Exhibit 10.23
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
By and Among
MGL INVESTMENTS, LLC,
MRM FINANCIAL SERVICES LTD.,
OTHER STOCKHOLDERS OF HEMISPHERE MANAGEMENT LIMITED,
and
THE BISYS GROUP, INC.
Dated as of March 7, 2002
Relating to the Hemisphere Group of Companies
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TABLE OF CONTENTS
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PAGE
ARTICLE I DEFINITIONS...............................................................................2
1.1 Definitions...................................................................................2
1.2 Interpretation................................................................................9
ARTICLE II SALE AND PURCHASE OF SHARES..............................................................10
2.1 Sale and Purchase............................................................................10
2.2 Payment for the Initial Shares...............................................................10
2.3 Allocation of Purchase Price.................................................................11
2.4 Allocation of Expenses.......................................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS................................................12
3.1 Due Incorporation; Subsidiaries..............................................................12
3.2 Due Authorization............................................................................12
3.3 Consents and Approvals; No Conflict; Releases................................................13
3.4 Capitalization...............................................................................14
3.5 Financial Statements; Undisclosed Liabilities................................................14
3.6 No Adverse Effects or Changes................................................................15
3.7 Title to and Sufficiency of Assets...........................................................16
3.8 Condition of Assets..........................................................................17
3.9 Real Property................................................................................17
3.10 Accounts Receivable; Advances................................................................17
3.11 Intellectual Property........................................................................17
3.12 Contracts....................................................................................19
3.13 Permits......................................................................................20
3.14 Employee Benefit Plans and Employment Agreements.............................................20
3.15 Employment and Labor Matters.................................................................22
3.16 Taxes........................................................................................23
3.17 Compliance with Law..........................................................................25
3.18 Money Laundering.............................................................................25
3.19 Litigation...................................................................................26
3.20 Bank Accounts................................................................................26
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3.21 Customers....................................................................................26
3.22 Insurance....................................................................................27
3.23 Fairness Opinion.............................................................................27
3.24 Net Asset Value Calculations.................................................................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER..............................................27
4.1 Due Incorporation............................................................................27
4.2 Due Authorization............................................................................27
4.3 Consents and Approvals; No Conflict..........................................................28
4.4 Litigation...................................................................................28
4.5 Financing....................................................................................28
4.6 Purchase for Investment......................................................................29
ARTICLE V COVENANTS................................................................................29
5.1 Implementing Agreement.......................................................................29
5.2 Access to Information and Facilities.........................................................29
5.3 Preservation of Business.....................................................................29
5.4 Consents and Approvals.......................................................................31
5.5 Resignation of Officers and Directors........................................................32
5.6 Trademarks...................................................................................32
5.7 Intercompany Payables and Receivables........................................................33
5.8 Brokers......................................................................................33
5.9 Preservation of Books and Records; Access....................................................33
5.10 Employees; Employee Benefit Plans............................................................34
5.11 MRM Guaranties...............................................................................35
5.12 Old Irish Lease..............................................................................36
5.13 Interim Financial Statements.................................................................36
5.14 Non-Competition..............................................................................36
5.15 Use of Hemisphere Name.......................................................................37
5.16 Negotiation With Others......................................................................37
5.17 Indemnity Agreement..........................................................................38
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5.18 Remaining Shares.............................................................................38
5.19 Acceleration of Vesting of Remaining Shares; Forfeiture of Remaining Shares..................38
5.20 Certain Releases of Remaining Shares to Purchaser Under Stock Escrow Agreement...............39
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.........................................39
6.1 Warranties True as of Both Present Date and Closing Date.....................................39
6.2 Compliance with Agreements and Covenants.....................................................39
6.3 Certificate of Compliance....................................................................39
6.4 Consents and Approvals.......................................................................39
6.5 Actions or Proceedings.......................................................................40
6.6 Opinion of Counsel...........................................................................40
6.7 Material Adverse Effect......................................................................40
6.8 Insolvency...................................................................................40
6.9 MRM Escrow Agreement.........................................................................40
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS...........................................40
7.1 Warranties True as of Both Present Date and Closing Date.....................................40
7.2 Compliance with Agreements and Covenants.....................................................41
7.3 Certificate of Compliance....................................................................41
7.4 Consents and Approvals.......................................................................41
7.5 Actions or Proceedings.......................................................................41
7.6 Opinion of Counsel...........................................................................41
7.7 MRM Escrow Agreement.........................................................................41
ARTICLE VIII CLOSINGS.................................................................................41
8.1 Closing......................................................................................41
8.2 Certain Deliveries by Sellers................................................................41
8.3 Certain Deliveries by Purchaser..............................................................43
8.4 Second Closing...............................................................................43
8.5 No Second Closing............................................................................46
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ARTICLE IX TERMINATION..............................................................................47
9.1 Termination..................................................................................47
9.2 Effect of Termination........................................................................48
ARTICLE X INDEMNIFICATION..........................................................................48
10.1 Survival.....................................................................................48
10.2 Indemnification by Seller....................................................................48
10.3 Indemnification by Purchaser.................................................................49
10.4 Limitations on Liability of Sellers..........................................................49
10.5 Claims.......................................................................................51
10.6 Notice of Third Party Claims; Assumption of Defense..........................................51
10.7 Settlement or Compromise.....................................................................52
10.8 Time Limits..................................................................................52
10.9 Net Losses and Subrogation...................................................................52
10.10 Purchase Price Adjustments...................................................................53
10.11 Role of Seller Representative................................................................53
ARTICLE XI MISCELLANEOUS............................................................................53
11.1 Expenses.....................................................................................53
11.2 Amendment....................................................................................53
11.3 Notices......................................................................................53
11.4 Disbursements and Payments in Dollars........................................................55
11.5 Waivers......................................................................................55
11.6 Assignment...................................................................................55
11.7 No Third Party Beneficiaries.................................................................56
11.8 Publicity....................................................................................56
11.9 Further Assurances...........................................................................56
11.10 Severability.................................................................................56
11.11 Entire Understanding.........................................................................56
11.12 Language.....................................................................................57
11.13 Applicable Law...............................................................................57
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11.14 Jurisdiction of Disputes; Waiver of Jury Trial...............................................57
11.15 Schedules....................................................................................58
11.16 Disclaimer of Warranties.....................................................................58
11.17 Seller Representative........................................................................59
11.18 Management Stockholder Representative........................................................60
11.19 Counterparts.................................................................................61
ARTICLE XII TAX MATTERS..............................................................................61
12.1 Filing of Tax Returns........................................................................61
12.2 Proration of Taxes...........................................................................61
12.3 Cooperation on Tax Matters...................................................................61
12.4 Refunds......................................................................................62
12.5 Section 338(g) Elections.....................................................................62
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(continued)
SCHEDULES
Schedule 1 Management Stockholders
Schedule 1.1A Financial Statements
Schedule 1.1B Other Stockholders
Schedule 1.1C Percentages
Schedule 1.1D Seller's Knowledge
Schedule 2.3 Purchase Price Allocation
Schedule 3.1(b) Jurisdiction; Foreign Qualification
Schedule 3.1(c) Equity Investments by Companies
Schedule 3.3(a) Consents and Approvals
Schedule 3.3(b) No Conflict
Schedule 3.4 Capitalization
Schedule 3.5 Financial Statements; Undisclosed Liabilities
Schedule 3.6 Adverse Effects or Changes
Schedule 3.7 Title to Properties
Schedule 3.8 Condition of Assets
Schedule 3.9 Real Property Leases
Schedule 3.10(a) Accounts Receivable
Schedule 3.10(b) Loans and Advances
Schedule 3.11(a) Intellectual Property
Schedule 3.11(b) Proprietary Software and Licensed Software
Schedule 3.11(e) Software Contracts Violations
Schedule 3.12 Contracts
Schedule 3.13 Permits
Schedule 3.14 Employee Benefit Plans and Employment Agreements
Schedule 3.15 Employment and Labor Matters
Schedule 3.15(c) Significant Employees
Schedule 3.15(d) OSHA
Schedule 3.16 Taxes
Schedule 3.17 Compliance with Law
Schedule 3.18 Money Laundering
Schedule 3.19 Litigation
Schedule 3.20 Bank Accounts
Schedule 3.21 Customers
Schedule 3.22 Insurance
Schedule 3.24 Net Asset Value Calculations
Schedule 4.3 Consents and Approvals; No Conflict
Schedule 4.5 Financing
Schedule 5.3 Preservation of Business
Schedule 5.11 MRM Guaranties
Schedule 5.17 Indemnity Agreements
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(continued)
EXHIBITS
Exhibit A Form of MRM Escrow Agreement
Exhibit B Form of Opinion of Counsel to MRM Sellers
Exhibit C Form of Opinion of Counsel to Purchaser
Exhibit D Form of Indemnity Agreement
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STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT is made as of the 7th day of March, 2002 by
and among MGL Investments, LLC, a Delaware limited liability company (the "US
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Holding Company"), MRM Financial Services Ltd., a Bermuda company (the "Non-US
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Holding Company"; the US Holding Company and the Non-US Holding Company being
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each an "MRM Seller" and collectively the "MRM Sellers"), the Persons listed on
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Schedule 1 (the "Management Stockholders"; the MRM Sellers and the Management
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Stockholders being each a "Seller" and collectively the "Sellers"), and The
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BISYS Group, Inc., a Delaware corporation (the "Purchaser"). Certain terms used
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herein are defined in Article I.
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W I T N E S S E T H:
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WHEREAS, the US Holding Company is the sole member of, and owns all of the
limited liability company interests in, Hemisphere Financial Services LLC, a
Delaware limited liability company ("Hemisphere-Boston"), and Hemisphere
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Financial Group LLC, a Delaware limited liability company ("Hemisphere-NY";
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Hemisphere-Boston and Hemisphere-NY being each a "US Company" and collectively
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the "US Companies");
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WHEREAS, the Non-US Holding Company and the Management Stockholders
collectively own all of the outstanding capital stock of Hemisphere Management
Limited, a Bermuda company ("Hemisphere-Bermuda");
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WHEREAS, the Non-US Holding Company owns all of the outstanding capital
stock of Hemisphere Management (Ireland) Limited, an Ireland company
("Hemisphere-Ireland"; the US Companies, Hemisphere-Bermuda and
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Hemisphere-Ireland being each a "Target Company" and collectively the "Target
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Companies");
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WHEREAS, Purchaser wishes to purchase from each Seller, and each Seller
wishes to sell to Purchaser, all of the issued and outstanding capital stock or
limited liability company interests in each Target Company which are owned by
such Seller, upon the terms and subject to the conditions contained herein;
WHEREAS, simultaneously with the execution of this Agreement, (i) the MRM
Sellers, Mutual Risk Management Ltd., a Bermuda company ("MRM"), the Management
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Stockholders and the Escrow Agent (as defined herein) are entering into an
escrow agreement (the "Management Escrow Agreement"), (ii) Purchaser, the Other
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Stockholders (as defined herein) and the Escrow Agent are entering into an
escrow agreement (the "Stock Escrow Agreement"), (iii) each of the Management
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Stockholders is entering into an agreement and release with the US Holding
Company, the Non-US Holding Company and Hemisphere-Bermuda (the "Agreement and
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Release"), (iv) each of the Other Stockholders is granting an irrevocable proxy
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to certain officers of Purchaser and (v) each of the individuals listed in
Schedule 5.17 is entering into an amendment to an indemnity agreement with MRM
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(the "Amendment to Indemnity Agreement"); and
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WHEREAS, simultaneously with the execution of this Agreement, the
certificates (the "Certificates") evidencing the Remaining Shares (as defined
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herein), which certificates shall be duly endorsed in blank without date or
accompanied by duly executed and undated stock powers or stock transfer forms,
or other duly executed instruments of conveyance sufficient to validly transfer
the Remaining Shares to Purchaser, shall be delivered to Xxxxxxx, Xxxxxxxx &
Xxxxx, to be deposited by them with the Escrow Agent to be held and disbursed
pursuant to the Stock Escrow Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained,
Purchaser and Sellers agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms shall have the following meanings for
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the purposes of this Agreement:
"Accounts Receivable" shall have the meaning set forth in Section 3.10.
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"Acquisition Transaction" shall have the meaning set forth in Section 5.16.
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"Affiliate" shall mean, with respect to any specified Person, any other
Person which, directly or indirectly, controls, is under common control with, or
is controlled by, such specified Person; provided that none of XL Capital Ltd,
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its subsidiaries or affiliates, or any of their respective officers or directors
shall be deemed to be an Affiliate of MRM, the MRM Sellers or any Company. The
term "control" as used in the preceding sentence means, with respect to a
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corporation, the right to exercise, directly or indirectly, more than 50% of the
voting rights attributable to the shares of such corporation, or with respect to
any Person other than a corporation, the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of such
Person.
"Agreement" shall mean this Stock Purchase Agreement, including all
Exhibits and Schedules hereto, as it may be amended, modified or supplemented
from time to time in accordance with its terms.
"Agreement and Release" shall have the meaning set forth in the fifth
recital to this Agreement.
"Amendment to Indemnity Agreement" shall have the meaning set forth in the
fifth recital to this Agreement.
"Benefit Plans" shall have the meaning set forth in Section 3.14(b).
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"Business" shall mean the business presently conducted by the Companies of
providing fund administration, securities services and corporate secretarial
services for mutual funds and investment companies.
"Business Day" shall mean any day of the year other than (i) any Saturday
or Sunday or (ii) any other day on which banks located in Xxxxxxxx, Bermuda or
New York, New York generally are closed for business.
"Certificates" shall have the meaning set forth in the sixth recital to
this Agreement.
"Closing" shall mean the consummation of the transactions contemplated
herein in accordance with Article VIII (other than the consummation of the
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transactions contemplated herein in accordance with Section 8.4).
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"Closing Amount" shall have the meaning set forth in Section 2.2.
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"Closing Date" shall mean the date on which the Closing occurs or is to
occur.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder.
"Companies" shall mean the US Companies and the Non-US Companies.
"Company" shall mean any of the Companies.
"Company Intellectual Property" shall mean all Intellectual Property used
by the Companies in the conduct of the Business, including the Registered
Intellectual Property.
"Consents" shall mean (i) the Consent Under Credit Agreement, dated as of
March 7, 2002, among the Borrowers, the Guarantors, the Lenders and the
Administrative Agent (each as defined therein) and (ii) the Consent and
Amendment to Debentures, dated as of March 7, 2002, among MRM, the Guarantors
(as defined therein) and XL Insurance (Bermuda) Ltd.
"Continuing Employees" shall have the meaning set forth in Section 5.10(b).
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"Contract" shall mean any contract, lease, sales order, purchase order,
agreement, indenture, mortgage, guaranty, promissory note, warrant or
instrument, whether in writing or oral.
"Credit Agreement" shall mean the Credit Agreement dated as of September
21, 2000 among Bank of America, N.A., as administrative agent, and the
borrowers, guarantors and lenders named therein.
"Debentures" shall mean MRM's 9-3/8% Convertible Exchangeable Debentures
due 2006.
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"Dollars" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.
"Enforceability Limitations" shall have the meaning set forth in Section
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3.2.
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"Equity Interest" shall mean any share of capital stock, limited liability
company interest, partnership interest or other equity interest in any Person.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall mean any corporation, trade or business which,
together with either US Company, is a member of a controlled group of
corporations or a group of trades or businesses under common control within the
meaning of section 414 of the Code.
"Escrow Agent" shall mean The Bank of New York.
"Financial Statements" shall mean the unaudited combined financial
statements of the Companies as of December 31, 2000 and December 31, 2001 (which
do not include any notes thereto), which are included in Schedule 1.1A,
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consisting of the balance sheet at such dates and the related statements of
earnings and retained earnings and cash flows for the fiscal years then ended.
"Governmental Authority" shall mean the government of the United States or
any foreign country or any state or political subdivision thereof or any entity,
body or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including any
quasi-governmental entity established to perform such functions.
"Hemisphere-Bermuda" shall have the meaning set forth in the second recital
to this Agreement.
"Hemisphere-Bermuda Holdings" shall mean Hemisphere Holdings Limited, a
Bermuda company and a wholly owned subsidiary of Hemisphere-Bermuda.
"Hemisphere-Boston" shall have the meaning set forth in the first recital
to this Agreement.
"Hemisphere-BVI" shall mean Hemisphere Management (B.V.I.) Ltd., a British
Virgin Islands company and a wholly owned subsidiary of Hemisphere-Bermuda.
"Hemisphere-Cayman" shall mean Hemisphere Fund Managers Limited, a Cayman
Islands company and a wholly owned subsidiary of Hemisphere-Bermuda.
"Hemisphere-Ireland" shall have the meaning set forth in the third recital
to this Agreement.
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"Hemisphere-NY" shall have the meaning set forth in the first recital to
this Agreement.
"Hemisphere Trust" shall have the meaning set forth in Section 5.15.
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"Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article X.
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"Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article X.
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"Initial Shares" shall mean all Shares excluding the Remaining Shares.
"Instruction Letter" shall have the meaning set forth in Section 2.2.
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"Intellectual Property" shall mean (i) United States and foreign patents
(including continuations, continuations-in-part, divisions, reissues and
re-examinations thereof) and patent applications; (ii) registered and
unregistered trade names, trademarks, service names and service marks (and
applications for registration of the same); (iii) copyrights (whether or not
registered) and copyright registrations (and applications for the same); and
(iv) rights in any of the following: data files, inventions, know-how, trade
secrets and domain names.
"Irish Plan" shall have the meaning set forth in Section 3.14(c)(i).
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"Law" shall mean any law, statute, regulation, ordinance, rule, order,
decree or governmental requirement enacted, promulgated or imposed by any
Governmental Authority.
"Leased Real Property" shall have the meaning set forth in Section 3.9(a).
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"Licensed Software" shall mean all computer software in which a third party
grants to any of the Companies a license for use in the Business.
"Lien" shall mean any lien, mortgage, pledge, adverse claim, security
interest or other encumbrance.
"Loss" or "Losses" shall mean any and all losses, liabilities, costs,
claims, damages and expenses, including reasonable attorneys', accountants' and
experts' fees and expenses.
"Major Customer" shall have the meaning set forth in Section 3.21(a).
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"Management Escrow Agreement" shall have the meaning set forth in the fifth
recital to this Agreement.
"Management Stockholder Representative" shall mean either Xxxxxx Xxxxx or
Xxxxx Xxxxxx, acting alone.
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"Management Stockholders" shall have the meaning set forth in the preamble
to this Agreement.
"Material Adverse Effect" shall mean an effect on the business or financial
condition of the Companies as a whole which is material and adverse, excluding
(i) changes in the economy of the United States or any other country, or (ii)
matters that result from general industry-wide developments.
"MRM" shall have the meaning set forth in the fifth recital to this
Agreement.
"MRM Escrow Agreement" shall mean an escrow agreement among Purchaser, the
MRM Sellers and the Escrow Agent, to be entered into at the Closing, in the form
attached hereto as Exhibit A.
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"MRM Escrow Amount" shall have the meaning set forth in Section 2.2(c).
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"MRM 401(k) Plan" shall have the meaning set forth in Section 5.10(c).
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"MRM Guaranties" shall have the meaning set forth in Section 5.11.
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"MRM Sellers" shall have the meaning set forth in the preamble to this
Agreement.
"Non-Competition Period" shall have the meaning set forth in Section 5.14.
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"Non-US Companies" shall mean Hemisphere-Bermuda, Hemisphere-Bermuda
Holdings, Hemisphere-Cayman, Hemisphere-BVI and Hemisphere-Ireland.
"Non-US Holding Company" shall have the meaning set forth in the preamble
to this Agreement.
"Old Irish Lease" shall have the meaning set forth in Section 5.12.
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"OSHA" shall have the meaning set forth in Section 3.15(d).
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"OSHA Act" shall have the meaning set forth in Section 3.15(d).
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"Other Stockholders" shall mean those Management Stockholders listed on
Schedule 1.1B.
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"Owned Source Codes" shall have the meaning set forth in Section 3.11(c).
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"Percentage" shall mean, with respect to the MRM Sellers, the percentage
set forth opposite such MRM Seller's name on Schedule 1.1C.
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"Permit" shall mean any permit, license, approval or other authorization
required or granted by any Governmental Authority.
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"Permitted Liens" shall mean (i) Liens for Taxes that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with US GAAP;
(ii) workers', mechanics', materialmen's, repairmen's, suppliers', carriers' or
similar Liens arising in the ordinary course of business with respect to
obligations that are not yet delinquent or that are not material and are being
contested in good faith by appropriate proceedings; (iii) Liens encumbering the
landlord's interest in the Leased Real Property; (iv) covenants, zoning
restrictions, easements, licenses, or other restrictions on the use of real
property or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use of such real
property, leases or leasehold estates; (v) any immaterial Liens which do not
materially impair the value of the property subject to such Lien or the use of
such property in the conduct of the Business; and (vi) those Liens set forth in
Schedule 3.7 and designated as "Permitted Liens", but not including any liens,
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security interests or pledges held by any lender as security for borrowed money
or for any guaranty of the obligations of any party.
"Person" shall mean any individual, corporation, company, proprietorship,
firm, partnership, limited partnership, limited liability company, trust,
association or other entity.
"Pre-Closing Tax Period" shall mean any Tax period ending on or before the
close of business on the Closing Date or, in the case of any Tax period which
includes, but does not end on, the Closing Date, the portion of such period up
to and including the Closing Date.
"Proprietary Software" shall mean all computer software in which any of the
Companies owns the intellectual property, including all source codes and object
codes.
"Purchase Price" shall mean the sum of the amounts payable by Purchaser
pursuant to Sections 2.2(a), (b), (c) and (d) and Section 8.4(b).
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"Purchaser" shall have the meaning set forth in the preamble to this
Agreement.
"Purchaser's Benefit Plans" shall have the meaning set forth in Section
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5.10(b).
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"Purchaser's 401(k) Plan" shall have the meaning set forth in Section
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5.10(c).
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"Real Property Leases" shall have the meaning set forth in Section 3.9(a).
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"Registered Intellectual Property" shall mean all patents, copyrights,
domain names, trade names and trade marks that have been registered, or for
which application for registration has been made, in the name of any of the
Companies as the owner in the United States Patent and Trademark Office or
similar Governmental Authority in any foreign country.
"Related Agreement" shall mean any Contract that is or is to be entered
into at the Closing or otherwise pursuant to this Agreement. The Related
Agreements
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executed by a specified Person shall be referred to as "such Person's Related
Agreements," "its Related Agreements" or another similar expression.
"Remaining Shares" shall mean the 21,700 shares of capital stock of
Hemisphere-Bermuda held of record by the Other Stockholders.
"Second Closing" shall have the meaning set forth in Section 2.1.
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"Second Closing Date" shall have the meaning set forth in Section 8.4(a).
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"Section 338(g) Election" shall have the meaning set forth in Section 12.5.
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"Sellers" shall have the meaning set forth in the preamble to this
Agreement.
"Seller's knowledge", or any similar expression with regard to the
knowledge or awareness of or receipt of notice by any Seller or any Company,
means the actual, direct and personal knowledge of any of the Persons listed in
Schedule 1.1D or the knowledge that any of such Persons would have after
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reasonable due inquiry.
"Seller Representative" shall mean the Non-US Holding Company.
"Shared Expenses" shall have the meaning set forth in Section 11.1.
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"Shares" shall mean, collectively, the shares of capital stock and limited
liability company interests in the Target Companies held of record by Sellers as
set forth in Schedule 3.4.
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"Software" shall mean the Licensed Software and the Proprietary Software.
"Software Contracts" shall have the meaning set forth in Section 3.11(e).
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"Specified Parties" shall have the meaning set forth in Section 5.16.
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"Stock Escrow Agreement" shall have the meaning set forth in the fifth
recital to this Agreement.
"Target Companies" shall have the meaning set forth in the third recital to
this Agreement.
"Taxes" shall mean all taxes, charges, fees, duties, levies or other
assessments (including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, goods and services, value added, stamp, user, transfer, fuel,
excess profits, occupational, interest equalization, windfall profits,
severance, payroll, unemployment and Social Security or similar taxes) which are
imposed by any Governmental Authority, and such term shall include any interest,
penalties or additions to tax attributable thereto.
"Tax Return" shall mean any report, return or other information required to
be supplied to a Governmental Authority in connection with any Taxes.
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"Tax Statute of Limitations Date" shall mean the close of business on the
45th day after the expiration of the applicable statute of limitations with
respect to Taxes, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).
"Tax Warranty" shall mean a representation or warranty in Section 3.16.
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"Title and Authorization Warranty" shall mean a representation or warranty
in Section 3.1(a), 3.2, 3.4, 4.1, 4.2 or 4.6.
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"US Benefit Plan" shall have the meaning set forth in Section 3.14(c)(ii).
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"US Companies" shall have the meaning set forth in the first recital to
this Agreement.
"US Continuing Employees" shall have the meaning set forth in Section
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5.10(c).
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"US GAAP" shall mean United States generally accepted accounting
principles, consistently applied, provided that, with respect to any matter as
to which there is more than one generally accepted accounting principle, US GAAP
shall mean the generally accepted accounting principle applied in the
preparation of the Financial Statements.
"US Holding Company" shall have the meaning set forth in the preamble to
this Agreement.
1.2 Interpretation. The headings preceding the text of Articles and
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Sections included in this Agreement and the headings to Schedules attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's successors and assigns to the extent such
successors and assigns are permitted by the terms of any applicable agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually. Reference to any agreement (including this
Agreement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Underscored references to
Articles, Sections, paragraphs, clauses, Exhibits or Schedules shall refer to
those portions of this Agreement. The use of the terms "hereunder," "hereof,"
"hereto" and words of similar import shall refer to this Agreement as a whole
and not to any particular Article, Section, paragraph or clause of, or Exhibit
or Schedule to, this Agreement.
-9-
ARTICLE II
SALE AND PURCHASE OF SHARES
2.1 Sale and Purchase. Subject to the terms and conditions of this
-----------------
Agreement, at the Closing, each Seller shall sell, assign, transfer and deliver
to Purchaser, and Purchaser shall purchase and acquire from such Seller and take
assignment and delivery from such Seller of, the Initial Shares which are owned
by such Seller, free and clear of all Liens (other than Liens for Taxes payable
by Purchaser in connection with the transfer of the Initial Shares). Pursuant to
Section 8.4 and subject to the terms of this Agreement, there shall be a second
-----------
closing (the "Second Closing"), at which each of the Other Stockholders shall
--------------
sell, assign, transfer and deliver to Purchaser, and Purchaser shall purchase
and acquire from such Other Stockholder and take assignment and delivery from
such Other Stockholder of, the Remaining Shares which are owned by such Other
Stockholder, free and clear of all Liens (other than Liens for Taxes payable by
Purchaser in connection with the transfer of the Remaining Shares).
2.2 Payment for the Initial Shares. In consideration for the Initial
------------------------------
Shares, at the Closing, Purchaser shall pay an aggregate amount equal to One
Hundred Twenty Six Million Six Hundred Thirty Four Thousand One Hundred Thirty
Six Dollars ($126,634,136) (the "Closing Amount"), all of which shall be
--------------
allocated and disbursed as follows:
(a) The sum of (i) One Hundred Fourteen Million Six Hundred
Thousand Dollars ($114,600,000), less (ii) Fifteen Million Dollars
----
($15,000,000), plus (iii) eight and four-tenths percent (8.4%) of the
----
amount of Shared Expenses estimated pursuant to Section 2.4, shall be
-----------
allocated and disbursed pursuant to the Instruction Letter.
(b) The sum of (i) Twelve Million Thirty Four Thousand One
Hundred Thirty Six Dollars ($12,034,136), less (ii) One Million Nine
----
Hundred Fifteen Thousand Dollars ($1,915,000), less (iii) eight and
----
four-tenths percent (8.4%) of the amount of Shared Expenses estimated
pursuant to Section 2.4, shall be paid to the Management Stockholder
-----------
Representative to be disbursed to the Management Stockholders.
(c) Fifteen Million Dollars ($15,000,000) (the "MRM Escrow
----------
Amount") shall be paid to the Escrow Agent to be held and disbursed
------
pursuant to the MRM Escrow Agreement. The MRM Escrow Amount shall be
used to satisfy any valid claims of Purchaser for indemnification by
the MRM Sellers pursuant to Article X made on or before August 1,
---------
2002. Any portion of the MRM Escrow Amount that has not been so used
shall be disbursed to the Seller Representative for disbursement to
the MRM Sellers pro rata in accordance with their respective
Percentages. In the event that any party has received a disbursement
of any amount pursuant to the MRM Escrow Agreement to which it is not
entitled pursuant to the
-10-
terms of this Agreement, such party shall (i) if another party is
entitled to such amount at that time, pay such amount to such other
party, or (ii) if no other party is entitled to such amount at that
time, pay such amount to the Escrow Agent to be held and disbursed
pursuant to the terms of the MRM Escrow Agreement.
(d) One Million Nine Hundred Fifteen Thousand Dollars
($1,915,000) shall be paid to the Escrow Agent to be held and
disbursed pursuant to the Management Escrow Agreement.
For purposes of Section 2.2(a), "Instruction Letter" shall refer to a letter
--------------
provided to Purchaser by the MRM Sellers in accordance with the notification
provisions of Section 11.3, which letter shall attach the notice received
------------
pursuant to Section 1(d) of the Consents and direct Purchaser to make the
payments of the amounts specified therein to the accounts identified therein and
further instruct Purchaser to pay any balance to MRM Sellers as provided
therein. The instructions contained in the Instruction Letter shall be
consistent with the terms and conditions of the Consents. Purchaser shall be
entitled to rely conclusively on the Instruction Letter as to payment or
otherwise. The MRM Sellers agree that if Purchaser receives instructions from
Bank of America, N.A., as collateral agent for the lenders party to the Credit
Agreement and for the holders of the Debentures, inconsistent with the
Instruction Letter, Purchaser shall be entitled to refrain from taking any
action under this Agreement until it has received satisfactory confirmation that
such dispute has been resolved.
All payments made hereunder or pursuant to Section 8.4 shall be made in
-----------
accordance with Section 11.4 and to such account or accounts as the receiving
------------
party shall designate in writing to the paying party.
2.3 Allocation of Purchase Price. Purchaser and Sellers agree to allocate
----------------------------
the Purchase Price among the Shares in accordance with Schedule 2.3. Purchaser
------------
and Sellers, in connection with their respective Tax Returns, shall not take any
position inconsistent with such treatment and allocation.
2.4 Allocation of Expenses. At least three Business Days prior to the
----------------------
Closing, the MRM Sellers shall deliver to the Management Stockholders a
statement providing an estimate of the Shared Expenses. The MRM Sellers shall
furnish the Management Stockholders with such documents and other records as the
Management Stockholders shall reasonably request in order to substantiate such
estimate, and the Management Stockholders shall have the right to comment on,
and consult with the MRM Sellers with respect to, such estimate. The Management
Stockholders shall be liable to the MRM Sellers for, in the aggregate, 13.2% of
the Shared Expenses estimated pursuant to this Section 2.4. The MRM Sellers
-----------
shall promptly refund to the Management Stockholder Representative for
disbursement to the Management Stockholders any overpayment of Shared Expenses.
-11-
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Purchaser as follows with respect to
itself and each Company in which it directly or indirectly owns Equity
Interests:
3.1 Due Incorporation; Subsidiaries.
-------------------------------
(a) The US Holding Company is a limited liability company duly
formed, validly existing and in good standing under the laws of the
State of Delaware. The Non-US Holding Company is a company duly formed
and validly existing under the laws of Bermuda. Each Management
Stockholder is an individual person. Each MRM Seller is licensed or
qualified to do business and is in good standing as a foreign company
or limited liability company (as the case may be) in each jurisdiction
where its ownership of Shares or its execution, delivery and
performance of this Agreement and its Related Agreements and the
consummation of the transactions contemplated hereby and thereby
require such licensing or qualification and in which the failure to be
so licensed or qualified would have a material adverse effect on such
MRM Seller.
(b) Each Company is a company or limited liability company duly
organized or formed (as applicable), validly existing and, if
applicable, in good standing under the laws of the jurisdiction set
forth opposite its name in Schedule 3.1(b). Each Company is licensed
---------------
or qualified to do business and is in good standing as a foreign
company or limited liability company (as the case may be) in each
jurisdiction where the nature of the Business conducted or properties
owned, leased or operated by it require such licensing or
qualification and in which the failure to be so licensed or qualified
would have a Material Adverse Effect. Such jurisdictions are listed in
Schedule 3.1(b).
---------------
(c) Except as set forth in Schedule 3.1(c), no Company directly
---------------
or indirectly owns any Equity Interest in any Person.
(d) Complete copies of the organizational documents and the
minutes from the last five years of each Company have been made
available to Purchaser.
3.2 Due Authorization. Each MRM Seller has all requisite company or limited
-----------------
liability company (as the case may be) power and authority to enter into this
Agreement and its Related Agreements and to consummate the transactions
contemplated hereby and thereby. Each Management Stockholder has the legal
capacity to enter into this Agreement and its Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by each MRM Seller of this Agreement and its Related
Agreements, and the consummation by
-12-
such MRM Seller of the transactions contemplated hereby and thereby, have been
duly and validly approved by such MRM Seller and no other company or limited
liability company (as the case may be) actions or proceedings on the part of
such MRM Seller are necessary to authorize the execution, delivery and
performance of this Agreement and its Related Agreements and the consummation of
the transactions contemplated hereby and thereby. Each Seller has duly and
validly executed and delivered this Agreement and has duly and validly executed
and delivered (or prior to or at the Closing or the Second Closing will duly and
validly execute and deliver) its Related Agreements. Assuming due authorization
(in the case of parties which are not individuals), execution and delivery of
this Agreement and its Related Agreements by the other parties hereto and
thereto, this Agreement constitutes a legal, valid and binding obligation of
each Seller, and each of such Seller's Related Agreements constitute (or upon
execution and delivery by such Seller will constitute) legal, valid and binding
obligations of such Seller, in each case, enforceable in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in effect
that affect the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies and by principles of equity
(collectively, "Enforceability Limitations").
--------------------------
3.3 Consents and Approvals; No Conflict; Releases.
---------------------------------------------
(a) Except as set forth in Schedule 3.3(a), no consent,
---------------
authorization or approval of, or filing or registration with, (i) any
Governmental Authority, (ii) any party to any Contract disclosed or
required to be disclosed on a Schedule to this Agreement or (iii) any
other party that, if not obtained, would cause a Material Adverse
Effect or a material adverse effect on the ability of such Seller to
consummate the transactions contemplated by this Agreement, is
necessary in connection with the execution, delivery or performance by
each Seller of this Agreement or any of its Related Agreements or the
consummation by such Seller of the transactions contemplated hereby or
thereby.
(b) Except as set forth in Schedule 3.3(b), the execution,
---------------
delivery and performance by each Seller of this Agreement and its
Related Agreements, and the consummation by such Seller of the
transactions contemplated hereby and thereby, do not and will not (i)
violate any material Law applicable to or binding on such Seller or
any Company or any of their respective assets; (ii) violate or
conflict with, result in a breach or termination of, constitute a
default or give any third party any additional right (including a
termination right under a change-in-control provision or otherwise)
under, permit cancellation of, result in the creation of any Lien upon
any of the assets of such Seller or any Company under, or result in or
constitute a circumstance which, with or without notice or lapse of
time or both, would constitute any of the foregoing under, any
material Contract to which such Seller or any Company is a party or by
which such Seller or any Company or any of their respective assets are
bound; (iii) permit the acceleration of the maturity of any
indebtedness of such Seller or any
-13-
Company or indebtedness secured by their respective assets; or (iv)
violate or conflict with any provision of any of the organizational
documents of such Seller or of any Company.
(c) The MRM Sellers have received from each of the Management
Stockholders a duly executed Agreement and Release, copies of which
have been delivered to Purchaser.
3.4 Capitalization.
--------------
(a) The authorized and outstanding Equity Interests of each
Company are set forth in Schedule 3.4. All of such Equity Interests
------------
are validly issued as set forth in Schedule 3.4, and all Equity
------------
Interests that are shares of capital stock are fully paid and
nonassessable. The Persons indicated in Schedule 3.4 are the record
------------
and beneficial owners of the Equity Interests in the Companies
indicated in Schedule 3.4, free and clear of any and all Liens. There
------------
are no Equity Interests in any Company held in the treasury of any
Company and no Equity Interests in any Company are currently reserved
for issuance for any purpose or upon the occurrence of any event or
condition.
(b) Except as set forth in Schedule 3.4, there are no Equity
------------
Interests in any Company issued or outstanding or any subscriptions,
options, warrants, calls, rights, convertible or exchangeable
securities or other agreements or commitments of any character
obligating any Seller or any Company, or obligating any Seller or any
of its Affiliates to cause any Company, to issue, transfer or sell, or
cause the issuance, transfer or sale of, any Equity Interests in any
Company. Except as set forth in Schedule 3.4, there are no outstanding
------------
contractual obligations of any Seller or any Company that relate to
the purchase, sale, issuance, repurchase, redemption, acquisition,
transfer, disposition, holding or voting of any Equity Interests in
any Company.
(c) The assignments, endorsements, stock powers, stock transfer
forms and other instruments of transfer delivered by Sellers to
Purchaser at the Closing will be sufficient to transfer to Purchaser
all legal and beneficial interests in the Shares, free and clear of
all Liens (other than Liens for Taxes payable by Purchaser in
connection with the transfer of the Shares).
3.5 Financial Statements; Undisclosed Liabilities.
---------------------------------------------
(a) Except as set forth in Schedule 3.5 and for the absence of
------------
footnotes, the Financial Statements have been prepared in accordance
with US GAAP and present fairly the financial position of the
Companies on a combined basis as of the dates thereof and the results
of operations and cash flows of the Companies on a combined basis for
the periods
-14-
covered thereby. The Financial Statements are in accordance with the
books and records of the Companies.
(b) Except as set forth in Schedule 3.5 or in the Financial
------------
Statements, none of the Companies has any liabilities, debts or
obligations, fixed or contingent, which were required to be reported
in a combined balance sheet as of December 31, 2001 prepared in
accordance with US GAAP or in the footnotes thereto.
(c) Except as set forth in Schedule 3.5, since December 31, 2001,
------------
none of the Companies has incurred any liabilities, debts or
obligations, fixed or contingent, which would be required to be
reported in a combined balance sheet as of the date hereof prepared in
accordance with US GAAP or in the footnotes thereto, other than
liabilities, debts and obligations which were incurred in the ordinary
course of business and other liabilities, debts and obligations that
are not material to the operations or financial condition of the
Business (provided that such reference to "material" shall not expand
materiality for purposes of US GAAP).
3.6 No Adverse Effects or Changes. Except as listed in Schedule 3.6, since
----------------------------- ------------
December 31, 2001, none of the Companies has:
(a) suffered any event or events which, individually or in the
aggregate, has had or would have a Material Adverse Effect;
(b) suffered any damage, destruction or loss to any of its assets
in excess of $100,000 that was not covered by insurance;
(c) sold, transferred, conveyed or otherwise disposed of, or
encumbered with any Lien (other than Permitted Liens), any asset
having an individual book value in excess of $100,000;
(d) made any changes in its accounting principles or practices
not required by US GAAP;
(e) entered into any material transaction with any Seller or any
of its Affiliates (other than another Company);
(f) authorized for issuance, issued, sold or delivered, or agreed
or committed to issue, sell or deliver, any Equity Interests or any
other securities of any Company, or amended any of the terms of any
such Equity Interests or other securities;
(g) split, combined or reclassified any of its Equity Interests,
declared, set aside or paid any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its Equity
-15-
Interests or other securities, or redeemed or otherwise acquired any
Equity Interests or securities of any Company;
(h) made any borrowings or incurred any indebtedness for borrowed
money, or assumed, guaranteed, endorsed (except for the negotiation or
collection of negotiable instruments in transactions in the ordinary
course of business and consistent with past practice) or otherwise
become liable for any obligations of any other Person;
(i) made any loans or capital contributions to, or investments
in, any other Person (other than another Company);
(j) entered into, adopted, amended or terminated any bonus,
profit sharing, compensation, termination, stock option, stock
appreciation right, restricted stock, performance unit, pension,
retirement, deferred compensation, employment, severance or other
employee benefit agreement, trust, plan or fund for the benefit of any
director, manager, officer or employee of the Companies, or increased
the compensation or benefits of any director, manager, officer or
employee of the Companies, or entered into any Contract to do any of
the foregoing, in each case except in the ordinary course of business
and consistent with past practice or as required by Law;
(k) acquired or leased any assets having an individual book value
in excess of $100,000;
(l) paid any amount, performed any obligation or agreed to pay
any amount or perform any obligation, in settlement or compromise of
any suits or claims of liability against any Company or any of its
directors, managers, officers or employees; or
(m) entered into any other material Contract other than in the
ordinary course of business and consistent with past practice.
3.7 Title to and Sufficiency of Assets.
----------------------------------
(a) Except as disclosed in Schedule 3.7, the Companies have good
------------
title to, and are the lawful owners of, all of the tangible and
intangible assets, properties and rights reflected in the balance
sheet as of December 31, 2001 contained in the Financial Statements
(other than assets held under lease or license and assets disposed of
in the ordinary course of business since December 31, 2001) or
acquired since December 31, 2001, free and clear of any Lien other
than Permitted Liens.
(b) The Companies either own, lease, license or otherwise have
the right to use all of the assets, properties and rights currently
used by the Companies in their conduct of the Business and all such
assets,
-16-
properties and rights are sufficient for the conduct of the Business
as conducted as of the date of this Agreement.
3.8 Condition of Assets. Except as disclosed in Schedule 3.8, to Seller's
------------------- ------------
knowledge, all of the tangible assets of the Companies currently used in the
Business, whether real or personal, owned or leased, are in good operating
condition and repair (with the exception of normal wear and tear) for the
purposes of the Business as currently conducted by the Companies.
3.9 Real Property.
-------------
(a) Schedule 3.9 includes a true, accurate and complete list of
------------
all real estate held by a Company under real property leases (the
"Leased Real Property") and all leases covering the Leased Real
--------------------
Property to which any Company is party (the "Real Property Leases").
--------------------
None of the Companies owns any real property or has any binding
commitment to purchase any real property. Sellers have made available
to Purchaser true and complete copies of all Real Property Leases.
(b) All of the Real Property Leases are in full force and effect,
valid and enforceable against the Company which is party thereto, and
to Seller's knowledge, against the other parties thereto, in
accordance with their respective terms, except as such enforceability
may be limited by Enforceability Limitations. None of Companies has
received any notice of any default under any Real Property Lease and
none of the Companies has any knowledge of default by any other party
thereto.
3.10 Accounts Receivable; Advances.
-----------------------------
(a) Schedule 3.10(a) contains an accurate and complete aging
----------------
schedule as of December 31, 2001, of all accounts receivable due to
the Companies resulting from goods sold or services provided by the
Companies ("Accounts Receivable"). Except as disclosed in Schedule
------------------- --------
3.10(a), each Account Receivable represents a bona fide sale made or
-------
service provided in the ordinary course of business and, after giving
effect to any reserves in the Financial Statements for collectibility,
is collectible in the ordinary course of business.
(b) Schedule 3.10(b) lists all loans and advances made by any of
----------------
the Companies to third parties that are outstanding on the date
hereof.
3.11 Intellectual Property.
---------------------
(a) Schedule 3.11(a) contains a complete and accurate list of all
----------------
Registered Intellectual Property as of the date hereof. The Company
Intellectual Property constitutes all of the material Intellectual
Property that is used by the Companies in the conduct of the Business.
Except as set forth in Schedule 3.11(a), a Company has all right,
----------------
title and interest in and
-17-
to, free and clear of all Liens other than Permitted Liens, or is
otherwise licensed or has the right to use, the Company Intellectual
Property. The Companies have used, prior to the date hereof, in the
United States, Bermuda, the British Virgin Islands, the Cayman Islands
and Ireland all trade names listed on Schedule 3.11(a) in the ordinary
----------------
and regular course of the Business. To the knowledge of Sellers, there
are no material infringements, misappropriations or dilutions by any
third parties upon any Company Intellectual Property. Except as
disclosed in Schedule 3.11(a), there are no outstanding orders,
----------------
judgments, injunctions, legal or governmental proceeding (other than
pending registrations or renewals or recordation of assignments)
against any Company or material stipulations, agreements or covenants
to which any Company is a party restricting the ownership (in the case
of Company Intellectual Property owned by one of the Companies) or use
of the Company Intellectual Property by the Companies. To the
knowledge of Sellers, none of the Companies are infringing in any
material respect the rights of others with respect to the use of the
Company Intellectual Property by such Company. There are no
proceedings or notices of proceedings against any Company to oppose,
cancel, or otherwise to defeat or invalidate any Companies' rights to
any of the Company Intellectual Property in any jurisdiction, and, to
the knowledge of Sellers, none are threatened. Except as set forth in
Schedule 3.11(a), the Companies and Sellers have used commercially
----------------
reasonable measures to protect and preserve the validity and
enforceability of the Company Intellectual Property that is owned by
any of the Companies and that is material to the operation of the
Business and the goodwill associated therewith, including the
confidentiality and enforceability of trade secrets and know-how and
the confidentiality and/or proprietary information included in the
Company Intellectual Property that is owned by any of the Companies
and that is material to the operation of the Business.
(b) Schedule 3.11(b) hereto contains a complete and accurate list
----------------
of (i) all material Proprietary Software and (ii) all material
Licensed Software other than off-the-shelf software licensed to any of
the Companies. Each of the Companies either owns, free and clear of
all Liens other than Permitted Liens, or has a valid license to use,
all of the Software.
(c) The source code forms of the most current versions of the
Proprietary Software (the "Owned Source Codes") are in the possession
------------------
of the Companies and, to Seller's knowledge, no third party has any
copy of any of the Owned Source Codes or any right, title, interest or
license, conditional or otherwise, with respect to any of the Owned
Source Codes and the Companies have not granted any such right, title,
interest or license covering any future period, with respect to any of
the Owned Source Codes. The Companies own the Owned Source Codes free
and clear of all Liens other than Permitted Liens.
-18-
(d) The Companies own and have possession of any material
documentation developed by or for the Companies with respect to the
Proprietary Software, including any such documentation relating to the
Owned Source Codes, and the object code form of the most recent
versions of the Proprietary Software. Sellers have made available to
Purchaser copies of all forms of past and present standard express
warranties extended by any of the Companies, related to any
Proprietary Software that is licensed to any third parties. To
Seller's knowledge, Sellers have no material liability as a result of
claims related to such warranties.
(e) Sellers have made available to Purchaser complete copies of
all material licenses, leases, contracts and other written
instruments, including any material maintenance, enhancement and
services agreements, granting any of the Companies rights in any
Software that is not owned by a Company (collectively, the "Software
--------
Contracts"). Except as provided in Schedule 3.11(e), all material
--------- ----------------
maintenance and support subscription plans are current and no
outstanding material invoices are past due with respect to any of the
Software Contracts. Except as set forth in Schedule 3.11(e), none of
----------------
the Companies, nor, to Seller's knowledge, any other party thereto is
in violation in any material respect of any Software Contract. Except
as set forth in Schedule 3.11(e), there is no unlicensed or
----------------
non-rightful material use by any of the Companies of any off-the-shelf
software.
3.12 Contracts. Schedule 3.12 is an accurate and complete list of all the
--------- -------------
executory Contracts of the following types to which any Company is a party or by
which it is bound, or to which any of its assets is subject:
(a) any Contract which requires a payment by any party in excess
of, or a series of payments by any Company which in the aggregate
exceed, $100,000 in any calendar year or provides for the delivery of
goods or performance of services, or any combination thereof, to any
Company having a value in excess of $100,000 in any calendar year
(excluding all Contracts with customers of the Companies other than
Contracts with the Major Customers set forth in Schedule 3.21);
-------------
(b) any collective bargaining agreement;
(c) any Contract with a sales representative, manufacturer's
representative, distributor, dealer, broker, sales agency, advertising
agency or other Person engaged in sales, distributing or promotional
activities, or any Contract to act as one of the foregoing on behalf
of any Person;
(d) any Contract pursuant to which any Company has made or will
make loans, or has or will have incurred or secured indebtedness for
-19-
borrowed money or become a guarantor or surety or pledged its credit
for or otherwise become responsible with respect to any undertaking of
another Person (except for the negotiation or collection of negotiable
instruments in transactions in the ordinary course of business);
(e) any Contract involving a partnership, joint venture or other
cooperative undertaking;
(f) any Contract with an Affiliate (other than another Company);
(g) any Contract involving any restrictions with respect to the
geographical area of operations or scope or type of business of any
Company or that requires any of the Companies to deal exclusively with
any third party;
(h) any power of attorney or Contract with any Person pursuant to
which such Person is granted the authority to act for or on behalf of
any Company or any Company is granted the authority to act for or on
behalf of any Person; or
(i) any confidentiality or non-disclosure agreement (except those
entered into in connection with the sale of the Business and those
Contracts that contain confidentiality or non-disclosure provisions
which are incidental to the primary purpose of such Contract).
Sellers have made available to Purchaser accurate and complete copies of each
Contract listed in Schedules 3.11(e) and 3.12. Except as set forth in Schedule
----------------- ---- --------
3.12, (i) each such Contract is in full force and effect and constitutes a
----
legal, valid and binding obligation of the Company which is party thereto and,
to Seller's knowledge, the other parties thereto, enforceable in accordance with
its terms, subject to Enforceability Limitations, and (ii) as of the date
hereof, no party to any such Contract has given any of the Companies written
notice that it intends to terminate such Contract prior to the end of the
current term of such Contract.
3.13 Permits. Schedule 3.13 is an accurate and complete list of all
------- -------------
material Permits held by the Companies. All the Permits so listed are in full
force and effect and none of the Companies has received any notice that any such
Permit will be revoked or canceled. Except for the Permits listed in Schedule
--------
3.13 and except for such Permits the failure to have which would not be
----
reasonably expected to have a Material Adverse Effect, there are no Permits
which are necessary for the lawful operation of the Business as currently
conducted by the Companies.
3.14 Employee Benefit Plans and Employment Agreements.
------------------------------------------------
(a) General. Except as listed in Schedule 3.14, none of the
------- -------------
Companies is a party to, contributes to or participates in:
-20-
(i) any "employee benefit plan" (as defined in section 3(3)
of ERISA);
(ii) any retirement or deferred compensation plan, incentive
compensation plan, stock plan, unemployment compensation plan,
vacation pay, severance pay, bonus or benefit arrangement, insurance
or hospitalization program or any other fringe benefit arrangements
for any current or former employee or director, which does not
constitute an employee benefit plan;
(iii) any employment agreement, other than the basic forms
of employment agreement, substantially in the forms attached in
Schedule 3.14, entered into by substantially all employees of the
-------------
Business; or
(iv) any retirement plan governed by the laws of Bermuda
other than that which provides for defined contributions to be made by
Hemisphere-Bermuda and its employees from time to time.
Except as set forth in Schedule 3.14, each employee benefit plan in which
-------------
employees of the Companies participate is sponsored by a Company.
(b) Plan Documents and Reports. A true and correct copy of each
--------------------------
of the plans, arrangements and agreements listed in Schedule 3.14
-------------
(collectively, the "Benefit Plans"), each as in effect on the date
-------------
hereof, has been made available to Purchaser.
(c) Compliance With Laws; Liabilities. As to all Benefit Plans,
---------------------------------
except as set forth in Schedule 3.14:
-------------
(i) all Benefit Plans comply, and have been administered in
compliance, in all material respects with all requirements of Law
applicable thereto; provided that in the case of the
--------
Hemisphere-Ireland Retirement Benefits Scheme (the "Irish Plan"),
----------
"Law" shall mean the Irish Pensions Xxx 0000;
(ii) there have been no "prohibited transactions" (as
described in section 406 of ERISA or section 4975 of the Code) with
respect to any Benefit Plan to which either US Company is party in
which either US Company participates or with respect to which either
US Company has any liability (each a "US Benefit Plan");
---------------
(iii) there are no actions, suits or claims (other than
routine claims for benefits) pending, or, to Seller's knowledge,
threatened, involving the Benefit Plans or the assets thereof;
(iv) none of the US Benefit Plans is subject to title IV of
ERISA and none of the US Benefit Plans is a multiemployer plan (as
-21-
defined in section 3(37) of ERISA) and neither US Company nor any
ERISA Affiliate of either US Company maintains or has any liability
with respect to any employee pension benefit plan (as defined in
section 3(2) of ERISA) which is subject to Title IV of ERISA,
including a multiemployer plan;
(v) all Benefit Plans have been administered in all material
respects in compliance with the applicable reporting, disclosure and
all other requirements of applicable law;
(vi) all contributions required by the terms of any Benefit
Plan have been made to such Benefit Plan in accordance with its terms;
and
(vii) the Irish Plan is a defined contribution scheme as
defined under Section 2 of the Irish Xxxxxxxx Xxx, 0000.
3.15 Employment and Labor Matters.
----------------------------
(a) Schedule 3.15 contains an accurate and complete list of the
-------------
names, titles or job descriptions, for all the officers and directors
or managers of each Company. Sellers have made available to Purchaser
the annual compensation for the preceding fiscal year for all the
officers and directors or managers of each Company disclosed in
Schedule 3.15. Except as described in Schedule 3.15, there is, and
------------- -------------
since January 1, 2001 there has been, no labor strike, labor dispute,
concerted labor slow-down, work stoppage or other material labor
difficulty pending or, to Seller's knowledge, threatened, against any
Company. Except as disclosed in Schedule 3.15, none of the employees
-------------
of any Company is covered by any collective bargaining agreement, and,
to Seller's knowledge, no attempt is currently being made or since
January 1, 2001 has been made to organize any employees of any Company
to form or enter a labor union or similar organization.
(b) Except as disclosed in Schedule 3.15, each of the Companies
-------------
has complied in all material respects with all applicable Laws
(including labor laws and including the Bermuda Employment Act), and
regulations relating to the hiring and employment of employees,
including those related to discrimination, harassment, wages, hours
and collective bargaining, and to the knowledge of Sellers, none of
the Companies are liable for any material penalties or damages for
failure to comply with any of the foregoing. There are no unfair labor
practice claims or charges pending or, to the knowledge of Sellers,
threatened involving any of the Companies.
(c) Except as disclosed in Schedule 3.15(c), as of the date
----------------
hereof, (i) no executive officer or significant employee set forth in
Schedule 3.15(c)
----------------
-22-
of any of the Companies has given any such Company written notice that
he or she intends to leave his or her employment with such Company as
a result of the consummation of the transactions contemplated hereby
or for any other reason, and (ii) to the knowledge of Sellers, no such
person referred to in clause (i) above has expressed any present
----------
intention to leave the employ of such Company.
(d) Except as described in Schedule 3.15(d) and within the past
----------------
two years, none of the Companies have received any written citation
for violations of the Occupational Safety and Health Act of 1970, 29
U.S.C. sec. 651 et seq. (the "OSHA Act"), any regulation promulgated
--------
pursuant to the OSHA Act, or similar foreign law and any rule or
regulation promulgated pursuant thereto, or paid any fines or
penalties with respect to any such citation. Except as described on
Schedule 3.15(d) and within the past two years: (i) there have not
----------------
been any inspections of any of the facilities of any of the Companies
by representatives of the Occupational Safety and Health
Administration ("OSHA") or any other similar Governmental Authority
----
vested with authority to enforce any statute, ordinance, rule or
regulation establishing standards of workplace safety; (ii) no
representative of OSHA or any other such Governmental Authority has
attempted to conduct any such inspection or sought permission from any
of the Companies to inspect any of such Company's facilities for that
purpose; (iii) none of the Companies has been notified of any
complaint or charge filed by any employee or employee representative
with OSHA or such similar authority, or any such Governmental
Authority which alleges that any of the Companies have violated in any
material respect the OSHA Act, or any other statute, ordinance, rule
or regulation establishing standards of workplace safety; and (iv)
none of the Companies maintains any condition, process, practice or
procedure at any of its facilities which violates in any material
respect either the OSHA Act or any other statute, ordinance,
regulation or rule establishing standards of workplace safety.
3.16 Taxes. Except as disclosed in Schedule 3.16:
----- -------------
(a) The US Companies and the US Holding Company have filed or
will timely file with respect to the business of Hemisphere-NY and
Hemisphere-Boston all material Tax Returns required to be filed for
periods ending on or prior to the Closing Date. Hemisphere-Ireland has
filed or will timely file with respect to the business of
Hemisphere-Ireland all material Tax Returns required to be filed for
periods ending on or prior to the Closing Date. All such Tax Returns
are or will be true, correct and complete in all material respects.
All Taxes shown as due and owing on all Tax Returns have been or will
be paid. None of the Companies has requested an extension of time
within which to file any Tax Return in respect of any taxable year
which has not since been filed.
-23-
(b) No federal, state, local or foreign audit or other
administrative proceeding or court proceeding exists with regard to
any Taxes or Tax Returns of any Company. None of the Companies has
received any written notice that an audit or other administrative
proceeding is pending or, to Seller's knowledge, threatened with
respect to any Taxes due from or with respect to any Company or any
Tax Return filed by or with respect to any Company. None of the
Companies has granted or been requested to grant any waiver of any
statutes of limitations applicable to any claim for Taxes.
(c) All Tax deficiencies which have been claimed, proposed or
asserted in writing against the Companies have been fully paid or
finally settled.
(d) There are no Tax Liens (other than for Taxes not yet due and
payable) upon the properties or assets of any Company.
(e) None of the Companies is subject to any Tax sharing agreement
(other than with respect to payments specifically provided herein).
(f) None of the properties owned by any of the US Companies (i)
are tax-exempt use property within the meaning of Section 168(h) of
the Code or (ii) have been financed with or directly or indirectly
secure any industrial revenue bonds or debt the interest on which is
tax-exempt under section 103(a) of the Code.
(g) None of the US Companies is a partner in any joint venture,
partnership or other arrangement or Contract that is treated as a
partnership for U.S. federal income tax purposes.
(h) None of the US Companies is a party to any safe harbor lease
within the meaning of section 168(f)(8) of the Code.
(i) True, correct and complete copies of any and all material tax
examination reports and statements of deficiencies assessed against,
or agreed to with respect to any of the Companies or the Business with
respect to the last two (2) years with the U.S. Internal Revenue
Service or any taxing Governmental Authority have been made available
to Purchaser. The Companies or Sellers have retained all records or
other information that may be materially relevant to Tax Returns,
audits or other examinations relating to liability for Taxes.
(j) Other than Hemisphere-NY, the Companies are not and have
never been members of an "affiliated group" within the meaning of
section 1504 of the Code.
-24-
(k) Neither Hemisphere-NY nor Hemisphere-Ireland is required to
include in income any adjustment under section 481(a) of the Code by
reason of a change in accounting method initiated, and to the
knowledge of Sellers the U.S. Internal Revenue Service has not
proposed any such adjustment or change in accounting method. None of
the Companies has a private letter ruling request, Technical Advice
Memorandum or Field Service Request or similar request pending with
the U.S. Internal Revenue Service or similar authority.
(l) All material elections with respect to Taxes affecting
Hemisphere-NY and Hemisphere-Ireland as of the date hereof are set
forth in Schedule 3.16. No new elections with respect to Taxes, or any
-------------
change in current elections with respect to Taxes of any of the
Companies or affecting any of the Companies shall be made after the
date of this Agreement without the prior written consent of Purchaser.
(m) All Taxes that any of the Companies is or was required by
applicable Law to withhold and collect, or that any Seller is or was
required to withhold or collect with respect to the Business, have
been duly withheld or collected and, to the extent required, have been
paid to the proper Government Authority, or other person or entity,
except where the failure to withhold or collect Taxes, individually or
in the aggregate, would not have a Material Adverse Effect.
3.17 Compliance with Law. Except as disclosed in Schedule 3.17:
------------------- -------------
(a) excluding Laws relating to employee benefit plans (as matters
relating to Laws applicable to employee benefit plans are as set forth
in Section 3.14), labor and employment matters (as matters relating to
------------
labor and employment Laws are as set forth in Section 3.15) and to
------------
Taxes (as matters relating to Tax Laws are set forth in Section 3.16),
------------
each Company is in compliance in all material respects with all Laws
applicable to or binding on it or any of its assets; and
(b) excluding Laws relating to employee benefit plans (as matters
relating to Laws applicable to employee benefit plans are as set forth
in Section 3.14) labor and employment matters (as matters relating to
------------
labor and employment Laws are as set forth in Section 3.15) and to
------------
Taxes (as matters relating to Tax Laws are set forth in Section 3.16),
------------
since January 1, 2001, no notice from any Governmental Authority has
been received by any Company claiming any violation by such Company of
any material Law.
3.18 Money Laundering. Except as set forth in Schedule 3.18:
---------------- -------------
(a) Each Company is in compliance in all material respects with
the Proceeds of Crime Act of 1997 of Bermuda and the Proceeds of Crime
-25-
(Money Laundering) Regulations 1998 of Bermuda or with other
applicable anti-money laundering Laws in its jurisdiction of
organization.
(b) Each Company has established and presently maintains
anti-money laundering policies and procedures which have been made
available to Purchaser and with which such Company is in compliance in
all material respects.
3.19 Litigation.
----------
(a) Except as disclosed in Schedule 3.19, there are no actions,
-------------
suits, arbitrations, proceedings or other litigation pending, or, to
Seller's knowledge, threatened, or, to Seller's knowledge, pending or
threatened investigations or material adverse claims against, or
specifically affecting in a material respect the Business of, any
Company or any of its officers, directors, managers, employees,
stockholders or members in their capacity as such or any of its
properties before any court or other Governmental Authority. Except as
disclosed in Schedule 3.19, none of the Companies is subject to any
-------------
order, judgment, decree, injunction, stipulation or consent order of
or with any court or other Governmental Authority. None of the
Companies has entered into any agreement to settle or compromise any
proceeding pending or threatened against it which has involved any
obligation other than the payment of money and for which any Company
has any continuing obligation.
(b) There are no actions, suits, proceedings or other litigation
pending, or, to Seller's knowledge, threatened, by or against any
Seller, any Company, or any of their respective Affiliates with
respect to this Agreement or the Related Agreements, or in connection
with the transactions contemplated hereby or thereby.
3.20 Bank Accounts. Schedule 3.20 sets forth an accurate and complete list
------------- -------------
of the names and locations of each bank or other financial institution at which
a Company has an account (giving the account numbers) or safe deposit box and
the names of all Persons authorized to draw thereon or who have access thereto.
3.21 Customers.
---------
(a) Schedule 3.21 sets forth an accurate and complete list of the
-------------
fifty (50) largest customers of the Companies as a whole in terms of
revenue during each of the 2000 and 2001 fiscal years (collectively,
the "Major Customers"), showing the total revenue received by the
---------------
Companies collectively in each such period from each such customer.
(b) Except as set forth in Schedule 3.21, since December 31, 2001
-------------
through the date hereof, there has been no material dispute between
any Company and any Major Customer and no Major Customer has given
-26-
any of the Companies written notice that it intends to cease doing business
with such Company.
3.22 Insurance. Schedule 3.22 hereto contains a list of all insurance
--------- -------------
policies maintained by or for the benefit of any of the Companies. Schedule 3.22
-------------
further lists all claims presently pending that have been made with respect to
the Companies which are covered by any such policy. None of the Companies or
Sellers has received notice of cancellation or non-renewal of any such policy.
3.23 Fairness Opinion. MRM has received an opinion dated the date hereof
----------------
from Credit Suisse First Boston Corporation to the effect that as of the date
hereof, the consideration to be received for the Shares is fair to MRM from a
financial point of view.
3.24 Net Asset Value Calculations. Except as set forth in Schedule 3.24,
---------------------------- -------------
since December 31, 2000, the Companies have performed all net asset value
calculations required to be performed on behalf of their customers correctly and
accurately (excluding errors in net asset value calculation the aggregate effect
of which would not be material in dollar amount).
3.25 Holding Companies. Each of the MRM Sellers is a holding company and
-----------------
has no operations or trade creditors.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Sellers as follows:
4.1 Due Incorporation. Purchaser is a corporation duly organized, validly
-----------------
existing and in good standing under the laws of the State of Delaware, with all
requisite corporate power and authority to own, lease and operate its properties
and to conduct its business as they are now being owned, leased, operated and
conducted. Purchaser is licensed or qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where its ownership of
the Shares or its execution, delivery and performance of this Agreement and its
Related Agreements and the consummation of the transactions contemplated hereby
and thereby require such licensing or qualification and in which the failure to
be so licensed or qualified would have a material adverse effect on Purchaser.
4.2 Due Authorization. Purchaser has all requisite corporate power and
-----------------
authority to enter into this Agreement and its Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Purchaser of this Agreement and its Related
Agreements, and the consummation by Purchaser of the transactions contemplated
hereby and thereby, have been duly and validly approved by its board of
directors and no other corporate actions or proceedings on the part of Purchaser
are necessary to authorize the execution, delivery and performance of this
Agreement and its Related Agreements and
-27-
the consummation of the transactions contemplated hereby and thereby. Purchaser
has duly and validly executed and delivered this Agreement and has duly and
validly executed and delivered (or prior to or at the Closing will duly and
validly execute and deliver) its Related Agreements. Assuming due authorization
(in the case of parties which are not individuals), execution and delivery of
this Agreement and its Related Agreements by the other parties hereto and
thereto, this Agreement constitutes a legal, valid and binding obligation of
Purchaser and its Related Agreements constitute (or upon execution and delivery
by Purchaser will constitute) legal, valid and binding obligations of Purchaser,
in each case, enforceable in accordance with their respective terms, except as
such enforceability may be limited by Enforceability Limitations.
4.3 Consents and Approvals; No Conflict.
-----------------------------------
(a) Except as set forth in Schedule 4.3, no consent,
------------
authorization or approval of, or filing or registration with, any
Governmental Authority or any party to any material Contract with
Purchaser or any of its Affiliates is necessary in connection with the
execution, delivery or performance by Purchaser of this Agreement or
any of its Related Agreements or the consummation by Purchaser of the
transactions contemplated hereby or thereby.
(b) Except as set forth in Schedule 4.3, the execution, delivery
------------
and performance by Purchaser of this Agreement and its Related
Agreements, and the consummation by Purchaser of the transactions
contemplated hereby and thereby, do not and will not (i) violate any
material Law applicable to or binding on Purchaser or any of its
assets; (ii) violate or conflict with, result in a breach or
termination of, constitute a default or give any third party any
additional right (including a termination right) under, permit
cancellation of, result in the creation of any Lien upon any of the
assets of Purchaser under, or result in or constitute a circumstance
which, with or without notice or lapse of time or both, would
constitute any of the foregoing under, any material Contract to which
Purchaser is a party or by which Purchaser or any of its assets are
bound; (iii) permit the acceleration of the maturity of any
indebtedness of Purchaser or indebtedness secured by its assets; or
(iv) violate or conflict with any provision of the certificate of
incorporation or bylaws of Purchaser.
4.4 Litigation. There are no actions, suits, proceedings or other
----------
litigation pending, or, to Purchaser's knowledge, threatened, by or against
Purchaser or any of its Affiliates with respect to this Agreement or the Related
Agreements, or in connection with the transactions contemplated hereby or
thereby.
4.5 Financing. Purchaser has internal resources or financing commitments
---------
from responsible financial institutions available in connection with the
acquisition of the Shares which are in an aggregate amount sufficient to
consummate the transactions contemplated hereby.
-28-
4.6 Purchase for Investment. Purchaser is acquiring the Shares for its own
-----------------------
account for investment and not with a view to, or for offer or resale in
connection with, a distribution of any of the Shares or any "beneficial
interest" in the Shares within the meaning of the Securities Act of 1933, as
amended, and the rules and regulations thereunder, and Purchaser has no present
intent, agreement or understanding to sell, pledge or otherwise dispose of any
Shares or any beneficial interest in any Shares to any other Person. Purchaser
understands that the Shares have not been registered under the Securities Act of
1933, as amended, or applicable foreign or state securities laws, and that none
of the Shares may be offered for sale, sold or otherwise transferred unless they
are registered or otherwise qualified under federal and any applicable foreign
or state securities law or unless an exemption from such registrations or
qualifications is available.
ARTICLE V
COVENANTS
5.1 Implementing Agreement. Subject to the terms and conditions hereof,
----------------------
each party hereto shall take all action required of it to fulfill its
obligations under the terms of this Agreement and shall otherwise use all
commercially reasonable efforts to facilitate the consummation of the
transactions contemplated hereby.
5.2 Access to Information and Facilities. From and after the date of this
------------------------------------
Agreement until the Closing Date, Sellers shall cause the Companies to (a) upon
reasonable notice from Purchaser to the Seller Representative, give Purchaser
and Purchaser's representatives reasonable access during normal business hours
to all of the facilities, properties, books, records and Contracts of the
Companies, (b) upon reasonable notice from Purchaser to the Seller
Representative, make the officers and management employees of the Companies
available to Purchaser and its representatives as Purchaser and its
representatives shall from time to time reasonably request and (c) furnish
Purchaser and its representatives with any and all information concerning the
Companies which is reasonably available to Sellers and which Purchaser or its
representatives reasonably request, provided that nothing herein will obligate
--------
any Seller or Company to take any actions that would unreasonably interrupt the
normal course of its business or to violate any Law or the terms of any Contract
to which any Seller or Company is a party or to which any of their assets are
subject. From and after the date of this Agreement until the Closing Date,
Purchaser shall not have access to or communicate with any customers of the
Companies without the prior written consent of the Seller Representative and
then only on such terms as are consented to by the Seller Representative.
5.3 Preservation of Business. From the date of this Agreement until the
------------------------
Closing Date, except as set forth in Schedule 5.3 or as otherwise contemplated
------------
by this Agreement, Sellers shall cause the Companies to operate only in the
ordinary course of business and in a manner consistent with past practice.
Without limiting the generality of the foregoing, except as set forth in
Schedule 5.3 or as otherwise contemplated by
-----------
-29-
this Agreement, prior to the Closing none of the Companies will, without the
prior written consent of Purchaser, which shall not be unreasonably withheld:
(a) sell, transfer, convey or otherwise dispose of, or encumber
with any Lien (other than Permitted Liens), any asset having an
individual book value in excess of $100,000;
(b) make any changes in its accounting principles or practices
not required by US GAAP;
(c) enter into any transaction with any Seller or any of its
Affiliates except in the ordinary course of business and consistent
with past practice;
(d) authorize for issuance, issue, sell or deliver, or agree or
commit to issue, sell or deliver, any Equity Interests or any other
securities of any Company, or amend any of the terms of any such
Equity Interests or other securities;
(e) split, combine or reclassify any Equity Interests, declare,
set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its Equity
Interests, or redeem or otherwise acquire any Equity Interests or
other securities of any Company;
(f) make any borrowings or incur any indebtedness for borrowed
money, or assume, guarantee, endorse (except for the negotiation or
collection of negotiable instruments in the ordinary course of
business and consistent with past practice) or otherwise become liable
for any obligations of any other Person;
(g) make any loans or capital contributions to, or investments
in, any other Person;
(h) enter into, adopt, amend or terminate any bonus, profit
sharing, compensation, termination, stock option, stock appreciation
right, restricted stock, performance unit, pension, retirement,
deferred compensation, employment, severance or other employee benefit
agreement, trust, plan or fund for the benefit of any director,
manager, officer or employee of the Companies, or increase the
compensation or benefits of any director, manager, officer or employee
of the Companies, or enter into any Contract to do any of the
foregoing, in each case except as required by Law or for scheduled
increases in the ordinary course of business;
(i) acquire or lease any assets having an individual book value
in excess of $100,000;
-30-
(j) pay any amount, perform any obligation or agree to pay any
amount or perform any obligation, in settlement or compromise of any
suit or claim of liability against any Company or any of their
respective directors, managers, officers or employees;
(k) merge into or with or consolidate with any other Person;
(l) make any change in its certificate of formation or limited
liability company agreement or other organizational documents;
(m) adopt any collective bargaining agreement; or
(n) enter into any other Contract other than in the ordinary
course of business and consistent with past practice.
5.4 Consents and Approvals.
----------------------
(a) From the date of this Agreement until the Closing Date, each
Seller shall, and shall cause each Company to, use commercially
reasonable efforts to obtain all consents, approvals, certificates and
other documents required in connection with the performance by it of
this Agreement and its Related Agreements and the consummation by it
of the transactions contemplated hereby and thereby. From the date of
this Agreement until the Closing Date, Purchaser shall use
commercially reasonable efforts to obtain all consents, approvals,
certificates and other documents required in connection with the
performance by it of this Agreement and its Related Agreements and the
consummation by it of the transactions contemplated hereby and
thereby. Each Seller shall, or shall cause each Company to, promptly
make all filings, applications, statements and reports to all
Governmental Authorities and other Persons that are required to be
made prior to the Closing Date by or on behalf of such Seller or such
Company pursuant to any applicable Law or Contract in connection with
this Agreement, its Related Agreements and the transactions
contemplated hereby and thereby. Purchaser shall promptly make all
filings, applications, statements and reports to all Governmental
Authorities and other Persons that are required to be made prior to
the Closing Date by or on behalf of Purchaser or any of its Affiliates
pursuant to any applicable Law or Contract in connection with this
Agreement, its Related Agreements and the transactions contemplated
hereby and thereby.
(b) Purchaser and Sellers agree to cooperate with each other and
to take any and all steps necessary to obtain as soon as practicable
each and every consent or approval under any antitrust, competition or
other Law that may be asserted by any antitrust, competition or other
Governmental Authority so as to enable the parties to expeditiously
close the transactions contemplated hereby, provided that Purchaser
--------
shall not
-31-
be required to (i) hold separate or divest any assets, or license or
enter into any arrangement or take any other action, that would have
the effect of reducing revenues of Purchaser or any of its Affiliates
or revenues of the Business in excess of $250,000 per annum, or that
would require Purchaser to incur expenses in excess of $250,000, or
(ii) participate in any litigation or protracted regulatory
proceeding.
5.5 Resignation of Officers and Directors. On or prior to the Closing Date,
-------------------------------------
MRM Sellers shall cause each person who is an officer, director or member of the
board of managers of any MRM Seller or any of their respective Affiliates (other
than the Companies) and who is also an officer, director or member of the board
of managers of, or a non-corporate trustee or fiduciary of any plan or
arrangement involving employee benefits of, one or more of the Companies to
tender his or her resignation from all such positions with the Companies
effective as of the Closing.
5.6 Trademarks.
----------
(a) No Seller is granting Purchaser or any Company a license to
use, no Seller is transferring to Purchaser or any Company, and
neither Purchaser nor the Companies shall have any right, title or
interest in or to, any trade names, trademarks, service names or
service marks (including the MRM logo or the name "Mutual Risk
Management" or "MRM" or any variation or derivation thereof, or any
Internet domain name, logo, name, variation or derivation
incorporating any such logo, name, xxxx, variation or derivation) of
any Seller or any of their respective Affiliates (other than the
Companies). Purchaser agrees to cause the Companies, from and after 30
days after the Closing, to cease to use, directly or indirectly, and
in any manner or form (including as a corporate or fictitious name,
Internet domain name, trade name, trademark, service name or service
xxxx), the MRM logo, the names "Mutual Risk Management" and "MRM" and
any variations and derivations thereof, and any Internet domain name,
logo, name, variation and derivation incorporating any such logo,
name, xxxx, variation or derivation; provided, that the Companies may
--------
use any service brochures which are in existence on the Closing Date
and bear any "MRM" names or logos, for a period of ninety (90) days
after the Closing Date.
(b) Purchaser acknowledges that Sellers and their respective
Affiliates would be irreparably harmed by any breach of this Section
-------
5.6 and that any relief under Article X will be inadequate to
--- ---------
compensate Sellers or such Affiliates for any such breach.
Accordingly, Purchaser (on behalf of itself and its Affiliates) agrees
that, in addition to any relief available under Article X, Sellers and
---------
their respective Affiliates shall be entitled, without the necessity
of proving actual damages or posting any bond, to injunctive relief
against Purchaser (or its Affiliates) in the event of any breach or
threatened breach by Purchaser (or its Affiliates) of its
-32-
covenants and agreements in this Section 5.6 and Purchaser (on behalf
-----------
of itself and its Affiliates) consents to the entry thereof.
5.7 Intercompany Payables and Receivables.
-------------------------------------
(a) At or prior to the Closing, Sellers shall cause the Companies
to distribute to the holders of Equity Interests in the Companies, or
transfer to any of the MRM Sellers and their respective Affiliates,
all receivables shown on the December 31, 2001 balance sheet included
in the Financial Statements as "Due from Affiliated Companies", set
off such receivables against payables owed to the MRM Sellers and
their respective Affiliates or release the MRM Sellers and their
respective Affiliates therefrom.
(b) At or prior to the Closing, Sellers shall cause the Companies
to pay all payables then owing to the MRM Sellers or their respective
Affiliates, or to set off such payables against receivables then owing
to the MRM Sellers and their respective Affiliates, regardless of
whether the payment or setting off of such payables would be in the
ordinary course of business and consistent with past practice.
5.8 Brokers. Regardless of whether the Closing shall occur, (a) each Seller
-------
shall indemnify Purchaser and its Affiliates against, and hold Purchaser and its
Affiliates harmless from, any and all liability for any brokers' or finders'
fees or other commissions arising with respect to brokers or finders retained or
engaged by such Seller or any of its Affiliates in respect of the transactions
contemplated by this Agreement, including Credit Suisse First Boston
Corporation, and (b) Purchaser shall indemnify each Seller and their respective
Affiliates against, and hold each Seller and their respective Affiliates
harmless from, any and all liability for any brokers' or finders' fees or other
commissions arising with respect to brokers or finders retained or engaged by
Purchaser or any of its Affiliates in respect of the transactions contemplated
by this Agreement.
5.9 Preservation of Books and Records; Access.
-----------------------------------------
(a) For a period of seven years after the Closing Date, Purchaser
shall preserve and retain, or cause the Companies to preserve and
retain, all corporate, accounting, legal, auditing and other books and
records of the Companies (including any documents relating to any
governmental or non-governmental claims, actions, suits, proceedings
or investigations) relating to the conduct of the business and
operations of the Companies prior to the Closing Date. Notwithstanding
the foregoing, during such seven-year period, Purchaser may dispose of
any such books and records which are offered to, but not accepted by,
the Seller Representative.
(b) After the Closing Date, Purchaser shall cause the Companies
to permit the MRM Sellers and their authorized representatives to have
reasonable access to, and to inspect and copy, all
-33-
books and records referred to in Section 5.9(a) and to meet with
--------------
officers and employees of Purchaser and the Companies on a mutually
convenient basis in order to obtain explanations with respect to such
books and records and to obtain additional information and to call
such officers and employees as witnesses.
5.10 Employees; Employee Benefit Plans.
---------------------------------
(a) Purchaser shall be responsible for any liability, cost or
expense arising from any action regarding any employee of the
Companies at or after the Closing, including any liability under the
Worker Adjustment and Retraining Notification Act, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of
1964, the National Labor Relations Act, the Fair Labor Standards Act,
any state or local Laws that are similar to any of the foregoing and
any and all common law causes of action including those for breach of
contract, defamation, or retaliatory discharge.
(b) Effective as of the Closing Date, the US Companies (and their
respective employees) shall cease to participate in the US Benefit
Plans. After the Closing Date, Purchaser shall provide all of the
employees of the Companies ("Continuing Employees") with Purchaser's
--------------------
standard employee benefit plans, programs, policies and arrangements
which are applicable to employees of Purchaser and its Affiliates of
the same category (the "Purchaser's Benefit Plans"); provided,
------------------------- --------
however, that Purchaser may provide that participation in Purchaser's
employee stock purchase plan shall be made available to Continuing
Employees as soon as practicable, but in no event later than the first
day of the first full calendar quarter beginning after the Closing
Date. Prior to the Closing Date, Sellers shall cause the Companies to,
upon reasonable notice from Purchaser to the Seller Representative,
grant to Purchaser reasonable access to the Continuing Employees,
during normal business hours, for purposes of enrolling the Continuing
Employees in Purchaser's Benefit Plans and Purchaser's 401(k) Plan (as
hereinafter defined).
(c) Effective as of the Closing Date, Purchaser shall make
available to Continuing Employees of the US Companies ("US Continuing
-------------
Employees") a defined contribution plan of Purchaser (the "Purchaser's
--------- -----------
401(k) Plan") which is intended to be qualified under section 401(a)
-----------
of the Code. US Continuing Employees who receive an eligible rollover
distribution (within the meaning of section 402(f)(2) of the Code)
which constitutes a direct rollover distribution within the meaning of
section 401(a)(31) of the Code and regulations thereunder from the
defined contribution plan maintained by MRM in which US Continuing
Employees were eligible to participate immediately prior to the
Closing Date (the "MRM 401(k) Plan") shall, subject to the provisions
---------------
of section 402 of the Code, be permitted to make a rollover
contribution to the Purchaser's
-34-
401(k) Plan. To the extent that, pursuant to the foregoing provisions
of this paragraph (c), a US Continuing Employee is eligible to make a
-------------
rollover contribution of a direct rollover distribution to the
Purchaser's 401(k) Plan, such rollover contribution may include
promissory notes for loans made to such US Continuing Employee under
the terms of the MRM 401(k) Plan.
(d) To the extent applicable with respect to the Purchaser's
Benefit Plans, US Continuing Employees (and their eligible dependents)
shall be given credit for their service with the US Companies and
their Affiliates (i) for all purposes to the extent such service was
taken into account under a corresponding US Benefit Plan, and (ii) for
purposes of satisfying any waiting periods, evidence of insurability
requirements, or the application of any pre-existing condition
limitations and shall be given credit for amounts paid under a
corresponding Benefit Plan during the same period for purposes of
applying deductibles, copayments and out-of-pocket maximums as though
such amounts had been paid in accordance with the terms and conditions
of the Purchaser's Benefit Plans. Notwithstanding the foregoing
provisions of this paragraph (d), service and other amounts shall not
-------------
be credited to US Continuing Employees (or their eligible dependents)
to the extent the crediting of such service or other amounts would
result in the duplication of benefits, and Purchaser's Benefit Plans
shall not be required to waive any pre-existing condition limitation
with respect to any US Continuing Employees (or their eligible
dependents) if, after taking into account the foregoing provisions of
this paragraph (d), such pre-existing condition limitation would not
-------------
be waived for other participants in applicable Purchaser's Benefit
Plans.
(e) After the Closing Date, Purchaser agrees that the Non-US
Companies or Purchaser shall be liable for all benefits payable under
all employee benefit plans established or maintained by the Non-US
Companies, the Non-US Companies' workers' compensation obligations and
all liabilities and obligations under and with respect to the Benefit
Plans other than the US Benefit Plans.
(f) It is understood and agreed that all provisions contained in
this Agreement with respect to employee benefit plans or employee
compensation are included for the sole benefit of the respective
parties hereto and do not and shall not create any right in any
employee or any other Person, including any participant in any Benefit
Plan or any other employee benefit or compensation plan or any
beneficiary thereof.
5.11 MRM Guaranties. At or prior to the Closing, Purchaser shall use
--------------
commercially reasonable efforts to cause each MRM Seller and their respective
Affiliates (other than the Companies) to be released, effective as of the
Closing, from all guaranty, surety and other similar obligations with respect to
obligations of the Companies listed on Schedule 5.11 (the "MRM Guaranties").
------------- --------------
After the Closing, Purchaser shall (and shall cause the Companies to) indemnify
each MRM Seller and
-35-
their respective Affiliates against, and hold each MRM Seller and their
respective Affiliates harmless from, any and all Losses incurred or suffered by
such MRM Seller or such Affiliate arising out of any such MRM Guaranty.
5.12 Old Irish Lease. After the Closing, Purchaser shall, and shall cause
---------------
Hemisphere-Ireland to, use commercially reasonable efforts to sublet the office
space located on the 2nd and 4th floors of Xxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxx that is under lease to Hemisphere-Ireland pursuant to
the leases described in more detail in Schedule 3.9 (collectively, the "Old
------------ ---
Irish Lease"), or to terminate such Old Irish Lease, provided that neither
-----------
Purchaser nor Hemisphere-Ireland shall sublet such office space or terminate the
Old Irish Lease without the consent of the Seller Representative.
5.13 Interim Financial Statements. From the date of this Agreement until
----------------------------
the Closing Date, Sellers shall cause the Companies to provide Purchaser with
copies of the monthly management report and any interim financial statements for
periods and dates after December 31, 2001 with respect to the Companies that are
prepared by or for the Companies as such reports or financial statements are
prepared.
5.14 Non-Competition. For a period of five (5) years from and after the
---------------
Closing Date (the "Non-Competition Period"), none of the MRM Sellers or their
----------------------
Affiliates (excluding the Management Stockholders) will, directly or indirectly,
anywhere in the world, conduct any business, or own, manage, operate, join,
control, finance, participate in the ownership, management, operation, control
or financing of, or become or be connected with or otherwise become or be
interested in or associated with, any Person which is at such time engaged in
competition with the Business as conducted by the Companies as of the Closing
Date; provided, however, that:
-------- -------
(a) the restrictions contained in this Section 5.14 shall not
------------
apply to the present operations or activities of any MRM Seller or any
of its Affiliates (other than the Companies), including the provision
by any MRM Seller or any of its Affiliates of incidental fund
administration services as part of its trust and corporate services
business;
(b) the restrictions contained in this Section 5.14 shall not
apply to the operations or activities of any Person not affiliated
with an MRM Seller (an "Acquiring Person") which acquires Equity
Interests or assets of either MRM Seller or any of their Affiliates,
or any Affiliate of such Acquiring Person (other than the MRM Sellers
and their Affiliates prior to such acquisition) and which immediately
prior to such acquisition is engaged in operations or activities in
competition with the Business;
(c) any of the MRM Sellers or their Affiliates may sell or
otherwise provide goods and services to competitors of the Business,
so long as the sale or provision of such goods and services in and of
itself does not directly compete with the Business;
-36-
(d) any of the MRM Sellers or their Affiliates may purchase fund
administration services, securities services and corporate secretarial
services from competitors of the Business; and
(e) any of the MRM Sellers or their Affiliates may, after the
Closing Date, own securities of any competitor of the Business (or its
corporate parent) which is listed on a national or foreign securities
exchange or regularly traded in the over-the-counter market, so long
as its total holdings in any such competitor (or its corporate parent)
do not comprise more than 5% of the outstanding securities of any
class of such competitor and provided that it does not have the power
to control or direct the management or affairs of such competitor. It
is recognized by the MRM Sellers that the Business is or will be after
the Closing Date conducted throughout the entire world, and that more
limited geographical limitations on this non-competition covenant are
therefore not appropriate.
Each MRM Seller represents and warrants to Purchaser that the present operations
or activities of any MRM Seller or any of its Affiliates (other than the
Companies) that overlap with that of the Business are only incidental to the
other businesses of any MRM Seller or any of its Affiliates.
5.15 Use of Hemisphere Name.
----------------------
After the Closing Date, Sellers shall use commercially reasonable efforts
to promptly (a) change the name of The Hemisphere Trust Company Limited, an
indirect subsidiary of MRM ("Hemisphere Trust"), to discontinue use of
----------------
"Hemisphere," (b) cause Hemisphere Trust to revise its product literature to
delete all references to "Hemisphere" and (c) cause Hemisphere Trust to change
its signage and stationery and otherwise discontinue use of "Hemisphere."
5.16 Negotiation With Others.
-----------------------
During the period between the date of this Agreement and the earlier to
occur of the Closing or the termination of this Agreement pursuant to Section
-------
9.1, none of the MRM Sellers or the Companies or their respective Affiliates
---
(collectively, the "Specified Parties") shall, or shall permit any agent or
-----------------
other representative of any of the Specified Parties to, directly or indirectly:
(a) solicit, initiate or engage in discussions or negotiations
with any Person other than Purchaser or its Affiliates or their
respective directors, officers, employees, representatives or agents
(whether such negotiations are initiated by any of the Specified
Parties or otherwise), or intentionally take any other action to
facilitate the efforts of any Person, other than Purchaser or its
Affiliates, relating to the possible acquisition of any of the
Companies, whether by way of merger or consolidation, purchase of
capital stock, purchase or lease of assets (excluding sales of assets
in the ordinary course of business not in violation of other
-37-
provisions of this Agreement) or otherwise, or of any portion of the
capital stock or assets (excluding sales of assets in the ordinary
course of business not in violation of other provisions of this
Agreement) of the Companies, other than as permitted under this
Agreement (any such acquisition being referred to as an "Acquisition
-----------
Transaction");
-----------
(b) provide non-public information to any Person, other than to
Purchaser or its Affiliates, relating to a possible Acquisition
Transaction;
(c) enter into an agreement with any Person, other than Purchaser
or any of its Affiliates, relating to or providing for a possible
Acquisition Transaction;
(d) consummate an Acquisition Transaction with any Person other
than Purchaser or any of its Affiliates; or
(e) make or authorize any statement, recommendation or
solicitation in support of any possible Acquisition Transaction not
involving Purchaser or its Affiliates.
5.17 Indemnity Agreement. On or prior to the Closing Date, Purchaser shall
-------------------
enter into an agreement with each employee listed in Schedule 5.17 substantially
-------------
in the form of Exhibit D attached hereto indemnifying such employees from and
---------
against any and all claims relating to the period on or after the Closing Date
that may be payable by such employee as a consequence of such employee's
position as a director, officer of trustee of one or more clients of the
Business.
5.18 Remaining Shares. From and after the date of this Agreement until the
----------------
Second Closing (hereinafter defined) none of the Other Stockholders shall
create, suffer or permit to be created any Lien on (a) any of the Remaining
Shares or (b) any of the rights of such Other Stockholder in or to such
Remaining Shares, whether arising under the Hemisphere-Bermuda 2001 Restricted
Stock Plan or the related Restricted Stock Agreement or otherwise.
5.19 Acceleration of Vesting of Remaining Shares; Forfeiture of Remaining
--------------------------------------------------------------------
Shares. Purchaser and the Other Stockholders agree that promptly after the
------
Closing, Purchaser shall cause Hemisphere-Bermuda to take such action as shall
be necessary to (a) fully vest as of the Closing Date the Remaining Shares held
by each of the Other Stockholders under the terms of Hemisphere-Bermuda's 2001
Restricted Plan and the Restricted Stock Agreements pursuant to which such
Remaining Shares were granted to such Other Stockholders and (b) provide with
respect to such vesting that if, on or after the Closing Date and on or prior to
the Second Closing Date, any such Remaining Shares become subject to a Lien that
cannot be discharged by the payment by Purchaser to the holder of such Lien of
all or a portion of the consideration for the Remaining Shares subject to such
Lien payable pursuant to Section 8.4 hereof, such Remaining Shares shall be
-----------
forfeited by the Other Stockholder who is the owner thereof and the vesting
thereof shall be null and void. For avoidance of doubt, for purposes of
-38-
this Section 5.19, a Lien on any Remaining Shares shall affect only such
------------
Remaining Shares and not affect any of the other Remaining Shares which are not
subject to said Lien or the obligations of the Other Stockholders holding such
other Remaining Shares to sell, and Purchaser to purchase, such other Remaining
Shares for the consideration in accordance with Section 8.4, without deduction
-----------
or setoff as a result of such Lien.
5.20 Certain Releases of Remaining Shares to Purchaser Under Stock Escrow
--------------------------------------------------------------------
Agreement. If the Remaining Shares are released to Purchaser pursuant to Section
---------
3(b) of the Stock Escrow Agreement, Purchaser shall distribute such Remaining
Shares (including to itself or to another party which shall have the right
thereto) in accordance with the terms of this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PURCHASER
The obligations of Purchaser under Article II (other than with respect to
----------
the Second Closing) are subject to the satisfaction or waiver by Purchaser of
the following conditions precedent on or before the Closing Date:
6.1 Warranties True as of Both Present Date and Closing Date. The
--------------------------------------------------------
representations and warranties of each Seller contained herein and in its
Related Agreements shall have been accurate, true and correct in all material
respects, except that all such representations and warranties that are qualified
by materiality shall be true and correct, on and as of the date hereof and of
such Related Agreements, respectively, and, except to the extent that any such
representation or warranty is made solely as of the date hereof or as of another
date earlier than the Closing Date, shall also be accurate, true and correct in
all material respects, except that all such representations and warranties that
are qualified by materiality shall be true and correct, on and as of the Closing
Date with the same force and effect as though made by such Seller on and as of
the Closing Date.
6.2 Compliance with Agreements and Covenants. Each Seller shall have
----------------------------------------
performed and complied in all material respects with all of its covenants and
obligations contained in this Agreement and in its Related Agreements to be
performed and complied with by it on or prior to the Closing Date.
6.3 Certificate of Compliance. Each MRM Seller shall have delivered to
-------------------------
Purchaser a certificate dated as of the Closing Date, signed by such MRM Seller,
certifying as to compliance with Sections 6.1 and 6.2.
------------ ---
6.4 Consents and Approvals. Purchaser shall have received written evidence
----------------------
satisfactory to Purchaser that (a) all consents and approvals set forth in
Schedule 3.3(a) and marked with an asterisk have been obtained, and (b) the
---------------
consent of holders owning no less than 95% of the outstanding aggregate
principal amount of 9-3/8% Convertible
-00-
Xxxxxxxxxxxx Xxxxxxxxxx due 2006 issued by MRM to the consummation of the
transactions contemplated hereby has been obtained.
6.5 Actions or Proceedings. No action or proceeding by any Governmental
----------------------
Authority or other Person shall have been instituted, and no Law shall have been
enacted or come into effect, after the date hereof, which enjoins, restrains,
prohibits or results in substantial damages to Purchaser or any of its
Affiliates in respect of, any provision of this Agreement or any Related
Agreement or the consummation of the transactions contemplated hereby or
thereby.
6.6 Opinion of Counsel. Purchaser shall have received opinions, dated the
------------------
Closing Date, of counsel to the MRM Sellers, to the effect set forth in Exhibit
-------
B.
-
6.7 Material Adverse Effect. No Material Adverse Effect shall have occurred
-----------------------
since the date of this Agreement.
6.8 Insolvency. No bankruptcy or insolvency proceeding shall have been
----------
instituted against or by MRM or either of the MRM Sellers and be continuing, and
neither MRM nor either MRM Seller shall have taken any steps to initiate such a
proceeding.
6.9 MRM Escrow Agreement. The Escrow Agent shall have delivered to
--------------------
Purchaser the MRM Escrow Agreement duly executed by the Escrow Agent.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers (other than the Other Stockholders) under
Article II are subject to the satisfaction or waiver by the Seller
----------
Representative of the following conditions precedent on or before the Closing
Date:
7.1 Warranties True as of Both Present Date and Closing Date. The
--------------------------------------------------------
representations and warranties of Purchaser contained herein and in its Related
Agreements shall have been accurate, true and correct in all material respects,
except that all such representations and warranties that are qualified by
materiality shall be true and correct, on and as of the date hereof and of such
Related Agreements, respectively, and shall also be accurate, true and correct
in all material respects on, except that all such representations and warranties
that are qualified by materiality shall be true and correct, and as of the
Closing Date with the same force and effect as though made by Purchaser on and
as of the Closing Date.
7.2 Compliance with Agreements and Covenants. Purchaser shall have
----------------------------------------
performed and complied in all material respects with all of its covenants and
obligations contained in this Agreement and in its Related Agreements to be
performed and complied with by it on or prior to the Closing Date.
-40-
7.3 Certificate of Compliance. Purchaser shall have delivered to the Seller
-------------------------
Representative a certificate of Purchaser dated as of the Closing Date, signed
by Purchaser, certifying as to compliance with Sections 7.1 and 7.2.
------------ ---
7.4 Consents and Approvals. The Seller Representative shall have received
----------------------
all consents and approvals of Governmental Authorities set forth on Schedule
--------
3.3(a) and marked with an asterisk and shall have received written evidence
------
satisfactory to the Seller Representative that all consents and approvals set
forth in Schedule 4.3 have been obtained.
------------
7.5 Actions or Proceedings. No action or proceeding by any Governmental
----------------------
Authority or other Person shall have been instituted, and no Law shall have been
enacted or come into effect, after the date hereof, which enjoins, restrains,
prohibits or results in substantial damages to any Seller or any of its
Affiliates in respect of, any provision of this Agreement or any Related
Agreement or the consummation of the transactions contemplated hereby or
thereby.
7.6 Opinion of Counsel. Sellers shall have received an opinion, dated the
------------------
Closing Date, of counsel to Purchaser, to the effect set forth in Exhibit C.
---------
7.7 MRM Escrow Agreement. The Escrow Agent shall have delivered to the MRM
--------------------
Sellers the MRM Escrow Agreement duly executed by the Escrow Agent.
ARTICLE VIII
CLOSINGS
8.1 Closing. Subject to Articles VI and VII, the Closing shall take place
------- ----------- ---
at the offices of Xxxxxxx Xxxx & Pearman, Hamilton, Bermuda, at 10:00 a.m.,
Atlantic Standard Time three (3) Business Days after the satisfaction or waiver
of the conditions precedent set forth in Sections 6.4 and 7.4. The Closing, and
------------ ---
all transactions to occur at the Closing, shall be deemed to have taken place
at, and shall be effective as of, 11:59 p.m., Atlantic Standard Time, on the
Closing Date.
8.2 Certain Deliveries by Sellers. At the Closing, Sellers shall deliver to
-----------------------------
Purchaser the following:
(a) certificates evidencing all of the Initial Shares which are
certificated, which certificates shall be duly endorsed in blank or
accompanied by duly executed stock powers or stock transfer forms,
assignments of Shares which are uncertificated or other duly executed
instruments of conveyance sufficient to validly transfer the Shares to
Purchaser;
(b) the resignations referred to in Section 5.5;
-----------
(c) a certificate of the secretary or an assistant secretary of
each MRM Seller certifying resolutions of the board of directors or
-41-
managers of such MRM Seller approving and authorizing the execution,
delivery and performance by such MRM Seller of this Agreement and its
Related Agreements and the consummation by such MRM Seller of the
transactions contemplated hereby and thereby (together with an
incumbency and signature certificate regarding the officer(s) signing
on behalf of such MRM Seller);
(d) a certificate of a director of Hemisphere-Ireland certifying
resolutions of the board of directors of Hemisphere-Ireland approving
transfers of the capital stock of Hemisphere-Ireland to Purchaser
(subject to stamping);
(e) the certificate of formation of the US Holding Company,
certified by the Secretary of State of Delaware, and the limited
liability company agreement of the US Holding Company, certified by
the secretary or an assistant secretary of the US Holding Company;
(f) a certificate of good standing for the US Holding Company
from the State of Delaware;
(g) the certificate of formation of each US Company, certified by
the Secretary of State of Delaware, and the limited liability company
agreement of each US Company, certified by the secretary of an
assistant secretary of such US Company;
(h) a certificate of good standing for each US Company from the
State of Delaware;
(i) the organizational documents of each of the Non-US Holding
Company and the Companies, certified by the applicable Governmental
Authority in their respective jurisdictions of organization or by the
secretary or an assistant secretary of the Non-US Holding Company or
such Company as appropriate;
(j) a certificate of compliance or good standing for each of the
Non-US Holding Company and the Companies (other than
Hemisphere-Ireland) from the applicable Governmental Authority in
their respective jurisdictions of organization;
(k) the MRM Escrow Agreement duly executed by each MRM Seller;
and
(l) such other documents and instruments as may be required by
any other provision of this Agreement or any Related Agreement or as
may reasonably be required to consummate the transactions contemplated
by this Agreement and the Related Agreements.
-42-
8.3 Certain Deliveries by Purchaser. At the Closing, Purchaser shall
-------------------------------
deliver to the Escrow Agent the amounts payable to the Escrow Agent pursuant to
Section 2.2(c) and Section 2.2(d); and shall deliver to Sellers the following:
-------------- --------------
(a) the amount payable to Sellers at the Closing pursuant to
Section 2.2(a) and Section 2.2(b);
-------------- --------------
(b) a certificate of the secretary or an assistant secretary of
Purchaser certifying resolutions of the board of directors of
Purchaser approving and authorizing the execution, delivery and
performance by Purchaser of this Agreement and its Related Agreements
and the consummation by Purchaser of the transactions contemplated
hereby and thereby (together with an incumbency and signature
certificate regarding the officer(s) signing on behalf of Purchaser);
and
(c) certificate of incorporation of Purchaser, certified by the
Secretary of State of Delaware and the by-laws of Purchaser, certified
by the secretary or an assistant secretary of Purchaser;
(d) a certificate of good standing for Purchaser from the State
of Delaware;
(e) copies of all releases of the MRM Guaranties that have been
obtained as of the Closing Date;
(f) the MRM Escrow Agreement duly executed by Purchaser; and
(g) such other documents and instruments as may be required by
any other provision of this Agreement or any Related Agreement or as
may reasonably be required to consummate the transactions contemplated
by this Agreement and the Related Agreements.
8.4 Second Closing.
--------------
(a) Subject to the satisfaction or waiver of the conditions set
forth in Section 8.4(d), the Second Closing shall take place at the
--------------
offices of Xxxxxxx Xxxx & Pearman, Hamilton, Bermuda, at 10:00 a.m.,
Atlantic Standard Time, on a date no earlier than June 3, 2002 and no
later than June 7, 2002 (the "Second Closing Date"). The Second
-------------------
Closing, and all transactions to occur at the Second Closing, shall be
deemed to have taken place at, and shall be effective as of, 11:59
p.m., Atlantic Standard Time, on the Second Closing Date.
(b) At the Second Closing, in consideration for the Remaining
Shares, Purchaser shall pay an aggregate amount equal to Six Million
Eight Hundred Eighteen Thousand Two Hundred Ninety Six Dollars
($6,818,296), less amounts attributable to Remaining Shares that are
----
-43-
forfeited pursuant to Section 5.19, all of which shall be allocated
------------
and disbursed as follows:
(i) The sum of (A) Five Million Seven Hundred Thirty- Three
Thousand Two Hundred Ninety-Six Dollars ($5,733,296), less (B) four
----
and eight-tenths percent (4.8%) of the amount of Shared Expenses
estimated pursuant to Section 2.4, less (C) fees and expenses of the
----------- ----
Escrow Agent under the Stock Escrow Agreement, and (D) less amounts
----
attributable to Remaining Shares that are forfeited pursuant to
Section 5.19, shall be paid to the Management Stockholder
------------
Representative to be disbursed to the Other Stockholders.
(ii) One Million Eighty Five Thousand Dollars ($1,085,000)
shall be paid to the Escrow Agent to be held and distributed pursuant
to the Management Escrow Agreement.
(iii) Four and eight-tenths percent (4.8%) of the amount of
Shared Expenses estimated pursuant to Section 2.4, shall be allocated
-----------
and disbursed to the MRM Sellers pro rata in accordance with their
respective Percentages.
(c) At the Second Closing, the Remaining Shares shall be
delivered to Purchaser in accordance with the provisions of the Stock
Escrow Agreement, and Purchaser shall be entitled to the release by
the Escrow Agent of the Remaining Shares from escrow to Purchaser upon
payment of the consideration for the Remaining Shares as provided
herein.
(d) The obligations of:
(i) Purchaser and the Other Stockholders under Section
-------
8.4(b) are subject to the satisfaction or waiver by the parties on or
------
before the Second Closing Date of the condition that the Closing shall
have taken place;
(ii) the Other Stockholders under Section 8.4(b) are subject
--------------
to the satisfaction or waiver by the Other Stockholders of the
following conditions:
(A) No bankruptcy or insolvency proceeding shall have been
instituted against or by Purchaser and be continuing, and
Purchaser shall not have taken any steps to initiate such a
proceeding; and
(B) No action or proceeding by any Governmental Authority or
other Person shall have been instituted, and no Law shall have
been enacted or come into effect, after the date hereof,
-44-
which enjoins, restrains or prohibits the consummation of
the transactions contemplated by this Section 8.4.
-----------
(iii) Purchaser under Section 8.4(b) are subject to the
--------------
satisfaction or waiver by Purchaser on or before the Second Closing
Date of the following conditions:
(A) Warranties True as of the Closing Date. The
--------------------------------------
representations and warranties of each Other Stockholder
contained herein and in its Related Agreements, except to the
extent that any such representation or warranty is made solely as
of the date hereof or as of another date earlier than the Closing
Date, shall have been accurate, true and correct in all material
respects, except that all such representations and warranties
that are qualified by materiality shall have been true and
correct, on and as of the Closing Date and to the extent such
representation and warranty concerns the Other Stockholders as
Sellers in their individual capacities, on and as of the Second
Closing Date, with the same force and effect as though made by
such Other Stockholder on and as of the Closing Date and the
Second Closing Date.
(B) Compliance with Agreements and Covenants. Each Other
----------------------------------------
Stockholder shall have performed and complied in all material
respects with all of its covenants and obligations contained in
this Agreement and in its Related Agreements to be performed and
complied with by such stockholder on or prior to the Closing Date
and the Second Closing Date.
(C) Certificate of Compliance. Each Other Stockholder shall
-------------------------
have delivered to Purchaser a certificate dated as of the Second
Closing Date, signed by such Other Stockholder, certifying as to
compliance with Sections 8.4(d)(iii)(A) and 8.4(d)(iii)(B).
----------------------- --------------
(D) Actions or Proceedings. No action or proceeding by any
----------------------
Governmental Authority or other Person shall have been
instituted, and no Law shall have been enacted or come into
effect, after the date hereof, which enjoins, restrains,
prohibits the consummation of the transactions contemplated
hereby or thereby.
(e) Notwithstanding the provisions of this Section 8.4, in the
-----------
event that any of the representations and warranties made by any of
the Other Stockholders in Section 3.4 hereof shall not be true and
-----------
correct as of the Second Closing Date, or in the event of a breach by
any of the Other Stockholders of the covenants set forth in Section
-------
5.18 hereof, Purchaser may, in its sole discretion, elect to purchase
----
the Remaining Shares held by any or all of such Other Stockholders in
accordance with
-45-
the provisions of this Section 8.4, in which event Purchaser shall be
-----------
entitled to deduct from the consideration to be paid for such
Remaining Shares any amount thereof that Purchaser shall determine to
be necessary in order for Purchaser to satisfy in full, discharge or
remove any Lien on such Remaining Shares or the rights of such Other
Stockholders therein or thereto.
8.5 No Second Closing. Notwithstanding anything to the contrary herein, if
-----------------
the Closing shall occur at any time after June 7, 2002 then this Agreement shall
be amended (without any action by any of the parties hereto) as follows:
(a) The sixth recital shall be deleted in its entirety and be of
no further force or effect;
(b) The definition of "Closing" in Article I shall be amended to
delete the words "(other than the consummation of the transactions
contemplated herein in accordance with Section 8.4)";
-----------
(c) The definition of "Purchase Price" in Article I shall be
amended to delete the words "and Section 8.4(b)";
-------------
(d) The second sentence of Section 2.1 shall be deleted and of no
force or effect;
(e) All references in this Agreement to "Initial Shares" shall be
deemed references to "Shares";
(f) Section 2.2 shall be amended to provide that the aggregate
amount paid by Purchaser at the Closing shall equal One Hundred Thirty
Three Million Four Hundred Fifty Two Thousand Four Hundred Thirty Two
Dollars ($133,452,432);
(g) The percentage set forth in Section 2.2(a)(iii) shall be
-------------------
amended to thirteen and two-tenths percent (13.2%);
(h) The dollar amounts set forth in Section 2.2(b)(i) and (ii)
shall be amended to Eighteen Million Eight Hundred Fifty Two Thousand
Four Hundred Thirty Two Dollars ($18,852,432) and Three Million
Dollars ($3,000,000), respectively, and the reference "eight and
four-tenths percent (8.4%) of" in Section 2.2(b)(iii) shall be amended
to "thirteen and two-tenths percent (13.2%)";
(i) The dollar amount set forth in Section 2.2(d) shall be
amended to Three Million Dollars ($3,000,000);
(j) The first sentence of Article VI shall be amended to delete
"(other than with respect to the Second Closing)";
-46-
(k) The first sentence of Article VII shall be amended to delete
"(other than the Other Stockholders )";
(l) Section 8.4, and all references in this Agreement thereto,
shall be of no further force or effect;
(m) any other appropriate adjustments to this Agreement to
reflect a single closing wherein Purchaser shall receive all Shares
and the Sellers shall receive the full Purchase Price hereunder; and
(n) Sections 5.18 and 5.19, and all references thereto, shall be
----------------------
deleted and shall be of no further force or effect.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated, and the transactions
-----------
contemplated herein may be abandoned, at any time on or prior to the Closing
Date:
(a) with the mutual written consent of the Seller Representative
and Purchaser;
(b) by the Seller Representative or Purchaser, if the Closing
shall not have taken place on or before June 30, 2002; provided, that
--------
the right to terminate this Agreement under this Section 9.1(b) shall
--------------
not be available to (i) the Seller Representative if the failure of
any MRM Seller to fulfill any of its obligations under this Agreement,
or the breach of or inaccuracy in any representation or warranty by
any MRM Seller in this Agreement, has been the cause of or resulted in
the failure of the Closing to occur on or before such date or (ii)
Purchaser if the failure of Purchaser to fulfill any of its
obligations under this Agreement, or the breach of or inaccuracy in
any representation or warranty by Purchaser in this Agreement, has
been the cause of or resulted in the failure of the Closing to occur
on or before such date; or
(c) by either Purchaser or the Seller Representative if a
Governmental Authority shall have issued an order, decree or ruling or
taken any other action (which order, decree or ruling the parties
hereto shall use their reasonable best 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 becomes final and nonappealable.
In the event of termination by the Seller Representative or Purchaser pursuant
to this Section 9.1 (other than Section 9.1(a)), written notice thereof
----------- --------------
shall be given to the other party.
-47-
9.2 Effect of Termination. If this Agreement is terminated pursuant to
---------------------
Section 9.1, all obligations of the parties hereunder shall terminate,
-----------
except for the obligations set forth in Sections 5.8 (Brokers), 11.1
------------ ----
(Expenses) and 11.8 (Publicity), which shall survive the termination of
----
this Agreement, and except that no such termination shall relieve any party
from liability for any prior intentional breach of this Agreement or any
prior breach of Section 4.5.
-----------
ARTICLE X
INDEMNIFICATION
10.1 Survival. The representations and warranties of the parties hereto
--------
contained herein and in the Related Agreements shall survive the Closing until
September 1, 2003, except that (i) Tax Warranties shall survive until the Tax
Statute of Limitations Date, and (ii) Title and Authorization Warranties shall
survive forever. Neither Purchaser nor any Seller shall have any liability with
respect to claims first asserted in connection with any representation or
warranty after the survival period specified therefor in this Section 10.1.
------------
10.2 Indemnification by Seller. Subject to Section 10.4, each MRM Seller,
------------------------- ------------
jointly and severally, agrees to indemnify Purchaser against, and agrees to hold
Purchaser harmless from, any and all Losses incurred or suffered by Purchaser
arising out of any of the following:
(a) any breach of or any inaccuracy in any representation or
warranty made by any Seller in this Agreement or any Related Agreement
or any document delivered by any Seller at the Closing; provided, that
--------
no MRM Seller shall have any liability under this Section 10.2(a) for
---------------
any breach of or inaccuracy in any representation or warranty unless
(i) in the case of all representations and warranties, except for Tax
Warranties and Title and Authorization Warranties, a notice of
Purchaser's claim is given to the Seller Representative not later than
the close of business on September 1, 2003, and (ii) in the case of
Tax Warranties, a notice of Purchaser's claim is given to the Seller
Representative not later than the close of business on the Tax Statute
of Limitations Date;
(b) any breach of or failure by any Seller to perform any
covenant or obligation of any Seller set out in this Agreement or any
Related Agreement or any document delivered by any Seller at the
Closing; provided, that no MRM Seller shall have any liability under
--------
this Section 10.2(b) for any breach or failure occurring on or prior
---------------
to the Closing Date unless a notice of Purchaser's claim is given to
the Seller Representative not later than the close of business on
September 1, 2003;
(c) any liability for Taxes for a Company attributable to the
Pre-Closing Tax Period in excess of reserves for such Tax liability
set forth in the Financial Statements, provided, however, that,
--------
notwithstanding the
-48-
foregoing, Sellers shall not be liable for any Tax liability arising
out of, resulting from, or accelerated by the Section 338(g) Election
by Purchaser; or
(d) any rent owed by Hemisphere-Ireland under the Old Irish Lease
in excess of any amounts received by Hemisphere-Ireland under any
sublease with respect to the office space covered by the Old Irish
Lease, provided that Purchaser and Hemisphere-Ireland shall have
--------
complied with Section 5.12.
------------
10.3 Indemnification by Purchaser. Purchaser agrees to indemnify each
----------------------------
Seller against, and agrees to hold each Seller harmless from, any and all Losses
incurred or suffered by such Seller arising out of any of the following:
(a) any breach of or any inaccuracy in any representation or
warranty made by Purchaser in this Agreement or any Related Agreement
or any document delivered by Purchaser at the Closing; provided, that
--------
Purchaser shall have no liability under this Section 10.3(a) for any
---------------
breach of or inaccuracy in any representation or warranty unless, in
the case of all representations and warranties, except for Title and
Authorization Warranties, a notice of such Seller's claim is given to
Purchaser not later than the close of business on September 1, 2003;
(b) any breach of or failure by Purchaser to perform any covenant
or obligation of Purchaser set out in this Agreement or any Related
Agreement or any document delivered by Purchaser at the Closing; or
(c) any liability of any Company arising out of the conduct of
the Business after the Closing Date, other than a liability of such
Company which provides the basis for a right of Purchaser to
indemnification under Section 10.2.
------------
10.4 Limitations on Liability of Sellers. Notwithstanding any other
-----------------------------------
provision of this Agreement:
(a) Purchaser shall have the right to payment by the MRM Sellers
under Section 10.2(a) for any inaccuracy in or breach of any
---------------
representation or warranty (other than Title and Authorization
Warranties and Tax Warranties) only if, and only to the extent that,
Purchaser shall have incurred as to all inaccuracies and breaches by
Sellers collectively, indemnifiable Losses in excess of One Million
Dollars ($1,000,000) and then only for such excess.
(b) The MRM Sellers shall not have any liability under or in
connection with this Agreement or the Related Agreements or the
transactions contemplated hereby or thereby (including under Section
-------
10.2(a) or otherwise) for any breach of or inaccuracy in any
-------
representation
-49-
or warranty (other than Tax Warranties) or any related matter in
excess of (i) as to all representations and warranties, with respect
to Sellers collectively, other than Title and Authorization Warranties
and Tax Warranties, Twenty-Five Million Dollars ($25,000,000) in the
aggregate, and (ii) as to Title and Authorization Warranties and the
indemnity obligation of Sellers set forth in Section 10.2(c), the
---------------
Purchase Price in the aggregate; provided, that in no event shall the
--------
MRM Sellers' collective aggregate liability for any and all matters
referred to in clauses (i) and (ii) exceed the Purchase Price in the
----------- ----
aggregate.
(c) None of the Management Stockholders shall have any liability
to Purchaser under this Agreement, it being understood that the MRM
Sellers may be entitled to recover from Management Stockholders
pursuant to the Management Escrow Agreement certain Losses for which
the MRM Sellers have indemnified Purchaser pursuant to this Agreement.
(d) In no event shall any Seller have any liability for punitive
damages.
(e) The sole and exclusive liability and responsibility of
Sellers to Purchaser under or in connection with the Shares, this
Agreement or the Related Agreements or the transactions contemplated
hereby or thereby (including for any breach of or inaccuracy in any
representation or warranty or for any breach of any covenant or
obligation or for any other reason), and the sole and exclusive remedy
of Purchaser with respect to any of the foregoing, shall be as set
forth in this Article X and in Section 5.8 and Section 11.4(b);
--------- ----------- ---------------
provided, that in the event of a breach by any Seller in the
--------
performance of its obligation to consummate the sale of any Shares to
Purchaser in accordance with, and subject to, the terms of this
Agreement, Purchaser shall be entitled to seek injunctive relief
against such Seller to compel such performance. To the extent that
Purchaser or any of its Affiliates has any Losses for which it may
assert any other right to indemnification, contribution or recovery
from any Seller or any of their respective Affiliates (whether under
this Agreement or under any common law or any statute, including any
environmental Law, or otherwise), Purchaser hereby waives, releases
and agrees not to assert such right, and Purchaser agrees to cause
each of its Affiliates to waive, release and agree not to assert such
right.
(f) In no event shall any Seller have any liability for any
claims by or with respect to any past, current or future employees of
any Company (or for any Losses relating thereto) which are first made
after the Closing and which arise out of or in connection with any
injuries to, or deaths or illnesses of, such employees.
10.5 Claims. As promptly as is reasonably practicable after becoming aware
------
of a claim for indemnification under this Agreement not involving a claim, or
the
-50-
commencement of any suit, action or proceeding, of the type described in Section
-------
10.6, but in any event no later than ten (10) Business Days after first becoming
----
aware of such claim, the Indemnified Person shall give notice to the
Indemnifying Person of such claim, which notice shall specify the facts alleged
to constitute the basis for such claim, the representations, warranties,
covenants and obligations alleged to have been breached and a good faith
estimate of the amount that the Indemnified Person seeks hereunder from the
Indemnifying Person. The Indemnifying Person shall have the right to request and
receive from the Indemnified Person such other information that is reasonably
available to the Indemnified Person as may be necessary for the Indemnifying
Person to determine that the limitations in Section 10.4 have been satisfied or
------------
do not apply with respect to such claim; provided, that the failure of the
--------
Indemnified Person to give such notice shall not relieve the Indemnifying Person
of its obligations under this Article X except to the extent (if any) that the
---------
Indemnifying Person shall have been prejudiced thereby.
10.6 Notice of Third Party Claims; Assumption of Defense. The Indemnified
---------------------------------------------------
Person shall give notice as promptly as is reasonably practicable, but in any
event no later than ten (10) Business Days after receiving notice thereof, to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement, which notice shall specify
in reasonable detail the nature and amount of such claim. The Indemnifying
Person shall have the right to request and receive from the Indemnified Person
such other information that is reasonably available to the Indemnified Person as
may be necessary for the Indemnifying Person to determine that the limitations
in Section 10.4 have been satisfied or do not apply; provided, that the failure
------------ --------
of the Indemnified Person to give such notice shall not relieve the Indemnifying
Person of its obligations under this Article X except to the extent (if any)
---------
that the Indemnifying Person shall have been prejudiced thereby. The
Indemnifying Person may, at its own expense, (a) participate in the defense of
any such claim, suit, action or proceeding and (b) upon notice to the
Indemnified Person, at any time during the course of any such claim, suit,
action or proceeding, assume the defense thereof with counsel of its own choice
and in the event of such assumption, shall have the exclusive right, subject to
clause (i) of Section 10.7, to settle or compromise such claim, suit, action or
---------- ------------
proceeding; provided, that the Indemnifying Person shall not have the right to
--------
assume the defense of any such claim, suit, action or proceeding if at such
time, it is reasonably foreseeable that such claim, suit, action or proceeding
would result in damages in excess of $7.5 million of the amount which would be
indemnifiable by the Indemnifying Person under this Agreement with respect to
such claim, suit, action or proceeding. If the Indemnifying Person assumes such
defense, the Indemnified Person shall have the right (but not the duty) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Person. Whether or not
the Indemnifying Person chooses to defend or prosecute any such claim, suit,
action or proceeding, all of the parties hereto shall cooperate in the defense
or prosecution thereof.
10.7 Settlement or Compromise. Any settlement or compromise made or caused
------------------------
to be made by the Indemnified Person (unless the Indemnifying Person has the
-51-
exclusive right to settle or compromise under clause (b) of Section 10.6) or the
---------- -------------
Indemnifying Person, as the case may be, of any such claim, suit, action or
proceeding of the kind referred to in Section 10.6 shall also be binding upon
------------
the Indemnifying Person or the Indemnified Person, as the case may be, in the
same manner as if a final judgment or decree had been entered by a court of
competent jurisdiction in the amount of such settlement or compromise; provided,
--------
that (i) no obligation, restriction or Loss shall be imposed on the Indemnified
Person as a result of such settlement or compromise without its prior written
consent, which consent shall not be unreasonably withheld, and (ii) the
Indemnified Person will not compromise or settle any claim, suit, action or
proceeding without the prior written consent of the Indemnifying Person, which
consent shall not be unreasonably withheld.
10.8 Time Limits. If any claim for indemnification or other recovery is
-----------
timely asserted under this Article X, the Indemnified Person shall have the
---------
right to bring an action, suit or proceeding with respect to such claim within
two (2) years after the earlier of (a) becoming aware of a claim for
indemnification or (b) receiving notice thereof, as the case may be, but may not
bring any such action, suit or proceeding thereafter.
10.9 Net Losses and Subrogation.
--------------------------
(a) Notwithstanding anything contained herein to the contrary,
the amount of any Losses incurred or suffered by any Indemnified
Person shall be calculated after giving effect to (i) any insurance
proceeds received by the Indemnified Person (or any of its Affiliates)
with respect to such Losses, and (ii) any recoveries obtained by the
Indemnified Person (or any of its Affiliates) from any other third
party. Each Indemnified Person shall exercise commercially reasonable
efforts to obtain such proceeds and recoveries. If any such proceeds
or recoveries are received by an Indemnified Person (or any of its
Affiliates) with respect to any Losses after an Indemnifying Person
has made a payment to the Indemnified Person with respect thereto, the
Indemnified Person (or such Affiliate) shall pay to the Indemnifying
Person the amount of such proceeds or recoveries (up to the amount of
the Indemnifying Person's payment).
(b) Upon making any payment to an Indemnified Person in respect
of any Losses, the Indemnifying Person will, to the extent of such
payment, be subrogated to all rights of the Indemnified Person (and
its Affiliates) against any third party in respect of the Losses to
which such payment relates to the extent of such payment. Such
Indemnified Person (and its Affiliates) and Indemnifying Person will
execute upon request all instruments reasonably necessary to evidence
or further perfect such subrogation rights.
10.10 Purchase Price Adjustments. To the extent permitted by Law, any
--------------------------
amounts payable under Section 10.2 or Section 10.3 shall be treated by Purchaser
------------ ------------
and Sellers as an adjustment to the Purchase Price.
-52-
10.11 Role of Seller Representative. Purchaser shall be entitled to deal
-----------------------------
with and rely on the Seller Representative on all matters involving Sellers in
connection with this Article X.
---------
ARTICLE XI
MISCELLANEOUS
11.1 Expenses. Each party hereto shall bear its own fees and expenses with
--------
respect to the transactions contemplated hereby, provided, that Purchaser shall
--------
pay all sales, use, value added, stamp, transfer, service, recording and like
taxes and fees imposed by any Governmental Authority in connection with the
transfer and assignment of the Shares. Notwithstanding the foregoing, with
respect to fees and expenses incurred by MRM Sellers on behalf of themselves and
the Management Stockholders, and by the Management Stockholders on their own
behalf, in connection with the transactions contemplated by this Agreement, any
Related Agreement, the Management Escrow Agreement and the Agreement and
Release, (a) the MRM Sellers shall pay for the fees of Credit Suisse First
Boston Corporation, and (b) the MRM Sellers shall bear 86.8%, and the Management
Stockholders shall bear 13.2%, of all other expenses incurred by the MRM Sellers
(including any expenses (but not fees) to be paid to Credit Suisse First Boston
Corporation) and the reasonable fees and expenses of legal counsel incurred by
the Management Stockholders (the "Shared Expenses").
---------------
11.2 Amendment. Except as provided in Section 11.15, this Agreement may be
--------- -------------
amended, modified or supplemented but only in writing signed by Purchaser and
the Seller Representative; provided that no such amendment, modification or
--------
waiver shall disproportionately affect the Management Stockholders or any one or
portion of them without the consent of the Management Stockholder Representative
(it being understood and agreed that any amendment, modification or waiver that
would cause the Management Stockholders to bear more than 13.2% of any decrease
in the Purchase Price shall be deemed to have a disproportionate effect on the
Management Stockholders for purposes of this Section 11.2).
------------
11.3 Notices. Any notice, request, instruction or other document to be
-------
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (a) when received if given in person or by courier or a courier
service or (b) on the date of transmission if sent by facsimile transmission
(receipt confirmed) on a Business Day during or before the normal business hours
of the intended recipient, and if not so sent on such a day and at such a time,
on the following Business Day:
(i) If to Purchaser, addressed as follows:
-53-
The BISYS Group, Inc.
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Drinker Xxxxxx & Xxxxxxx LLP
000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
(ii) If to any MRM Seller or the Seller Representative,
addressed as follows:
c/o Mutual Risk Management Ltd.
00 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx XX XX
Xxxxxxxxx: Chairman
Facsimile: (000) 000-0000
with a copy to:
Mayer, Brown, Xxxx & Maw
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(iii) If to any Management Stockholder or the Management
Stockholder Representative, addressed as follows:
c/o Hemisphere Management Limited
Xxxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx XX XX
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
-54-
with a copy to:
c/o Hemisphere Management Limited
Xxxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx XX XX
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
11.4 Disbursements and Payments in Dollars.
-------------------------------------
(a) Except as otherwise provided in a Related Agreement or as
expressly provided herein, all payments pursuant hereto shall be made
by wire transfer in Dollars in same day or immediately available funds
without any set-off, deduction or counterclaim whatsoever.
(b) Not later than one Business Day prior to the Closing and one
Business Day prior to the Second Closing, the MRM Sellers shall
instruct Purchaser in writing as to each of the portions of amounts to
be disbursed by Purchaser pursuant to Sections 2.2(a), 2.2(b),
--------------- ------
8.4(b)(i) and 8.4(b)(iii), as applicable. Purchaser assumes no
--------- -----------
responsibility or liability to any other party to this Agreement with
respect to such written instructions, and Purchaser shall be entitled
to conclusively rely on such instructions in disbursing such amounts.
The MRM Sellers, jointly and severally, agree to indemnify and hold
Purchaser harmless from and against any and all Losses incurred or
suffered by any party hereto resulting, directly or indirectly, from
Purchaser's following such instructions. The limitations on the
indemnification of Purchaser set forth in Sections 10.4(a), 10.4(b)
---------------- -------
and 10.4(d) shall not apply to such indemnification.
-------
11.5 Waivers. The failure of a party hereto at any time or times to require
-------
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by a party of any condition or of any
breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
11.6 Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the parties hereto and their respective successors and permitted
assigns; provided, that, except as otherwise provided herein, no assignment of
--------
any rights or obligations hereunder, by operation of law or otherwise, shall be
made by any Seller without the written consent of Purchaser, or by Purchaser
without the written consent of the Seller Representative; provided, further that
--------
no such assignment shall
-55-
disproportionately affect the Management Stockholders or any one or portion of
them without the consent of the Management Stockholder Representative.
Notwithstanding the foregoing, Purchaser may assign any or all of its rights
(but not its obligations) under this Agreement to one or more of Purchaser's
wholly owned subsidiaries without the consent of any other party hereto,
provided that no such assignment shall increase or otherwise adversely
--------
affect the obligations of any Seller hereunder. Notwithstanding the foregoing,
the MRM Sellers may grant a security interest in all of their respective rights
to receive moneys under this Agreement to Bank of America, N.A., as collateral
agent for the lenders party to the Credit Agreement and for the holders of the
Debentures, without the consent of any other party hereto.
11.7 No Third Party Beneficiaries. This Agreement is solely for the benefit
----------------------------
of the parties hereto and, to the extent provided herein, their respective
Affiliates, and no provision of this Agreement shall be deemed to confer upon
other third parties any remedy, claim, liability, reimbursement, cause of action
or other right.
11.8 Publicity. Prior to the Closing Date, no public announcement or other
---------
publicity regarding the existence of this Agreement or its contents or the
transactions contemplated hereby shall be made by Purchaser, any Seller or any
of their respective Affiliates, officers, directors, employees, representatives
or agents, without the prior written agreement of Purchaser and the Seller
Representative, in any case, as to form, content, timing and manner of
distribution or publication. On and after the Closing Date, each Seller and
Purchaser agree to hold confidential the terms and provisions of this Agreement
and the terms of the transactions contemplated hereby. Notwithstanding the
foregoing, nothing in this Section 11.8 shall prevent any party or its
------------
Affiliates from (a) making any public announcement or disclosure required by Law
or the rules of any stock exchange, (b) discussing this Agreement or its
contents or the transactions contemplated hereby with officers, directors,
managers, employees, representatives and agents of such party and its Affiliates
and with those Persons whose approval, agreement or opinion, as the case may be,
is required for consummation of such particular transaction or transactions, or
(c) enforcing its rights hereunder.
11.9 Further Assurances. Upon the reasonable request of Purchaser, each
------------------
Seller shall on and after the Closing Date execute and deliver to Purchaser such
assignments and other instruments as may be reasonably requested by Purchaser
and are required to effectuate completely the transfer and assignment to
Purchaser of the Shares, and to otherwise carry out the purposes of this
Agreement.
11.10 Severability. If any provision of this Agreement shall be held
------------
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
11.11 Entire Understanding. This Agreement and the Related Agreements set
--------------------
forth the entire agreement and understanding of the parties hereto with respect
to the transactions contemplated hereby and supersede any and all prior
agreements,
-56-
arrangements and understandings among the parties relating to the subject matter
hereof, excluding the letter agreement, dated February 1, 2002, between
Purchaser and Credit Suisse First Boston Corporation, as exclusive agent for MRM
(relating to confidentiality and other matters), which remains in full force and
effect.
11.12 Language. Sellers and Purchaser agree that the language used in this
--------
Agreement is the language chosen by the parties to express their mutual intent,
and that no rule of strict construction is to be applied against any Seller or
Purchaser.
11.13 Applicable Law. This Agreement shall be governed by and construed and
--------------
enforced in accordance with the internal laws of the State of New York without
giving effect to the principles of conflicts of law thereof.
11.14 Jurisdiction of Disputes; Waiver of Jury Trial. In the event either
----------------------------------------------
party to this Agreement commences any litigation, proceeding or other legal
action in connection with or relating to this Agreement, any Related Agreement
or any matters contemplated hereby or thereby, each party to this Agreement
hereby (a) agrees that any such litigation, proceeding or other legal action may
be brought in a court of competent jurisdiction located within the County of New
York, in the State of New York, whether a state or federal court; (b) agrees
that in connection with any such litigation, proceeding or action, such party
will consent and submit to personal jurisdiction in any such court described in
clause (a) of this Section 11.14 and to service of process upon it in accordance
---------- -------------
with the rules and statutes governing service of process; (c) agrees to waive to
the full extent permitted by law any objection that it may now or hereafter have
to the venue of any such litigation, proceeding or action in any such court or
that any such litigation, proceeding or action was brought in an inconvenient
forum; (d) designates, appoints and directs Corporation Service Company as its
authorized agent to receive on its behalf service of any and all process and
documents in any such litigation, proceeding or action in the State of New York,
except that each of the Management Stockholders instead designates, appoints and
directs the Management Stockholder Representative as his or her authorized agent
to receive on his or her behalf, delivered by registered mail to the address of
the Management Stockholder Representative set forth in Section 11.3, service of
------------
any and all process and documents in any such litigation, proceeding or action
in the State of New York; (e) agrees to notify the other party to this Agreement
immediately if such agent shall refuse to act, or be prevented from acting, as
agent and, in such event, promptly to designate another agent in the State of
New York to serve in place of such agent and deliver to the other party written
evidence of such substitute agent's acceptance of such designation; (f) agrees
as an alternative method of service to service of process in any such
litigation, proceeding or action by mailing of copies thereof to such party at
its address set forth in Section 11.3; (g) agrees that any service made as
------------
provided herein shall be effective and binding service in every respect; and (h)
agrees that nothing herein shall affect the rights of either party to effect
service of process in any other manner permitted by Law. EACH PARTY HERETO
WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN CONNECTION WITH OR
RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS CONTEMPLATED
HEREBY OR
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THEREBY, AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO
EFFECT SUCH WAIVER.
11.15 Schedules. Any information disclosed pursuant to any Schedule hereto
---------
shall also be deemed to be disclosed to Purchaser for all other purposes of this
Agreement to the extent that the relevance of such information for such other
purposes is reasonably apparent. Neither the specification of any Dollar amount
in any item or matter in any provision of this Agreement nor the inclusion of
any specific item or matter in any Schedule hereto is intended to imply that
such amount, or higher or lower amounts, or the item or matter so specified or
included or other items or matters, are or are not material, and no party shall
use the fact of the specification of any such amount or the inclusion of any
such item or matter in any dispute or controversy between the parties as to
whether any item or matter not specified herein or included in any Schedule
hereto is or is not material for purposes of this Agreement. Neither the
specification of any item or matter in any provision of this Agreement nor the
inclusion of any specific item or matter in any Schedule hereto is intended to
imply that such item or matter, or other items or matters, are or are not in the
ordinary course of business, and no party shall use the fact of the
specification or the inclusion of any such item or matter in any dispute or
controversy between the parties as to whether any item or matter not specified
herein or included in any Schedule hereto is or is not in the ordinary course of
business for purposes of this Agreement. The Seller Representative or the
Management Stockholder Representative may, from time to time prior to or at the
Closing, by notice in accordance with the terms of this Agreement, supplement or
amend any Schedule, including one or more supplements or amendments thereto to
correct any matter which, if not corrected, would constitute a breach or a
failure to be true at the Closing of any representation, warranty, covenant or
obligation contained herein. Such supplemental or amended Schedule shall be
deemed to cure any breach or a failure to be true at the Closing for purposes of
Section 6.1, provided, that such breach or a failure to be true at the Closing
----------- --------
did not have a materially adverse economic impact on the Business. Further, if
the Closing occurs, any such supplement and amendment will be effective to cure
and correct for all other purposes any breach of any representation, warranty,
covenant or obligation which would have existed if the Seller Representative had
not made such supplement or amendment, and all references to any Schedule hereto
which is supplemented or amended as provided in this Section 11.15 shall for all
-------------
purposes after the Closing be deemed to be a reference to such Schedule as so
supplemented or amended.
11.16 Disclaimer of Warranties. None of the Sellers makes any
------------------------
representations or warranties with respect to any projections, forecasts or
forward-looking statements provided to Purchaser. There is no assurance that any
projected or forecasted results will be achieved. Except to the extent of the
express representations and warranties contained in Article III, Sellers
-----------
disclaim all other representations and warranties, whether express or implied.
Purchaser acknowledges and agrees that neither Sellers, their respective
Affiliates, any of their representatives nor any other Person has made any
representation or warranty, express or implied, as to the accuracy or
completeness of any memoranda, charts, summaries, schedules or other information
heretofore made available by Sellers, their respective Affiliates or their
representatives to Purchaser, any
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of its Affiliates or their representatives (including any materials or other
information provided by Credit Suisse First Boston Corporation) or any
information that is not included in this Agreement or the Schedules hereto, and
neither Sellers, its Affiliates, any of their representatives nor any other
Person will have or be subject to any liability to Purchaser, any of its
Affiliates or their representatives resulting from the distribution of any such
information to, or the use of any such information by, Purchaser, any of its
Affiliates or any of their agents, consultants, accountants, counsel or other
representatives.
11.17 Seller Representative.
---------------------
(a) Each Seller hereby appoints the Non-US Holding Company as the
Seller Representative. The Non-US Holding Company hereby accepts such
appointment and agrees to perform all of the duties of the Seller
Representative hereunder.
(b) Each Seller hereby authorizes the Seller Representative to
make all decisions and take all actions on its behalf to administer
the transactions contemplated hereby (except to the extent that this
Agreement specifically requires Purchaser to deal directly with a
particular Seller or the Management Stockholder Representative),
including (i) the receipt from Purchaser of all payments made by
Purchaser to MRM Sellers pursuant to this Agreement, (ii) giving and
receiving of notices to be given or received by any Seller, and (iii)
the contest, defense or settlement of any claims for which any Seller
may be required or requested to indemnify Purchaser pursuant to
Section 10.2. All decisions and actions by the Seller Representative
------------
permitted by this Agreement shall be binding upon all of the Sellers,
and no Seller shall have any right to object, dissent, protest or
otherwise contest the same.
(c) Purchaser shall be entitled to deal with and rely
conclusively on the Seller Representative as provided herein as if,
and with the same effect as if, the Seller Representative constituted
all of the Sellers, and Purchaser shall be under no obligation to
involve itself with the Seller Representative's performance for the
benefit of the Sellers, or the Sellers' relationships inter se.
--------
Notwithstanding the foregoing provisions of this Section 11.17, or any
-------------
other provisions of this Agreement, Purchaser may in its sole
discretion elect to deal directly with any Seller instead of the
Seller Representative.
(d) The provisions of this Section 11.17 are irrevocable and
-------------
coupled with an interest and shall be enforceable notwithstanding any
rights or remedies that any Seller may have in connection with the
transactions contemplated by this Agreement.
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11.18 Management Stockholder Representative.
-------------------------------------
(a) Each Management Stockholder hereby appoints each of Xxxxxx
Xxxxx and Xxxxx Xxxxxx as the Management Stockholder Representative.
Xxxxxx Xxxxx and Xxxxx Xxxxxx hereby accept such appointment and agree
to perform all of the duties of the Management Stockholder
Representative hereunder.
(b) Each Management Stockholder hereby authorizes the Management
Stockholder Representative to make all decisions and take all actions
on his behalf with respect to the transactions contemplated hereby
(except to the extent that this Agreement specifically requires
Purchaser to deal directly with each Seller or the Seller
Representative), including (i) the receipt from Purchaser of all
payments and disbursements made by Purchaser to Management
Stockholders pursuant to this Agreement and (ii) giving and receiving
of notices to be given or received by any Management Stockholder. All
decisions and actions by the Management Stockholder Representative
permitted by this Agreement shall be binding upon all of the
Management Stockholders, and no Management Stockholder shall have any
right to object, dissent, protest or otherwise contest the same.
(c) Purchaser and the MRM Sellers shall be entitled to deal with
and rely conclusively on the Management Stockholder Representative as
provided herein as if, and with the same effect as if, the Management
Stockholder Representative constituted all of the Management
Stockholders, and none of Purchaser or the MRM Sellers shall be under
any obligation to involve itself with the Management Stockholder
Representative's performance for the benefit of the Management
Stockholders, or the Management Stockholders' relationships inter se.
--------
Notwithstanding the foregoing provisions of this Section 11.18, or any
-------------
other provisions of this Agreement, Purchaser and the MRM Sellers may
in its sole discretion elect to deal directly with any Management
Stockholder instead of the Management Stockholder Representative.
(d) The Management Stockholders hereby agree to hold Purchaser
and MRM Sellers harmless from and against any and all Losses which
Purchaser, MRM Sellers or the Management Stockholders may become
subject insofar as such Losses arise out of or are based upon any act
taken or omitted to be taken by Purchaser or MRM Sellers in reliance
on the action or inaction of the Management Stockholder Representative
as provided herein.
(e) The provisions of this Section 11.18 are irrevocable and
-------------
coupled with an interest and shall be enforceable notwithstanding any
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rights or remedies that any Management Stockholder may have in
connection with the transactions contemplated by this Agreement.
11.19 Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
ARTICLE XII
TAX MATTERS
12.1 Filing of Tax Returns. Except as otherwise provided in this Section
--------------------- -------
12.1, Purchaser shall prepare or cause to be prepared and file or cause to be
----
filed all Tax Returns for the Companies for all (a) taxable years ending on or
prior to the Closing Date which are filed after the Closing Date, (b) taxable
years beginning before and ending after the Closing Date and (c) taxable years
beginning after the Closing Date. Purchaser shall permit the Seller
Representative to review and comment on each Tax Return described in (a) and (b)
above prior to filing. Notwithstanding the foregoing, Sellers shall prepare or
cause to be prepared all state, local, or foreign combined or consolidated Tax
Returns that require a Company to be included in such returns for any
Pre-Closing Tax Period. Sellers shall prepare and timely file all such returns
on a basis that is consistent with its prior practices.
12.2 Proration of Taxes. In each case of a jurisdiction or Tax with respect
------------------
to which the taxable year of a Company does not end on the Closing Date, for
purposes of allocating liability for Taxes there shall be deemed a short taxable
year ending on and including the Closing Date and a second deemed short taxable
year beginning on and including the day after such date. Any Taxes for a taxable
period beginning during the Pre-Closing Tax Period and ending after the Closing
Date shall be apportioned between the Pre-Closing Tax Period and the subsequent
period based, in the case of property taxes, on a per diem basis, and, in the
case of other Taxes, on an interim closing of the books as of the close of the
Pre-Closing Tax Period.
12.3 Cooperation on Tax Matters
--------------------------
(a) Sellers and Purchaser agree to furnish or cause to be
furnished to the other, upon request, as promptly as practicable, such
information (including access to books and records) and assistance
relating to each Company as is reasonably necessary for the filing of
any Tax Return, the preparation for any Tax audit, the prosecution or
defense of any claim, suit or proceeding relating to any proposed Tax
adjustment for a Company attributable to the Pre-Closing Tax Period.
Sellers and Purchaser shall keep all such information and documents
received by them confidential unless otherwise required by Law.
(b) Sellers and Purchaser agree to retain or cause to be retained
all books and records pertinent to each Company until the
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applicable period for assessment of Taxes under applicable Law (giving
effect to any and all extensions or waivers) has expired, and such
additional period as necessary for any administrative or judicial
proceedings relating to any proposed assessment, and to abide by and cause
each Company to abide by all record retention agreements entered into with
any Taxing authority. Sellers and Purchaser agree to give the other
reasonable notice prior to transferring, discarding or destroying any such
books and records relating to Tax matters and, if so requested, Sellers and
Purchaser shall allow the requesting party to take possession of such books
and records.
(c) Sellers and Purchaser shall cooperate with each other in the
conduct of any audit or other proceedings for any Tax purposes and
they shall each execute and deliver such powers of attorney and other
documents as are reasonably necessary to carry out the intent of this
Agreement.
12.4 Refunds. Sellers shall be entitled to any refunds of Taxes (including
-------
interest thereon) received by Purchaser or an Affiliate of
Purchaser to the extent such refunds (a) relate to Taxes paid by a Seller
or a Company with respect to the operations of a Company, (b) relate to
Taxes attributable to the Pre-Closing Tax Period, and (c) were not accrued
as a receivable in the Financial Statements.
12.5 Section 338(g) Elections. Sellers acknowledge that Purchaser may, in
------------------------
its discretion, make an election under Section 338(g) of the Code (a "Section
-------
338(g) Election") with respect to any or all of the Non-US
---------------
Companies.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
PURCHASER:
THE BISYS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
MRM SELLERS:
MGL INVESTMENTS, LLC
By: /s/ Xxxxxxx X. X'Xxxxx
--------------------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Vice President, Secretary and Treasurer
MRM FINANCIAL SERVICES LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
S-1
MANAGEMENT STOCKHOLDERS:
/s/ Xxxx Xxxxxxxx
---------------------------------------------
Xxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx
---------------------------------------------
Xxxxx Xxxxxx
/s/ Xxxx Xxxxxx
---------------------------------------------
Xxxx Xxxxxx
/s/ Xxxxxxx Xxxxx
---------------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxxx Xxxx
---------------------------------------------
Xxxxx Xxxx
/s/ Xxx Xxxxx Xxxxx
---------------------------------------------
Xxx Xxxxx Xxxxx
/s/ Xxxxxxx XxXxxxx
---------------------------------------------
Xxxxxxx XxXxxxx
/s/ Xxxxxx Xxxxxxx
---------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxx
---------------------------------------------
Xxxxxxx Xxxx
S-2
/s/ Xxxx Xxxx
---------------------------------------------
Xxxx Xxxx
/s/ Xxx Fronchak
---------------------------------------------
Xxx Fronchak
/s/ Xxxx Xxxxxx
---------------------------------------------
Xxxx Xxxxxx
/s/ Xxxxxx Xxxxx
---------------------------------------------
Xxxxxx Xxxxx
/s/ Xxxxxxx Xxxxx
---------------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxxxx Xxxx
---------------------------------------------
Xxxxxxxx Xxxx
/s/ Xxxxx Xxxxx
---------------------------------------------
Xxxxx Jared
/s/ Xxxxx Xxxxxxxxx
---------------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxx Xxxxxx
---------------------------------------------
Xxxx Xxxxxx
/s/ Xxxxxx Xxxxxxxx
---------------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxxxxx Xxxxxxxxxx
---------------------------------------------
Xxxxxxxxx Xxxxxxxxxx
S-3
/s/ Xxxxx Xxxxxxx
---------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
---------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxxxx
/s/ Xxxx Xxxxxxx
---------------------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxxxx Xxxxx
---------------------------------------------
Xxxxxxxx Xxxxx
/s/ Xxxxx Xxxxxxx
---------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxx
---------------------------------------------
Xxxxxxx Xxxxx
X-0
MRM, which indirectly owns all of the outstanding capital stock or limited
liability company interests in the MRM Sellers, absolutely and irrevocably
guarantees to Purchaser the prompt payment and satisfaction of all obligations
(monetary or otherwise) of the MRM Sellers under this Agreement and the MRM
Sellers' Related Agreements.
MUTUAL RISK MANAGEMENT LTD.
By: /s/ Xxxxxxx X. X'Xxxxx
------------------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Senior Vice President
and General Counsel
S-5
