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EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
Among
BRASSRING INC.,
CENTRAL NEWSPAPERS, INC.
And
CAREER SERVICES, INC.
Dated as of February 10, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Interpretations
SECTION 1.01. Definitions....................................................... 2
SECTION 1.02. Interpretations................................................... 8
ARTICLE II
The Merger
SECTION 2.01. The Merger........................................................ 9
SECTION 2.02. Closing........................................................... 9
SECTION 2.03. Effective Time.................................................... 9
SECTION 2.04. Effects........................................................... 10
SECTION 2.05. Certificate of Incorporation and By-Laws.......................... 10
SECTION 2.06. Directors......................................................... 10
SECTION 2.07. Officers.......................................................... 10
ARTICLE III
Effect on the Capital Stock of the
Constituent Corporations; Exchange of Certificates;
Adjustment to Merger Consideration
SECTION 3.01. Effect on Capital Stock........................................... 11
SECTION 3.02. Transactions to be Effected at the
Closing.............................................. 12
SECTION 3.03. No Further Ownership Rights in Career
Services Capital Stock............................... 12
SECTION 3.04. Working Capital Adjustment to the Merger
Consideration........................................ 13
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of Central
and Career Services.................................. 15
SECTION 4.02. Representations and Warranties of
BrassRing............................................ 34
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ARTICLE V
Covenants
SECTION 5.01. Conduct of Career Services Business............................... 45
SECTION 5.02. Advice of Changes................................................. 47
SECTION 5.03. Consultation...................................................... 47
SECTION 5.04. Insurance......................................................... 48
SECTION 5.05. No Solicitation................................................... 48
SECTION 5.06. Access to Information............................................. 49
SECTION 5.07. Reasonable Efforts; Notification.................................. 50
SECTION 5.08. Stockholder Approvals............................................. 49
SECTION 5.09. Costs and Expenses................................................ 50
SECTION 5.10. Publicity......................................................... 50
SECTION 5.11. Agreements Not To Compete......................................... 50
SECTION 5.12. Tax Matters....................................................... 51
SECTION 5.13. Confidential Information.......................................... 53
SECTION 5.14. Other Actions..................................................... 54
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to the Obligations of Each
Party Hereto......................................... 54
SECTION 6.02. Conditions to the Obligations of
BrassRing............................................ 55
SECTION 6.03. Conditions to the Obligations of
Central.............................................. 57
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination....................................................... 59
SECTION 7.02. Effect of Termination............................................. 61
SECTION 7.03. Amendment......................................................... 61
SECTION 7.04. Extension; Waiver................................................. 61
ARTICLE VIII
Survival of Representations and Warranties; Indemnification
SECTION 8.01. Survival of Representations and
Warranties........................................... 61
SECTION 8.02. Tax Indemnification............................................... 62
SECTION 8.03. Other Indemnification by Central.................................. 62
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SECTION 8.04. Indemnification by BrassRing...................................... 63
SECTION 8.05. Exclusivity of Indemnification.................................... 64
SECTION 8.06. Calculation of Losses............................................. 65
SECTION 8.07. Termination of Indemnification.................................... 65
SECTION 8.08. Procedures........................................................ 65
ARTICLE IX
General Provisions
SECTION 9.01. Notices........................................................... 67
SECTION 9.02. Headings.......................................................... 68
SECTION 9.03. Severability...................................................... 68
SECTION 9.04. Counterparts...................................................... 69
SECTION 9.05. Entire Agreement; No Third-Party
Beneficiaries........................................ 69
SECTION 9.06. Governing Law..................................................... 69
SECTION 9.07. Assignment........................................................ 69
SECTION 9.08. Consent to Jurisdiction........................................... 69
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Exhibits
A Form of Amended Stockholders' Agreement
Schedules Delivered by Central
4.01(c) No Conflicts; Consents
4.01(d) Career Services Financial Statements
4.01(e) Permitted Liens
4.01(f) Intellectual Property
4.01(g)(i) Contracts
4.01(g)(ii) Status of Contracts
4.01(h) Permits
4.01(j) Insurance
4.01(k) Tax Matters
4.01(l) Certain Changes and Events
4.01(m) Proceedings
4.01(n)(i) Compliance with Laws
4.01(n)(ii) Compliance with Environmental Laws
4.01(q) Benefit Plans
4.01(u) Undisclosed Liabilities
5.01 Conduct of Business
Schedules Delivered by BrassRing
4.02(a) Organization and Standing
4.02(d) BrassRing Financial Statements
4.02(e) Permitted Liens
4.02(f) Intellectual Property
4.02(g)(i) Contracts
4.02(g)(ii) Status of Contracts
4.02(h) Permits
4.02(j) Certain Changes and Events
4.02(k) Proceedings
4.02(l)(i) Compliance with Laws
4.02(l)(ii) Compliance with Environmental Laws
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AGREEMENT AND PLAN OF MERGER dated as of
February 10, 2000, among BRASSRING INC., a Delaware
corporation ("BrassRing"), CENTRAL NEWSPAPERS, INC.,
an Indiana corporation ("Central"), and CAREER
SERVICES, INC., an Arizona corporation and a wholly
owned subsidiary of Central ("Career Services").
WHEREAS the respective Boards of Directors of BrassRing,
Central and Career Services have approved the merger (the "Merger") of Career
Services with and into BrassRing on the terms and subject to the conditions set
forth in this Agreement, whereby all the issued capital stock of Career Services
(the "Career Services Capital Stock") (excluding any shares owned by Career
Services), shall be converted into the right to receive, in the aggregate, the
consideration determined as set forth herein;
WHEREAS, immediately following the consummation of the Merger,
the Stockholders' Agreement dated as of September 30, 1999 (the "Existing
Stockholders' Agreement"), among Xxxxxx, Inc. (formerly Kaplan Educational
Centers, Inc.) ("Kaplan"), Tribune Company ("Tribune"), Accel VI L.P., Accel
Internet Fund II L.P., Accel Keiretsu VI L.P., Accel Investors '98 L.P.
(collectively, "Accel", and together with Kaplan and Tribune, the "Existing
Stockholders") and BrassRing, shall be amended substantially in the form set
forth in Exhibit A attached hereto (the "Amended Stockholders' Agreement", and
together with this Agreement, the "Transaction Agreements") to provide that
Central shall become a party thereto; and
WHEREAS, BrassRing, Central and Career Services desire to make
certain representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the premises, mutual
promises, representations, warranties and covenants contained in this Agreement
and intending to be legally bound, the parties hereto hereby agree as follows:
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ARTICLE I
Definitions and Interpretations
SECTION 1.01. Definitions. The following terms,
as used in this Agreement, shall have the following meanings:
"Accel" has the meaning set forth in the second preamble to
this Agreement.
"Accounting Firm" has the meaning set forth in Section 3.04.
"Accounts Receivable" means any and all accounts receivable,
notes and other amounts receivable from third parties, together with any unpaid
financing charges accrued thereon.
"Adjusted Merger Consideration" has the meaning set forth in
Section 3.04(c).
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, such Person. For the purpose of this definition "control", when
used with respect to any specified Person, shall mean the power to direct or
cause the direction of the management and policies of such Person, directly or
indirectly, whether through ownership of voting securities or partnership or
other ownership interests, by contract or otherwise; and the terms
"controlling" and "controlled" shall have correlative meanings.
"Agents" has the meaning set forth in Section 5.13.
"Agreement" means this Agreement and Plan of Merger, including
all Exhibits and Schedules attached hereto.
"Amended Stockholders' Agreement" has the meaning set forth in
the second recital to this Agreement.
"ABCA" means the Arizona Business Corporation Act.
"Articles of Merger" has the meaning set forth in Section
2.03.
"BrassRing" has the meaning set forth in the second recital to
this Agreement.
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"BrassRing Benefit Plans" has the meaning set forth in Section
4.02(q).
"BrassRing Common Stock" has the meaning set forth in Section
3.01(c).
"BrassRing Financial Statements" has the meaning set forth in
Section 4.02(d).
"BrassRing Indemnitee" has the meaning set forth in Section
8.02(a).
"BrassRing Material Adverse Effect" means a material adverse
effect (i) on the business, assets, condition (financial or otherwise),
prospects or results of operations of BrassRing and its subsidiaries taken as a
whole or (ii) on the ability of BrassRing to perform its obligations under this
Agreement.
"BrassRing Permitted Lien" means (i) any Lien disclosed on
Schedule 4.02(e), (ii) any mechanics', carriers', workmens', repairmens' or
other like Lien arising in the ordinary course of business, any Lien arising
under any original purchase price conditional sales contract or equipment lease
with a third party entered into in the ordinary course of business and any Lien
for Taxes that are not due and payable or that may thereafter be paid without
penalty and (iii) any other imperfection of title or encumbrance, if any, that
does not, individually or in the aggregate, materially impair the continued use
of the assets to which it relates in the conduct of the business of BrassRing
and its subsidiaries as presently conducted.
"BrassRing Preferred Stock" has the meaning set forth in
Section 3.01(c).
"Career Services" has the meaning set forth in the preamble to
this Agreement.
"Career Services Balance Sheet" has the meaning set forth in
Section 4.01(d).
"Career Services Benefit Plans" has the meaning set forth in
Section 4.01(q).
"Career Services Capital Stock" has the meaning set forth in
the first recital to this Agreement.
"Career Services Financial Statements" has the meaning set
forth in section 4.01(d).
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"Career Services Material Adverse Effect" means a material
adverse effect (i) on the business, assets, condition (financial or otherwise),
prospects or results of operations of Career Services and its subsidiaries taken
as a whole or (ii) on the ability of Central or Career Services to perform their
respective obligations under this Agreement.
"Career Services Permitted Lien" means (i) any Lien disclosed
on Schedule 4.01(e), (ii) any mechanics', carriers', workmen's, repairmen's or
other like Lien arising or incurred in the ordinary course of business, any Lien
arising under any original purchase price conditional sales contract or
equipment lease with a third party entered into in the ordinary course of
business and any Lien for Taxes that are not due and payable or that may
thereafter be paid without penalty and (iii) any other imperfection of title or
encumbrance, if any, that does not, individually or in the aggregate, materially
impair the continued use of the assets to which it relates in the conduct of the
business of Career Systems and its subsidiaries as presently conducted.
"Central" has the meaning set forth in the preamble to this
Agreement.
"Central Indemnitee" has the meaning set forth in Section
8.02(b).
"Certificates" in as the meaning set forth in Section 3.01(c).
"Certificate of Merger" has the meaning set forth in Section
2.03.
"Closing" has the meaning set forth in Section 2.02.
"Closing Date" means the date on which the Closing occurs.
"Closing Working Capital" has the meaning set forth in Section
3.04.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commonly Controlled Entity" has the meaning set forth in
Section 4.01(q).
"Contracts" means sales agreements, customer subscriptions,
service contracts, distribution agreements,
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product warranties, technical assistance or service agreements, and all other
written or oral contracts, leases, subleases, licenses, sublicenses, indentures
and other commitments, agreements, arrangements and undertakings, and all
amendments thereto.
"Current Assets" has the meaning set forth in Section 3.04.
"Current Liabilities" has the meaning set forth in Section
3.04.
"DGCL" means the General Corporation Law of the State of
Delaware.
"DLJ" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation.
"Effective Time" has the meaning set forth in Section 2.03.
"Environmental Laws" means all Federal, state and local laws
(including common law), regulations, rules, ordinances, codes, decrees,
judgements and orders, in each case relating to pollution, protection of the
environment, natural resources or human health and safety.
"ERISA" has the meaning set forth in Section 4.01(q).
"Existing Stockholders' Agreement" has the meaning set forth
in the second recital to this Agreement.
"GAAP" has the meaning set forth in Section 3.04(d).
"Governmental Entity" means any Federal, state, local or
foreign government or any court of competent jurisdiction, administrative
agency or commission or other governmental authority or instrumentality.
"Hazardous Materials" means (i) any petroleum or petroleum
products, radon gas, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation, and (ii) any chemical, material, substance or
waste that is regulated pursuant to any Environmental Law.
"HireSystems Business" means the business of conducting a
web-based hiring management system for corporate and institutional customers,
which business is
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currently conducted through the HireSystems division of BrassRing.
"HireSystems Material Adverse Effect" means a material adverse
effect on the business, assets, condition (financial or otherwise), prospects or
results of the HireSystems Business.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"indemnified party" has the meaning set forth in Section
8.08(a).
"Intellectual Property" has the meaning set forth in Section
4.01(f).
"Kaplan" has the meaning set forth in the second recital to
this Agreement.
"Lien" means any lien, charge, claim, pledge, security
interest, security agreement, right to purchase, conditional sale agreement or
other title retention agree ment, lease, tenancy, right of occupancy, easement,
mortgage, restriction, reservation, reversion, license, option, covenant or
other encumbrance (including the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code of any jurisdiction).
"Losses" has the meaning set forth in Section 8.03(a).
"Merger" has the meaning set forth in the first recital to
this Agreement.
"Merger Consideration" has the meaning set forth in Section
3.01(c).
"Notice of Disagreement" has the meaning set forth in Section
3.04(b).
"Outside Date" has the meaning set forth in Section 7.01.
"Pension Plan" has the meaning set forth in Section 4.01(q).
"Permits" means permits, concessions, grants, franchises,
licenses, consents, certificates, orders and other authorizations and approvals
of any Governmental Entity.
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"Person" means any individual, corporation, organization,
partnership, joint venture, trust, firm, association (whether or not
incorporated), Governmental Entity or other entity.
"Personal Property" means tangible personal property,
including machinery, equipment, computer hardware, tools, business machines,
office furniture and fixtures, vehicles, and other tangible personal property.
"Pre-Closing Taxes" means Taxes relating to any Pre-Closing
Tax Period.
"Pre-Closing Tax Period" means all taxable periods (or
portions thereof) ending on or before the Closing Date.
"Property Taxes" has the meaning set forth in Section 8.02(c).
"Real Property" means real property and interests in real
property including any buildings, fixtures and other improvements.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Statement" has the meaning set forth in Section 3.04.
"Straddle Period" means any taxable period that includes (but
does not end on) the Closing Date.
"Surviving Corporation" has the meaning set forth in Section
2.01.
"Tax" means any tax, governmental fee or other like assessment
or charge of any kind whatsoever (including any tax imposed under Subtitle A of
the Code and any net income, alternative or add-on minimum tax, gross income,
gross receipts, sales, use, ad valorem, value-added, transfer, franchise,
profits, license, withholding tax on amounts paid, payroll, employment, excise,
severance, stamp, capital stock, occupation, property, environmental or windfall
profit tax, premium, custom, duty or other tax), together with any interest,
penalty, addition to tax or additional amount due or imposed by any Governmental
Entity responsible for the imposition of any such tax.
"Taxing Authority" means any domestic, foreign, Federal,
national, state, county or municipal or other local government, any subdivision,
agency, commission or authority
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thereof, or any quasi-governmental body exercising tax regulatory authority.
"Tax Return" means all Federal, state, local, provincial and
foreign Tax returns, declarations, statements, reports, schedules, forms and
information returns, and any amended Tax Return, relating to Taxes.
"Third Party Claim" has the meaning set forth in Section
8.08(a).
"Transaction Agreements" has the meaning set forth in the
second recital to this Agreement.
"Transfer Tax" means any transfer, documentary, sales, use,
registration, value-added and any other similar Tax (including any applicable
real estate transfer tax and real property transfer gains tax) and related
amounts (including any interest, penalty, addition to tax or additional amount
due, or imposed by any Governmental Entity responsible for the imposition of any
such tax).
"Tribune" has the meaning set forth in the second recital to
this Agreement.
"WC Amount" has the meaning set forth in Section 3.04.
"Welfare Plan" has the meaning set forth in Section 4.01(q).
"Westech" means Westech ExpoCorporation, a California
corporation that is a wholly owned subsidiary of Career Services and an indirect
wholly owned subsidiary of Central.
"Working Capital" has the meaning set forth in Section 3.04.
SECTION 1.02. Interpretations. (a) When used in this
Agreement, the words "include", "includes" and "including" shall be deemed to be
followed by the words "without limitation".
(b) Any terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) When used in this Agreement, the word "or" is not
exclusive.
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(d) Unless otherwise specified, all references to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles,
Sections, Exhibits and Schedules to this Agreement.
(e) This Agreement shall be deemed drafted jointly by all the
parties hereto and shall not be specifically construed against any party hereto
based on any claim that such party or its counsel drafted this Agreement.
ARTICLE II
The Merger
SECTION 2.01. The Merger. On the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL, Career
Services shall be merged with and into BrassRing at the Effective Time (as
defined below). At the Effective Time, the separate corporate existence of
Career Services shall cease and BrassRing shall continue as the surviving
corporation (the "Surviving Corporation").
SECTION 2.02. Closing. The closing (the "Closing") of the
Merger shall take place at the offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. on the second business day
following the satisfaction (or, to the extent permitted by law, waiver by all
parties) of the conditions set forth in Section 6.01, or, if on such day any
condition set forth in Section 6.02 or 6.03 has not been satisfied (or, to the
extent permitted by applicable law, waived by the party or parties entitled to
the benefits thereof), as soon as practicable after all the conditions set forth
in Article VI have been satisfied (or, to the extent permitted by applicable
law, waived by the parties entitled to the benefits thereof), or at such other
place, time and date as shall be agreed in writing between BrassRing and
Central.
SECTION 2.03. Effective Time. Prior to the Closing, BrassRing
shall prepare, and on the Closing Date or as soon as practicable thereafter
BrassRing shall file (i) with the Secretary of State of the State of Delaware, a
certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL and shall make all other filings or recordings required under the DGCL
and (ii) with the Arizona Corporation Commission, articles of merger or other
appropriate documents (in any such case, the "Articles of Merger") executed in
accordance
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with the relevant provisions of the ABCA and shall make all other filings and or
recordings take all such other actions required under the ABCA. The Merger shall
become effective at such time as the Certificate of Merger is duly filed with
the Delaware Secretary of State or at such subsequent time as shall be stated in
the Certificate of Merger (the "Effective Time").
SECTION 2.04. Effects. The Merger shall have the effects set
forth in Section 259 of the DGCL and Section 10-1106 of the ABCA.
SECTION 2.05. Certificate of Incorporation and By-Laws. (a)
The Restated Certificate of Incorporation of BrassRing as in effect immediately
prior to the Effective Time shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
(b) The By-Laws of BrassRing as in effect immediately prior
to the Effective Time shall be the By-Laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 2.06. Directors. The directors of BrassRing
immediately following the Effective Time shall be as set forth in the Amended
Stockholders' Agreement, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be.
SECTION 2.07. Officers. The officers of BrassRing immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be; provided that,
immediately following the Effective Time, BrassRing shall cause Xxxxxxxx X.
Xxxxxx to resign as Chief Executive Officer of BrassRing and Xxxx Xxxxx to
become the Chief Executive Officer of the Surviving Corporation.
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ARTICLE III
Effect on the Capital Stock of the
Constituent Corporations; Exchange of Certificates;
Adjustment to Merger Consideration
SECTION 3.01. Effect on Capital Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of the holder of any
shares of Career Services Capital Stock or any shares of capital stock of
BrassRing:
(a) Capital Stock of BrassRing. Each issued and outstanding
share of capital stock of BrassRing shall remain outstanding and unaffected by
the Merger.
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(b) Cancelation of Treasury Stock. Each share of Career
Services Capital Stock that is owned by Career Services shall automatically be
canceled and shall cease to exist, and no BrassRing capital stock or other
consideration shall be delivered in exchange therefor.
(c) Conversion of Career Services Capital Stock. Subject to
Section 3.01(b), all outstanding shares of Career Services Capital Stock, in the
aggregate, shall be converted into the right to receive, in the aggregate, (i)
9,877,280 shares of Common Stock of BrassRing, par value $0.0001 per share, (the
"BrassRing Common Stock") and (ii) 3,896,645 shares of Series B Convertible
Preferred Stock of BrassRing, par value $0.0001 per share (the "BrassRing
Preferred Stock") (collectively, the "Merger Consideration"). As of the
Effective Time, all such shares of Career Services Capital Stock shall no longer
be outstanding and shall automatically be canceled and shall cease to exist, and
the holders of certificates ("Certificates") which immediately prior to the
Effective Time represented any such shares of Career Services Capital Stock
shall cease to have any rights with respect thereto, except (i) the collective
right to receive the Merger Consideration upon surrender of all such
Certificates in accordance with Section 3.02, without interest, and (ii) as
provided in Section 3.04.
SECTION 3.02. Transactions to be Effected at the Closing.
Promptly following the Effective Time, (a) Central shall deliver to BrassRing
100% of the Certificates formerly representing all outstanding shares of Career
Services Capital Stock, together with such other documents as may reasonably be
required by BrassRing to evidence such surrender, and (b) BrassRing shall
deliver to Central the number of shares of BrassRing Common Stock and BrassRing
Preferred Stock payable to Central pursuant to Section 3.01. Delivery of the
Career Services Capital Stock shall be effected, and risk of loss and title to
the Certificates shall pass only upon delivery of such Certificates to
BrassRing.
SECTION 3.03. No Further Ownership Rights in Career Services
Capital Stock. The Merger Consideration issued (and paid) in accordance with the
terms of this
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Article III upon conversion of any shares of Career Services Capital Stock shall
be deemed to have been issued (and paid) in full satisfaction (except as
provided in Section 3.04 below) of all rights pertaining to such shares and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of shares of Career Services Capital Stock that
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, any Certificates are presented to the Surviving Corporation for
any reason, they shall be automatically canceled and cease to exist.
SECTION 3.04. Working Capital Adjustment to the Merger
Consideration. (a) Within 60 days after the Closing Date, BrassRing shall
prepare and deliver to Central a statement (the "Statement"), certified by an
officer of BrassRing, setting forth Working Capital (as defined in Section
3.04(d)) as of the close of business on the Closing Date ("Closing Working
Capital"). At BrassRing's option, a physical inventory shall be conducted by
Career Services consistent with past practice on or before the Closing Date for
the purpose of preparing the Statement, and each of Central and BrassRing and
their respective independent auditors shall have the right to observe the taking
of such physical inventory. Any costs or expenses incurred by the Surviving
Corporation in connection with such taking of physical inventory shall be shared
equally by Central and BrassRing.
(b) During the 30-day period following Central's receipt of
the Statement, Central and its independent auditors shall be permitted to review
the working papers relating to the Statement. The Statement shall become final
and binding upon the parties on the 30th day following delivery thereof, unless
Central gives written notice of its disagreement with the Statement (a "Notice
of Disagreement") to BrassRing prior to such date. Any Notice of Disagreement
shall (i) specify in reasonable detail the nature of any disagreement so
asserted, (ii) only include disagreements based on mathematical errors or based
on Closing Working Capital not being calculated in accordance with this Section
3.04 and (iii) be accompanied by a certificate of Central's independent auditors
that they concur with each of the positions taken by Central in the Notice of
Disagreement. If a Notice of Disagreement is received by BrassRing in a timely
manner, then the Statement (as revised in accordance with this sentence) shall
become final and binding upon Central and BrassRing on the earlier of (A) the
date Central and BrassRing resolve in writing any differences they have with
respect to the matters specified in the Notice of Disagreement or (B) the date
any disputed matters
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are finally resolved in writing by the Accounting Firm (as defined below).
During the 30-day period following the delivery of a Notice of Disagreement,
Central and BrassRing shall seek in good faith to resolve in writing any
differences that they may have with respect to the matters specified in the
Notice of Disagreement. During such period BrassRing and its auditors shall have
access to the working papers of Central's auditors prepared in connection with
their certification of the Notice of Disagreement. At the end of such 30-day
period, Central and BrassRing shall submit to an independent accounting firm
(the "Accounting Firm") for arbitration any and all matters that remain in
dispute and which were properly included in the Notice of Disagreement. The
Accounting Firm shall be the Washington D.C. office of PriceWaterhouseCoopers
LLP located at 0000 X Xxxxxx or, if such firm is unable or unwilling to act,
such other nationally recognized independent public accounting firm as shall be
agreed upon by BrassRing and Central in writing. Judgment may be entered upon
the determination of the Accounting Firm in any court having jurisdiction over
the party against which such determination is to be enforced. The cost of any
arbitration (including the fees and expenses of the Accounting Firm and
reasonable attorney fees and expenses of the parties) pursuant to this Section
3.04 shall be borne by BrassRing and Central in inverse proportion as they may
prevail on disputed amounts resolved by the Accounting Firm, which proportionate
allocations shall also be determined by the Accounting Firm at the time the
determination of the Accounting Firm is rendered on the merits of the matters
submitted. The fees and disbursements of Central's independent auditors incurred
in connection with their review of the Statement and certification of any Notice
of Disagreement shall be borne by Central, and the fees and disbursements of
BrassRing's independent auditors incurred in connection with their review of the
Statement and any Notice of Disagreement shall be borne by BrassRing.
(c) The Merger Consideration shall be increased by the amount
by which Closing Working Capital exceeds zero (the "WC Amount"), and the Merger
Consideration shall be decreased by the amount by which Closing Working Capital
is less than the WC Amount (the Merger Consideration as so increased or
decreased shall hereinafter be referred to as the "Adjusted Merger
Consideration"). If the Adjusted Merger Consideration is a positive amount,
BrassRing shall, and if the Adjusted Merger Consideration is a negative amount,
Central shall, within 10 business days after the Statement becomes final and
binding on the parties, make payment by wire transfer in immediately available
funds of the amount of such difference, together with interest
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thereon at a rate equal to the rate of interest from time to time announced
publicly by Citibank, N.A. as its prime rate, calculated on the basis of the
actual number of days elapsed divided by 365, from the Closing Date to the date
of payment.
(d) The term "Working Capital" means Current Assets minus
Current Liabilities. The terms "Current Assets" and "Current Liabilities" mean
the consolidated current assets and consolidated current liabilities,
respectively, of Career Services and its consolidated subsidiaries, calculated
in accordance with United States generally accepted accounting principles
("GAAP").
(e) Following the Closing, BrassRing shall not take any action
with respect to the accounting books and records of Career Services or Westech
on which the Statement is to be based that would obstruct or prevent the
preparation of the Statement and the determination of Closing Working Capital as
provided in this Section 3.04. During the period of time from and after the date
of delivery of the Statement to Central through the resolution of any adjustment
to the Merger Consideration contemplated by this Section 3.04, BrassRing shall
afford to Central and any accountants, counsel or financial advisers retained by
Central in connection with any adjustment to the Merger Consideration
contemplated by this Section 3.04 reasonable access during normal business hours
to the books and records of Career Services (if within the control of BrassRing)
to the extent relevant to the adjustment contemplated by this Section 3.04.
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of Central and
Career Services. Each of Central and Career Services hereby represents and
warrants to BrassRing as follows:
(a) Organization, Standing and Power. Each of Central, Career
Services and Westech is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. Each of Career Services and
Westech has full corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its property and assets and carry on its
business as presently conducted. Each of Career
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Services and Westech is duly qualified to do business as a foreign corporation
in each jurisdiction in which it is required to qualify. Central has delivered
to BrassRing true and complete copies of the Certificate of Incorporation and
By-Laws of each of Central, Career Services and Westech, each as amended to the
date of this Agreement. The stock certificate and transfer books and the minute
books of Career Services and Westech (which have been made available for
inspection by BrassRing prior to the date hereof) are true and complete.
(b) Authority; Execution and Delivery; Enforceability. Each
of Central and Career Services has full power and authority to execute this
Agreement and each of the other Transaction Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by each of Central and Career Services of this Agreement
and each of the other Transaction Agreements to which it is a party and the
consummation by each of Central and Career Services of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of each of Central and Career Services, and no
other corporate proceedings on the part of each of Central, Career Services and
Westech are necessary to authorize this Agreement or any of the other
Transaction Agreements to which Central or Career Services, as the case may be,
is a party or the consummation of the transactions contemplated hereby or
thereby. No state takeover statute or similar statute or regulation applies or
purports to apply to Central, Career Services or Westech with respect to this
Agreement and the other Transaction Agreements, the Merger, or the other
transactions contemplated hereby or thereby. Each of Central and Career Services
has duly executed and delivered this Agreement and, prior to the Closing, each
of Central and Career Services will have duly executed and delivered each other
Transaction Agreement to which it is a party. This Agreement constitutes, and
each other Transaction Agreement to which Central or Career Services is a party
will, upon the Closing, constitute, a legal, valid and binding obligation of
Central or Career Services, as the case may be, enforceable against Central or
Career Services, as the case may be, in accordance with its terms.
(c) No Conflicts; Consents. Except as disclosed on Schedule
4.01(c), the execution and delivery by each of Central and Career Services of
this Agreement and each of the other Transaction Agreements to which it is a
party does not, and the consummation of the Merger and the other transactions
contemplated hereby and thereby and the compliance by each of Central and Career
Services with the terms hereof
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and thereof will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancelation or acceleration of any obligation or the loss
of a benefit under, or result in the creation of any Lien upon any of the
properties or assets of Career Services or Westech under, any provision of (i)
the Certificate of Incorporation or By-Laws of Central, Career Services or
Westech as the case may be, (ii) any Contract to which Central, Career Services
or Westech is a party or by which any of their respective properties or assets
is bound or (iii) any judgment, order or decree, or statute, law, ordinance,
rule or regulation, applicable to Central, Career Services or Westech or any of
their respective properties or assets. No consent, approval, license, permit,
order or authorization of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect to any
of Central, Career Services or Westech in connection with the execution,
delivery and performance of this Agreement or any of the other Transaction
Agreements to which it is a party or the consummation of the Merger and the
other transactions contemplated hereby and thereby, other than (i) compliance
with, and filings under, the HSR Act, if required, and (ii) filings with the
Secretary of State of the State of Delaware and the Arizona Corporation
Commission in connection with the Merger, including the filing of a Certificate
of Merger and the Articles of Merger.
(d) Financial Statements. Schedule 4.01(d) sets forth (i) the
unaudited balance sheet of Career Services and its subsidiaries as of December
26, 1999 (the "Career Services Balance Sheet") and (ii) unaudited statements of
operations of Career Services and its subsidiaries for the fiscal year ended
December 26, 1999 (collectively, the "Career Services Financial Statements").
The Career Services Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be otherwise indicated on Schedule 4.01(d))
and fairly present in all respects the financial position of Career Services and
its subsidiaries as of the dates thereof and the results of the operations of
Career Services and its subsidiaries for the periods then ended.
(e) Assets Other than Real Property Interests. Except as
disclosed on Schedule 4.01(e), each of Career Services and Westech have good and
valid title to all its assets, in each case free and clear of all Liens, except
Career Services Permitted Liens. This Section 4.01(e) does not relate to
Intellectual Property, which is exclusively
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the subject of Section 4.01(f), or Real Property, which is exclusively the
subject of Section 4.01(p).
(f) Intellectual Property. Career Services or Westech owns,
possesses, licenses or has rights to use without the consent of any Person all
trademarks and service marks and applications and registrations therefor,
Internet domain names, trade names, copyrights, licenses, inventions, software,
technology, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures) and
other intellectual property (collectively, "Intellectual Property") necessary
for the conduct of the businesses of Career Services and Westech as now
conducted. Schedule 4.01(f) sets forth a true and complete list (excluding
software and trade secrets) of all material Intellectual Property of Career
Services and Westech and agreements relating thereto. Neither Career Services
nor Westech has filed any U.S. or foreign patent application, and does not own
any issued patent. Except as disclosed on Schedule 4.01(f), (i) to the knowledge
of Central and/or Career Services, there is no infringement, misappropriation or
violation by any Person of Intellectual Property of Career Services or Westech,
(ii) there is no pending or, to the knowledge of Central and/or Career Services,
threatened action, suit, proceeding or claim by any Person challenging the
rights of Career Services or Westech in or to any Intellectual Property of
Career Services or Westech, and neither Central nor Career Services is aware of
any facts which would form a reasonable basis for any such claim, (iii) there is
no pending or, to the knowledge of Central and/or Career Services, threatened
action, suit, proceeding or claim by any Person challenging the validity or
scope of any Intellectual Property of Career Services or Westech, and neither
Central nor Career Services is aware of any facts which would form a reasonable
basis for any such claim, and (iv) there is no pending or, to the knowledge of
Central and/or Career Services, threatened action, suit, proceeding or claim by
any Person that Career Services or Westech infringes, misappropriates or
otherwise violates any proprietary rights of any Person, and neither Central nor
Career Services is aware of any other fact which would form a reasonable basis
for any such claim. True and correct copies of all material licenses and other
material agreements between Central, Career Services, Westech or any of their
Affiliates and any other third parties, in each case relating to the
Intellectual Property of Career Services or Westech, and all amendments and
supplements thereto, have been provided to BrassRing.
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(g) Contracts.
(i) Except as disclosed on Schedule 4.01(g)(i), none of
Central, Career Services or Westech, nor any of their Affiliates, is a
party to, or bound by, any Contract that is used, held for use or
intended to be used primarily in connection with, or that arises
primarily out of, the business, properties or assets of Career Services
or Westech and that is:
(A) a written employment agreement or employment
Contract;
(B) a collective bargaining agreement or other
Contract with any labor organization, union or association;
(C) a covenant not to compete;
(D) a Contract with (1) any stockholder of Central
or any of its Affiliates or (2) any officer or employee of
Central or any of its Affiliates (other than employment
agreements and employment Contracts described in clause (A)
above);
(E) a lease, sublease or similar Contract with any
Person under which Central, Career Services, Westech or any
of their Affiliates is a lessor or sublessor of, or makes
available for use to any Person, (1) any Real Property
occupied by Central, Career Services, Westech or any of their
Affiliates or (2) any portion of any premises occupied by
Central, Career Services, Westech or any of their Affiliates;
(F) a lease, sublease or similar Contract with any
Person under which Central, Career Services, Westech or any
of their Affiliates is a lessor or sublessor of, or makes
available for use to any Person, any Personal Property that
is used, held for use or intended to be used primarily in
connection with, or that arises primarily out of, the
business, properties or assets of Career Services or Westech;
(G) (1) a continuing Contract for the purchase of
materials, supplies or equipment, (2) a Contract for
management, service, consulting or similar services or (3) a
Contract for advertising services, in each case that is
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material to the business of Career Services or Westech;
(H) (1) a Contract under which Central, Career
Services, Westech or any of their Affiliates has borrowed any
money from, or issued any note, bond, debenture or other
evidence of indebtedness to, any Person or (2) any other note,
bond, debenture or other evidence of indebtedness issued by
Central, Career Services, Westech or any of their Affiliates
to any Person;
(I) a Contract (including any so-called take-or-pay
or keepwell agreement) under which (1) any Person has,
directly or indirectly, guaranteed indebtedness, liabilities
or obligations of Central, Career Services, Westech or any of
their Affiliates or (2) Central, Career Services, Westech or
any of their Affiliates has, directly or indirectly,
guaranteed indebtedness, liabilities or obligations of any
other Person (in each case other than endorsements for the
purpose of collection in the ordinary course of business);
(J) a Contract under which Central, Career Services,
Westech or any of their Affiliates has, directly or
indirectly, made any advance, loan, extension of credit or
capital contribution to, or other investment in, any Person
(other than extensions of trade credit in the ordinary course
of business);
(K) a Contract providing for indemnification of any
Person with respect to liabilities relating to Career Services
or Westech (other than in the ordinary course of business);
(L) a power of attorney (other than a power of
attorney given in the ordinary course of business with respect
to routine Tax matters);
(M) a Contract not made in the ordinary course of
business;
(N) a confidentiality agreement, other than in the
ordinary course of business;
(O) a Contract (including a purchase order)
involving payment by Central, Career Services, Westech or any
of their Affiliates of more than $125,000 or extending for a
term more than
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180 days from the date of this Agreement, other than purchase
orders entered into in the ordinary course of business prior
to the date of this Agreement and purchase orders entered into
in the ordinary course of business after the date of this
Agreement and not in violation of this Agreement;
(P) a Contract (including a sales order) involving
the obligation of Central, Career Services, Westech or any of
their Affiliates to deliver products or services for payment
of more than $125,000 or extending for a term more than 180
days from the date of this Agreement, other than subscriptions
for products or services sold in the ordinary course of
business prior to the date of this Agreement and other than
for products or services entered into in the ordinary course
of business after the date of this Agreement and not in
violation of this Agreement;
(Q) a Contract with, or license or Permit granted by
or from, any Governmental Entity;
(R) a Contract providing for the services of any
dealer, distributor, non-employee sales representative,
franchisee or similar representative involving the payment by
Central, Career Services, Westech or any of their Affiliates
of more than $125,000;
(S) a Contract granting a Lien upon any assets or
property of Career Services or Westech, other than a Career
Services Permitted Lien;
(T) a Contract for the sale of any assets or
property of Career Services or Westech or the grant of any
preferential rights to purchase any assets or property of
Career Services or Westech or requiring the consent of any
party to the transfer of any assets of property of Career
Services or Westech;
(U) any other Contract that has an aggregate future
liability to any Person (other than BrassRing) in excess of
$125,000; or
(V) a Contract other than as described above to
which BrassRing, Xxxxxx, Tribune, Accel or any of their
Affiliates is a party or by which BrassRing, Xxxxxx, Tribune,
Accel or any of their Affiliates or any of their respective
properties
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or assets is bound, in each case that is material to the
business of Career Services or Westech or the use of any of
the assets of property of Career Services or Westech.
(ii) Except as disclosed on Schedule 4.01(g)(ii), each
Contract identified on Schedule 4.01(g)(i) is valid, binding and in
full force and effect and is enforceable by Career Services or Westech
in accordance with its terms. Except as disclosed on Schedule
4.01(g)(ii), Central, Career Services or Westech as the case may be,
has performed all obligations required to be performed by it under all
Contracts to which Career Services or Westech is a party or by which it
or any of its or their properties or assets are bound, and none of
Central, Career Services or Westech has taken any actions that are in
conflict with, or that would result in any violation of, or default
(with or without notice or lapse of time, or both) under, any such
Contract, and, to the knowledge of Central and/or Career Services, no
other party to any such Contract has taken any action that is in
conflict with, or that would result in any violation of, or default
(with or without notice or lapse of time, or both) under, such
Contract. None of Central, Career Services or Westech has, except as
disclosed on Schedule 4.01(g)(ii), received any written or oral notice
of the intention of any party to terminate any Contract listed on
Schedule 4.01(g)(i). Complete and correct copies of all Contracts
listed on Schedule 4.01(g)(i), together with all amendments thereto,
have been made available to BrassRing.
(h) Permits. Schedule 4.01(h) sets forth all Permits issued or
granted to Career Services or Westech by Governmental Entities that are
necessary or desirable for the conduct of the business of Career Services.
Except as disclosed on Schedule 4.01(h), (i) to the knowledge of Central and/or
Career Services, all such Permits are validly held by Career Services or
Westech, and each of Career Services and Westech, as applicable, has complied in
all respects with the terms and conditions thereof, (ii) since January 1, 1999,
none of Central, Career Services or Westech has received any written notice of
any suit, action or proceeding relating to the revocation or modification of any
such Permits, and (iii) to the knowledge of Central and/or Career Services, none
of such Permits will be subject to suspension, modification, revocation or
nonrenewal as a result of the execution and delivery of this Agreement or any of
the other Transaction Agreements or the consummation of the transactions
contemplated hereby and thereby. Career
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Services and Westech possess all Permits to own or hold under lease and operate
their respective assets and to conduct their businesses as currently conducted.
(i) Accounts Receivable. All the accounts receivable of Career
Services and Westech (a) represent actual indebtedness incurred by the
applicable account debtors and (b) have arisen from bona fide transactions in
the ordinary course of business of Career Services or Westech, as the case may
be. To the knowledge of Central and/or Career Services, all such accounts
receivable are good and collectible at the aggregate recorded amounts thereof,
net of any applicable reserves for doubtful accounts reflected in the Career
Services Financial Statements. Since the date of the Career Services Financial
Statements, there have not been any write-offs as uncollectible of any customer
accounts receivable of Career Services or Westech, except for write-offs in the
ordinary course of the business of Career Services or Westech and consistent
with past practice.
(j) Insurance. Career Services and Westech maintain policies
of fire and casualty, liability and other forms of insurance that cover their
respective businesses and assets in such amounts, with such deductibles and
against such risks and losses as are, in the judgment of each of Central and
Career Services, reasonable for the business and assets of Career Services and
Westech. The insurance policies maintained with respect to Career Services and
Westech and their assets and properties are disclosed on Schedule 4.01(j). All
such policies are in full force and effect, all premiums due and payable thereon
have been paid (other than retroactive or retrospective premium adjustments that
are not yet, but may be, required to be paid with respect to any period ending
prior to the Closing Date, and no notice of cancelation or termination has been
received with respect to any such policy which has not been replaced on
substantially similar terms prior to the date of such cancelation. To the
knowledge of Central and/or Career Services, the activities and operations of
Career Services and Westech have been conducted in a manner so as to conform in
all material respects to all applicable provisions of such insurance policies.
(k) Taxes. Except as set forth in Schedule 4.01(k),
(i) (A) Career Services and Westech, and any affiliated group,
within the meaning of Section 1504 of the Code, of which Career
Services or Westech is or has been a member, has filed or caused to be
filed in a
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timely manner (within any applicable extension periods) all material
Tax Returns required to be filed by the Code or by applicable state,
local or foreign tax laws, (B) all material Taxes with respect to
taxable periods covered by such Tax Returns, and all other Taxes for
which Career Services or Westech is or might otherwise be liable have
been timely paid in full or will be timely paid in full by the due date
thereof and the most recent financial statements for Career Services
and Westech reflect an adequate reserve for all Taxes payable by Career
Services and Westech for all taxable periods and portions thereof
through the date of such financial statements, and (C) there are no
material Liens for Taxes with respect to any of the assets or
properties of Career Services or Westech.
(ii) No Tax Return of Career Services or Westech has ever been
examined by the Internal Revenue Service. No material Tax Return of
Career Services, Westech or any affiliated group of which Career
Services or Westech is currently or has ever been a member is under
audit or examination by any Taxing Authority, and no written or
unwritten notice of such an audit or examination has been received by
Career Services or Westech.
(iii) Each material deficiency resulting from any audit or
examination relating to Taxes of Career Services or Westech by any
Taxing Authority has been timely paid. No material issues relating to
Taxes of Career Services or Westech were raised by the relevant Taxing
Authority in any completed audit or examination that can reasonably be
expected to recur in a later taxable period. The relevant statute of
limitations is closed with respect to the Federal income Tax Returns of
Career Services, Westech and any affiliated group of which Career
Services or Westech has ever been a part for all years through December
31, 1995. Career Services and Westech have made available to BrassRing
documents setting forth the dates of the most recent audits or
examinations of Career Services, Westech or any affiliated group of
which Career Services or Westech has ever been a member by any Taxing
Authority in respect of Federal, foreign and material state and local
Taxes for all taxable periods for which the statute of limitations has
not yet expired.
(iv) Career Services and Westech are not parties to or bound
by any tax sharing agreement, tax indemnity obligation or similar
agreement, arrangement or practice with respect to Taxes (including any
advance
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pricing agreement, closing agreement or other agreement relating to
Taxes with any Taxing Authority).
(v) Career Services and Westech shall not be required to
include in a taxable period ending after the Closing Date taxable
income attributable to income that accrued in a prior taxable period
but was not recognized in any prior taxable period as a result of the
installment method of accounting, the long-term contract method of
accounting, the cash method of accounting or Section 381 of the Code or
any comparable provision of state, local, or foreign Tax law, or for
any other reason.
(vi) None of Career Services, Westech, Central nor any of
their Affiliates has taken any action or has any knowledge of any fact
or circumstance that is reasonably likely to prevent the transactions
contemplated hereby, including the Merger, from qualifying as a
reorganization within the meaning of Section 368(a)(1)(A) of the Code.
(vii) (A) neither Central nor any of its Affiliates has made
with respect to Career Services, Westech or any property held by Career
Services or Westech, any consent under Section 341 of the Code, (B) no
property of Career Services or Westech is "tax exempt use property"
within the meaning of Section 168(h) of the Code, (C) Career Services
and Westech are not parties to any lease made pursuant to Section
168(f)(8) of the Internal Revenue Code of 1954, and (D) none of the
assets of Career Services or Westech is subject to a lease under
Section 7701(h) of the Code or under any predecessor section thereof.
(viii) (A) there are no outstanding agreements or waivers
extending, or having the effect of extending, the statutory period of
limitation applicable to any material Tax returns required to be filed
with respect to Career Services or Westech, (B) neither Career
Services, Westech, nor any affiliated group, within the meaning of
Section 1504 of the Code, of which Career Services or Westech is or has
been a member, has requested any extension of time within which to file
any material Tax return, which return has not yet been filed, and (C)
no power of attorney with respect to any Taxes has been executed or
filed with any Taxing Authority by or on behalf of Career Services or
Westech.
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(ix) Central is not a "foreign person" within the
meaning of Section 1445 of the Code.
(l) Absence of Certain Changes or Events. Except as disclosed
on Schedule 4.01(l), from the date of the most recent Career Services Financial
Statements to the date of this Agreement, each of Central and Career Services
has conducted the business of Career Services and its subsidiaries only in the
ordinary course, and during such period there has not been:
(i) any event, change, effect or development that has had or
could reasonably be expected to have a Career Services Material Adverse
Effect;
(ii) (A) any granting by Central, Career Services, Westech or
any of their Affiliates to any employee of Career Services or Westech,
of any increase in compensation, except in the ordinary course of
business consistent with past practice or as was required under
employment agreements in effect as of the date of the most recent
Career Services Financial Statements, (B) any granting by Central,
Career Services, Westech or any of their Affiliates to any employee of
Career Services or Westech of any increase in severance or termination
pay, except as was required under any employment, severance or
termination agreements in effect as of the date of the Career Services
Financial Statements or (C) any entry by Central, Career Services,
Westech or any of their Affiliates with any employee of Career Services
or Westech into any employment, severance or termination agreement;
(iii) any change in accounting methods, principles or
practices by Central, Career Services or Westech materially affecting
the business, properties or assets of Career Services or Westech,
except insofar as may have been required by a change in generally
accepted accounting principles;
(iv) any elections by Central, Career Services or Westech with
respect to Taxes directly relating to the business, properties or
assets of Career Services or Westech or settlement or compromise by
Central, Career Services or Westech of any Tax liability or refund
directly relating to the business, properties or assets of Career
Services or Westech; or
(v) any declaration, setting aside or payment of any
dividends, distributions or other amounts (whether in cash, stock or
property) with respect to any shares
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of Career Services Capital Stock or capital stock of Westech.
(m) Proceedings. Except as disclosed on Schedule 4.01(m),
there is no suit, action or proceeding pending or, to the knowledge of Central
and/or Career Services, threatened, against or affecting Career Services or
Westech or any of their assets or relating to the transactions contemplated by
this Agreement, nor is there any judgment, order or decree outstanding against
or affecting Career Services or Westech or their assets. Except as disclosed on
Schedule 4.01(m), there are no suits, actions or proceedings initiated by
Central, Career Services, Westech or any of their Affiliates or that Central,
Career Services, Westech or any of their Affiliates intends to initiate, against
any other Person arising out of the conduct of Career Services or Westech.
Except as disclosed on Schedule 4.01(m), to the knowledge of Central and/or
Career Services, there is no pending or threatened investigation of the conduct
of the business or relating to any of the assets of Career Services or Westech.
(n) Compliance with Laws.
(i) Except as disclosed on Schedule 4.01(n)(i), each of Career
Services and Westech are in compliance in all material respects with
all applicable laws, ordinances, rules and regulations, relating to the
business or any of the assets of Career Services and its subsidiaries
including those laws, ordinances, rules and regulations relating to
occupational health and safety. Except as disclosed on Schedule
4.01(n)(i), none of Central, Career Services or Westech has received
any written communication since January 1, 1997, from any Governmental
Entity that alleges that Career Services or Westech is not in
compliance in any respect with any law, ordinance, rule or regulation
applicable to Career Services or Westech. None of Central, Career
Services or Westech has received any written notice that any
investigation or review by any Governmental Entity with respect to
Career Services or Westech is pending or that any such investigation or
review is contemplated. This Section 4.01(n)(i) does not relate to
matters with respect to Taxes, which are the subject of Section
4.01(k), or with respect to environmental matters, which are the
subject of Section 4.01(n)(ii).
(ii) Except as disclosed in Schedule 4.01(n)(ii), Career
Services and Westech are in compliance in all material respects with
all applicable Environmental
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Laws, and Career Services and Westech have, and are in compliance with,
all environmental Permits necessary for the conduct of their
businesses, which permits are listed on Schedule 4.01(n)(ii). Except as
disclosed in Schedule 4.01(n)(ii), none of Central, Career Services or
Westech has received any written communication since January 1, 1997
from any Governmental Entity or person that alleges that Career
Services or Westech is in violation of, or subject to liability under,
any Environmental Law. Except as disclosed in Schedule 4.01(n)(ii),
none of Central, Career Services or Westech has released, generated,
treated, stored, disposed of or transported Hazardous Materials, or
arranged for any such activities, in a manner that could reasonably
likely (i) result in any remedial or investigative action on the part
of Career Services or Westech, or (ii) form the basis of any claim
against Career Services or Westech or, to the knowledge of Central
and/or Career Services, against any person or entity whose liability
Career Services or Westech has or may have retained or assumed either
contractually or by operation of law.
(o) Labor Agreements and Actions. Neither Career Services nor
Westech is bound by, or subject to, any written or oral, express or implied,
contract, commitment or arrangement with any labor union, and no labor union has
requested or, to the knowledge of Central and/or Career Services, sought to
represent any of the employees, representatives or agents of Career Services or
Westech. There is no strike or other labor dispute involving Career Services or
Westech pending, or, to the knowledge of Central and/or Career Services,
threatened, nor are Central and Career Services aware of any labor organization
activity involving the employees of Career Services or Westech. Neither Central
nor Career Services is aware that any employee of Career Services or Westech
intends to terminate his or her employment with Career Services or Westech and
none of Central, Career Services or Westech has a present intention to terminate
the employment of any employee of Career Services or Westech. Career Services
and Westech have complied with all applicable Federal and state equal employment
opportunity laws and with other laws related to employment.
(p) Real Property. Neither Career Services nor Westech owns
any Real Property, and any Real Property held under lease by Career Services or
Westech is held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the use made
and proposed to be made of such
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Real Property by Career Services and/or Westech, as the case may be.
Career Services and Westech enjoy peaceful and undisturbed possession
under all material leases.
(q) Benefit Plans.
(i) Schedule 4.01(q) contains a list and a brief description
of each "employee pension benefit plan" (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (a "Pension Plan"), "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA) (a "Welfare Plan"), and each other
plan, arrangement or policy (written or oral) relating to stock
options, stock purchases, compensation, deferred compensation,
severance, fringe benefits or other employee benefits, in each case
maintained or contributed to, or required to be maintained or
contributed to, by Career Services, Westech or any other person or
entity that, together with Career Services, is or was treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code
(each, together with Career Services and Westech, a "Commonly
Controlled Entity") for the benefit of any present or former officers,
employees, agents, directors or independent contractors of Career
Services (all the foregoing being herein called "Career Services
Benefit Plans").
(ii) Career Services has delivered to BrassRing true, complete
and correct copies of (A) each Career Services Benefit Plan (or, in the
case of any unwritten Career Services Benefit Plans, descriptions
thereof), (B) the most recent annual report on Form 5500 (including all
schedules and attachments thereto) filed with the Internal Revenue
Service with respect to each Career Services Benefit Plan (if any such
report was required by applicable law), (C) the most recent summary
plan description (or similar document) for each Career Services Benefit
Plan for which such a summary plan description is required by
applicable law or was otherwise provided to plan participants or
beneficiaries and (D) each trust agreement and insurance or annuity
contract or other funding or financing arrange ment relating to any
Career Services Benefit Plan.
(iii) To the knowledge of Central and/or Career Services, (A)
each such Form 5500 and each such summary plan description (or similar
document) was as of its date and is true, complete and correct in all
material respects, (B) each Career Services Benefit Plan has been
administered in all material respects in
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accordance with its terms, (C) Career Services and all the Career
Services Benefit Plans are in compliance in all material respects with
the applicable provisions of ERISA, the Code, all other applicable laws
and the terms of all applicable collective bargaining agreements, (D)
all reports, returns and similar documents with respect to the Career
Services Benefit Plans required to be filed with any Governmental
Entity or distributed to any Career Services Benefit Plan participant
have been duly and timely filed or distributed and, to the knowledge of
Central and/or Career Services, all reports, returns and similar
documents actually filed or distributed were true, complete and correct
in all material respects, and (E) there are no investigations by any
Governmental Entity, termination proceedings or other claims (except
routine claims for benefits payable under the Career Services Benefit
Plans) or proceedings against or involving any Career Services Benefit
Plan or asserting any rights to or claims for benefits under any Career
Services Benefit Plan that could give rise to any material liability,
and there are not any facts or circumstances that could give rise to
any liability in the event of any such investigation, claim or
Proceeding.
(iv) Each Pension Plan that is intended to be qualified under
Code Section 401(a) has been the subject of a determination letter from
the Internal Revenue Service to the effect that such Pension Plan is
qualified and the related trust is exempt from Federal income taxes
under Sections 401(a) and 501(a), respectively, of the Code; no such
determination letter has been revoked, and, to the knowledge of Central
and/or Career Services, revocation has not been threatened; and each
such plan has not been amended since the effective date of its most
recent determination letter in any respect that might adversely affect
its qualification, materially increase its cost or require security
under Section 307 of ERISA. Career Services has delivered to BrassRing
a copy of the most recent determination letter received with respect to
each such Pension Plan for which such a letter has been issued, as well
as a copy of any pending application for a determination letter. Career
Services has also provided to BrassRing a list of all amendments to
such plans as to which a favorable determination letter has not yet
been received. No event has occurred that could subject any Career
Services Benefit Plan to tax under Section 511 of the Code.
(v) Schedule 4.01(q) discloses whether: (1) any "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406 of
ERISA) has occurred that
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involves the assets of any Career Services Benefit Plan; (2) any
prohibited transaction has occurred that could subject Career Services,
Westech or any of their employees, or, to the knowledge of Career
Services and/or Central, a trustee, administrator or other fiduciary of
any trust created under any Career Services Benefit Plan to the tax or
penalty on prohibited transactions imposed by Section 4975 of ERISA or
the sanctions imposed under Title I of ERISA; (3) any of the Career
Services Benefit Plans has been terminated or has been the subject of a
"reportable event" (as defined in Section 4043 of ERISA and the
regulations thereunder); and (4) Career Services, Westech, and to the
best knowledge of Career Services and/or Westech, any trustee,
administrator or other fiduciary of any Benefit Plan or any agent of
any of the foregoing has engaged in any transaction or acted in a
manner that could, or failed to act so as to, subject Career Services,
Westech or any trustee, administrator or other fiduciary to any
liability for breach of fiduciary duty under ERISA or any other
applicable law.
(vi) No Commonly Controlled Entity has incurred any liability
to a Pension Plan (other than for contributions not yet due) or to the
Pension Benefit Guaranty Corporation other than for the payment of
premiums not yet due), which liability has not been fully paid as of
the date hereof.
(vii) No Common Controlled Entity has (a) engaged in a
transaction described in Section 4069 of ERISA that could subject
Career Services to liability at any time after the date hereof or (b)
acted in a manner that could, or failed to act so as to, result in
fines, penalties, taxes or related changes under (x) Section 502(c)(i)
or (1) of ERISA, (y) Section 4071 of ERISA or (z) Chapter 43 of the
Code.
(viii) No Commonly Controlled Entity has contributed to a
"multiemployer plan" (as defined in Section 4001(a)(e) of ERISA) since
January 1, 1995.
(ix) The list of Welfare Plans in Schedule 4.01(q) discloses
whether each Welfare Plan is (i) unfunded, (ii) funded through a
"welfare benefit fund", as such term is defined in Section 419(e) of
the Code, or other funding mechanism or (iii) insured. Each such
Welfare Plan may be amended or terminated without material liability to
Career Services or Westech at any time after the Closing Date. Career
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Services and its subsidiaries comply with the applicable requirements
of Section 4980B(f) of the Code with respect to each Career Services
Benefit Plan that is a group health plan, as such term is defined in
Section 5000(b)(1) of the Code.
(x) No employee of Career Services or Westech will be entitled
to any additional benefits or any acceleration of the time of payment
or vesting of any benefits under any Career Services Benefit Plan as a
result of the Merger and the other transactions contemplated by this
Agreement and the other Transaction Agreements.
(xi) Any amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the Merger
and the other transactions contemplated by this Agreement or the other
Transaction Agreements by any employee, officer, director or inde
pendent contractor of Career Services, Westech or any of their
affiliates who is a "disqualified individual" (as such term is defined
in proposed Treasury Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation arrangement or
Career Services Benefit Plan currently in effect would not be
characterized as an "excess parachute payment" (as such term is defined
in Section 280G(b)(1) of the Code). Schedule 4.01(q) sets forth (A) the
maximum amount that could be paid to each executive officer of Career
Services and its subsidiaries as a result of the transactions
contemplated by this Agreement under all employment, severance and
termination agreements, other compensation arrangements and Career
Services Benefit Plans currently in effect and (B) the "base amount"
(as such term is defined in Section 280G(b)(3) of the Code) for each
such executive officer calculated as of the date of this Agreement.
(xii) Except as disclosed on Schedule 4.01(q), there are no
material unfunded liabilities, actual or contingent, arising under any
Career Services Benefit Plan for which Career Services or Westech could
be liable. No Liens have been imposed on any Career Services Benefit
Plans or on the assets of Career Services or Westech pursuant to the
Code or ERISA.
(r) Brokers. Other than DLJ, no broker, investment banker,
financial advisor or other Person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
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consummation of the transactions contemplated by this Agreement and the other
Transaction Agreements based upon arrangements made by or on behalf of Central,
Career Services, Westech or any of their Affiliates. Neither Career Services nor
Westech has any liability for any fees or commissions payable to DLJ in
connection with the consummation of the transactions contemplated by this
Agreement or any of the other Transaction Agreements.
(s) Capitalization of Career Services and Westech. The
authorized capital stock of Career Services consists of (i) 100,000 shares of
Common Stock, no par value per share, of which 80,000 shares are issued and
outstanding and (ii) 100,000 shares of Preferred Stock, no par value per share,
of which no shares are issued and outstanding. The authorized capital stock of
Westech consists of 1,000,000 shares of Common Stock, no par value per share, of
which 142,800 shares are issued and outstanding. Except as described in the
immediately preceding two sentences, there are no other shares of capital stock
or other equity securities of Career Services or Westech issued, reserved for
issuance or outstanding. All of the outstanding shares of Career Services
Capital Stock and capital stock of Westech are duly and validly authorized and
issued, are fully paid and nonassessable and have been issued in compliance with
applicable Federal and state securities laws. There are no outstanding options,
warrants, rights (including conversion or preemptive rights) or agreements, in
writing or oral, for the purchase or acquisition from Career Services or Westech
of any shares of capital stock of Career Services or Westech. There exist no
rights of first refusal or similar rights in respect of shares of Career
Services Capital Stock or capital stock of Westech issued or sold by Career
Services.
(t) Subsidiaries. Career Services has no direct or indirect
subsidiaries other than Westech and does not own, directly or indirectly, any
capital stock, membership interest, partnership interest, joint venture interest
or other equity interest in any Person other than Westech.
(u) No Undisclosed Liabilities. Except as disclosed on
Schedule 4.01(u), to the knowledge of Central and/or Career Services, neither
Career Services nor Westech is subject to any liability (whether accrued,
absolute, contingent, unasserted or otherwise) that is not shown or that is in
excess of amounts shown or reserved for in the Career Services Financial
Statements, other than liabilities of the same nature as those set forth in such
financial statements and reasonably incurred in the ordinary course of
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business of such entities after the respective dates of such financial
statements.
(v) Private Offering. None of Central, Career Services,
Westech, their affiliates and/or their representatives has issued, sold or
offered any security of Career Services to any person under circumstances that
would cause the sale of the Career Services Capital Stock, as contemplated by
this Agreement, to be subject to the registration requirements of the Securities
Act. None of Central, Career Services, their affiliates and/or their
representatives will offer the shares of Career Services Capital Stock or any
part thereof or any similar securities for issuance or sale to, or solicit any
offer to acquire any of the same from, anyone so as to make the issuance and
sale of the shares of Career Services Capital Stock subject to the registration
requirements of Section 5 of the Securities Act. Assuming the representations of
BrassRing contained in Section 4.02(r) are true and correct, the sale and
delivery of the shares of Career Services Capital Stock hereunder are exempt
from the registration and prospectus delivery requirements of the Securities
Act.
SECTION 4.02. Representations and Warranties of BrassRing.
BrassRing hereby represents and warrants to Central as follows:
(a) Organization, Standing and Power. BrassRing is duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority and possesses all
governmental franchises, licenses, permits, and except as disclosed on Schedule
4.02(a), authorizations and approvals necessary to enable it to own, lease or
otherwise hold its property and assets and carry on its business as presently
conducted, other than such franchises, licenses, permits, authorizations and
approvals the lack of which, individually or in the aggregate, have not had and
could not reasonably be expected to have a BrassRing Material Adverse Effect.
BrassRing has made available to Central or Central's representatives true and
complete copies of the Restated Certificate of Incorporation and By-Laws of
BrassRing, in each case as amended through the date of this Agreement. BrassRing
is duly qualified to do business as a foreign corporation in each jurisdiction
in which it is required to qualify.
(b) Authority; Execution and Delivery; Enforceability.
BrassRing has full power and authority to execute this Agreement and each of the
other Transaction Agreements to which it is a party and to consummate the
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Merger and the other transactions contemplated hereby and thereby. The execution
and delivery by BrassRing of this Agreement and each of the other Transaction
Agreements to which it is a party and the consummation by BrassRing of the
Merger and the other transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of BrassRing, and no
other corporate proceedings on the part of BrassRing are necessary to authorize
this Agreement or any of the other Transaction Agreements to which BrassRing a
party or the consummation of the Merger and the other transactions contemplated
hereby or thereby. BrassRing has duly executed and delivered this Agreement and,
prior to the Closing, BrassRing will have duly executed and delivered each other
Transaction Agreement to which it is a party. This Agreement constitutes, and
each other Transaction Agreement to which BrassRing is a party will, upon the
Closing, constitute, a legal, valid and binding obligation of BrassRing,
enforceable against the BrassRing in accordance with its terms.
(c) No Conflicts; Consents. The execution and delivery by
BrassRing of this Agreement and each of the other Transaction Agreements to
which it is a party do not, and the consummation of the Merger and the other
transactions contemplated hereby and thereby and the compliance by BrassRing
with the terms hereof and thereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration of
any obligation or the loss of a benefit under, or result in the creation of any
Lien upon any of its properties or assets under, any provision of (i) the
Restated Certificate of Incorporation or By-Laws of BrassRing, (ii) any Contract
to which BrassRing is a party or by which any of its properties or assets is
bound or (iii) any judgment, order or decree, or statute, law, ordinance, rule
or regulation, applicable to BrassRing or any of its properties or assets. No
consent, approval, license, permit, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required to be obtained
or made by or with respect to BrassRing in connection with the execution,
delivery and performance of this Agreement or any of the other Transaction
Agreements to which it is a party or the consummation of the transactions
contemplated hereby and thereby, other than (i) compliance with, and filings
under, the HSR Act, if required and (ii) filings with the Secretary of State of
the State of Delaware and the Arizona Corporation Commission in connection with
the Merger, including the filing of the Certificate of Merger and the Articles
of Merger.
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(d) Financial Statements. Schedule 4.02(d) sets forth (i) the
unaudited balance sheets of BrassRing and its consolidated subsidiaries as of
December 31, 1999 and (ii) an unaudited statement of operations of BrassRing and
its consolidated subsidiaries for the period from BrassRing's inception through
December 31, 1999 (collectively, the "BrassRing Financial Statements"). The
BrassRing Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be otherwise indicated on Schedule 4.02(d)) and fairly
present in all respects the financial position of BrassRing and its consolidated
subsidiaries as of the dates thereof and the results of the operations of
BrassRing and its consolidated subsidiaries for the periods then ended.
(e) Assets Other than Real Property Interests. Except as
disclosed on Schedule 4.02(e), BrassRing has good and valid title to all of its
material assets, in each case free and clear of all Liens, except (i) BrassRing
Permitted Liens and (ii) other imperfections of title or encumbrances, if any,
that, individually or in the aggregate, do not materially impair the continued
use and operation of the assets to which they relate in the conduct of the
business of BrassRing as presently conducted. This Section 4.02(e) does not
relate to Intellectual Property, which is exclusively the subject of Section
4.02(f), or Real Property, which is exclusively the subject of Section 4.02(n).
(f) Intellectual Property. BrassRing owns, possesses, licenses or
has rights to use without the consent of any Person all material Intellectual
Property necessary for the conduct of its business as now conducted, other than
Intellectual Property that is not material to the conduct of the business of
BrassRing as presently conducted. Schedule 4.02(f) sets forth a true and
complete list (excluding software and trade secrets) of all material
Intellectual Property of BrassRing and material agreements relating thereto.
BrassRing has not filed any U.S. or foreign patent application, and does not own
any issued patent. Except as disclosed on Schedule 4.02(f), (i) to the knowledge
of BrassRing, there is no infringement, misappropriation or violation by any
Person of any Intellectual Property of BrassRing, (ii) there is no pending or,
to the knowledge of BrassRing, threatened action, suit, proceeding
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or claim by any Person challenging the rights of BrassRing in or to any
Intellectual Property of BrassRing, and BrassRing is not aware of any facts
which would form a reasonable basis for any such claim, (iii) there is no
pending or, to the knowledge of BrassRing, threatened action, suit, proceeding
or claim by any Person challenging the validity or scope of any Intellectual
Property of BrassRing, and is not aware of any facts which would form a
reasonable basis for any such claim, and (iv) there is no pending or, to the
knowledge of BrassRing, threatened action, suit, proceeding or claim by any
Person that BrassRing infringes, misappropriates or otherwise violates any
proprietary rights of any Person, and is not aware of any other fact which would
form a reasonable basis for any such claim. True and correct copies of all
material licenses and other material agreements between BrassRing or any of its
Affiliates and any other third parties, in each case relating to the
Intellectual Property of BrassRing, and all amendments and supplements thereto,
have been made available to Central.
(g) Contracts.
(i) Except as disclosed on Schedule 4.02(g)(i), neither
BrassRing, nor any of its subsidiaries, is a party to, or bound by, any
material Contract that is used, held for use or intended to be used
primarily in connection with, or that arises primarily out of, the
business, properties or assets of BrassRing and that is:
(A) a written employment agreement or employment
Contract;
(B) a collective bargaining agreement or other Contract
with any labor organization, union or association;
(C) a covenant not to compete;
(D) a Contract with (1) any stockholder of BrassRing or
any of its Affiliates or (2) any officer or employee of BrassRing
or any of its subsidiaries (other than employment agreements and
employment contracts described in clause (A) above);
(E) a lease, sublease or similar Contract with any Person
under which BrassRing or any of its subsidiaries is a lessor or
sublessor of, or makes available for use to any Person, (1) any
Real Property occupied by BrassRing or any of its subsidiaries or
(2) any portion of any premises occupied by BrassRing or any of
its subsidiaries;
(F) a lease, sublease or similar Contract with any Person
under which BrassRing or any of
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its subsidiaries is a lessor or sublessor of, or makes available
for use to any Person, any Personal Property that is used, held
for use or intended to be used primarily in connection with, or
that arises primarily out of, the business, properties or assets
of BrassRing;
(G) (1) a continuing Contract for the purchase of
materials, supplies or equipment, (2) a Contract for management,
service, consulting or similar services or (3) a Contract for
advertising services, in each case that is material to the
business of BrassRing;
(H) (1) a Contract under which BrassRing or any of its
subsidiaries has borrowed any money from, or issued any note,
bond, debenture or other evidence of indebtedness to, any Person
or (2) any other note, bond, debenture or other evidence of
indebtedness issued by BrassRing or any of its subsidiaries to
any Person;
(I) a Contract (including any so-called take-or-pay or
keepwell agreement) under which (1) any Person has, directly or
indirectly, guaranteed indebtedness, liabilities or obligations
of BrassRing or any of its subsidiaries or (2) BrassRing or any
of its subsidiaries has, directly or indirectly, guaranteed
indebtedness, liabilities or obligations of any other Person (in
each case other than endorsements for the purpose of collection
in the ordinary course of business);
(J) a Contract under which BrassRing or any of its
subsidiaries has, directly or indirectly, made any advance, loan,
extension of credit or capital contribution to, or other
investment in, any Person (other than extensions of trade credit
in the ordinary course of business);
(K) a Contract providing for indemnification of any
Person with respect to liabilities relating to BrassRing (other
than in the ordinary course of business);
(L) a power of attorney (other than a power of attorney
given in the ordinary course of business with respect to routine
Tax matters);
(M) a Contract not made in the ordinary course of
business;
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(N) a confidentiality agreement, other than in the
ordinary course of business;
(O) a Contract (including a purchase order) involving
payment by BrassRing or any of its subsidiaries of more than
$125,000 or extending for a term more than 180 days from the date
of this Agreement, other than purchase orders entered into in the
ordinary course of business prior to the date of this Agreement
and purchase orders entered into in the ordinary course of
business after the date of this Agreement and not in violation of
this Agreement;
(P) a Contract (including a sales order) involving the
obligation of BrassRing or any of its subsidiaries to deliver
products or services for payment of more than $125,000 or
extending for a term more than 180 days from the date of this
Agreement, other than subscriptions for products or services sold
in the ordinary course of business prior to the date of this
Agreement and other than for products or services entered into in
the ordinary course of business after the date of this Agreement
and not in violation of this Agreement;
(Q) a Contract with, or license or Permit granted by or
from, any Governmental Entity;
(R) a Contract providing for the services of any dealer,
distributor, non-employee sales representative, franchisee or
similar representative involving the payment by BrassRing or any
of its subsidiaries of more than $125,000;
(S) a Contract granting a Lien upon any assets or
property of BrassRing, other than a BrassRing Permitted Lien;
(T) a Contract for the sale of any assets or property of
BrassRing or the grant of any preferential rights to purchase any
assets or property of BrassRing or requiring the consent of any
party to the transfer of any assets of property of BrassRing;
(U) any other Contract that has an aggregate future
liability to any Person (other than BrassRing) in excess of
$125,000; or
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(V) a Contract other than as described above to which
Central, Career Services or any of their Affiliates is a party or
by which Central, Career Services or any of their Affiliates or
any of their respective properties or assets is bound, in each
case that is material to the business of BrassRing or the use of
any of the assets of property of BrassRing.
(ii) Except as disclosed on Schedule 4.02(g)(ii), each Contract
identified on Schedule 4.02(g)(i) is valid, binding and in full force
and effect and is enforceable by BrassRing in accordance with its terms
except for such failures to be valid and binding, in full force and
effect or enforceable that, individually or in the aggregate, have not
had a BrassRing Material Adverse Effect. Except as disclosed on Schedule
4.02(g)(ii), BrassRing has performed all material obligations required
to be performed by it under all Contracts to which it is a party or by
which it or any of its properties or assets is bound, and BrassRing has
not taken any actions that are in conflict with, or that would result in
any material violation of, or default (with or without notice or lapse
of time, or both) in any material respect under, any such Contract, and,
to the knowledge of BrassRing, no other party to any such Contract has
taken any action that is in conflict with, or that would result in any
material violation of, or default (with or without notice or lapse of
time, or both) in any material respect under, such Contract, except for
such conflicts, violations and defaults that, individually or in the
aggregate have not had a BrassRing Material Adverse Effect. Except as
disclosed on Schedule 4.02(g)(ii), BrassRing has not received any
written or oral notice of the intention of any party to terminate any
Contract listed on Schedule 4.02(g)(i). Complete and correct copies of
all Contracts listed on Schedule 4.02(g)(i), together with all
amendments thereto, have been made available to Central.
(h) Permits. Schedule 4.02(h) sets forth all Permits issued or
granted to BrassRing by Governmental Entities that are necessary or desirable
for the conduct of the business of BrassRing. Except as disclosed on Schedule
4.02(h), (i) to the knowledge of BrassRing, all such Permits are validly held by
BrassRing, and BrassRing has complied in all respects with the terms and
conditions thereof, (ii) since its inception, BrassRing has not received any
written notice of any suit, action or proceeding relating to the revocation or
modification of any
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such Permits, and (iii) to the knowledge of BrassRing, none of such Permits will
be subject to suspension, modification, revocation or nonrenewal as a result of
the execution and delivery of this Agreement or any of the other Transaction
Agreements or the consummation of the transactions contemplated hereby and
thereby. BrassRing possesses all Permits to own or hold under lease and operate
its assets and to conduct its business as currently conducted.
(i) Insurance. BrassRing maintains policies of fire and casualty,
liability and other forms of insurance that cover its business and assets in
such amounts, with such deductibles and against such risks and losses as are, in
the judgment of BrassRing, reasonable for the business and assets of BrassRing.
All such policies will terminate as of the Closing Date. BrassRing shall use
commercially reasonable efforts to obtain insurance policies comparable to those
maintained by BrassRing as of the date hereof to cover the business and assets
of BrassRing immediately following the Effective Time.
(j) Absence of Certain Changes or Events. Except as disclosed on
Schedule 4.02(j), from the date of the most recent BrassRing Financial
Statements to the date of this Agreement, BrassRing has conducted its business
only in the ordinary course, and during such period there has not been:
(i) any event, change, effect or development that has had or
could reasonably be expected to have BrassRing Material Adverse Effect;
(ii) any change in accounting methods, principles or practices by
BrassRing materially affecting the business, properties or assets of
BrassRing, except insofar as may have been required by a change in
generally accepted accounting principles;
(iii) any declaration, setting aside or payment of any dividends,
distributions or other amounts (whether in cash, stock or property) with
respect to any shares of capital stock of BrassRing.
(k) Proceedings. Except as disclosed on Schedule 4.02(k), there
is no suit, action or proceeding pending or, to the knowledge of BrassRing,
threatened, against or affecting BrassRing or any of its assets or relating to
the transactions contemplated by this Agreement, nor is there any judgment,
order or decree outstanding against or affecting BrassRing or its assets. Except
as disclosed on Schedule 4.02(k), there are no suits, actions or proceedings
initiated by BrassRing or any of its Affil-
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iates or that BrassRing or any of its Affiliates intends to initiate, against
any other Person arising out of the conduct of BrassRing. Except as disclosed on
Schedule 4.02(k), to the knowledge of BrassRing, there is no pending or
threatened investigation of the conduct of the business or relating to any of
the assets of BrassRing.
(l) Compliance with Laws. (i) Except as disclosed on Schedule
4.02(l)(i), BrassRing is in compliance in all material respects with all
applicable laws, ordinances, rules and regulations, relating to the business or
any of the assets of BrassRing including those laws, ordinances, rules and
regulations relating to occupational health and safety. Except as disclosed on
Schedule 4.02(l)(i), BrassRing has not received any written communication since
its inception, from any Governmental Entity that alleges that BrassRing is not
in compliance in any respect with any law, ordinance, rule or regulation
applicable to BrassRing. BrassRing has not received any written notice that any
investigation or review by any Governmental Entity with respect to BrassRing is
pending or that any such investigation or review is contemplated. Section
4.02(l)(i) does not relate to environmental matters, which are the subject of
Section 4.02(l)(ii).
(ii) Except as disclosed in Schedule 4.02(l)(ii), BrassRing is in
compliance in all material respects with all applicable Environmental Laws, and
BrassRing has, and is in compliance with, all Environmental Permits necessary
for the conduct of its business, which permits are listed on Schedule
4.02(l)(ii). Except as disclosed in Schedule 4.02(l)(ii), BrassRing has not
received any written communication since its inception from any Governmental
Entity or person that alleges that BrassRing is in violation of, or subject to
liability under, any Environmental Law. Except as disclosed in Schedule
4.02(l)(ii), BrassRing has not released, generated, treated, stored, disposed of
or transported Hazardous Materials, or arranged for any such activities, in a
manner that could reasonably likely (i) result in any remedial or investigative
action on the part of BrassRing, or (ii) form the basis of any claim against
BrassRing or, to the knowledge of BrassRing, against any person or entity whose
liability BrassRing has or may have retained or assumed either contractually or
by operation of law.
(m) Labor Agreements and Actions. BrassRing is not bound by, or
subject to, any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
knowledge of BrassRing, sought to represent any of the employees,
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representatives or agents of BrassRing. There is no strike or other labor
dispute involving BrassRing pending, or, to the knowledge of BrassRing,
threatened, nor is BrassRing aware of any labor organization activity involving
the employees of BrassRing. BrassRing is not aware that any employee of
BrassRing intends to terminate his or her employment with BrassRing and
BrassRing has no present intention to terminate the employment of any employee
of BrassRing. BrassRing has complied with all applicable Federal and state equal
employment opportunity laws and with other laws related to employment.
(n) Real Property. BrassRing does not own any Real Property, and
any Real Property held under lease by BrassRing is held by it under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not materially interfere with the use made and proposed to be made of such
Real Property by BrassRing. BrassRing enjoys peaceful and undisturbed possession
under all material leases.
(o) Benefit Plans. There are no material unfunded liabilities,
actual or contingent, arising under any employee benefit plan as defined in
Section 3(3) of ERISA, stock option, stock purchase, deferred compensation plan
or arrangement and other fringe benefit plans maintained or contributed to by
BrassRing ("BrassRing Benefit Plans") for which BrassRing could be liable. No
Liens have been imposed on any BrassRing Benefit Plans. Each BrassRing Benefit
Plan is in compliance in all material respects with the applicable provisions of
the Code and ERISA.
(p) Brokers. No broker, investment banker, financial advisor or
other Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the consummation of the
transactions contemplated by this Agreement and the other Transaction Agreements
based upon arrangements made by or on behalf of BrassRing or any of its
Affiliates.
(q) Capitalization of BrassRing. (i) The authorized capital
stock of BrassRing consists of 150,000,000 shares of BrassRing Common Stock, of
which 32,697,202 shares are issued and outstanding and (ii) 30,000,000 shares of
BrassRing Preferred Stock, of which 12,899,239 shares are issued and
outstanding. Except as described in the preceding sentence, there are no other
shares of capital stock or other equity securities of BrassRing issued, reserved
for issuance or outstanding. All of the outstanding shares of BrassRing Common
Stock and BrassRing
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Preferred Stock are duly and validly authorized and issued, are fully paid and
nonassessable and have been issued in compliance with applicable Federal and
state securities laws. Except for (i) options issued for an aggregate of
8,866,484 and 2,794,635 shares of BrassRing Common Stock under the 1998
BrassRing Inc. Incentive Stock Plan and the BrassRing Inc. Incentive Stock Plan
for Xxxxxx Employees, respectively, and (ii) warrants to purchase 75,000 shares
of BrassRing Common Stock, there are no outstanding options, warrants, rights
(including conversion or preemptive rights) or agreements, in writing or oral,
for the purchase or acquisition from BrassRing of any shares of its capital
stock. There exist no rights of first refusal or similar rights in respect of
shares of BrassRing capital stock issued or sold by BrassRing.
(r) Securities Act. The shares of Career Services Capital Stock
acquired by BrassRing pursuant to this Agreement are being acquired for
investment only and not with a view to any public distribution thereof, and
BrassRing shall not offer to sell or otherwise dispose of the shares of Career
Services Capital Stock so acquired by it in violation of any of the registration
requirements of the Securities Act.
(s) Taxes. (i)(A) BrassRing and its subsidiaries have filed or
caused to be filed in a timely manner (within any applicable extension periods)
all material Tax Returns required to be filed by them by the Code or by
applicable state, local or foreign tax laws, (B) all material Taxes with respect
to taxable periods covered by such Tax Returns, and all other Taxes for which
they might otherwise be liable have been timely paid in full or will be timely
paid in full by the due date thereof and their most recent financial statements
reflect an adequate reserve for all Taxes payable by them for all taxable
periods and portions thereof through the date of such financial statements, and
(C) there are no material Liens for Taxes with respect to any of their assets or
properties.
(ii) No Tax Return of BrassRing has been examined by the Internal
Revenue Service for any taxable year since BrassRing ceased to be a
subsidiary in a consolidated group.
(iii) BrassRing and its subsidiaries are not parties to or bound
by any tax sharing agreement, tax indemnity obligation or similar
agreement, arrangement or practice with respect to Taxes with any other
party.
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(vi) Neither BrassRing nor any of its subsidiaries has taken any
action or has any knowledge of any fact or circumstance that is
reasonably likely to prevent the transactions contemplated hereby,
including the Merger, from qualifying as a reorganization within the
meaning of Section 368(a)(1)(A) of the Code.
(v) BrassRing is not a "foreign person" within the meaning of
Section 1445 of the Code.
ARTICLE V
Covenants
SECTION 5.01. Conduct of Career Services Business. Except for
matters set forth on Schedule 5.01 or otherwise expressly permitted by the terms
of this Agreement, from the date of this Agreement to the Closing, Central
shall cause the businesses of Career Services and Westech to be conducted in the
usual, regular or ordinary course in substantially the same manner as previously
conducted and, to the extent consistent therewith, use all reasonable efforts to
preserve Career Services and Westech, keep available the services of the
employees of Career Services and Westech and maintain the relationships of
Career Services and Westech with suppliers, customers, licensors, licensees,
distributors and others with whom the businesses of Career Services and Westech
deal to the end that the businesses of Career Services and Westech shall be
unimpaired at the Closing. Without limiting the generality of the foregoing,
except as set forth on Schedule 5.01 or otherwise expressly permitted or
required by the terms of this Agreement, prior to the Closing none of Central,
Career Services and/or Westech shall do any of the following, or permit any of
the following to be done, without the prior written consent of BrassRing:
(i) amend the Certificate of Incorporation or By-Laws of Career
Services or Westech;
(ii) redeem or otherwise acquire any shares of Career Services
Capital Stock or capital stock of Westech or issue any capital stock or
any option, warrant or right relating thereto or any securities
convertible into or exchangeable for any shares of Career Services
Capital Stock or capital stock of Westech;
(iii) (A) adopt or amend any Career Services Benefit Plan (or any
plan that would be a Career Services
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Benefit Plan if adopted) or enter into, adopt, extend (beyond the
Closing Date), renew or amend any collective bargaining agreement or
other Contract relating to Career Services or Westech with any labor
organization, union or association, except in each case as required by
applicable law;
(iv) grant to any executive officer or employee of Career
Services or Westech any increase in compensation or benefits, except in
the ordinary course of business and consistent with past practice or as
may be required under existing agreements and except for any increases
for which Central shall be solely obligated;
(v) renew or amend any existing, or enter into any new,
collective bargaining agreement or other Contract relating to Career
Services or Westech with any labor organization, union or association,
except in each case as required by applicable laws;
(vi) incur or assume any liabilities, obligations or indebtedness
for borrowed money or guarantee any such liabilities, obligations or
indebtedness of Career Services or Westech, other than in the ordinary
course of business consistent with past practice; provided, however,
that in no event shall Career Services or Westech incur or assume any
long-term indebtedness for borrowed moneys;
(vii) cancel any material indebtedness for borrowed money
(individually or in the aggregate) or waive any claims or rights of
substantial value of Career Services or Westech;
(viii) except for intercompany transactions in the ordinary
course of business consistent with past practice, pay, loan or advance
any amount to, or sell, transfer or lease any of the assets of Career
Services or Westech to, or enter into any agreement or arrangement with,
Central or any of its Affiliates;
(ix) permit, allow or suffer any property or assets of Career
Services or Westech to become subjected to any Lien of any nature
whatsoever that would have been required to be set forth on Schedule
4.01(e) had such Lien existed on the date of this Agreement;
(x) make or incur any capital expenditure on behalf of Career
Services or Westech that, individually, is in excess of $125,000 or make
or incur
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any such expenditures which, in the aggregate, are in excess of
$125,000;
(xi) sell, lease, license or otherwise dispose of any of the
assets of Career Services and/or Westech that are material, individually
or in the aggregate, to Career Services or Westech;
(xii) enter into any lease of Real Property on behalf of Career
Services or Westech, except any renewals of existing leases in the
ordinary course of business consistent with past practice;
(xiii) acquire by merging or consolidating with, or by purchasing
a substantial portion of the assets of, or by any other manner, any
Person or any business or division of any Person or otherwise acquire
any assets that are material, individually or in the aggregate, to
Career Services or Westech;
(xiv) make any change in any method of Career Services' or
Westech's accounting or accounting practice or policy other than those
required by generally accepted accounting principles;
(xv) enter into any Contract, or any other commitment, agreement,
arrangement or undertaking, written or oral, or engage in any
transaction, involving any future benefit to or liability of Career
Services or Westech in excess of $125,000 or that is otherwise material
to the business of Career Services or Westech as presently conducted;
(xvi) declare, set aside or pay any dividends, distributions or
other amounts (whether in cash, stock or property) with respect to any
shares of Career Services Capital Stock or capital stock of Westech; or
(xvii) authorize any of, or commit or agree to do or
take, whether in writing or oral, any of, the foregoing
actions.
SECTION 5.02. Advice of Changes. BrassRing, Central and Career
Services shall promptly advise one another orally and in writing of any change
or event having, or which, insofar as can reasonably be foreseen, would have, a
Career Services Material Adverse Effect or a BrassRing
Material Adverse Effect, as applicable.
SECTION 5.03. Consultation. In connection with the continuing
operation of the business of Career Services
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and Westech between the date of this Agreement and the Closing, Central shall
use reasonable efforts to consult in good faith on a regular and frequent basis
with the representatives of BrassRing to report material operational
developments and the general status of ongoing operations pursuant to procedures
reasonably requested by BrassRing or such representatives. Central acknowledges
that any such consultation shall not constitute a waiver by BrassRing of any
rights it may have under this Agreement, and that BrassRing shall not have any
liability or responsibility for any actions of Central or any of its officers or
directors with respect to matters that are the subject of such consultations
unless BrassRing expressly consents to such action in writing.
SECTION 5.04. Insurance. Career Services shall keep, or cause to
be kept, all insurance policies set forth in Schedule 4.01(j) or suitable
replacements therefor, in full force and effect through the close of business on
the Closing Date.
SECTION 5.05. No Solicitation. Central shall not, nor shall
Central authorize or permit any officer, director or employee of or any
investment banker, attorney, accountant or other representative retained by it,
Career Services and/or Westech to, (i) solicit, initiate or encourage any "other
bid", (ii) enter into any agreement with respect to any other bid or (iii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any other bid. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the preceding
sentence by any executive officer of Central, Career Services or Westech or any
investment banker, attorney or other advisor or representative of Central,
Career Services or Westech, whether or not such person is purporting to act on
behalf of Central, Career Services, Westech or otherwise, shall be deemed to be
a breach of this Section 5.05 by Central. Central and Career Services promptly
shall advise BrassRing orally and in writing of any other bid or any inquiry
with respect to or which could reasonably lead to any other bid and the identity
of the person making any such other bid or inquiry. As used in this Section
5.05, "other bid" shall mean any proposal for a merger, sale of securities, sale
of substantial assets or similar transaction involving Career Services or
Westech other than (A) the transactions contemplated by this Agreement and (B)
the acquisition of inventory in the ordinary course of business.
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SECTION 5.06. Access to Information. (a) Central, Career Services
and Westech shall afford to BrassRing, and to the officers, employees,
accountants, counsel, financial advisors and other representatives of BrassRing,
reasonable access during normal business hours during the period prior to the
Closing, to all the properties, assets, books, records and Tax Returns of Career
Services and Westech, and, during such period, each of Central, Career Services
and Westech shall furnish promptly to BrassRing all information concerning
Career Services and Westech as BrassRing may reasonably request.
(b) BrassRing shall afford to Central, and to the officers,
employees, accountants, counsel, financial advisors and other representatives of
Central, reasonable access during normal business hours during the period prior
to the Closing, to all the properties, assets, books, records and Tax Returns of
BrassRing, and, during such period, BrassRing shall furnish promptly to Central
all information concerning BrassRing as Central may reasonably request.
SECTION 5.07. Reasonable Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each party
hereto shall use all reason able efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with one
another in doing, all things necessary, proper or advisable to consummate, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement and the other Transaction Agreements, including (i) the obtaining of
all necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
(including filings with Governmental Entities, if any) and the taking of all
reasonable steps as may be necessary to avoid an action or nonaction by, or to
obtain a waiver, consent or approval from, any Governmental Entity, (ii) the
obtaining of all necessary waivers, consents and approvals from third parties,
(iii) the defending of any suits, actions or proceedings, whether judicial or
administrative, challenging this Agreement or any of the other Transaction
Agreements or the consummation of the transactions contemplated hereby or
thereby, including seeking to have any stay or temporary restraining order
entered by any Governmental Entity vacated or reversed, and (iv) the execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by this Agreement or the other Transaction Agreements
or to fully carry out the purposes of this Agreement and the other Transaction
Agreements.
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(b) Each party shall give prompt written notice to each other
party of (i) any representation or warranty made by such party contained in this
Agreement or any other Transaction Agreement becoming untrue or inaccurate in
any material respect or (ii) the failure by such party to comply with, or
satisfy in any material respect, any covenant, condition or agreement to be
complied with or satisfied by such party under this Agreement or any of the
other Transaction Agreements; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of such party or
the conditions to the obligations of such party under this Agreement or any of
the other Transaction Agreements.
SECTION 5.08. Stockholder Approvals. As soon as practicable
after execution of this Agreement, (i) Central, as the sole stockholder of
Career Services, shall by formal action of its Board of Directors approve this
Agreement pursuant to Section 10-1103 of the ABCA and (ii) each of Xxxxxx,
Tribune and Accel, shall execute written consents pursuant to Section 228 of the
DGCL, adopting this Agreement pursuant to Section 252 of the DGCL.
SECTION 5.09. Costs and Expenses. Whether or not the Closing
takes place, all costs and expenses incurred in connection with this Agreement
and the other Transaction Agreements and the transactions contemplated hereby
and thereby shall be paid by the party incurring such cost or expense.
SECTION 5.10. Publicity. No party hereto shall make a public
release or announcement concerning the transactions contemplated by this
Agreement and the other Transaction Agreements without the prior consent of each
other party, which consent shall not be unreasonably with held, except as such
release or announcement may be required by law or the rules or regulations of
any United States or foreign securities exchange, in which case such party shall
allow such other parties reasonable time to comment on such release or
announcement in advance of such issuance.
SECTION 5.11. Agreements Not To Compete. (a) For a period of four
years from the Closing, Central shall not and shall cause its Affiliates not to,
directly or indirectly (i) engage in a national recruiting business or (ii)
acquire any ownership interest representing more than an aggregate of 10% of any
class of capital stock of any Person engaged, directly or indirectly, in a
national recruiting business; provided that Central's ownership interest in
BrassRing shall not constitute a violation of this Section 5.11(a).
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(b) Each party hereto hereby acknowledges and agrees that the
provisions of Section 5.11(a) shall not apply to (i) any recruiting business
that is local, and not national, in scope or (ii) any ownership interest any
party may have in any of (A) XxxxxxXxxx.xxx, Inc., (B) 21st Century
Communications, Inc. or (C) Classified Ventures, Inc.
(c) Each party hereto understands that the other parties hereto
would not have entered into this Agreement absent the provisions of Section
5.11(a). Accordingly, notwithstanding any other provision of this Agreement, it
is understood and agreed that any remedies at law would be inadequate in the
case of any breach of the covenants contained in Section 5.11(a). Each party
hereto shall be entitled to equitable relief, including the remedy of specific
performance, with respect to any breach or attempted breach of the covenants
contained in Section 5.11(a).
SECTION 5.12. Tax Matters. (a) Return Filings. For any taxable
period of Career Services or Westech that includes (but does not end on) the
Closing Date, BrassRing shall timely prepare and file with the appropriate
authorities all Tax Returns required to be filed and shall pay all Taxes due
with respect to such Tax Returns; provided, however, that Central shall
reimburse BrassRing (in accordance with Sections 8.02 and 8.08) for any amount
owed by Central pursuant to Sections 8.02 and 8.08 with respect to the taxable
periods covered by such Tax Returns. For any taxable period of Career Services
or Westech that ends on or before the Closing Date, Central shall timely prepare
and file with the appropriate authorities all Tax Returns required to be filed,
and shall pay all Taxes due with respect to such Tax Returns; provided, however,
that (i) at least 60 days prior to the due date for filing any such Tax Returns
(taking into account any applicable extensions), Central shall furnish BrassRing
with all schedules relating to Career Services and Westech that are filed with
such Tax Returns for BrassRing's review and comment and (ii) no such Tax Returns
shall be filed with any Taxing Authority without BrassRing's prior written
consent. Any Tax Return described in the preceding sentence shall be prepared on
a basis consistent with the past practices of Career Services and Westech, as
appropriate, and in a manner that does not distort taxable income (e.g., by
deferring income or accelerating deductions). All Tax Returns for the period
including the Closing Date shall be filed on the basis that the relevant taxable
period ended as of the close of business on the Closing Date, unless the
relevant Taxing Authority will not accept such a Tax Return.
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(b) Cooperation. Central, Career Services, Westech and BrassRing
shall reasonably cooperate, and shall cause their respective affiliates,
officers, employees, agents, auditors and representatives reasonably to
cooperate, in preparing and filing all Tax Returns, including maintaining and
making available to each other all records necessary in connection with Taxes
and in resolving all disputes and audits with respect to all taxable periods
relating to Taxes. Central and its affiliates will need access, from time to
time, after the Closing Date, to certain accounting and Tax records and
information held by Career Services or Westech to the extent such records and
information pertain to events occurring prior to the Closing Date; therefore,
BrassRing shall (i) use its best efforts to properly retain and maintain such
records until such time as Central agrees that such retention and maintenance is
no longer necessary, and (ii) to allow Central and its agents and
representatives (and agents or representatives of any of its affiliates), at
times and dates mutually acceptable to the parties, to inspect, review and make
copies of such records as Central may deem necessary or appropriate from time to
time, such activities to be conducted during normal business hours and at
Central's expense.
(c) Refunds and Credits. Any refund or credit of Taxes of Career
Services or Westech for any taxable period ending on or before the Closing Date
shall be for the account of Central. Notwithstanding the foregoing, any such
refund or credit shall be for the account of BrassRing to the extent that such
refunds or credits are attributable (determined on a marginal basis) to the
carryback from a taxable period beginning after the Closing Date (or the portion
of a Straddle Period that begins on the date after the Closing Date) of items of
loss, deductions or other Tax items of Career Services (or any of its
affiliates, including BrassRing and Westech). Any refund or credit of Taxes of
Career Services or Westech for any taxable period beginning after the Closing
Date shall be for the account of BrassRing. Any refund or credit of Taxes of
Career Services or Westech for any Straddle Period shall be equitably
apportioned, based on the principals of Section 8.02(c), between Central and
BrassRing. Each party shall, or shall cause its affiliates to, forward to any
other party entitled under this Section 5.12(c) to any refund or credit of Taxes
any such refund within 10 days after such refund is received or reimburse such
other party for any such credit within 10 days after the credit is allowed or
applied against other Tax liability; provided, however, that any such amounts
shall be net of any Tax cost or benefit to the payor party attributable to the
receipt of such refund and/or the payment of such amounts to the payee party.
The parties
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shall treat any payments under the preceding sentence as an adjustment to the
Merger Consideration, unless a final determination (which shall include the
execution of a Form 870-AD or successor form) with respect to BrassRing or any
of its affiliates causes any such payment not to be treated as an adjustment to
the Merger Consideration for United States Federal income Tax purposes.
(d) Tax Sharing Agreements. Central shall cause the provisions of
any Tax sharing agreement between Central or any of its affiliates and Career
Services or Westech, to be terminated on or before the Closing Date. After the
Closing Date, no party shall have any rights or obligations under any such Tax
sharing agreement.
(e) Prior Period Returns. Central shall be responsible for filing
any amended consolidated, combined or unitary Tax Returns for taxable years
ending on or prior to the Closing Date which are required as a result of
examination adjustments made by the Internal Revenue Service or by the
applicable state, local or foreign taxing authorities for such taxable years as
finally determined. For those jurisdictions in which separate Tax Returns are
filed by Career Services or Westech, any required amended returns resulting from
such examination adjustments, as finally determined, shall be prepared by
Central and furnished to BrassRing for approval (which approval shall not be
unreasonably withheld), signature and filing at least 30 days prior to the due
date for filing such Tax Returns.
SECTION 5.13. Confidential Information. Each party hereto and its
Affiliates shall, and shall cause its and their respective representatives,
officers, directors, employees, attorneys, accountants and agents (collectively,
"Agents"), to keep secret and retain in strictest confidence any and all
confidential information relating to Central, Career Services or BrassRing, as
the case may be, that has been or may be provided by Central (or its Affiliates)
or BrassRing (or its Affiliates), as the case may be, in connection with this
Agreement or the transactions contemplated hereby and that is proprietary to
Central, Career Services or BrassRing, as the case may be, or otherwise not
available to the general public (provided that such confidential information
shall not include any information that (i) has become generally available to the
public other than as a result of a disclosure by such party, its Affiliates or
its Agents, (ii) has been independently developed by such party or an Affiliate
of such party without violating any obligations owed to the other parties hereto
pursuant to this Section 5.13 or (iii) was available to such party or an
Affiliate of such party on a non-
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confidential basis from a third party having no legally enforceable obligation
of confidentiality to the party to whom such information relates and which has
not itself received such information directly or indirectly in breach of any
such obligation of confidentiality), and shall not disclose such confidential
information, and shall cause its Agents not to disclose such confidential
information, to any Person other than such party, its Affiliates or their
respective Agents, except as may be required by law or pursuant to any listing
agreement with, or the rules or regulations of, any national securities exchange
on which securities of such party or any such Affiliate are listed or traded (in
which event the party making such disclosure or whose Affiliates or Agents are
making such disclosure shall so notify the party to whom such information
relates as promptly as practicable (and, if possible, prior to making such
disclosure) and shall seek confidential treatment of such information). The
obligations under this Section 5.13 shall survive the termination of this
Agreement and any Person ceasing to be an Affiliate of a party hereto for a
period of three (3) years from the earlier of either such event in respect of
any party hereto or Affiliate of any party, whereupon such obligations shall
terminate.
SECTION 5.14. Other Actions. None of BrassRing, Central or Career
Services shall take, or permit to be taken, any action that would, or that could
reasonably be expected to, result in (i) any of the representations and
warranties of BrassRing, Central or Career Services, as applicable, set forth in
this Agreement becoming untrue in any material respect or (ii) any of the
conditions to the Closing set forth in Article VI not being satisfied.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to the Obligations of Each Party Hereto.
The obligation of each party hereto to consummate the Merger and the other
transactions contemplated by this Agreement and the other Transaction
Agreements is subject to the satisfaction or waiver on or prior to the Closing
of the following conditions:
(a) Governmental Approvals. The waiting period under the HSR Act,
if applicable to the consummation of the transactions contemplated by this
Agreement and the other Transaction Agreements, shall have expired or been
terminated. All other authorizations, consents, orders or approvals of, or
declarations or filings with, or expira-
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tions of waiting periods imposed by, any Governmental Entity necessary for the
consummation of the Merger and the other transactions contemplated by this
Agreement and the other Transaction Agreements shall have been obtained or filed
or shall have occurred.
(b) No Injunctions or Restraints. No applicable statute, law,
ordinance, rule or regulation enacted, entered, promulgated, enforced or issued
by, any Governmental Entity, no temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction, and no other legal restraint or prohibition preventing the
consummation of the Merger and the other transactions contemplated by this
Agreement and the other Transaction Agreements shall be in effect.
(c) Absence of Proceedings. There shall not be pending or
threatened any suit, action or proceeding by any Governmental Entity or any
suit, action, litigation or proceeding by any other Person that has a reasonable
likelihood of success, challenging or seeking to restrain or prohibit the
consummation of the Merger and the other transactions contemplated by this
Agreement and the other Transaction Agreements or seeking to obtain in
connection with the consummation of the Merger and the other transactions
contemplated by this Agreement and the other Transaction Agreements any damages
that are material in relation to each party hereto and that, if successful,
could be reasonably expected to have a material adverse effect on the business,
assets, condition (financial or otherwise), prospects or results of operations
of the Surviving Corporation as constituted upon consummation of the
transactions contemplated by this Agreement.
SECTION 6.02. Conditions to the Obligations of BrassRing. The
obligation of BrassRing to consummate the Merger and the other transactions
contemplated by this Agreement and the other Transaction Agreements is subject
to the satisfaction or waiver on or prior to the Closing of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Central and Career Services in this Agreement and in the other
Transaction Agreements, as applicable, that are qualified as to materiality
shall be true and correct, and those not so qualified shall be true and correct
in all material respects, as of the date hereof and as of the Closing Date as
though made on the Closing Date. BrassRing shall have received certificates from
each of Central and Career Services signed by authorized officers
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of Central and Career Services, respectively, to such effect.
(b) Performance of Obligations. Each of Central and Career
Services shall have performed or complied in all material respects with all
covenants and obligations required by this Agreement and the other Transaction
Agreements to be satisfied by BrassRing, as the case may be, prior to the
Closing. BrassRing shall have received a certificate from each of Central and
Career Services signed by an authorized officer of Central and Career Services,
respectively, to such effect.
(c) Opinion of Tax Counsel. BrassRing shall have received an
opinion dated the Closing Date of Cravath, Swaine & Xxxxx, counsel to BrassRing,
which opinion shall state that the Merger will be treated for Federal income tax
purposes as a reorganization within the meaning of Section 368(a)(1)(A) of the
Code.
(d) Amended Stockholders' Agreement. The Amended Stockholders'
Agreement shall have been duly executed and delivered by each of the parties
thereto (other than BrassRing), and as of the Effective Time such Amended
Stockholders' Agreement shall constitute a legal, valid and binding obligation
of each of the parties thereto (other than BrassRing), enforceable against each
such party in accordance with its terms, and be in full force and effect.
(e) Other Documents. Central, Career Services and Westech shall
have furnished to BrassRing such other documents relating to Career Services and
Westech as BrassRing (or their counsel) may reasonably request.
(f) No Litigation. There shall not be pending or threatened any
suit, action or proceeding by any Governmental Entity or any other Person, in
each case that has a reasonable likelihood of success, (i) challenging the
acquisition by BrassRing of any Career Services Capital Stock, seeking to
restrain or prohibit the consummation of the Merger or any other transaction
contemplated by this Agreement or the other Transaction Agreements or seeking to
obtain from the BrassRing, Central or Career Services any damages that are
material in relation to the business, property and assets of Career Services and
Westech, taken as a whole, (ii) seeking to prohibit or limit the ownership or
operation by Career Services, BrassRing or any of BrassRing's subsidiaries of
any material portion of the business or assets of Career Services, Westech,
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BrassRing or any of BrassRing's subsidiaries of any material portion of the
business or assets of Career Services, Westech, BrassRing or any of BrassRing's
subsidiaries, or to compel Career Services, Westech, BrassRing or any of
BrassRing's subsidiaries to dispose of or hold separate any material portion of
the business or assets of Career Services or Westech, BrassRing or any of
BrassRing's subsidiaries, as a result of the Merger or any other transaction
contemplated by this Agreement or the other Transaction Agreements, (iii)
seeking to impose limitations on the ability of BrassRing to acquire or hold, or
exercise full rights of ownership of, any shares of Career Services Capital
Stock, (iv) seeking to prohibit BrassRing or any of its subsidiaries from
effectively controlling in any material respect the business or operations of
Career Services or Westech or (v) which otherwise is reasonably likely to have a
Career Services Material Adverse Effect.
(g) Absence of Career Services Material Adverse Effect. Since the
date of this Agreement there shall not have been any event, change, effect or
development that, individually or in the aggregate, has had or could reasonably
be expected to have a Career Services Material Adverse Effect.
(h) Release of Liens. Career Services and Westech shall have
obtained the release of all Liens on their assets other than (x) those Liens the
release of which shall have been waived by BrassRing prior to the Effective Time
or (y) Liens described in clause (ii) or clause (iii) of the definition of
Career Services Permitted Liens.
(i) Assignment of Leases. Career Services shall have obtained
consents to the assignment to BrassRing of all leases listed on Schedule
4.01(c).
(j) Release from Xxxxx. Central shall have obtained a release
from Xxxx Xxxxx terminating her Employment Agreement dated as of April 9, 1999
with Central and Career Services and releasing each of Career Services and
Westech from any and all liability for matters relating to or arising out of
Sill's employment with Central, Career Services, Westech or any of their
Affiliates.
SECTION 6.03. Conditions to the Obligations of Central. The
obligation of Central to consummate the Merger and the other transactions
contemplated by this Agreement and the other Transaction Agreements is subject
to the satisfaction or waiver on or prior to the Closing of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of BrassRing in this
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Agreement and the other Transaction Agreements, as applicable, that are
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the date
hereof and as of the Closing Date as though made on the Closing Date. Central
shall have received a certificate from an authorized officer of BrassRing to
such effect.
(b) Performance of Obligations. BrassRing shall have performed or
complied in all material respects with all covenants and obligations required by
this Agreement and the other Transaction Agreements to be satisfied by BrassRing
prior to the Closing. Central shall have received a certificate from signed by
an authorized officer of BrassRing to such effect.
(c) Opinion of Tax Counsel. Central shall have received an
opinion dated the Closing Date of PriceWaterhouseCoopers LLP, which opinion
shall state that the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a)(1)(A) of the Code.
(d) Amended Stockholders Agreement. The Amended Stockholders'
Agreement shall have been duly executed and delivered by each of the parties
thereto (other than Central), and as of the Effective Time such Amended
Stockholders' Agreement shall constitute a legal, valid and binding obligation
of each of the parties thereto (other than Central), enforceable against each
such party in accordance with its terms, and be in full force and effect.
(e) Other Documents. BrassRing shall have furnished to Central
such other documents relating to BrassRing as Central (or their counsel) may
reasonably request.
(f) No Litigation. There shall not be pending or threatened any
suit, action or proceeding by any Governmental Entity or any other Person, in
each case that has a reasonable likelihood of success, (i) challenging the
acquisition by BrassRing of any Career Services Capital Stock, seeking to
restrain or prohibit the consummation of the Merger or any other transaction
contemplated by this Agreement or the other Transaction Agreements or seeking to
obtain from the BrassRing, Central or Career Services any damages that are
material in relation to the business, property and assets of Career Services and
Westech, taken as a whole, (ii) seeking to prohibit or limit the ownership or
operation by Career Services, BrassRing or any of BrassRing's subsidiaries of
any material portion of the
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business or assets of Career Services, Westech, BrassRing or any of BrassRing's
subsidiaries of any material portion of the business or assets of Career
Services, Westech, BrassRing or any of BrassRing's subsidiaries, or to compel
Career Services, BrassRing or any of BrassRing's subsidiaries to dispose of or
hold separate any material portion of the business or assets of Career Services,
Westech, BrassRing or any of BrassRing's subsidiaries, as a result of the Merger
or any other transaction contemplated by this Agreement or the other Transaction
Agreements, (iii) seeking to impose limitations on the ability of BrassRing to
acquire or hold, or exercise full rights of ownership of, any shares of Career
Services Capital Stock, (iv) seeking to prohibit BrassRing or any of its
subsidiaries from effectively controlling in any material respect the business
or operations of Career Services or Westech or (v) which otherwise is reasonably
likely to have a Career Services Material Adverse Effect.
(g) Absence of BrassRing Material Adverse Effect. There shall not
have been any event, change, effect or development that, individually or in the
aggregate, has had or could reasonably be expected to have a BrassRing Material
Adverse Effect.
(h) Post-Closing Insurance Coverage. BrassRing shall have
obtained insurance policies comparable to those maintained by BrassRing as of
the date hereof to cover the business and assets of BrassRing immediately
following the Effective Time.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be terminated at
any time prior to the Closing:
(i) by mutual written consent of each of the parties hereto;
(ii) by either BrassRing or Central:
(A) if the transactions contemplated by this Agreement
and the other Transaction Agreements are not consummated within
90 days from the date of this Agreement (the "Outside Date"),
unless the failure to consummate such transactions is the result
of a wilful and material breach of this
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Agreement or any other Transaction Agreement by the party
seeking to terminate this Agreement; or
(B) if any Governmental Entity issues an order, decree or
ruling, or takes any other action, permanently enjoining,
restraining or otherwise prohibiting the transactions
contemplated by this Agreement and the other Transaction
Agreements and such order, decree, ruling or other action shall
have become final and nonappealable;
(iii) by BrassRing, if (A) any condition to the obligation of
BrassRing to consummate the transactions contemplated in this Agreement
and the other Transaction Agreements set forth in Section 6.02 becomes
incapable of satisfaction prior to the Outside Date (unless the failure
to satisfy such condition is the result of a wilful and material breach
of this Agreement or any other Transaction Agreement by BrassRing) or
(B) Central or Career Services breaches or fails to perform in any
material respect any of its representations, warranties or covenants
contained in this Agreement or any other Transaction Agreement, which
breach or failure to perform (i) would give rise to the failure of a
condition set forth in Section 6.02(a) or 6.02(b) and (ii) cannot be, or
has not been, cured within 30 days after the giving of written notice to
Central or Career Services, as the case may be, of such breach or
failure to perform (so long as BrassRing is not then in wilful and
material breach of any representation, warranty or covenant contained in
this Agreement or any other Transaction Agreement);
(iv) by Central, if (A) any condition to the obligation of
Central to consummate the transactions contemplated in this Agreement
and the other Trans action Agreements set forth in Section 6.03 becomes
incapable of satisfaction prior to the Outside Date (unless the failure
to satisfy such condition is the result of a wilful and material breach
of this Agreement or any other Transaction Agreement by Central) or (B)
if BrassRing reaches or fails to perform in any material respect any of
its representations, warranties or covenants contained in this Agreement
or any other Transaction Agreement, which breach or failure to perform
(i) would give rise to the failure of a condition set forth in Section
6.03(a) or 6.03(b) and (ii) cannot be, or has not been, cured within 30
days after the giving of written notice to BrassRing of such breach or
failure to perform (so long as neither
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Central not Career Services is then in wilful and material breach of any
representation, warranty or covenant contained in this Agreement or any
other Transaction Agreement).
SECTION 7.02. Effect of Termination. In the event of termination
of this Agreement as provided in Section 7.01, this Agreement shall forthwith
become void and have no effect, without any liability or obligation on the part
of any of the parties hereto (or any Affiliate of any party), other than
pursuant to Section 5.09, Section 5.13, this Section 7.02 and Article IX, which
provisions shall survive such termination.
SECTION 7.03. Amendment. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.
SECTION 7.04. Extension; Waiver. At any time prior to the
Closing, the parties hereto may (a) extend the time for the performance of any
of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties of the other parties hereto
contained in this Agreement or in any other Transaction Agreement or (c) waive
compliance by the other parties hereto with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
ARTICLE VIII
Survival of Representations and Warranties; Indemnification
SECTION 8.01. Survival of Representations and Warranties. The
representations, warranties, covenants and agreements contained in this
Agreement and in any document delivered in connection herewith shall survive the
Closing solely for purposes of Article VIII and shall terminate at the close of
business one year following the Closing Date; provided, however, that (i) the
representations and warranties of Central and Career
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Services set forth in Sections 4.01(k) and 4.01(q) shall terminate upon the
expiration of the statute of limitations applicable to the matters that are the
subject of such Sections and (ii) the representations and warranties of Central
and Career Services set forth in Sections 4.01(a), 4.01(b), 4.01(c), 4.01(e) and
4.01(s) shall not terminate.
SECTION 8.02. Tax Indemnification. (a) From and after the
Closing, Central shall be liable for and shall indemnify BrassRing and its
officers, directors, employees, stockholders and representatives (the "BrassRing
Indemnitees") against and hold them harmless from (i) any Pre-Closing Taxes of
Career Services and Westech, (ii) any liability of Career Services or Westech
for the payment of any amount of Taxes as a result of Career Services or Westech
being a member of an affiliated, consolidated or combined group with any other
corporation at any time on or prior to the Closing Date and (iii) any liability
of any Person with respect to the payment of Taxes as a result of any express or
implied obligation of Career Services or Westech to indemnify any other Person.
(b) From and after the Closing, BrassRing shall be liable for and
shall indemnify Central and its officers, directors, employees, stockholders and
representatives (the "Central Indemnitees") against and hold it harmless from
all liabilities for Taxes of Career Services and Westech for any taxable period
ending after the Closing Date (except to the extent (i) such taxable period
began before the Closing Date, in which case the indemnity under this Section
8.02(b) shall cover only that part of any such Taxes that are not for the
Pre-Closing Tax Period of Career Services or Westech, or (ii) such liability
results from any breach by Central or Career Services of representations and
warranties contained in Sections 4.01(k)(iv), (v) or (vii)).
(c) In the case of any Straddle Period:
(i) real, personal and intangible property Taxes ("property
Taxes") of Career Services and Westech for the Pre-Closing Tax Period
shall equal the amount of such property Taxes for the entire Straddle
Period multiplied by a fraction, the numerator of which is the number of
days during the Straddle Period that are in the Pre-Closing Tax Period
and the denominator of which is the number of days in the Straddle
Period; and
(ii) the Taxes of Career Services and Westech (other than
property Taxes) for the Pre-Closing Tax Period shall be computed as if
such taxable period ended as of the close of business on the Closing
Date.
SECTION 8.03. Other Indemnification by Central. (a) From and
after the Closing, Central shall be liable for, and shall indemnify each
BrassRing Indemnitee against
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and hold it harmless from, any loss, liability, claim, damage or expense
including reasonable legal fees and expenses (collectively, "Losses"), suffered
or incurred by such BrassRing Indemnitee (other than any Loss relating to Taxes
to the extent covered by the indemnification provisions set forth in Section
8.02) arising from, relating to or otherwise in respect of:
(i) any breach of any representation or warranty of Central or
Career Services contained in this Agreement, in any other Transaction
Agreement or in any certificate delivered pursuant hereto;
(ii) any breach of any covenant of Central or Career Services
contained in this Agreement; and
(iii) any fees, expenses or other payments incurred or owed by
Central, Career Services or Westech to any brokers, financial advisors
or comparable other Persons retained or employed by it in connection
with the transactions contemplated by this Agreement.
(b) Central shall not be required to indemnify any BrassRing
Indemnitee, and shall not have any liability:
(i) under clause (i) of Section 8.03(a) unless the aggregate of
all Losses for which Central would, but for this clause (i), be liable
thereunder exceeds on a cumulative basis an amount equal to $250,000,
and then only to the extent of any such excess;
(ii) under clauses (i) and (ii) of Section 8.03(a) in excess of
$9,000,000 (except that this paragraph (b) shall not apply to (A) any
breach of any representation and warranty of Central set forth in
Sections 4.01(a), 4.01(b), 4.01(e) or (B) any wilful breach of any
covenant by Central or Career Services); and
(iii) for any Taxes that were liabilities in computing Closing
Working Capital to the extent such Taxes reduced the Merger
Consideration.
SECTION 8.04. Indemnification by BrassRing. (a) From and after
the Closing, BrassRing shall be liable for, and shall indemnify each Central
Indemnitee against and hold it harmless from, any Loss suffered or incurred by
such Central Indemnitee arising from, relating to or otherwise in respect of:
(i) any breach of any representation or warranty of BrassRing
contained in this Agreement, in any other
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Transaction Agreement or in any certificate delivered pursuant hereto;
(ii) any breach of any covenant of BrassRing contained in this
Agreement; and
(iii) any fees, expenses or other payments incurred or owed by
BrassRing to any brokers, financial advisors or comparable other Persons
retained or employed by it in connection with the transactions
contemplated by this Agreement;
provided, however, that in the case of (i) and (ii) above BrassRing shall only
be so liable, or be required to so indemnify Central or hold Central harmless,
to the extent that the substance of any such breach causes a HireSystems
Material Adverse Effect; and
(b) BrassRing shall not be required to indemnify any Central
Indemnitee, and shall not have any liability:
(i) under clauses (i) and (ii) of Section 8.04(a) unless the
aggregate of all Losses for which BrassRing would, but for this clause
(i), be liable thereunder exceeds on a cumulative basis an amount equal
to $250,000, and then only to the extent of any such excess; and
(ii) under clauses (i) and (ii) of Section 8.04(a) in excess of
$9,000,000 (except that this paragraph (b) shall not apply to any wilful
breach of any covenant by BrassRing).
SECTION 8.05. Exclusivity of Indemnification. Except as otherwise
specifically provided in this Agreement or in any other Transaction Agreement,
each of BrassRing, Central and Career Services acknowledges that the sole and
exclusive monetary remedy after the Closing with respect to any and all claims
relating to this Agreement, the other Transaction Agreements and the
transactions contemplated hereby and thereby (other than pursuant to Section
3.04 or claims of, or causes of action arising from, fraud) shall be pursuant to
claims made by or on behalf of BrassRing or Central, as the case may be, in
accordance with the indemnification provisions set forth in this Article VIII
(it being understood that the provisions of this Section 8.05 do not apply to
any claim for equitable relief, including the remedy of specific performance,
that any party may have under this Agreement or any of the other Transaction
Agreements with respect to any breach or attempted breach of the covenants
contained herein or therein). In furtherance of
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the foregoing, BrassRing (on behalf of itself and each BrassRing Indemnitee) and
Central (on behalf of itself and each Central Indemnitee) hereby waives, from
and after the Closing, to the fullest extent permitted under applicable law, any
and all rights, claims and causes of action (other than claims of, or causes of
action arising from, fraud) for monetary damages it may have against any party
hereto (or any Affiliate of any party) arising under or based upon this
Agreement, any other Transaction Agreement, any document or certificate
delivered in connection herewith, any applicable law, common law or otherwise
(except pursuant to the indemnification provisions set forth in this Article
VIII). Each of the parties hereto acknowledges and agrees that all claims for
indemnification pursuant to the indemnification provisions set forth in this
Article VIII shall be subject to, and shall be initiated in accordance with,
Section 9.06 of the Amended Stockholders' Agreement.
SECTION 8.06. Calculation of Losses. The amount of any Loss for
which indemnification is provided under this Article VIII shall be net of any
amounts recovered or recoverable by the indemnified party under insurance
policies with respect to such Loss.
SECTION 8.07. Termination of Indemnification. The obligations to
indemnify and hold harmless any party, (i) pursuant to Section 8.02(a) or
8.02(b), shall terminate upon the expiration of the statute of limitations
applicable to the Taxes that are the subject of such Sections, (ii) pursuant to
Section 8.03(a)(i) or Section 8.04(a)(i), shall terminate when the applicable
representation or warranty terminates pursuant to Section 8.01 and (iii)
pursuant to the other clauses of Section 8.03 and Section 8.04 shall not
terminate; provided, however, that such obligations to indemnify and hold
harmless shall not terminate with respect to any item as to which the person to
be indemnified shall have, before the expiration of the applicable period,
previously made a claim by delivering a notice of such claim (stating in
reasonable detail the basis of such claim) pursuant to Section 8.08 to the party
to be providing the indemnification.
SECTION 8.08. Procedures. (a) Third Party Claims. In order for a
person (the "indemnified party") to be entitled to any indemnification provided
for under Section 8.02, 8.03 or 8.04 in respect of, arising out of or involving
a claim made by any person against the indemnified party (a "Third Party
Claim"), such indemnified party must notify the indemnifying party in writing
(and in reasonable detail) of the Third Party Claim within 10 business days
after receipt by such indemnified party of notice of the
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Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure. Thereafter, the indemnified party shall deliver to the indemnifying
party, within five business days' time after the indemnified party's receipt
thereof, copies of all notices and documents (including court papers) received
by the indemnified party relating to the Third Party Claim.
(b) Assumption. If a Third Party Claim is made against an
indemnified party, the indemnifying party shall be entitled to participate in
the defense thereof and, if it so chooses, to assume the defense thereof with
counsel selected by the indemnifying party; provided, however, that such counsel
is not reasonably objected to by the indemnified party. Should the indemnifying
party so elect to assume the defense of a Third Party Claim, the indemnifying
party shall not be liable to the indemnified party for any legal expenses
subsequently incurred by the indemnified party in connection with the defense
thereof. If the indemnifying party assumes such defense, the indemnified party
shall have the right to participate in the defense thereof and to employ counsel
(not reasonably objected to by the indemnifying party), at its own expense,
separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses of counsel employed
by the indemnified party for any period during which the indemnifying party has
not assumed the defense thereof. If the indemnifying party chooses to defend or
prosecute a Third Party Claim, all the indemnified parties shall cooperate in
the defense or prosecution thereof. Such cooperation shall include the retention
and (upon the indemnifying party's request) the provision to the indemnifying
party of records and information that are reasonably relevant to such Third
Party Claim, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Whether or not the indemnifying party assumes the defense of a Third
Party Claim, the indemnified party shall not admit any liability with respect
to, or settle, compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent (which consent shall not be
unreasonably withheld). If the indemnifying party assumes the defense of a Third
Party Claim, the indemnified party shall agree to any settlement, compromise or
discharge of a Third Party Claim that the indemnifying party may recommend and
that by its terms obligates the indemnifying party to pay the full
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amount of the liability in connection with such Third Party Claim, and which
releases the indemnified party completely in connection with such Third Party
Claim.
(c) Other Claims. In the event any indemnified party should have
a claim against any indemnifying party under Section 8.02, 8.03 or 8.04 that
does not involve a Third Party Claim being asserted against or sought to be
collected from such indemnified party, the indemnified party shall deliver
notice of such claim with reasonable promptness to the indemnifying party.
Subject to Section 8.08 the failure by any indemnified party so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to such indemnified party under Section 8.02, 8.03 or 8.04,
except to the extent that the indemnifying party demonstrates that it has been
actually prejudiced by such failure.
ARTICLE IX
General Provisions
SECTION 9.01. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by the parties hereto at the following addresses (or
at such other address for such party as shall be specified by like notice):
(i) if to BrassRing,
BrassRing Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
with copies to:
Xxxxxx, Inc.
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx, Esq.
Telephone No: (000) 000-0000
Fax No.: (000) 000-0000
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Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
(ii) if to Central,
Central Newspapers, Inc.
000 Xxxx Xxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, General Counsel
Telephone No.: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Central Newspapers, Inc.
000 Xxxx Xxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. XxxXxxxxxxxx,
Chief Financial Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
SECTION 9.02. Headings. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 9.03. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party hereto. Upon determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the extent possible.
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SECTION 9.04. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties hereto and delivered to the other parties hereto.
SECTION 9.05. Entire Agreement; No Third-Party Beneficiaries.
This Agreement and the other Transaction Agreements (i) constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties hereto and thereto with respect to the transactions
contemplated by this Agreement and the other Transaction Agreements and (ii) are
not intended to confer upon any Person other than (x) the parties hereto or
thereto and (y) the BrassRing Indemnitees and the Central Indemnitees, any
rights or remedies.
SECTION 9.06. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 9.07. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise, by any of the parties hereto
without the prior written consent of the other parties. Any purported assignment
without such consent shall be null and void and of no force and effect. Subject
to the preceding sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their respective
successors and assigns.
SECTION 9.08. Consent to Jurisdiction. Each of the parties hereto
(i) consents to submit to the personal jurisdiction of any Federal court located
in the State of Delaware or any Delaware state court in the event any dispute
arises regarding this Agreement or the transactions contemplated hereby, (ii)
agrees not to attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees not to bring any
action relating to this Agreement or the transactions contemplated hereby in any
court other than any Federal court sitting in the State of Delaware or any
Delaware state court and (iv) waives any right to trial by jury with
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respect to any action related to, or arising out of, this Agreement or the
transactions contemplated hereby.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement
to be signed by its officer thereunto duly authorized as of the date first
written above.
BRASSRING INC.,
by ______________________________________
Name:
Title:
CENTRAL NEWSPAPERS, INC.,
by ______________________________________
Name:
Title:
CAREER SERVICES, INC.,
by ______________________________________
Name:
Title:
77
EXHIBIT A
FORM OF AMENDED
STOCKHOLDERS' AGREEMENT
