
Communications Group Inc., a Massachusetts corporation ("BCGI"), Cellular
Express, Inc., a Massachusetts corporation and wholly-owned subsidiary of BCGI
("Cellular") and Wireless TeleServices Corp., a Massachusetts corporation and
wholly-owned subsidiary of BCGI ("Wireless TeleServices" and together with
Cellular the "Sellers"). Each of the Purchaser, Parent, BCGI and the Sellers is
referred to herein as a "Party" and collectively as the "Parties".
RECITALS
WHEREAS, the Sellers are engaged in the business of providing
teleservice support for inbound teleservices needs of the subscribers of
wireless communications carriers in the United States (the "Business"), which
Business is referred to by the Sellers as the "Teleservices Division" (the
"Division"); and
WHEREAS, subject to the terms and conditions contained in this
Agreement, the Sellers intend to sell, transfer and assign to Purchaser, and
Purchaser intends to purchase and acquire from the Sellers, substantially all of
the assets of the Division, all on the terms set forth herein; and
NOW THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
"AFFILIATE" shall mean, as to any Person (i) any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person, (ii) any corporation or organization (other than a
Subsidiary of such Person) of which such Person is an officer, director or
partner or is, directly or indirectly, the beneficial owner of 10% or more of
any class of equity securities, (iii) any trust or other estate in which such
Person has a substantial beneficial interest or as to which such Person serves
as trustee or in a similar fiduciary capacity, and (iv) any relative or spouse
of such Person, or any relative of such spouse, who has the same home as such
Person or who is a director or officer of such Person or any of its parents or
Subsidiaries. The term "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with"), as applied to any
Person, means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or other ownership
interest, by contract or otherwise.
"AGREEMENT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"ASSETS" shall have the meaning set forth in Section 2.1(a) hereof.
"ASSIGNMENT AND ASSUMPTION OF CONTRACTS AGREEMENT" shall have the
meaning set forth in Section 7.2(g) hereof.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section
2.1(c) hereof.
"BALANCE SHEET" shall mean the balance sheet as of the Balance Sheet
Date included in the Division Financial Statements.
"BALANCE SHEET DATE" shall mean September 30, 2000.
"BCGI" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"XXXX OF SALE" shall mean such bills of sale to be entered into by and
between Purchaser and each of the Sellers and BCGI on the Closing Date pursuant
to which each of the Sellers and BCGI will transfer the Assets held by it to
Purchaser as contemplated by Section 2.1(a) of this Agreement, in form and
substance reasonably satisfactory in each case to Purchaser and the applicable
Seller or BCGI.
"BUSINESS" shall have the meaning set forth in the Recitals hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banks in Denver, Colorado and Boston, Massachusetts are authorized
or obligated by law or executive order to close.
"CELLULAR" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"CLOSING" shall have the meaning set forth in Section 3.2 hereof.
"CLOSING DATE" shall have the meaning set forth in Section 3.2 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPUTER PROGRAMS" shall mean (i) any and all computer software
programs, including all source and object code, (ii) databases and compilations,
including any and all data and collections of data, whether machine readable or
otherwise, (iii) all descriptions, flow-charts and other work product used to
design, plan, organize and develop any of the foregoing, (iv) all domain names
and the content contained on the respective Internet site(s) and (v) all
documentation, including user manuals and training materials, relating to any of
the foregoing.
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"CONTRACTS" shall have the meaning set forth in Section 2.1(a) hereof.
"DAMAGES" shall have the meaning set forth in Section 8.2(a) hereof.
"DIVISION" shall have the meaning set forth in the Recitals hereof.
"DIVISION FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 4.6(e) hereof.
"EARN-OUT ADJUSTMENT AMOUNT" shall have the meaning set forth in
Section 3.1(e) hereof.
"EARN-OUT PAYMENT" shall have the meaning set forth in Section 3.1(c)
hereof.
"EMPLOYEE BENEFIT PLAN" shall mean any (i) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (ii) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (iii) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan) or (iv) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" shall have the meaning set forth in
Section 3(2) of ERISA.
"EMPLOYEE WELFARE BENEFIT PLAN" shall have the meaning set forth in
Section 3(1) of ERISA.
"EMPLOYMENT OFFER LETTER" shall mean an Employment Offer Letter, the
form of which is attached hereto as EXHIBIT B.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EXCLUDED LIABILITIES" shall have the meaning set forth in Section
2.1(d) hereof.
"EXCLUDED ASSETS" shall have the meaning set forth in Section 2.2
hereof.
"FINANCIAL STATEMENTS" shall have the meaning set forth in Section
4.6(a) hereof.
"GOVERNMENTAL AUTHORITY" shall mean any national, federal, state, local
or foreign judicial, legislative, executive or governmental regulatory
authority.
"HIRED EMPLOYEES" shall mean Xxxxxxx Xxx, Xxxxxxx Xxxxx and Xxxxxx
Xxxxxxx.
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
"INDEBTEDNESS" of any Person at any date shall include (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current
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trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices) and including earn-out or similar
contingent purchase amounts, (ii) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations of such Person under capitalized leases, (iv) all obligations of
such Person in respect of acceptances issued or created for the account of such
Person, (v) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof and (vi) all guarantees by such Person of obligations of
others.
"INSTRUMENTS OF TRANSFER" shall have the meaning set forth in Section
2.1(b) hereof.
"INTELLECTUAL PROPERTY" shall mean all intellectual property rights
used in the operation of the Division as currently conducted, including all
patents and patent applications, trademarks, trademark registrations and
applications, service marks, service xxxx registrations and applications, logos,
designs, slogans and general intangibles of like nature, together with all
goodwill related to the foregoing, trade names, copyrights, copyright
registrations and applications, Computer Programs, technology, trade secrets,
know-how, confidential confirmation, proprietary processes and formulae.
"IRS" shall mean the Internal Revenue Service of the United States.
"KNOWLEDGE" means actual knowledge after reasonable due inquiry of any
officer or director of the applicable Person.
"LAWS" shall mean any federal, state, foreign or local law, statute,
ordinance, rule, regulation, order, judgment or decree, administrative order, or
administrative and judicial decision.
"LIABILITIES" shall mean debts, liabilities, commitments, obligations,
duties and responsibilities of any kind and description, whether absolute,
accrued, contingent, monetary or nonmonetary, direct or indirect, known or
unknown, matured or unmatured or of any other nature.
"LICENSES" shall have the meaning set forth in Section 4.14(d) hereof.
"LIENS" shall mean any lien, pledge, mortgage, security interest,
lease, charge, option, right of first refusal, easement, servitude, transfer
restriction under any shareholder or similar agreement, or any other encumbrance
of any nature whatsoever; except liens for taxes not yet due and payable.
"LITIGATION" shall mean any litigation, legal action, arbitration,
proceeding, material demand, material claim or investigation pending, or to the
Knowledge of the Sellers or BCGI threatened, against, affecting or brought by or
against either of the Sellers or BCGI, relating to the Division or any of the
Assets or Assumed Liabilities.
"MARKS" shall mean all trade names, trademarks, service marks, brand
names, brand marks, fictitious names or other Intellectual Property relating
thereto.
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"MATERIAL ADVERSE EFFECT" shall mean, with respect to the same or any
similar events, acts, conditions or occurrences, whether individually or in the
aggregate, a material adverse effect on or a material adverse change in (i) the
Assets or the Assumed Liabilities, (ii) any of the business, prospects,
condition (financial or otherwise), operations, assets or liabilities of the
Division, (iii) the legality or enforceability against the Sellers of this
Agreement or (iv) the ability of each of the Sellers to perform its respective
obligations and to consummate the transactions under this Agreement. For
purposes of clauses (i) and (ii) of this definition and without limiting the
generality of the foregoing, an effect or change with respect to the same or any
similar event(s), act(s), condition(s) or occurrence(s) individually or in the
aggregate with respect to which the Sellers would reasonably be expected to have
$100,000 in the aggregate or more in Damages being asserted against, imposed
upon or sustained by the Assets or the Division taken as a whole or a
corresponding increase in the Assumed Liabilities shall constitute a "material
adverse" effect or change.
"MATERIAL CONTRACTS" shall have the meaning set forth in Section
4.13(a) hereof.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section 3(37)
of ERISA.
"NEW EMPLOYEES" shall have the meaning set forth in Section 6.10(a)
hereof.
"NONDELIVERED ASSET" shall have the meaning set forth in Section 2.3
hereof.
"OTHER ENTITY" shall have the meaning set forth in Section 4.2 hereof.
"PARENT" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"PARTIES" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"PARTY" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"PERMITS" shall mean as to any Person, all licenses, permits,
franchises, orders, approvals, concessions, registrations, authorizations and
qualifications under any federal, state, local or foreign laws with any and all
Governmental Authorities or with any and all industry or other non-governmental
self-regulatory organizations that are issued to such Person.
"PERSON" shall mean an individual, a corporation, a partnership,
limited liability company, an association, a trust or other entity or
organization.
"PREEXISTING BUSINESS" shall mean (a) any agreement, contract or
arrangement existing as of the Closing Date for the provision of Teleservices
Products and Services by Parent or its Affiliates; (b) Teleservices Products and
Services business based upon outstanding or existing proposals of Parent or its
Affiliates as of the Closing Date, to wit: AT&T Fixed Wireless Division (also
known as, Digital Broadband) for provisioning, customer care, sales and billing
support; Xxxxxx Xxxxxxx Wireless division customer care; BellSouth Mobility
provisioning and customer care; Qwest Wireless customer care and inbound sales
and SBC Wireless Hispanic
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customer care; (c) any Teleservices Products and Services provided to Verizon
Communications, or its successors and assigns, as deemed by Verizon
Communications or its successor and assigns to be in substitution for
Teleservices Products and Services currently provided by Parent or its
Affiliates to Verizon's CLEC Division; and (d) any subsequent extensions,
renewals, modifications and amendments related to the business described in
subparagraphs (a), (b) and (c) above. For the avoidance of doubt, Preexisting
Business shall not include any business generated by Parent, Purchaser and any
of their Affiliates, based exclusively upon the opportunity introduced to Parent
by the Sellers relating to Verizon Communication's Great Lakes wireless
communications business.
"PROHIBITED TRANSACTIONS" shall mean any prohibited transaction under
Section 4975 of the Code or Section 406 or 407 of ERISA with respect to any
Employee Benefit Plan.
"PROJECTIONS" shall have the meaning set forth in Section 4.6(c)
hereof.
"PURCHASE PRICE" shall have the meaning set forth in Section 3.1(a)
hereof.
"PURCHASER" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"PURCHASER INDEMNIFIED PARTIES" shall mean Purchaser, Parent and their
successors, assigns, Affiliates and the agents and employees of any of them.
"QUALIFYING REVENUE" for calendar years 2001, 2002, 2003 and 2004 shall
mean the difference between (i) the sum of (y) the annual gross revenue
recognized in accordance with US GAAP by Purchaser, Parent and any Affiliate of
Purchaser or Parent for the respective calendar year derived solely from the
following sources: (A) those Contracts set forth on Attachments 1 and 2 to the
Assignment and Assumption of Contracts Agreement, and any subsequent renewals,
work authorizations, amendments or modifications thereto entered into by
Purchaser, Parent and any Affiliate of Purchaser or Parent; (B) any extension of
the existing relationships with the parties to the Contracts set forth on
Attachments 1 and 2 to the Assignment and Assumption of Contracts Agreement,
pursuant to new contracts or agreements for the provision of Teleservices
Products and Services to wireless telecommunications carriers by Purchaser,
Parent and any Affiliate of Purchaser or Parent, excluding any revenue derived
from any Preexisting Business; (C) leads for the provision of Teleservices
Products and Services to wireless teleservices carriers, (and any extension of
the business relationship with those parties, provided that the agreements and
arrangements from such leads generate revenue of $1,000,000, or more, within the
first twelve (12) months after the operational date of such agreements and
arrangements), provided by BCGI pursuant to the Strategic Relationship Agreement
attached hereto as EXHIBIT D, between BCGI and Parent, resulting in
commissionable payments under the Strategic Relationship Agreement; and (D)
leads for the provision of Teleservices Products and Services to parties
unrelated to wireless teleservices Business, excluding, however, any renewals,
amendments or modifications thereto; plus (z) any revenue actually received by
Purchaser, Parent or their Affiliates after June 15 of the respective calendar
year, which revenue was recognized in a previous calendar year, beginning with
revenue recognized in calendar year 2001; and (ii) the amount of such recognized
revenue described is subsection (y) above that has not been actually
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received by Parent, Purchaser or any of their Affiliates on or before April 1 of
the succeeding year.
"REAL PROPERTY" shall have the meaning set forth in Section 4.8(b)
hereof.
"RELATED AGREEMENTS" shall have the meaning set forth in Section 4.1
hereof.
"RESOLUTION PERIOD" shall have the meaning set forth in Section 8.4(c)
hereof.
"REVENUE TARGET" shall mean the following amounts for each of the
respective calendar years: (i) $37,500,000 for 2001; (ii) $49,900,000 for 2002;
(iii) $60,600,000 for 2003; and (iv) $72,700,000 for 2004.
"SCHEDULE" and any references to specific items therein shall mean the
disclosure schedule delivered by the Sellers to Purchaser contemporaneously with
the execution of this Agreement.
"SELLERS" shall have the meaning set forth in the introductory
paragraph to this Agreement. Unless the context specifically provides otherwise,
use of the term "SELLERS" herein shall mean either of the Sellers individually
AND both of the Sellers collectively.
"SELLERS' 401(k) PLAN" shall have the meaning set forth in Section
6.10(b) hereof.
"SELLER INDEMNIFIED PARTIES" shall mean the Sellers and their
successors, assigns, Affiliates and the agents and employees of any of them.
"SELLERS' WELFARE PLANS" shall have the meaning set forth in Section
6.10(a) hereof.
"SOFTWARE" means computer software, programs and databases of the
Division in any form, including Internet web sites, web site content, member or
user lists and information associated therewith and links, object code, run
time, build time, protocols, operating systems and specifications, files, data,
databases, database management code, utilities, user interfaces, menus, images,
icons, forms, objects, screens, report formats, templates, methods of
processing, software engines, platforms, data formats, encryption keys and other
security features, all versions, updates, corrections, enhancements, and
modifications thereof, and all related documentation, developer and design
notes, comments and annotations.
"STATEMENT OF REVENUE" shall have the meaning set forth in Section
3.1(h) hereof.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation or
other organization, whether incorporated or unincorporated, of which such Person
or any other subsidiary of such person beneficially owns a majority of the
voting or equity interests.
"TAX LAW" shall mean any Law relating to Taxes.
"TAX RETURN" shall mean any return, report, information return or other
document (including any related or supporting information) with respect to
Taxes.
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"TAXES" shall mean all taxes, charges, fees, duties, levies, penalties
or other assessments imposed by any Governmental Authority, including income,
gross receipts, excise, property, sales, gain, use, license, capital stock,
transfer, franchise, payroll, withholding, social security or other taxes,
including any interest, penalties or additions attributable thereto.
"TELESERVICES PRODUCTS AND SERVICES" shall mean customer care solutions
for third parties from basic customer assistance to full 24x7 duplication of
customer care environments. In addition, services include implementation,
training and consulting with respect to customer care solutions.
"TREASURY REGULATIONS" shall mean the United States Income Tax
Regulations, including Temporary Regulations, promulgated under the Code, as the
same may be amended hereafter from time to time (including corresponding
provisions of succeeding U.S. Income Tax Regulations).
"US GAAP" means the United States generally accepted accounting
principles.
Section 1.2 TERMS GENERALLY. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation" even if not followed
actually by such phrase unless the context expressly provides otherwise. Unless
otherwise expressly defined, terms defined in the Agreement shall have the same
meanings when used in any Exhibit or Schedule and terms defined in any Exhibit
or Schedule shall have the same meanings when used in the Agreement or in any
other Exhibit or Schedule. The words "herein," "hereof," "hereto" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular provision of this Agreement. The phrase "made
available" in this Agreement shall mean that the information referred to has
been made available by the Party in question. The phrases "the date of this
Agreement," "the date hereof," and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to the date set forth in the
introductory paragraph of this Agreement. References to "dollars" or "$" in this
Agreement shall mean United States dollars unless the context provides
otherwise.
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ARTICLE II
ACQUISITION AND DISPOSITION OF ASSETS
Section 2.1 PURCHASE AND SALE OF ASSETS
(a) Upon the terms and subject to the conditions of this
Agreement, at the Closing the Sellers and BCGI will sell, convey, assign,
transfer and deliver to Purchaser, and Purchaser will purchase and pay for, all
of the Sellers' and BCGI's right, title and interest in and to all of the assets
listed on Schedule 2.1(a), which consist of all of the properties, assets,
claims, contracts, Intellectual Property and businesses of every kind, character
and description, whether tangible or intangible, whether real, personal or
mixed, whether accrued, contingent or otherwise, and wherever located, used in
the operation of and constituting the Division (collectively the "Assets"),
except the Excluded Assets including, without limitation, the following:
(i) all Intellectual Property of the Division listed
on Schedule 2.1(a)(i);
(ii) all contracts, agreements, contract rights,
license agreements, purchase and sales orders, quotations and other
executory commitments of each Seller and BCGI entered into in
connection with the operation of the Division listed on Schedule
2.1(a)(ii) (the "Contracts");
(iii) all Computer Programs, computer equipment and
related software and software licenses, office equipment and other
personal property of the Division listed on Schedule 2.1(a)(iii);
(iv) all books of account, customer and supplier
lists including addresses, drawings, files, papers and records of or
relating to the Division;
(v) all deposits, advance payments, prepaid items and
expenses, deferred charges, rights of offset and credits and claims for
refund of the Division listed on Schedule 2.1(a)(v);
(vi) all claims, rights and causes in action against
third parties and all rights to insurance proceeds relating to any
damage, destruction or impairment of the Assets;
(vii) subject to the receipt of necessary consents or
approvals to transfer pursuant to the transactions contemplated in this
Agreement, all licenses, permits, consents and certificates of any
regulatory, administrative or other governmental agency or body issued
to or held by each Seller necessary to the conduct of the business of
the Division;
(viii) all fixed assets and inventory of the
Division;
(ix) the leasehold interests list on Schedule
2.1(a)(ix) and all of the Sellers' rights in leasehold improvements
related thereto;
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(x) all goodwill, if any, associated with the Assets
and the Division; and
(xi) all other miscellaneous items set forth on
Schedule 2.1(a)(xi).
(b) The sale, conveyance, assignment, transfer and delivery of
the Assets will be effected by delivery by the Sellers and/or BCGI to Purchaser
of (i) the Xxxx of Sale, (ii) the Assignment and Assumption of Contracts
Agreement and (iii) such other good and sufficient instruments of conveyance,
transfer and assignment (together with the Xxxx of Sale and the Assignment and
Assumption of Contracts Agreement, the "Instruments of Transfer") as shall be
necessary to vest in Purchaser full right, title and interest in and to the
Assets.
(c) Upon the terms and subject to the conditions of this
Agreement, including but not limited to the exceptions set forth in Section
2.1(d), at the Closing Purchaser will (i) assume and agree to pay, perform and
discharge as and when due the liabilities and obligations of the Sellers or BCGI
listed in Schedule 2.1(c)(1) and (ii) assume and agree to perform and discharge
all of the liabilities and obligations under the agreements listed on Schedule
2.1(c)(2), which relate to the Division and are to be performed on or after the
Closing Date (collectively, the "Assumed Liabilities"). The assumption of the
Assumed Liabilities by Purchaser will be effected by delivery by Purchaser to
the Sellers of the duly executed Assignment and Assumption of Contracts
Agreement.
(d) Except for the Assumed Liabilities and as may be expressly
provided for in this Agreement, Purchaser shall not assume and neither the
Sellers, BCGI nor their Affiliates shall assign to Purchaser and the Sellers,
BCGI and their Affiliates, as is appropriate, shall remain liable for, any
liability or obligation, direct or indirect, absolute or contingent, of the
Sellers, BCGI or any Subsidiary, division, associate or Affiliate of the
Sellers, BCGI or of any Person, relating to (i) Taxes with respect to or
attributable to the Assets for all taxable periods through the Closing Date or
the properties, business or operations of the Sellers, BCGI or any Subsidiary,
division, associate or Affiliate of the Sellers or BCGI and Taxes of the Sellers
or BCGI with respect to or attributable to the transactions contemplated hereby
or otherwise, (ii) any liabilities associated with the Excluded Assets, (iii)
any other liabilities of the Sellers or BCGI not listed on Schedule 2.1(c)(1)
including, without limitation, any other Indebtedness of the Sellers or BCGI and
all noncompete payments, change of control payments, outstanding severance
payments, liabilities related to the Assets, loans to or from officers or
shareholders, amounts related to intercompany balances and obligations related
to prior acquisitions, of the Sellers or BCGI and (iv) any other liabilities or
obligations of the Sellers, BCGI or their Affiliates not expressly assumed by
Purchaser (subsections (i) through (iv) collectively referred to as the
"Excluded Liabilities").
Section 2.2 EXCLUDED ASSETS The Assets shall not include any assets of
the Sellers or BCGI set forth on Schedule 2.2 (collectively, the "Excluded
Assets"), including without limitation all accounts receivable, cash and any tax
refunds of the Sellers for operations of the Division on or prior to the
Closing, all of the Sellers' and BCGI's right, title and interest in and to
which shall be retained by the Sellers or BCGI, as applicable.
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Section 2.3 NONDELIVERED ASSETS. Notwithstanding anything else
contained in this Agreement, in the event that an Asset is not delivered by the
Sellers or BCGI to Purchaser at Closing (a "Nondelivered Asset"), the Sellers or
BCGI shall deliver such Asset to Purchaser as soon as the Sellers or BCGI have
actual knowledge of the existence of such Nondelivered Asset; provided, however,
that if any equipment listed on Schedule 2.3 shall remain on the premises of the
Sellers or BCGI thirty (30) days after the Closing, then Purchaser shall pay to
the Sellers the sum of $1,000.00 per month until Purchaser gives written notice
to the Sellers that Purchaser no longer requires the use of such equipment,
which shall not be more than twelve (12) months following the Closing. Any
equipment left on the premises for more than twelve (12) months after the
Closing may be disposed of by the Sellers. Purchaser shall pay the costs of
maintenance of such equipment while on the premises of the Sellers and the costs
of disposal of such equipment. Purchaser shall insure the equipment against loss
at its own expense. If Purchaser desires to have the equipment shipped to
another location, it shall give prior written notice to the Sellers, and
Purchaser shall arrange to have the equipment moved at its expense.
Section 2.4 NO ASSIGNMENT IF BREACH. Notwithstanding anything contained
in this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any of the Assets, or to assume any Assumed Liabilities, if
the attempted assignment or assumption of the same, as a result of the absence
of the consent or authorization of a third party, would constitute a breach or
default under any lease, agreement, encumbrance or commitment or would in any
way adversely affect the rights, or increase the obligations, of any Party with
respect thereto or would otherwise affect the ability of the Purchaser to
receive the benefit of the Assets. If any such consent or authorization is not
obtained, or if an attempted assignment or assumption would be ineffective or
would adversely affect the rights or benefits or increase the obligations of
Purchaser with respect to any such Assets or Assumed Liabilities, as
appropriate, then the Parties shall enter into such reasonable cooperative
arrangements (including without limitation sublease, agency, partial closing,
management, indemnity or payment arrangements and enforcement at the cost and
for the benefit of Purchaser of any and all rights of the Sellers against an
involved third party) to provide the Parties with such benefits and obligations
as most closely approximate those contemplated by this Agreement.
ARTICLE III
PAYMENT AND DELIVERY
Section 3.1 PURCHASE PRICE; ALLOCATION; EARN-OUT
(a) PURCHASE PRICE AND PAYMENT. The total purchase price under this
Agreement shall be the sum of FIFTEEN MILLION DOLLARS ($15,000,000.00), less the
amount of the Assumed Liabilities described on Schedule 2.1(c) (the "Purchase
Price"). On the Closing Date, Purchaser will (i) deliver to Wireless
TeleServices the Purchase Price payable to Wireless TeleServices in immediately
available United States funds by wire transfer in accordance with the terms and
provisions set forth herein and (ii) assume the Assumed Liabilities.
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(b) ALLOCATION OF CONSIDERATION. The aggregate consideration paid by
Purchaser to Wireless TeleServices pursuant to Section 3.1(a) hereof, shall be
allocated among the Assets as set forth on EXHIBIT A attached hereto. EXHIBIT A
shall also set forth the specific Seller and Purchaser of the Assets for which a
portion of the Purchase Price is being allocated thereunder. The allocation of
the Purchase Price was bargained and negotiated for and each Party hereto shall
file all Tax Returns (including Form 8594 which has been agreed upon by the
Purchaser and the Sellers) in a manner consistent with Exhibit A. As soon as
reasonably practicable, Purchaser will propose a preliminary Form 8594 and
submit such Form 8594 for Sellers' review and concurrence.
(c) EARN-OUT PAYMENT. If the Qualifying Revenue for calendar year 2001,
2002, 2003 or 2004 equals or exceeds the respective Revenue Target for the
applicable year, subject to Section 8.4 hereof, Purchaser or Parent shall pay to
Wireless TeleServices, in cash in immediately payable funds pursuant to Section
3.1(h) hereof, an amount equal to $5.0 million (the "Earn-Out Payment") (subject
to adjustment pursuant to Section 3.1(d) below). No Earn-Out Payment may be
earned for revenues recognized after December 31, 2004.
(d) EARN-OUT PAYMENT ADJUSTMENT. The Earn-Out Payment to be paid by
Purchaser or Parent with respect to any applicable year shall be adjusted up or
down based on the Qualifying Revenue applicable for such year as a percentage of
the applicable Revenue Target for such year in accordance with the following
schedule:
(i) if Qualifying Revenue is equal to or greater than 90% of
the applicable Revenue Target but less than 95% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 50% of the Earn-Out Payment;
(ii) if Qualifying Revenue is equal to or greater than 95% of
the applicable Revenue Target but less than 100% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 75% of the Earn-Out Payment;
(iii) if Qualifying Revenue is equal to or greater than 100%
of the applicable Revenue Target but less than 110% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 100% of the Earn-Out Payment;
(iv) if Qualifying Revenue is equal to or greater than 110% of
the applicable Revenue Target but less than 120% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 110% of the Earn-Out Payment;
(v) if Qualifying Revenue is equal to or greater than 120% of
the applicable Revenue Target but less than 130% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 120% of the Earn-Out Payment ;
(vi) if Qualifying Revenue is equal to or greater than 130% of
the applicable Revenue Target but less than 140% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 130% of the Earn-Out Payment;
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(vii) if Qualifying Revenue is equal to or greater than 140%
of the applicable Revenue Target but less than 150% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 140% of the Earn-Out Payment;
(viii) if Qualifying Revenue is equal to or greater than 150%
of the applicable Revenue Target but less than 160% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 150% of the Earn-Out Payment;
(ix) if Qualifying Revenue is equal to or greater than 160% of
the applicable Revenue Target but less than 170% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 160% of the Earn-Out Payment;
(x) if Qualifying Revenue is equal to or greater than 170% of
the applicable Revenue Target but less than 180% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 170% of the Earn-Out Payment;
(xi) if Qualifying Revenue is equal to or greater than 180% of
the applicable Revenue Target but less than 190% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 180% of the Earn-Out Payment;
(xii) if Qualifying Revenue is equal to or greater than 190%
of the applicable Revenue Target but less than 200% of the
applicable Revenue Target, Wireless TeleServices shall be
entitled to receive 190% of the Earn-Out Payment; and
(xiii) if Qualifying Revenue is equal to or greater than 200%
of the applicable Revenue Target, Wireless TeleServices shall
be entitled to receive 200% of the Earn-Out Payment.
Wireless TeleServices is not entitled to receive the Earn-Out Payment in any
year in which Qualifying Revenue is less than 90% of the applicable Revenue
Target for such year.
(e) EARN-OUT RECALCULATION. In the event that either Parent or
Purchaser collects any revenue after April 1st and on or before June 15th of the
calendar year following the calendar year in which such revenue was recognized
in accordance with US GAAP, Qualifying Revenue for such prior year shall be
recalculated to include such collected revenue. If, based upon such
recalculation, Wireless TeleServices would have been entitled to an Earn-Out
Payment for such calendar year or a greater Earn-Out Payment than was actually
earned for such calendar year, Purchaser shall pay to Wireless TeleServices the
positive difference between the adjusted Earn-Out Payment based upon the
recalculation of Qualifying Revenue less the Earn-Out Payment, if any,
originally earned by Wireless TeleServices pursuant to Section 3.1(c) (such
difference being the "Earn-Out Adustment Amount"). The Purchaser shall pay any
Earn-Out Adjustment Amount in cash in immediately available funds on or before
June 30 of the applicable year. No adjustment pursuant to this Section 3.1(e)
shall be made for any revenue collected after June 15, 2005.
(f) LIMITATIONS ON EARN-OUT PAYMENTS. Notwithstanding the obligations
of Purchaser under Sections 3.1(c) and 3.1(d) to pay the Earn-Out Payments upon
the attainment of the
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Revenue Targets and under Section 3.1(e) to pay the Earn-Out Adjustment Amounts,
in no event shall the aggregate of all Earn-Out Payments and Earn-Out Adjustment
Amounts earned exceed $20,000,000. At such time as the Sellers have earned
Earn-Out Payments and Earn-Out Adjustment Amounts equal to $20,000,000, the
provisions of Sections 3.1(c), 3.1(d) and 3.1(e) shall be of no further force
and effect.
(g) EARN-OUT GUARANTY. Parent, by its execution of this Agreement, does
hereby guarantee the payment of any and all Earn-Out Payments and Earn-Out
Adjustment Amounts payable under the terms hereof. Subject to Section 8.4
hereof, if Purchaser fails to pay any Earn-Out Payment or Earn-Out Adjustment
Amount due hereunder, Parent will make such payment.
(h) PAYMENT AND AUDIT RIGHTS. Purchaser and Parent shall maintain
records of Qualifying Revenue under the terms of this Agreement. All such
records shall be maintained in accordance with recognized accounting practices.
For each of the calendar years ended 2001, 2002, 2003 and 2004, Parent shall
prepare and deliver, or cause to be delivered, to BCGI at a reasonable time
after the determination of Qualifying Revenue for each such year (but in no
event later than April 5 of the applicable calendar year), a certificate of the
Parent's Chief Financial Officer stating the determination of Qualifying Revenue
for such calendar year, which statement shall in reasonable detail set forth the
basis for such determination (the "Statement of Revenue"). Unless there is an
objection to the Statement of Revenue as provided below, any Earn-Out Payment
due hereunder shall be paid no later than fifteen (15) days following delivery
to BCGI of the Statement of Revenue. Within ten (10) days following the delivery
of the Statement of Revenue by Parent to BCGI, BCGI may provide written
objection to Parent of the calculation of Qualifying Revenue. If BCGI so
objects, the Parties shall attempt to resolve such dispute by negotiation. If
the Parties are unable to resolve such dispute within twenty (20) days of any
objection by BCGI, the Parties shall appoint one of the five largest independent
certified public accountants, as shall be mutually agreed, who shall, at the
Sellers' and Purchaser's joint expense, review the Statement of Revenue and
determine the amount of Qualifying Revenue. The finding of such accounting firm
shall be binding on the Parties. The Sellers shall have the right to examine and
audit, at their own cost and expense, the records of Purchaser upon which the
Statement of Revenue has been prepared, during normal business hours upon
reasonable advance written notice.
Section 3.2 CLOSING. Subject to the terms of Article VII and Section
2.3 hereof, the sale, conveyance, assignment, transfer and delivery of the
Assets by the Sellers and payment of the Purchase Price and assumption of the
Assumed Liabilities by Purchaser (hereinafter called the "Closing") shall take
place on or before December 31, 2000 at the offices of Xxxxx & Xxxxxxx L.L.P.,
0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, or on such other date,
time and place as may be mutually agreed upon by the Parties hereto. The date on
which the Closing occurs is referred to herein as the "Closing Date."
Notwithstanding the foregoing or any other provision of this Agreement to the
contrary, the Parties hereto agree that the closing of the transactions
contemplated herein shall be deemed to take effect at 12:01 A.M. (Mountain Time)
on the Closing Date.
Section 3.3 DELIVERIES BY THE SELLERS. At the Closing, the Sellers and
BCGI shall deliver or cause to be delivered to Purchaser:
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(a) A duly executed Xxxx of Sale relating to the Assets
referred to in Section 2.1 hereof;
(b) Such other good and sufficient Instruments of Transfer as
shall be necessary to vest in Purchaser all of the Sellers' and BCGI's title to
the Assets free and clear of all Liens;
(c) The certificate referred to in Section 7.2(d) hereof;
(d) Copies of all consents, approvals, authorizations,
agreements and other documentation required pursuant to Section 7.2 hereof;
(e) Strategic Relationship Agreement duly executed by BCGI in
the form attached hereto as EXHIBIT D;
(f) Employment Offer Letters, duly executed by the Hired
Employees;
(g) CCST License and Maintenance Agreements, duly executed by
the Sellers and BCGI in the forms attached hereto as EXHIBIT F.
(h) Assignment and Assumption of Contracts Agreement, duly
executed by the Sellers and BCGI in the form attached hereto as EXHIBIT E.
(i) Unanimous written consents and approvals of this Agreement
and all actions contemplated hereby by the Boards of Directors of the Sellers
and BCGI and the shareholders of the Sellers;
(j) Legal opinion of Ropes & Xxxx in the form attached hereto
as EXHIBIT C; and
(k) Such other documents, instruments and writings reasonably
requested by Purchaser at or prior to the Closing.
Purchaser will thereupon take actual possession of the Assets
and assume the Assumed Liabilities.
Section 3.4 DELIVERIES BY PURCHASER. At the Closing, Purchaser shall
deliver to the Sellers and/or BCGI:
(a) The Purchase Price payable in immediately available United
States funds by wire transfer to such account or accounts as are designated by
the Sellers;
(b) A duly executed Assignment and Assumption of Contracts
Agreement relating to the Assumed Liabilities, referred to in Section 2.1(c)
hereof;
(c) The certificate referred to in Section 7.3(c) hereof;
(d) Employment Offer Letters with respect to the Hired
Employees; and
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(e) Such other documents, instruments and writing reasonably
requested by the Sellers at or prior to the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The following representations and warranties are made to Purchaser and
Parent jointly and severally by the Sellers and BCGI:
Section 4.1 AUTHORIZATION AND VALIDITY. Each of the Sellers and BCGI
have full corporate, power and authority to enter into this Agreement, the
Instruments of Transfer and the Strategic Relationship Agreement and the CCST
License and Maintenance Agreements (the "Related Agreements") and to carry out
their obligations hereunder and thereunder. The execution, delivery and
performance by each of the Sellers and BCGI of this Agreement, the Instruments
of Transfer and the Related Agreements, and the consummation by the Sellers and
BCGI of the transactions contemplated hereby and thereby, have been duly and
validly authorized by the boards of directors of each of the Sellers and BCGI
and the shareholders, as applicable, thereof and no other corporate proceeding
on the part of the Sellers or BCGI, or the shareholders thereof, is necessary to
authorize the execution and delivery by the Sellers and BCGI of this Agreement,
the Instruments of Transfer and the Related Agreements, or the consummation by
the Sellers and BCGI of the transactions contemplated hereby or thereby. This
Agreement, the Instruments of Transfer and the Related Agreements have been duly
and validly executed and delivered by the Sellers and BCGI and, assuming the
same constitute a valid and binding obligation of any other Parties hereto or
thereto, constitute a valid and binding obligation of the Sellers and BCGI
enforceable against the Sellers and BCGI in accordance with their terms, except
that (i) such enforcement may be subject to applicable bankruptcy, insolvency or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
Section 4.2 SUBSIDIARIES. Schedule 4.2 sets forth the name, form of
organization, jurisdiction of organization, capitalization and percentage
ownership of any Person in which the Sellers directly or indirectly own any
equity or other ownership interest (an "Other Entity") other than such interests
that are Excluded Assets. Except as set forth on Schedule 4.2, the Sellers have
no Subsidiaries. All outstanding shares of capital stock, partnership interests
and other ownership interests of each Other Entity are owned beneficially and of
record by the Sellers free and clear of any Liens, preemptive rights and similar
rights. Except for the Other Entities, neither of the Sellers owns any equity or
other ownership interests in any other Person.
Section 4.3 ORGANIZATION. Each Seller and BCGI (i) is duly organized,
validly existing and in good standing in accordance with the Laws of the state
of its incorporation, (ii) has full corporate power and authority to own all of
its properties and assets, including the Assets, and to carry on its business as
it is now being conducted and (iii) is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary,
except where the failure to be so qualified
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could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. The Sellers have delivered to Purchaser a complete and
correct copy of the certificate of incorporation and bylaws or other
organizational documents of each of the Sellers. Such organizational documents
are in full force and effect and neither of the Sellers is in material violation
of any provision of such organizational documents.
Section 4.4 NO CONFLICT. Except as set forth on Schedule 4.4, neither
the execution, delivery or performance of this Agreement or the other documents
and instruments to be executed and delivered by the Sellers or BCGI pursuant
hereto, nor the consummation by the Sellers or BCGI of the transactions
contemplated hereby or thereby, nor compliance by the Sellers or BCGI with any
of the provisions hereof or thereof, will (i) conflict with or result in any
breach of any provision of the articles of incorporation or bylaws of the
Sellers or BCGI, (ii) constitute a change in control under or require the
consent from or the giving notice to a third party, result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, or result in the creation of any Lien upon any of the
Assets pursuant to, any of the terms, conditions or provisions of any
contractual obligation of either of the Sellers or BCGI, (iii) violate any
order, writ, injunction, decree, statute, rule or regulation of any Governmental
Authority applicable to the Sellers or BCGI or to which any of their properties
or assets (including the Assets) may be bound or (iv) result in triggering any
right of first refusal or other right under any shareholder, partnership or
joint venture agreement to which either of the Sellers or BCGI is a party,
except in the case of clauses (ii), (iii) or (iv) for such violations, breaches
or defaults which would not, individually or in the aggregate, have a Material
Adverse Effect.
Section 4.5 GOVERNMENTAL CONSENTS. Except for the filing and expiration
of the applicable waiting period required by the HSR Act, or the earlier
termination thereof, no consent, order or authorization of, or registration,
declaration or filing with, any Governmental Authority is required in connection
with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby.
Section 4.6 FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES;
FORECASTS.
(a) BCGI has made available to Parent and Purchaser the (i)
audited, consolidated financial statements of BCGI for the fiscal years ended
December 31, 1997, 1998 and 1999, and (ii) the unaudited, consolidated financial
statements of BCGI for the six (6) month period ended June 30, 2000
(collectively, the "Financial Statements"). The Financial Statements have been
prepared in accordance with US GAAP applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes thereto) and each
fairly presents the financial position, results of operations and cash flows of
BCGI as at the respective dates thereof and for the respective periods indicated
therein except as otherwise noted therein (subject, in the case of the unaudited
statements, to normal and recurring year end adjustments that would not have a
Material Adverse Effect). The unaudited financial statements of the Division for
the fiscal years ended December 31, 1997, 1998, 1999 and the nine (9) month
period ended September 30, 2000 (the "Division Financial Statements") are
attached hereto as Exhibit 4.6(a). The Division Financial Statements have been
prepared in accordance with US GAAP applied on a consistent
17
basis for the periods indicated (other than the ommission of footnote disclosure
thereto), and present fairly in all material respects the operations and
financial condition of the Division for the periods and as of the dates
indicated (subject to normal and recurring year-end adjustments which would not
have a Material Adverse Effect).
(b) Neither the Sellers nor BCGI have any Liabilities that
would be material to the business of the Division, except for such Liabilities
as (i) are set forth on Schedule 4.6(b) hereto, (ii) are reflected on the
Balance Sheet or (iii) were incurred since December 31, 1999 or the Balance
Sheet Date (as appropriate) in the ordinary course of business consistent with
past practice and which individually and in the aggregate have not had and could
not reasonably be expected to have a Material Adverse Effect.
(c) The Sellers and BCGI have provided to Purchaser and Parent
income statement forecasts and projections with respect to the Division (the
"Projections"), which are attached hereto as Schedule 4.6(c). The Projections
have been prepared in good faith and are based upon reasonable assumptions;
however, the actual results may vary materially from the Projections. The
Sellers and BCGI are not aware of any facts or other information that could
result in the Projections being materially inaccurate or untrue.
Section 4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
contemplated herein or as set forth on Schedule 4.7, since the Balance Sheet
Date, (i) the Sellers and BCGI have conducted the business of the Division only
in the ordinary course and consistent with past practice, (ii) there have not
been any developments or events which have had or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect and (iii)
neither the Sellers nor BCGI has taken any of the following actions:
(a) (A) sold, leased, transferred or disposed of any Assets,
other than assets that individually or in the aggregate would not be material,
in either case, in the ordinary course of business of the Division consistent
with past practice, (B) incurred any Lien thereupon, except for Liens incurred
in the ordinary course of business consistent with past practice which Liens
would not in the aggregate be material, (C) acquired or leased any assets of the
Division other than assets that individually or in the aggregate would not be
material in the ordinary course of business consistent with past practice or (D)
entered into any commitment or transaction with respect to (A), (B) or (C)
above;
(b) (A) incurred, assumed or refinanced any Indebtedness of
the Division or (B) made any loans, advances or capital contributions to, or
investments in, any Person binding upon the Division;
(c) (A) changed any of the accounting or tax principles,
practices or methods used by the Sellers, except as required by changes in
applicable Tax Laws or (B) changed reserve amounts or policies;
(d) made any change in the compensation payable or to become
payable to any of the officers, directors, employees, agents, consultants or
Persons acting in a similar capacity of the Division (other than general
increases in wages to employees who are not officers or directors
18
or Persons acting in a similar capacity of the Division in the ordinary course
consistent with past practice), or to Persons providing management services to
the Division, entered into or amended any employment, severance, consulting,
termination or other agreement or employee benefit plan of the Division or made
any loans to any of the Division's officers, directors, employees, agents or
consultants or Persons acting in a similar capacity or made any change in its
existing borrowing or lending arrangements for or on behalf of any of such
Persons pursuant to an employee benefit plan or otherwise;
(e) paid or made any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit pursuant to any existing
plan, agreement or arrangement to any officer, director, employee or Person
acting in a similar capacity of the Division or paid or agreed to pay or made
any accrual or arrangement for payment to any officers, directors, employees or
Persons acting in a similar capacity or Affiliates of the Division of any amount
relating to unused vacation days, except payments and accruals made in the
ordinary course of business consistent with past practice, and, from the Balance
Sheet Date, adopted or paid, granted, issued, accelerated or accrued any
deferred salary or other deferred payments or benefits not in the ordinary
course of business consistent with past practice pursuant to any pension,
profit-sharing, bonus, extra compensation, incentive, deferred compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, retirement or other employee benefit plan, agreement or
arrangement, or any employment or consulting agreement with or for the benefit
of any director, officer, employee, agent or consultant or Person acting in a
similar capacity of the Division, whether past or present, or amend in any
material respect any such existing plan, agreement or arrangement in a manner
consistent with the foregoing;
(f) entered into any collective bargaining agreement;
(g) made any payments (other than regular compensation payable
to officers and employees or Persons acting in a similar capacity of the
Division in the ordinary course of business consistent with past practice),
loans, advances or other distributions to, or enter into any transaction,
agreement or arrangement with, the Division's officers, directors, employees,
agents, consultants or Persons acting in a similar capacity, stockholders,
associates or family members;
(h) made or authorized any capital expenditures for the
Division, except in the ordinary course of business consistent with past
practice not in excess of $10,000 individually or $25,000 in the aggregate;
(i) incurred any Taxes for the Division, except in the
ordinary course of business consistent with past practice;
(j) settled or compromised any Tax liability or agreed to any
adjustment of any Tax attribute or made any election with respect to Taxes of
the Division;
(k) failed to duly and timely file any Tax Return with the
appropriate Governmental Authorities required to be filed by it in a true and
complete and correct form or to timely pay all Taxes shown to be due thereon;
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(l) (A) entered into, amended, renewed or terminated or waived
any right under, any Material Contract of the Division, or, except in the
ordinary course of business consistent with past practice, any other agreement
with respect to the Division or (B) taken any action or failed to take any
action that, with or without either notice or lapse of time, would constitute a
material default under any Material Contract of the Division;
(m) (A) made any change in its working capital practices
generally, including accelerating any collections of cash or accounts receivable
or deferring payments or (B) failed to make timely payments, including with
respect to accounts payable and liabilities incurred in the ordinary course of
business;
(n) failed to renew (at levels consistent with presently
existing levels), terminated or amended or failed to perform any of its
obligations or permitted any material default to exist or caused any material
breach under, or entered into (except for renewals in the ordinary course of
business consistent with past practice), any material policy of insurance
relating to the Assets;
(o) disposed of or permitted to lapse any material
Intellectual Property of the Division; or
(p) provided any confidential information of the Division to
any Person, other than to Purchaser and Parent, except in the ordinary course of
business consistent with past practice or otherwise pursuant to appropriate
confidentiality agreements, and except as required by any Law, any existing
agreements set forth on Schedule 4.14 or as may be reasonably necessary to
secure or protect intellectual or other property rights of any of the Sellers.
Section 4.8 PROPERTY, ASSETS.
(a) The Assets constitute all of the properties, assets,
claims, contracts, Intellectual Property, and businesses of every kind,
character and description, whether tangible or intangible, whether real,
personal or mixed, whether accrued, contingent or otherwise, and wherever
located, used in the operation of and constituting the Division. The Sellers and
BCGI own, or otherwise have a valid leasehold (or license, in the case of
off-the-shelf software) interest providing sufficient and legally enforceable
rights to use, all of the property and assets necessary or otherwise material to
the conduct of the business of the Division. The Sellers and BCGI have good and
marketable title to, a valid leasehold interest in, or a license to use all
Assets whether or not reflected on the Balance Sheet or acquired since the
Balance Sheet Date, free and clear of all Liens (other than Liens set forth in
Schedule 4.8(a) hereof), other than immaterial assets disposed of since the
Balance Sheet Date in the ordinary course of business consistent with past
practice. Such assets are generally in good operating condition and repair
(ordinary wear and tear excepted), have been maintained in accordance with
reasonable maintenance practices and are suitable for their present uses. Other
than BCGI's equity ownership interests in each of the Sellers, BCGI does not own
or otherwise have any leasehold or license interest in any property and assets
necessary or otherwise material to the operation of the conduct of the Division.
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(b) Schedule 4.8(b) contains a list of all real property
leased by the Sellers ("Real Property") in connection with the conduct of the
business of the Division. The Sellers have valid leasehold interests in the Real
Property, free and clear of all Liens except for defects in title, Liens
suffered or granted by any landlord, or Liens which do not and will not
materially interfere with the use of the Real Property as presently used or
intended by the Sellers to be used, otherwise materially impair business
operations at such properties, or materially detract from the value of the Real
Property as presently used or intended by the Sellers to be used. The current
use of the Real Property by the Sellers does not violate the certificate of
occupancy thereof or, to the Knowledge of the Sellers, any local zoning or
similar land use or other Laws. None of the Sellers has received notice of any
pending or threatened condemnation proceeding, or of any sale or other
disposition in lieu of condemnation, affecting any of the Real Property.
(c) Schedule 4.8(c) sets forth as of September 30, 2000, a
complete and accurate list of all furniture, equipment, automobiles and all
other tangible personal property (including its net book value) owned by, in the
possession of, or used by the Sellers in connection with the business of the
Division. Except for personal property leases, such personal property is not
held under any lease, security agreement, conditional sales contract, or other
title retention or security arrangement. None of such personal property is
located other than in the possession of the Sellers.
Section 4.9 LITIGATION AND CLAIMS, COMPLIANCE WITH LAWS.
(a) Schedule 4.9(a) sets forth all Litigation as of the date
hereof, including the name of the claimant, the date of the alleged act or
omission and a detailed narrative as to the nature of the alleged act or
omission in connection with such matters. Neither the Sellers, BCGI nor the
Assets are subject to any order, consent decree, settlement or similar agreement
with any Governmental Authority relating to the Division. There is no judgment,
injunction, decree, order or other determination of an arbitrator or
Governmental Authority specifically applicable to BCGI, the Sellers or any of
their properties or assets relating to the Division. Except as disclosed on
Schedule 4.9(a), there is no Litigation relating to alleged unlawful
discrimination or sexual harassment. As of the date hereof, there is no
Litigation which seeks to prevent consummation of the transactions contemplated
hereby or which seeks material damages in connection with the transactions
contemplated hereby.
(b) Except as set forth in Schedule 4.9(b), BCGI and each of
the Sellers have complied and are in compliance with all Laws (excluding
Environmental Laws) applicable to BCGI and the Sellers and their respective
business. Except as set forth in Schedule 4.9(b), BCGI and the Sellers hold all
material licenses, permits and other authorizations of Governmental Authorities
necessary to conduct their respective business as now being conducted or, under
currently applicable Laws, to continue to conduct their respective business as
now being conducted. Except as set forth in Schedule 4.9(b), there is no intent
to make any changes in the conduct of the businesses of BCGI or the Sellers
related to the Division that will result in or cause BCGI or the Sellers to be
in noncompliance with applicable Laws or that will require changes in or a loss
of any such licenses, permits or other authorizations or an increase in any
expenses related thereto. Such licenses, permits and other authorizations as
aforesaid held by BCGI and the Sellers are valid and in full force and effect,
and there are no (i) actions pending or,
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to the Knowledge of BCGI and the Sellers, threatened or (ii) investigations
pending or, to the Knowledge of BCGI and the Sellers, threatened that could
result in the termination, impairment or non-renewal thereof.
Section 4.10 TAXES. The Sellers and BCGI have timely filed or caused to
be filed with the appropriate federal, state and local Governmental Authorities
all Tax Returns required to be filed with respect to or attributable to BCGI and
the Sellers and each such Tax Return is true, complete and correct in all
material respects. All Taxes owed by BCGI and the Sellers (whether or not shown
on any Tax Return ), except those which are not yet due and payable, have been
paid. Neither BCGI nor the Sellers is currently the beneficiary of any extension
of time within which to file any Tax Return. All Taxes required to be withheld
by or with respect to BCGI and the Sellers have been timely paid or, if
applicable, withheld and paid to the appropriate Governmental Authority. There
are no deficiencies or assessments of Taxes from any Governmental Authority with
respect to or attributable to BCGI or the Sellers. There are no ongoing audits
or examinations of any of the Tax Returns relating to or attributable to BCGI or
the Sellers and (v) BCGI or the Sellers have not granted any requests,
agreements, consents or waivers to extend the statutory period of limitations
applicable to the assessment of any Taxes with respect to or attributable to
BCGI or the Sellers. No claim has ever been made by a Governmental Authority in
a jurisdiction where either BCGI or the Sellers do not file Tax Returns that
either BCGI and the Sellers are or may be subject to taxation by that
jurisdiction.
Section 4.11 ENVIRONMENTAL MATTERS. The Sellers and BCGI to their
Knowledge are in all material respects in compliance with the provisions of all
Laws relating to pollution, protection of the environment or occupational safety
and health applicable to them or to real property owned or leased by them or to
the use, operation or occupancy thereof. The Sellers and BCGI have not engaged
in any activity in material violation of any provision of any Law relating to
pollution, protection of the environment or occupational safety and health. The
Sellers and BCGI do not have any material liability, absolute or contingent,
under any federal, state or local law relating to pollution, protection of the
environment or occupational safety and health.
Section 4.12 MATERIAL CONTRACTS.
(a) Schedule 4.12 lists (without duplication) each of the
following contracts and other agreements (or, in the case of oral contracts,
summaries thereof) relating to the business of the Division to which any of the
Sellers or BCGI is a party or by or to which the Sellers, BCGI or any of their
assets or properties is bound or subject (such contracts and agreements being
"Material Contracts"):
(i) any agreements relating to franchise operations,
and agreements with or relating to any committee or organization of, or
representing, franchisees or franchisors;
(ii) any advertising, market research and other
marketing agreements;
(iii) any employment (other than standard sales
associate agreements and oral at-will employment agreements), severance,
non-competition, consulting or other
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agreements of any nature (other than standard sales associate
agreements and oral at-will employment agreements) with any current
director, officer or employee of the Division;
(iv) any agreements restricting the ability of any of
the Sellers or BCGI to incur Indebtedness;
(v) any agreements relating to the making of any loan
or advance by any of the Sellers or BCGI;
(vi) any agreements relating to Indebtedness,
interest rate swap or hedging arrangements, sale and leaseback
transactions or other similar financing transactions;
(vii) any agreements providing for the
indemnification by any of the Sellers or BCGI of any Person, except
those entered into in the ordinary course of business which are not
material to any of the Sellers or BCGI;
(viii) any agreements with any Governmental
Authority;
(ix) any agreements relating to the purchasing of
goods by, or the furnishing of services to, any of the Sellers or BCGI
(A) requiring financial commitments in excess of $10,000 or (B) having a
term which is greater than six months and which is not terminable by the
Seller party thereto or BCGI on less than 90 days' notice without the
payment of any termination fee or similar payment;
(x) any contracts, agreements and other arrangements
for the sale of assets or for the furnishing of services by any of the
Sellers or BCGI (A) with firm commitments having a value in excess of
$10,000 or (B) having a term which is greater than six months and which
is not terminable by the Seller party thereto or BCGI on less than 90
days' notice without the payment of any termination fee or similar
payment;
(xi) any broker, distributor, dealer, representative
or agency (other than standard sales associate agreements) agreements;
(xii) other than license agreements related to any
off-the-shelf computer software applications, any agreements (including
settlement agreements) currently in effect pursuant to which any of the
Sellers or BCGI license the right to use any Intellectual Property to
any Person or from any Person, and research and development agreements;
(xiii) other than confidentiality agreements entered
into with Sellers' or BCGI's broker and potential buyers of the
Division, any confidentiality agreements entered into by any of the
Sellers or BCGI during the period commencing two years prior to the
date hereof pursuant to which confidential information has been
provided to a third party or by which either of the Sellers or BCGI was
restricted from providing information to third parties, other than
those entered into the ordinary course of business relating to any of
the Sellers' or BCGI's operations;
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(xiv) any shareholder, voting trust or similar
agreements relating to either of the Sellers or BCGI to which either of
the Sellers or BCGI is a party;
(xv) any leases of Real Property;
(xvi) any joint venture, partnership or similar
documents or agreements;
(xvii) any agreements relating to the provision of
mortgage, escrow or title services or relating to the purchase of
property pursuant to any guaranteed sales or other similar programs;
(xviii) any agreements that limit or purport to limit
the ability of either of the Sellers or BCGI to own, operation, sell,
transfer, pledge or otherwise dispose of any assets; and
(xix) all other agreements, contracts or commitments
not made in the ordinary course of business which are material to either
of the Sellers or BCGI.
(b) Each Material Contract is in full force and effect, and is
legal, valid, binding on and enforceable against the Seller party thereto and
BCGI and the other parties thereto except that (i) such enforcement may be
subject to the applicable bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. Except as set forth on Schedule 4.12,
upon consummation of the transactions contemplated by this Agreement, each
Material Contract shall remain in full force and effect without any loss of
benefits thereunder and without the need to obtain the consent of any party
thereto to the transactions contemplated by this Agreement. Neither of the
Sellers or BCGI is (and with the giving of notice or lapse of time would not be)
in breach of, or default under, any Material Contract and, to the Knowledge of
the Sellers and BCGI, no other party thereto is in breach of, or default under,
any Material Contract. Neither of the Sellers nor BCGI has received any notice,
whether oral or written, that any Material Contract is not enforceable against
any party thereto, that any Material Contract has been terminated before the
expiration of its term or that any party to a Material Contract intends to
terminate such Material Contract prior to the termination date specified therein
or does not intend to renew such Material Contract upon the termination date
specified therein, or that any other party is in breach of, or default under,
any Material Contract. True and complete copies of all Material Contracts or, in
the case of oral agreements, if any, written summaries thereof have been
delivered or made available to Purchaser.
Section 4.13 INTELLECTUAL PROPERTY.
(a) Each of the Sellers or BCGI is the sole and exclusive
owner of, or has the valid right to use the Intellectual Property necessary or
otherwise material to the conduct of the business of the Division, free and
clear of all Liens. Schedule 4.13(a) sets forth a complete and accurate list
(including which Party is the owner or licensee thereof) of all (i) patents and
patent
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applications used or useful in connection with the business of the Division,
(ii) trademark or service xxxx registrations and applications used or useful in
connection with the business of the Division, (iii) copyright registrations and
applications used or useful in connection with the business of the Division and
(iv) material unregistered copyrights, service marks, trademarks and trade names
used or useful in connection with the business of the Division, each as owned or
licensed by any of the Sellers. One or more of the Sellers or BCGI currently is
listed in the records of the appropriate United States or state agency as the
sole owner of record for each owned application and registration listed on
Schedule 4.13(a).
(b) The registrations listed on Schedule 4.13(a) are valid and
subsisting, in full force and effect in all material respects, and have not been
canceled, expired or abandoned. There is no pending, existing, or, to the
Knowledge of the Sellers or BCGI, threatened, opposition, interference,
cancellation proceeding or other legal or governmental proceeding before any
court or registration authority in any jurisdiction against the registrations
listed on Schedule 4.13(a). There is no pending, existing, or, to the Knowledge
of the Sellers or BCGI, threatened opposition, interference, cancellation
proceeding or other legal or governmental proceeding before any court or
registration authority in any jurisdiction against any of the Intellectual
Property of the Division.
(c) Schedule 4.13(c) lists all of the Computer Programs other
than off-the-shelf applications which are owned, licensed, leased or otherwise
used by either of the Sellers or BCGI in connection with the operation of the
Division as currently conducted, and identifies which is owned, licensed,
leased, or otherwise used, as the case may be. Each Computer Program listed on
Schedule 4.13(c) is either (i) owned by a Seller or BCGI, (ii) currently in the
public domain or otherwise available to a Seller or BCGI without the license,
lease or consent of any third party, or (iii) used under rights granted to a
Seller or BCGI pursuant to a written agreement, license or lease from a third
party, which written agreement, license or lease is set forth on Schedule
4.13(c). The Sellers and BCGI use the Computer Programs set forth on Schedule
4.13(c) in connection with the operation of the Division as conducted on the
date hereof and, to the Knowledge of the Sellers or BCGI, such use does not
violate the rights of any third party. All Computer Programs set forth in
Schedule 4.13(c) were either developed by (x) employees of one or more of the
Sellers or BCGI within the scope of their employment, (y) third parties as
"work-made-for-hire," as that term is defined under Section 101 of the United
States copyright laws, pursuant to written agreements or (z) independent
contractors who have assigned their rights to one or more of the Sellers or BCGI
pursuant to written agreements.
(d) Except for agreements under which either of the Sellers or
BCGI is licensed to use any off-the-shelf computer software application,
Schedule 4.13(d) sets forth a complete and accurate list of all agreements
pertaining to the use of or granting any right to use or practice any rights
under any Intellectual Property of the Division, whether either of the Sellers
or BCGI is the licensee or licensor thereunder (the "Licenses") and any written
settlements or assignments relating to any Intellectual Property of the
Division. The Licenses are valid and binding obligations of each Seller a party
thereto or BCGI and, to the Knowledge of the Sellers or BCGI, of the other
parties thereto, enforceable against each such party in accordance with their
terms, and the Sellers or BCGI are not in breach or default under any Licenses
and, to the Knowledge of the Sellers or BCGI, no other party is in breach or
default under any Licenses.
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(e) To the Knowledge of the Sellers or BCGI, no trade secret
or confidential know-how material to the business of the Division as currently
operated or planned to be operated has been disclosed or authorized to be
disclosed to any third party, other than pursuant to a non-disclosure agreement
that protects the Sellers' or BCGI's proprietary interests in and to such trade
secrets and confidential know-how.
(f) To the Knowledge of the Sellers or BCGI, the conduct of
the business of the Division does not infringe upon any intellectual property
right owned or controlled by any third party and no third party is infringing
upon any Intellectual Property of the Division owned by any of the Sellers or
BCGI and no such claims have been made against a third party by any of the
Sellers or BCGI. There are no claims or suits pending or, to the Knowledge of
the Sellers or BCGI, threatened, and neither of the Sellers or BCGI has received
any written notice of a third party claim or suit (x) alleging that any of the
activities or the conduct of the Division infringes upon or constitutes the
unauthorized use of the proprietary rights of any third party or (y) challenging
the ownership, use, validity or enforceability of the Intellectual Property of
the Division.
(g) There are no settlements, consents, judgments or orders or
other agreements which restrict the rights of either of the Sellers or BCGI to
use any Intellectual Property of the Division and there exist no concurrent use
or other agreements which restrict either of the Sellers' or BCGI's rights to
use any Intellectual Property of the Division owned by any of the Sellers or
BCGI.
(h) Except as set forth on Schedule 4.13(h), the consummation
of the transactions contemplated hereby will not result in the loss or
impairment of the right of the Purchaser or its successors to own or use any of
the Intellectual Property of the Division currently owned or used by the Sellers
or BCGI nor will it require the consent of any Governmental Authority or third
party in respect of any such Intellectual Property and no present or former
employee, officer or director of either of the Sellers or BCGI has any right,
title, or interest, directly or indirectly, in whole or in part, in any such
Intellectual Property.
Section 4.14 EMPLOYEE BENEFITS; ERISA.
(a) Except as set forth in Schedule 4.14, with respect to all
employees and former employees of the Sellers or BCGI who perform or performed
functions in connection with the business of the Division and all dependents and
beneficiaries of such employees and former employees: (i) the Sellers and BCGI
do not maintain or contribute to any nonqualified deferred compensation or
retirement plans, contracts or arrangements; (ii) the Sellers and BCGI do not
maintain or contribute to any qualified defined contribution plans (as defined
in Section 3(34) of ERISA or Section 414(i) of the Code); (iii) the Sellers and
BCGI do not maintain or contribute to any qualified defined benefit plans (as
defined in Section 3(35) of ERISA or Section 414(j) of the Code); (iv) the
Sellers and BCGI do not maintain or contribute to any Employee Welfare Benefit
Plans; and (v) the Sellers and BCGI do not maintain any severance plan for, or
have any severance agreement with, any employee.
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(b) To the extent required (either as a matter of law or to
obtain the intended tax treatment and tax benefits) all Employee Benefit Plans
comply in all material respects with the requirements of ERISA and the Code.
With respect to the Employee Benefit Plans, (i) all required contributions which
are due have been made and a proper accrual has been made for all contributions
due in the current fiscal year and (ii) there have been no Prohibited
Transactions.
(c) The Sellers and BCGI do not contribute (and have never
contributed) to any multiemployer plan, as defined in Section 3(37) of ERISA.
The Sellers and BCGI have no actual or potential liabilities under Section 4201
of ERISA for any complete or partial withdrawal from a multiemployer plan. The
Sellers and BCGI have no actual or potential liability for death or medical
benefits after separation from employment, other than (i) death benefits under
the employee benefit plans or programs (whether or not subject to ERISA) set
forth on Schedule 4.14, (ii) health care continuation benefits described in
Section 4980B of the Code or (iii) other actual or potential liabilities that
would not, singly or in the aggregate, have a Material Adverse Effect.
(d) Neither the Sellers, BCGI, nor any of their directors,
partners, officers, or employees thereof have committed any breach of fiduciary
responsibility imposed by ERISA or any other applicable law with respect to the
Employee Benefit Plans which would subject the Sellers, BCGI Purchaser or any of
their respective directors, partners, officers or employees to any liability
under ERISA or any applicable law that would have a Material Adverse Effect.
(e) The Sellers and BCGI have not incurred any liability for
any tax or civil penalty or any disqualification of any Employee Benefit Plan
imposed by Sections 4980B or 4975 of the Code or Part 6 of Title I or Section
502(i) of ERISA.
Section 4.15 LABOR MATTERS. Except as set forth on Schedule 4.15, (i)
there is no labor strike, slowdown, stoppage or lockout actually pending, or to
the actual knowledge of the Sellers or BCGI without inquiry, threatened against
or affecting the Sellers or BCGI or relating to the Division, and during the
past three years there have not been any such actions, (ii) the Sellers and BCGI
are not a party to or bound by any collective bargaining or similar agreement
with any labor organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of the Division,
(iii) none of the employees of the Division is represented by any labor
organization nor, to the Knowledge of the Sellers and BCGI, does any question
concerning representation exist concerning such employees and, to the Knowledge
of the Sellers and BCGI, there have been no union organizing activities among
the employees of the Sellers or BCGI within the past three years, (iv) there are
no written personnel policies, rules or procedures applicable to employees of
the Division, other than those set forth on Schedule 4.15, true and correct
copies of which have been delivered to the Purchaser at least ten days prior to
the Closing Date, (v) the Sellers and BCGI are, and have at all times been, in
compliance, in all material respects, with all applicable Laws respecting
employment and employment practices, terms and conditions of employment, wages,
hours of work and occupational safety and health, and are not engaged in any
unfair labor practices as defined in the National Labor Relations Act or other
applicable Laws, (vi) there is no unfair labor practice charge or complaint
against the Sellers pending or, to the Knowledge of the Sellers and BCGI,
threatened before the National Labor Relations Board or any similar state or
foreign agency, (vii) there is no grievance arising
27
out of any collective bargaining agreement or other grievance procedure, (viii)
no charges with respect to or relating to the Sellers or BCGI are pending before
the Equal Employment Opportunity Commission or any other agency responsible for
the prevention of unlawful employment practices, (ix) neither of the Sellers nor
BCGI has received notice of the intent of any federal, state, local or foreign
agency responsible for the enforcement of labor or employment Laws to conduct an
investigation with respect to or relating to the Sellers or BCGI and, to the
Knowledge of the Sellers and BCGI, no such investigation is in progress and (x)
there are no complaints, lawsuits or other proceedings pending or, to the
Knowledge of the Sellers and BCGI, threatened in any forum by or on behalf of
any present or former employee of the Division, any applicant for employment or
classes of the foregoing alleging breach of any express or implied contract or
employment, any Laws governing employment or the termination thereof or other
discriminatory, wrongful or tortious conduct in connection with the employment
relationship.
Section 4.16 FRANCHISE AND OTHER RELATIONSHIPS.
(a) Except as set forth in Schedule 4.16 or with respect to
off-the-shelf software applications, neither of the Sellers, BCGI, nor any
entity in which they have any interest relating to the Division (i) is or was a
franchisee, sub-franchisee, licensee or sub-licensee of any Person, (ii) is or
was the sub-franchisor or sub-licensor of any Person or (iii) is or was under
any agreement or obligation to any Person with respect to any franchisee,
franchisor, licensee or licensor (or sub-franchisor, sub-franchisee,
sub-licensee or sub-licensor) relationship.
(b) Neither of the Sellers nor BCGI has granted any person the
right to operate a franchised or licensed business using any trademark or
tradename of the Division or the right to sell or grant others a franchise or
license to use any trademarks or tradenames of the Division.
(c) Except as set forth on Schedule 4.16, neither of the
Sellers nor BCGI has any obligation or commitment with respect to any mortgage,
title insurance, relocation, referral, settlement, escrow or other services
similar to the foregoing, or any affinity relationships, relating to the
Division, and the transactions contemplated hereby shall not, subject to any
obligation or commitment of Purchaser independent of the transactions
contemplated herein, obligate Purchaser to use any such services.
Section 4.17 AFFILIATE TRANSACTIONS. Schedule 4.17 lists all
agreements, arrangements and currently proposed agreements and arrangements, by
or between any of the Sellers or BCGI, on the one hand, with or for the benefit
of any director, officer of any of the Sellers or BCGI or any of such Person's
Affiliates, or any entity in which any such Person has a direct or indirect
material interest, relating to the Division.
Section 4.18 BROKERS, FINDERS, ETC.. Except as set forth on Schedule
4.18, neither of the Sellers nor BCGI has employed, or is subject to the valid
claim of, nor has either of the Sellers or BCGI incurred any liability that
would be payable by the Sellers or BCGI, for any brokerage, finder's or other
fees or commissions of any broker, finder or other financial intermediary in
connection with the transactions contemplated by this Agreement.
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Section 4.19 QUESTIONABLE PAYMENTS. To the Knowledge of Sellers and
BCGI, neither of the Sellers, BCGI nor any director or officer (or Person of
similar capacity) thereof has used any funds of the Sellers or BCGI for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, made any direct or indirect unlawful payments to government
officials or employees from corporate funds, established or maintained any
unlawful or unrecorded fund or corporate monies or other assets; made any false
or fictitious entries on the books or records of any such corporations, made any
bribe, payoff, kickback or other unlawful payment.
Section 4.20 COMPETING OR RELATED BUSINESS. Except as set forth on
Schedule 4.20, neither BCGI nor the Sellers have any direct or indirect interest
of any nature whatever in any Person which competes with, conducts any business
similar to, has any arrangement or agreement with, or is involved in any way
with, any business similar to the business of the Division being acquired
pursuant to the purchase of the Assets hereunder.
Section 4.21 COMPLIANCE WITH BULK SALES ACT; UNIFORM COMMERCIAL CODE.
The Sellers are not, on the effective date of Closing, indebted to or a debtor
of any Person except for the Assumed Liabilities. There are not, and will not
be, any creditors who can object to the transfer of the Assets under any
applicable Bulk Sales Act or the Uniform Commercial Code, or statutes of similar
import, if applicable.
Section 4.22 RECORDS.
(a) The record books of the Sellers contain complete and
accurate records of all actions taken by the boards of directors of the Sellers.
Complete and accurate copies of all the minute books of Wireless TeleServices
and Cellular have been made available by the Sellers to Purchaser. All officers
of the Sellers and BCGI have been properly elected.
(b) The accounting books and records of the Sellers and BCGI
with respect to the Division are complete and correct, have been maintained in
accordance with applicable Laws and good business practices and accurately
reflect the basis for the financial condition and results of operations of the
Division set forth in the Division Financial Statements.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT
Purchaser and Parent hereby jointly and severally represent and warrant
to the Sellers as follows:
Section 5.1 AUTHORIZATION AND VALIDITY. Each of Purchaser and Parent
has full corporate power and authority to execute and deliver this Agreement and
the other documents and instruments to be executed and delivered by Purchaser
and Parent pursuant hereto and to carry out their obligations hereunder and
thereunder. The execution, delivery and performance by Purchaser and Parent of
this Agreement and the other documents and instruments to be executed and
delivered by Purchaser and Parent pursuant hereto, and the consummation by
Purchaser and Parent of the transactions contemplated hereby and thereby have
been duly
29
authorized by all necessary corporate action on the part of Purchaser and
Parent, and no other corporate proceedings on the part of Purchaser or Parent
are necessary to authorize the execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Purchaser and
Parent pursuant hereto or the consummation of the transactions contemplated
hereby or thereby. This Agreement and the other documents and instruments to be
executed and delivered by Purchaser and Parent pursuant hereto have been duly
executed and delivered by Purchaser and Parent, and, assuming due execution and
delivery by each of the Sellers, as applicable, each constitutes a valid and
binding obligation of Purchaser and Parent enforceable against Purchaser and
Parent in accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Section 5.2 ORGANIZATION. Purchaser and Parent are corporations
organized under the laws of the State of Colorado and the State of Delaware,
respectively. Each of Purchaser and Parent is duly organized, validly existing
and in good standing and has full power and authority to carry on its business
as presently conducted.
Section 5.3 NO CONFLICT. Neither the execution, delivery or performance
by Purchaser or Parent of this Agreement nor the consummation of the
transactions contemplated hereby and compliance by Purchaser or Parent with any
of the provisions hereof or thereof will (i) conflict with or result in any
breach of any provision of the articles of incorporation or bylaws of Purchaser
or Parent, (ii) require any consent, approval or notice under, violate or result
in the violation of, conflict with or result in a breach of any provisions of,
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, accelerate the
performance required by or result in a right of termination or acceleration,
result in the loss of a material benefit under or result in the creation of any
Lien upon any of the properties or assets of Purchaser or Parent under any of
the terms, conditions or provisions of any material contractual obligation of
Purchaser or Parent or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation of any Governmental Authority applicable to
Purchaser or Parent or to which any of their properties or assets may be bound,
except in such case as would not materially impair or delay Purchaser or Parent
in the consummation of the transactions contemplated hereby.
Section 5.4 GOVERNMENTAL CONSENTS. Except for the filing and expiration
of the applicable waiting period required by the HSR Act, or the earlier
termination thereof, no consent, order or authorization of, or registration,
declaration or filing with, any Governmental Authority is required in connection
with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby by Purchaser.
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Section 5.5 BROKERS, FINDERS, ETC. Neither Purchaser nor Parent has
employed, nor is subject to the valid claim of, nor has Purchaser or Parent
incurred any liability that would be payable by Purchaser or Parent, for any
brokerage, finder's or other fees or commissions of any broker, finder or other
financial intermediary in connection with the transactions contemplated by this
Agreement.
ARTICLE VI
COVENANTS
Section 6.1 REASONABLE BEST EFFORTS.
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement, the Parties agree to use their reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, prior or advisable under any applicable Laws to
consummate and make effective the transactions contemplated by this Agreement as
promptly as practicable including, but not limited to (i) the preparation and
filing of all forms, registrations and notices required to be filed to
consummate the transactions contemplated by this Agreement and the taking of
such actions by any third party or Governmental Authority and (ii) the
satisfaction of the other Parties' conditions to Closing. In addition, no Party
hereto shall take any action after the date hereof that would reasonably be
expected to materially delay the obtaining of, or result in not obtaining, any
permission, approval or consent from any Governmental Authority necessary to be
obtained prior to Closing.
(b) Prior to the Closing, each Party shall promptly consult
with the other Parties hereto with respect to, provide any necessary information
with respect to and provide the other (or its counsel) copies of, all filings
made by such Party with any Governmental Authority or any other information
supplied by such Party to a Governmental Authority in connection with this
Agreement and the transactions contemplated by this Agreement. Each Party hereto
shall promptly inform the other of any communication from any Governmental
Authority regarding any of the transactions contemplated by this Agreement. If
any Party hereto or Affiliate thereof receives a request for additional
information or documentary material from any such Governmental Authority with
respect to the transactions contemplated by this Agreement, then such Party will
endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other Parties, an appropriate
response in compliance with such request. To the extent that transfers of
Permits are required as a result of execution of this Agreement or consummation
of the transactions contemplated hereby, the Sellers shall use their best
efforts to effect such transfers.
(c) Notwithstanding the foregoing, nothing in this Agreement
shall be deemed to restrict the conduct by the Parties or any of their
Affiliates of their businesses, including making any filings under applicable
laws necessary or appropriate in connection with any transaction or the
consummation of the transactions contemplated thereby, or require Purchaser,
Parent or any of their Affiliates to (i) enter into any agreement with any
Governmental Authority or to consent to any order, decree or judgment requiring
Purchaser, Parent or any of their Affiliates to hold separate or divest, or to
restrict the dominion or control of Purchaser, Parent or
31
any of their Affiliates over, any of the assets, properties of businesses of
Purchaser, Parent or any of their Affiliates or the Sellers, in each case as in
existence on the date hereof or (ii) defend against any litigation brought by
any Governmental Authority seeking to prevent the consummation of the
transactions contemplated hereby.
Section 6.2 CONDUCT OF BUSINESS. Except as expressly provided by this
Agreement or with the prior written consent of Purchaser and Parent, during the
period from the date of this Agreement to the Closing, BCGI and the Sellers
shall conduct the business of the Division only in the ordinary course of
business consistent with past practice (including paying all accounts payable in
accordance with past practice), and shall use their reasonable best efforts to
preserve intact the present business organization of the Division, keep
available the services of the present officers and employees serving the
Division, and preserve the material relationships with licensors, licensees,
agents, employees and any others having business dealings with the Division.
Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Agreement, the Sellers and BCGI shall not, prior to
the Closing Date, without the prior written consent of Purchaser:
(a) (i) sell, lease, transfer or dispose of any assets or
rights of or relating to the Division, other than assets or rights that
individually or in the aggregate would not be material, in either case, in the
ordinary course of business of the Division consistent with past practice, (ii)
incur any Lien thereupon, except for Liens incurred in the ordinary course of
business consistent with past practice which Liens would not in the aggregate be
material, (iii) acquire or lease any assets or rights of or relating to the
Division other than assets or rights that individually or in the aggregate would
not be material in the ordinary course of business consistent with past
practice, or (iv) enter into any commitment or transaction with respect to (i),
(ii) or (iii) above;
(b) (i) incur, assume or refinance any Indebtedness relating
to the Division or (ii) make any loans, advances or capital contributions to, or
investments in, any Person relating to the Division;
(c) pay, discharge or satisfy any liability, obligation, or
Lien of the Division, other than payment, discharge or satisfaction of (i)
Indebtedness as it matures and becomes due and payable, or (ii) liabilities,
obligations or Liens in the ordinary course of business consistent with past
practice;
(d) (i) change any of the accounting or tax principles,
practices or methods used by BCGI or the Sellers relating to the Division,
except as required by changes in applicable Tax Laws, or (ii) change reserve
amounts or policies;
(e) make any change in the compensation payable or to become
payable to any of the Division's officers, directors, employees, agents or
consultants (other than general increases in wages to employees who are not
officers or directors or Affiliates in the ordinary course consistent with past
practice), or to Persons providing management services, enter into or amend any
employment, severance, consulting, termination or other agreement or employee
benefit plan or make any loans to any of such officers, directors, employees,
Affiliates, agents or
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consultants or make any change in its existing borrowing or lending arrangements
for or on behalf of any of such Persons pursuant to an employee benefit plan or
otherwise;
(f) pay or make any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit pursuant to any existing
plan, agreement or arrangement to any officer, director, employee of the
Division or pay or agree to pay or make any accrual or arrangement for payment
to any officers, directors, employees of the Division of any amount relating to
unused vacation days, except payments and accruals made in the ordinary course
consistent with past practice, adopt of pay, grant, issue, accelerate or accrue
salary or other payments or benefits pursuant to any pension, profit-sharing,
bonus, extra compensation, incentive, deferred compensation, stock purchase,
stock option, stock appreciation right, group insurance, severance pay,
retirement or other employee benefit plan, agreement or arrangement, or any
employment or consulting agreement with or for the benefit of any such director,
officer, employee, agent or consultant, whether past or present, or amend in any
material respect any such existing plan, agreement or arrangement in a manner
consistent with the foregoing;
(g) enter into any collective bargaining agreement;
(h) make any payments (other than regular compensation payable
to officers and employees of any of the Sellers in the ordinary course
consistent with past practice), loans, advances or other distributions to, or
enter into any transaction, agreement or arrangement with, the Sellers'
Affiliates, officers, directors, employees, agents, consultants, stockholders of
their Affiliates, associates or family members affecting the Division;
(i) make or authorize any capital expenditures for the
Division, except in the ordinary course consistent with past practice not in
excess of $10,000 individually or $25,000 in the aggregate;
(j) incur any Taxes for the Division, except in the ordinary
course of business consistent with past practice;
(k) settle or compromise any Tax liability or agree to any
adjustment of any Tax attribute or make any election with respect to Taxes with
respect to the Division;
(l) fail to duly and timely file any Tax Return with the
appropriate Governmental Authorities required to be filed by it in a true and
complete and correct form or to timely pay all Taxes shown to be due thereon;
(m) (i) enter into, amend, renew or permit the automatic
renewal of, terminate or waive any right under, any Material Contract, or,
except in the ordinary course of business consistent with past practice, any
other agreement, or (ii) take any action or fail to take any action that, with
or without either notice or lapse of time, would constitute a default under any
Material Contract;
(n) (i) make any change in its working capital practices
generally, including accelerating any collections of cash or accounts receivable
or deferring payments or (ii) fail to
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make timely accruals, including with respect to accounts payable and liabilities
incurred in the ordinary course of business;
(o) fail to renew (at levels consistent with presently
existing levels), terminate or amend or fail to perform any of its obligations
or permit any material default to exist or cause any material breach under, or
enter into (except for renewals in the ordinary course of business consistent
with past practice), any material policy of insurance;
(p) dispose of or permit to lapse any material Intellectual
Property of the Division;
(q) except in the ordinary course of business consistent with
past practice pursuant to appropriate confidentiality agreements, and except as
required by any Law, any existing agreements set forth on Schedule 4.14 or as
may be reasonably necessary to secure or protect intellectual or other property
rights of BCGI and the Sellers, provide any confidential information of the
Division to any Person other than Purchaser or Parent; or
(r) take, or agree to take, any of the foregoing actions or
any action which would make any representation or warranty contained in this
Agreement untrue or incorrect, or which would reasonably be expected to prevent
the satisfaction of any condition to Closing set forth in Article VII hereof or
prevent or delay the consummation of the transactions contemplated by this
Agreement.
Section 6.3 ACCESS. The Sellers and BCGI shall permit Purchaser, Parent
and their representatives, for a period of two (2) years after the Closing, to
have full access, upon reasonable prior written notice, to the employees, books
and records of the Sellers and BCGI related to the Division for purposes of
preparing tax information of Purchaser or Parent, reviewing employment records
of the employees of the Division and conducting environmental assessments, and,
for a period of two (2) years after Closing, shall furnish, or cause to be
furnished, to Purchaser and Parent, such financial, Tax and operating data and
other available information with respect to such entities and their respective
assets, properties, employees, businesses and operations of the Division as
Purchaser or Parent shall from time to time reasonably request. In exercising
their right of access hereunder, Purchaser and Parent shall use reasonable
efforts to avoid undue disruption to the businesses of either of the Sellers or
BCGI. No investigation pursuant to this Section shall affect any representation
or warranty made by any of the Sellers or BCGI hereunder.
Section 6.4 FURTHER ASSURANCES. From and after the Closing Date, the
Sellers and BCGI shall promptly execute, acknowledge and deliver any other
assurances or documents reasonably requested by Purchaser to permit Purchaser to
satisfy its obligations hereunder or to evidence title, or to provide Purchaser
with the benefits enumerated in this Agreement. In furtherance of, and without
limitation with respect to the foregoing, BCGI and the Sellers shall use
reasonable best efforts from and after the Closing Date to assist Purchaser in
obtaining, or causing to be made or to occur, all consents, approvals, permits
or authorizations required to be obtained, declarations or filings required to
be made and waiting periods or terminations required to have occurred from or
with any Governmental Authority or third party in connection with the
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execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
Section 6.5 FINANCIAL STATEMENTS. The Sellers shall promptly prepare at
the end of each month and promptly, and in any event within twenty days of the
prior month's end, deliver to Purchaser the balance sheet, income statement and
statement of cash flows for the Division, prepared consistently with the
practices used in preparation of the Division Financial Statements, for each
month ended between the date of this Agreement and the Closing Date.
Section 6.6 PUBLIC DISCLOSURE; CONFIDENTIALITY.
(a) Each of the Parties agrees that, except as may be required
to comply with the requirements of any applicable Laws or stock exchange rules
(after consultation with the other Parties hereto), no press release or similar
public announcement or communication shall, prior to the Closing, be made or
caused to be made concerning the execution or performance of this Agreement
unless the other Parties shall have consented to such disclosure (such consent
not to be unreasonably withheld).
(b) Purchaser and Parent shall, prior to the Closing Date,
cause any confidential information of BCGI and the Sellers received pursuant to
this Agreement to be kept confidential and will not use such documents, work
papers and other materials in its business or in any other manner or for any
other purpose other than as contemplated hereby. The foregoing shall not
preclude Purchaser and Parent from (i) the use or disclosure of such information
which currently is known generally to the public or which subsequently has come
into the public domain, other than by way of disclosure by Purchaser or Parent
in violation of this Agreement, (ii) the use or disclosure of such information
that becomes available to Purchaser or Parent on a non-confidential basis from a
source other than BCGI, the Sellers or BCGI's or the Sellers' agents provided
that such source is not known by Purchaser or Parent to have a legal obligation
prohibiting the disclosure of such information, or (iii) the disclosure of such
information required by law or court order, provided that, to the extent
practicable, prior to such disclosure required by law or court order, Purchaser
or Parent shall give prior written notice, as is deemed reasonable under the
circumstances, to BCGI and the Sellers in order to give BCGI and the Sellers an
opportunity to seek judicial relief from such requirement.
(c) From and after the Closing Date, BCGI and the Sellers
shall keep confidential all confidential information relating to the Sellers or
the Assets. The foregoing shall not preclude BCGI or the Sellers from (i) the
use or disclosure of such information which currently is known generally to the
public or which subsequently has come into the public domain, other than by way
of disclosure by BCGI or the Sellers in violation of this Agreement or (ii) the
disclosure of such information to the extent required by law or court order,
provided that, to the extent practicable, prior to such disclosure required by
law or court order, BCGI and the Sellers will give Purchaser prior written
notice of the nature of the required disclosure.
Section 6.7 NO SOLICITATION. Neither BCGI, the Sellers nor any of their
Affiliates, or any of such Persons' officers, directors, employees,
stockholders, Affiliates, agents, or representatives (or any Persons of a
similar capacity) will, directly or indirectly, prior to
35
December 31, 2000: (i) solicit, initiate or encourage the submission of any
proposal or offer from any Person other than Purchaser or Parent, enter into or
continue any discussions or negotiations with, or provide any information to,
any Person other than Purchaser or Parent, relating to any (y) merger,
consolidation or other business combination involving the Division or (z)
acquisition or disposition of any material assets of or related to the Division
or (ii) in the event of an unsolicited offer by another Person with respect to
those matters referred to in subsection (y) and (z) above, engage in
negotiations or discussions with, or provide any information or data to, any
Person relating to such offer.
Section 6.8 UPDATING SCHEDULES. From time to time prior to the Closing,
the Sellers and BCGI shall promptly supplement or amend any of the Schedules
with respect to any matter, condition or occurrence hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in such Schedules. No supplement or amendment shall be
deemed to cure any breach of any representation or warranty made in this
Agreement or have any effect for the purpose of determining the satisfaction of
conditions set forth herein.
Section 6.9 TAXES. The Sellers and BCGI shall pay all Taxes arising out
of the transfer of the Assets and shall pay all Taxes in connection with the
Sellers' operations of the Division prior to the Closing. Purchaser shall pay
all Taxes in connection with Purchaser's operations of the Division after the
Closing. In addition, the Sellers and BCGI shall pay any and all Taxes in
connection with the Sellers' and BCGI's misfiling, non-filing or late filing of
any Tax Return. Purchaser shall not be responsible for any Taxes of the Sellers
or BCGI of any kind related to any period ending on or prior to the Closing. The
Sellers shall not be responsible for any Taxes of Purchaser or Parent of any
kind related to any period ending after the Closing.
Section 6.10 EMPLOYEE BENEFIT PLANS.
(a) Effective as of the end of the day immediately preceding
the Closing Date and except as otherwise provided in this Section, employees of
the Division who are hired by Purchaser ("New Employees") shall cease to be
covered by the Sellers' and BCGI's employee welfare benefit plans including,
without limitation, any Employee Welfare Benefit Plan, and any and all other
plans, programs, policies and arrangements which provide medical and dental
coverage, life and accident insurance, disability insurance and vacation pay
(the "Sellers' Welfare Plans"). The Sellers and BCGI shall be responsible for
all of the following claims incurred by New Employees under the Sellers' Welfare
Plans: (i) under any medical, dental or health plans for treatment or services
rendered prior to the Closing Date; (ii) under any life insurance plans with
respect to deaths occurring prior to the Closing Date and (iii) for any payments
or benefits arising prior to the Closing Date under any other of the Sellers'
Welfare Plans, except that the extent to which any and all such claims are
payable shall be determined by the provisions of the applicable Sellers' Welfare
Plan.
(b) The Sellers and BCGI, as applicable, maintain a defined
contribution profit-sharing plan with a cash or deferred arrangement (the
"Sellers' 401(k) Plan") that is intended to qualify under Sections 401(a) and
401(k) of the Code. The Sellers and BCGI, as applicable, shall retain
sponsorship of the Sellers' 401(k) Plan after the Closing Date and
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Purchaser shall not be entitled to any assets of the Sellers' 401(k) Plan.
Purchaser shall not assume any responsibility or liability for the Sellers'
401(k) Plan, and the Sellers and BCGI and the Sellers' 401(k) Plan shall remain
solely and entirely responsible for satisfying any and all obligations and
liabilities arising under the Sellers' 401(k) Plan. As of the Closing Date, the
accrued benefits under the Sellers' 401(k) Plan of all New Employees shall
become 100% vested and non-forfeitable. The accrued benefits of New Employees
under the Sellers' 401(k) Plan shall be distributed to the New Employees after
the Closing Date or held in accordance with the terms of the Sellers' 401(k)
Plan and the applicable provisions of the Code.
Section 6.11 EMPLOYEES. Purchaser hereby covenants and agrees that at
Closing it shall make offers of employment to each employee of the Sellers set
forth on Schedule 6.11 on terms and conditions substantially equivalent to those
provided by the Sellers as of the Closing Date; provided, however, that
Purchaser is not obligated in connection with such offers of employment to
provided for the grant of stock options or other equity incentives of Purchaser,
Parent or its Affiliates. For purposes of calculating an employee's right or
ability to participate in a benefit or other plan offered by Purchaser, credit
shall be given to such employee for the term of such employee's employment with
the Sellers.
Section 6.12 OPERATION OF BUSINESS POST CLOSING. For the period from
the Closing Date until the date on which no further Earn-Out Payments may be
earned hereunder, Purchaser and Parent shall not, except (i) as contemplated by
this Agreement, or (ii) without the prior written consent of the Sellers, which
consent shall not be unreasonably withheld or delayed:
(a) cancel or terminate, other than for cause, any Contract
set forth on Attachments 1 and 2 to the Assignment and Assumption of Contacts
Agreement or any other contract producing Qualifying Revenue, or any renewal,
amendment or modification thereof; or
(b) cease to operate the Business for reasons unrelated to
poor performance of the Business or a downturn generally in the market for
outsourced Teleservices Products and Services for wireless communications
carriers.
Section 6.13 INSURANCE. The Sellers and BCGI shall insure in sufficient
amounts the fixed assets of the Division against losses during the period from
the date of execution hereof through the Closing Date.
Section 6.14 COLLECTION OF QUALIFYING REVENUE. Parent and Purchaser
hereby agree to use commercially reasonable efforts to collect Qualifying
Revenue; provided, however, that such obligation does not require Parent of
Purchaser to commence legal proceedings in connection with such collection
efforts.
Section 6.15 NON-COMPETITION.
(a) Purchaser, Parent, BCGI and the Sellers agree that for the
period of three (3) years from the Closing Date, the Sellers and BCGI and their
respective Affiliates shall not (i) engage, directly or indirectly, in the
business of providing Teleservices Products and Services in competition with
Purchaser, Parent or their Affiliates, other than through a Person who becomes
37
an Affiliate of the Sellers or BCGI after the Closing Date as a result of a
corporate level type transaction not in violation of the following clause (ii),
(ii) enter into a strategic relationship or other corporate level type
transaction with a competitor of Purchaser, Parent or their Affiliates, which is
principally engaged in the provision of Teleservices Products and Services, or
(iii) bid, contract or enter into a similar arrangement with a competitor of
Purchaser, Parent or their Affiliates, which is principally engaged in the
provision of Teleservices Products and Services, with respect to business
involving both a customer billing and a Teleservices Products and Services
component, in each case without the prior written consent of Purchaser or
Parent. Notwithstanding the foregoing, the Sellers, BCGI and their Affiliates
may (x) enter into agreements or transactions with any Person not principally
engaged in the business of providing Teleservices Products and Services;
provided, however, that the nature of such agreement or transaction is not the
provision of Teleservices Products and Services and (y) provide billing
services, web-based care, IVR-based care, or other automated customer care
interfaces to applications which do not involve Teleservices Products and
Services which the Sellers and BCGI and their Affiliates are commercially
offering to third parties. Notwithstanding the foregoing, BCGI or either of the
Sellers may provide, either directly or indirectly, Teleservices Products and
Services to any Person that was the subject of a sales lead provided by BCGI to
Parent pursuant to the Strategic Relationship Agreement and which Parent has
rejected in accordance with Section 3 of Attachment 2 to the Strategic
Relationship Agreement, other than a rejection by Parent for the reason set
forth in subsection (iii) thereof. The provisions of this Section 6.15 shall
terminate and be of no further force or effect in the event that Purchaser and
Parent cease to operate the Business.
For the avoidance of doubt, a Person who is deemed to be principally
engaged in the provision of Teleservices Products and Services shall mean any
Person that derives 50% or more of its gross revenues from the sales of
Teleservices Products and Services, including, without limitation: Convergys,
Sitel, APAC, Sykes, Stream, ICT Group, RMH Teleservices, Attento (but
specifically excluding its parent Telefonica), West Teleservices, Telespectrum,
SR Teleperformance, Sento and Precision Response (but excluding its parent, USA
Networks.
(b) Notwithstanding anything to the contrary contained in this
Section 6.15, for the purposes of this Section 6.15, ownership of securities
having no more than five (5) percent of the outstanding voting power of any
competitor of Parent and Purchaser engaged in any business related to
Teleservices Products and Services which are listed on any national securities
exchange or traded actively in the national over-the-counter market shall not be
deemed to be in violation of this Section 6.15 so long as the person owning such
securities has no other connection or relationship with such competitor.
(c) Notwithstanding anything to the contrary contained in this
Section 6.15, neither BCGI nor the Sellers nor their respective Affiliates shall
solicit for the purpose of providing Telservices Products and Services, either
directly or indirectly, for the three-year-period provided in Section 6.15, any
Person who has produced Qualifying Revenue hereunder.
(d) The Sellers and BCGI acknowledge that irreparable injury
may be caused to Purchaser or Parent in the event of a breach of this Section
6.15 by the Sellers or BCGI and
38
that, in the event of such breach preliminary and permanent injunctive relief
would be available to Purchaser or Parent.
Section 6.16 PAYMENT OF ASSIGNMENT FEES. . If, in connection with the
assignment and assumption of the Contracts set forth on Attachment 3 to the
Assignment and Assumption of Contracts Agreement to the following vendors, IEX,
IMA Edge, Aspect, Kronos, Lucent and Nice, it is necessary to pay any fees or
penalties in connection with such assignments and assumptions, the Parties agree
as follows: (i) Parent and Purchaser will be obligated to pay the first $150,000
of such fees and penalties in the aggregate, (ii) Parent and Purchaser on the
one hand and the Sellers and BCGI on the other hand will be obligated to pay in
equal amounts any such fees and penalties in excess of $150,000 and up to
$500,000 and (iii) the Sellers and BCGI shall be obligated to pay any such fees
and penalties in excess of $500,000. Without limiting the generality of this
Section 6.16, the Parties shall make a joint effort to reduce the fees and
penalties incurred in connection with the assignment and assumption of the
Contracts set forth on Attachment 3 to the Assignment and Assumption of
Contracts Agreement; provided, however, that such joint effort shall not
abrogate the Sellers' or BCGI's obligations herein to obtain the consents from
the vendors named above to such assignments.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. The
obligations of each Party hereto to effect the Closing are subject to the
satisfaction (or waiver) at or prior to the Closing of the condition that no
temporary restraining order, preliminary or permanent injunction or other order
or decree which prevents the consummation of the transactions contemplated
hereby shall have been issued and remain in effect, and no statute, rule or
regulation shall have been enacted by any Governmental Authority which makes the
consummation of the transactions contemplated hereby illegal and the waiting
period under the HSR Act shall have expired or been earlier terminated.
Section 7.2 CONDITIONS TO THE OBLIGATIONS OF PURCHASER. The obligation
of Purchaser to effect the Closing is subject to the satisfaction (or waiver by
Purchaser) at or prior to the Closing, of the following conditions:
(a) REPRESENTATION AND WARRANTIES. The representations and
warranties of the Sellers and BCGI contained herein shall have been true and
correct in all material respects when made and shall be true and correct in all
material respects as of the Closing, as if made as of the Closing (except that
representations and warranties that are expressly made as of a specific date
need be true in all material respects only as of such date).
(b) COVENANTS. Each of the Sellers and BCGI shall have
performed in all respects the covenants and obligations required to be performed
by it on or prior to the Closing.
(c) NO MATERIAL ADVERSE EFFECT. There shall not have been, or
no event shall have occurred, which could reasonably be expected to result in a
Material Adverse Effect.
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(d) CERTIFICATES. The Sellers and BCGI shall have furnished
Purchaser with a certificate, dated the Closing Date, to the effect that the
conditions set forth in Sections 7.2(a), (b) and (c) have been satisfied.
(e) OPINION. The Sellers shall have furnished Purchaser with
the legal opinion of Ropes & Xxxx in the form attached hereto as EXHIBIT C and
otherwise reasonably satisfactory to Purchaser.
(f) LITIGATION. No Litigation shall have been commenced and be
continuing which seeks to prevent consummation of the transactions contemplated
hereby or which seeks material damages from Purchaser or Parent, in connection
with the transactions contemplated hereby.
(g) ASSIGNMENT AND ASSUMPTION OF CONTRACTS AGREEMENT. The
Sellers and BCGI shall have executed and delivered to Purchaser the Assignment
and Assumption of Contacts Agreement in the form attached hereto as EXHIBIT E
(the "Assignment and Assumption of Contracts Agreement").
(h) CONSENTS. All consents, approvals, permits or
authorizations required to be obtained, declarations or filings required to be
made and waiting periods or terminations required to have occurred prior to the
Closing from or with any Governmental Authority or third party in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, shall have been obtained, made or occurred.
The Sellers and BCGI shall have provided executed copies of the third party
consents required to be obtained in connection with the assignment to Purchaser
of the Material Contracts, including, but not limited to, those Contracts set
forth on the Attachments to the Assignment and Assumption of Contracts
Agreement.
(i) EMPLOYMENT OFFER LETTER. Each of the Hired Employees shall
have executed and delivered to Purchaser an Employment Offer Letter in the form
attached hereto as EXHIBIT B.
(j) TERMINATION OF EMPLOYMENT OF EMPLOYEES. Evidence
reasonably satisfactory to Purchaser that the Sellers and BCGI, as applicable,
shall have terminated the employment of each of the employees set forth on
Schedule 6.11 and paid such employees all vacation pay accrued through the
Closing Date.
(k) CONSENT OF DIRECTORS AND SHAREHOLDERS. The Sellers and
BCGI shall have provided copies of unanimous written consents and approvals of
this Agreement and all actions contemplated hereby by their respective Boards of
Directors and shareholders, as applicable.
(l) STRATEGIC RELATIONSHIP AGREEMENT. BCGI shall have entered
into that Strategic Relationship Agreement in the form attached hereto as
EXHIBIT D.
(m) CCST LICENSE AND MAINTENANCE AGREEMENTS. Cellular shall
have executed a CCST License Agreement and a CCST Maintenance Agreement in the
forms attached hereto as EXHIBIT F.
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(n) DISCLOSURE SCHEDULES. The Sellers and BCGI shall have
provided to Purchaser (i) Schedules 2.1(a), 2.1(a)(ii), 2.1(a)(iii), 2.1(c)(2),
2.2, 4.4, 4.7, 4.8(a), 4.8(c), 4.13(c), 4.13(d) and 4.13(h) hereto and (ii) each
of the attachments to the Assignment and Assumption of Contracts Agreement, all
of which shall be in form and substance satisfactory to Purchaser in its sole
discretion.
Section 7.3 CONDITIONS TO THE OBLIGATIONS OF THE SELLERS AND BCGI. The
obligations of the Sellers and BCGI to effect the Closing is subject to the
satisfaction (or waiver by the Sellers or BCGI) on or prior to the Closing, of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser and Parent contained herein shall have been true and
correct in all material respects when made and shall be true and correct in all
material respects as of the Closing, as if made as of the Closing (except that
representations and warranties that are expressly made as of a specific date
need be true in all material respects only as of such date).
(b) COVENANTS. Purchaser and Parent shall have performed in
all respects the covenants and obligations required to be performed by them at
or prior to the Closing.
(c) CERTIFICATE. Purchaser and Parent shall have furnished the
Sellers with a certificate dated the Closing Date, signed on their behalf by an
authorized signatory of Purchaser and of Parent, to the effect that the
conditions set forth in Sections 7.3(a) and (b) have been satisfied.
(d) LITIGATION. No Litigation shall have been commenced and
be continuing which seeks to prevent consummation of the transactions
contemplated hereby or which seeks material damages from the Sellers or any of
their Affiliates in connection with the transactions contemplated hereby.
(e) ASSIGNMENT AND ASSUMPTION OF CONTRACTS AGREEMENT.
Purchaser shall have executed and delivered to the Sellers and BCGI the
Assignment and Assumption of Contracts Agreement.
(f) CONSENTS. All consents, approvals, permits or
authorizations required to be obtained, declarations or filings required to be
made and waiting periods or terminations required to have occurred prior to the
Closing from or with any Governmental Authority or third party in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, shall have been obtained, made or occurred.
(g) CONSENT OF DIRECTORS. Purchaser shall have furnished the
Sellers with a copy of the unanimous written consent of this Agreement and all
actions contemplated hereby by its Board of Directors or a certificate
certifying to the foregoing.
(h) STRATEGIC RELATIONSHIP AGREEMENT. Parent shall have
entered into that certain Strategic Relationship Agreement in the form attached
hereto as EXHIBIT D.
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(i) CCST LICENSE AND MAINTENANCE AGREEMENTS. Purchaser shall
have executed a CCST License Agreement and a CCST Maintenance Agreement in the
forms attached hereto as EXHIBIT F.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
Section 8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by Purchaser in this Agreement shall
terminate on the second anniversary of the Closing Date. Each of the
representations and warranties made by the Sellers and BCGI in this Agreement
shall terminate on the second anniversary of the Closing Date; PROVIDED,
HOWEVER, that (i) the representation and warranty contained in Sections 4.10
shall survive the Closing until 90 days following the expiration of the
applicable statute of limitations and (ii) the representations and warranties
contained in Sections 4.1, 4.3 and 4.11 shall survive the Closing and remain in
full force and effect without termination. In the event notice of any claim for
indemnification under Section 8.2(a) hereof shall have been given within the
applicable survival period, the representations and warranties that are the
subject of such indemnification claim, and the indemnification obligations
related thereto, shall survive until such time as such claim is finally
resolved. The indemnification obligations of the Parties hereunder shall survive
for a period of two (2) years from the Closing Date; provided, however, that the
indemnification obligations of the Sellers and BCGI with respect to the breach
of representations and warranties set forth in Sections 4.1, 4.3, 4.10 and 4.11
shall survive until twelve (12) months after the Sellers are no longer entitled
to Earn-Out Payments hereunder. The covenants and agreements of the Parties set
forth in this Agreement shall survive until twelve (12) months after the Sellers
are no longer entitled to Earn-Out Payments hereunder, expect as expressly
provided herein.
Section 8.2 INDEMNIFICATION.
(a) Subject to the other provisions of this Article VIII, BCGI
and the Sellers shall, jointly and severally indemnify, defend, release and hold
harmless the Purchaser Indemnified Parties from and against any and all costs,
expenses, losses, damages and liabilities (including reasonable attorneys' fees
and expenses, but specifically excluding punitive damages and consequential
damages) ("Damages") suffered by any of the Purchaser Indemnified Parties to the
extent resulting from, arising out of, or incurred with respect to, or (in the
case of claims asserted against any of the Purchaser Indemnified Parties by a
third party) alleged to result from, arise out of or have been incurred with
respect to, (i) any breach of or inaccuracy in any representation or warranty as
of the Closing Date of any of BCGI or the Sellers contained in this Agreement;
(ii) any breach of any covenant of BCGI or any of the Sellers contained in this
Agreement; (iii) all Litigation relating to actions, omissions or events
occurring on or prior to the Closing Date; (iv) any act or omission of BCGI's or
the Sellers' employees, agents, directors or officers prior to the Closing Date;
(v) any Liabilities or obligations of BCGI or the Sellers which are not Assumed
Liabilities; (vi) any claim or other action arising under the Worker Adjustment
and Retraining Notification Act of 1988, as amended, in connection with the
Sellers' termination of those employees of the Sellers identified on Schedule
6.11 hereof; (vii) any liability, claim or other action arising out of any Law
relating to pollution, protection of the environment or
42
occupational safety and health arising out of or relating to the use, operation
or occupancy at any time on or prior to the Closing Date of the Real Property
set forth on Schedule 4.8(b) hereto in which the Sellers and BCGI has or had an
interest and (viii) those items of litigation set forth on Schedule 4.9 hereto.
(b) Subject to the other provisions of this Article VIII,
Purchaser and Parent shall, jointly and severally, indemnify, defend and hold
harmless the Seller Indemnified Parties to the extent resulting from and against
any and all Damages suffered by any of the Seller Indemnified Parties to the
extent resulting from, arising out of, or incurred with respect to, or (in the
case of claims asserted against any of the Seller Indemnified Parties by a third
party) alleged to result from, arise out of or have been incurred with respect
to, (i) any breach of or inaccuracy in any representation or warranty as of the
date made or as of the Closing Date of Purchaser or Parent contained in this
Agreement; (ii) any breach of any covenant of Purchaser or Parent contained in
this Agreement; (iii) all Litigation relating to actions, omissions or events
occurring after the Closing Date; (iv) any act or omission of Purchaser's or
Parent's employees, agents, directors or officers occurring after the Closing
Date; (v) the Assumed Liabilities; and (vi) any liability, claim or other action
arising out of any Law relating to pollution, protection of the environment or
occupational safety and health arising out of or relating to the use, operation
or occupancy at any time after the Closing Date of the Real Property set forth
on Schedule 4.8(b) hereto in which Purchaser has or had an interest.
(c) BCGI and the Sellers shall have no liability with respect
to Damages arising from an unintentional breach or inaccuracy of a
representation or warranty contained in Article IV until the aggregate amount of
such Damages exceed $200,000, after which BCGI and the Sellers shall be liable
under this Article VIII only for those Damages in excess thereof. In no event
shall the aggregate liability of BCGI and the Sellers hereunder (for
indemnification or otherwise) exceed, in the aggregate, the sum of the Purchase
Price plus any Earn-Out Payments or Earn-Out Adjustment Amounts earned pursuant
to Section 3.1 hereof; provided, however, in the event of fraud, intentional
misrepresentation or willful misconduct on the part of either of the Sellers or
BCGI, Purchaser and Parent shall have the right to recover Damages in excess of
the foregoing.
(d) Purchaser shall have no liability with respect to Damages
arising from an unintentional breach or inaccuracy of a representation or
warranty contained in Article V until the aggregate amount of such Damages
exceed $200,000, after which Purchaser and Parent shall be liable under this
Article VIII only for those Damages in excess thereof. In no event shall the
aggregate liability of Purchaser and Parent for Damages hereunder (for
indemnification or otherwise) exceed, in the aggregate, the sum of the Purchase
Price plus any Earn-Out Payments or Earn-Out Adjustment Amounts earned pursuant
to Section 3.1 hereof.
Section 8.3 NOTICE AND RESOLUTION OF THIRD PARTY CLAIM.
(a) An indemnified party under this Agreement shall promptly
give written notice to the indemnifying party after obtaining knowledge of any
third party claim or litigation against the indemnified party as to which
recovery may be sought against the indemnifying party because of the indemnity
set forth in Section 8.2, specifying in reasonable detail the claim or
43
litigation and the basis for indemnification; PROVIDED, HOWEVER, that the
failure of the indemnified party promptly to notify the indemnifying party of
any such matter shall not release the indemnifying party, in whole or in part,
from its obligations under this Article VIII except to the extent the
indemnified party's failure to so notify in breach of this paragraph (a)
materially prejudices the indemnifying party's ability to defend against such
third party claim or litigation. The indemnified party shall permit the
indemnifying party to assume the defense of any such claim, litigation or any
litigation resulting from such third party claim.
(b) If the indemnifying party assumes the defense of any such
third party claim or litigation, the obligations of the indemnifying party under
this Agreement shall include taking all steps necessary in the investigation,
defense or settlement of such claim or litigation (including the retention of
legal counsel) and holding the indemnified party harmless from and against any
and all losses caused by or arising out of any settlement approved by the
indemnifying party or any judgment in connection with such claim or litigation.
The indemnifying party shall not, in the defense of such claim or litigation,
consent to entry of any judgment (except with the written consent of the
indemnified party) or enter into any settlement (except with the written consent
of the indemnified party): (i) that does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the indemnified party a
complete release from, all liability in respect of such claim or litigation or
(ii) the effect of which is to permit any injunction, declaratory judgment,
other order or other equitable relief to be entered, directly or indirectly,
against any indemnified party. The indemnifying party shall permit the
indemnified party to participate in such defense or settlement through counsel
chosen by the indemnified party, with the fees and expenses of such counsel
borne by the indemnified party.
(c) Failure by the indemnifying party to notify the
indemnified party of its election to assume the defense of any such claim or
litigation by a third party within thirty (30) days after notice thereof has
been given to the indemnifying party shall be deemed a waiver by the
indemnifying party of its right to assume the defense of such claim or
litigation. If the indemnifying party does not assume the defense of such claim
or litigation by a third party, the indemnified party may defend or settle such
claim or litigation in such matter as the indemnified party may deem appropriate
and may settle such claim or litigation on such terms as it may deem
appropriate.
Section 8.4 SECURITY FOR THE SELLERS' INDEMNIFICATION OBLIGATION. As
security for the agreement by the Sellers and BCGI to indemnify and hold the
Purchaser Indemnified Parties harmless as described in Section 8.2 hereof, the
Purchaser Indemnified Parties shall be entitled to set off the amount of any
indemnifiable Damages against all or a portion of any Earn-Out Payment or an
Earn-Out Adjustment Amount that has been earned by Wireless TeleServices
pursuant to Sections 3.1(c) or 3.1(e) hereof but not yet paid by Purchaser.
Purchaser's right to effect a set off against any Earn-Out Payment or Earn-Out
Adjustment Amount, shall be limited to the amount of indemnifiable Damages
subject to such claim pursuant to Section 8.4(a), and the balance of the
Earn-Out Payment shall be paid to Wireless TeleServices in accordance with
Section 3.1 hereof.
44
(a) The Purchaser Indemnified Parties shall give written
notice to the Sellers of any matter as to which the Purchaser Indemnified
Parties are entitled to be indemnified, which notice shall set forth the amount
of indemnifiable Damages which the Purchaser Indemnified Parties claim to have
sustained by reason thereof.
(b) A setoff may be effected at any time after the later to
occur of the expiration of thirty (30) days from the date of such notice (the
"Notice of Contest Period") or, if the claim is contested, the date the dispute
is resolved.
(c) If, prior to the expiration of a Notice of Contest Period,
the Sellers shall notify the Purchaser Indemnified Parties in writing of an
intention to dispute the claim and if such dispute is not resolved within thirty
(30) days after expiration of such period (the "Resolution Period"), then such
dispute shall be resolved by a committee of three arbitrators (one appointed by
the Sellers, one appointed by the Purchaser Indemnified Parties and one
appointed by the other two so appointed), all of whom shall be appointed within
fifteen (15) days after the expiration of the Resolution Period. The arbitrators
shall abide by the rules of the American Arbitration Association, and their
decision shall be made within thirty (30) days following their appointment and
shall be final and binding on all Parties.
Section 8.5 OTHER INDEMNIFICATION PROVISION. The remedies
provided for in this Article VIII shall be in addition to and not in lieu of any
other remedies available to Purchaser, Parent or the Purchaser Indemnified
Parties under this Agreement or at law.
ARTICLE IX
TERMINATION
Section 9.1 TERMINATION. This Agreement may be terminated at any time
prior to Closing:
(a) by mutual agreement of the Parties;
(b) by Purchaser or Parent or by the Sellers, by giving
written notice of such termination to the other Parties, if the Closing shall
not have occurred on or prior to December 31, 2000; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 9.1(b) shall not be
available to any Party whose failure to perform any material covenant or
obligation under this Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date;
(c) by Purchaser or Parent or the Sellers by giving written
notice of termination to the other Parties, if there shall have been a material
breach of any of the covenants or agreements or any of the representations or
warranties set forth in this Agreement on the part of the other Party, which
breach is not cured within ten (10) days following written notice given by the
terminating Party to the Party committing such breach, or which breach, by its
nature, cannot be cured prior to the Closing; PROVIDED, HOWEVER, that the right
to terminate this Agreement under this Section 9.1(c) shall not be available if
at the time the terminating Party is
45
in material breach of any representation, warranty, covenant or other agreement
contained herein; or
(d) by Purchaser or Parent or the Sellers by written notice of
termination to the other Parties if any Governmental Authority of competent
jurisdiction shall have issued any statute, rule, regulation, order, decree or
injunction or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such
statute, rule, regulation, order, decree or injunction or other action shall
have become final.
Section 9.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement in accordance with Section 9.1 hereof, this Agreement shall
thereafter become void and have no effect, and no Party thereto shall have any
liability to any other Party hereto or any of its respective Affiliates,
directors, officers or employees, except for the obligations of the Parties
hereto contained in this Section 9.2 and in Sections 6.6, 10.1, 10.5, 10.6 and
10.8 hereof, and provided that nothing contained in this Section 9.2 shall
relieve any Party from liability for a breach of any provision of this
Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.1 NOTICES. All notices or other communications hereunder
shall be deemed to have been duly given and made if in writing and if served by
personal delivery upon the Party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by a national courier
service, or if sent by facsimile; PROVIDED, HOWEVER, that the facsimile is
promptly followed by telephone confirmation thereof to the appropriate person at
the address set forth below, or at such other address as may be designated in
writing hereafter, in the same manner, by such person.
To BCGI:
Boston Communications Group, Inc.
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
To Cellular:
Cellular Express, Inc.
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
46
To Wireless TeleServices:
Wireless TeleServices Corp.
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxxxx
To Parent:
TeleTech Holdings, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
To Purchaser:
TeleTech Holdings, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
One Xxxxx Center
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
47
Any such notice shall be deemed delivered (a) on the date delivered if
by personal delivery, (b) on the date upon which the return receipt is signed or
delivery is refused or the notice is designated by the postal authorities as a
not deliverable, as the case may be, if mailed by registered or certified mail,
(c) on the next succeeding business day if sent by national courier service, or
(d) on the date telecommunicated if by facsimile if confirmed by telephone
confirmation.
Section 10.2 AMENDMENT, WAIVER. Any provision of this Agreement may be
amended or waived if, and only if such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchaser and each Seller, or in the
case of a waiver, by the Party against whom the waiver is to be effective. No
failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
Section 10.3 ASSIGNMENT. Prior to the Closing Date, no Party to this
Agreement may assign any of its rights or obligations under this Agreement
without the prior written consent of the other Parties hereto; PROVIDED,
HOWEVER, that Purchaser may assign any of its rights and obligations hereunder
in whole or in part to any of its respective Affiliates without obtaining the
consent of the other Parties hereto. From and after the Closing Date, any Party
may assign its rights and obligations hereunder to a Person that acquires all or
substantially all of the stock or assets of such Party.
Section 10.4 ENTIRE AGREEMENT. This Agreement (including all Schedules
and Exhibits hereto) contains the entire agreement between the Parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, oral or written, with respect to such matters.
Section 10.5 PARTIES IN INTEREST. This Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective
successors and assigns. Nothing in this Agreement, express or implied, is
intended to confer upon any Person other than Purchaser, Parent, the Sellers or
their successors or assigns, any rights or remedies under or by reason of this
Agreement.
Section 10.6 EXPENSE. All costs and expenses incurred by Purchaser in
connection with this Agreement and the transactions contemplated hereby shall be
borne by Purchaser, and all costs and expenses incurred by the Sellers in
connection with this Agreement and the transactions contemplated hereby shall be
borne by the Sellers.
Section 10.7 GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS. This
Agreement shall be governed by the laws of the State of Colorado, its rules of
conflict of laws notwithstanding. Purchaser and each Seller hereby agree and
consent to be subject to the exclusive jurisdiction of the federal and state
courts of the State of Colorado or the Commonwealth of Massachusetts in any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby. Each Party hereby irrevocably consents to the service of
any and all process in any such suit, action or
48
proceeding by the delivery of such process to such Party at the address and in
the manner provided in Section 10.1
Section 10.8 SPECIFIC PERFORMANCE. The Parties hereto agree that if any
of the provisions of this Agreement are not performed in accordance with their
specific terms or are otherwise breached, irreparable damage would occur, no
adequate remedy at law would exist and damages would be difficult to determine,
and that the Parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
Section 10.9 TRANSFER AND SIMILAR TAXES. Notwithstanding any other
provision of this Agreement to the contrary, the Sellers shall assume and
promptly pay when due all sales, property, use, privilege, transfer,
documentary, gains, stamp, duties, recording and similar Taxes and fees
(including any penalties, interest or additions) imposed upon any Party incurred
in connection with the transactions contemplated by this Agreement.
Section 10.10 HEADINGS. The heading references herein and in the table
of contents hereto are for convenience purposes only, do not constitute a part
of this Agreement, and shall not be deemed to limit or affect any of the
provisions hereof.
Section 10.11 NON-SOLICITATION OF EMPLOYEES. For a period of four (4)
years from the Closing Date, neither Purchaser nor Parent on the one hand nor
the Sellers or BCGI on the other hand will hire, contract, or solicit the
employment of any current employee or former employee of the other party (the
"employer") for or on behalf of itself or any other person or entity, without
the prior written consent of the employer. The foregoing provision shall not be
applicable to Purchaser or Parent hiring the New Employees pursuant to the terms
hereof. With respect to former employees of an employer, the foregoing
provisions will not apply if such former employee was terminated by the employer
or a period of six (6) months has elapsed from the last date that such employee
was employed by the employer.
Section 10.12 OTHER SERVICES. The Sellers and BCGI shall make available
the services of Xxxxxxx XxXxxxxx, so long as she is employed by the Sellers or
BCGI, for consultation with Purchaser for up to 40 hours per week for a period
of six (6) months, following the Closing Date. Purchaser shall have the right to
request the services of Xxxxxxx XxXxxxxx and shall pay for all such services
requested at the rate of $78.13 per hour, payable monthly in arrears. If the
Purchaser requests that a retention package be offered to Xxxxxxx XxXxxxxx, then
the aforesaid rate shall be increased to reflect this cost. Nothing in this
Agreement shall require the Sellers to maintain the employment of Xxxxxxx
XxXxxxxx for the full time period referenced herein. The Sellers also agree to
provide office space, supplies and telephone for use by two employees of
Purchaser at the office of the Sellers as mutually agreed upon by the Parties
during the term of the Strategic Relationship Agreement. Purchaser agrees to pay
the Sellers the sum of $500.00 per month per employee for such services.
[SIGNATURE PAGES FOLLOW]
49
SIGNATURES
IN WITNESS WHEREOF, the Parties have executed or caused this Agreement
to be executed as of the date first written above.
TELETECH HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxx Xxxxx
--------------------------------------
Title: Treasurer
-------------------------------------
TELETECH CUSTOMER CARE MANAGEMENT
(COLORADO), INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxx Xxxxx
--------------------------------------
Title: Treasurer
-------------------------------------
BOSTON COMMUNICATIONS GROUP INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxx
--------------------------------------
Title: CFO
-------------------------------------
CELLULAR EXPRESS, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxx
--------------------------------------
Title: CFO
-------------------------------------
50
WIRELESS TELESERVICES CORP.
By: /s/ Xxxxx Xxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxx
--------------------------------------
Title: CFO
-------------------------------------
51
SCHEDULES
Schedule 2.1(a) Assets
Schedule 2.1(a)(i) Intellectual Property
Schedule 2.1(a)(ii) Contracts
Schedule 2.1(a)(iii) Computer Programs
Schedule 2.1(a)(v) Prepaid Charges
Schedule 2.1(a)(ix) Leasehold Interests
Schedule 2.1(a)(xi) Miscellaneous Assets
Schedule 2.1(c)(1) Assumed Liabilities
Schedule 2.1(c)(2) Assumed Liabilities - Agreements
Schedule 2.2 Excluded Assets
Schedule 2.3 Retained Equipment
Schedule 4.2 Subsidiaries
Schedule 4.4 No Conflict
Schedule 4.6(a) Division Financial Statements
Schedule 4.6(b) No Undisclosed Liabilities
Schedule 4.6(c) Forecasts and Projections
Schedule 4.7 Absence of Changes
Schedule 4.8(a) Liens
Schedule 4.8(b) Real Property
Schedule 4.8(c) Personal Property
Schedule 4.9(a) Litigation
Schedule 4.9(b) Licenses and Permits
Schedule 4.12 Material Contracts
Schedule 4.13(a) Intellectual Property
Schedule 4.13(c) Computer Programs
Schedule 4.13(d) Licenses Related to Intellectual Property
Schedule 4.13(h) Impairment of Intellectual Property
Schedule 4.14 Employee Benefits
Schedule 4.15 Labor Matters
Schedule 4.16 Franchise and License Arrangements
Schedule 4.17 Affiliate Transactions
Schedule 4.18 Brokers
Schedule 4.20 Competing Businesses
Schedule 6.11 Employees
EXHIBIT A
ALLOCATION OF CONSIDERATION
Prepaids and deposits
45,000
Property, plant and equipment 4,000,000
Goodwill 10,955,000
--------------------
Total Consideration 15,000,000
Less Assumed Liabilities 2,289,000
--------------------
Net Consideration $12,711,000
====================
EXHIBIT B
EMPLOYMENT OFFER LETTERS
EXHIBIT C
FORM OF LEGAL OPINION OF SELLERS' COUNSEL
[(a) Each of the Sellers and BCGI is validly existing as a
corporation, and in good standing as of the date of the [certificates] specified
in Paragraph _ above, under the laws of the State of Massachusetts. Each of
Sellers and BCGI has the corporate power and corporate authority under its
[articles] of incorporation and the ____ Corporation Law to own, lease and
operate its current properties and to transact the business in which it is
currently engaged. ________[name of individual] has the legal capacity to
execute the [Transaction Documents] and to consummate the transactions
contemplated thereby.
(b) Each of the Sellers and BCGI is authorized to transact
business as a foreign corporation in the States of ________,________ and _______
as of the respective dates of the [certificates] specified in Paragraph[s] __,__
and __ above. Each of the Sellers and BCGI is registered as a foreign company
under the laws of the States of_____,______and as of the respective dates of the
certificates specified in Paragraphs_____,_____and above.
(c) Each of the Sellers and BCGI has the power and authority
under its [articles] of incorporation and the ____ Corporation Law to execute
and deliver the [Transaction Documents] and to perform its obligations
thereunder. The execution, delivery and performance as of the date hereof by
each of the Sellers and BCGI of the [Transaction Documents] have been duly
authorized by all necessary corporate action of each of the Sellers and BCGI.
(d) The [Transaction Documents] have been duly executed and
delivered on behalf of each of the Sellers and BCGI and constitute a valid and
binding obligation of each of the Sellers and BCGI. Assuming _____ has such
legal capacity as described in Paragraph (a)
C-1
above, the [Transaction Documents] constitute a valid and binding obligation of
each of the Sellers and BCGI, enforceable in accordance with its terms.
(e) The execution, delivery and performance as of the date
hereof by each of the Sellers and BCGI of the [Transaction Documents] do not (i)
require any approval of their shareholders which has not been obtained, (ii)
violate the____Corporation Law, as amended or the [Articles] of Incorporation or
Bylaws of each of the Sellers or BCGI, (iii) violate any applicable federal or
state law, rule, regulation, order, judgment or decree, (iv) breach or
constitute a default under any agreement or contract to which each of the
Sellers or BCGI is a party or to which each of the Sellers or BCGI is subject or
(v) result in the creation of any lien upon any of the properties of the Sellers
and BCGI pursuant to any of the foregoing.
(f) No approval or consent of, or registration or filing is
required to be obtained or made by the Sellers or BCGI in connection with the
execution, delivery by the Sellers and BCGI of the [Transaction Documents other
than __________________, which approvals have been obtained.]
C-2
EXHIBIT D
STRATEGIC RELATIONSHIP AGREEMENT
EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF CONTRACTS AGREEMENT
EXHIBIT F
CCST LICENSE AND MAINTENANCE AGREEMENTS
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND TERMS........................................................1
Section 1.1 Certain Definitions..............................................1
Section 1.2 Terms Generally..................................................8
ARTICLE II ACQUISITION AND DISPOSITION OF ASSETS.......................................9
Section 2.1 Purchase and Sale of Assets......................................9
Section 2.2 Excluded Assets.................................................10
Section 2.3 Nondelivered Assets.............................................11
Section 2.4 No Assignment If Breach.........................................11
ARTICLE III PAYMENT AND DELIVERY......................................................11
Section 3.1 Purchase Price; Allocation; Earn-out............................11
Section 3.2 Closing.........................................................14
Section 3.3 Deliveries by the Sellers.......................................14
Section 3.4 Deliveries by Purchaser.........................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS..............................16
Section 4.1 Authorization and Validity......................................16
Section 4.2 Subsidiaries....................................................16
Section 4.3 Organization....................................................16
Section 4.4 No Conflict.....................................................17
Section 4.5 Governmental Consents...........................................17
Section 4.6 Financial Statements; No Undisclosed Liabilities; Forecasts.....17
Section 4.7 Absence of Certain Changes or Events............................18
Section 4.8 Property, Assets................................................20
Section 4.9 Litigation and Claims, Compliance With Laws.....................21
Section 4.10 Taxes...........................................................22
Section 4.11 Environmental Matters...........................................22
Section 4.12 Material Contracts..............................................22
Section 4.13 Intellectual Property...........................................24
Section 4.14 Employee Benefits; Erisa........................................26
Section 4.15 Labor Matters...................................................27
Section 4.16 Franchise and Other Relationships...............................28
Section 4.17 Affiliate Transactions..........................................28
Section 4.18 Brokers, Finders, Etc...........................................28
Section 4.19 Questionable Payments...........................................29
Section 4.20 Competing or Related Business...................................29
Section 4.21 Compliance With Bulk Sales Act; Uniform Commercial Code.........29
Section 4.22 Records.........................................................29
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER.................................29
Section 5.1 Authorization and Validity......................................29
i
Section 5.2 ORGANIZATION....................................................30
Section 5.3 NO CONFLICT.....................................................30
Section 5.4 GOVERNMENTAL CONSENTS...........................................30
Section 5.5 BROKERS, FINDERS, ETC...........................................31
ARTICLE VI COVENANTS...................................................................31
Section 6.1 REASONABLE BEST EFFORTS.........................................31
Section 6.2 CONDUCT OF BUSINESS.............................................32
Section 6.3 ACCESS..........................................................34
Section 6.4 FURTHER ASSURANCES..............................................34
Section 6.5 FINANCIAL STATEMENTS............................................35
Section 6.6 PUBLIC DISCLOSURE; CONFIDENTIALITY..............................35
Section 6.7 NO SOLICITATION.................................................35
Section 6.8 UPDATING SCHEDULES..............................................36
Section 6.9 TAXES...........................................................36
Section 6.10 EMPLOYEE BENEFIT PLANS..........................................36
Section 6.11 EMPLOYEES.......................................................37
Section 6.12 OPERATION OF BUSINESS POST CLOSING..............................37
Section 6.13 INSURANCE.......................................................37
Section 6.14 COLLECTION OF QUALIFYING REVENUE................................37
Section 6.15 NON-COMPETITION.................................................37
Section 6.16 PAYMENT OF ASSIGNMENT FEES......................................39
ARTICLE VII CONDITIONS TO CLOSING.....................................................39
Section 7.1 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES....................39
Section 7.2 CONDITIONS TO THE OBLIGATIONS OF PURCHASER......................39
Section 7.3 CONDITIONS TO THE OBLIGATIONS OF THE SELLERS AND BCGI...........41
ARTICLE VIII SURVIVAL AND INDEMNIFICATION.............................................42
Section 8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES......................42
Section 8.2 INDEMNIFICATION.................................................42
Section 8.3 NOTICE AND RESOLUTION OF THIRD PARTY CLAIM......................43
Section 8.4 SECURITY FOR THE SELLERS' INDEMNIFICATION OBLIGATION............44
Section 8.5 OTHER INDEMNIFICATION PROVISION.................................45
ARTICLE IX TERMINATION.................................................................45
Section 9.1 TERMINATION.....................................................45
Section 9.2 EFFECT OF TERMINATION...........................................46
ARTICLE X MISCELLANEOUS................................................................46
Section 10.1 NOTICES.........................................................46
Section 10.2 AMENDMENT, WAIVER...............................................48
Section 10.3 ASSIGNMENT......................................................48
Section 10.4 ENTIRE AGREEMENT................................................48
Section 10.5 PARTIES IN INTEREST.............................................48
Section 10.6 EXPENSE.........................................................48
Section 10.7 GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS.................48
Section 10.8 SPECIFIC PERFORMANCE............................................49
ii
Section 10.9 TRANSFER AND SIMILAR TAXES......................................49
Section 10.10 HEADINGS........................................................49
Section 10.11 NON-SOLICITATION OF EMPLOYEES...................................49
Section 10.12 OTHER SERVICES..................................................49
Exhibits
A. Allocation of Consideration
B. Employment Offer Letter
C. Legal Opinion of Sellers' Counsel
D. Strategic Relationship Agreement
E. Assignment and Assumption Agreement
F. CCST License and Maintenance Agreements
iii
