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AGREEMENT AND PLAN OF MERGER
by and among
XXXXXXX AMERICAN CORPORATION,
RICHMONT MARKETING SPECIALISTS INC.
and
THE STOCKHOLDERS OF
RICHMONT MARKETING SPECIALISTS INC.
Dated as of April 28, 1999
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TABLE OF CONTENTS
Page
ARTICLE 1. THE MERGER.....................................................2
1.1 The Merger.....................................................2
1.2 The Closing....................................................2
1.3 Effective Time.................................................2
1.4 Ancillary Agreements...........................................2
1.5 Certificate of Incorporation and Bylaws of the Surviving
Corporation....................................................3
1.6 Board of Directors of Surviving Corporation....................3
1.7 Officers of Surviving Corporation..............................4
1.8 Change of Name.................................................4
ARTICLE 2. EXCHANGE OF STOCK..............................................4
2.1 Outstanding Common Stock of Xxxxxxx............................4
2.2 Conversion of RMSI Stock.......................................4
2.3 Lost or Stolen Certificates....................................7
2.4 Dissenters' Rights.............................................7
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF RMSI.........................8
3.1 Existence; Good Standing; Authority; Compliance With Law.......8
3.2 Authorization, Validity and Effect of Agreements...............9
3.3 Capital Stock of RMSI.........................................10
3.4 Real Property.................................................10
3.5 Contracts.....................................................12
3.6 Transactions with Interested Persons..........................13
3.7 Employee Benefit Programs.....................................13
3.8 Intentionally Omitted.........................................16
3.9 No Payments to Employees, Officers and Directors..............16
3.10 Taxes.........................................................16
3.11 Tax-Free Treatment............................................18
3.12 Proxy Statement...............................................18
3.13 SEC Documents.................................................18
3.14 No Brokers....................................................19
3.15 Litigation....................................................19
3.16 Absence of Certain Changes....................................19
3.17 Disclosure....................................................19
3.18 Undisclosed Liabilities.......................................20
3.19 Customers and Principals......................................20
3.20 Receivables...................................................20
3.21 Definition of RMSI's Knowledge................................20
3.22 Ownership of Xxxxxxx Common Stock.............................20
ARTICLE 4. INVESTMENT REPRESENTATIONS AND WARRANTIES OF THE RMSI
STOCKHOLDERS..........................................................21
4.1 Investment Representations....................................21
4.2 Registration..................................................21
4.3 Ownership of Xxxxxxx Common Stock.............................22
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF XXXXXXX.....................22
5.1 Existence; Good Standing; Authority; Compliance With Law......22
5.2 Authorization, Validity and Effect of Agreements..............23
5.3 Capital Stock of Xxxxxxx......................................24
5.4 Real Property. ...............................................25
5.5 Contracts.....................................................26
5.6 Transactions with Interested Persons..........................27
5.7 Employee Benefit Programs.....................................27
5.8 Intentionally Omitted.........................................29
5.9 No Payments to Employees, Officers and Directors..............29
5.10 Taxes.........................................................29
5.11 Tax-Free Treatment............................................31
5.12 Proxy Statement...............................................31
5.13 SEC Documents.................................................31
5.14 No Brokers....................................................32
5.15 Litigation....................................................32
5.16 Absence of Certain Changes....................................32
5.17 Disclosure....................................................32
5.18 Undisclosed Liabilities.......................................33
5.19 Customers and Principals......................................33
5.20 Receivables...................................................33
5.21 Definition of Xxxxxxx'x Knowledge.............................33
5.22 Opinion of Financial Advisor..................................33
ARTICLE 6. COVENANTS.....................................................34
6.1 Acquisition Proposals.........................................34
6.2 Conduct of Businesses.........................................36
6.3 Meeting of Stockholders.......................................39
6.4 Filings; Other Action.........................................39
6.5 Access to Information.........................................40
6.6 Publicity.....................................................41
6.7 Proxy Statement...............................................41
6.8 Listing Application...........................................42
6.9 Further Action................................................42
6.10 Affiliates of RMSI............................................43
6.11 Expenses......................................................43
6.12 Notice of Default.............................................43
6.13 Filings Under Xxxx-Xxxxx-Xxxxxx Act...........................44
6.14 Tax-Free Treatment............................................44
6.15 Nonsolicitation...............................................44
6.16 Financing.....................................................45
6.17 RMSI Employees................................................45
6.18 Exchange Offer Registration Statement.........................45
6.19 Option Registration Statement.................................46
6.20 Ancillary Agreements..........................................46
6.21 Spousal Consent...............................................47
ARTICLE 7. CONDITIONS....................................................47
7.1 Conditions to Each Party's Obligation to Effect the Merger....47
7.2 Conditions to Obligations of RMSI to Effect the Merger........48
7.3 Conditions to Obligation of Xxxxxxx to Effect the Merger......49
ARTICLE 8. TERMINATION; AMENDMENT; WAIVER................................50
8.1 Termination...................................................50
8.2 Effect of Termination.........................................51
8.3 Extension; Waiver.............................................51
ARTICLE 9. GENERAL PROVISIONS............................................52
9.1 Nonsurvival of Representations, Warranties and Agreements.....52
9.2 Notices.......................................................52
9.3 Assignment; Binding Effect; Benefit...........................53
9.4 Entire Agreement..............................................53
9.5 Amendment.....................................................54
9.6 Governing Law.................................................54
9.7 Counterparts..................................................54
9.8 Headings......................................................54
9.9 Interpretation................................................54
9.10 Waivers.......................................................54
9.11 Incorporation.................................................55
9.12 Severability..................................................55
9.13 Enforcement of Agreement......................................55
9.14 Certain Definitions...........................................55
EXHIBITS
Exhibit A Certificate of Merger
Exhibit B-1 Form of Xxxxxxx Voting Agreement
Exhibit B-2 Form of RMSI Voting Agreement
Exhibit C-1 Form of Charter Amendment for Changes to Board of Directors
Exhibit C-2 Form of Charter Amendment for Name Change
Exhibit D Form of Affiliate Letter
Exhibit E Form of SMART Cancellation Consent
Exhibit F Form of Spousal Consent
Exhibit G Form of Post-Merger Voting Agreement
Exhibit H Form of Advisory Agreement
Exhibit I-1 Registration Rights Agreement for RMSI Stockholders
Exhibit I-2 Form of Registration Rights Agreement for Xxxxxxx Stockholders
SCHEDULES
Schedule 7.2(g) List of Xxxxxxx Required Consents
Schedule 7.3(i) List of RMSI Required Consents
Schedule 6.2(a)(xiii) Pending Transactions
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), is made and
entered into as of April 28, 1999, by and among Xxxxxxx American
Corporation, a Delaware corporation ("Xxxxxxx"), Richmont Marketing
Specialists Inc., a Delaware corporation ("RMSI"), and MS Acquisition
Limited, a Texas limited partnership, Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx,
Xxxx X. Xxxxxx and Xxxxxxx X. Xxxx (collectively, the "RMSI Stockholders").
RECITALS
WHEREAS, the boards of directors of Xxxxxxx and RMSI have each
determined that it is advisable and in the best interests of their
respective stockholders to consummate, and have approved, the business
combination transaction provided for herein in which RMSI would merge with
and into Xxxxxxx and Xxxxxxx would be the surviving corporation (the
"Merger");
WHEREAS, the boards of directors of Xxxxxxx and RMSI, respectively,
have determined that the Merger is in the best interests of their
respective companies and presents an opportunity for their respective
companies to achieve long-term strategic and financial benefits, and
accordingly have agreed to effect the transactions provided for herein upon
the terms and subject to the conditions set forth herein;
WHEREAS, contemporaneously with the execution of this Agreement, the
RMSI Stockholders are entering into an agreement with Xxxxxxx in which they
have agreed to vote their shares of common stock, par value $.01 per share,
of RMSI ("RMSI Common Stock") subject to the terms contained therein;
WHEREAS, contemporaneously with the execution of this Agreement,
Monroe & Company II, LLC, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxx, Xxxxxxx X.
Xxxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx, Xx. and Xxxxxx X. Xxxxxx
(the "Management Stockholders"), are entering into an agreement with RMSI
in which they have agreed to vote their shares of common stock, par value
$.01 per share, of Xxxxxxx ("Xxxxxxx Common Stock") and their shares of
restricted common stock, par value $.01 per share, of Xxxxxxx ("Xxxxxxx
Restricted Common Stock"), subject to the terms contained therein; and
WHEREAS, Xxxxxxx, RMSI and the RMSI Stockholders desire to make
certain representations, warranties and agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound, the parties hereto hereby agree as follows:
ARTICLE 1. THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as hereinafter defined), RMSI shall be
merged with and into Xxxxxxx in accordance with this Agreement, and the
separate corporate existence of RMSI shall thereupon cease. Xxxxxxx shall
be the surviving corporation in the Merger (sometimes hereinafter referred
to as the "Surviving Corporation"). The Merger shall have the effect
specified in Section 259 of the Delaware General Corporation Law (the
"DGCL"). It is intended that the Merger will qualify as a reorganization
under Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"). All of the parties to this Agreement agree to report the Merger,
for all purposes, in a manner which is consistent with the preceding
sentence.
1.2 The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at
the offices of Xxxxxxx, Procter & Xxxx LLP, Exchange Place, Boston,
Massachusetts, at 10:00 a.m., local time, on the date which is the first
business day immediately following the day on which the last of the
conditions set forth in Article 7 shall be fulfilled or waived in
accordance herewith, or at such other time, date or place as the parties
hereto may agree. Unless the parties shall otherwise agree, the parties
shall use their reasonable best efforts to cause the Closing to occur as
soon as possible after the meetings of stockholders of RMSI and Xxxxxxx
held pursuant to Section 6.3. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."
1.3 Effective Time. If all of the conditions to the Merger set forth
in Article 7 shall have been fulfilled or waived in accordance herewith and
this Agreement shall not have been terminated as provided in Article 8, the
parties hereto shall promptly cause a Certificate of Merger satisfying the
requirements of the DGCL and in substantially the form attached hereto as
Exhibit A (the "Certificate of Merger"), to be properly executed, verified
and delivered for filing in accordance with the DGCL on the Closing Date.
The Merger shall become effective upon the filing of the Certificate of
Merger with the office of the Secretary of State of the State of Delaware
in accordance with the DGCL or at such later time which the parties hereto
shall have agreed upon and designated in such filing in accordance with
applicable law as the effective time of the Merger (the "Effective Time").
1.4 Ancillary Agreements. As an inducement to Xxxxxxx and RMSI to
enter into this Agreement, the following agreements are being executed
contemporaneously with the execution of this Agreement: the voting
agreement dated as of the date hereof by and among Xxxxxxx and the each of
the RMSI Stockholders in the form attached hereto as Exhibit B-1 (the "RMSI
Voting Agreement") and the voting agreement by and among RMSI and each of
the Management Stockholders in the form attached hereto as Exhibit B-2 (the
"Xxxxxxx Voting Agreement"). In addition, Xxxxxxx agrees to use
commercially reasonable efforts to obtain a Voting Agreement in the form
attached hereto as Exhibit B-2 from Xxxxxx X. Xxxxxxx, the Xxxxxx X.
Xxxxxxx 1984 Revocable Trust and the Xxxxxx X. Xxxxxxx 1991 Charitable
Remainder Unitrust.
1.5 Certificate of Incorporation and Bylaws of the Surviving
Corporation.
(a) Charter. The Second Amended and Restated Certificate of
Incorporation of Xxxxxxx in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation, as
amended as provided in Sections 1.6(b) and 1.8 of this Agreement and until
duly amended in accordance with applicable law and such certificate of
incorporation (the "Surviving Corporation Charter").
(b) Bylaws. The bylaws of Xxxxxxx in effect immediately prior
to the Effective Time shall be the bylaws of the Surviving Corporation,
until duly amended in accordance with applicable law, the Surviving
Corporation Charter and such bylaws.
1.6 Board of Directors of Surviving Corporation.
(a) As of the Effective Time, the number of directors of
Xxxxxxx shall be fixed at nine (9). As of the Effective Time, four (4) of
the directors of Xxxxxxx shall be Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx III,
Xxxxx X. Xxxxxx and Xxxxx X. Xxxxxxxxxxx (the foregoing four (4)
individuals being referred to herein collectively as the "Xxxxxxx
Designees"). As of the Effective Time, the remaining five (5) directors of
Xxxxxxx shall be Xxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxxxx X. Xxxx and Xxxxxx
X. Xxxxxxxx and one (1) individual (the "Independent Director") designated
by RMSI prior to the Effective Time who shall not be an employee of either
RMSI or Xxxxxxx and shall otherwise be reasonably acceptable to Xxxxxxx
(the foregoing five (5) individuals being referred to herein collectively
as the "RMSI Designees").
(b) At the Effective Time, the Second Amended and Restated
Certificate of Incorporation of Xxxxxxx shall be amended as set forth in
Exhibit C-1 attached hereto (the "Board Amendment") so that the Board of
Directors of Xxxxxxx shall be divided into three (3) classes, and the
directors of each class of the Board of Directors of Xxxxxxx shall be as
follows (subject to the provisions of this Section 1.6):
Class Designee Term Expires
I Xxxxxx X. Xxxxxxxx 2000
I Xxxxxxx X. Xxxx 2000
I Xxxxx X. Xxxxxxxxxxx 2000
II Xxxx X. Xxxxxx 2001
II Xxxxxx X. Xxxxxxx 2001
II Xxxxxx X. Xxxxx III 2001
III Xxxx X. Xxxxxx 2002
III Xxxxx X. Xxxxxx 2002
III Independent Director 2002
(c) Xxxxxxx and RMSI agree that in the event that any Xxxxxxx
Designee is unable or otherwise fails to serve, for any reason, as a
director of Xxxxxxx at the Effective Time, Xxxxxxx shall have the right to
designate another individual to serve as a director of Xxxxxxx at the
Effective Time in place of such Xxxxxxx Designee (or if a vacancy shall be
deemed to have occurred in respect thereof, Xxxxxxx shall have the right to
fill such vacancy, notwithstanding any other provision to the contrary
contained herein); provided, however, that such individual shall be
reasonably satisfactory to RMSI. Xxxxxxx and RMSI shall each cause such
designee of Xxxxxxx to be elected to the Board of Directors of Xxxxxxx at
the Effective Time in place of such Xxxxxxx Designee.
(d) Xxxxxxx and RMSI agree that in the event that any RMSI
Designee is unable or otherwise fails to serve, for any reason, as a
director of Xxxxxxx at the Effective Time, RMSI shall have the right to
designate another individual to serve as a director of Xxxxxxx at the
Effective Time in place of such RMSI Designee (or if a vacancy shall be
deemed to have occurred in respect thereof, RMSI shall have the right to
fill such vacancy, notwithstanding any other provision to the contrary
contained herein); provided, however, that such individual shall be
reasonably satisfactory to Xxxxxxx. Xxxxxxx and RMSI shall each cause such
designee of RMSI to be elected to the Board of Directors of Xxxxxxx at the
Effective Time in place of such RMSI Designee.
1.7 Officers of Surviving Corporation. At the Effective Time, the
officers of Xxxxxxx shall include, but not be limited to, Xxxxxx X.
Xxxxxxxx, who shall be Chairman of the Board of Directors, Xxxxxx X.
Xxxxxxx, who shall be Chief Executive Officer and President, Xxxxx X.
Xxxxxx, who shall be Chief Operating Officer, Xxxxxx X. Xxxxx, who shall be
Chief Financial Officer, Xxxxxxx X. Xxxxxxxx, who shall be Executive Vice
President--Sales, and Xxxxxxx Xxxx, who shall be an Executive Vice
President--New Business Development.
1.8 Change of Name. At the Effective Time, Article I of the Second
Amended and Restated Certificate of Incorporation of Xxxxxxx shall be
amended to change the name of the Surviving Corporation to "Marketing
Specialists Corporation" as set forth in Exhibit C-2 attached hereto.
ARTICLE 2. EXCHANGE OF STOCK
2.1 Outstanding Common Stock of Xxxxxxx. At and after the Effective
Time, each share of Xxxxxxx Common Stock outstanding immediately prior to
the Effective Time shall remain outstanding.
2.2 Conversion of RMSI Stock.
(a) The maximum aggregate number of shares of Xxxxxxx Common Stock
issuable to the holders of RMSI Common Stock in the Merger shall be
6,705,551. At the Effective Time, each share of RMSI Common Stock issued
and outstanding immediately prior to the Effective Time (other than those
shares of RMSI Common Stock to be canceled pursuant to Section 2.2(c) below
and except as otherwise provided in Section 2.4 below with respect to
Dissenting Shares (as defined below)) shall, by virtue of the Merger and
without any action on the part of Xxxxxxx or RMSI or the holders of any of
the securities of either of such corporations, be converted into that
number of fully paid and nonassessable shares of Xxxxxxx Common Stock equal
to the quotient (the "Exchange Ratio") obtained by dividing (i) 6,705,551
by (ii) the total number of shares of RMSI Common Stock issued and
outstanding immediately prior to the Effective Time; provided, however,
that no fractional shares of Xxxxxxx Common Stock shall be issued pursuant
hereto. In lieu of the issuance of any fractional shares of Xxxxxxx Common
Stock pursuant to this Agreement, each holder of RMSI Common Stock upon
surrender of a certificate representing ownership of RMSI Common Stock for
exchange shall be paid an amount in cash (without interest), rounded to the
nearest cent, determined by multiplying (i) the average closing price of
Xxxxxxx Common Stock on the Nasdaq National Market on the five (5) trading
days immediately preceding the second day prior to the Closing Date by (ii)
the fractional amount of the shares which such holder would otherwise be
entitled to receive under this Article 2. The term "Merger Consideration"
shall mean the total number of shares of Xxxxxxx Common Stock to be issued
to holders of RMSI Common Stock in the Merger, together with the total
amount of cash delivered in lieu of fractional shares pursuant to this
Section 2.2(a).
(b) As a result of the Merger and without any action on the
part of the holders thereof, all shares of RMSI Common Stock shall cease to
be outstanding, shall be canceled and retired and shall cease to exist and
each holder of a certificate (a "Certificate" and, collectively, the
"Certificates") representing any shares of RMSI Common Stock (other than
those shares of RMSI Common Stock to be canceled pursuant to Section 2.2(c)
below and except as otherwise provided in Section 2.4 below with respect to
Dissenting Shares (as defined below)) shall thereafter cease to have any
rights with respect to such shares of RMSI Common Stock, except, without
interest, such holder's proportionate share of the Merger Consideration in
accordance with Section 2.2(a) upon the surrender of such Certificate.
(c) Each share of RMSI Common Stock issued and held in RMSI's
treasury or owned by Xxxxxxx immediately prior to the Effective Time, if
any, by virtue of the Merger shall cease to be outstanding, shall be
canceled and retired and shall cease to exist and no payment of any
consideration shall be made with respect thereto.
(d) At the Effective Time, the stock transfer books of RMSI shall be
closed, and there shall be no further registration of transfers of shares
of RMSI Common Stock thereafter on the records of RMSI. If, after the
Effective Time, Certificates are presented for transfer, they shall be
canceled against delivery of the Merger Consideration as hereinabove
provided and the holder of such Certificates shall also be entitled to
receive any and all dividends and distributions (whether in the form of
cash, stock or otherwise) payable in respect of the Merger Consideration
with a record date after the Effective Time and prior to the cancellation
of such Certificates. Certificates surrendered for exchange by any person
constituting an "affiliate" of RMSI for purposes of Rule 145, as such rule
may be amended from time to time ("Rule 145"), of the rules and regulations
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), shall not be exchanged until Xxxxxxx has received an affiliate
letter in the form attached hereto as Exhibit D (the "Affiliate Letter")
from such person.
(e) At the Effective Time, and subject to the consent of the holder
thereof, RMSI's obligations with respect to each senior management
appreciation right (collectively, the "SMARTs") outstanding immediately
prior to the Effective Time shall be canceled and, in exchange therefor,
the holders of such SMARTs shall be entitled to receive incentive options
to purchase shares of Xxxxxxx Common Stock issued pursuant to Xxxxxxx'x
Amended and Restated 1998 Stock Option and Incentive Plan (such plan, the
"Xxxxxxx Option Plan," and such options, the "Rollover Options") upon the
surrender and cancellation of the agreements representing their SMARTs and
delivery of an instrument substantially in the form attached hereto as
Exhibit E, by which such holder represents its good title to such SMART and
agrees to its cancellation upon the terms hereof ("SMART Cancellation
Consent"). Each Rollover Option shall be an "incentive stock option" within
the meaning of Section 422(b) of the Code (the "qualified options"). No
interest shall accrue with respect to any of the SMARTs. Each Rollover
Option shall (i) be exercisable for that number of whole shares of Xxxxxxx
Common Stock equal to the product of the number of SMARTs held by such
holder immediately prior to the Effective Time multiplied by the greater of
(x) the quotient obtained by dividing (A) 405,000 by (B) the total number
of SMARTs issued and outstanding immediately prior to the Effective Time
(the "SMART Ratio"), and (y) the product of (A) the SMART Ratio and (B) the
quotient obtained by dividing (1) the lesser of (a) the Fair Market Value
(defined below) of the Xxxxxxx Common Stock as of the Effective Time, and
(b) $20.00, by (2) $13.50, and rounding the resulting number to the nearest
whole number of shares of the Xxxxxxx Common Stock, (ii) be vested or vest
with respect to 20% of the shares underlying such option on each
anniversary of the original date of grant of the corresponding SMARTs, and
be fully vested upon the fifth anniversary of the original date of grant of
the corresponding SMARTs, (iii) have a per share exercise price equal to
the greater of (x) Fair Market Value (defined below) of the Xxxxxxx Common
Stock as of the Effective Time, and (y) $13.50, and (iv) otherwise be in
substantially the form customarily used for option grants under the Xxxxxxx
Option Plan. In the event that any holder of SMARTs shall not have executed
a SMART Cancellation Consent prior to the Effective Time, such SMART shall
remain outstanding and be an obligation of the Surviving Corporation. In
addition, at the Effective Time, Xxxxxxx shall issue non-qualified options
to purchase 167,500 shares of the Xxxxxxx Common Stock under the Xxxxxxx
Option Plan to Xxxx X. Xxxxxx and non-qualified options to purchase 55,833
shares of Xxxxxxx Common Stock under the Xxxxxxx Option Plan to each of
Xxxx X. Xxxxxx, Xxxxxxx X. Xxxx and Xxxxxx Xxxxxxxx (the "New Options").
Each New Option will (i) vest with respect to 20% of the shares underlying
such option on each anniversary of the date of grant and be fully vested
upon the fifth anniversary of the date of grant and (ii) have a per share
exercise price equal to the greater of (x) Fair Market Value of the Xxxxxxx
Common Stock as of the Effective Time, and (y) $13.50. The parties
acknowledge that, pursuant to the terms of the Xxxxxxx Option Plan, each of
Xxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxxxx X. Xxxx and the Independent
Director shall be granted non-qualified options to purchase 20,000 shares
of Xxxxxxx Common Stock on the fifth day following the Closing Date (the
"Director Options") in addition to the New Options. Each Director Option
will (i) vest with respect to 20% of the shares underlying such option on
each anniversary of the date of grant and be fully vested upon the fifth
anniversary of the date of grant and (ii) have an exercise price per share
equal to Fair Market Value of the Xxxxxxx Common Stock as of the date of
grant. Xxxxxxx shall reserve for issuance the number of shares of Xxxxxxx
Common Stock that will become issuable upon the exercise of such Rollover
Options, New Options and the Director Options pursuant to this Section
2.2(e) and shall cause a valid registration statement (such as Form S-8 or
other appropriate form) to be in effect to cover the issuance of shares of
Xxxxxxx Common Stock upon the exercise of the Rollover Options, the New
Options and the Director Options (the "Option Registration Statement").
Xxxxxxx shall seek stockholder approval to the extent required to reserve
additional shares for issuance upon the exercise of that number of Rollover
Options, New Options and Director Options, in the aggregate, in excess of
the total number of shares available for issuance under the Xxxxxxx Option
Plan as of the date hereof (the "Xxxxxxx Option Approval"). For the
purposes of this section, "Fair Market Value" on any given date means the
last reported sale price at which Xxxxxxx Common Stock is traded on the
date immediately preceding such given date or, if no Xxxxxxx Common Stock
is traded on such date, the next preceding date on which Xxxxxxx Common
Stock was traded, as reflected on the principal stock exchange or, if
applicable, any other national stock exchange on which the Xxxxxxx Common
Stock is traded or admitted to trading.
(f) All Merger Consideration issued or paid, as the case may
be, upon the surrender for exchange of Certificates representing shares of
RMSI Common Stock in accordance with the terms of this Article 2 shall be
deemed to have been issued (and paid) in full satisfaction of all rights
pertaining to the shares of RMSI Common Stock exchanged for Merger
Consideration theretofore represented by such Certificates.
2.3 Lost or Stolen Certificates. In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by Xxxxxxx, the posting by such person of a bond
in such reasonable amount as Xxxxxxx may direct as indemnity against any
claim that may be made against it with respect to such Certificate, Xxxxxxx
will issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration to which such person is entitled under Section 2.2(a).
2.4 Dissenters' Rights.
(a) Subject to the RMSI Voting Agreement, notwithstanding anything in
this Agreement to the contrary and unless otherwise provided by applicable
law, shares of RMSI Common Stock that are issued and outstanding
immediately prior to the Effective Time and that are owned by RMSI
Stockholders who in accordance with Section 262 of the DGCL have properly
exercised and perfected their rights of appraisal, shall not be converted
into the right to receive the Merger Consideration, unless and until such
RMSI Stockholders shall have failed to perfect or shall have effectively
withdrawn or lost their right of appraisal and payment under applicable
law. If any such RMSI Stockholder shall have failed to perfect or shall
have effectively withdrawn or lost such right of appraisal, each share of
RMSI Common Stock held by such RMSI Stockholder shall thereupon be deemed
to have been converted into the right to receive and become exchangeable
for, at the Effective Time, the Merger Consideration pursuant to Section
2.2 hereof. Holders of shares of RMSI Common Stock who become entitled
pursuant to the provisions of the DGCL to payment for such shares under the
provisions thereof shall receive payment from the Surviving Corporation and
such shares shall be canceled.
(b) RMSI shall give Xxxxxxx (i) prompt notice of any demands
for appraisal received by RMSI, withdrawals of such demands, and any other
instruments served in connection with such demands pursuant to the DGCL and
received by RMSI and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the DGCL consistent
with the obligations of RMSI thereunder. RMSI shall not, except with the
prior written consent of Xxxxxxx, (x) make any payment with respect to any
demands for appraisal, (y) offer to settle or settle any such demands or
(z) waive any failure to timely deliver a written demand for appraisal in
accordance with the DGCL.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF RMSI
As a material inducement to Xxxxxxx to enter into this Agreement and
consummate the transactions contemplated hereby, except as set forth in the
disclosure letter delivered at or prior to the execution hereof to Xxxxxxx
(the "RMSI Disclosure Letter"), RMSI hereby represents and warrants to
Xxxxxxx as follows; provided, however, that (i) none of the representations
and warranties contained in this Article 3 reflect any matter relating to
any of the entities, assets, businesses or operations acquired or to be
acquired by RMSI or any RMSI Subsidiary in connection with any of the
pending or completed acquisitions disclosed on Schedule 6.2(a)(xiii) hereto
(the "RMSI Acquisition Matters") and (ii) no RMSI Acquisition Matter will
in any event constitute or be deemed to constitute a breach of any of the
representations or warranties contained in this Article 3.
3.1 Existence; Good Standing; Authority; Compliance With Law.
(a) RMSI is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware. RMSI is duly
licensed or qualified to do business as a foreign corporation and is in
good standing under the laws of any other state of the United States in
which the character of the properties owned or leased by it therein or in
which the transaction of its business makes such qualification necessary,
except where the failure to be so licensed or qualified could not have a
material adverse effect on the combined business, assets, results of
operations or financial condition of RMSI and the RMSI Subsidiaries taken
as a whole (a "RMSI Material Adverse Effect"). RMSI has all requisite
corporate power and authority to own, operate, lease and encumber its
properties and carry on its business as now conducted or proposed to be
conducted.
(b) Each RMSI Subsidiary is a corporation or partnership duly
incorporated or organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, has the
corporate or partnership power and authority to own its properties and to
carry on its business as it is now being conducted or proposed to be
conducted, and, is duly qualified to do business and is in good standing in
each jurisdiction in which the ownership of its property or the conduct of
its business requires such qualification, except for jurisdictions in which
such failure to be so qualified or to be in good standing would not have a
RMSI Material Adverse Effect. Except as set forth in Section 3.1(b) of the
RMSI Disclosure Letter, all of the outstanding shares of capital stock of,
or partnership or other equity interests in, each RMSI Subsidiary are owned
beneficially and of record by RMSI free of any lien, restriction or
encumbrance and such shares, partnership interests or other equity
interests have been duly and validly issued and are outstanding, fully paid
and non-assessable. Except as set forth in Section 3.1(b) of the RMSI
Disclosure Letter, there are no outstanding options, warrants, rights,
commitments, preemptive rights or agreements of any kind for the issuance
or sale of, or outstanding securities convertible into, any additional
shares of capital stock of any class, or partnership or other equity
interests in, any of the RMSI Subsidiaries, or outstanding warrants,
options or other rights to acquire any such convertible securities.
(c) Copies of the certificate of incorporation or other charter
documents and bylaws (and in each case, all amendments thereto) of RMSI as
they exist on the date hereof have been delivered or made available to
Xxxxxxx and its counsel. All such copies are true, correct and complete and
no amendments thereto are pending. None of RMSI or any of the RMSI
subsidiaries are in violation of their respective certificates of
incorporation or bylaws.
3.2 Authorization, Validity and Effect of Agreements. RMSI has the
requisite power and authority to enter into the transactions contemplated
hereby and to execute and deliver this Agreement and the Xxxxxxx Voting
Agreement. The Board of Directors of RMSI has unanimously approved and
declared advisable this Agreement, the Merger, and the other documents and
transactions contemplated by this Agreement. The execution by RMSI of this
Agreement and the Xxxxxxx Voting Agreement and the consummation of the
transactions contemplated by this Agreement and the Xxxxxxx Voting
Agreement have been duly authorized by all requisite corporate action on
the part of RMSI and no other action on the part of RMSI is required in
connection therewith (except for stockholder approval). This Agreement and
the Xxxxxxx Voting Agreement constitute the valid and legally binding
obligations of RMSI, enforceable against RMSI, in accordance with their
respective terms. The execution, delivery and performance by RMSI of this
Agreement and each such agreement, document and instrument
(a) does not and will not violate any provision of the certificate
of incorporation or bylaws of RMSI, as applicable;
(b) does not and will not violate any laws of the United States,
or any state or other jurisdiction applicable to RMSI or require RMSI to
obtain any approval, consent or waiver of, or make any filing with, any
person or entity (governmental or otherwise) that has not been obtained or
made, except for the filing of the Certificate of Merger with the Secretary
of State of Delaware and except as contemplated by Section 6.13 of this
Agreement; and
(c) except as set forth in Section 3.2 of the RMSI Disclosure
Letter, does not and will not (A) result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of any indenture or loan or credit agreement or any other
material agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination or
arbitration award to which RMSI is a party or by which the property of RMSI
is bound or affected, except for such breaches, defaults, accelerations or
rights of termination which, individually or in the aggregate, could not
reasonably be expected to have a RMSI Material Adverse Effect or hinder the
consummation of the transaction contemplated by this Agreement, or (B)
result in the creation or imposition of any mortgage, pledge, lien,
security interest or other charge or encumbrance on any of RMSI's assets or
its capital stock.
3.3 Capital Stock of RMSI. The authorized capital stock of RMSI
consists of 1,000,000 shares of RMSI Common Stock of which 137,635 shares
are issued and outstanding and no shares are held in treasury. The
authorized capital stock of RMSI does not include any preferred stock. As
of the date hereof, all of the outstanding shares of RMSI Common Stock have
been duly and validly issued and are fully paid and non-assessable. Except
as disclosed in Section 3.3 of the RMSI Disclosure Letter, there are no
outstanding options, warrants, rights, commitments, preemptive rights or
agreements of any kind for the issuance or sale by RMSI of, or outstanding
securities convertible into, any additional shares of capital stock of any
class of RMSI or outstanding warrants, options or other rights to acquire
any such convertible securities or stock appreciation rights or other
instrument whose value is derived from the capital stock of RMSI, except
for that certain warrant dated October 7, 1997 and held by Xxxxxxx X.
Xxxxxxxx (the "Xxxxxxxx Warrant"). Except as set forth in Section 3.3 of
the RMSI Disclosure Letter, there are no voting trusts, voting agreements,
proxies or other agreements, instruments or undertakings with respect to
the voting of RMSI Common Stock to which RMSI or, to RMSI's knowledge, any
of its stockholders is a party. The RMSI Stockholders own of record all of
the issued and outstanding shares of capital stock of RMSI, in the amounts
set forth in Section 3.3 of the RMSI Disclosure Letter, except for the
Xxxxxxxx Warrant.
3.4 Real Property.
(a) Title. RMSI and each of the RMSI Subsidiaries has good,
clear, record and marketable title to all of the real property owned by
RMSI or any of the RMSI Subsidiaries (referred to in this Section as the
"Owned Real Property"), free and clear of all easements, covenants,
restrictions, leases, mortgages, liens, assessments, claims, rights,
judgments, encroachments or other matters affecting title (collectively,
"Encumbrances"), other than:
(i) easements, covenants, restrictions and similar
encumbrances that do not materially interfere with
the use of the Owned Real Property as currently
used and improved,
(ii) minor encroachments that do not materially
adversely affect the value or use of the Owned Real
Property as currently used and improved and that
could be removed without material cost, and
(iii) liens for Taxes (as defined in Section 3.10) not
yet due or delinquent or being contested in good
faith by appropriate means and statutory liens
arising in the ordinary course of business by
operation of law that are not yet due or
delinquent.
((i), (ii) and (iii) are collectively referred to as "Permitted
Encumbrances"), except as set forth in Section 3.4 of the RMSI Disclosure
Letter. To the knowledge of RMSI, the lessors of all of the real property
leased by RMSI or any of the RMSI Subsidiaries (referred to in this Section
as the "Leased Real Property", and together with the Owned Real Property,
the "Real Property") have good, clear, record and marketable title to the
Leased Real Property, and RMSI and the RMSI Subsidiaries have good, clear,
record and marketable title to enforceable leasehold interests in the
Leased Real Property, in each case free and clear of all Encumbrances other
than Permitted Encumbrances, subject only to the right of reversion of the
lessor, except as set forth in Section 3.4 of the RMSI Disclosure Letter.
(b) Status of Leases. Each of the leases of the Real Property
has been duly authorized and executed by RMSI and is in full force and
effect, except where the failure to be so would not have an RMSI Material
Adverse Effect. To the knowledge of RMSI, each of said leases has been duly
authorized and executed by the other party to each of said leases. Neither
RMSI nor any of the RMSI Subsidiaries is in default under any material
provision of any such said lease, nor has any event occurred which, with
notice or the passage of time, or both, would give rise to such a default.
To the knowledge of RMSI, the other party to each of said leases is not in
default under any material provision of any such lease and there is no
event which, with notice or the passage of time, or both, would give rise
to such a default.
(c) Consents. Except as set forth in Section 3.4 of the RMSI
Disclosure Letter, (i) no consent or approval is required with respect to
the transactions contemplated by this Agreement from the other parties to
any lease of Leased Real Property, from the holder of any Encumbrance on
any Owned Real Property, and (ii) no filing with any regulatory authority
is required in connection with the Real Property, and to the extent that
any such consents, approvals or filings are required, RMSI will use
commercially reasonable efforts to obtain or complete them before the
Closing.
(d) Condition of Real Property. Except as set forth in Section 3.4
of the RMSI Disclosure Letter, there are no material defects in the physical
condition of any land, buildings or improvements constituting part of the
Real Property, including without limitation, structural elements,
mechanical systems, parking and loading areas, and all such buildings and
improvements are in good operating condition and repair.
(e) Compliance with the Law. To the best of RMSI's knowledge,
neither RMSI nor any RMSI Subsidiary has received any notice from any
governmental authority of any violation of any law, ordinance, regulation,
license, permit or authorization issued with respect to any Real Property
and no such violation exists, in either case, which could reasonably be
expected to have a RMSI Material Adverse Effect. All improvements located
on or constituting part of the Real Property and their use and operation by
RMSI and the RMSI Subsidiaries are in compliance in all material respects
with all applicable laws, ordinances, regulations, licenses, permits and
authorizations, except as set forth in Section 3.4 of the RMSI Disclosure
Letter. No approval or consent to the transactions contemplated by this
Agreement is required of any governmental authority with jurisdiction over
any aspect of the Real Property or its use or operations, except where the
failure to obtain such approval or consent would not have a RMSI Material
Adverse Effect. Neither RMSI nor any RMSI Subsidiary has received any
notice of any material real estate tax deficiency or assessment which has
not been satisfied or is aware of any proposed material deficiency, claim
or assessment with respect to any of the Real Property, or any pending or
threatened condemnation thereof.
3.5 Contracts. Except as set forth in Section 3.5 of the RMSI
Disclosure Letter, neither RMSI nor any of the RMSI Subsidiaries is in
default under any RMSI Material Contract or has any knowledge of conditions
or facts which, with notice or the passage of time, or both, would give
rise to such a default, except for such defaults which, individually or in
the aggregate, could not reasonably be expected to have a RMSI Material
Adverse Effect. To the knowledge of RMSI, no third party under any RMSI
Material Contract is in default thereunder and there is no event which,
with notice or the passage of time, or both, would give rise to such a
default. Except as set forth in Section 3.5 of the RMSI Disclosure Letter,
each RMSI Material Contract has been duly authorized and executed by RMSI,
is in full force and effect and is enforceable by RMSI in accordance with
its terms, except where the failure to be so would not have an RMSI
Material Adverse Effect. For purposes of this Agreement, the term "RMSI
Material Contract" shall include the following:
(a) any plan or contract providing for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments,
profit sharing, collective bargaining or the like, or any contract or
agreement with any labor union;
(b) any employment contract or contract for services which is
not terminable within 30 days by RMSI or an RMSI Subsidiary without
liability for any penalty or severance payment;
(c) any contract or agreement under which, as of the date of
this Agreement, RMSI or any of the RMSI Subsidiaries has unpaid obligations
of $100,000 or more, except contracts and agreements specifically disclosed
elsewhere under this Agreement;
(d) any contract or agreement involving more than $100,000 of
unpaid obligations of RMSI or any of the RMSI Subsidiaries as of the date of
this Agreement which, by its terms, does not terminate or is not terminable
without penalty by RMSI or an RMSI Subsidiary or their successors within
one year after the date hereof;
(e) any contract or agreement for the sale or lease of its
products or services not made in the ordinary course of business;
(f) any contract containing covenants limiting the freedom of
RMSI or any of the RMSI Subsidiaries to compete in any line of business or
with any person or entity other than as is standard in the food brokerage
industry;
(g) any contract or agreement for the purchase of any fixed
asset for a price in excess of $100,000 whether or not such purchase is in
the ordinary course of business;
(h) any license agreement (as licensor or licensee);
(i) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money not
otherwise disclosed in the RMSI SEC Report (including, if applicable, a
description on any prepayment penalties or similar obligations); or
(j) any contract or agreement with any officer, employee,
director or stockholder of RMSI or any of the RMSI Subsidiaries or with any
persons or organizations controlled by or affiliated with any of them.
3.6 Transactions with Interested Persons. Except as disclosed in the
RMSI SEC Report (as hereinafter defined) or as set forth in Section 3.6 of
the RMSI Disclosure Letter hereto, neither RMSI, nor any affiliate of RMSI,
(i) owns directly or indirectly on an individual or joint basis any
material interest in, or serves as an officer or director or in another
similar capacity of, any competitor or supplier of RMSI or any of the RMSI
Subsidiaries, or any organization which has a material contract or
arrangement with RMSI or any of the RMSI Subsidiaries or (ii) has directly
or indirectly engaged in any transaction involving any lease or transfer
any material (measured at the time of such transaction or as of the date
hereof) cash, property or rights to or from RMSI or any of the RMSI
Subsidiaries from, to or for the benefit of any affiliate of RMSI or any of
the RMSI Subsidiaries.
3.7 Employee Benefit Programs.
(a) Section 3.7 of the RMSI Disclosure Letter sets forth a list
of every material and significant Employee Program that is currently
maintained by RMSI or an Affiliate of RMSI ("RMSI Affiliate") ("RMSI
Employee Programs").
(b) Each RMSI Employee Program which has been intended to
qualify under Section 401(a) or 501(c)(9) of the Code has received a
favorable determination or approval letter from the IRS regarding its
qualification under such section and except as disclosed in Section 3.7 of
the RMSI Disclosure Letter has, in fact, been qualified under the
applicable section of the Code from the effective date of such RMSI
Employee Program through and including the Closing Date (or, if earlier,
the date that such RMSI Employee Program was terminated). No event or
omission has occurred which would cause any such Employee Program to lose
its qualification under the applicable Code section.
(c) Neither RMSI nor any RMSI Affiliate knows, nor should any
of them reasonably know, of any material failure of any party to comply
with any laws applicable with respect to the RMSI Employee Programs. With
respect to any RMSI Employee Program, there has been no (i) "prohibited
transaction," as defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Code Section 4975, (ii)
material failure to comply with any provision of ERISA, other applicable
law, or any agreement, or (iii) non-deductible contribution, which, in the
case of any of (i), (ii), or (iii), could subject RMSI or any RMSI
Affiliate to material liability either directly or indirectly (including,
without limitation, through any obligation of indemnification or
contribution) for any damages, penalties, or taxes, or any other loss or
expense. No litigation or governmental administrative proceeding (or
investigation) or other proceeding (other than those relating to routine
claims for benefits) is pending or, to the knowledge of RMSI, threatened
with respect to any such RMSI Employee Program.
(d) Except as disclosed in Section 3.7 of the RMSI Disclosure
Letter, during the last 3 years, neither RMSI nor any RMSI Affiliate (i) has
maintained any Employee Program which has been subject to title IV of ERISA
or Code Section 412 (a "RMSI Title IV Plan"), including, but not limited
to, any Multiemployer Plan, (ii) has provided health care or any other
non-pension benefits to any employees after their employment is terminated
(other than as required by part 6 of subtitle B of title I of ERISA), or
has promised to provide such post-termination benefits, for a period of
longer than 12 months or (iii) has provided health care or any other
non-pension benefits to any individuals who were previously employed by
entities acquired by RMSI prior to the date of this Agreement for a period
of longer than 12 months.
(e) With respect to each RMSI Employee Program, complete and
correct copies of the following documents (if applicable to such RMSI Employee
Program) have previously been delivered or made available to Xxxxxxx: (i)
all documents embodying or governing such RMSI Employee Program, and any
funding medium for the RMSI Employee Program (including, without
limitation, trust agreements) as they may have been amended to the date
hereof; (ii) the most recent IRS determination or approval letter with
respect to such RMSI Employee Program under Code Section 401(a) or
501(c)(9), and any applications for determination or approval subsequently
filed with the IRS; (iii) the three most recently filed IRS Forms 5500,
with all applicable schedules and accountants' opinions attached thereto;
(iv) the three most recent actuarial valuation reports completed with
respect to such RMSI Employee Program; (v) the summary plan description for
such RMSI Employee Program (or other descriptions of such RMSI Employee
Program provided to employees) and all modifications thereto; (vi) any
insurance policy (including any fiduciary liability insurance policy or
fidelity bond) related to such RMSI Employee Program; (vii) any
registration statement or other filing made pursuant to any federal or
state securities law and (viii) all correspondence to and from any state or
federal agency within the last three years.
(f) Each RMSI Employee Program may be amended, terminated, or
otherwise modified by RMSI to the greatest extent permitted by applicable
law, including the elimination of any and all future benefit accruals under
any RMSI Employee Program and no condition exists which would limit the
right of RMSI or the RMSI Affiliate to so amend, terminate or otherwise
modify such RMSI Employee Program.
(g) For purposes of this Section and Section 5.7:
(i) "Employee Program" means (A) all employee benefit
plans within the meaning of ERISA Section 3(3), including, but not limited
to, multiple employer welfare arrangements (within the meaning of ERISA
Section 3(40)), plans to which more than one unaffiliated employer
contributes and employee benefit plans (such as foreign or excess benefit
plans) which are not subject to ERISA; and (B) material stock option or
equity-based plans, bonus or incentive award plans, severance pay policies
or agreements, deferred compensation agreements, supplemental income
arrangements, vacation plans, and all other material employee benefit
plans, agreements, and arrangements not described in (A) above, including
without limitation, any arrangement intended to comply with Section 120,
125, 127 or 129 of the Code. In the case of an Employee Program funded
through a trust described in Code Section 401(a) or an organization
described in Code Section 501(c)(9), each reference to such Employee
Program shall include a reference to such trust or organization.
(ii) An entity "maintains" an Employee Program if such
entity sponsors, contributes to, or provides benefits under such Employee
Program, or has any obligation (by agreement or under applicable law) to
contribute to or provide benefits under such Employee Program, or if such
Employee Program provides benefits to or otherwise covers employees of such
entity (or their spouses, dependents, or beneficiaries).
(iii) An entity is an "Affiliate" of a person if it would
have ever been considered a single employer under ERISA Section 4001(b) or
part of the same "controlled group" as such person for purposes of ERISA
Section 302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or
non-pension) employee benefit plan to which more than one unaffiliated
employer contributes and which is maintained pursuant to one or more
collective bargaining agreements.
(h) No liability under Title IV or Section 302 of ERISA has
been incurred by RMSI or any RMSI Affiliate that has not been satisfied in
full and no condition exists that presents a material risk to RMSI or any
RMSI Affiliate of incurring any such liability, other than liability for
premiums due to the Pension Benefit Guaranty Corporation (the "PBGC")
(which premiums have been paid when due).
(i) The PBGC has not instituted proceedings to terminate any
RMSI Title IV Plan and no condition exists that presents a material risk
that such proceedings will be instituted.
(j) With respect to each RMSI Title IV Plan, the present value
of accrued benefits under such plan, based upon the actuarial assumptions
used for funding purposes in the most recent actuarial report prepared by
such plan's actuary with respect to such plan, did not exceed, as of its
latest valuation date, the then current value of the assets of such plan
allocable to such accrued benefits.
(k) No RMSI Title IV Plan or any trust established there under
has incurred any "accumulated funding deficiency" (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, as of the
last day of the most recent fiscal year of each RMSI Title IV Plan ended
prior to the Closing Date.
(l) No amounts payable under the RMSI Employee Programs will
fail to be deductible for federal income tax purposes by virtue of Section
162(a)(1), 162(m) or 280G of the Code.
3.8 Intentionally Omitted
3.9 No Payments to Employees, Officers and Directors. Section 3.9 of
the RMSI Disclosure Letter contains a true and complete list of all
arrangements, agreements or plans pursuant to which any cash or non-cash
payments or other obligation will become payable, accelerate the time of
payment or vesting or increase any amount currently payable (and the
maximum aggregate amount which may be payable thereunder) to each employee,
officer or director of RMSI or any RMSI Subsidiary as a result of the
Merger (assuming no termination of service).
3.10 Taxes. Except as set forth in Section 3.10 of the RMSI
Disclosure Letter:
(a) RMSI and each of the RMSI Subsidiaries have timely filed
all income and other material Tax Returns required to be filed by them
through the date hereof in a manner correct and complete in all material
respects and have timely paid or caused to be paid all Taxes shown as due
on such Tax Returns and all income and other material Taxes otherwise
required to be paid by them through the date hereof whether disputed or
not.
(b) On or before the Closing Date, RMSI and each of the RMSI
Subsidiaries shall have paid all income and other material Taxes (whether
or not shown on any Tax Return) required to be paid by them on or before
the Closing Date whether disputed or not and shall have accrued or made
full, adequate and complete provision on their books as required by U.S.
generally accepted accounting principles ("GAAP") for all income and other
material Taxes (whether or not shown on any Tax Return) not required to be
paid by them on or before the Closing Date.
(c) No Tax Authority is now asserting or, to the best knowledge
of RMSI, threatening to assert against RMSI or any of the RMSI Subsidiaries
any deficiency or claim for Taxes. No claim for unpaid income taxes or for
other unpaid material Taxes has become a lien or encumbrance of any kind
against any material asset of RMSI or any of the RMSI Subsidiaries except
for statutory liens for such Taxes that are not yet due. Neither RMSI nor
any of the RMSI Subsidiaries has entered into a closing agreement pursuant
to Section 7121 of the Code after December 31, 1990.
(d) RMSI and the RMSI Subsidiaries have previously delivered or
made available to Xxxxxxx complete and accurate copies of (1) all audit
reports, revenue agent reports, requests for letter rulings, letter
rulings, technical advice memoranda and similar documents issued by all Tax
Authorities relating to Taxes, (2) all income Tax Returns filed by RMSI or
any of the RMSI Subsidiaries with respect to taxable periods beginning
after December 31, 1990 and (3) any closing agreements (and any exhibits
thereto) entered into by RMSI or any of the RMSI Subsidiaries as of the
date hereof. RMSI will deliver or make available to Xxxxxxx any documents
mentioned in the preceding sentence that become available to RMSI or any of
the RMSI Subsidiaries after the date hereof and on or before the Closing
Date.
(e) There has not been any audit of any tax return filed by
RMSI or any of the RMSI Subsidiaries with respect to any taxable year
beginning after December 31, 1990, no such audit is in progress, and
neither RMSI nor any of the RMSI Subsidiaries has been notified by any Tax
Authority that any such audit is contemplated or pending. Neither RMSI nor
any of the RMSI Subsidiaries has requested or received an extension of time
with respect to any date on which a tax return was or is to be filed by
RMSI or any of the RMSI Subsidiaries and there is no extension, waiver or
agreement for the extension of time for the assessment or payment of any
Taxes owed (or alleged to be owed) by RMSI or any of the RMSI Subsidiaries.
(f) No power of attorney has been granted by or with respect to
RMSI or any of the RMSI Subsidiaries with respect to any matter relating to
Taxes.
(g) There are no agreements or understandings relating to Taxes
between RMSI or any of the RMSI Subsidiaries and any other party affecting
or which could affect RMSI or any of the RMSI Subsidiaries by which RMSI or
any of the RMSI Subsidiaries will be bound after the Closing Date or which
could affect the computation of Taxes by RMSI or any of the RMSI
Subsidiaries.
(h) For purposes of this Agreement, all references (1) to the
"Code" shall include any similar provisions of state, local or foreign law,
(2) "Taxes" shall include all federal, state, local, foreign, and other taxes,
including without limitation, income taxes, estimated taxes, alternative
minimum taxes, excise taxes, sales taxes, use taxes, value-added taxes,
gross receipts taxes, franchise taxes, capital stock taxes, employment and
payroll-related taxes, withholding taxes, stamp taxes, transfer taxes,
windfall profit taxes, environmental taxes and property taxes, whether or
not measured in whole or in part by net income, and all deficiencies,
interest, fines, penalties and other additions to tax, (3) "Tax Returns"
shall mean all returns, reports, declarations, information, estimates,
schedules, filings and documents (including any related or supporting
information) filed or required by any Tax Authority to be filed with
respect to Taxes, including, without limitation, all information returns,
claims for refund, amended returns, declarations of estimated tax and
requests for extensions of time to file any item described in this
paragraph, and (4) "Tax Authority" shall mean the Internal Revenue Service
and any other state, local or foreign governmental authority responsible
for the collection or administration of Taxes.
3.11 Tax-Free Treatment. Neither RMSI nor any of the RMSI
Subsidiaries has taken or caused to be taken any action which would cause
the Merger to fail to qualify as a Reorganization under Section 368(a) of
the Code.
3.12 Proxy Statement. On the date the Proxy Statement (as defined in
Section 6.7 hereof) is mailed to Xxxxxxx'x stockholders, none of the
information supplied in writing by or on behalf of RMSI for inclusion in
the Proxy Statement will be false or misleading with respect to any
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading or necessary to
correct any statement in any earlier communication with respect to the
stockholders' meeting or the solicitation of proxies therefore which has
become false or misleading. Notwithstanding the foregoing, RMSI makes no
representation or warranty with respect to information supplied by Xxxxxxx
or any of its affiliates or representatives in writing for inclusion in the
Proxy Statement.
3.13 SEC Documents. As of its date of filing, RMSI's registration
statement on Form S-4, as amended by Amendment No. 1, in the form filed
with the SEC on April 20, 1999 (the "RMSI SEC Report"), except as disclosed
in Section 3.13 of the RMSI Disclosure Letter, did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the parties hereto acknowledge that the RMSI SEC
Report does not contain any information or disclosure relating to this
Agreement and the transactions contemplated thereby, including the Merger.
There is no material fact existing today directly relating to the business,
operations or condition of RMSI (other than facts which relate to general
economic trends or conditions or general conditions affecting the
industries in which RMSI or the RMSI Subsidiaries operate) that is
reasonably likely to have a RMSI Material Adverse Effect, that has not been
set forth in the RMSI SEC Report or the RMSI Disclosure Letter; provided
that the loss of, or a reduction in revenues from, one or more customers or
principals shall be deemed not to have a RMSI Material Adverse Effect;
provided, further, that, notwithstanding the foregoing proviso, a loss of,
or reduction in revenues from, any customers or principals, individually or
in the aggregate, which results in a reduction in the annual revenues of
RMSI and Xxxxxxx taken on a consolidated pro forma basis of more than $25
million (a "Material Customer Loss"), shall be deemed to have an RMSI
Material Adverse Effect. For the purpose of determining a Material Customer
Loss, annual revenues, shall mean commission revenues plus gross margin on
sales with respect to businesses in which sales are accounted for in a
manner other than commission revenues. A true and complete copy of the RMSI
SEC Report has been delivered to Xxxxxxx. Each of the consolidated balance
sheets of RMSI included in or incorporated by reference into the RMSI SEC
Report (including the related notes and schedules) fairly presents the
consolidated financial position of RMSI and RMSI Subsidiaries as of its
date and each of the consolidated statements of income, retained earnings
and cash flows of RMSI included in or incorporated by reference into the
RMSI SEC Report (including any related notes and schedules) fairly presents
the results of operations, retained earnings or cash flows, as the case may
be, of RMSI and the RMSI Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to normal year-end audit
adjustments which would not be material in amount or effect), in each case
in accordance with generally accepted accounting principles consistently
applied during the periods involved, except, in the case of the unaudited
statements, as permitted by Form 10-Q pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
3.14 No Brokers. Except as disclosed in Section 3.14 of the RMSI
Disclosure Letter, neither RMSI nor any RMSI Subsidiary has entered into
any contract, arrangement or understanding with any person or firm which
may result in the obligation of such entity, RMSI or Xxxxxxx to pay any
finder's fees, brokerage or agent's commissions, advisory fee or other like
payments relating to or in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
3.15 Litigation. There is no litigation or governmental or
administrative proceeding, arbitration or investigation pending or, to the
knowledge of RMSI, threatened against RMSI or the RMSI Subsidiaries which,
either individually or in the aggregate, is reasonably likely to have an
RMSI Material Adverse Effect, or which would prevent or hinder the
consummation of the transactions contemplated by this Agreement.
3.16 Absence of Certain Changes. Except as disclosed in Section 3.16
of the RMSI Disclosure Letter, since December 31, 1998, there has not been
any change in the financial condition, properties, assets, liabilities,
business or operations of RMSI, which change by itself or in conjunction
with all other such changes, whether or not arising in the ordinary course
of business, has had a RMSI Material Adverse Effect; provided that the loss
of, or reduction in revenues from, one or more customers or principals
shall be deemed not to have a RMSI Material Adverse Effect under any
provision of this Agreement, unless the loss of, or reduction in revenues
from, such customers or principals, individually or in the aggregate,
constitute a Material Customer Loss;
3.17 Disclosure. Subject to the terms thereof, the representations,
warranties and statements contained or referred to in this Agreement and in
the certificates, exhibits and the RMSI Disclosure Letter delivered by RMSI
pursuant to this Agreement (including the RMSI SEC Report) to Xxxxxxx do
not contain any untrue statement of a material fact, and, when taken
together, do not omit to state a material fact required to be stated
therein or necessary in order to make such representations, warranties or
statements not misleading in light of the circumstances under which they
were made.
3.18 Undisclosed Liabilities. Except as and to the extent reflected,
reserved against or otherwise specifically disclosed in the RMSI SEC Report
and the RMSI Disclosure Letter, neither RMSI nor any RMSI Subsidiary has
any liabilities or obligations of any kind required to be disclosed in
accordance with GAAP applied on a basis consistent with past practice,
whether accrued, absolute, known or unknown, asserted or unasserted,
contingent or otherwise which could reasonably be expected to have,
individually or in the aggregate, a RMSI Material Adverse Effect.
3.19 Customers and Principals. Except as disclosed in Section 3.19 of
the RMSI Disclosure Letter, as of the date hereof, RMSI has no knowledge of
(i) any loss since December 31, 1998 or any currently threatened loss of
any material customer or principal, other than losses or threatened losses
arising out of, resulting from or relating to the execution or consummation
of this Agreement or the transactions contemplated thereby, or (ii) any
pending bankruptcy filing, insolvency or material adverse change in the
financial position of any material customer or principal.
3.20 Receivables. All of RMSI's accounts receivable arose from bona
fide transactions in the ordinary course of business, are valid and
collectible obligations of the respective makers thereof and were not and
are not subject to any offset or counter-claim, except for the amount
reserved for doubtful accounts set forth on (i) prior to the availability
of RMSI's consolidated unaudited financial statements for the quarter ended
March 31, 1999, RMSI's consolidated audited financial statements for the
year ended December 31, 1998, and (ii) after RMSI's consolidated unaudited
financial statements for the quarter ended March 31, 1999 become available,
RMSI's consolidated unaudited financial statements for the quarter ended
March 31, 1999 (the "RMSI Financials"). RMSI's accounts receivable are
reflected on the RMSI Financials in accordance with GAAP applied on a basis
consistent with past practice. Since the date of the RMSI Financials, there
have not been any material write-offs as uncollectible of any of RMSI's
accounts receivable, except for write-offs in the ordinary course of
business and consistent with past practice.
3.21 Definition of RMSI's Knowledge. As used in this Agreement, the
phrase "to the knowledge of RMSI" or "to the best knowledge of RMSI" (or
words of similar import) means the actual knowledge of Xxxx X. Xxxxxx,
Xxxxxxx X. Xxxx, Xxxxxx X. Xxxxxxxx or Xxxxx X. Xxxxxx.
3.22 Ownership of Xxxxxxx Common Stock. Except as set forth in
Section 3.22 of the RMSI Disclosure Letter, neither RMSI nor, to the
knowledge of RMSI, any RMSI Stockholder or any of their affiliates owns,
beneficially or of record, any shares of Xxxxxxx Common Stock, any option
to acquire or sell any shares of Xxxxxxx Common Stock, or any warrants,
rights, commitments, preemptive rights or agreements of any kind for the
acquisition or sale of, any shares of Xxxxxxx Common Stock, and is not a
party to any voting trusts, voting agreement, proxies or other agreements,
instruments or undertakings with respect to the voting of Xxxxxxx Common
Stock, except for the Post-Merger Voting Agreement.
ARTICLE 4. INVESTMENT REPRESENTATIONS AND WARRANTIES OF THE RMSI
STOCKHOLDERS
Each RMSI Stockholder hereby severally represents and warrants to
Xxxxxxx that with respect to such RMSI Stockholder's receipt of Xxxxxxx
Common Stock hereunder:
4.1 Investment Representations. Such RMSI Stockholder is acquiring
the Xxxxxxx Common Stock for its own account, for investment, and not with
a view to any "distribution" thereof within the meaning of the Securities
Act. The jurisdiction of residence of such RMSI Stockholder is the State of
Texas and the offer and sale of the Xxxxxxx Common Stock to such RMSI
Stockholder will take place in such jurisdiction. Such RMSI Stockholder is
an "accredited investor" as defined in the Securities Act and is
knowledgeable and experienced in the making of investments of the type
involved in the acquisition of the Xxxxxxx Common Stock pursuant to the
Agreement, is able to bear the economic risk of loss of its investment in
Xxxxxxx, has been granted the opportunity to investigate the affairs of
Xxxxxxx and to ask questions of its officers and employees, and has availed
itself of such opportunity either directly or through its authorized
representative. Such RMSI Stockholder has received and reviewed a copy of
this Agreement and all exhibits, schedules and appendices hereto (including
without limitation the Xxxxxxx Disclosure Letter) as well as copies of the
Xxxxxxx SEC Report.
4.2 Registration. Such RMSI Stockholder understands that because the
Xxxxxxx Common Stock issued as part of the Merger Consideration has not
been registered under the Securities Act or securities or "blue sky" laws
of any jurisdiction, he cannot dispose of any or all of the shares of such
Xxxxxxx Common Stock unless such shares of Xxxxxxx Common Stock are
subsequently registered under the Securities Act or exemptions from such
registration are available. Such RMSI Stockholder acknowledges and
understands that, except as provided in the Registration Rights Agreement
(as defined in Section 7.2(e)), he, she or it has no independent right to
require Xxxxxxx to register the Xxxxxxx Common Stock. Such RMSI Stockholder
further understands that Xxxxxxx may, as a condition to the transfer of any
of the Xxxxxxx Common Stock issued in the Merger, require that the request
for transfer be accompanied by an opinion of counsel as described below.
Such RMSI Stockholder understands that each certificate representing the
Xxxxxxx Common Stock issued in the Merger will bear a legend in
substantially the form provided below (in addition to any legend required
under applicable state securities laws).
THE SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER
NAMED HEREON FOR HIS OWN ACCOUNT FOR INVESTMENT; AND SUCH
SECURITIES MAY NOT BE PLEDGED, SOLD OR IN ANY OTHER WAY
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933,
AS IN EFFECT AT THAT TIME, OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.
4.3 Ownership of Xxxxxxx Common Stock. Except as set forth on Section
4.3 of the RMSI Disclosure Letter, neither such RMSI Stockholder nor any of
his or its respective family members or affiliates own, beneficially or of
record, any shares of Xxxxxxx Common Stock, any option to acquire or sell
any shares of Xxxxxxx Common Stock, or any warrants, rights, commitments,
preemptive rights or agreements of any kind for the acquisition or sale of,
any shares of Xxxxxxx Common stock, and is not a party to any voting
trusts, voting agreement, proxies or other agreements, instruments or
undertakings with respect to the voting of Xxxxxxx Common Stock, except for
the Post-Merger Voting Agreement.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF XXXXXXX
As a material inducement to RMSI to enter into this Agreement and
consummate the transactions contemplated hereby, except as set forth in the
disclosure letter delivered at or prior to the execution hereof to RMSI
(the "Xxxxxxx Disclosure Letter"), Xxxxxxx hereby represents and warrants
to RMSI as follows; provided, however, that (i) none of the representations
and warranties contained in this Article 5 reflect any matter relating to
any of the entities, assets, businesses or operations acquired or to be
acquired by Xxxxxxx or any Xxxxxxx Subsidiary in connection with any of the
pending or completed acquisitions disclosed on Schedule 6.2(a)(xiii) hereto
(the "Xxxxxxx Acquisition Matters") and (ii) no Xxxxxxx Acquisition Matter
will in any event constitute or be deemed to constitute a breach of any of
the representations or warranties contained in this Article 5.
5.1 Existence; Good Standing; Authority; Compliance With Law.
(a) Xxxxxxx is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware. Xxxxxxx is duly
licensed or qualified to do business as a foreign corporation and is in
good standing under the laws of any other state of the United States in
which the character of the properties owned or leased by it therein or in
which the transaction of its business makes such qualification necessary,
except where the failure to be so licensed or qualified could not have a
material adverse effect on the combined business, assets, results of
operations or financial condition of Xxxxxxx and the Xxxxxxx Subsidiaries
taken as a whole (a "Xxxxxxx Material Adverse Effect"). Xxxxxxx has all
requisite corporate power and authority to own, operate, lease and encumber
its properties and carry on its business as now conducted or proposed to be
conducted.
(b) Each Xxxxxxx Subsidiary is a corporation or partnership
duly incorporated or organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization, has the
corporate or partnership power and authority to own its properties and to
carry on its business as it is now being conducted or proposed to be
conducted, and, except as set forth on Section 5.1 of the Xxxxxxx
Disclosure Letter, is duly qualified to do business and is in good standing
in each jurisdiction in which the ownership of its property or the conduct
of its business requires such qualification, except for jurisdictions in
which such failure to be so qualified or to be in good standing would not
have a Xxxxxxx Material Adverse Effect. Except as set forth in Section
5.1(b) of the Xxxxxxx Disclosure Letter, all of the outstanding shares of
capital stock of, or partnership or other equity interests in, each Xxxxxxx
Subsidiary are owned beneficially and of record by Xxxxxxx free of any
lien, restriction or encumbrance and such shares, partnership interests or
other equity interests have been duly and validly issued and are
outstanding, fully paid and non-assessable. There are no outstanding
options, warrants, rights, commitments, preemptive rights or agreements of
any kind for the issuance or sale of, or outstanding securities convertible
into, any additional shares of capital stock of any class, or partnership
or other equity interests in, any of the Xxxxxxx Subsidiaries, or
outstanding warrants, options or other rights to acquire any such
convertible securities.
(c) Copies of the certificate of incorporation or other charter
documents and by-laws (and in each case, all amendments thereto) of Xxxxxxx
as they exist on the date hereof have been delivered or made available to
RMSI and its counsel. All such copies are true, correct and complete and no
amendments thereto are pending. Xxxxxxx is not in violation of its
certificate of incorporation or bylaws.
5.2 Authorization, Validity and Effect of Agreements. Xxxxxxx has the
requisite power and authority to enter into the transactions contemplated
hereby and to execute and deliver this Agreement and the RMSI Voting
Agreement. The Board of Directors of Xxxxxxx has unanimously approved and
declared advisable this Agreement, the Merger, and the other documents and
transactions contemplated by this Agreement. A committee comprised of the
independent directors of the Board of Directors of Xxxxxxx (the "Special
Committee") has recommended to the Xxxxxxx Board of Directors the
advisability of entering into this Agreement. The execution by Xxxxxxx of
this Agreement and the RMSI Voting Agreement and the consummation of the
transactions contemplated by this Agreement and the RMSI Voting Agreement
have been duly authorized by all requisite corporate action on the part of
Xxxxxxx and no other action on the part of Xxxxxxx is required in
connection therewith (except for stockholder approval). Except for
stockholder approval, Xxxxxxx has taken all actions necessary to permit the
Merger, this Agreement, the Voting Agreements and the other documents,
instruments and transactions contemplated by this Agreement to be executed
and consummated in accordance with and permitted by the provisions of
Section 203 of the DGCL, including, without limitation, the approval of the
Merger, this Agreement, the Voting Agreements and the other documents,
instruments and transactions contemplated by this Agreement by the Board of
Directors of Xxxxxxx prior the execution of this Agreement, the Voting
Agreements and the other documents, instruments and transactions
contemplated by this Agreement. This Agreement, the RMSI Voting Agreement
and the other documents contemplated by the Agreement constitute the valid
and legally binding obligations of Xxxxxxx, enforceable against Xxxxxxx, in
accordance with their respective terms. The execution, delivery and
performance by Xxxxxxx of this Agreement and each such agreement, document
and instrument
(a) does not and will not violate any provision of the certificate
of incorporation or bylaws of Xxxxxxx, as applicable;
(b) does not and will not violate any laws of the United
States, or any state or other jurisdiction applicable to Xxxxxxx or require
Xxxxxxx to obtain any approval, consent or waiver of, or make any filing
with, any person or entity (governmental or otherwise) that has not been
obtained or made, except for the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware, a proxy statement with the
U.S. Securities and Exchange Commission and except as contemplated by
Section 6.13 of this Agreement; and
(c) except as set forth in Section 5.2 of the Xxxxxxx
Disclosure Letter, does not and will not (A) result in a breach of,
constitute a default under, accelerate any obligation under, or give rise
to a right of termination of any indenture or loan or credit agreement or
any other material agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which Xxxxxxx is a party or by which
the property of Xxxxxxx is bound or affected, except for such breaches,
defaults, accelerations or rights of termination which, individually or in
the aggregate, could not reasonably be expected to have a Xxxxxxx Material
Adverse Effect or hinder the consummation of the transaction contemplated
by this Agreement, or (B) result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or encumbrance on
any of Xxxxxxx'x assets or its capital stock.
5.3 Capital Stock of Xxxxxxx. The authorized capital stock of Xxxxxxx
consists of (i) 1,000,000 shares of preferred stock, par value $.01 per
share, of which none are outstanding, (ii) 50,000,000 shares of Xxxxxxx
Common Stock of which 7,172,300 shares are outstanding and no shares are
held in treasury and (iii) 4,000,000 shares of Restricted Common Stock of
which 335,700 shares are outstanding and no shares are held in treasury. As
of the date hereof, all of the outstanding shares of Xxxxxxx Common Stock
have been duly and validly issued and are fully paid and non-assessable.
Except as disclosed in Section 5.3 of the Xxxxxxx Disclosure Letter, there
are no outstanding options, warrants, rights, commitments, preemptive
rights or agreements of any kind for the issuance or sale by Xxxxxxx of, or
outstanding securities convertible into, any additional shares of capital
stock of any class of Xxxxxxx or outstanding warrants, options or other
rights to acquire any such convertible securities or stock appreciation
rights or other instrument whose value is derived from the capital stock of
Xxxxxxx. Except as set forth in Section 5.3 of the Xxxxxxx Disclosure
Letter, there are no voting trusts, voting agreements, proxies or other
agreements, instruments or undertakings with respect to the voting of
Xxxxxxx Common Stock to which Xxxxxxx or, to Xxxxxxx'x knowledge, any of
its stockholders is a party.
5.4 Real Property.
(a) Title. Xxxxxxx and each of the Xxxxxxx Subsidiaries has
good, clear, record and marketable title to all of the real property owned
by Xxxxxxx or any of the Xxxxxxx Subsidiaries (referred to in this Section
as the "Owned Real Property"), free and clear of all Encumbrances, other
than Permitted Encumbrances, except as set forth in Section 5.4 of the
Xxxxxxx Disclosure Letter. To the knowledge of Xxxxxxx, the lessors of all
of the real property leased by Xxxxxxx or any of the Xxxxxxx Subsidiaries
(referred to in this Section as the "Leased Real Property", and together
with the Owned Real Property, the "Real Property") have good, clear, record
and marketable title to the Leased Real Property, and Xxxxxxx and the
Xxxxxxx Subsidiaries have good, clear, record and marketable title to
enforceable leasehold interests in the Leased Real Property, in each case
free and clear of all Encumbrances other than Permitted Encumbrances,
subject only to the right of reversion of the lessor, except as set forth
in Section 5.4 of the Xxxxxxx Disclosure Letter.
(b) Status of Leases. Each of the leases of the Real Property
has been duly authorized and executed by Xxxxxxx and is in full force and
effect, except where the failure to be so would not have a Xxxxxxx Material
Adverse Effect. To the knowledge of Xxxxxxx, each of said leases has been
duly authorized and executed by the other party to each of said leases.
Neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries is in default under any
material provision of any such said lease, nor has any event occurred
which, with notice or the passage of time, or both, would give rise to such
a default. To the knowledge of Xxxxxxx, the other party to each of said
leases is not in default under any material provision of any such lease and
there is no event which, with notice or the passage of time, or both, would
give rise to such a default.
(c) Consents. Except as set forth in Section 5.4 of the Xxxxxxx
Disclosure Letter, (i) no consent or approval is required with respect to
the transactions contemplated by this Agreement from the other parties to
any lease of Leased Real Property, from the holder of any Encumbrance on
any Owned Real Property, and (ii) no filing with any regulatory authority
is required in connection with the Real Property, and to the extent that
any such consents, approvals or filings are required, Xxxxxxx will use
commercially reasonable efforts to obtain or complete them before the
Closing.
(d) Condition of Real Property. Except as set forth in Section
5.4 of the Xxxxxxx Disclosure Letter, there are no material defects in the
physical condition of any land, buildings or improvements constituting part
of the Real Property, including without limitation, structural elements,
mechanical systems, parking and loading areas, and all such buildings and
improvements are in good operating condition and repair.
(e) Compliance with the Law. To the best of Xxxxxxx'x
knowledge, neither Xxxxxxx nor any Xxxxxxx Subsidiary has received any
notice from any governmental authority of any violation of any law,
ordinance, regulation, license, permit or authorization issued with respect
to any Real Property and no such violation exists, in either case, which
could reasonably be expected to have a Xxxxxxx Material Adverse Effect. All
improvements located on or constituting part of the Real Property and their
use and operation by Xxxxxxx and the Xxxxxxx Subsidiaries are in compliance
in all material respects with all applicable laws, ordinances, regulations,
licenses, permits and authorizations, except as set forth in Section 5.4 of
the Xxxxxxx Disclosure Letter. No approval or consent to the transactions
contemplated by this Agreement is required of any governmental authority
with jurisdiction over any aspect of the Real Property or its use or
operations, except where the failure to obtain such approval or consent
would not have a Xxxxxxx Material Adverse Effect. Neither Xxxxxxx nor any
Xxxxxxx Subsidiary has received any notice of any material real estate tax
deficiency or assessment which has not been satisfied or is aware of any
proposed material deficiency, claim or assessment with respect to any of
the Real Property, or any pending or threatened condemnation thereof.
5.5 Contracts. Except as set forth in Section 5.5 of the Xxxxxxx
Disclosure Letter, neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries is
in default under any Xxxxxxx Material Contract or has any knowledge of
conditions or facts which, with notice or the passage of time, or both,
would give rise to such a default, except for such defaults which,
individually or in the aggregate, could not reasonably be expected to have
a Xxxxxxx Material Adverse Effect. To the knowledge of Xxxxxxx, no third
party under any Xxxxxxx Material Contract is in default thereunder and
there is no event which, with notice or the passage of time, or both, would
give rise to such a default. Except as set forth in Section 5.5 of the
Xxxxxxx Disclosure Letter, each Xxxxxxx Material Contract has been duly
authorized and executed by Xxxxxxx, is in full force and effect and is
enforceable by Xxxxxxx in accordance with its terms, except where the
failure to be so would not have a Xxxxxxx Material Adverse Effect. For
purposes of this Agreement, the term "Xxxxxxx Material Contract" shall
include the following:
(a) any plan or contract providing for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments,
profit sharing, collective bargaining or the like, or any contract or
agreement with any labor union;
(b) any employment contract or contract for services which is
not terminable within 30 days by Xxxxxxx or an Xxxxxxx Subsidiary without
liability for any penalty or severance payment;
(c) any contract or agreement under which, as of the date of
this Agreement, Xxxxxxx or any of the Xxxxxxx Subsidiaries has unpaid
obligations of $100,000 or more, except contracts and agreements
specifically disclosed elsewhere under this Agreement;
(d) any contract or agreement involving more than $100,000 of
unpaid obligations of Xxxxxxx or any of the Xxxxxxx Subsidiaries as of the
date of this Agreement which, by its terms, does not terminate or is not
terminable without penalty by Xxxxxxx or an Xxxxxxx Subsidiary or their
successors within one year after the date hereof;
(e) any contract or agreement for the sale or lease of its
products or services not made in the ordinary course of business;
(f) any contract containing covenants limiting the freedom of
Xxxxxxx or any of the Xxxxxxx Subsidiaries to compete in any line of
business or with any person or entity other than as is standard in the food
brokerage industry;
(g) any contract or agreement for the purchase of any fixed
asset for a price in excess of $100,000 whether or not such purchase is in
the ordinary course of business;
(h) any license agreement (as licensor or licensee);
(i) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money not
otherwise disclosed in the Xxxxxxx SEC Reports (including, if applicable, a
description on any prepayment penalties or similar obligations); or
(j) any contract or agreement with any officer, employee,
director or stockholder of Xxxxxxx or any of the Xxxxxxx Subsidiaries or
with any persons or organizations controlled by or affiliated with any of
them.
5.6 Transactions with Interested Persons. Except as disclosed in the
Xxxxxxx SEC Report (as hereinafter defined) or as set forth in Section 5.6
of the Xxxxxxx Disclosure Letter hereto, neither Xxxxxxx, nor any affiliate
of Xxxxxxx, (i) owns directly or indirectly on an individual or joint basis
any material interest in, or serves as an officer or director or in another
similar capacity of, any competitor or supplier of Xxxxxxx or any of the
Xxxxxxx Subsidiaries, or any organization which has a material contract or
arrangement with Xxxxxxx or any of the Xxxxxxx Subsidiaries or (ii) has
directly or indirectly engaged in any transaction involving any lease or
transfer of any material (measured at the time of such transaction or as of
the date hereof) cash, property or rights to or from Xxxxxxx or any of the
Xxxxxxx Subsidiaries from, to or for the benefit of any affiliate of
Xxxxxxx or any of the Xxxxxxx Subsidiaries.
5.7 Employee Benefit Programs.
(a) Section 5.7 of the Xxxxxxx Disclosure Letter sets forth a
list of every material and significant Employee Program that is currently
maintained by Xxxxxxx or an Affiliate of Xxxxxxx (a "Xxxxxxx Affiliate")
("Xxxxxxx Employee Programs").
(b) Each Xxxxxxx Employee Program which has been intended to
qualify under Section 401(a) or 501(c)(9) of the Code has received a
favorable determination or approval letter from the IRS regarding its
qualification under such section and except as disclosed in Section 5.7 of
the Xxxxxxx Disclosure Letter has, in fact, been qualified under the
applicable section of the Code from the effective date of such Xxxxxxx
Employee Program through and including the Closing Date (or, if earlier,
the date that such Xxxxxxx Employee Program). No event or omission has
occurred which would cause any such Xxxxxxx Employee Program to lose its
qualification under the applicable Code section.
(c) Neither Xxxxxxx nor any Xxxxxxx Affiliate knows, nor should
any of them reasonably know, of any material failure of any party to comply
with any laws applicable with respect to the Xxxxxxx Employee Programs.
With respect to any Xxxxxxx Employee Program, there has been no (i)
"prohibited transaction," as defined in Section 406 of ERISA or Code
Section 4975, (ii) material failure to comply with any provision of ERISA,
other applicable law, or any agreement, or (iii) non-deductible
contribution, which, in the case of any of (i), (ii), or (iii), could
subject Xxxxxxx or any Xxxxxxx Affiliate to material liability either
directly or indirectly (including, without limitation, through any
obligation of indemnification or contribution) for any damages, penalties,
or taxes, or any other loss or expense. No litigation or governmental
administrative proceeding (or investigation) or other proceeding (other
than those relating to routine claims for benefits) is pending or, to the
knowledge of Xxxxxxx, threatened with respect to any such Xxxxxxx Employee
Program.
(d) Except as disclosed in Section 5.7 of the Xxxxxxx
Disclosure Letter, during the last 3 years, neither Xxxxxxx nor any Xxxxxxx
Affiliate (i) has maintained any Employee Program which has been subject to
title IV of ERISA or Code Section 412 (a "Xxxxxxx Title IV Plan"),
including, but not limited to, any Multiemployer Plan, (ii) has provided
health care or any other non-pension benefits to any employees after their
employment is terminated (other than as required by part 6 of subtitle B of
title I of ERISA), or has promised to provide such post-termination
benefits, for a period longer than 12 months or (iii) has provided health
care or any other non-pension benefits to any individuals who were
previously employed by entities acquired by Xxxxxxx prior to the date of
this Agreement for a period longer than 12 months.
(e) With respect to each Xxxxxxx Employee Program, complete and
correct copies of the following documents (if applicable to such Xxxxxxx
Employee Program) have previously been delivered to RMSI: (i) all documents
embodying or governing such Xxxxxxx Employee Program, and any funding
medium for the Xxxxxxx Employee Program (including, without limitation,
trust agreements) as they may have been amended to the date hereof; (ii)
the most recent IRS determination or approval letter with respect to such
Xxxxxxx Employee Program under Code Section 401(a) or 501(c)(9), and any
applications for determination or approval subsequently filed with the IRS;
(iii) the three most recently filed IRS Forms 5500, with all applicable
schedules and accountants' opinions attached thereto; (iv) the three most
recent actuarial valuation reports completed with respect to such Xxxxxxx
Employee Program; (v) the summary plan description for such Xxxxxxx
Employee Program (or other descriptions of such Xxxxxxx Employee Program
provided to employees) and all modifications thereto; (vi) any insurance
policy (including any fiduciary liability insurance policy or fidelity
bond) related to such Xxxxxxx Employee Program; (vii) any registration
statement or other filing made pursuant to any federal or state securities
law and (viii) all correspondence to and from any state or federal agency
within the last three years.
(f) Each Xxxxxxx Employee Program may be amended, terminated,
or otherwise modified by Xxxxxxx to the greatest extent permitted by
applicable law, including the elimination of any and all future benefit
accruals under any Xxxxxxx Employee Program and, except as disclosed on
Section 5.7 of the Xxxxxxx Disclosure Letter, no condition exists which
would limit the right of Xxxxxxx or the Xxxxxxx Affiliate to so amend,
terminate or otherwise modify such Xxxxxxx Employee Program.
(g) No liability under Title IV or Section 302 of ERISA has
been incurred by Xxxxxxx or any Xxxxxxx Affiliate that has not been
satisfied in full and no condition exists that presents a material risk to
Xxxxxxx or any Xxxxxxx Affiliate of incurring any such liability, other
than liability for premiums due to the PBGC (which premiums have been paid
when due).
(h) The PBGC has not instituted proceedings to terminate any
Xxxxxxx Title IV Plan and no condition exists that presents a material risk
that such proceedings will be instituted.
(i) Except as disclosed in Section 5.7 of the Xxxxxxx
Disclosure Letter, with respect to each Xxxxxxx Title IV Plan, the present
value of accrued benefits under such plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such plan's actuary with respect to such plan, did not exceed,
as of its latest valuation date, the then current value of the assets of
such plan allocable to such accrued benefits.
(j) No Xxxxxxx Title IV Plan or any trust established there
under has incurred any "accumulated funding deficiency" (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived,
as of the last day of the most recent fiscal year of each Xxxxxxx Title IV
Plan ended prior to the Closing Date.
(k) No amounts payable under the Xxxxxxx Employee Programs will
fail to be deductible for federal income tax purposes by virtue of Section
162(a)(1), 162(m) or 280G of the Code.
5.8 Intentionally Omitted
5.9 No Payments to Employees, Officers and Directors. Section 5.9 of
the Xxxxxxx Disclosure Letter contains a true and complete list of all
arrangements, agreements or plans pursuant to which any cash or non-cash
payments or other obligation will become payable, accelerate the time of
payment or vesting or increase any amount currently payable (and the
maximum aggregate amount which may be payable thereunder) to each employee,
officer or director of Xxxxxxx or any Xxxxxxx Subsidiary as a result of the
Merger (assuming no termination of service).
5.10 Taxes. Except as set forth in Section 5.10 of the Xxxxxxx
Disclosure Letter:
(a) Xxxxxxx and each of the Xxxxxxx Subsidiaries have timely
filed all income and other material Tax Returns required to be filed by
them through the date hereof in a manner correct and complete in all
material respects and have timely paid or caused to be paid all Taxes shown
as due on such Tax Returns and all income and other material Taxes
otherwise required to be paid by them through the date hereof whether
disputed or not.
(b) On or before the Closing Date, Xxxxxxx and each of the Xxxxxxx
Subsidiaries shall have paid all income and other material Taxes (whether
or not shown on any Tax Return) required to be paid by them on or before
the Closing Date whether disputed or not and shall have accrued or made
full, adequate and complete provision on their books as required by GAAP
for all income and other material Taxes (whether or not shown on any Tax
Return) not required to be paid by them on or before the Closing Date.
(c) No Tax Authority is now asserting or, to the best knowledge
of Xxxxxxx, threatening to assert against Xxxxxxx or any of the Xxxxxxx
Subsidiaries any deficiency or claim for Taxes. No claim for unpaid income
taxes or for other unpaid material Taxes has become a lien or encumbrance
of any kind against any material asset of Xxxxxxx or any of the Xxxxxxx
Subsidiaries except for statutory liens for such Taxes that are not yet
due. Neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries has entered into a
closing agreement pursuant to Section 7121 of the Code after December 31,
1990.
(d) Xxxxxxx and the Xxxxxxx Subsidiaries have previously
delivered or made available to RMSI complete and accurate copies of (1) all
audit reports, revenue agent reports, requests for letter rulings, letter
rulings, technical advice memoranda and similar documents issued by all Tax
Authorities relating to Taxes, (2) all income Tax Returns filed by Xxxxxxx
or any of the Xxxxxxx Subsidiaries with respect to taxable periods
beginning after December 31, 1990 and (3) any closing agreements (and any
exhibits thereto) entered into by Xxxxxxx or any of the Xxxxxxx
Subsidiaries as of the date hereof. Xxxxxxx will deliver or make available
to RMSI any documents mentioned in the preceding sentence that become
available to Xxxxxxx or any of the Xxxxxxx Subsidiaries after the date
hereof and on or before the Closing Date.
(e) There has not been any audit of any tax return filed by
Xxxxxxx or any of the Xxxxxxx Subsidiaries with respect to any taxable year
beginning after December 31, 1990, no such audit is in progress, and
neither Xxxxxxx nor any of the Xxxxxxx Subsidiaries has been notified by
any Tax Authority that any such audit is contemplated or pending. Neither
Xxxxxxx nor any of the Xxxxxxx Subsidiaries has requested or received an
extension of time with respect to any date on which a tax return was or is
to be filed by Xxxxxxx or any of the Xxxxxxx Subsidiaries and there is no
extension, waiver or agreement for the extension of time for the assessment
or payment of any Taxes owed (or alleged to be owed) by Xxxxxxx or any of
the Xxxxxxx Subsidiaries.
(f) No power of attorney has been granted by or with respect to
Xxxxxxx or any of the Xxxxxxx Subsidiaries with respect to any matter
relating to Taxes.
(g) There are no agreements or understandings relating to Taxes
between Xxxxxxx or any of the Xxxxxxx Subsidiaries and any other party
affecting or which could affect Xxxxxxx or any of the Xxxxxxx Subsidiaries
by which Xxxxxxx or any of the Xxxxxxx Subsidiaries will be bound after the
Closing Date or which could affect the computation of Taxes by Xxxxxxx or
any of the Xxxxxxx Subsidiaries.
5.11 Tax-Free Treatment. Neither Xxxxxxx nor any of the Xxxxxxx
Subsidiaries has taken or caused to be taken any action which would cause
the Merger to fail to qualify as a Reorganization under Section 368(a) of
the Code.
5.12 Proxy Statement. On the date the Proxy Statement (as defined in
Section 6.7 hereof) is mailed to Xxxxxxx'x stockholders, none of the
information supplied in writing by or on behalf of Xxxxxxx for inclusion in
the Proxy Statement will be false or misleading with respect to any
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading or necessary to
correct any statement in any earlier communication with respect to the
stockholders' meeting or the solicitation of proxies therefore which has
become false or misleading. Notwithstanding the foregoing, Xxxxxxx makes no
representation or warranty with respect to information supplied by RMSI or
any of its affiliates or representatives in writing for inclusion in the
Proxy Statement.
5.13 SEC Documents. As of the date it was declared effective by the
SEC, Xxxxxxx'x Registration Statement on Form S-1 (Registration No.
333-53419), as amended (the "S-1"), (i) complied as to form in all material
respects with the applicable requirements of the Securities Act and the
Exchange Act and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. As of its date of
filing, Xxxxxxx'x Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 filed with the SEC on March 31, 1999 (the "Xxxxxxx SEC
Report") (i) complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and (ii)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the parties hereto
acknowledge that the Xxxxxxx SEC Report does not contain any information or
disclosure relating to this Agreement and the transactions contemplated
thereby, including the Merger. There is no material fact existing today
directly relating to the business, operations or condition of Xxxxxxx
(other than facts which relate to general economic trends or conditions or
general conditions affecting the industries in which Xxxxxxx or the Xxxxxxx
Subsidiaries operate) that is reasonably likely to have a Xxxxxxx Material
Adverse Effect, that has not been set forth in the Xxxxxxx SEC Report or
the Xxxxxxx Disclosure Letter; provided that the loss of, or a reduction in
revenues from, one or more customers or principals shall be deemed not to
have a Xxxxxxx Material Adverse Effect, unless the loss of, or reductions
in revenues from, such customers or principals, individually or in the
aggregate, constitute a Material Customer Loss. A true and complete copy of
the Xxxxxxx SEC Report has been delivered to RMSI. Each of the consolidated
balance sheets of Xxxxxxx included in or incorporated by reference into the
Xxxxxxx SEC Report and the S-1 (including the related notes and schedules)
fairly presents the consolidated financial position of Xxxxxxx and the
Xxxxxxx Subsidiaries as of its date and each of the consolidated statements
of income, retained earnings and cash flows of Xxxxxxx included in or
incorporated by reference into the Xxxxxxx SEC Report and the S-1
(including any related notes and schedules) fairly presents the results of
operations, retained earnings or cash flows, as the case may be, of Xxxxxxx
and the Xxxxxxx Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to normal year-end audit adjustments
which would not be material in amount or effect), in each case in
accordance with generally accepted accounting principles consistently
applied during the periods involved, except, in the case of the unaudited
statements, as permitted by Form 10-Q pursuant to Section 13 or 15(d) of
the Exchange Act.
5.14 No Brokers. Except as disclosed in Section 5.14 of the Xxxxxxx
Disclosure Letter, neither Xxxxxxx nor any Xxxxxxx Subsidiary has entered
into any contract, arrangement or understanding with any person or firm
which may result in the obligation of such entity, RMSI or Xxxxxxx to pay
any finder's fees, brokerage or agent's commissions, advisory fee or other
like payments relating to or in connection with the negotiations leading to
this Agreement or the consummation of the transactions contemplated hereby.
5.15 Litigation. There is no litigation or governmental or
administrative proceeding, arbitration or investigation pending or, to the
knowledge of Xxxxxxx, threatened against Xxxxxxx or the Xxxxxxx
Subsidiaries which, either individually or in the aggregate, is reasonably
likely to have a Xxxxxxx Material Adverse Effect on Xxxxxxx and the Xxxxxxx
Subsidiaries taken as a whole, or which would prevent or hinder the
consummation of the transactions contemplated by this Agreement.
5.16 Absence of Certain Changes. Except as disclosed in Section 5.16
of the Xxxxxxx Disclosure Letter, since December 31, 1998 there has not
been any change in the financial condition, properties, assets,
liabilities, business or operations of Xxxxxxx, which change by itself or
in conjunction with all other such changes, whether or not arising in the
ordinary course of business, has had a Xxxxxxx Material Adverse Effect;
provided that no decrease in the reported price of Xxxxxxx Common Stock
shall in any event constitute a Xxxxxxx Material Adverse Effect under any
provision of this Agreement; provided further that the loss of, or a
reduction in revenues from, one or more customers or principals shall be
deemed not to have a Xxxxxxx Material Adverse Effect under any provision of
this Agreement, unless the loss of, or reduction in revenues from, such
customers or principals, individually or in the aggregate, constitute a
Material Customer Loss.
5.17 Disclosure. The representations, warranties and statements
contained or referred to in this Agreement and in the certificates,
exhibits and the Xxxxxxx Disclosure Letter delivered by Xxxxxxx pursuant to
this Agreement (including the Xxxxxxx SEC Report) to RMSI do not contain
any untrue statement of a material fact, and, when taken together, do not
omit to state a material fact required to be stated therein or necessary in
order to make such representations, warranties or statements not misleading
in light of the circumstances under which they were made.
5.18 Undisclosed Liabilities. Except as and to the extent reflected,
reserved against or otherwise specifically disclosed in the Xxxxxxx SEC
Report and the Xxxxxxx Disclosure Letter, neither Xxxxxxx nor any Xxxxxxx
Subsidiary has any liabilities or obligations of any kind required to be
disclosed in accordance with GAAP applied on a basis consistent with past
practice, whether accrued, absolute, known or unknown, asserted or
unasserted, contingent or otherwise which could reasonably be expected to
have, individually or in the aggregate, a Xxxxxxx Material Adverse Effect.
5.19 Customers and Principals. Except as disclosed in Section 5.16 of
the Xxxxxxx Disclosure Letter, as of the date hereof, Xxxxxxx has no
knowledge of (i) any loss since December 31, 1998 or any currently
threatened loss of any material customer or principal, other than losses or
threatened losses arising out of, resulting from or relating to the
execution or consummation of this Agreement or the transactions
contemplated thereby, or (ii) any pending bankruptcy filing, insolvency or
material adverse change in the financial position of any material customer
or principal.
5.20 Receivables. All of Xxxxxxx'x accounts receivable arose from
bona fide transactions in the ordinary course of business, are valid and
collectible obligations of the respective makers thereof and were not and
are not subject to any offset or counter-claim, except for the amount
reserved for doubtful accounts set forth on (i) prior to the availability
of Xxxxxxx'x consolidated unaudited financial statements for the quarter
ended March 31, 1999, Xxxxxxx'x consolidated audited financial statements
for the year ended December 31, 1998, and (ii) after Xxxxxxx'x consolidated
unaudited financial statements for the quarter ended March 31, 1999 become
available, Xxxxxxx'x consolidated unaudited financial statements for the
quarter ended March 31, 1999 (the "Xxxxxxx Financials"). Xxxxxxx'x accounts
receivable are reflected on the Xxxxxxx Financials in accordance with GAAP
(as defined herein) applied on a basis consistent with past practice. Since
the date of the Xxxxxxx Financials, there have not been any material
write-offs as uncollectible of any of Xxxxxxx'x accounts receivable, except
for write-offs in the ordinary course of business and consistent with past
practice.
5.21 Definition of Xxxxxxx'x Knowledge. As used in this Agreement,
the phrase "to the knowledge of Xxxxxxx" or "to the best knowledge of
Xxxxxxx" (or words of similar import) means the actual knowledge of Xxxxxx
X. Xxxxxxx, Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxx or Xxxxxx X. Xxxxxx.
5.22 Opinion of Financial Advisor. The Special Committee has received
the opinion of Xxxxxx Xxxxxxx Xxxxxx Gull, its financial advisor,
substantially to the effect that the Merger is fair to Xxxxxxx from a
financial point of view, a copy of which will be provided to RMSI.
ARTICLE 6. COVENANTS
6.1 Acquisition Proposals.
(a) RMSI represents and warrants that it has terminated any
discussions or negotiations relating to, or that may reasonably be expected
to lead to, any Acquisition Proposal (as defined below). From and after the
date hereof until the termination of this Agreement, RMSI shall not, nor
shall it permit any of the RMSI Subsidiaries to, nor shall it authorize or
permit any officer, director, employee, agent, advisor or representative of
RMSI or any of the RMSI Subsidiaries to, directly or indirectly (i)
solicit, initiate or encourage the submission of, any inquiries, proposals
or offers from any person relating to an Acquisition Proposal, (ii) enter
into any agreement with respect to any Acquisition Proposal, or (iii) enter
into, engage in, or participate or continue in, any discussions or
negotiations regarding, or furnish to any person any information with
respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or would reasonably be expected to
lead to, any Acquisition Proposal.
(b) Xxxxxxx represents and warrants that it has terminated any
discussions or negotiations relating to, or that may reasonably be expected
to lead to, any Acquisition Proposal (as defined below). From and after the
date hereof until the termination of this Agreement, Xxxxxxx shall not, nor
shall it permit any of the Xxxxxxx Subsidiaries to, nor shall it authorize
or permit any officer, director, employee, agent, advisor or representative
of Xxxxxxx or any of the Xxxxxxx Subsidiaries to, directly or indirectly
(i) solicit, initiate or encourage the submission of, any inquiries,
proposals or offers from any person relating to an Acquisition Proposal,
(ii) enter into any agreement with respect to any Acquisition Proposal, or
(iii) enter into, engage in, or participate or continue in, any discussions
or negotiations regarding, or furnish to any person any information with
respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or would reasonably be expected to
lead to, any Acquisition Proposal. Notwithstanding anything to the contrary
in this Agreement, Xxxxxxx may (A) furnish information to, or participate
in discussions or negotiations with, any person or entity that makes bona
fide, written, unsolicited Acquisition Proposal for which financing, to the
extent required to consummate the Acquisition Proposal, is then fully and
unconditionally committed in writing or is, in the good faith judgment of
the Xxxxxxx Board of Directors, likely to be obtained, with respect to
Xxxxxxx if the Board of Directors of Xxxxxxx determines in good faith (i)
after receiving the advice of outside counsel and (ii) after receiving the
advice of the financial advisor to the directors that such Acquisition
Proposal, if accepted, is reasonably likely to be completed, taking into
account all legal, financial, regulatory and other aspects of the
Acquisition Proposal and the person making the Acquisition Proposal and
that would, if consummated, result in a transaction more favorable to
Xxxxxxx'x stockholders from a financial point of view than the transaction
contemplated by this Agreement (any such Acquisition Proposal, a "Superior
Proposal"); provided, however, that prior to Xxxxxxx'x furnishing such
information or participating in such discussions or negotiations, such
person or entity shall have executed a confidentiality and standstill
agreement with Xxxxxxx having terms substantially similar to those
contained in that certain exclusivity/confidentiality agreement, dated
March 10, 1999 between Xxxxxxx and RMSI (the "Confidentiality Agreement"),
and (B) comply with Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with respect to an Acquisition Proposal.
(c) As used herein, the term "Acquisition Proposal" shall mean,
with respect to any person, any proposal or offer for a (i) merger,
consolidation or similar transaction involving such person, (ii) sale,
lease or other disposition, directly or indirectly, by merger,
consolidation, share exchange or otherwise, of any assets of such person or
their subsidiaries representing 15% or more of the consolidated assets of
such person and their subsidiaries, (iii) issue, sale or other disposition
of (including by way of merger, consolidation, share exchange or any
similar transaction) securities (or options, rights or warrants to
purchase, or securities convertible into, such securities) representing 15%
or more of the votes attached to the outstanding securities of such person,
(iv) transaction in which any person shall acquire beneficial ownership (as
such term is defined in Rule 13d-3 under the Exchange Act), or the right to
acquire beneficial ownership, or any "group" (as such term is defined under
the Exchange Act) shall have been formed which beneficially owns or has the
right to acquire beneficial ownership of, 15% or more of the outstanding
shares of such person's capital stock or (v) recapitalization,
restructuring, liquidation or dissolution with respect to such person or
their subsidiaries; provided, however, that the term "Acquisition Proposal"
shall not include the Merger and the transactions contemplated thereby.
(d) Xxxxxxx and RMSI shall immediately advise the other party
orally and in writing of any Acquisition Proposal made to it or made after
the date hereof, including the terms thereof and any changes thereto and
any termination thereof, or any inquiry, proposal or discussion regarding
any such Acquisition Proposal, the identity of the person making such
Acquisition Proposal or inquiry, proposal or discussion, the material terms
thereof. After the receipt by Xxxxxxx of an Acquisition Proposal, Xxxxxxx
shall, unless prohibited by law from doing so, keep RMSI informed on a
current basis of the status of any such inquiry, proposal or discussion.
(e) Prior to the vote on this Agreement at the Xxxxxxx Stockholders
Meeting, the Board of Directors of Xxxxxxx, at any time 48 hours following
notification to RMSI of Xxxxxxx'x intention to do so and only if Xxxxxxx
shall have otherwise complied with its obligations under this Section 6.1,
may withdraw or modify its approval or recommendation of the Merger,
terminate this Agreement, and cause Xxxxxxx to enter into any agreement
with respect to a Superior Proposal, provided it shall pay or cause to be
paid to RMSI the Termination Amount. If Xxxxxxx shall have notified RMSI of
its intent to enter into an agreement with respect to a Superior Proposal
in compliance with the preceding sentence, and has otherwise complied with
that sentence, Xxxxxxx may enter into an agreement with respect to such
Superior Proposal (with the person making the Superior Proposal and on
terms no less favorable than those specified in the notification to RMSI)
after the expiration of such 48 hour period.
6.2 Conduct of Businesses.
(a) Conduct by Xxxxxxx and RMSI. Prior to the Effective Time,
unless the other party has consented in writing thereto or unless otherwise
specifically permitted by this Agreement and except for those matters set
forth in Schedule 6.2 attached hereto, Xxxxxxx and RMSI:
(i) shall use their respective reasonable best efforts,
and shall cause each of their respective subsidiaries to use their
reasonable best efforts, to preserve intact their business
organizations and goodwill and keep available the services of their
respective executive officers and material employees, their customers
and principals and others having business relations with Xxxxxxx or
RMSI, as applicable;
(ii) shall confer on a regular basis with one or more
representatives of the other party to report on material operational
matters and any proposals to engage in material transactions;
(iii) shall promptly notify the other party of any
material emergency or other material change in the condition
(financial or otherwise), business, properties, assets, liabilities,
prospects or the normal course of their businesses or in the
operation of their properties, any material governmental complaints,
investigations or hearings (or communications indicating that the
same may be contemplated), or the breach in any material respect of
any representation or warranty contained herein;
(iv) shall promptly deliver to the other party true and
correct copies of any report, statement or schedule filed by or with
respect to it with the SEC subsequent to the date of this Agreement
and copies of all correspondence with the SEC relating thereto;
(v) shall, and shall cause each of their respective
subsidiaries to, conduct its operations according to their usual,
regular and ordinary course in substantially the same manner as
heretofore conducted and refrain from changing or introducing any
method of financial or tax accounting, management or operations
except in the ordinary course of business and consistent with past
practices, subject to clauses (vi)-(xix) below;
(vi) shall not amend their respective certificate of
incorporation or bylaws, and shall cause each of their respective
subsidiaries not to amend their charter, bylaws, joint venture
documents, partnership agreements or equivalent documents;
(vii) shall not (A) issue any shares of its capital
stock, effect any stock split, reverse stock split, stock dividend,
recapitalization or other similar transaction, (B) grant, confer or
award any option, warrant, conversion right or other right not
existing on the date hereof to acquire any shares of its capital
stock or grant any stock appreciation rights, (C) increase any
compensation, other than in the ordinary course of business
consistent with past practice, or enter into or amend any employment
agreement with any of their present or future officers or directors,
or (D) adopt any new employee benefit plan (including any stock
option, stock appreciation right, stock benefit or stock purchase
plan) or amend any of their benefit plans in any material respect,
except for changes which are not more favorable to participants in
such plans or are otherwise required to comply with applicable law;
(viii)shall not (A) declare, set aside or pay any
dividend or make any other distribution or payment with respect to
any shares of its capital stock, or (B) directly or indirectly
redeem, purchase or otherwise acquire any shares of their respective
capital stock or capital stock of any or their respective
subsidiaries, or make any commitment for any such action;
(ix) shall not, and shall cause all of their respective
subsidiaries not to, sell, lease or otherwise dispose of, or agree to
the sale, lease or other disposition of any of their assets or
properties which are material, individually or in the aggregate, or
any of the capital stock of, or partnership or other interests owned
by, Xxxxxxx, RMSI or any of their subsidiaries except in the ordinary
course of business;
(x) shall not, and shall not authorize or give any of
their respective subsidiaries consent to, make any loans, advances or
capital contributions to, or investments in, any other person other
than loans and advances to employees relating to the incurrence of
expenses in the ordinary course consistent with past practices;
(xi) shall not, and shall not permit any of their
respective subsidiaries to, pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes thereto)
of RMSI included in the RMSI SEC Report or of Xxxxxxx included in the
Xxxxxxx SEC Reports, as applicable, or incurred in the ordinary
course of business consistent with past practice or entered into in
accordance with this Agreement or the settlement of claims and
litigation in the ordinary course of business;
(xii) shall not, and shall cause all of their respective
subsidiaries not to, enter into any commitment not provided for in
their respective capital expenditure budgets which may result in
total payments or liability by it in excess of $100,000 per year
(provided, however, that nothing contained in this clause (xii) shall
permit Xxxxxxx or RMSI, as applicable, or any of their respective
subsidiaries to take any action prohibited by the other provisions of
this Section 6.2), other than commitments for expenses of attorneys,
accountants and investment bankers incurred in connection with the
transactions contemplated by this Agreement or, if and to the extent
consistent with this Agreement, any Acquisition Proposal; and
(xiii)shall not, and shall cause all of their respective
subsidiaries not to, engage in any discussions relating to, make any
proposal or offer relating to, or enter into any agreement with
respect to, any acquisition or purchase by Xxxxxxx or RMSI, as
applicable, or any of their respective subsidiaries of all or a
significant portion of the assets of, or any capital stock or other
equity interest in, any entity, or any merger, consolidation,
business combination or similar transaction involving Xxxxxxx or
RMSI, as applicable, or any of their respective subsidiaries, other
than in connection with the pending transactions listed on Schedule
6.2(a)(xiii) contained in their respective Disclosure Letters;
(xiv) shall not, and shall cause all of their respective
subsidiaries not to, make any purchase of any product, asset or
property other than in the ordinary course of business, or mortgage,
pledge, subject to a lien or otherwise encumber any of its properties
or assets other than in the ordinary course of business, other than
in connection with the pending transactions listed on Schedule
6.2(a)(xiii) contained in their respective Disclosure Letters;
(xv) shall not, and shall cause all of their respective
subsidiaries not to, incur any contingent liability as a guarantor or
otherwise with respect to the obligations of others, or incur any
other indebtedness or contingent or fixed obligations or liabilities
except in the ordinary course of business;
(xvi) shall not, and shall cause all of their respective
subsidiaries not to, make any change in the compensation payable or
to become payable to any of their respective officers, employees,
agents or independent contractors other than increases in the
ordinary course of business consistent with past practices, provided
that no compensation payable to any of Xxxxxxx'x or RMSI's officers,
employees, agents, or independent contractors shall be increased by
more than 5% of the compensation received by such person for the
calendar year ending December 31, 1998;
(xvii) shall have, and shall cause all of their respective
subsidiaries to have, in effect and maintain at all times all
insurance of the kind and in the amount it currently carries or
equivalent insurance with any substitute insurers approved in writing
by the other party;
(xviii) shall permit, and shall cause all of their
respective subsidiaries to permit the other party and its authorized
representatives to have full access to all its properties, assets,
records, Tax Returns, contracts and documents and furnish to the
other party or its authorized representatives such financial and
other information with respect to its business or properties as the
other party may from time to time reasonably request; and
(xix) shall not, and shall cause all of their respective
subsidiaries not to, make any material Tax elections, settle or
compromise any Tax liability with any Taxing Authority or file any
amended Tax Return or claim for refund.
Any request for consent of Xxxxxxx under this Section 6.2 shall be
directed to Xxxxxx X. Xxxxxxx at the address set forth for Xxxxxxx in
Section 9.2 hereof, with copies to Xxxxxx X. Cable, P.C. at the address set
forth for Xxxxxxx, Procter & Xxxx LLP set forth in Section 9.2 hereof. Any
request for consent of RMSI under this Section 6.2 shall be directed to
Xxxxxx X. Xxxxxxxx at the address set forth for RMSI in Section 9.2 hereof,
with copies to Xxxxxx Xxxxxx Simon, Esq. at the address set forth for
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP set forth in Section 9.2 hereof.
6.3 Meeting of Stockholders. Promptly following execution of this
Agreement, each of Xxxxxxx and RMSI will take all action necessary in
accordance with applicable law and their respective charter and bylaws to
convene a meeting of their respective stockholders as promptly as
practicable to consider and vote upon the approval of this Agreement and
the consummation of the transactions contemplated hereby. The Board of
Directors of each of Xxxxxxx and RMSI has recommended that their respective
stockholders approve this Agreement and the transactions contemplated
hereby and each of Xxxxxxx and RMSI shall use their reasonable best efforts
to obtain such approval, including, without limitation, by timely mailing
the Proxy Statement (as defined in Section 6.7 hereof) to Xxxxxxx'x
stockholders; provided, however, that nothing contained in this Section 6.3
shall prohibit the Board of Directors of Xxxxxxx from changing such
recommendation or using their reasonable best efforts to obtain such
approval if the Board of Directors of Xxxxxxx has determined in good faith,
after consultation with and in reliance upon the advice of Xxxxxxx, Procter
& Xxxx LLP, or another nationally recognized firm selected by Xxxxxxx, that
the failure to do so would be a violation of such Board of Directors'
fiduciary duties to its stockholders under applicable law. It shall be a
condition to the mailing of the Proxy Statement that (i) Xxxxxxx shall have
received a "comfort" letter from Ernst & Young, L.L.P., independent public
accountants for RMSI, dated as of a date within two business days before
the date on which the Proxy Statement, with respect to the financial
statements of RMSI included or incorporated in the Proxy Statement is first
mailed to stockholders, in form and substance reasonably satisfactory to
Xxxxxxx, and customary in scope and substance for "comfort" letters
delivered by independent public accountants in connection with proxy
statements similar to the Proxy Statement; and (ii) RMSI shall have
received a "comfort" letter from Xxxxxx Xxxxxxxx LLP, independent public
accountants for Xxxxxxx, dated as of a date within two business days before
the date on which the Proxy Statement, with respect to the financial
statements of Xxxxxxx included or incorporated in the Proxy Statement is
first mailed to stockholders, in form and substance reasonably satisfactory
to RMSI, and customary in scope and substance for "comfort" letters
delivered by independent public accountants in connection with proxy
statements similar to the Proxy Statement.
6.4 Filings; Other Action. Subject to the terms and conditions herein
provided, RMSI and Xxxxxxx shall: (a) use all reasonable best efforts to
cooperate with one another in (i) determining which filings are required to
be made prior to the Effective Time with, and which consents, approvals,
permits or authorizations are required to be obtained prior to the
Effective Time from, governmental or regulatory authorities of the United
States, the several states, and foreign jurisdictions and any third parties
in connection with the execution and delivery of this Agreement and the
other agreements contemplated hereby (the "Ancillary Agreements") and the
consummation of the transactions contemplated by such agreements and (ii)
timely making all such filings and timely seeking all such consents,
approvals, permits or authorizations; (b) use all reasonable best efforts
to obtain in writing any consents required from third parties to effectuate
the Merger and the transactions contemplated hereby and by the Ancillary
Agreements, including without limitation the required consents set forth on
Schedule 7.3(g), in form and substance reasonably satisfactory to each of
RMSI and Xxxxxxx; and (c) use all reasonable best efforts to take, or cause
to be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement, and the other Ancillary
Agreements. If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purpose of this Agreement or the
Ancillary Agreements, the proper officers and directors of Xxxxxxx and RMSI
shall take all such necessary action. Xxxxxxx and RMSI shall cooperate with
all reasonable requests of the other parties hereto and their counsel in
connection with the consummation of the transactions contemplated hereby.
6.5 Access to Information.
(a) Upon reasonable notice to the other, Xxxxxxx and RMSI shall
(and shall cause their respective subsidiaries to) afford to the officers,
employees, accountants, counsel and other representatives of the others,
reasonable access, during normal business hours during the period from the
date hereof to the Effective Time, to all its properties, books, contracts,
commitments and records and permit such persons to make such inspections as
they may reasonably require, and during such period, Xxxxxxx and RMSI shall
(and cause their respective subsidiaries to) furnish promptly to the others
all information concerning its business, properties, personnel and
accountants as the others may reasonably request.
(b) RMSI agrees that, unless and until the Closing has been
consummated, RMSI and their officers, directors, agents and representatives
will hold in strict confidence, and will not use, any confidential or
proprietary data or information obtained from Xxxxxxx with respect to its
business or financial condition except for the purpose of evaluating,
negotiating and completing the transaction contemplated hereby. Information
that (i) is or becomes generally available to the public as a result of
disclosure by Xxxxxxx or its representatives, (ii) was available to RMSI on
a non-confidential basis prior to its disclosure to RMSI by Xxxxxxx, (iii)
becomes available to RMSI on a non-confidential basis from a source other
than Xxxxxxx or its representatives provided that such source is not bound
by a confidentiality Agreement with Xxxxxxx or its representatives or (iv)
was developed by RMSI independently and without any use of information
provided by or obtained from Xxxxxxx shall not be deemed confidential or
proprietary information for purposes of this agreement. If the transaction
contemplated by this Agreement is not consummated, RMSI will return to
Xxxxxxx (or certify that they have destroyed) all copies of such data and
information, including but not limited to financial information, customer
lists, business and corporate records, worksheets, test reports, Tax
Returns, lists, memoranda, and other documents prepared by or made
available to RMSI in connection with the transaction.
(c) Xxxxxxx agrees that, unless and until the Closing has been
consummated, Xxxxxxx and their officers, directors, agents and
representatives will hold in strict confidence, and will not use, any
confidential or proprietary data or information obtained from RMSI with
respect to its business or financial condition except for the purpose of
evaluating, negotiating and completing the transaction contemplated hereby.
Information that (i) is or becomes generally available to the public as a
result of disclosure by RMSI or its representatives, (ii) was available to
Xxxxxxx on a non-confidential basis prior to its disclosure to Xxxxxxx by
RMSI, (iii) becomes available to Xxxxxxx on a non-confidential basis from a
source other than RMSI or its representatives provided that such source is
not bound by a confidentiality agreement with RMSI or its representatives
or (iv) was developed by Xxxxxxx independently and without any use of
information provided by or obtained from RMSI shall not be deemed
confidential or proprietary information for purposes of this Agreement. If
the transaction contemplated by this Agreement is not consummated, Xxxxxxx
will return to RMSI (or certify that they have destroyed) all copies of
such data and information, including but not limited to financial
information, customer lists, business and corporate records, worksheets,
test reports, Tax Returns, lists, memoranda, and other documents prepared
by or made available to Xxxxxxx in connection with the transaction.
6.6 Publicity. Xxxxxxx and RMSI shall consult with each other before
issuing any press release or otherwise making any public statements with
respect to this Agreement, the Ancillary Agreements, or any transaction
contemplated hereby and thereby and shall not issue any such press release
or make any such public statement without the prior consent of the other
parties, which consent shall not be unreasonably withheld; provided,
however, that a party may, without the prior consent of the other parties,
issue such press release or make such public statement as may be required
(i) in the opinion of counsel under any applicable law or regulation or
pursuant to the rules of any exchange or the NASDAQ National Market or (ii)
in response to any legal process, including, without limitation, any
interrogatories, documents subpoena or civil investigative demand.
6.7 Proxy Statement. Xxxxxxx shall prepare and file with the SEC
(with appropriate requests for confidential treatment, unless the parties
hereto otherwise agree) under the Exchange Act, a proxy statement and form
of proxies (such proxy statement and form of proxy, together with any
amendments to supplements thereto, the "Proxy Statement") relating to the
stockholder meeting of Xxxxxxx and the vote of the stockholders of Xxxxxxx
with respect to this Agreement (the "Xxxxxxx Stockholders Meeting").
Xxxxxxx and RMSI will cause the Proxy Statement to comply as to form in all
material respects with the applicable provisions of the Exchange Act and
the rules and regulations thereunder. Each of Xxxxxxx, on the one hand, and
RMSI, on the other hand, shall furnish all information about itself and its
business and operations and all necessary financial information to the
other as the other may reasonably request in connection with the
preparation of the Proxy Statement. Xxxxxxx shall use its reasonable best
efforts, and RMSI will cooperate with them, to have the Proxy Statement
cleared with the SEC as promptly as practicable. Each of Xxxxxxx and RMSI,
agrees promptly to correct any information provided by it for use in the
Proxy Statement if and to the extent that such information shall have
become false or misleading in any material respect, and each of the parties
hereto further agrees to take all steps necessary to amend or supplement
the Proxy Statement and to cause the Proxy Statement as so amended or
supplemented to be filed with the SEC and to be disseminated to Xxxxxxx'x
stockholders, in each case as and to the extent required by applicable
federal and state securities laws and the DGCL. Each of Xxxxxxx and RMSI
agrees that the information provided by it for inclusion in the Proxy
Statement and each amendment or supplement thereto, at the time of mailing
thereof, will not include any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Each of Xxxxxxx and RMSI will advise the other
parties, and deliver copies (if any) to them, promptly after receipt
thereof, of (i) any request by or correspondence or communication from the
SEC with respect to the Proxy Statement (ii) any responses thereto and
(iii) notice of the time when the Proxy Statement has been cleared or any
supplement or amendment has been filed, the issuance of any stop order.
6.8 Listing Application. Xxxxxxx and RMSI shall cooperate and
promptly prepare and submit to the Nasdaq National Market all reports,
applications and other documents that may be necessary or desirable to
enable all of the shares of Xxxxxxx Common Stock issuable in the Merger or
that will be reserved for issuance at the Effective Time to be listed for
trading on the Nasdaq National Market. Each of Xxxxxxx and RMSI shall
furnish all information about itself and its business and operation and all
necessary financial information to the other as the other may reasonably
request in connection with the such Nasdaq National Market listing process.
Each of Xxxxxxx and RMSI agree promptly to correct any information provided
by it for use in the Nasdaq National Market listing process if and to the
extent that such information shall have become false or misleading in any
material respect. Each of Xxxxxxx and RMSI will advise and deliver copies
(if any) to the other parties, promptly after it receives notice thereof,
of any request by the Nasdaq National Market for amendment of any submitted
materials or comments thereon and responses thereto or requests by the
Nasdaq National Market for additional information.
6.9 Further Action. Each party hereto shall, subject to the
fulfillment at or before the Effective Time of each of the conditions of
performance set forth herein or the waiver thereof, perform such further
acts and execute such documents as may reasonably be required to effect the
Merger and the transactions contemplated by this Agreement, and the
Ancillary Agreements. In connection with the Closing, RMSI and each RMSI
Subsidiary shall use its reasonable best efforts to deliver to Xxxxxxx such
deeds, bills of sale, assignments, certificates, affidavits, indemnities
and other agreements and documents as are reasonably required to effectuate
consummation of the transactions described herein.
6.10 Affiliates of RMSI.
(a) RMSI shall use its reasonable best efforts to deliver or cause
to be delivered to Xxxxxxx, prior to the Closing Date, from each of the RMSI
Stockholders ("Affiliates"), an Affiliate Letter in the form attached
hereto as Exhibit X. Xxxxxxx shall be entitled to place legends as
specified in such affiliate letters on the certificates evidencing any
shares to be received by such Affiliates pursuant to the terms of this
Agreement and to issue appropriate stop transfer instructions to the
transfer agent for the shares, consistent with the terms of such affiliate
letters.
(b) Xxxxxxx shall file the reports required to be filed by it
under the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and shall take such further action as any Affiliate of RMSI may
reasonably request, all to the extent required from time to time to enable
such Affiliate to sell shares received by such Affiliate in the Merger
without registration under the Securities Act pursuant to (i) Rule
145(d)(1) or (ii) any successor rule or regulation hereafter adopted by the
SEC.
6.11 Expenses. All costs and expenses incurred in connection with
this Agreement and the Ancillary Agreements and the transactions
contemplated hereby and thereby shall be paid by the party incurring such
expenses, except that (a) the filing fees in connection with the filing of
the Proxy Statement with the SEC, (b) the filing fee in connection with the
listing of the shares of Xxxxxxx Common Stock issuable in the Merger and
issuable upon exercise of the Rollover Options and the New Options on the
Nasdaq National Market, if any, (c) the expenses incurred for printing the
Proxy Statement, and (d) the filing fee in connection with the filing(s),
if any, under the HSR Act, shall be shared equally by RMSI, on the one
hand, and Xxxxxxx, on the other hand. All costs and expenses for
professional services rendered in connection with the transactions
contemplated by this Agreement and the Ancillary Agreements including, but
not limited to, investment banking and legal services ("Professional
Expenses"), will be paid by each party incurring such costs and expenses.
Notwithstanding anything in this Agreement to the contrary, in the event
that the Merger is consummated, all costs and expenses incurred by Xxxxxxx,
RMSI and the RMSI Stockholders in connection with this Agreement and the
Ancillary Agreements and the transactions contemplated hereby and thereby
(including, without limitation, any and all Professional Expenses) shall be
paid by the Surviving Corporation; provided, however, that the Surviving
Corporation shall not be obligated to pay any expenses incurred by Xx.
Xxxxxxxx, Xx. Xxxxxx, Xx. Xxxxxx or Xx. Xxxx in an amount not to exceed
$10,000 in the aggregate.
6.12 Notice of Default.
(a) Promptly upon the occurrence of, or promptly upon RMSI
becoming aware of the impending or threatened occurrence of, any event
which would cause or constitute a breach or default, or would have caused
or constituted a breach or default had such event occurred or been known to
the RMSI prior to the date hereof, of any of the representations,
warranties or covenants of RMSI contained in or referred to in this
Agreement, the RMSI Disclosure Letter or in any Exhibit referred to in this
Agreement, RMSI shall give detailed written notice thereof to Xxxxxxx and
RMSI shall use its best efforts to prevent or promptly remedy the same.
(b) Promptly upon the occurrence of, or promptly upon Xxxxxxx
becoming aware of the impending or threatened occurrence of, any event
which would cause or constitute a breach or default, or would have caused
or constituted a breach or default had such event occurred or been known to
the Xxxxxxx prior to the date hereof, of any of the representations,
warranties or covenants of Xxxxxxx contained in or referred to in this
Agreement, the Xxxxxxx Disclosure Letter or in any Exhibit referred to in
this Agreement, Xxxxxxx give detailed written notice thereof to RMSI and
Xxxxxxx shall use its best efforts to prevent or promptly remedy the same.
6.13 Filings Under Xxxx-Xxxxx-Xxxxxx Act. As soon as practicable,
each of Xxxxxxx and RMSI shall, if required, file with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of
Justice (the "Antitrust Division") a premerger notification form and any
supplemental information (other than privileged information) which may be
requested in connection therewith pursuant to the Xxxx-Xxxxx-Xxxxxx Act,
which filings and supplemental information will comply in all material
respects with the requirements of the Xxxx-Xxxxx-Xxxxxx Act. Each of
Xxxxxxx and RMSI shall cooperate fully with the other in connection with
the preparation of any such filings and shall use their respective best
efforts to respond to any requests for supplemental information from the
FTC or the Antitrust Division and to obtain early termination of any
waiting period applicable to the Merger under the Xxxx- Xxxxx-Xxxxxx Act.
Any and all filing fees required to be paid in connection with the
premerger notification pursuant to the Xxxx-Xxxxx-Xxxxxx Act shall be borne
and paid by one half by Xxxxxxx and one half by RMSI.
6.14 Tax-Free Treatment. Neither Xxxxxxx nor RMSI nor any of the
Xxxxxxx Subsidiaries nor any of the RMSI Subsidiaries shall take or cause
to be taken any action, whether before or after Closing, which would cause
the Merger to fail to qualify as a reorganization under Section 368(a) of
the Code.
6.15 Nonsolicitation. Prior to the Effective Time and, in the event
that this Agreement is terminated for any reason, for a period of one (1)
year following the Effective Time, neither Xxxxxxx nor RMSI nor any of the
Xxxxxxx Subsidiaries nor any of the RMSI Subsidiaries shall directly, or
indirectly, solicit for employment or hire any employee of the other party,
or any of their respective subsidiaries, with whom such party has had
contact or who became known to such party in connection with the Merger;
provided, however, that the foregoing provision shall not prohibit (i) the
employment of an employee who contacts the hiring party of his or her own
initiative and without any direct or indirect solicitation by such hiring
party or (ii) general advertisement in newspapers or other periodicals in
the ordinary course of business.
6.16 Financing.
(a) RMSI and Xxxxxxx agree to use commercially reasonable
efforts to refinance their existing senior debt and credit facilities with
Chase Manhattan Bank and First Union National Bank, respectively (the
"Senior Debt"), to the extent required, on terms which are commercially
reasonable based upon the business, operations and financial condition of
RMSI and Xxxxxxx (including any potential Tax liability of RMSI or the
Surviving Corporation incurred in connection with the consummation of the
Merger (the "Relevant Factors")) at the time, as determined independently
by Xxxxxxx and RMSI in their respective good faith judgment.
(b) Xxxxxxx agrees to use commercially reasonable efforts to
assume RMSI's 10 1/8% Senior Subordinated Notes due 2007 (the "RMSI Notes")
and RMSI and Xxxxxxx will if necessary, use commercially reasonable efforts
to obtain any consents or waivers required to permit the assumption of the
RMSI Notes by Xxxxxxx; provided, however, that if Xxxxxxx and RMSI mutually
agree to repurchase and refinance the RMSI Notes, Xxxxxxx and RMSI shall
use commercially reasonable efforts to consummate such repurchase and
refinancing on terms which are commercially reasonable based upon the
Relevant Factors at the time, as determined independently by Xxxxxxx and
RMSI in their respective good faith judgment.
(c) Xxxxxxx agrees to use commercially reasonable efforts to
assist RMSI in completing the exchange offer relating to, and registration
of, the RMSI Notes, including assisting RMSI in the preparation of pro
forma financial statements and providing RMSI with any other information
reasonably required to complete the exchange offer and the registration of
the RMSI Notes.
6.17 RMSI Employees. Each employee of RMSI who was an employee of
RMSI immediately prior to the Closing shall (i) be entitled to participate
in the Xxxxxxx Employee Programs (or any similar or successor program) to
the same extent as similarly situated employees of Xxxxxxx, (ii) shall
receive credit for such employee's past service with RMSI as of the Closing
for all purposes under such plans and programs, (iii) to the extent
permitted under the terms of such plans and programs, not to be subject to
any waiting periods or limitations on benefits for pre-existing conditions
and shall be given credit for amounts paid under corresponding plans during
the appropriate period prior to the Closing and (iv) shall be given credit
for all accrued but unused vacation time credited to such employee as of
the Closing. Notwithstanding the foregoing, nothing contained in this
Section 6.19 shall confer any rights, remedies, obligations or liabilities
upon any party other than the parties hereto.
6.18 Exchange Offer Registration Statement. RMSI shall use reasonable
best efforts to take all actions necessary, including without limitation,
preparing and filing any additional amendments to its Registration
Statement on Form S-4 initially filed on March 10, 1999 (the "RMSI
Registration Statement") relating to the RMSI Notes, to have the RMSI
Registration Statement declared effective with the SEC under the Securities
Act and to consummate the exchange offer contemplated therein as promptly
as practicable thereafter and prior to the Effective Time. RMSI will cause
the RMSI Registration Statement to comply as to form in all material
respects with the applicable provisions of the Securities Act and the rules
and regulations thereunder. Each of Xxxxxxx, on the one hand, and RMSI, on
the other hand, shall furnish all information about itself and its business
and operations and all necessary financial information to the other as the
other may reasonably request in connection with the preparation of the RMSI
Registration Statement. RMSI shall use its reasonable best efforts, and
Xxxxxxx will cooperate with them, to have the RMSI Registration Statement
declared effective by the SEC as promptly as practicable but in any event
prior to the Effective Time. Each of Xxxxxxx and RMSI agrees promptly to
correct any information provided by it for use in the RMSI Registration
Statement if and to the extent that such information shall have become
false or misleading in any material respect, and each of the parties hereto
further agrees to take all steps necessary to amend or supplement the RMSI
Registration Statement and to cause the RMSI Registration Statement as so
amended or supplemented to be filed with the SEC and to be disseminated to
the holders of the RMSI Notes. Each of Xxxxxxx and RMSI agrees that the
information provided by it in writing for inclusion in the RMSI
Registration Statement and each amendment or supplement thereto, at the
time of mailing thereof, will not include any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of Xxxxxxx
and RMSI will advise the other party, and deliver copies (if any) to them,
promptly after receipt thereof, of (i) any request by or correspondence or
communication from the SEC with respect to the RMSI Registration Statement,
(ii) any responses thereto and (iii) notice of the time when the RMSI
Registration Statement has been declared effective or any supplement or
amendment has been filed, the issuance of any stop order.
6.19 Option Registration Statement. Xxxxxxx shall prepare and file
with the SEC under the Securities Act the Option Registration Statement
relating to the registration of shares of Xxxxxxx Common Stock issuable
upon the exercise of the Rollover Options, the New Options and the Director
Options. Xxxxxxx and RMSI will cause the Option Registration Statement to
comply as to form in all material respects with the applicable provisions
of the Securities Act and the rules and regulations thereunder. Xxxxxxx
shall use its reasonable best efforts to have the Option Registration
Statement declared effective as promptly as practicable following the
Effective Time.
6.20 Ancillary Agreements. The parties shall use their reasonable
best efforts (i) to enter into a voting agreement in the form attached
hereto as Exhibit D (the "Post-Merger Voting Agreement") by and among each
of the RMSI Stockholders, Monroe & Company, LLC, and JLM Management
Company, LLC, (ii) to obtain an executed SMART Cancellation Consent
from each holder of SMARTs and the agreements representing such holder's
SMARTs, (iii) enter into an advisory agreement in the form attached hereto
as Exhibit F (the "Joint Advisory Agreement") by and among Xxxxxxx, Xxxxxx
& Company, LLC and Richmont Capital Partners I, L.P. and (iv) to enter into
the Registration Rights Agreement (as defined in Section 7.2(e)).
6.21 Spousal Consent. RMSI, Xx. Xxxxxx and Xx. Xxxxxx shall use their
respective best efforts to obtain, no later than seventy-two hours
following the date hereof, a consent in substantially the form attached
hereto as Exhibit F from the spouses of each of Xx. Xxxxxx and Xx. Xxxxxx.
ARTICLE 7. CONDITIONS
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger and the other
transactions contemplated herein shall be subject to the fulfillment at or
prior to the Closing Date of the following conditions, any or all of which
may be waived, in whole or in part by the parties hereto, to the extent
permitted by applicable law:
(a) Stockholder Approvals. This Agreement and the Merger shall
have been approved and adopted by the requisite vote of the stockholders of
RMSI and this Agreement, the Merger and the Board Amendment shall have been
approved and adopted by the requisite vote of the stockholders of Xxxxxxx.
(b) Xxxx-Xxxxx-Xxxxxx. All required filings under the
Xxxx-Xxxxx-Xxxxxx Act shall have been completed and all applicable time
limitations under such Act shall have expired without a request for further
information by the relevant federal authorities under such Act, or in the
event of such a request for further information, the expiration of all
applicable time limitations under the Act shall have occurred without the
objection of such federal authorities.
(c) Listing. Xxxxxxx shall have obtained the approval for the
listing of the shares issuable in the Merger on the Nasdaq National Market,
subject to official notice of issuance.
(d) Refinancing. (a) The Senior Debt shall have been refinanced to
the extent required on terms which are commercially reasonable based upon
the Relevant Factors at the time, as determined independently by Xxxxxxx
and RMSI in their respective good faith judgment, (b) (i) Xxxxxxx shall
have assumed the RMSI Notes, (ii) Xxxxxxx and RMSI shall have obtained any
consents or waivers required for Xxxxxxx to assume the RMSI Notes on
commercially reasonable terms as determined independently by both RMSI and
Xxxxxxx in their respective good faith judgment and Xxxxxxx shall have
assumed the RMSI Notes, or (iii) the RMSI Notes shall have been repurchased
and refinanced on terms which are commercially reasonable based upon the
Relevant Factors at the time, as determined independently by Xxxxxxx and
RMSI in their respective good faith judgment ((a) and (b) together, the
"Financing"), and (c) after giving effect to the Merger and the Financing,
RMSI and Xxxxxxx, on a consolidated pro forma basis, shall have available
funds to pay all expenses relating to the consummation of the Merger.
(e) Ancillary Agreements. The Post-Merger Voting Agreement and
the Joint Advisory Agreement shall have been entered into by the parties
thereto.
(f) No Injunction. No United States federal or state court of
competent jurisdiction or other governmental entity shall have issued a
final order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the Merger.
7.2 Conditions to Obligations of RMSI to Effect the Merger. The
obligation of RMSI to effect the Merger and the other transactions
contemplated hereby shall be subject to the fulfillment at or prior to the
Closing Date of the following conditions, unless waived by RMSI:
(a) Representations and Warranties. Each of the representations
and warranties of Xxxxxxx contained in this Agreement qualified as to
materiality or Xxxxxxx Material Adverse Effect shall be true and correct in
all respects and the representations and warranties of Xxxxxxx contained in
this Agreement that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of
the Effective Time as though made on and as of the Effective Time, and RMSI
shall have received a certificate, dated the Closing Date, signed on behalf
of Xxxxxxx by the President of Xxxxxxx to the foregoing effect; provided,
however, that (A) representations and warranties expressly made as of an
earlier date need only be true and correct in all material respects as of
such earlier date, (B) no decrease in the reported price of Xxxxxxx Common
Stock, and no loss of any customers or principals shall be taken into
account when determining the truth or accuracy of any representation or
warranty, except to the extent that the loss of such customers or
principals, individually or in the aggregate, constitute a Material
Customer Loss.
(b) Performance of Obligations. Xxxxxxx shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by Xxxxxxx at
or prior to the Closing.
(c) Certificate from Officers. Xxxxxxx shall have delivered to
RMSI a certificate of its respective President or Chief Financial Officer
dated the Closing Date to the effect that the statements set forth in
paragraphs (a) and (b) above with respect to Xxxxxxx in this Section 7.2
are true and correct.
(d) Opinion of Counsel. RMSI shall have received the opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, or another nationally recognized
law firm selected by RMSI, subject to customary conditions and
qualifications (including reliance, in part, on a certificate from an
authorized officer of each of Xxxxxxx and RMSI (collectively, the "Tax
Certificates") to the effect that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code, which
opinion shall not have been withdrawn or modified in any material respect.
(e) Registration Rights. Xxxxxxx and the RMSI Stockholders and
shall have entered into a registration rights agreement in the form
attached hereto as Exhibit I-1 (the
"Registration Rights Agreement").
(f) Consents. Xxxxxxx shall have obtained the consents set
forth on Schedule 7.2(g) hereto in a form satisfactory to RMSI.
(g) Option Approval. Xxxxxxx shall have obtained the Xxxxxxx
Option Approval from the stockholders of Xxxxxxx to the extent necessary.
7.3 Conditions to Obligation of Xxxxxxx to Effect the Merger. The
obligations of Xxxxxxx to effect the Merger and the other transactions
contemplated hereby shall be subject to the fulfillment at or prior to the
Closing Date of the following conditions, unless waived by Xxxxxxx:
(a) Representations and Warranties. Each of the representations
and warranties of RMSI contained in this Agreement qualified as to
materiality or RMSI Material Adverse Effect and in Section 3.22 shall be
true and correct in all respects and the representations and warranties of
RMSI contained in this Agreement that are not so qualified (except for the
representations in Section 3.22) shall be true and correct in all material
respects, in each case as of the date of this Agreement and as of the
Effective Time as though made on and as of the Effective Time, and Xxxxxxx
shall have received a certificate, dated the Closing Date, signed on behalf
of RMSI by the President of RMSI to the foregoing effect; provided,
however, that (A) representations and warranties expressly made as of an
earlier date need only be true and correct in all material respects as of
such earlier date, and (B) the loss of any customer or principal shall not
be taken into account when determining the truth or accuracy of any
representation or warranty, except to the extent that the loss of such
customers or principals, individually or in the aggregate, constitute a
Material Customer Loss.
(b) Performance of Obligations. RMSI shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by RMSI, at or
prior to the Closing.
(c) Certificate from Officers. RMSI shall have delivered to
Xxxxxxx a certificate of the Chairman of the Board, the President or the Chief
Financial Officer of RMSI dated the Closing Date to the effect that the
statements set forth in paragraphs (a) and (b) above in this Section 7.3
are true and correct.
(d) Opinion of Counsel. Xxxxxxx shall have received the opinion
of Xxxxxxx, Procter & Xxxx LLP, or another nationally recognized law firm
selected by Xxxxxxx, subject to customary conditions and qualifications
(including reliance, in part, on the Tax Certificates (as defined in
Section 7.2(d) to the effect that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code), which
opinion shall not have been withdrawn or modified in any material respect.
(e) Consents. RMSI shall have obtained the consents set forth
on Schedule
7.3(g) hereto in a form satisfactory to Xxxxxxx.
(f) Registration Rights Agreement. Xxxxxxx and certain
stockholders of Xxxxxxx attached hereto as Exhibit I-2.
ARTICLE 8. TERMINATION; AMENDMENT; WAIVER
8.1 Termination. This Agreement may be terminated and abandoned at
any time prior to the Effective Time, whether before or after approval of
matters presented in connection with the Merger by the stockholders of RMSI
and Xxxxxxx:
(a) by mutual written consent of Xxxxxxx and RMSI;
(b) by Xxxxxxx or RMSI, if any United States federal or state
court of competent jurisdiction or other governmental entity shall have
issued a final order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have become final and
nonappealable, provided that the party seeking to terminate shall have used
its best efforts to appeal such order, decree, ruling or other action;
(c) by RMSI, if Xxxxxxx has failed to perform in any material
respect any of its obligations required to be performed by it under this
Agreement and such failure continues for more than 30 days after notice
unless failure to so perform has been caused by or results from a breach of
this Agreement by RMSI;
(d) by Xxxxxxx, if RMSI shall have failed to perform in any
material respect any of its obligations required to be performed by it
under this Agreement and such failure continues for more than 30 days after
notice unless failure to so perform has been caused by or results from a
breach of this Agreement by Xxxxxxx;
(e) (i) by RMSI, if the Board of Directors of Xxxxxxx or the
Special Committee withdraws or modifies in a manner adverse to RMSI its
approval or recommendation of the Merger, or (ii) by Xxxxxxx or RMSI, if
the Board of Directors of Xxxxxxx, or any independent or special committee
of the Board of Directors of Xxxxxxx formed for the purpose of evaluating a
Superior Proposal, recommends a Superior Proposal as provided in Section
6.1(e);
(f) by either Xxxxxxx or RMSI, if this Agreement and the
transactions contemplated hereby shall have failed to receive the requisite
vote for approval and adoption by the stockholders of Xxxxxxx upon the
holding of a duly convened stockholder meeting; or
(g) by either Xxxxxxx or RMSI, if the Merger shall not have
been consummated on or before December 31, 1999 (other than due to the
failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed by it at or prior
to the Effective Time).
8.2 Effect of Termination.
(a) In the event of termination of this Agreement by either
RMSI or Xxxxxxx as provided in Section 8.1, this Agreement shall forthwith
become void and have no effect, without any liability or obligation on the
part of RMSI or Xxxxxxx, other than the provisions of Sections 6.5(b),
6.5(c), 6.6, 6.11, 6.15, 8.2, 8.3 and 9.4 and the last sentence of Section
9.3. Nothing contained in this Section 8.2 shall relieve any party for any
willful breach of the representations, warranties, covenants or agreements
set forth in this Agreement or any RMSI Voting Agreement or Xxxxxxx Voting
Agreement.
(b) If Xxxxxxx or RMSI terminates this Agreement pursuant to
Section 8.1(e), then Xxxxxxx shall pay to RMSI an amount in cash equal to
$2,500,000 plus out-of-pocket costs and expenses, in connection with this
Agreement and the transactions contemplated hereby, including without
limitation Professional Expenses (the "Termination Amount"). Payment of
such Termination Amount shall be RMSI's exclusive remedy relating to such
termination and, upon Xxxxxxx'x payment of such amount, RMSI shall have no
right to any further damages.
(c) If at any time prior to or within one year after
termination of this Agreement pursuant to Section 8.1(f), Xxxxxxx enters
into an agreement relating to a Post- Termination Acquisition Proposal (as
hereinafter defined) with a person other than RMSI or Xxxxxxx'x Board of
Directors recommends or resolves to recommend to Xxxxxxx'x stockholders
approval or acceptance of a Post-Termination Acquisition Proposal with a
person other than RMSI, then, upon the entry into such agreement or the
making of such recommendation or resolution, Xxxxxxx shall pay to RMSI the
Termination Amount which amount shall be reduced by any monies previously
paid by Xxxxxxx to RMSI pursuant to this Section 8.2. Payment of such
Termination Amount shall be RMSI's exclusive remedy relating to such
termination and, upon Xxxxxxx'x payment of such amount, RMSI shall have no
right to any further damages. For purposes of this Agreement,
"Post-Termination Acquisition Proposal" shall mean, with respect to any
person, any Acquisition Proposal made after the termination of this
Agreement.
(d) At any time prior to or within one year after termination of
this Agreement, Xxxxxxx shall not enter into any agreement relating to a
Post-Termination Acquisition Proposal with a Person other than RMSI unless
such agreement provides that such Person shall, upon the execution of such
agreement, pay any Termination Amount otherwise due RMSI under this Section
8.2.
8.3 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies
in the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the first
sentence of Section 9.5, waive compliance with any of the agreements or
conditions contained in this Agreement; provided, however, that if either
party waives in writing any inaccuracies in the representations or
warranties contained in this Agreement or any breaches thereof, or the sole
remedy of such party (the "Determining Party") shall be to consummate the
Merger; provided, further, that whether or not the Merger is consummated,
the Determining Party may not seek any damages or other payments from the
other party hereto arising out of or relating to any such inaccuracies or
breaches. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of such rights.
ARTICLE 9. GENERAL PROVISIONS
9.1 Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement shall not
survive the Merger; provided, however, that the agreements contained in
Article 2, and Sections 6.5, 6.9, 6.11, 6.17, 6.19, 8.3 and this Article 9
shall survive the Merger.
9.2 Notices. Any notice required to be given hereunder shall be in
writing and shall be sent by facsimile transmission (confirmed by any of
the methods that follow), courier service (with proof of service), hand
delivery or certified or registered mail (return receipt requested and
first-class postage prepaid) and addressed as follows:
If to Xxxxxxx:
Xxxxxxx American Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
With copies to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Cable, P.C.
If to RMSI:
Richmont Marketing Specialists Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxxx, Esq.
With copies to:
Richmont Capital Partners I, L.P.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxx
and:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx Simon, Esq.
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the
date so delivered.
9.3 Assignment; Binding Effect; Benefit. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned
prior to the Closing by any of the parties hereto (whether by operation of
law or otherwise) without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, except for the provisions of Article 2 and
Sections 6.9 and 6.11, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
9.4 Entire Agreement. This Agreement (including all exhibits and
schedules hereto), the Ancillary Agreements, the RMSI Disclosure Letter and
the Xxxxxxx Disclosure Letter and any documents expressly identified in
this Agreement as having been delivered by the parties in connection
herewith including, without limitation, the Xxxxxxx SEC Report and the RMSI
SEC Report, constitute the entire agreement among the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings among the partes with respect thereto except that the
Confidentiality Agreement shall remain in effect and shall be binding upon
the parties hereto and thereto in accordance with their respective terms;
provided, however, to the extent, any of the terms of the Confidentiality
Agreement are inconsistent with this Agreement or any of the Ancillary
Agreements, this Agreement and such Ancillary Agreements shall be
controlling. No addition to or modification of any provision of this
Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
9.5 Amendment. This Agreement may be amended by the parties hereto,
by action taken by their respective boards of directors, at any time before
or after approval of matters presented in connection with the Merger by the
stockholders of Xxxxxxx and the stockholders of RMSI, but after any such
stockholder approval, no amendment shall be made which by law requires the
further approval of stockholders without obtaining such further approval.
This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the parties hereto.
9.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to its
rules of conflict of laws. RMSI and Xxxxxxx hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America located
in the State of Delaware (the "Delaware Courts") for any litigation arising
out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except
in such courts), waive any objection to the laying of venue of any such
litigation in the Delaware Courts and agree not to plead or claim in any
Delaware Court that such litigation brought therein has been brought in any
inconvenient forum.
9.7 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which so executed and delivered
shall be an original, but all such counterparts shall together constitute
one and the same instrument. Each counterpart may consist of a number of
copies hereof each signed by less than all, but together signed by all of
the parties hereto.
9.8 Headings. Headings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
9.9 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and
vice versa, and words denoting any gender shall include all genders and
words denoting natural persons shall include corporations and partnerships
and vice versa.
9.10 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained in this
Agreement. The waiver by any party hereto of a breach of any provision
hereunder shall not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder.
9.11 Incorporation. The RMSI Disclosure Letter, the Xxxxxxx
Disclosure Letter and all Exhibits attached hereto and thereto and referred
to herein and therein are hereby incorporated herein and made a part hereof
for all purposes as if fully set forth herein.
9.12 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
9.13 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with its specific terms or
was otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions and other equitable remedies to
prevent breaches of this Agreement and to enforce specifically the terms
and provisions hereof in any Delaware Court, this being in addition to any
other remedy to which they are entitled at law or in equity. Any
requirements for the securing or posting of any bond with respect to such
remedy are hereby waived by each of the parties hereto.
9.14 Certain Definitions.
(a) As used in this Agreement, the term "Xxxxxxx Subsidiary" or
"Xxxxxxx Subsidiaries" when used with respect to any party means any
corporation, partnership, joint venture, business trust or other entity, of
which such party directly or indirectly owns or controls at least a
majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or
others performing similar functions with respect to such corporation or
other organization or a majority of the economic interest in such entity.
(b) As used in this Agreement, the term "RMSI Subsidiary" or
"RMSI Subsidiaries" means when used with respect to any party means any
corporation, partnership, joint venture, business trust or other entity, of
which such party directly or indirectly owns or controls at least a
majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or
others performing similar functions with respect to such corporation or
other organization or a majority of the economic interest in such entity.
(c) As used in this Agreement, the word "person" means an
individual, a corporation, a partnership, an association, a joint-stock
company, a trust, a limited liability company, any unincorporated
organization or any other entity.
(d) As used in this Agreement, the word "affiliate" shall have
the meaning set forth in Rule 12b-2 of the Exchange Act.
(e) As used in this Agreement, the phrase "transactions
contemplated by this Agreement" shall include without limitation, each act
and transaction to be performed or completed under this Agreement or any of
the Ancillary Agreements by any party hereto or thereto.
[remainder of page intentionally left blank]
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
IN WITNESS WHEREOF, the parties have executed this Agreement and
caused the same to be duly delivered on their behalf on the day and year
first written above.
XXXXXXX AMERICAN CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President & Chief Executive
Officer
RICHMONT MARKETING SPECIALISTS INC.
By:/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
RMSI STOCKHOLDERS:
MS ACQUISITION LIMITED
By: MS Acquisition Corporation, its
General Partner
By:/s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx
