EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
by and among
BDM, INC.,
THE XXX GROUP, INC.,
THE MACMANUS GROUP, INC.,
TLG ACQUISITION CORP.
and
TMG ACQUISITION CORP.
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Dated as of December 30, 1999
TABLE OF CONTENTS
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ARTICLE I
THE MERGERS............................................................ A-2
Section 1.1 The Xxx Group Merger................................... A-2
Section 1.2 The MacManus Merger.................................... A-2
Section 1.3 Effective Time......................................... A-2
Section 1.4 Effects of the Mergers................................. A-2
Section 1.5 Directors.............................................. A-3
Section 1.6 Agreements Regarding Parent............................ A-3
ARTICLE II
EFFECT OF MERGER ON STOCK.............................................. A-4
Section 2.1 Effect on Xxx Group Stock and LAC Stock................ A-4
Section 2.2 Effect on MacManus Stock and MAC Stock................. A-5
Section 2.3 Shares of Dissenting Stockholders...................... A-5
Section 2.4 Surrender of Stock Certificates........................ A-5
Section 2.5 Dividends; Transfer Taxes; Withholding................. A-6
Section 2.6 No Fractional Securities............................... A-6
Section 2.7 Deposit Into Voting Trust.............................. A-7
Section 2.8 Adjustment of Exchange Ratio........................... A-7
Section 2.9 No Further Ownership Rights............................ A-7
Section 2.10 Closing of Company Transfer Books...................... A-7
Section 2.11 Lost Certificates...................................... A-7
Section 2.12 Stockholder and Voting Agreements...................... A-7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MACMANUS............................. A-8
Section 3.1 Organization and Qualification; Subsidiaries........... A-8
Section 3.2 Certificate of Incorporation and Bylaws................ A-8
Section 3.3 Capitalization......................................... A-8
Section 3.4 Authority Relative to this Agreement................... A-9
Section 3.5 No Conflict; Required Filings and Consents............. A-9
Section 3.6 Financial Statements................................... A-10
Section 3.7 Absence of Certain Changes or Events................... A-10
Section 3.8 Litigation............................................. A-10
Section 3.9 No Violation of Law; Permits........................... A-10
Section 3.10 Employee Matters; ERISA................................ A-11
Section 3.11 Labor Matters.......................................... A-12
Section 3.12 Board Action; Vote Required............................ A-12
Section 3.13 Brokers................................................ A-13
Section 3.14 Tax Matters............................................ A-13
Section 3.15 Intellectual Property.................................. A-13
Section 3.16 Insurance.............................................. A-14
Section 3.17 Certain Contracts...................................... A-14
Section 3.18 Client Relations....................................... A-14
Section 3.19 Licenses............................................... A-14
Section 3.20 Year 2000.............................................. A-15
Foreign Corrupt Practices and International Trade
Section 3.21 Sanctions.............................................. A-15
Section 3.22 No Undisclosed Liabilities............................. A-15
Section 3.23 Accounts Receivable.................................... A-15
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Section 3.24 Affiliated Transactions................................ A-15
Section 3.25 Information in Proxy Statement......................... A-16
Section 3.26 Opinion of Financial Advisor........................... A-16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF XXX GROUP............................ A-16
Section 4.1 Organization and Qualification; Subsidiaries........... A-16
Section 4.2 Certificate of Incorporation and Bylaws................ A-16
Section 4.3 Capitalization......................................... A-16
Section 4.4 Authority Relative to this Agreement................... A-17
Section 4.5 No Conflict; Required Filings and Consents............. A-18
Section 4.6 Financial Statements................................... A-18
Section 4.7 Absence of Certain Changes or Events................... A-18
Section 4.8 Litigation............................................. A-18
Section 4.9 No Violation of Law; Permits........................... A-19
Section 4.10 Employee Matters; ERISA................................ A-19
Section 4.11 Labor Matters.......................................... A-20
Section 4.12 Board Action; Vote Required............................ A-21
Section 4.13 Brokers................................................ A-21
Section 4.14 Tax Matters............................................ A-21
Section 4.15 Intellectual Property.................................. A-21
Section 4.16 Insurance.............................................. A-22
Section 4.17 Certain Contracts...................................... A-22
Section 4.18 Client Relations....................................... A-22
Section 4.19 Licenses............................................... A-22
Section 4.20 Year 2000.............................................. A-22
Section 4.21 Foreign Corrupt Practices and International Trade
Sanctions.............................................. A-23
Section 4.22 No Undisclosed Liabilities............................. A-23
Section 4.23 Accounts Receivable.................................... A-23
Section 4.24 Affiliated Transactions................................ A-23
Section 4.25 Information in Proxy Statement......................... A-23
Section 4.26 Opinion of Financial Advisor........................... A-23
ARTICLE V
CONDUCT OF INDEPENDENT BUSINESSES PENDING THE MERGER................... A-24
Section 5.1 Transition Planning.................................... A-24
Section 5.2 Conduct of Business in the Ordinary Course............. A-24
Section 5.3 Control of Operations.................................. A-26
Section 5.4 Sale of Giant Step..................................... A-26
Section 5.5 Deferred Compensation Arrangements..................... A-26
Section 5.6 Partial Sale of Novo................................... A-26
ARTICLE VI
ADDITIONAL AGREEMENTS.................................................. A-26
Section 6.1 Proxy Statement........................................ A-26
Section 6.2 Stockholder Meetings................................... A-27
Section 6.3 Closing; Regulatory Approvals.......................... A-27
Section 6.4 Access to Information.................................. A-28
Section 6.5 Public Announcements................................... A-28
Section 6.6 Cooperation............................................ A-28
Section 6.7 Indemnification, Directors' and Officers' Insurance.... A-28
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Section 6.8 Employee Benefit Plans................................. A-28
Section 6.9 Blue Sky............................................... A-28
Section 6.10 Tax-Free Reorganization; Other Matters................. A-29
Section 6.11 Permitted Acquisitions................................. A-29
Section 6.12 MacManus Offer......................................... A-29
Section 6.13 Xxx Group Redemption................................... A-29
Section 6.14 Notice of Developments................................. A-29
Section 6.15 Further Assurances..................................... A-30
ARTICLE VII
CONDITIONS TO THE MERGERS.............................................. A-30
Section 7.1 Conditions to Obligations of Each Party to Effect the
Mergers................................................ A-30
Section 7.2 Additional Conditions to Obligations of MacManus....... A-30
Section 7.3 Additional Conditions to Obligations of Xxx Group...... A-31
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER...................................... A-32
Section 8.1 Termination............................................ A-32
Section 8.2 Expense Reimbursement.................................. A-32
Section 8.3 Effect of Termination.................................. A-33
Section 8.4 Amendment.............................................. A-33
Section 8.5 Waiver................................................. A-33
ARTICLE IX
GENERAL PROVISIONS..................................................... A-33
Section 9.1 Non-Survival of Representations and Warranties......... A-33
Section 9.2 Dispute Resolution..................................... A-33
Section 9.3 "Knowledge" Defined.................................... A-34
Section 9.4 "Person" Defined....................................... A-34
Section 9.5 "Material Adverse Effect" Defined...................... A-34
Section 9.6 Notices................................................ A-34
Section 9.7 Expenses............................................... A-35
Section 9.8 Headings............................................... A-35
Section 9.9 Severability........................................... A-35
Section 9.10 Entire Agreement; No Third-Party Beneficiaries......... A-35
Section 9.11 Assignment............................................. A-35
Section 9.12 Governing Law.......................................... A-35
Section 9.13 Submission to Jurisdiction; Waivers.................... A-36
Section 9.14 Construction........................................... A-36
Section 9.15 Incorporation of Schedules and Exhibits................ A-36
Section 9.16 Counterparts........................................... A-36
Exhibit A--Certificate of Incorporation of Parent
Exhibit B--Voting Trust Agreement
Exhibit C--Parent Stockholder Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 30, 1999, by and among
BDM, INC., a Delaware corporation ("Parent"), THE XXX GROUP, INC., a Delaware
corporation ("Xxx Group"), THE MACMANUS GROUP, INC., a Delaware corporation
("MacManus"), TLG ACQUISITION CORP., a Delaware corporation ("LAC"), and TMG
ACQUISITION CORP., a Delaware corporation ("MAC").
W I T N E S S E T H
WHEREAS, Xxx Group and MacManus desire to combine their respective
businesses, shareholders, managements, employees and other constituencies in a
merger of equals transaction upon the terms and subject to the conditions in
this Agreement (the "Combination");
WHEREAS, (i) each of Parent, LAC and MAC is a newly formed corporation
organized and existing under the laws of the State of Delaware; and (ii) each
of Xxx Group and MacManus is a corporation organized and existing under the
laws of the State of Delaware;
WHEREAS, all of the outstanding capital stock of each of LAC and MAC is
owned by Parent;
WHEREAS, the Board of Directors of each of Xxx Group and MacManus deems it
advisable and in the best interests of its respective shareholders to effect
the Combination by causing each of Xxx Group and MacManus to become
subsidiaries of Parent pursuant to the Mergers (as defined below) as provided
for in this Agreement;
WHEREAS, the parties desire to make certain representations, warranties,
covenants and agreements in connection with the Combination and also to
prescribe various conditions to the Combination; and
WHEREAS, for U.S. federal income tax purposes, it is intended that the Xxx
Group Merger (as defined below), and the MacManus Merger (as defined below),
when taken together, will qualify as a transaction described in Section 351 of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
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ARTICLE I
The Mergers
Section 1.1 The Xxx Group Merger.
(a) Upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the Delaware General Corporation Law (the
"Delaware Law"), LAC shall merge with and into Xxx Group (the "Xxx Group
Merger") at the Effective Time (as defined in Section 1.3). Xxx Group shall be
the surviving corporation in the Xxx Group Merger (the "Xxx Group Surviving
Corporation") and shall thereupon become a wholly-owned subsidiary of Parent.
From and after the Effective Time, the identity and separate existence of LAC
shall cease.
(b) In connection with the Xxx Group Merger, Xxx Group and MacManus shall
take such actions as may be necessary to cause Parent to reserve a sufficient
number of shares of common stock, par value $.01 per share, of Parent (the
"Parent Common Stock"), prior to the Xxx Group Merger, to permit the issuance
of shares of Parent Common Stock to the holders of common stock, par value
$.01 per share, of Xxx Group (the "Xxx Group Common Stock") as of the
Effective Time in accordance with the terms of this Agreement. Xxx Group and
MacManus shall cause such shares of Parent Common Stock to be duly authorized,
validly issued, fully paid and non-assessable.
Section 1.2 The MacManus Merger.
(a) Upon the terms and subject to the conditions set forth in this
Agreement and in accordance with Delaware Law, MAC shall merge with and into
MacManus (the "MacManus Merger," and together with the Xxx Group Merger, the
"Mergers") at the Effective Time. MacManus shall be the surviving corporation
in the MacManus Merger (the "MacManus Surviving Corporation" and together with
the Xxx Group Surviving Corporation, the "Surviving Corporations") and shall
thereupon become a wholly-owned subsidiary of Parent. From and after the
Effective Time, the identity and separate existence of MAC shall cease.
(b) In connection with the MacManus Merger, MacManus and Xxx Group shall
take such actions as may be necessary to cause Parent to reserve a sufficient
number of shares of Parent Common Stock, prior to the MacManus Merger, to
permit the issuance of shares of Parent Common Stock to the holders of
MacManus Common Stock (as defined in Section 2.2(a)) as of the Effective Time
in accordance with the terms of this Agreement. Xxx Group and MacManus shall
cause such shares of Parent Common Stock to be duly authorized, validly
issued, fully paid and non-assessable.
Section 1.3 Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on or after the Closing Date: (a) with respect to the Xxx
Group Merger, the parties shall file with the Secretary of State of the State
of Delaware a certificate of merger duly completed and executed in accordance
with the relevant provisions of Delaware Law and shall make all other filings
or recordings required under Delaware Law in order to effect the Xxx Group
Merger; and (b) with respect to the MacManus Merger, the parties shall file
with the Secretary of State of the State of Delaware a certificate of merger
duly completed and executed in accordance with the relevant provisions of
Delaware Law and shall make all other filings required under Delaware Law to
effect the MacManus Merger. Each Merger shall become effective at the actual
time of the filing of the respective certificate of merger or at such other
later time as is reasonably specified in such certificates of merger (the time
at which both Mergers have become fully effective being hereinafter referred
to as the "Effective Time").
Section 1.4 Effects of the Mergers.
(a) Delaware Law. Each of the Mergers shall have the effects set forth in
Section 259 of Delaware Law.
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(b) Names of Surviving Corporations. The names of the Xxx Group Surviving
Corporation and the MacManus Surviving Corporation from and after the Effective
Time shall be "The Xxx Group, Inc." and "The MacManus Group, Inc.,"
respectively, until changed or amended in accordance with applicable law.
(c) Charter Documents. At the Effective Time (i) the Certificate of
Incorporation and Bylaws of LAC, as in effect immediately prior to the
Effective Time (and in a form mutually agreed to by Xxx Group and MacManus),
shall be the Certificate of Incorporation and Bylaws, respectively, of the Xxx
Group Surviving Corporation, and (ii) the Certificate of Incorporation and
Bylaws of MAC, as in effect immediately prior to the Effective Time (and in a
form mutually agreed to by Xxx Group and MacManus), shall be the Certificate of
Incorporation and Bylaws, respectively, of the MacManus Surviving Corporation.
Section 1.5 Directors.
(a) Xxx Group Surviving Corporation. The directors of the Xxx Group
Surviving Corporation from and after the Effective Time shall be the directors
of Xxx Group immediately prior to the Effective Time, until successors are duly
elected or appointed and qualified in accordance with Delaware Law and the
certificate of incorporation and bylaws of such Surviving Corporation.
(b) MacManus Surviving Corporation. The directors of MacManus Surviving
Corporation from and after the Effective Time shall be the directors of
MacManus immediately prior to the Effective Time , until successors are duly
elected or appointed and qualified in accordance with Delaware Law and the
certificate of incorporation and bylaws of such Surviving Corporation.
Section 1.6 Agreements Regarding Parent.
(a) Parent Charter Documents. At the Effective Time, the Certificate of
Incorporation of Parent, substantially in the form of Exhibit A hereto, shall
be in full force and legal effect. At the Effective Time, the Bylaws of Parent
shall be in such form as Xxx Group and MacManus shall mutually agree.
(b) Board of Directors and Committees of Parent.
(i) The Board of Directors of Parent shall, prior to the Effective Time,
have 4 members, who shall be Xxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxx and
Xxxxx Xxxxx.
(ii) From and after the Effective Time, the composition of the Parent
Board of Directors and its committees shall be as described in the Voting
Trust Agreement, substantially in the form of Exhibit B hereto (the "Voting
Trust Agreement").
(c) Executive Officers of Parent. Immediately following the Effective Time:
(i) Mr. Xxx Xxxxxxx shall be the Chairman of the Board of Parent, (ii) Xx.
Xxxxxxx Xxxxxxx shall be Vice Chairman of the Board of Parent, (iii) Xx. Xxxxx
Xxxxx shall be the Chief Executive Officer of Parent, (iv) Mr. Xxxxx Xxxxx
shall be the President and Chief Operating Officer of Parent and (v) Xx.
Xxxxxxxxx Xxxxxxx shall be the Chief Administrative Officer and Secretary of
Parent. The remaining executive officers of Parent shall be designated and
elected by the Parent Board of Directors.
(d) Parent Representations. As of the date of this Agreement, Parent (i)
does not have and has not had any assets other than the capital stock of LAC
and MAC and its rights under this Agreement, (ii) does not and
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has not conducted any business or operations and has never incurred any
liabilities or obligations other than expenses related to its incorporation and
its continuing corporate existence and its obligations under this Agreement and
(iii) does not have and has not had any employees. The entire authorized
capital stock of Parent consists of 1000 shares of Parent Common Stock, none of
which are issued or outstanding. The Parent Common Stock issued in the Mergers
will be duly authorized, validly issued, fully paid and non-assessable. Parent
is not a party to any option, warrant, purchase right or other contract or
commitment that could require it to issue, sell, transfer or otherwise dispose
of any capital stock of Parent. Parent is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Parent has the necessary corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. The execution
and delivery of this Agreement by Parent and the consummation by Parent of the
transactions contemplated hereby (including the issuance of Parent Common Stock
in the Mergers) have been duly authorized by all necessary corporate action on
the part of Parent. This Agreement has been duly executed and delivered by
Parent and, assuming the due authorization, execution and delivery thereof by
the other parties, constitutes a legal, valid and binding obligation of Parent,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting the rights and remedies of creditors generally and to general
principles of equity (regardless of whether considered in a proceeding in
equity or at law).
(e) Parent Status. Xxx Group and MacManus shall cause the representations
and warranties contained in subsection (d) above to be true and correct until
immediately prior to the Effective Time; provided that, prior to the Closing,
Parent may enter into agreements with Dentsu, Inc. or one or more of its
affiliates ("Dentsu") for the issuance of Parent Common Stock to Dentsu.
ARTICLE II
Effect of Merger on Stock
Section 2.1 Effect on Xxx Group Stock and LAC Stock. As of the Effective
Time, by virtue of the Xxx Group Merger and without any action on the part of
LAC, Xxx Group or the holders of any securities of LAC or Xxx Group:
(a) Cancellation of Treasury Stock and MacManus Owned Stock. Each share
of Xxx Group Common Stock that is owned directly by Xxx Group or any of its
Subsidiaries or by MacManus or any of its Subsidiaries (but not including
any such shares owned by employees or employee benefit or pension plans)
shall automatically be canceled and retired and shall cease to exist, and
no consideration shall be delivered in exchange therefor.
(b) Conversion of Xxx Group Common Stock. Subject to Section 2.6, each
issued and outstanding share of Xxx Group Common Stock (other than shares
to be canceled in accordance with Section 2.1(a)) shall be converted into
one (the "Xxx Group Merger Exchange Ratio") fully paid and nonassessable
share of Parent Common Stock (such consideration being referred to herein
as the "Xxx Group Merger Consideration"). As of the Effective Time, all
such shares of Xxx Group Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and
each holder of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares of Xxx Group Common Stock
(the "Xxx Group Certificates") shall cease to have any rights with respect
thereto, except the right to receive (i) certificates ("Parent
Certificates") representing the number of whole shares of Parent Common
Stock into which such shares have been converted, (ii) certain dividends
and other distributions in accordance with Section 2.5 and (iii) cash in
lieu of fractional shares of Parent Common Stock in accordance with Section
2.6, without interest.
(c) Conversion of Common Stock of LAC. Each issued and outstanding share
of common stock, par value $.01 per share, of LAC shall be converted into
one fully paid and nonassessable share of common stock of Xxx Group
Surviving Corporation.
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Section 2.2 Effect on MacManus Stock and MAC Stock. As of the Effective
Time, by virtue of the MacManus Merger and without any action on the part of
MAC, MacManus or the holders of any securities of MAC or MacManus:
(a) Cancellation of Treasury Stock and Xxx Group Owned Stock. Each share
of Class A Common Stock, par value $1.00 per share, and Class C Common
Stock, par value $.05 per share (collectively, "MacManus Common Stock")
that is owned directly by MacManus or any of its Subsidiaries or by Xxx
Group or any of its Subsidiaries (but not including any such shares owned
by employees or employee benefit or pension plans) shall automatically be
canceled and retired and shall cease to exist, and no consideration shall
be delivered in exchange therefor.
(b) Conversion of MacManus Common Stock. Subject to Section 2.6, each
issued and outstanding share of MacManus Common Stock (other than shares to
be canceled in accordance with Section 2.2(a)) shall be converted into
8.599806 (the "MacManus Merger Exchange Ratio") fully paid and
nonassessable shares of Parent Common Stock (such consideration being
referred to herein as the "MacManus Merger Consideration"). As of the
Effective Time, all such shares of MacManus Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of
MacManus Common Stock (the "MacManus Certificates" and together with the
Xxx Group Certificates, the "Certificates") shall cease to have any rights
with respect thereto, except the right to receive (i) Parent Certificates,
(ii) certain dividends and other distributions in accordance with Section
2.5, and (iii) cash in lieu of fractional shares of Parent Common Stock in
accordance with Section 2.6, without interest.
(c) Conversion of Common Stock of MAC. Each issued and outstanding share
of common stock, par value $.01 per share, of MAC shall be converted into
one fully paid and nonassessable share of common stock of the MacManus
Surviving Corporation.
(d) Cancellation of Parent Common Stock Owned by Xxx Group and
MacManus. Any shares of Parent Common Stock owned by Xxx Group or by
MacManus immediately prior to the Effective Time shall automatically be
canceled and retired and shall cease to exist, and no consideration shall
be delivered in exchange therefor. MacManus and Xxx Group shall take all
actions reasonably necessary to accomplish the cancellation and retirement
of any such shares in connection with the Closing.
Section 2.3 Shares of Dissenting Stockholders. Notwithstanding anything in
this Agreement to the contrary, any issued and outstanding shares of Xxx Group
Common Stock or MacManus Common Stock held by a person (a "Dissenting
Stockholder") who objects to the Xxx Group Merger or the MacManus Merger, as
the case may be, and complies with all the provisions of Delaware Law
concerning the right of holders of such shares to dissent from the respective
Merger and require appraisal of its shares (the "Dissenting Shares") shall not
be converted as described in Sections 2.1 or 2.2, but shall be converted into
the right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to Delaware Law and the terms of any stock
purchase or stockholder agreement to which such Dissenting Stockholder is a
party. All payments to a Dissenting Stockholder made pursuant to this Section
shall be paid by the respective Surviving Corporation out of the available
funds of such corporation (and not by the Parent). If, after the Effective
Time, such Dissenting Stockholder withdraws his or her demand for appraisal or
fails to perfect or otherwise loses his or her right of appraisal, in any case
pursuant to Delaware Law, his or her shares shall be deemed to be converted as
of the Effective Time solely into the consideration described in Sections
2.1(b) or 2.2(b), as applicable, without interest thereon.
Section 2.4 Surrender of Stock Certificates.
(a) Prior to the Stockholder Meetings (as defined in Section 6.2), Parent
shall mail to each record holder of Xxx Group Common Stock and MacManus Common
Stock a letter of transmittal in form reasonably acceptable to Xxx Group and
MacManus (which shall contain instructions for effecting the surrender of the
Certificates in exchange for Parent Certificates and/or cash in lieu of
fractional shares in accordance with this
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Article II and shall specify that delivery of the respective Merger
Consideration shall be effected, and risk of loss shall pass, only upon proper
delivery of Certificates to Parent). Upon surrender for cancellation of a
Certificate, together with such letter of transmittal, duly completed and
executed (and such other documents as may be reasonably requested by Parent)
the holder of such Certificate shall be entitled to receive in exchange
therefor (i) a Parent Certificate representing the number of full shares of
Parent Common Stock into which the Xxx Group Common Stock or MacManus Common
Stock, as the case may be, theretofore represented by the Certificates so
surrendered shall have been converted in accordance with Section 2.1(b) or
2.2(b) hereof and (ii) a cash payment in lieu of fractional shares of Parent
Common Stock, if any, in accordance with Section 2.6 hereof. All shares of
Parent Common Stock so issued shall be deemed to have been issued at the
Effective Time. Any Certificate so surrendered shall forthwith be canceled.
(b) Subject to subsection (a) above, as soon as practicable after the
Effective Time, Parent shall deliver (i) Parent Certificates representing the
shares of Parent Common Stock issuable pursuant to Sections 2.1(b) and 2.2(b)
in exchange for Certificates representing outstanding shares of Xxx Group
Common Stock and MacManus Common Stock as the case may be and (ii) cash
required to make payments in lieu of any fractional shares pursuant to Section
2.6.
Section 2.5 Dividends; Transfer Taxes; Withholding. No dividends or other
distributions that are declared on or after the Effective Time on Parent Common
Stock, or are payable to the holders of record thereof on or after the
Effective Time, will be paid to any person entitled by reason of the Mergers to
receive a Parent Certificate until such person surrenders the related
Certificate or Certificates, as provided in Section 2.4, and no cash payment in
lieu of fractional of Parent Common Stock shares will be paid to any such
person pursuant to Section 2.6 until such person shall so surrender the related
Certificate or Certificates. Subject to the effect of applicable escheat,
abandoned property or similar laws, there shall be paid to each record holder
of a new Parent Certificate: (i) at the time of such surrender or as promptly
as practicable thereafter, the amount of any dividends or other distributions
theretofore paid with respect to the shares of Parent Common Stock represented
by such new Parent Certificate and having a record date on or after the
Effective Time and a payment date prior to such surrender; (ii) at the
appropriate payment date or as promptly as practicable thereafter, the amount
of any dividends or other distributions payable with respect to such shares of
Parent Common Stock and having a record date on or after the Effective Time but
prior to such surrender and a payment date on or subsequent to such surrender;
and (iii) at the time of such surrender or as promptly as practicable
thereafter, the amount of any cash payable in lieu of fractional shares as
contemplated by Section 2.6. In no event shall the person entitled to receive
such dividends or other distributions be entitled to receive interest on such
dividends or other distributions. If any Parent Certificate or cash or other
property is to be issued or delivered in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange shall pay to Parent any transfer or other taxes
required by reason of the issuance of Parent Certificates for such shares of
Parent Common Stock in a name other than that of the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of Parent that
such tax has been paid or is not applicable. Parent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this
Agreement such amounts as Parent is required to deduct and withhold with
respect to the making of such payment under the Code or under any provision of
federal, state, local or foreign tax law. To the extent that amounts are so
withheld by Parent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the person in respect of which such
deduction and withholding was made by Parent.
Section 2.6 No Fractional Securities. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates pursuant to this Article II, and no Parent dividend or
other distribution or stock split shall relate to any such fractional share,
and no such fractional share shall entitle the owner thereof to vote or to any
other rights of a security holder of Parent. In lieu of any such fractional
share, each holder of Xxx Group Common Stock or MacManus Common Stock who would
otherwise have been entitled to a fraction of a share of Parent Common Stock
upon surrender of
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Certificates for exchange pursuant to this Article II will be paid an amount in
cash (without interest), rounded to the nearest cent, determined by multiplying
the book value of Xxx Group Common Stock or MacManus Common Stock immediately
prior to the Effective Time, as applicable, by the fractional interest to which
such holder would otherwise be entitled. For purposes of paying such cash in
lieu of fractional shares, all Certificates surrendered for exchange by a
stockholder shall be aggregated.
Section 2.7 Deposit Into Voting Trust. Notwithstanding any other provision
in this Agreement, Parent shall deliver all Parent Certificates representing
Parent Common Stock issued in the Mergers to the voting trustees under the
Voting Trust Agreement for deposit into such voting trust. It is contemplated
that such trustees will issue and deliver to the beneficiaries under the Voting
Trust Agreement certificates of beneficial ownership with respect to the Parent
Common Stock held under the Voting Trust Agreement promptly following the
Effective Time.
Section 2.8 Adjustment of Exchange Ratio. In the event of any
reclassification, stock split or stock dividend with respect to Xxx Group
Common Stock or MacManus Common Stock, any change or conversion of Xxx Group
Common Stock or MacManus Common Stock into other securities or any other
dividend or distribution with respect to the Xxx Group Common Stock or MacManus
Common Stock prior to the Effective Time, except with respect to those items
listed on Schedule 2.8 hereto, appropriate and proportionate adjustments, if
any, shall be made to the Xxx Group Merger Exchange Ratio or MacManus Merger
Exchange Ratio, as applicable, and all references to such exchange ratio in
this Agreement shall be deemed to be to the exchange ratio as so adjusted.
Section 2.9 No Further Ownership Rights. All shares of Parent Common Stock
issued and/or cash paid upon the surrender for exchange of Certificates in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Xxx Group Common Stock
or MacManus Common Stock represented by such Certificates. From and after the
Effective Time, all shares converted in accordance with this Article II shall
no longer be outstanding and shall automatically be canceled and shall cease to
exist.
Section 2.10 Closing of Company Transfer Books. At the Effective Time, the
stock transfer books of Xxx Group and MacManus shall be closed and no transfer
of shares of the capital stock of such companies shall thereafter be made on
the records of such companies. If, after the Effective Time, Certificates are
presented to Parent or a Surviving Corporation, such certificates shall be
canceled and exchanged as provided in this Article II.
Section 2.11 Lost Certificates. If 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
Parent, the providing of a written indemnity against any claim that may be made
against them with respect to such Certificate, Parent will issue in exchange
for such lost, stolen or destroyed Certificate the shares of Parent Common
Stock and/or any cash in lieu of fractional shares of Parent Common Stock to
which the holders thereof are entitled pursuant to Sections 2.1 or 2.2, as
applicable, and any dividends or other distributions to which the holders
thereof are entitled pursuant to Section 2.5.
Section 2.12 Stockholder and Voting Agreements. Notwithstanding anything in
this Article II to the contrary, no Parent Certificate shall be issued in the
Mergers to a person who has not executed and delivered to Parent a Voting Trust
Agreement substantially in the form of Exhibit B hereto and a Stockholder
Agreement substantially in the form of Exhibit C hereto.
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ARTICLE III
Representations and Warranties of MacManus
MacManus hereby represents and warrants as of the date hereof to Xxx Group
as follows:
Section 3.1 Organization and Qualification; Subsidiaries. MacManus and each
of its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, except for such failure which, when taken together with all other
such failures, would not reasonably be expected to have a Material Adverse
Effect (as defined in Section 9.5) on MacManus. Each of MacManus and its
Subsidiaries has the requisite power and authority and any necessary Permit (as
defined in Section 3.9) to own, operate or lease the properties that it
purports to own, operate or lease and to carry on its business as it is now
being conducted, and is duly qualified as a foreign corporation to do business,
and is in good standing, in each jurisdiction where the character of its
properties owned, operated or leased or the nature of its activities makes such
qualification necessary, except for such failure which, when taken together
with all other such failures, would not reasonably be expected to have a
Material Adverse Effect on MacManus.
Section 3.2 Certificate of Incorporation and Bylaws. MacManus has heretofore
furnished, or otherwise made available, to Xxx Group a complete and correct
copy of the Certificate of Incorporation and the Bylaws (or other such
organizational documents), each as amended to the date hereof, of MacManus and
each of its Major Subsidiaries (as listed on Schedule 3.2 hereto). Such
Certificates of Incorporation and Bylaws (or other such organizational
documents) are in full force and effect. Neither MacManus nor any of its
Subsidiaries is in violation of any of the provisions of its respective
Certificate of Incorporation or its Bylaws (or other such organizational
documents), except for such violations which, when taken together with all
other such violations, would not reasonably be expected to have a Material
Adverse Effect on MacManus.
Section 3.3 Capitalization.
(a) The authorized and outstanding capital stock of MacManus as of the date
hereof is set forth on Schedule 3.3. Except as set forth on Schedule 3.3, there
are no outstanding MacManus Equity Rights. For purposes of this Agreement,
"MacManus Equity Rights" shall mean subscriptions, options, warrants, calls,
commitments, agreements, conversion rights or other rights of any character
(contingent or otherwise) to purchase or otherwise acquire from MacManus or any
of MacManus' Subsidiaries at any time, or upon the happening of any stated
event, any shares of the capital stock or other voting or non-voting securities
of MacManus.
(b) Except as set forth on Schedule 3.3, there are no outstanding
obligations of MacManus or any of MacManus' Subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock of MacManus or MacManus Equity
Rights.
(c) All of the issued and outstanding shares of MacManus Common Stock are
validly issued, fully paid and nonassessable and have been duly authorized.
(d) Schedule 3.3 sets forth for each Subsidiary of MacManus (i) its legal
name and jurisdiction of incorporation or organization, (ii) type of entity
(corporation, limited liability company, partnership or other) and (iii) the
number or proportion of shares or interests held directly or indirectly by
MacManus. MacManus or one of its wholly-owned Subsidiaries has good and valid
title to the capital stock or ownership interests in each of its Major
Subsidiaries, free and clear of any liens, security interests, pledges,
agreements, claims, charges or encumbrances. Except as set forth on Schedule
3.3, there are no existing subscriptions, options, warrants, calls,
commitments, agreements, conversion rights or other rights of any character
(contingent or otherwise) to purchase or otherwise acquire at any time, or upon
the happening of any stated event, any shares of the capital stock or other
voting or non-voting securities of any of MacManus' Major Subsidiaries, whether
or not presently issued or outstanding, and there are no outstanding
obligations to repurchase, redeem or otherwise acquire any shares of capital
stock or other voting or non-voting securities of any of MacManus' Major
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Subsidiaries. Except as set forth on Schedule 3.3, there are no existing
subscriptions, options, warrants, calls, commitments, agreements, conversion
rights or other rights of any character (contingent or otherwise) to purchase
or otherwise acquire at any time, or upon the happening of any stated event,
any shares of the capital stock or other voting or non-voting securities of any
of MacManus' Subsidiaries (other than its Major Subsidiaries), whether or not
presently issued or outstanding, and there are no outstanding obligations to
repurchase, redeem or otherwise acquire any shares of capital stock or other
voting or non-voting securities of any of MacManus' Subsidiaries (other than
its Major Subsidiaries), other than such as would not, individually or in the
aggregate, have a Material Adverse Effect on MacManus. Except for (i) its
Subsidiaries, (ii) immaterial amounts of equity securities, (iii) investments
of Persons in which MacManus has less than a five percent (5%) interest, and
(iv) equity interests disclosed on Schedule 3.3 hereto, MacManus does not
directly or indirectly own any equity interest in any other Person. There are
no outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to MacManus or any of its Major
Subsidiaries. Except as disclosed on Schedule 3.3, there are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of
the capital stock of MacManus or any of its Major Subsidiaries.
(e) Except as set forth on Schedule 3.3, no bonds, debentures, notes or
other indebtedness of MacManus or any of its Major Subsidiaries having the
right to vote on any matters on which stockholders may vote are issued or
outstanding.
(f) As of the Effective Time, there will be no more than 1,128,775 issued
and outstanding shares of MacManus Common Stock (less the number of shares
redeemed by MacManus from the date of this Agreement through the Effective
Time).
Section 3.4 Authority Relative to this Agreement. MacManus has the necessary
corporate power and authority to enter into this Agreement and, subject to
obtaining any necessary stockholder approval of the MacManus Merger, this
Agreement and the transactions contemplated hereby, to carry out its
obligations hereunder. The execution and delivery of this Agreement by MacManus
and the consummation by MacManus of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of MacManus,
subject to the approval of this Agreement and the transactions contemplated
hereby by MacManus' stockholders required by Delaware Law. This Agreement has
been duly executed and delivered by MacManus and, assuming the due
authorization, execution and delivery thereof by the other parties, constitutes
a legal, valid and binding obligation of MacManus, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the rights
and remedies of creditors generally and to general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
Section 3.5 No Conflict; Required Filings and Consents.
(a) Except as set forth on Schedule 3.5 or as described in subsection (b)
below, the execution and delivery of this Agreement by MacManus does not, and
the performance of this Agreement by MacManus will not, (i) violate or conflict
with the Certificate of Incorporation or Bylaws of MacManus, (ii) conflict with
or violate any law, regulation, court order, judgment or decree applicable to
MacManus or any of its Subsidiaries or by which any of their respective
property is bound or affected, (iii) violate or conflict with the Certificate
of Incorporation or Bylaws (or other such organizational documents) of any of
MacManus' Subsidiaries, or (iv) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination or cancellation of, or
result in the creation of a lien or encumbrance on any of the properties or
assets of MacManus or any of its Subsidiaries pursuant to, or result in the
loss of any benefit or right, or result in an acceleration of any rights or
amounts due resulting from a change of control or otherwise, or require the
consent of any other party to, any contract, instrument, Permit, license or
franchise to which MacManus or any of its Subsidiaries is a party or by which
MacManus, any of such Subsidiaries or any of their respective property is bound
or affected, except, in the case of clauses (ii), (iii) and (iv) above, for
matters addressed in Section 3.5(b) or conflicts, violations, breaches,
defaults, rights, results or consents which, individually or in the aggregate,
would not have a Material Adverse Effect on MacManus.
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(b) Except for applicable requirements, if any, of foreign regulatory laws
and commissions, the premerger notification requirements of the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), filing
and recordation of appropriate merger or other documents as required by
Delaware Law and any filings required pursuant to any state securities or "blue
sky" laws, neither MacManus nor any of its Subsidiaries is required to submit
any notice, report or other filing with any domestic or foreign, national,
federal, state, county, city, local or other administrative, legislative,
regulatory or other governmental authority, commission, agency, court of
competent jurisdiction or other judicial entity, tribunal, arbitrator, office,
principality, registry, legislative or regulatory body, instrumentality, or
non-governmental, quasi-governmental, or private agency, commission or
authority or any arbitral tribunal exercising any regulatory or taxing
authority (a "Governmental or Regulatory Authority") in connection with the
execution, delivery or performance of this Agreement. Except as set forth in
the immediately preceding sentence, no waiver, consent, approval or
authorization of any Governmental or Regulatory Authority is required to be
obtained by MacManus or any of its Subsidiaries in connection with its
execution, delivery or performance of this Agreement, other than such as would
not have a Material Adverse Effect on MacManus or the Parent.
Section 3.6 Financial Statements. The financial statements, including all
related notes and schedules, listed on Schedule 3.6 hereto (the "MacManus
Financial Statements") (copies of which have been provided to Xxx Group) are
consistent with the books and records of MacManus and its Subsidiaries and
fairly present the consolidated financial position of MacManus and its
Subsidiaries as at the respective dates thereof and the consolidated results of
operations and cash flows of MacManus and its Subsidiaries for the periods
indicated in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except for changes in accounting principles disclosed in the notes
thereto) and subject in the case of interim financial statements to normal
year-end adjustments (which adjustments will not be material individually or in
the aggregate).
Section 3.7 Absence of Certain Changes or Events. Except as disclosed on
Schedule 3.7, since June 30, 1999, and except as permitted by this Agreement or
consented to hereunder, MacManus and its Subsidiaries have not incurred any
material liability, except in the ordinary course of their businesses
consistent with their past practices. Since June 30, 1999, there has not been
any change, or any event involving a prospective change, in the business,
financial condition, operations or results of operations of MacManus or any of
its Subsidiaries which has had, or is reasonably likely to have, a Material
Adverse Effect on MacManus. Since January 1, 1999, MacManus and its Major
Subsidiaries have conducted their respective businesses in the ordinary course
consistent with their past practices.
Section 3.8 Litigation. Except as set forth on Schedule 3.8 hereto, there
are no claims, actions, suits, proceedings or investigations pending or, to
MacManus' knowledge, threatened against MacManus or any of its Subsidiaries, or
any properties or rights of MacManus or any of its Subsidiaries, before any
Governmental or Regulatory Authority which (i) would individually or in the
aggregate be reasonably likely to have a Material Adverse Effect on MacManus or
(ii) seek to prevent or delay, or seek damages in connection with, the
transactions contemplated by this Agreement. None of MacManus and its
Subsidiaries is subject to any material outstanding injunction, judgment,
order, decree, ruling or charge. With respect to Tax (as defined in Section
3.14) matters, litigation shall not be deemed threatened unless a Tax authority
has delivered a written notice of deficiency to MacManus or any of its
Subsidiaries.
Section 3.9 No Violation of Law; Permits. The business of MacManus and its
Subsidiaries is not being conducted in violation of any statute, law,
ordinance, regulation, judgment, order or decree of any Governmental or
Regulatory Authority ("Legal Requirements"), or in violation of any permits,
franchises, licenses, privileges, immunities, approvals, certificates, orders,
authorizations or consents that are granted by any Governmental or Regulatory
Authority ("Permits"), except for violations and possible violations none of
which, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on MacManus. Except as set forth on Schedule 3.9
hereto, no investigation, review or proceeding by any Governmental or
Regulatory Authority with respect to MacManus or any of its Subsidiaries in
relation to any violation or alleged violation of law or regulation is pending
or, to MacManus' knowledge, threatened, nor has
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any Governmental or Regulatory Authority indicated an intention to conduct the
same, except for such investigations which, if they resulted in adverse
findings, would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on MacManus. Except as set forth on
Schedule 3.9 hereto, neither MacManus nor any of its Subsidiaries is subject to
any cease and desist or other order, judgment, injunction or decree issued by,
or is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or has adopted any
board resolutions at the request of, any Governmental or Regulatory Authority
that materially restricts the conduct of its business or which would reasonably
be expected to have a Material Adverse Effect on MacManus, nor has MacManus or
any of its Subsidiaries been advised in writing that any Governmental or
Regulatory Authority is considering issuing or requesting any of the foregoing.
Section 3.10 Employee Matters; ERISA. Except as set forth on Schedule 3.10:
(a) Copies of all employee benefit plans covering present or former
employees or directors of MacManus and of each of its Major Subsidiaries or
their beneficiaries, or providing benefits to such persons in respect of
services provided to any such entity, or with respect to which MacManus or
any of its Major Subsidiaries has, or has had, an obligation to contribute
or any other liability, including, but not limited to, any employee benefit
plans within the meaning of Section 3(3) of ERISA, any deferred
compensation, stock, profit sharing, retirement, savings, medical, health,
life insurance, disability, sick leave, cafeteria or flexible spending,
vacation, or severance programs, policies or plans (collectively, the
"MacManus Benefit Plans"), whether funded or unfunded, insured or
uninsured, have been made available to Xxx Group.
(b) Each of the MacManus Benefit Plans intended to be "qualified" within
the meaning of Section 401(a) of the Code has been determined by the
Internal Revenue Service (the "IRS") to be so qualified, and, to MacManus'
knowledge, no circumstances exist that could reasonably be expected to
adversely affect such qualification. MacManus is in compliance in all
material respects with, and each of the MacManus Benefit Plans complies in
form with, and is and has been operated in all material respects in
compliance with, all applicable Legal Requirements, including, without
limitation, ERISA and the Code. No assets of MacManus or any of its Major
Subsidiaries are subject to liens arising under ERISA or the Code on
account of any MacManus Benefit Plan, neither MacManus nor any of its Major
Subsidiaries has been required to provide any security under Sections
401(a)(29) or 412(f) of the Code, or under Section 307 of ERISA, and no
event has occurred that could give rise to any such lien or a requirement
to provide such security.
(c) With respect to the MacManus Benefit Plans, individually and in the
aggregate, no event has occurred and, to MacManus' knowledge, there does
not now exist any condition or set of circumstances, that could subject
MacManus or any of its Major Subsidiaries to any material liability arising
under the Code, ERISA or any other applicable Legal Requirements
(including, without limitation, any liability to any such plan or the
Pension Benefit Guaranty Corporation (the "PBGC")), or under any indemnity
agreement to which MacManus or any of its Subsidiaries is a party,
excluding liability for benefit claims and funding obligations payable in
the ordinary course. No MacManus Benefit Plan subject to Title IV of ERISA
has terminated, nor has a "reportable event" (within the meaning of Section
4043 of ERISA) occurred with respect to any such plan (other than such
events with respect to which the reporting requirement has been waived by
regulation).
(d) None of the MacManus Benefit Plans that are "welfare plans" within
the meaning of Section 3(1) of ERISA (i) provide for any post-employment or
retiree benefits other than continuation coverage required to be provided
under Section 4980B of the Code, Part 6 of Title I of ERISA, or applicable
state law, or (ii) has provided any disqualified benefit, within the
meaning of Section 4976 of the Code, with respect to which an excise tax
has been, or could be, imposed.
(e) MacManus has made available to Xxx Group copies of the following
documents with respect to each MacManus Benefit Plan, where applicable, (i)
all plan documents governing such plan and the most
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recent summary plan description furnished to employees, (ii) the three (3)
most recent annual reports filed with the IRS, (Form 5500-series),
including all schedules and attachments thereto, (iii) each related trust
agreement or other funding arrangement (including all amendments to each
such agreement), (iv) the most recent determination of the IRS with respect
to the qualified status of such MacManus Benefit Plan, and any currently-
pending application for such a letter, and (v) the most recent actuarial
report or valuation.
(f) Except as set forth on Schedule 3.10 hereto as made available to Xxx
Group prior to the date hereof, the consummation or announcement of any
transaction contemplated by this Agreement will not (either alone or upon
the occurrence of any additional or further acts or events) result in any
(i) payment (whether of severance pay or otherwise) becoming due from
MacManus or any of its Major Subsidiaries to any officer, employee, former
employee or director thereof or to the trustee under any "rabbi trust" or
similar arrangement, (ii) benefit under any MacManus Benefit Plan being
established or becoming accelerated, vested or payable, or (iii)
"reportable event" (as defined in Section 4043 of ERISA) with respect to a
MacManus Benefit Plan subject to Title IV of ERISA.
(g) The consummation or announcement of any transaction contemplated by
this Agreement will not (either alone or upon the occurrence of any
additional or further acts or events) result in the disqualification of any
of the MacManus Benefit Plans intended to be qualified under, result in a
prohibited transaction or breach of fiduciary duty under, or otherwise
violate, ERISA or the Code.
(h) Neither MacManus nor any of its Major Subsidiaries nor any of their
directors, officers, employees or agents, nor any "party in interest" or
"disqualified person", as such terms are defined in Section 3 of ERISA and
Section 4975 of the Code, with respect to any MacManus Benefit Plan, has
engaged in or been a party to any "prohibited transaction", as such term is
defined in Section 4975 of the Code or Section 406 of ERISA, which is not
otherwise exempt, which could result in the imposition of either a penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code upon MacManus or its Major Subsidiaries, or which could
constitute a breach of fiduciary duty which could result in liability on
the part of MacManus or any of its Major Subsidiaries.
(i) No MacManus Benefit Plan has incurred any "accumulated funding
deficiency" (as defined in Section 412 of the Code or Part 3 of Title I of
ERISA), whether or not waived. Neither MacManus nor any of its Major
Subsidiaries has incurred, and none of such entities reasonably expects to
incur, any material liability to the PBGC with respect to any MacManus
Benefit Plan. Neither MacManus nor any of its Major Subsidiaries is a party
to, contributes to, or is required to contribute to, and neither has
incurred or reasonably expects to incur, any withdrawal liability with
respect to, any "multiemployer plan" (as defined in Section 3(37) of
ERISA). No MacManus Benefit Plan is a "multiple employer plan", within the
meaning of the Code or ERISA.
Section 3.11 Labor Matters. Except as set forth on Schedule 3.11, neither
MacManus nor any of its Major Subsidiaries has any labor unions or is the
subject of any pending proceeding asserting that it or any of its Major
Subsidiaries has committed an unfair labor practice or seeking to compel it to
recognize or bargain with any labor union or labor organization, nor is any
such proceeding pending or, to MacManus' knowledge, threatened, except in each
case as would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on MacManus. To the knowledge of MacManus, none
of the officers or managing directors of MacManus or any of its Major
Subsidiaries (or individuals holding positions with similar seniority or
responsibility) has any plans to terminate employment with MacManus or such
Major Subsidiary as the case may be.
Section 3.12 Board Action; Vote Required.
(a) The Board of Directors of MacManus has unanimously approved this
Agreement and the MacManus Merger, declared its advisability and determined
that the transactions contemplated by this Agreement are in the best interests
of MacManus and its stockholders and has resolved to recommend to such
stockholders that they vote in favor thereof.
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(b) The approval of this Agreement by a majority of the votes entitled to be
cast by all holders of MacManus Common Stock is the only vote of the holders of
any class or series of the capital stock of MacManus required to approve this
Agreement, the MacManus Merger and the other transactions contemplated hereby.
Section 3.13 Brokers. Except for the fees and expenses of Xxxxxx Xxxxxxx
(the "Financial Advisor"), no broker, finder or investment banker is entitled
to any brokerage, finder's, investment banking or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of MacManus or any of its Subsidiaries.
Section 3.14 Tax Matters. Except as set forth on Schedule 3.14 attached
hereto and except to the extent that the failure of the following
representations to be true would not have in the aggregate a Material Adverse
Effect on MacManus or the MacManus Surviving Corporation:
(a) All U.S. federal, state or local or foreign returns, reports, or
statements required to be filed with any Governmental or Regulatory
Authority with respect to Taxes (as hereinafter defined), including any
attachments thereto or amendments thereof ("Tax Returns") required to be
filed by MacManus or its Subsidiaries on or prior to the Effective Time
have been or will be timely filed with the appropriate Governmental or
Regulatory Authorities and are or will be correct in all respects, and all
U.S. federal, state or local or foreign taxes of any kind, including,
without limitation, those on or measured by or referred to as income, gross
receipts, capital, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, value added, property or windfall profits taxes, customs, duties,
or similar fees, assessments, or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax, or additional
amounts thereon ("Taxes") due by MacManus or its Subsidiaries on or prior
to the Effective Time have been, or will be, timely paid;
(b) All unpaid Taxes in respect of MacManus or its Subsidiaries with
respect to taxable periods ending on or prior to the Effective Time or with
respect to taxable periods that begin before the Effective Time and end
after the Effective Time, to the extent such Taxes are attributable to the
portion of such period ending at the Effective Time, have been or will be
adequately reflected as a liability on the books of MacManus or its
Subsidiaries on or prior to the Effective Time;
(c) There are no liens (except for statutory liens for current Taxes not
yet due and payable) against any domestic or foreign assets of MacManus or
any of its Subsidiaries resulting from any unpaid Taxes;
(d) Except as set forth on Schedule 3.14, no audit or other proceeding
with respect to Taxes due from MacManus or any of its Subsidiaries, or any
Tax Return of MacManus or any of its Subsidiaries, is pending, threatened
in writing, or being conducted by any Governmental or Regulatory Authority;
(e) Except as set forth on Schedule 3.14, no extension of the statute of
limitations on the assessment of any Taxes has been granted by MacManus or
any of its Subsidiaries and is currently in effect; and
(f) Neither MacManus nor any of its Subsidiaries is a party to any
agreement, contract, arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of any "excess parachute
payment" within the meaning of Section 280G of the Code or any similar
provision of foreign, state or local law.
Section 3.15 Intellectual Property. MacManus and its Subsidiaries have all
right, title and interest in, or a valid and binding license to use, all
Intellectual Property (as defined below) that is individually or in the
aggregate material to the conduct of the businesses of MacManus and its
Subsidiaries taken as a whole ("MacManus Intellectual Property"). Except as
disclosed in Schedule 3.15, (i) MacManus and its Subsidiaries have not
defaulted in any material respect under any license to use MacManus
Intellectual Property, (ii) MacManus and its Subsidiaries are not the subject
of any proceeding or litigation for infringement of any third party
Intellectual Property, (iii) MacManus has no knowledge of circumstances that
would be reasonably expected to give rise to any such proceeding or litigation,
and (iv) MacManus has no knowledge of
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circumstances that are causing or would be reasonably expected to cause the
loss or impairment of MacManus Intellectual Property, other than a default,
proceeding, litigation, loss or impairment that is not having or would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on MacManus. For purposes of this Agreement, "Intellectual
Property" means patents and patent rights, trademarks and trademark rights,
trade names and trade name rights, service marks and service xxxx rights,
copyrights and copyright rights, trade secret and trade secret rights, and
other intellectual property rights, and all pending applications for and
registrations of any of the foregoing.
Section 3.16 Insurance. Except as set forth on Schedule 3.16 hereto, each of
MacManus and each of its Major Subsidiaries is insured with financially
responsible insurers in such amounts and against such risks and losses as are
customary for companies conducting the business as conducted by MacManus and
its Major Subsidiaries. Except as set forth on Schedule 3.16 hereto, since
January 1, 1998, neither MacManus nor any of its Major Subsidiaries has
received notice of cancellation or termination with respect to any material
insurance policy of MacManus or its Major Subsidiaries which has not been
cured. The insurance policies of MacManus and its Major Subsidiaries are valid
and enforceable policies.
Section 3.17 Certain Contracts. Listed on Schedule 3.17 are all (i) material
real property leases and subleases, (ii) material joint venture, strategic
alliance and other similar such agreements, (iii) contracts related to
indebtedness of more than $20 million or any guarantee of such indebtedness,
and (iv) any other contract or agreement (or related group thereof) the
remaining performance of which by any party involves payment or consideration
in excess of $20 million, but excluding in each case any contracts for the
rendering of services to clients or real estate leases, to which MacManus or
any of its Subsidiaries is a party (the "MacManus Contracts"). True and
complete copies of the MacManus Contracts have been made available to Xxx
Group. The MacManus Contracts are legal, valid, binding, enforceable and in
full force and effect except to the extent they have previously expired in
accordance with their terms or, to the extent such invalidity or
unenforceability would not have a Material Adverse Effect on MacManus, and
neither MacManus nor any of its Subsidiaries has violated any provision of, or
committed or failed to perform any act which with or without notice, lapse of
time or both would constitute a default under the provisions of, any MacManus
Contract, except for defaults which individually and in the aggregate would not
reasonably be expected to result in a Material Adverse Effect on MacManus.
Schedule 3.17 separately identifies each MacManus Contract which contains a
change-in-control or similar type provision which will be "triggered" and/or
require a consent as a result of the transactions contemplated hereby. To the
knowledge of MacManus, no party (other than MacManus or its Subsidiaries) to
any MacManus Contract is in material breach or default thereof (and no event
has occurred which with notice or lapse of time would constitute a breach or
default or permit termination, modification or acceleration under any such
Contract) or has repudiated any provision of any such Contract. Neither
MacManus nor any of its Major Subsidiaries owns any material real property.
Section 3.18 Client Relations. Except as set forth on Schedule 3.18, to
MacManus' knowledge (without making any special inquiry), no MacManus Material
Client (as defined below) of MacManus or any of its Subsidiaries has advised
MacManus or such Subsidiary orally or in writing that it is (x) terminating or
considering terminating the handling of its business by MacManus as a whole or
in any substantial part or (y) planning to reduce its future spending with
MacManus or such Subsidiary in any material manner. For purposes of this
Agreement, a "MacManus Material Client" is any client expected to provide at
least the amount set forth on Schedule 3.18 in annualized revenues to MacManus
and its Subsidiaries, taken as a whole, under current budgets.
Section 3.19 Licenses. MacManus and each of its Subsidiaries are the
authorized legal holders or otherwise have rights to all Permits and licenses
and operating rights necessary for the operation of their businesses as
presently operated (collectively, the "MacManus Licenses"), except for such
failure which, when taken together with all other such failures, would not
reasonably be expected to have a Material Adverse Effect on MacManus. There is
not now pending and, to MacManus' knowledge, there is not threatened, any
action by or before any Governmental or Regulatory Authority to revoke,
suspend, cancel, rescind or modify in any material respect any of the MacManus
Licenses.
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Section 3.20 Year 2000.
(a) MacManus has initiated a review and assessment of all areas within its
and each of its existing Major Subsidiaries' business and operations that could
reasonably be expected to adversely affected by a failure of any of its Systems
to be Year 2000 Compliant and developed a plan and timeline for addressing Year
2000 compliance on a timely basis. As of the date of this Agreement, MacManus
has completed its implementation of such plans in all material respects. For
purposes of this Agreement, "Systems" refers to any computer hardware,
software, databases, automated systems or other computer and telecommunications
equipment owned or used primarily by a Person, or included or incorporated in
such Person's products. For purposes of this Agreement, "Year 2000 Compliant"
means, with respect to Systems, that such Systems are designed to be used prior
to, during and after the calendar year 2000 A.D. and will (i) operate normally,
(ii) record, process, calculate, compare, sequence, or use dates properly,
(iii) accurately determine intervals between and time elapsed among dates
before, within and after such year, including leap years, and (iv) otherwise
operate without error relating to date data, specifically including any error
relating to, or the product of, date data which represents or references
different centuries or more than one century. Based on the foregoing, to
MacManus' knowledge, all Systems that are material to its or any of its Major
Subsidiaries' business or operations are reasonably expected on a timely basis
to be Year 2000 Compliant.
(b) To the knowledge of MacManus, those Systems which are owned or used by
others and which are used or relied on by MacManus or its Major Subsidiaries in
the conduct of their respective businesses are Year 2000 Compliant, except as
would not have a Material Adverse Effect on MacManus.
Section 3.21 Foreign Corrupt Practices and International Trade Sanctions. To
MacManus' knowledge, neither MacManus, nor any of its Major Subsidiaries, nor
any of their respective directors, officers, agents, employees or any other
Persons acting on their behalf has, in connection with the operation of their
respective businesses, (i) used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials, candidates
or members of political parties or organizations, or established or maintained
any unlawful or unrecorded funds in violation of Section 104 of the Foreign
Corrupt Practices Act of 1977, as amended, or any other similar applicable
foreign, federal or state law, (ii) paid, accepted or received any unlawful
contributions, payments, expenditures or gifts, or (iii) violated or operated
in noncompliance with any export restrictions, anti-boycott regulations,
embargo regulations or other applicable domestic or foreign laws and
regulations.
Section 3.22 No Undisclosed Liabilities. To the knowledge of MacManus,
neither MacManus nor any of its Subsidiaries has any liability (whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due) or obligation of any nature (and there is no basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand against any of them giving rise to any such liability or
obligation), that have, or would be reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on MacManus, except for (i)
liabilities set forth on the face of the MacManus Financial Statements (rather
than in any notes thereto) or disclosed in the Schedules to this Agreement or
the Proxy Statement and (ii) liabilities which have arisen after the MacManus
Financial Statements in the ordinary course of business of MacManus and its
Subsidiaries (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty, tort,
infringement or violation of law).
Section 3.23 Accounts Receivable. All accounts receivable of MacManus and
its Subsidiaries are reflected properly on their books and records, are valid
receivables and subject to no setoffs or counterclaims, subject only to
reserves set forth on the face of the MacManus Financial Statements (rather
than in any notes thereto) as adjusted for the passage of time through the
Effective Time in accordance with the past custom and practice of MacManus and
its Subsidiaries, and except as would not have a Material Adverse Effect on
MacManus.
Section 3.24 Affiliated Transactions. Except as set forth in Schedule 3.24,
no executive officer or director of MacManus or any of its Major Subsidiaries
or, to the knowledge MacManus, any individual related by blood, marriage or
adoption to any such individual or any entity in which any such person or
individual
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owns any beneficial interest, is a party to any agreement, contract, commitment
or transaction with MacManus or any of its Major Subsidiaries (excluding any
employment agreement and rights under benefits plans) or has any material
interest in any material property used by MacManus or any of its Major
Subsidiaries, including any Intellectual Property rights.
Section 3.25 Information in Proxy Statement. None of the information
supplied or to be supplied by MacManus specifically for inclusion in the Proxy
Statement (as hereinafter defined) will, at the time the Proxy Statement is
first distributed to the stockholders of MacManus and Xxx Group, at the time of
each Stockholders Meeting and at any time it is amended or supplemented,
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Section 3.26 Opinion of Financial Advisor. MacManus has received the written
opinion of the Financial Advisor to the effect that, as of the date hereof, the
consideration to be received by the holders of MacManus Common Stock in
connection with the MacManus Merger is fair to such holders from a financial
point of view.
ARTICLE IV
Representations and Warranties of Xxx Group
Xxx Group hereby represents and warrants as of the date hereof to MacManus
as follows:
Section 4.1 Organization and Qualification; Subsidiaries. Xxx Group and each
of its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, except for such failure which, when taken together with all other
such failures, would not reasonably be expected to have a Material Adverse
Effect on Xxx Group. Each of Xxx Group and its Subsidiaries has the requisite
power and authority and any necessary Permit to own, operate or lease the
properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, operated or leased or the nature of its
activities makes such qualification necessary, except for such failure which,
when taken together with all other such failures, would not reasonably be
expected to have a Material Adverse Effect on Xxx Group.
Section 4.2 Certificate of Incorporation and Bylaws. Xxx Group has
heretofore furnished, or otherwise made available, to MacManus a complete and
correct copy of the Certificate of Incorporation and the Bylaws (or such other
organizational documents), each as amended to the date hereof, of Xxx Group and
each of its Major Subsidiaries (as listed on Schedule 4.2 hereto). Such
Certificates of Incorporation and Bylaws (or such other organizational
documents) are in full force and effect. Neither Xxx Group nor any of its
Subsidiaries is in violation of any of the provisions of its respective
Certificate of Incorporation or its Bylaws (or such other organizational
documents), except for such violations which, when taken together with all
other such violations, would not reasonably be expected to have a Material
Adverse Effect on Xxx Group.
Section 4.3 Capitalization.
(a) The authorized and outstanding capital stock of Xxx Group as of the date
hereof is set forth on Schedule 4.3. Except as set forth on Schedule 4.3, there
are no outstanding Xxx Group Equity Rights. For purposes of this Agreement,
"Xxx Group Equity Rights" shall mean subscriptions, options, warrants, calls,
commitments, agreements, conversion rights or other rights of any character
(contingent or otherwise) to purchase or otherwise acquire from Xxx Group or
any of Xxx Group's Subsidiaries at any time, or upon the happening of any
stated event, any shares of the capital stock or other voting or non-voting
securities of Xxx Group.
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(b) Except as set forth on Schedule 4.3, there are no outstanding
obligations of Xxx Group or any of Xxx Group's Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of Xxx Group or Xxx
Group Equity Rights.
(c) All of the issued and outstanding shares of Xxx Group Common Stock are
validly issued, fully paid and nonassessable and have been duly authorized.
(d) Schedule 4.3 sets forth for each Subsidiary of Xxx Group (i) its legal
name and jurisdiction of incorporation or organization, (ii) type of entity
(corporation, limited liability company, partnership or other) and (iii) the
number or proportion of shares or interests held directly or indirectly by Xxx
Group (or similar information). Xxx Group or one of its wholly-owned
Subsidiaries has good and valid title to the capital stock or ownership
interests in each of its Major Subsidiaries, free and clear of any liens,
security interests, pledges, agreements, claims, charges or encumbrances.
Except as set forth on Schedule 4.3, there are no existing subscriptions,
options, warrants, calls, commitments, agreements, conversion rights or other
rights of any character (contingent or otherwise) to purchase or otherwise
acquire at any time, or upon the happening of any stated event, any shares of
the capital stock or other voting or non-voting securities of any of Xxx
Group's Major Subsidiaries, whether or not presently issued or outstanding, and
there are no outstanding obligations to repurchase, redeem or otherwise acquire
any shares of capital stock or other voting or non-voting securities of any of
Xxx Group's Major Subsidiaries. Except as set forth on Schedule 4.3, there are
no existing subscriptions, options, warrants, calls, commitments, agreements,
conversion rights or other rights of any character (contingent or otherwise) to
purchase or otherwise acquire at any time, or upon the happening of any stated
event, any shares of the capital stock or other voting or non-voting securities
of any of Xxx Group's Subsidiaries (other than its Major Subsidiaries), whether
or not presently issued or outstanding, and there are no outstanding
obligations to repurchase, redeem or otherwise acquire any shares of capital
stock or other voting or non-voting securities of any of Xxx Group's
Subsidiaries (other than its Major Subsidiaries), other than such as would not,
individually or in the aggregate, have a Material Adverse Effect on Xxx Group.
Except for (i) its Subsidiaries, (ii) immaterial amounts of equity securities,
(iii) investments of Persons in which Xxx Group has less than a five percent
(5%) interest and (iv) equity interests disclosed on Schedule 4.3 hereto, Xxx
Group does not directly or indirectly own any equity interest in any other
Person. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation or similar rights with respect to Xxx Group or any
of its Major Subsidiaries. Except as disclosed on Schedule 4.3, there are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of Xxx Group or any of its Major Subsidiaries.
(e) Except as set forth on Schedule 4.3, no bonds, debentures, notes or
other indebtedness of Xxx Group or any of its Major Subsidiaries having the
right to vote on any matters on which stockholders may vote are issued or
outstanding.
(f) As of the Effective Time, there will be no more than 10,140,605 issued
and outstanding shares of Xxx Group Common Stock (less the number of shares
redeemed by Xxx Group from the date of this Agreement through the Effective
Time).
Section 4.4 Authority Relative to this Agreement. Xxx Group has the
necessary corporate power and authority to enter into this Agreement and,
subject to obtaining any necessary stockholder approval of the Xxx Group
Merger, this Agreement and the transactions contemplated hereby, to carry out
its obligations hereunder. The execution and delivery of this Agreement by Xxx
Group and the consummation by Xxx Group of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of Xxx
Group, subject to the approval of this Agreement and the transactions
contemplated hereby by Xxx Group's stockholders required by Delaware Law. This
Agreement has been duly executed and delivered by Xxx Group and, assuming the
due authorization, execution and delivery thereof by the other parties,
constitutes a legal, valid and binding obligation of Xxx Group, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
the rights and remedies of creditors generally and to general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
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Section 4.5 No Conflict; Required Filings and Consents.
(a) Except as set forth on Schedule 4.5 or as described in subsection
(b) below, the execution and delivery of this Agreement by Xxx Group does
not, and the performance of this Agreement by Xxx Group will not, (i)
violate or conflict with the Certificate of Incorporation or Bylaws of Xxx
Group, (ii) conflict with or violate any law, regulation, court order,
judgment or decree applicable to Xxx Group or any of its Subsidiaries or by
which any of their respective property is bound or affected, (iii) violate
or conflict with the Certificate of Incorporation or Bylaws (or other such
organizational documents) of any of Xxx Group's Subsidiaries, or (iv)
result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Xxx
Group or any of its Subsidiaries pursuant to, or result in the loss of any
material benefit or right, or result in an acceleration of any rights or
amounts due resulting from a change of control or otherwise, or require the
consent of any other party to any contract, instrument, Permit, license or
franchise to which Xxx Group or any of its Subsidiaries is a party or by
which Xxx Group, any of such Subsidiaries or any of their respective
property is bound or affected, except, in the case of clauses (ii), (iii)
and (iv) above, for matters addressed in Section 4.5(b) or conflicts,
violations, breaches, defaults, rights, results or consents which,
individually or in the aggregate, would not have a Material Adverse Effect
on Xxx Group.
(b) Except for applicable requirements, if any, of foreign regulatory
laws and commissions, the premerger notification requirements of the HSR
Act, filing and recordation of appropriate merger or other documents as
required by Delaware Law and any filings required pursuant to any state
securities or "blue sky" laws, neither Xxx Group nor any of its
Subsidiaries is required to submit any notice, report or other filing with
any Governmental or Regulatory Authority in connection with the execution,
delivery or performance of this Agreement. Except as set forth in the
immediately preceding sentence, no waiver, consent, approval or
authorization of any Governmental or Regulatory Authority is required to be
obtained by Xxx Group or any of its Subsidiaries in connection with its
execution, delivery or performance of this Agreement, other than such as
would not have a Material Adverse Effect on Xxx Group or the Parent.
Section 4.6 Financial Statements. The financial statements, including all
related notes and schedules, listed on Schedule 4.6 hereto (the "Xxx Group
Financial Statements") (copies of which have been provided to MacManus) are
consistent with the books and records of Xxx Group and its Subsidiaries and
fairly present the consolidated financial position of Xxx Group and its
Subsidiaries as at the respective dates thereof and the consolidated results of
operations and cash flows of Xxx Group and its Subsidiaries for the periods
indicated in accordance with GAAP applied on a consistent basis throughout the
periods involved (except for changes in accounting principles disclosed in the
notes thereto) and subject in the case of interim financial statements to
normal year-end adjustments (which adjustments will not be material
individually or in the aggregate).
Section 4.7 Absence of Certain Changes or Events. Except as disclosed on
Schedule 4.7, since June 30, 1999, and except as permitted by this Agreement or
consented to hereunder, Xxx Group and its Subsidiaries have not incurred any
material liability, except in the ordinary course of their businesses
consistent with their past practices. Since June 30, 1999, there has not been
any change, or any event involving a prospective change, in the business,
financial condition, operations or results of operations of Xxx Group or any of
its Subsidiaries which has had, or is reasonably likely to have, a Material
Adverse Effect on Xxx Group. Since January 1, 1999, Xxx Group and its Major
Subsidiaries have conducted their respective businesses in the ordinary course
consistent with their past practices.
Section 4.8 Litigation. Except as set forth on Schedule 4.8 hereto, there
are no claims, actions, suits, proceedings or investigations pending or, to Xxx
Group's knowledge, threatened against Xxx Group or any of its Subsidiaries, or
any properties or rights of Xxx Group or any of its Subsidiaries, before any
Governmental or Regulatory Authority which (i) would individually or in the
aggregate be reasonably likely to have a Material Adverse Effect on Xxx Group
or (ii) seek to prevent or delay, or seek damages in connection with, the
transactions contemplated by this Agreement. None of Xxx Group and its
Subsidiaries is subject to any material
A-18
outstanding injunction, judgment, order, decree, ruling or charge. With respect
to Tax matters, litigation shall not be deemed threatened unless a Tax
authority has delivered a written notice of deficiency to Xxx Group or any of
its Subsidiaries.
Section 4.9 No Violation of Law; Permits. The business of Xxx Group and its
Subsidiaries is not being conducted in violation of any Legal Requirements or
in violation of any Permits, except for violations and possible violations none
of which, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect on Xxx Group. Except as set forth on Schedule
4.9 hereto, no investigation, review or proceeding by any Governmental or
Regulatory Authority with respect to Xxx Group or any of its Subsidiaries in
relation to any violation or alleged violation of law or regulation is pending
or, to Xxx Group's knowledge, threatened, nor has any Governmental or
Regulatory Authority indicated an intention to conduct the same, except for
such investigations which, if they resulted in adverse findings, would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Xxx Group. Except as set forth on Schedule 4.9 hereto,
neither Xxx Group nor any of its Subsidiaries is subject to any cease and
desist or other order, judgment, injunction or decree issued by, or is a party
to any written agreement, consent agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or has adopted any board resolutions at
the request of, any Governmental or Regulatory Authority that materially
restricts the conduct of its business or which would reasonably be expected to
have a Material Adverse Effect on Xxx Group, nor has Xxx Group or any of its
Subsidiaries been advised in writing that any Governmental or Regulatory
Authority is considering issuing or requesting any of the foregoing.
Section 4.10 Employee Matters; ERISA. Except as set forth on Schedule 4.10:
(a) Copies of all employee benefit plans covering present or former
employees or directors of Xxx Group and of each of its Major Subsidiaries
or their beneficiaries, or providing benefits to such persons in respect of
services provided to any such entity, or with respect to which Xxx Group or
any of its Major Subsidiaries has, or has had, an obligation to contribute
or any other liability, including, but not limited to, any employee benefit
plans within the meaning of Section 3(3) of ERISA, any deferred
compensation, stock, profit sharing, retirement, savings, medical, health,
life insurance, disability, sick leave, cafeteria or flexible spending,
vacation, or severance programs, policies or plans (collectively, the "Xxx
Group Benefit Plans"), whether funded or unfunded, insured or uninsured,
have been made available to MacManus.
(b) Each of the Xxx Group Benefit Plans intended to be "qualified"
within the meaning of Section 401(a) of the Code has been determined by the
IRS to be so qualified, and, to Xxx Group's knowledge, no circumstances
exist that could reasonably be expected to adversely affect such
qualification. Xxx Group is in compliance in all material respects with,
and each of the Xxx Group Benefit Plans complies in form with, and is and
has been operated in all material respects in compliance with, all
applicable Legal Requirements, including, without limitation, ERISA and the
Code. No assets of Xxx Group or any of its Major Subsidiaries are subject
to liens arising under ERISA or the Code on account of any Xxx Group
Benefit Plan, neither Xxx Group nor any of its Major Subsidiaries has been
required to provide any security under Sections 401(a)(29) or 412(f) of the
Code, or under Section 307 of ERISA, and no event has occurred that could
give rise to any such lien or a requirement to provide such security.
(c) With respect to the Xxx Group Benefit Plans, individually and in the
aggregate, no event has occurred and, to Xxx Group's knowledge, there does
not now exist any condition or set of circumstances, that could subject Xxx
Group or any of its Major Subsidiaries to any material liability arising
under the Code, ERISA or any other applicable Legal Requirements
(including, without limitation, any liability to any such plan or the
PBGC), or under any indemnity agreement to which Xxx Group or any of its
Subsidiaries is a party, excluding liability for benefit claims and funding
obligations payable in the ordinary course. No Xxx Group Benefit Plan
subject to Title IV of ERISA has terminated, nor has a "reportable event"
(within the meaning of Section 4043 of ERISA) occurred with respect to any
such plan (other than such events with respect to which the reporting
requirement has been waived by regulation).
A-19
(d) None of the Xxx Group Benefit Plans that are "welfare plans" within
the meaning of Section 3(1) of ERISA (i) provide for any post-employment or
retiree benefits other than continuation coverage required to be provided
under Section 4980B of the Code, Part 6 of Title I of ERISA or applicable
state law, or (ii) has provided any disqualified benefit, within the
meaning of Section 4976 of the Code, with respect to which an excise tax
has been, or could be, imposed.
(e) Xxx Group has made available to MacManus copies of the following
documents with respect to each Xxx Group Benefit Plan, where applicable,
(i) all plan documents governing such plan and the most recent summary plan
description furnished to employees, (ii) the three (3) most recent annual
reports filed with the IRS, (Form 5500-series), including all schedules and
attachments thereto, (iii) each related trust agreement or other funding
arrangement (including all amendments to each such agreement), (iv) the
most recent determination of the IRS with respect to the qualified status
of such Xxx Group Benefit Plan, and any currently-pending application for
such a letter, and (v) the most recent actuarial report or valuation.
(f) Except as set forth on Schedule 4.10 hereto as made available to
MacManus prior to the date hereof, the consummation or announcement of any
transaction contemplated by this Agreement will not (either alone or upon
the occurrence of any additional or further acts or events) result in any
(i) payment (whether of severance pay or otherwise) becoming due from Xxx
Group or any of its Major Subsidiaries to any officer, employee, former
employee or director thereof or to the trustee under any "rabbi trust" or
similar arrangement, (ii) benefit under any Xxx Group Benefit Plan being
established or becoming accelerated, vested or payable, or (iii)
"reportable event" (as defined in Section 4043 of ERISA) with respect to a
Xxx Group Benefit Plan subject to Title IV of ERISA.
(g) The consummation or announcement of any transaction contemplated by
this Agreement will not (either alone or upon the occurrence of any
additional or further acts or events) result in the disqualification of any
of the Xxx Group Benefit Plans intended to be qualified under, result in a
prohibited transaction or breach of fiduciary duty under, or otherwise
violate, ERISA or the Code.
(h) Neither Xxx Group nor any of its Major Subsidiaries nor any of their
directors, officers, employees or agents, nor any "party in interest" or
"disqualified person", as such terms are defined in Section 3 of ERISA and
Section 4975 of the Code, with respect to any Xxx Group Benefit Plan, has
engaged in or been a party to any "prohibited transaction", as such term is
defined in Section 4975 of the Code or Section 406 of ERISA, which is not
otherwise exempt, which could result in the imposition of either a penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code upon Xxx Group or its Major Subsidiaries, or which could
constitute a breach of fiduciary duty which could result in liability on
the part of Xxx Group or any of its Major Subsidiaries.
(i) No Xxx Group Benefit Plan has incurred any "accumulated funding
deficiency" (as defined in Section 412 of the Code or Part 3 of Title I of
ERISA), whether or not waived. Neither Xxx Group nor any of its Major
Subsidiaries has incurred, and none of such entities reasonably expects to
incur, any material liability to the PBGC with respect to any Xxx Group
Benefit Plan. Neither Xxx Group nor any of its Major Subsidiaries is a
party to, contributes to, or is required to contribute to, and neither has
incurred or reasonably expects to incur, any withdrawal liability with
respect to, any "multiemployer plan" (as defined in Section 3(37) of
ERISA). No Xxx Group Benefit Plan is a "multiple employer plan", within the
meaning of the Code or ERISA.
Section 4.11 Labor Matters. Except as set forth on Schedule 4.11, neither
Xxx Group nor any of its Major Subsidiaries has any labor unions or is the
subject of any pending proceeding asserting that it or any of its Major
Subsidiaries has committed an unfair labor practice or seeking to compel it to
recognize or bargain with any labor union or labor organization, nor is any
such proceeding pending or, to Xxx Group's knowledge, threatened, except in
each case as would not, individually or in the aggregate, be reasonably likely
to have a Material Adverse Effect on Xxx Group. To the knowledge of Xxx Group,
none of the officers or managing directors of Xxx Group or any of its Major
Subsidiaries (or individuals holding positions with similar seniority or
responsibility) has any plans to terminate employment with Xxx Group or such
Major Subsidiary as the case may be.
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Section 4.12 Board Action; Vote Required.
(a) The Board of Directors of Xxx Group has unanimously approved this
Agreement and the Xxx Group Merger, declared its advisability and determined
that the transactions contemplated by this Agreement are in the best interests
of Xxx Group and its stockholders and has resolved to recommend to such
stockholders that they vote in favor thereof.
(b) The approval of this Agreement by a majority of the votes entitled to be
cast by all holders of Xxx Group Common Stock is the only vote of the holders
of any class or series of the capital stock of Xxx Group required to approve
this Agreement, the Xxx Group Merger and the other transactions contemplated
hereby.
Section 4.13 Brokers. Except for the fees and expenses of the Financial
Advisor, no broker, finder or investment banker is entitled to any brokerage,
finder's, investment banking or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Xxx Group or any of its Subsidiaries.
Section 4.14 Tax Matters. Except as set forth on Schedule 4.14 attached
hereto and except to the extent that the failure of the following
representations to be true would not have in the aggregate a Material Adverse
Effect on Xxx Group or the Xxx Group Surviving Corporation:
(a) All Tax Returns required to be filed by Xxx Group or its
Subsidiaries on or prior to the Effective Time have been or will be timely
filed with the appropriate Governmental or Regulatory Authorities and are
or will be correct in all respects, and all Taxes due by Xxx Group or its
Subsidiaries on or prior to the Effective Time have been, or will be,
timely paid;
(b) All unpaid Taxes in respect of Xxx Group or its Subsidiaries with
respect to taxable periods ending on or prior to the Effective Time or with
respect to taxable periods that begin before the Effective Time and end
after the Effective Time, to the extent such Taxes are attributable to the
portion of such period ending at the Effective Time, have been or will be
adequately reflected as a liability on the books of Xxx Group or its
Subsidiaries on or prior to the Effective Time;
(c) There are no liens (except for statutory liens for current Taxes not
yet due and payable) against any domestic or foreign assets of Xxx Group or
any of its Subsidiaries resulting from any unpaid Taxes;
(d) No audit or other proceeding with respect to Taxes due from Xxx
Group or any of its Subsidiaries, or any Tax Return of Xxx Group or any of
its Subsidiaries, is pending, threatened in writing, or being conducted by
any Governmental or Regulatory Authority;
(e) No extension of the statute of limitations on the assessment of any
Taxes has been granted by Xxx Group or any of its Subsidiaries and is
currently in effect; and
(f) Neither Xxx Group nor any of its Subsidiaries is a party to any
agreement, contract, arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of any "excess parachute
payment" within the meaning of Section 280G of the Code or any similar
provision of foreign, state or local law.
Section 4.15 Intellectual Property. Xxx Group and its Subsidiaries have all
right, title and interest in, or a valid and binding license to use, all
Intellectual Property that is individually or in the aggregate material to the
conduct of the businesses of Xxx Group and its Subsidiaries taken as a whole
("Xxx Group Intellectual Property"). Except as disclosed in Schedule 4.15, (i)
Xxx Group and its Subsidiaries have not defaulted in any material respect under
any license to use Xxx Group Intellectual Property, (ii) Xxx Group and its
Subsidiaries are not the subject of any proceeding or litigation for
infringement of any third party Intellectual Property, (iii) Xxx Group has no
knowledge of circumstances that would be reasonably expected to give rise to
any such proceeding or litigation, and (iv) Xxx Group has no knowledge of
circumstances that are causing or would be reasonably expected to cause the
loss or impairment of Xxx Group Intellectual Property, other than a default,
proceeding, litigation, loss or impairment that is not having or would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on Xxx Group.
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Section 4.16 Insurance. Except as set forth on Schedule 4.16 hereto, each of
Xxx Group and each of its Major Subsidiaries is insured with financially
responsible insurers in such amounts and against such risks and losses as are
customary for companies conducting the business as conducted by Xxx Group and
its Major Subsidiaries. Except as set forth on Schedule 4.16 hereto, since
January 1, 1998, neither Xxx Group nor any of its Major Subsidiaries has
received notice of cancellation or termination with respect to any material
insurance policy of Xxx Group or its Major Subsidiaries which has not been
cured. The insurance policies of Xxx Group and its Major Subsidiaries are valid
and enforceable policies.
Section 4.17 Certain Contracts. Listed on Schedule 4.17 are all (i) material
real property leases and subleases, (ii) material joint venture, strategic
alliance and other such agreements, (iii) contracts related to indebtedness of
more than $20 million or any guarantee of such indebtedness and (iv) any other
contract or agreement (or related group thereof) the remaining performance of
which by any party involves payment or consideration in excess of $20 million,
but excluding in each case any contracts for the rendering of services to
clients or real estate leases, to which Xxx Group or any of its Subsidiaries is
a party (the "Xxx Group Contracts"). True and complete copies of the Xxx Group
Contracts have been made available to MacManus. The Xxx Group Contracts are
legal, valid, binding, enforceable and in full force and effect except to the
extent they have previously expired in accordance with their terms or to the
extent such invalidity or unenforceability would not have a Material Adverse
Effect on Xxx Group, and neither Xxx Group nor any of its Subsidiaries has
violated any provision of, or committed or failed to perform any act which with
or without notice, lapse of time or both would constitute a default under the
provisions of, any Xxx Group Contract, except for defaults which, individually
and in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect on Xxx Group. Schedule 4.17 separately identifies each Xxx Group
Contract which contains a change-in-control or similar type provision which
will be "triggered" and/or require a consent as a result of the transactions
contemplated hereby. To the knowledge of Xxx Group, no party (other than Xxx
Group or its Subsidiaries) to any Xxx Group Contract is in material breach or
default thereof (and no event has occurred which with notice or lapse of time
would constitute a breach or default or permit termination, modification or
acceleration under any such Contract) or has repudiated any provision of any
such Contract. Neither Xxx Group nor any of its Major Subsidiaries owns any
material real estate.
Section 4.18 Client Relations. Except as set forth on Schedule 4.18, to Xxx
Group's knowledge (without making any special inquiry), no Xxx Xxxxx Xxxxxxxx
Client (as defined below) of Xxx Group or any of its Subsidiaries has advised
Xxx Group or such Subsidiary orally or in writing that it is (x) terminating or
considering terminating the handling of its business by Xxx Group as a whole or
in any substantial part or (y) planning to reduce its future spending with Xxx
Group or such Subsidiary in any material manner. For purposes of this
Agreement, a "Xxx Xxxxx Xxxxxxxx Client" is any client expected to provide at
least the amount set forth on Schedule 4.18 in annualized revenues to Xxx Group
and its Subsidiaries, taken as a whole, under current budgets.
Section 4.19 Licenses. Xxx Group and each of its Subsidiaries are the
authorized legal holders or otherwise have rights to all Permits and licenses
and operating rights necessary for the operation of their businesses as
presently operated (collectively, the "Xxx Group Licenses"), except for such
failure which, when taken together with all other such failures, would not
reasonably be expected to have a Material Adverse Effect on Xxx Group. There is
not now pending and, to Xxx Group's knowledge, there is not threatened, any
action by or before any Governmental or Regulatory Authority to revoke,
suspend, cancel, rescind or modify in any material respect any of the Xxx Group
Licenses.
Section 4.20 Year 2000.
(a) Xxx Group has initiated a review and assessment of all areas within its
and each of its existing Major Subsidiaries' business and operations that could
reasonably be expected to be adversely affected by a failure of any of its
Systems to be Year 2000 Compliant and developed a plan and timeline for
addressing Year 2000 compliance on a timely basis. As of the date of this
Agreement, Xxx Group has completed its implementation of such plans in all
material respects. Based on the foregoing, to Xxx Group's knowledge, all
Systems that are
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material to its or any of its Major Subsidiaries' business or operations are
reasonably expected on a timely basis to be Year 2000 Compliant.
(b) To the knowledge of Xxx Group, those Systems which are owned or used by
others and which are used or relied on by Xxx Group or its Major Subsidiaries
in the conduct of their respective businesses are Year 2000 Compliant, except
as would not have a Material Adverse Effect on Xxx Group.
Section 4.21 Foreign Corrupt Practices and International Trade Sanctions. To
Xxx Group's knowledge, neither Xxx Group, nor any of its Major Subsidiaries,
nor any of their respective directors, officers, agents, employees or any other
Persons acting on their behalf has, in connection with the operation of their
respective businesses, (i) used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials, candidates
or members of political parties or organizations, or established or maintained
any unlawful or unrecorded funds in violation of Section 104 of the Foreign
Corrupt Practices Act of 1977, as amended, or any other similar applicable
foreign, federal or state law, (ii) paid, accepted or received any unlawful
contributions, payments, expenditures or gifts, or (iii) violated or operated
in noncompliance with any export restrictions, anti-boycott regulations,
embargo regulations or other applicable domestic or foreign laws and
regulations.
Section 4.22 No Undisclosed Liabilities. To the knowledge of Xxx Group,
neither Xxx Group nor any of its Subsidiaries has any liability (whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due) or obligation of any nature (and there is no basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand against any of them giving rise to any such liability or
obligation), that have, or would be reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Xxx Group, except for (i)
liabilities set forth on the face of the Xxx Group Financial Statements (rather
than in any notes thereto) or disclosed in the Schedules to this Agreement or
the Proxy Statement and (ii) liabilities which have arisen after the Xxx Group
Financial Statements in the ordinary course of business of Xxx Group and its
Subsidiaries (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty, tort,
infringement or violation of law).
Section 4.23 Accounts Receivable. All accounts receivable of Xxx Group and
its Subsidiaries are reflected properly on their books and records, are valid
receivables and subject to no setoffs or counterclaims, subject only to
reserves set forth on the face of the Xxx Group Financial Statements (rather
than in any notes thereto) as adjusted for the passage of time through the
Effective Time in accordance with the past custom and practice of Xxx Group and
its Subsidiaries, except as would not have a Material Adverse Effect on Xxx
Group.
Section 4.24 Affiliated Transactions. Except as set forth in Schedule 4.24,
no executive officer or director of Xxx Group or any of its Major Subsidiaries
or, to the knowledge Xxx Group, any individual related by blood, marriage or
adoption to any such individual or any entity in which any such person or
individual owns any beneficial interest, is a party to any agreement, contract,
commitment or transaction with Xxx Group or any of its Major Subsidiaries
(excluding any employment agreement and rights under benefits plans) or has any
material interest in any material property used by Xxx Group or any of its
Major Subsidiaries, including any Intellectual Property rights.
Section 4.25 Information in Proxy Statement. None of the information
supplied or to be supplied by Xxx Group specifically for inclusion in the Proxy
Statement (as hereinafter defined) will, at the time the Proxy Statement is
first distributed to the stockholders of MacManus and Xxx Group, at the time of
each Stockholders Meeting and at any time it is amended or supplemented,
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Section 4.26 Opinion of Financial Advisor. Xxx Group has received the
written opinion of the Financial Advisor to the effect that, as of the date
hereof, the consideration to be received by the holders of Xxx Group Common
Stock in connection with the Xxx Group Merger is fair to such holders from a
financial point of view.
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ARTICLE V
Conduct of Independent Businesses Pending the Merger
Section 5.1 Transition Planning. A four-person committee (the "Transition
Committee"), the members of which will be the individuals listed on Schedule
5.1, is hereby created to coordinate the numerous administrative matters
necessary to be performed in connection with the Mergers. If any of such
persons is unable to serve on the Transition Committee for any reason, then
MacManus and Xxx Group shall take such action as may be required so that the
Transition Committee consists of two (2) persons designated by each of MacManus
and Xxx Group. The Transition Committee shall be responsible for coordinating
all aspects of administrative planning and implementation relating to the
Mergers and the other transactions contemplated hereby. The affirmative vote of
three (3) members of the Transition Committee shall be required for such
committee to take action.
Section 5.2 Conduct of Business in the Ordinary Course. Each of MacManus and
Xxx Group covenants and agrees that, between the date hereof and the Effective
Time, unless the Transition Committee shall otherwise consent in writing, and
except as described on Schedule 5.2 hereto or as otherwise expressly
contemplated hereby, the business of such party and its Subsidiaries shall be
conducted only in, and such entities shall not take any action except in, the
ordinary course of business and in a manner consistent with past practice and
all Legal Requirements and Permits; and each of MacManus and Xxx Group and
their respective Subsidiaries will use their commercially reasonable efforts to
preserve substantially intact their business organizations, to keep available
the services of those of their present officers, employees and consultants who
are integral to the operation of their businesses as presently conducted and to
preserve their present relationships with significant clients and suppliers and
with other persons with whom they have significant business relations. By way
of amplification and not limitation, unless the Transition Committee shall
otherwise consent in writing, and except as set forth on Schedule 5.2 hereto or
as otherwise expressly contemplated by this Agreement, each of MacManus and Xxx
Group agrees on behalf of itself and its Subsidiaries that they will not,
between the date hereof and the Effective Time, directly or indirectly, do any
of the following:
(a) (i) except for (a) the issuance of shares of MacManus Common Stock
and Xxx Group Common Stock to employees in the ordinary course of business
and in the amounts set forth in Schedule 5.2, (b) the issuance of
securities by a Subsidiary to any Person which is directly or indirectly
wholly-owned by MacManus or Xxx Group (as the case may be), (c) liens
granted to secure indebtedness permitted by Schedule 5.2 or (d) issuances
permitted under Section 6.11: issue, sell, pledge, dispose of, encumber,
authorize, or propose the issuance, sale, pledge, disposition, encumbrance
or authorization of any shares of capital stock of any class, or any
options, warrants, convertible securities or other rights of any kind to
acquire any shares of capital stock of, or any other ownership interest in,
such party or any of its Subsidiaries;
(ii) amend or propose to amend the Certificate of Incorporation or
Bylaws (or other comparable organizational document) of such party or
any of its Subsidiaries, or adopt, amend or propose to amend any
stockholder rights plan or related rights agreement;
(iii) split, combine or reclassify any outstanding shares of capital
stock of MacManus or Xxx Group, or declare, set aside or pay any
dividend or distribution payable in cash, stock, property or otherwise
with respect to shares of MacManus Common Stock or Xxx Group Common
Stock;
(iv) redeem, purchase or otherwise acquire or offer to redeem,
purchase or otherwise acquire any shares of its capital stock; or
(v) authorize or propose or enter into any contract, agreement,
commitment or arrangement with respect to any of the matters prohibited
by this Section 5.2(a); or
(b) (i) except for Acquisitions permitted pursuant to Section 6.11
hereof, acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization
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or division thereof or make or increase any investment in another entity
(other than an entity which is a wholly-owned Subsidiary of such party as
of the date hereof and other than incorporation of a wholly-owned
Subsidiary) or joint ventures;
(ii) except in the ordinary course of business and in a manner
consistent with past practice sell, pledge, dispose of, or encumber or
authorize or propose the sale, pledge, disposition or encumbrance of
any assets of such party or any of its Subsidiaries, except for
transactions permitted by Schedule 5.2 or borrowings contemplated by
Section 6.12 or 6.13 as the case may be;
(iii) except in the ordinary course of business and in a manner
consistent with past practice, authorize or make capital expenditures
not set forth in the most recent budgets presented to the other party
prior to the date hereof;
(iv) except as permitted by Schedule 5.2 and Acquisitions permitted
pursuant to Section 6.11 hereof, enter into any other agreement,
contract or commitment except in the ordinary course of business of
operating the existing businesses of MacManus or Xxx Group, as the case
may be; or
(v) authorize or enter into any contract, agreement, commitment or
arrangement with respect to any of the matters prohibited by this
Section 5.2(b);
(c) incur or assume indebtedness (other from that shown on the MacManus
Financial Statements or Xxx Group Financial Statements, as the case may be)
or assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other person, except (i) as permitted by Schedule 5.2 hereto, (ii)
refinancing of existing indebtedness and (iii) as contemplated by Section
6.12 or 6.13 as the case may be;
(d) except as set forth in Schedule 5.2, take any action with respect to
(i) the grant of any severance or termination pay, or stay, bonus, or other
incentive arrangements (otherwise than pursuant to Benefit Plans and
policies of such party in effect on the date hereof or in the ordinary
course of such party's business), (ii) the payment (except in the ordinary
course of business and in amounts and in a manner consistent with past
practice or as otherwise required by Legal Requirements or the provisions
of any MacManus Benefit Plan or Xxx Group Benefit Plan, as the case may be)
under any MacManus Benefit Plan or any Xxx Group Benefit Plan, as the case
may be, to any director or officer of, or independent contractor or
consultant to, such party or any of its Subsidiaries, (iii) adopt or
otherwise materially amend (except for amendments required or made
advisable by Legal Requirements) any MacManus Benefit Plan or Xxx Group
Benefit Plan, as the case may be, or (iv) grant or establish any new awards
under any such existing MacManus Benefit Plan or Xxx Group Benefit Plan
(except in the ordinary course of business and in amounts and in a manner
consistent with past practice);
(e) file any material amended Tax Returns, settle any material Tax
audits or other proceedings, other than a settlement of currently pending
proceedings or subsequent related proceedings for an immaterial amount, or
change in any material respect (i) its method of tax accounting or tax
practice or (ii) its accounting policies, methods or procedures, except as
required by GAAP;
(f) take any action specified on Schedule 5.2 that would prevent or
impede the Mergers, taken together, from qualifying for U.S. federal income
tax purposes as a transaction having the effects described under Sections
351 and 368 of the Code;
(g) (i) issue SARs, new performance shares, restricted stock, or similar
equity based rights, except as set forth on Schedule 5.2;
(ii) materially modify any actuarial cost method, assumption or
practice used in determining benefit obligations, annual expense and
funding for any Benefit Plan, except to the extent required by GAAP;
(iii) materially modify the investment philosophy of the Benefit
Plan trusts or maintain an asset allocation which is not consistent
with such philosophy, subject to any ERISA fiduciary obligation;
(iv) subject to any ERISA fiduciary obligation, enter into any
outsourcing agreement, or any other material contract relating to the
Benefit Plans or management of the Benefit Plan trusts;
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(v) except as described on Schedule 5.2, offer any new or extend any
existing retirement incentive, "window" or similar benefit program;
(vi) grant any ad hoc pension increase; or
(vii) establish any new or fund any existing "rabbi" or similar trust
(except in accordance with the current terms of such trust), or enter into
any other arrangement for the purpose of securing non-qualified benefits or
deferred compensation; or
(h) authorize or enter into any contract, agreement, commitment or
arrangement with respect to any of the matters prohibited by this Section
5.2.
MacManus and Xxx Group agree that any written approval to a variance from
the above obtained under this Section 5.2 may be relied upon by a party if
signed by a member of the Transition Committee appointed by the other party.
Section 5.3 Control of Operations. Xxx Group shall not have, directly or
indirectly, the right to control or direct MacManus' business, operations or
affairs prior to the Effective Time. MacManus shall not have, directly or
indirectly, the right to control or direct Xxx Group's business, operations or
affairs prior to the Effective Time. Prior to the Effective Time, each of Xxx
Group and MacManus shall exercise, consistent with the terms and conditions of
this Agreement, complete control and supervision over their respective
business, operations and affairs.
Section 5.4 Sale of Giant Step. Notwithstanding any other provision of this
Agreement, Xxx Group shall be entitled to sell and transfer all of its capital
stock in Giant Step to a third party buyer on terms substantially similar to
those set forth on Schedule 5.5 (or such other terms as may be approved by the
Transition Committee) and to take all other actions which are reasonably
necessary to complete such transaction.
Section 5.5 Deferred Compensation Arrangements. Notwithstanding any other
provision of this Agreement, MacManus shall be entitled to distribute all
profit appreciation accounts (known as "PAC") account balances, deferred profit
allowance (known as "DPA") account balances, growth accumulation plan (known as
"GAP") account balances and to redeem its outstanding $8 preferred stock as of
December 31, 1999 to the applicable employees in calendar year 2000, whether
before or after the Effective Time; provided that the aggregate amount of such
payments shall not exceed $31,600,000.
Section 5.6 Partial Sale of Novo. Notwithstanding any other provision of
this Agreement, MacManus shall be entitled to sell to certain of its
stockholders and employees (and certain other persons) a portion of its
ownership interest in Novo MediaGroup, Inc. on terms substantially similar to
those set forth on Schedule 5.6.
ARTICLE VI
Additional Agreements
Section 6.1 Proxy Statement.
(a) As promptly as practicable after the execution and delivery of this
Agreement, MacManus and Xxx Group will prepare a joint proxy statement/private
placement memoranda (the "Proxy Statement"), and promptly thereafter shall mail
to the holders of shares of MacManus Common Stock and Xxx Group Common Stock
the Proxy Statement. Each of MacManus and Xxx Group agree to cooperate with the
other party in the preparation of the Proxy Statement, including without
limitation, supplying information required for the Proxy Statement.
(b) After the mailing thereof in connection with the Stockholders Meetings,
no amendment or supplement to the Proxy Statement will be made by MacManus or
Xxx Group without the prior approval of the other party. If at any time prior
to the Stockholders Meetings any information relating to Xxx Group or MacManus,
or any of their respective affiliates, officers or directors, or otherwise, is
discovered by Xxx Group or MacManus and
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which should be set forth in an amendment or supplement to the Proxy Statement,
so that such document would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, then the
party which discovers such information shall promptly notify the other party
hereto and an appropriate amendment or supplement describing such information
shall be promptly, to the extent required by law, disseminated to the
respective stockholders.
Section 6.2 Stockholder Meetings. As promptly as practicable after the
completion of the Proxy Statement, each of Xxx Group and MacManus shall duly
give notice of, convene and hold a meeting of its respective stockholders (the
"Stockholders Meetings") in accordance with Delaware Law for the purposes of
obtaining the approval of their respective stockholders required to approve
this Agreement and the other transactions contemplated hereby (the "Stockholder
Approvals") and each of Xxx Group and MacManus shall use their commercially
reasonable efforts to obtain the Stockholder Approval from their respective
stockholders. The board of directors of each of Xxx Group and MacManus shall
unanimously recommend to their respective stockholders the adoption of this
Agreement and declare the approval of this Agreement advisable. Notwithstanding
the previous sentence, the board of directors of each of Xxx Group and MacManus
may withdraw or modify its recommendation that its stockholders approve this
Agreement and its finding that such approval is advisable if such board of
directors, after having consulted with outside counsel, determines that the
refusal to do so would constitute a breach by such board of directors of their
fiduciary duties under applicable laws; provided, further, that the respective
board of directors shall continue to take all action necessary to convene the
respective Stockholders Meeting and shall submit for (or shall not withdraw
from) the consideration of such stockholders the adoption of this Agreement
(even if such board of directors is permitted to withdraw or modify its
approval with respect to this Agreement).
Section 6.3 Closing; Regulatory Approvals.
(a) Upon the terms and subject to the conditions hereof and as soon as
practicable after the conditions set forth in Article VII hereof have been
fulfilled or waived, each of the parties shall execute in the manner required
by Delaware Law and deliver to and file with the Secretary of State of the
State of Delaware such certificates, instruments and agreements as may be
required by Delaware Law, and the parties shall take all such other and further
actions as may be required by law, to make the Mergers effective. Prior to the
filings referred to in this Section 6.3(a), a closing (the "Closing") will be
held at the offices of Xxxxxxxx & Xxxxx in New York (or such other place as the
parties may agree) for the purpose of confirming all the foregoing. The Closing
will take place upon the later to occur of January 31, 2000 and two business
days after the fulfillment or waiver of all of the conditions to closing set
forth in Article VII of this Agreement, unless otherwise agreed to by the
parties (the date of the Closing being herein referred to as the "Closing
Date").
(b) Each of Xxx Group and MacManus shall use all commercially reasonable
efforts to take or cause to be taken and do or cause to be done prior to the
Effective Time all things necessary, proper or advisable to ensure compliance
with all Legal Requirements and Permits, and to obtain in a timely manner all
necessary Permits or waivers from, approvals or consents of, or declarations,
registrations or filings with, and all expirations of waiting periods imposed
by, any Governmental or Regulatory Authority, including without limitation
compliance with the HSR Act, which are necessary for the consummation of the
transactions contemplated hereby (the "Required Regulatory Approvals").
(c) In connection with and without limiting the foregoing, Xxx Group and
MacManus shall (i) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to the
Mergers, this Agreement or any of the other transactions contemplated hereby
and (ii) if any state takeover statute or similar statute or regulation becomes
applicable to the Mergers, this Agreement or any of the other transactions
contemplated hereby, take all action necessary to ensure that the Mergers and
the other transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Mergers and the other
transactions contemplated by this Agreement.
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Section 6.4 Access to Information. From the date hereof to the Effective
Time, each of MacManus and Xxx Group shall, and shall cause its respective
Subsidiaries, and its and their officers, directors, employees, auditors,
counsel and agents to afford the officers, employees, auditors, counsel and
agents of the other party reasonable access during regular business hours to
such party's and its Subsidiaries' officers, employees, auditors, counsel,
agents, properties, offices and other facilities and to all of their respective
books and records, and shall furnish the other with all financial, operating
and other data and information as such other party may reasonably request.
Section 6.5 Public Announcements. MacManus and Xxx Group shall develop a
joint communications plan and each party shall use all commercially reasonable
efforts to ensure that all press releases and other public statements with
respect to the transactions contemplated hereby shall be consistent with such
joint communications plan or, to the extent inconsistent therewith, shall have
received the prior written approval of the other party.
Section 6.6 Cooperation. Upon the terms and subject to the conditions
hereof, each of the parties agrees to cooperate with each other (i) to take or
cause to be taken all actions and to do or cause to be done all things
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement and (ii) to obtain all necessary waivers, consents and approvals
from any Governmental or Regulatory Authority or other Person, including
Required Regulatory Approvals and (iii) to effect all necessary filings under
the HSR Act or any other Legal Requirements or Permits. Nothing in this
Agreement shall require Xxx Group or MacManus to enter into any sale or
divestiture of assets related to obtaining antitrust approval. The parties
shall (i) cooperate in responding to inquiries from, and making presentations
to, Governmental or Regulatory Authorities; (ii) promptly inform the other
party of any material oral or written communication received by such party
from, or given by such party to any Governmental or Regulatory Authority and of
any material communication received or given in connection with any proceeding
by a private party, in each case regarding any of the transactions contemplated
hereby; and (iii) consult with each other in advance of any meeting or
conference with, or of making any filing or other written submission to, any
such Governmental or Regulatory Authority or, in connection with any proceeding
by a private party, with any other Person, and to the extent permitted by the
applicable Governmental or Regulatory Authority or other Person, give the other
party the opportunity to attend and participate in such meetings and
conferences, or to review and approve any such filing or other written
submission, in each case regarding the Mergers.
Section 6.7 Indemnification, Directors' and Officers' Insurance. For a
period of six (6) years after the Effective Time, (a) the Surviving
Corporations shall maintain in effect the provisions regarding indemnification
of officers and directors in the charter and bylaws of Xxx Group, MacManus and
each of their respective Subsidiaries no less advantageous to such officers and
directors and any director, officer or employee indemnification agreements of
Xxx Group, MacManus and their respective Subsidiaries, (b) the Surviving
Corporations shall maintain in effect the current policies of directors' and
officers' liability insurance and fiduciary liability insurance maintained by
Xxx Group or MacManus, as the case may be (provided that Parent may substitute
therefor policies of at least the same coverage and amounts containing terms
and conditions which are, in the aggregate, no less advantageous to the insured
in any material respect) with respect to claims arising from facts or events
which occurred on or before the Effective Time, and (c) the Surviving
Corporations shall indemnify the directors and officers of Xxx Group or
MacManus and their respective Subsidiaries, as the case may be, to the fullest
extent to which they are permitted to indemnify such officers and directors
under their respective charters and bylaws and applicable law.
Section 6.8 Employee Benefit Plans. Except as otherwise provided herein or
set forth on Schedule 5.2, MacManus and Xxx Group agree that the Surviving
Corporations (and their Subsidiaries) shall maintain the Xxx Group Benefit
Plans and MacManus Benefit Plans as separate plans after the Effective Time
with respect to employees covered by such plans immediately prior to the
Effective Time until otherwise determined by the Parent Board of Directors.
Section 6.9 Blue Sky. MacManus and Xxx Group will use their commercially
reasonable efforts to obtain prior to the Effective Time any necessary foreign
and state securities or "blue sky" and other such
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Permits and approvals required to permit the distribution of the shares of
Parent Common Stock to be issued in accordance with the provisions of this
Agreement.
Section 6.10 Tax-Free Reorganization; Other Matters. Each of the parties
will use its commercially reasonable efforts, and each agrees to cooperate with
the other parties and provide one another with such documentation, information
and materials, as may be reasonably necessary, proper or advisable, to cause
the Mergers to qualify for U.S. federal income tax purposes as being a
transaction described in Sections 351 and 368 of the Code. Parent and the
Surviving Corporations shall use all commercially reasonable efforts to oppose
and defend against any challenge to the tax treatment of the redemptions or the
Mergers by the Internal Revenue Service or any other applicable taxing
authority.
Section 6.11 Permitted Acquisitions. During the period from the date of this
Agreement through the Closing Date, each of MacManus and Xxx Group may engage
in acquisition and investment transactions taking the form of a stock
acquisition, asset acquisition, merger, investment or similar type or form of
transaction ("Acquisitions"); provided, however, that such transactions comply
with this Section 6.11. Each of MacManus and Xxx Group may engage in
Acquisitions provided that the value of the aggregate consideration payable by
such party in any such Acquisition shall not exceed $10,000,000 (including
assumptions of debt) and that such consideration paid shall not include any
capital stock or other equity interests in MacManus or Xxx Group; provided that
the foregoing notwithstanding, Xxx Group may acquire Media Estrategia for
aggregate consideration of approximately $30 million in cash and the Danish
company identified by Xxx Xxxxxxx for total consideration of up to $10 million
(which may include up to approximately 32,200 shares of Xxx Group Common Stock)
(so long as the total number of shares of Xxx Group Common Stock outstanding at
the Effective Time does not exceed 10,140,605). Any Acquisition in excess of
such amount shall require the prior written consent of the other party.
Section 6.12 MacManus Offer. Notwithstanding any other provision in this
Agreement, MacManus shall offer to redeem from its stockholders up to 40% of
their shares of MacManus Common Stock at a price per share equal to $992.25 in
cash, and MacManus shall redeem any and all shares of its Common Stock tendered
to it pursuant to such redemption offer (the "MacManus Offer"). MacManus shall
initiate such Offer as soon as practicable after the date of this Agreement and
shall consummate such Offer prior to the Closing. Notwithstanding any other
provision in this Agreement, MacManus may incur bank or other third party
indebtedness up to an amount equal to the total consideration paid to its
stockholders in connection with the MacManus Offer. MacManus shall consult with
Xxx Group regarding the terms of the financing for the MacManus Offer. MacManus
shall cause the MacManus Offer to be made and consummated in accordance with
applicable law and its organizational documents.
Section 6.13 Xxx Group Redemption. Notwithstanding any other provision in
this Agreement, Xxx Group may offer to redeem from all or certain of its
stockholders (at the sole discretion of Xxx Group) up to 1,000,000 shares of
its Common Stock at a price per share equal to $115.38 in cash, and Xxx Group
shall be entitled to acquire up to 1,000,000 shares of its Common Stock
pursuant to such offers (the "Xxx Group Redemption"). Xxx Group shall initiate
the Xxx Group Redemption as soon as practicable after the date of this
Agreement and shall consummate such Redemption prior to the Closing.
Notwithstanding any other provision in this Agreement, Xxx Group may incur bank
or other third party indebtedness up to an amount equal to the total
consideration paid to its stockholders in the Xxx Group Redemption. Xxx Group
shall consult with MacManus regarding the terms of the financing for the Xxx
Group Redemption. Xxx Group shall cause the Xxx Group Redemption to be made and
consummated in accordance with applicable law and its organizational documents.
Section 6.14 Notice of Developments. Each of Xxx Group and MacManus will
give prompt written notice to the other of any development causing a breach of
any of its representations and warranties in this Agreement. No disclosure
pursuant to this Section, however, shall be deemed to amend or supplement any
schedule or disclosure schedule or to prevent or cure any misrepresentation,
breach of warranty or breach of covenant.
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Section 6.15 Further Assurances. At and after the Effective Time, the
officers and directors of each of the Surviving Corporations will be authorized
to execute and deliver, in the name and on behalf of Xxx Group or LAC or
MacManus or MAC, as the case may be, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf such entity, any other
actions and things to vest, perfect or confirm of record or otherwise in the
respective Surviving Corporation any and all right, title and interest in, to
and under any of the rights, properties or assets of such entity acquired or to
be acquired by the respective Surviving Corporation as a result of, or in
connection with, the respective Merger.
ARTICLE VII
Conditions to the Mergers
Section 7.1 Conditions to Obligations of Each Party to Effect the
Mergers. The respective obligations of each party to effect their respective
Mergers shall be subject to the following conditions:
(a) Stockholder Approval. The MacManus Merger, this Agreement and the
transactions contemplated hereby shall have been approved and adopted by
the requisite vote of the stockholders of MacManus in accordance with
Delaware Law and the organizational documents of MacManus. The Xxx Group
Merger, this Agreement and the transactions contemplated hereby shall have
been approved and adopted by the requisite vote of the stockholders of Xxx
Group in accordance with Delaware Law and the organizational documents of
Xxx Group.
(b) Legality. No federal, state or foreign statute, rule, regulation,
executive order, decree or injunction shall have been enacted, entered,
promulgated or enforced by any Governmental or Regulatory Authority which
is in effect and has the effect of (i) making either Merger illegal in the
United States or otherwise prohibiting the consummation of either Merger in
the United States, or (ii) creating a Material Adverse Effect on either
Surviving Corporation or Parent; provided that the closing condition as to
the receipt of Required Regulatory Approvals shall be governed by Section
7.1(c) below.
(c) Regulatory Matters. Any waiting period applicable to the
consummation of the Mergers under the HSR Act shall have expired or been
terminated. All other Required Regulatory Approvals shall be in full force
and effect, except those (i) as to which appropriate interim or
transitional arrangements have been made or (ii) which are not material to
either Surviving Corporation or Parent.
(d) Debt Financing. MacManus shall have obtained bank or third party
debt financing for the MacManus Offer and Xxx Group shall have obtained
bank or third party debt financing for the Xxx Group Redemption.
(e) Tax Opinion. MacManus and Xxx Group shall have received an opinion
of Xxxxxx Xxxxxxxx LLP, special tax advisors to MacManus, as to the tax
treatment of the MacManus Offer and the MacManus Merger; such opinion shall
be in form and substance reasonably acceptable to both MacManus and Xxx
Group; and such opinion shall be reconfirmed as of the Effective Time. In
rendering such opinion, counsel may require and rely upon reasonable
representations contained in certificates of officers of Xxx Group and
MacManus.
Section 7.2 Additional Conditions to Obligations of MacManus. The
obligations of MacManus to effect the MacManus Merger are also subject to the
fulfillment of the following conditions:
(a) Representations and Warranties of Xxx Group. The representations and
warranties of Xxx Group set forth in this Agreement shall be true and
correct (without giving effect to any qualifications as to Material Adverse
Effect, materiality or similar qualifications) at and as of the Effective
Time as if made at and as of the Effective Time, taking into account the
effects of actions contemplated herein or permitted hereunder, except for
such failures to be true and correct which in the aggregate would not
reasonably be expected to result in a Material Adverse Effect on Xxx Group,
or a material adverse effect on the consummation of the transactions
contemplated hereby.
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(b) Representations and Warranties of Parent. The representations and
warranties regarding Parent set forth in this Agreement shall be true and
correct at and as of the Effective Time as if made at and as of the
Effective Time, except as a result of actions which Parent is permitted or
required to take under the terms of this Agreement.
(c) Xxx Group Outstanding Shares. The representation of Xxx Group
contained in Section 4.3(f) shall be true and correct at and as of the
Effective Time.
(d) Agreements and Covenants. Xxx Group 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 it on or before the Effective
Time.
(e) Consents Under Xxx Group Agreements. Xxx Group shall have obtained
the consent or approval of any Person whose consent or approval shall be
required under any agreement or instrument in order to permit the
consummation of the transactions contemplated hereby, except those which
the failure to obtain would not, individually or in the aggregate, have a
Material Adverse Effect on either Surviving Corporation or Parent.
(f) Legal Opinion. MacManus shall have received an opinion of Xxxxxxxx &
Xxxxx, counsel to Xxx Group, dated the Closing Date in reasonable and
customary form.
Section 7.3 Additional Conditions to Obligations of Xxx Group. The
obligations of Xxx Group to effect the Xxx Group Merger are also subject to the
fulfillment of the following conditions:
(a) Representations and Warranties of MacManus. The representations and
warranties of MacManus set forth in this Agreement shall be true and
correct (without giving effect to any qualifications as to Material Adverse
Effect, materiality or similar qualifications) at and as of the Effective
Time as if made at and as of the Effective Time, taking into account the
effects of actions contemplated herein or permitted hereunder, except for
such failures to be true and correct which in the aggregate would not
reasonably be expected to result in a Material Adverse Effect on MacManus,
or a material adverse effect on the consummation of the transactions
contemplated hereby.
(b) Representation and Warranties of Parent. The representations and
warranties regarding Parent set forth in this Agreement shall be true and
correct at and as of the Effective Time as if made at and as of the
Effective Time, except as a result of actions which Parent is permitted or
required to take under the terms of this Agreement.
(c) MacManus Outstanding Shares. The representation of MacManus
contained in Section 3.3(f) shall be true and correct in all respects at
and as of the Effective Time.
(d) Agreements and Covenants. MacManus 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 it on or before the Effective
Time.
(e) Consents Under MacManus Agreements. MacManus shall have obtained the
consent or approval of any Person whose consent or approval shall be
required under any agreement or instrument in order to permit the
consummation of the transactions contemplated hereby, except those which
the failure to obtain would not, individually or in the aggregate, have a
Material Adverse Effect on either Surviving Corporation or Parent.
(f) Legal Opinion. Xxx Group shall have received an opinion of Xxxxx &
Xxxxxxx, counsel to MacManus, dated the Closing Date in reasonable and
customary form.
(g) Tax Opinion. Xxx Group shall have received an opinion of Xxxxxxxx &
Xxxxx, counsel to Xxx Group, as to the tax treatment of the Xxx Group
Redemption and the Xxx Group Merger; such opinion shall be in form and
substance reasonably acceptable to Xxx Group; and such opinion shall be
reconfirmed as of the Effective Time. In rendering such opinion, counsel
may require and rely upon reasonable representations contained in
certificates of officers of MacManus and Xxx Group.
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ARTICLE VIII
Termination, Amendment and Waiver
Section 8.1 Termination. This Agreement may be terminated at any time before
the Effective Time, in each case as authorized by the respective Board of
Directors of MacManus or Xxx Group:
(a) By mutual written consent of each of MacManus and Xxx Group;
(b) By either MacManus or Xxx Group if the Mergers shall not have been
consummated on or before March 31, 2000 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section
8.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before the Termination Date;
provided further, however, that in the event that on the Termination Date
the condition to Closing set forth in Section 7.1(d) shall not have been
fulfilled, but all other conditions to Closing shall be fulfilled or shall
be capable of being fulfilled, then the Termination Date shall be extended
for a period of 90 days;
(c) By either MacManus or Xxx Group if any Governmental or Regulatory
Authority shall have issued an order, decree or ruling or taken any other
action (which order, decree or ruling the parties shall use their
commercially reasonable efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable;
(d) (i) By MacManus, if Xxx Group shall have breached any of its
representations or warranties or breached or failed to perform any of its
covenants or other agreements contained in this Agreement, which breach or
failure to perform (a) is incapable of being cured by Xxx Group prior to
the Termination Date, and (b) renders any condition under Sections 7.1 or
7.2 incapable of being satisfied prior to the Termination Date; or
(ii) By Xxx Group, if MacManus shall have breached any of its
representations or warranties or breached or failed to perform any of its
covenants or other agreements contained in this Agreement, which breach or
failure to perform (a) is incapable of being cured by MacManus prior to the
Termination Date, and (b) renders any condition under Sections 7.1 or 7.3
incapable of being satisfied prior to the Termination Date; or
(e) (i) By MacManus, if the board of directors of MacManus in good faith
is not satisfied with its business, financial, operational, legal and other
due diligence regarding Xxx Group, including without limitation contingent
liabilities relating to tax matters; or
(ii) By Xxx Group, if the board of directors of Xxx Group in good faith
is not satisfied with its business, financial, operational, legal and other
due diligence regarding MacManus, including without limitation contingent
liabilities relating to tax matters.
(f) By either MacManus or Xxx Group if either Stockholder Approval shall
fail to have been obtained at the corresponding Stockholder Meeting,
including any adjournments thereof.
Section 8.2 Expense Reimbursement.
(a) If this Agreement shall be terminated pursuant to Section 8.1(d)(ii) by
Xxx Group or pursuant to Section 8.1(f) by either party if MacManus Stockholder
Approval is not obtained, then MacManus shall promptly, but in no event later
than two business days after the date of such termination, pay Xxx Group an
amount in cash equal to $2 million as reimbursement for expenses incurred by
Xxx Group in connection with this Agreement and the transactions contemplated
hereby.
(b) If this Agreement shall be terminated pursuant to Section 8.1(d)(i) by
MacManus or pursuant to Section 8.1(f) by either party if Xxx Group Stockholder
Approval is not obtained, then Xxx Group shall promptly, but in no event later
than two business days after the date of such termination, pay MacManus an
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amount in cash equal to $2 million as reimbursement for expenses incurred by
MacManus in connection with this Agreement and the transactions contemplated
hereby.
(c) The foregoing expense reimbursement provisions are in addition to, and
not in derogation of, any statutory, equitable or common law remedy that Xxx
Group or MacManus as the case may be may have against the other party by reason
of an intentional or willful breach of this Agreement prior to termination.
Section 8.3 Effect of Termination. In the event of termination of this
Agreement as provided in Section 8.1 hereof, this Agreement shall forthwith
become void and there shall be no liability on the part of any of the parties,
except as set forth in this Section 8.3 and in Sections 3.13, 4.13, 8.2, 9.2
and 9.7 hereof.
Section 8.4 Amendment. This Agreement may be amended by the parties pursuant
to a writing executed and delivered by all of the parties at any time before
the Effective Time; provided, however, that, after approval of this Agreement
by the stockholders of either Xxx Group or MacManus, no amendment may be made
which would (a) alter or change the amount or kind of consideration to be
received by the holders of MacManus Common Stock or Xxx Group Common Stock upon
consummation of the Mergers or (b) alter or change any of the terms and
conditions of this Agreement if such alteration or change would adversely
affect the holders of any class or series of securities of MacManus or Xxx
Group. This Agreement may not be amended except by an instrument in writing
signed by the parties.
Section 8.5 Waiver. At any time before the Effective Time, any party may, as
to itself only, (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 herein or in any document
delivered pursuant hereto, and (c) waive compliance with any of the agreements
or conditions contained herein. Any agreement on the part of a party to any
such extension or waiver shall be valid only as against such party and only if
set forth in an instrument in writing signed by such party.
ARTICLE IX
General Provisions
Section 9.1 Non-Survival of Representations and Warranties. The
representations and warranties in this Agreement shall terminate at the
Effective Time.
Section 9.2 Dispute Resolution. To the extent feasible, Xxx Group and
MacManus desire to resolve any controversies or claims or issues arising out of
or relating to this Agreement through discussions and negotiations between each
other. The parties agree to use their commercially reasonable efforts to
attempt to resolve any disputes, controversies, claims or issues arising out of
or relating to this Agreement by face-to-face negotiations with each other. In
the event that, notwithstanding good faith discussions, such controversies,
claims or issues cannot be resolved solely between the parties, then the
parties shall, within 10 days after any party thereto gives written notice of
its desire to submit such dispute to arbitration, jointly submit their dispute
to binding arbitration in the City of Chicago, notwithstanding Section 9.13.
Such arbitration shall be administered by the American Arbitration Association
(the "Institute") in accordance with its then prevailing rules for commercial
arbitration (except as otherwise provided by this Agreement), by three
independent and impartial arbitrators, acting in a neutral capacity
(collectively, the "Arbitrator"), one of whom shall be appointed by Xxx Group,
one of whom shall be appointed by MacManus and one of whom shall be appointed
by the Institute, unless the parties thereto agree to use only one arbitrator.
Notwithstanding anything to the contrary provided in Section 9.12 of this
Agreement, the arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. Section 1 et seq. The Arbitrator shall permit and facilitate such
discovery as it shall determine appropriate in the circumstances, taking into
account the needs of the parties and the desirability of making discovery
expeditious and cost effective. The Arbitrator may issue such interim orders in
accordance with principles of equity as may be necessary to protect any party
from irreparable harm during the pendency
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of any arbitration, including entry of a preliminary injunction. Any such order
shall be without prejudice to the final determination of the controversy. The
Arbitrator shall render its award within 90 days after the conclusion of the
arbitration hearing, except as may otherwise be agreed by Xxx Group and
MacManus. The Arbitrator shall not be empowered to award any party any punitive
damages in connection therewith, and each party hereby irrevocably waives any
right to recover such punitive damages. The Arbitrator's determination as to a
dispute shall be final and binding for all purposes. Each party shall bear its
own costs and expenses in any arbitration pursuant to this Section, and such
parties shall each bear one-half of the fees and expenses of the Arbitrator,
which fees and expenses of the Arbitrator (or an estimate thereof determined by
the Arbitrator) shall be paid at commencement of arbitration. Each party to any
such arbitration shall use its reasonable best efforts and utmost diligence to
safeguard and to protect against disclosure, misuse, espionage, loss and theft
and shall keep and maintain in strict confidence and shall not disclose to any
third party any information that may be disclosed to it in connection with such
arbitration proceeding, other than to its employees and agents who require
access to such information to perform their duties and other than is required
or appropriate to disclose pursuant to applicable law or court order or in any
arbitration contemplated by this Agreement; the arbitrator shall to the extent
permitted by the rules and regulations of the Institute be likewise bound by
this confidentiality provision and shall not make public its opinion or
findings in connection with the relevant proceeding.
Section 9.3 "Knowledge" Defined. Where any representation and warranty
contained in this Agreement is expressly specified by reference to the
knowledge of any party, such term shall be limited to the actual knowledge of
the senior executive officers of such party and unless otherwise stated, such
knowledge that would have been discovered by such executive officers after
reasonable inquiry.
Section 9.4 "Person" Defined. "Person" shall mean and include an individual,
a company, a joint venture, a corporation (including any non-profit
corporation), an estate, an association, a trust, a general or limited
partnership, a limited liability company, a limited liability partnership, an
unincorporated organization and a government or other department or agency
thereof.
Section 9.5 "Material Adverse Effect" Defined. "Material Adverse Effect"
shall mean any change in or effect on the referenced Person or any of its
Subsidiaries that is or will be materially adverse to the business, operations,
results of operations or financial condition of such referenced corporation and
its Subsidiaries taken as a whole, but shall not include the effects of changes
that are generally applicable in (i) the advertising industry, (ii) the United
States economy, or (iii) the United States securities markets.
Section 9.6 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date of receipt and shall be delivered personally or mailed
by registered or certified mail (postage prepaid, return receipt requested),
sent by overnight courier or sent by telecopy, to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy number for
a party as shall be specified by like notice):
(a) if to Xxx Group or LAC, to:
The Xxx Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Administrative Officer
Facsimile: (000) 000-0000
with copies to:
The Xxx Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Executive Vice President/General Counsel
Facsimile: (000) 000-0000
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Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Facsimile: (000) 000-0000
(b) if to MacManus or to MAC, to:
The MacManus Group, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
(c) if to Parent, to each of the addressees set forth in (a) and (b)
above
Section 9.7 Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, except that those expenses incurred in connection with the printing
of the Proxy Statements and any filing fee required in connection with the
filing of Premerger Notifications under the HSR Act or other Required
Regulatory Approval, shall be shared equally by MacManus and Xxx Group.
Section 9.8 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.9 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, then all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the maximum extent possible.
Section 9.10 Entire Agreement; No Third-Party Beneficiaries. This Agreement
constitutes the entire agreement and, except as expressly set forth herein,
supersedes any and all other prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject matter
hereof and, except for Section 6.7 (Indemnification, Directors' and Officers'
Insurance), is not intended to confer upon any person other than XxxXxxxx, Xxx
Group, and, after the Effective Time, their respective stockholders, any rights
or remedies hereunder.
Section 9.11 Assignment. No party shall have the right to assign its rights
or obligations under this Agreement without the prior written consent of the
other parties hereto.
Section 9.12 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely within that
State, without regard to the conflicts of laws provisions thereof.
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Section 9.13 Submission to Jurisdiction; Waivers. Subject to Section 9.2,
each of the parties hereto irrevocably agrees that any legal action or
proceeding with respect to this Agreement or for recognition and enforcement of
any judgment in respect hereof brought by the other party hereto or its
successors or assigns may be brought and determined in the courts of the State
of Delaware, and each of the parties hereto hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the nonexclusive jurisdiction of
the aforesaid courts. Subject to Section 9.2, each of the parties hereto hereby
irrevocably waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason other than the failure to serve in
accordance with this Section 9.13, (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and (c) to the fullest extent permitted by the applicable law, that
(i) the suit, action or proceeding in such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
Section 9.14 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. The word "including" shall mean
including without limitation. The Parties intend that each representation,
warranty and covenant contained herein shall have independent significance. If
any Party has breached any representation, warrant or covenant contained herein
in any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first representation,
warranty or covenant.
Section 9.15 Incorporation of Schedules and Exhibits. The exhibits and
schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
Section 9.16 Counterparts. This Agreement may be executed in one or more
counterparts (including by facsimile), and by the different parties in separate
counterparts, each of which when executed shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Parent, Xxx Group, MacManus, LAC and MAC have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
BDM, Inc.
/s/ Xxxxxxxxx Xxxxxxx
By: _________________________________
Name:
Title:
The Xxx Group, Inc.
/s/ Xxxxxxxxx Xxxxxxx
By: _________________________________
Name:
Title:
The MacManus Group, Inc.
/s/ Xxxxx X. Xxxxx
By: _________________________________
Name:
Title:
TLG Acquisition Corp.
/s/ Xxxxxxxxx Xxxxxxx
By: _________________________________
Name:
Title:
TMG Acquisition Corp.
/s/ Xxxxxxxxx Xxxxxxx
By: _________________________________
Name:
Title:
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