________________________
AGREEMENT AND PLAN OF REORGANIZATION
dated as of April 16, 1997
by and among
ICCE, Inc.,
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Associates, Inc., DCCA Professional Temporaries,
Inc., EKT, Inc., and Infinity Enterprises, Inc.,
and
▇▇▇▇▇▇ Acquisition, Inc., DCCA Acquisition, Inc., EKT Acquisition,
Inc., and Infinity Acquisition, Inc.
and
the Shareholders named herein
TABLE OF CONTENTS
Page
I. DEFINITIONS 1
II. THE MERGER 3
2.1 Merger 3
2.2 Effective Time of the Merger 4
2.3 Effect of the Merger 4
2.4 Certain Information With Respect to the Capital
Stock of the Companies, the Acquisition Companies,
and ICCE 5
III. CONVERSION OF STOCK 5
3.1 Conversion of Outstanding Shares 5
3.2 No Fractional Shares 6
3.3 Treasury Shares 6
3.4 Change in Number of Shares 6
3.5 Rights of ICCE Shareholders 6
IV. CLOSING 7
4.1 The Closing Date 7
4.2 The Closing 7
V. REPRESENTATIONS AND WARRANTIES OF EACH OF THE
COMPANIES AND THE SHAREHOLDERS 8
(A) Representations and Warranties of Each of the
Companies and its Shareholders 8
5.1 Due Organization 8
5.2 Authorization 8
5.3 Capital Stock of the Company 8
5.4 Transactions in Capital Stock 8
5.5 Subsidiaries 9
5.6 Predecessor Status, etc. 9
5.7 Spin-off by the Company 9
5.8 Financial Statements 9
5.9 Liabilities and Obligations 9
5.10 Accounts and Notes Receivable 10
5.12 Environmental Matters 11
5.13 Personal Property 11
5.14 Significant Customers; Material Contracts and
Commitments 11
5.15 Real Property 12
5.16 Insurance 12
5.17 Compensation; Employment Agreements; Organized
Labor Matters 12
5.18 Employee Plans 13
5.19 Compliance with ERISA 13
i
5.20 Conformity with Law, Litigation 15
5.21 Taxes 15
5.22 No Violations 18
5.23 Government Contracts 18
5.24 Absence of Changes 18
5.25 Deposit Accounts, Powers of Attorney 19
5.26 Disclosure 20
5.27 Pooling Information 20
(B) Representations and Warranties of Shareholders 20
5.28 Authority, Ownership 20
5.29 Preemptive Rights 20
VI. REPRESENTATIONS OF THE ACQUISITION COMPANIES
AND ICCE 21
6.1 Due Organization 21
6.2 Authorization 21
6.3 Capital Stock of ICCE and the Acquisition
Companies 21
6.4 Transactions in Capital Stock, Reorganization
Accounting 21
6.5 Subsidiaries 21
6.6 Financial Statements 22
6.7 Liabilities and Obligations 22
6.8 Conformity with Law, Litigation 22
6.9 No Violations 22
6.10 ICCE Stock 22
6.11 No Side Agreements 22
6.12 Business; Real Property, Material Agreements 23
6.13 Permits and Intangibles 23
6.14 Disclosure 23
VII. COVENANTS PRIOR TO CLOSING 23
7.1 Access and Cooperation; Due Diligence 23
7.2 Conduct of Business Pending Closing 24
7.3 Prohibited Activities 25
7.4 No Shop 26
7.5 Notification of Certain Matters 26
7.6 Further Assurances 26
VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF
EACH OF THE COMPANIES AND ITS SHAREHOLDERS 27
8.1 Representations and Warranties; Performance of
Obligations 27
8.2 No Litigation 27
8.3 Opinion of Counsel 27
8.4 Consents and Approvals 27
8.5 Good Standing Certificates 27
8.6 No Material Adverse Change 28
8.7 Secretary's Certificate 28
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8.8 Employment Agreements 28
8.9 Opinion of Accountants 28
8.10 Tax Opinion 28
8.11 Registration Rights 28
8.12 Shareholders Agreement 28
8.13 Financing 28
8.14 Agreements 28
IX. CONDITIONS PRECEDENT TO OBLIGATIONS OF ICCE 29
9.1 Representations and Warranties; Performance of
Obligations 29
9.2 No Litigation 29
9.3 Secretary's Certificate 29
9.4 No Material Adverse Effect 29
9.5 Shareholders' Release 29
9.6 Termination of Related Party Agreements 29
9.7 Opinion of Counsel 30
9.8 Consents and Approvals 30
9.9 Good Standing Certificates 30
9.10 Employment Agreements 30
9.11 Registration Rights 30
9.12 Shareholders Agreement 30
9.13 Opinion of Accountants 30
9.14 Tax Opinion 30
9.15 Affiliates Agreements 30
X. COVENANTS OF ICCE AFTER CLOSING 31
10.1 Preservation of Tax and Accounting Treatment 31
10.2 Preparation and Filing of Tax Returns 31
10.3 Preservation of Employee Benefit Plans 32
XI. INDEMNIFICATION 32
11.1 Survival of Representations and Warranties 32
11.2 Indemnification by the Shareholders 32
11.3 Indemnification by ICCE 32
11.4 Claims 33
11.5 Exclusive Remedy 33
11.6 Limitations on Indemnification 33
XII. TERMINATION OF AGREEMENT 34
12.1 Termination 34
XIII. GENERAL 34
13.1 Cooperation 34
13.2 Successors and Assigns 34
13.3 Entire Agreement 34
13.4 Counterparts 35
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13.5 Brokers and Agents 35
13.6 Expenses 35
13.7 Notices 35
13.8 Governing Law 36
13.9 Exercise of Rights and Remedies 36
13.10 Time 36
13.11 Reformation and Severability 36
13.12 Captions 36
13.13 Amendments and Waivers 36
iv
SCHEDULES and EXHIBITS
Schedule 1 - List of Shareholders' Names and Addresses
Schedule 5.1 - Qualifications to do Business; Fundamental Documents
Schedule 5.3 - Exceptions Regarding Capital Stock of Company
Schedule 5.4 - Transactions in Capital Stock; Options & Warrants to
Acquire Capital Stock
Schedule 5.6 - Names of Predecessor Companies
Schedule 5.7 - Sales or Spin-Offs of Significant Assets
Schedule 5.8 - Initial Financial Statements
Schedule 5.9 - Significant Liabilities and Obligations
Schedule 5.10 - Accounts and Notes Receivable
Schedule 5.11 - Licenses, Franchises, Permits and Other Governmental
Authorizations
Schedule 5.12 - Environmental Matters
Schedule 5.13 - Personal Property
Schedule 5.14 - Significant Customers and Material Contracts
Schedule 5.15 - Real Property
Schedule 5.16 - Insurance Policies and Claims
Schedule 5.17 - Officers, Directors and Key Employees, Employment
Agreements; Compensation
Schedule 5.18 - Employee Benefit Plans
Schedule 5.19 - Violations of ERISA
Schedule 5.20 - Violations of Law, Regulations or Orders
Schedule 5.21 - Tax Returns and Examinations
Schedule 5.21(v) - Federal, State, Local and Foreign Income Tax Returns Filed
Schedule 5.21(xvii) - Aggregate Tax Losses
Schedule 5.22(a) - Violations of Charter and Documents and Material Defaults
Schedule 5.23 - Governmental Contracts Subject to Price Redetermination or
Renegotiation
Schedule 5.24 - Changes Since Balance Sheet Date
Schedule 5.25 - Deposit Accounts; Powers of Attorney
Schedule 5.29 - Ownership of Company Stock
Schedule 6.1 - Articles and Bylaws of ICCE
Schedule 6.3 - Ownership of ICCE Stock, etc.
Schedule 6.4 - Transactions in Capital Stock of ICCE
Schedule 6.7 - Liabilities and Obligations of ICCE
Schedule 6.8 - Conformity with Law; Litigation of ICCE
Schedule 6.9 - Violations of Charter Documents and Material Defaults of
ICCE
Schedule 6.12 - Real Property and Material Personal Property and Agreements
of ICCE
Schedule 7.2 - Exceptions to Conducting Business in the Ordinary Course
Between Balance Sheet Date and Consummation Date
Schedule 7.3 - Prohibited Activities
Schedule 8.13 - Financing
v
Schedule 9.6 - Exceptions to Terminations of Related Party Agreements
Exhibit A - Form of Articles of Merger
Exhibit B - Form of Opinion of Nelson, Mullins, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, LLP
Exhibit C - Form of Employment Agreement
Exhibit D - Form of Registration Rights Agreement
Exhibit E - Form of Shareholders Agreement
Exhibit F - Form of Opinion of Counsel to Companies, etc.
Exhibit G - Form of Opinion of Counsel to ICCE
Exhibit H - Form of Affiliate Agreement
vi
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of
April 16, 1997, by and among ICCE, Inc., a Georgia corporation ("ICCE"), ▇▇▇▇▇
▇. ▇▇▇▇▇▇ & Associates, Inc., a Georgia corporation ("▇▇▇▇▇▇"), DCCA
Professional Temporaries, Inc., a Georgia corporation ("DCCA"), EKT, Inc., a
North Carolina corporation ("EKT"), Infinity Enterprises, Inc., a Maryland
close corporation ("Infinity"), ▇▇▇▇▇▇ Acquisition, Inc., a Georgia corporation
("▇▇▇▇▇▇ Acquisition"), DCCA Acquisition, Inc., a Georgia corporation ("DCCA
Acquisition"), EKT Acquisition, Inc., a North Carolina corporation ("EKT
Acquisition"), and Infinity Acquisition, Inc., a Maryland corporation
("Infinity Acquisition"), and each of the individuals listed on Schedule 1
hereto (each a "Shareholder" and collectively the "Shareholders"). The
Shareholders are all of the shareholders of the Companies (as herein after
defined).
WHEREAS, ICCE is a corporation duly organized and existing under the laws
of the State of Georgia, having been incorporated on March 10, 1997, solely for
the purpose of completing the transactions set forth herein;
WHEREAS, the respective Boards of Directors of ICCE and each of the
Companies (as hereinafter defined) deem it advisable and in the best interests
of each of the Companies and their respective Shareholders that the Companies,
pursuant to this Agreement and the applicable laws of the states of
incorporation of each of the merging entities, merge with wholly owned
subsidiaries of ICCE pursuant to reverse triangular mergers as more
particularly set forth herein;
WHEREAS, the Shareholders will receive shares of ICCE stock pursuant to
such merger;
WHEREAS, the parties intend that the merger qualify as a tax-free
reorganization under Sections 351 and 368(a) of the Internal Revenue Code of
1986;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto agree as follows:
I. DEFINITIONS
Unless the context otherwise requires, capitalized terms used in this
Agreement or in any schedule or exhibit attached hereto and not otherwise
defined herein shall have the following meanings:
"1933 Act" means the Securities Act of 1933, as amended.
"Acquired Party" shall have the meaning set forth in Section 5.21(i).
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"Acquisition Company" shall mean each of ▇▇▇▇▇▇ Acquisition, DCCA
Acquisition, EKT Acquisition, and Infinity Acquisition, each of which is a
wholly owned subsidiary of ICCE. "Acquisition Companies" shall mean all of the
foregoing companies collectively.
"Articles of Merger" shall mean the Articles of Merger, Plan of Merger or
Certificates of Merger substantially in the forms attached hereto as Exhibit A,
with such changes as may be required by applicable state laws or agreement
among the parties.
"Balance Sheet Date" shall mean December 31, 1996.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section 4.1.
"COBRA" shall have the meaning set forth in Section 5.19.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean each of ▇▇▇▇▇▇, DCCA, EKT, and Infinity, and
"Companies" shall mean all of the foregoing companies collectively.
"Company Financial Statements" shall have the meaning set forth in Section
5.8.
"Company Stock" shall have the meaning set forth in Section 3.1.
"Conversion Ratios" shall have the meaning set forth in Section 3.1.
"Effective Time of the Merger" shall mean the time as set forth in Section
2.2.
"Environmental Laws" shall have the meaning set forth in Section 5.12.
"ERISA" means Employee Retirement Income Security Act of 1974.
"ICCE Documents" shall have the meaning set forth in Section 6.9.
"ICCE Stock" shall mean the common stock, no par value, of ICCE.
"Indemnification Threshold" shall have the meaning set forth in Section
11.6.
"Indemnified Party" shall have the meaning set forth in Section 11.4.
"Indemnifying Party" shall have the meaning set forth in Section 11.4.
"IRS" shall mean the United States Internal Revenue Service.
2
"Material Adverse Effect" shall mean a material adverse impact on the
business, operations, affairs, prospects, properties, assets or condition
(financial or otherwise) of the party referred to.
"Material Documents" shall have the meaning set forth in Section 5.22.
"Merger" shall mean collectively the merger of each Acquisition Company
with and into its corresponding target Company as described in Section 2.1
below and pursuant to this Agreement and the applicable provisions of the State
Laws.
"PBGC" means Pension Benefit Guaranty Corporation.
"Permits" shall have the meaning set forth in Section 5.11(a).
"Plans" shall have the meaning set forth in Section 5.18.
"Qualified Plans" shall have the meaning set forth in Section 5.19(ii).
"Relevant Group" shall have the meaning set forth in Section 5.21(i).
"Returns" shall have the meaning set forth in Section 5.21.
"Rule" shall have the meaning set forth in Section 5.20.
"SEC" shall mean the United States Securities and Exchange Commission.
"State Laws" shall mean the corporation law of each of Georgia, Maryland
and North Carolina.
"Statutory Liens" shall have the meaning set forth at the end of Section
7.3(v).
"Shareholders" shall have the meaning set forth in the first paragraph of
this Agreement.
"Tax" shall have the meaning set forth at the end of Section 5.21.
"Tax Losses" shall have the meaning set forth in Section 5.21(xvi).
"Taxing Authority" shall have the meaning set forth in Section 5.21.
II. THE MERGER
2.1 Merger. Subject to the terms and conditions hereof and of the
applicable Articles of Merger, each Acquisition Company shall be merged with
and into a Company as described below and in accordance with the applicable
provisions of the State Laws:
3
(i) ▇▇▇▇▇▇ Acquisition shall be merged with and into ▇▇▇▇▇▇; ▇▇▇▇▇▇ shall
be the surviving corporation and shall continue its existence under the name of
"▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Associates, Inc."; and ▇▇▇▇▇▇ shall succeed to and possess
all of the assets, rights, liabilities and debts of ▇▇▇▇▇▇ Acquisition;
(ii) DCCA Acquisition shall be merged with and into DCCA; DCCA shall be
the surviving corporation and shall continue its existence under the name of
"DCCA Professional Temporaries, Inc."; and DCCA shall succeed to and possess
all of the assets, rights, liabilities and debts of DCCA Acquisition;
(iii) EKT Acquisition shall be merged with and into EKT; EKT shall be
the surviving corporation and shall continue its existence under the name of
"EKT, Inc." d/b/a ▇▇▇ ▇▇▇▇▇▇▇ Associates of Charlotte; and EKT shall succeed to
and possess all of the assets, rights, liabilities and debts of EKT
Acquisition; and
(iv) Infinity Acquisition shall be merged with and into Infinity; Infinity
shall be the surviving corporation and shall continue its existence under the
name of "Infinity Enterprises, Inc." d/b/a ▇▇▇ ▇▇▇▇▇▇▇ Associates of Washington
D.C.; and Infinity shall succeed to and possess all of the assets, rights,
liabilities and debts of Infinity Acquisition.
2.2 Effective Time of the Merger. The Merger shall become effective at
such time as all of the Articles of Merger (i) have been executed by the
applicable Companies and Acquisition Companies in accordance with the
applicable provisions of the State Laws, (ii) have been duly filed with the
appropriate authorities in the states in which each of the Companies and
Acquisition Company are organized, as required by the State Laws, and (iii)
have become effective in accordance with their terms and the State Laws (the
"Effective Time of the Merger").
2.3 Effect of the Merger. Upon consummation of the Merger:
(i) the Articles of Incorporation of each of the Companies then in effect
shall remain the Articles of Incorporation of each such Company following the
Merger; provided, however, that Infinity may amend its Articles of
Incorporation pursuant to the Articles of Merger;
(ii) the Bylaws of each of the Companies then in effect shall remain the
Bylaws of each such Company following the Merger;
(iii) the officers of each of the Companies immediately prior to the
Effective Time of the Merger shall continue as the officers of each such
Company following the Merger in the same capacity or capacities;
(iv) the assets, liabilities, and debts of each of the Companies shall
remain the assets, liabilities, and debts of each such Company following the
Merger.
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2.4 Certain Information With Respect to the Capital Stock of the
Companies, the Acquisition Companies, and ICCE. The respective designations
and numbers of outstanding shares and voting rights of each class of
outstanding capital stock of each of the Companies and of ICCE as of the date
of this Agreement are as follows:
(i) the authorized and outstanding capital stock of each of the Companies
is:
Authorized Shares Outstanding
Company of Common Stock Shares
▇▇▇▇▇▇ 100,000 1,000
DCCA 10,000 500
EKT 10,000 10
Infinity 100,000 850
(ii) The authorized capital stock of ICCE consists of 45 million shares of
ICCE Stock, of which no shares are issued and outstanding, and 5 million shares
of preferred stock, no par value, of which no shares are issued and
outstanding.
(iii) Each of the Acquisition Companies has 10,000 authorized shares of
no par value common stock, of which 1,000 shares are outstanding and owned by
ICCE.
III. CONVERSION OF STOCK
3.1 Conversion of Outstanding Shares. At the Effective Time of the
Merger, all of the stock of each of the Companies issued and outstanding
immediately prior to the Effective Time of the Merger (the "Company Stock")
shall be converted into a total of 4,240,286 shares of ICCE Stock according to
the following conversion ratios (the "Conversion Ratios"):
(i) Each outstanding share of common stock of ▇▇▇▇▇▇ shall be converted
into 1,101.600 shares of ICCE Stock;
(ii) Each outstanding share of common stock of DCCA shall be converted
into 944.228 shares of ICCE Stock;
(iii) Each outstanding share of common stock of EKT shall be converted
into 13,114.300 shares of ICCE Stock;
(iv) Each outstanding share of common stock of Infinity shall be converted
into 2,982.858 shares of ICCE Stock;
(v) Each outstanding share of common stock of ▇▇▇▇▇▇ Acquisition shall be
converted into one share of ▇▇▇▇▇▇ common stock;
5
(vi) Each outstanding share of common stock of DCCA Acquisition shall be
converted into one share of DCCA common stock;
(vii) Each outstanding share of common stock of EKT Acquisition shall
be converted into one share of EKT common stock; and
(viii) Each outstanding share of common stock of Infinity Acquisition
shall be converted into one share of Infinity common stock
3.2 No Fractional Shares. No fractional shares shall be issued pursuant
to the Merger. To the extent any Shareholder is entitled to receive a
fractional share of ICCE Stock pursuant to Section 3.1 above, the number of
shares of ICCE Stock that the Shareholder shall be entitled to receive shall be
rounded down to the next lower whole number.
3.3 Treasury Shares. All shares of stock that are held by each of the
Companies as treasury stock shall be retired and canceled and no shares of ICCE
Stock or other consideration shall be delivered or paid in exchange therefor.
3.4 Change in Number of Shares. (a) If, prior to the Closing Date, there
occurs an increase, decrease, or other change in the number of outstanding
shares of any of the Company Stock as a result of a stock split, stock
dividend, reverse stock split, or other similar event, the Conversion Ratio
under which shares of such Company Stock may be converted into the right to
receive shares of ICCE Stock pursuant to this Section 3.1 shall be
proportionally adjusted so that the aggregate number of shares of ICCE Stock to
be issued in the Merger and to be received by each Shareholder remains the same
as set forth in Section 3.1 above.
(b) If, prior to the Closing Date, there occurs an increase, decrease, or
other change in the number of outstanding shares of ICCE Stock as a result of a
stock split, stock dividend, reverse stock split, or other similar event, the
Conversion Ratio under which shares of Company Stock may be converted into the
right to receive shares of ICCE Stock shall be proportionally adjusted so that
the ownership interest of each of the Shareholders in ICCE shall remain the
same. Nothing in the foregoing shall be deemed to prohibit ICCE from taking
any and all such steps as are reasonably necessary to pursue and consummate
such other business reorganizations, mergers, acquisitions or securities
distributions as ICCE's management or its Board of Directors shall deem to be
in the best interests of ICCE and its shareholders.
3.5 Rights of ICCE Shareholders. All ICCE Stock received by the
Shareholders pursuant to this Agreement shall, except for restrictions on
resale or transfer described in any agreement among the parties hereof, have
the same rights as all outstanding shares of ICCE Stock prior to the Merger,
including all voting rights.
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IV. CLOSING
4.1 The Closing Date. The closing of the Merger and the transactions
hereunder (the "Closing") shall occur on the date as determined by the parties,
which shall in any case be on or before April 30, 1997, unless otherwise agreed
in writing by the parties (the "Closing Date").
4.2 The Closing. The Closing shall occur on the Closing Date at such
time and place as agreed upon by the parties. At the Closing the following
shall occur:
(i) Each of the Articles of Merger shall be filed with the appropriate
state authorities, or if already filed shall become effective as provided
therein and the Merger shall thereby be effected;
(ii) The Shareholders shall deliver to ICCE the certificates representing
all of the applicable Company Stock, duly endorsed in blank by the
Shareholders, or accompanied by blank stock powers, with all necessary transfer
tax and other revenue stamps, acquired at the Shareholders' expense, affixed
and canceled. To the extent any certificate representing Company Stock is lost
or missing, the applicable Shareholder shall deliver an affidavit of lost
certificate and associated indemnifications in such form as may be approved by
ICCE and its legal counsel. The Shareholders agree to take all further actions
necessary to cure any deficiencies with respect to the endorsement of the stock
certificates or other documents of conveyance with respect to such Company
Stock or with respect to the stock powers accompanying any Company Stock;
(iii) ICCE shall deliver to the Shareholders newly issued shares of
ICCE Stock in accordance with Section 3.1 above;
(iv) Each of the Companies shall deliver to ICCE newly issued shares of
their common stock in accordance with Section 3.1 above;
(v) The certificates representing outstanding stock in each of the
Acquisition Companies shall be canceled; and
(vi) All other transactions contemplated herein shall be completed,
including the execution and delivery of the certificates pursuant to Sections
8.1 and 9.1 hereunder, the Shareholders' Agreement pursuant to Sections 8.12
and 9.12, the Affiliate Letter pursuant to Section 9.15, the Registration
Rights Agreement pursuant to Section 8.11 and 9.11, and any and all other
documents required to be delivered hereunder.
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V. REPRESENTATIONS AND WARRANTIES OF EACH OF THE COMPANIES
AND THE SHAREHOLDERS
(A) Representations and Warranties of Each of the Companies and its
Shareholders.
Each of the Companies and each of such Company's Shareholders severally
and not jointly represent and warrant to ICCE and to each other Company and
their Shareholders that, with respect to such Company (but not with respect to
any other Company), all of the representations and warranties in this Article
V(A) are true at the date of this Agreement.
5.1 Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation, and is duly authorized and qualified to do business under all
applicable laws, regulations, ordinances and orders of public authorities to
carry on its business in the places and in the manner as now conducted except
(i) as set forth on Schedule 5.1 or (ii) where the failure to be so authorized
or qualified would not have a Material Adverse Effect on the Company. Schedule
5.1 contains a list of all jurisdictions in which the Company is authorized or
qualified to do business. A certified copy of the Certificate or Articles of
Incorporation and a true, complete and correct copy of the Bylaws of the
Company are attached hereto as Schedule 5.1. The minute books and stock records
of the Company as provided to ICCE are correct and complete in all material
respects.
5.2 Authorization. The execution and delivery of this Agreement by the
Company and the completion of the transactions contemplated herein have been
duly and validly authorized by the Board of Directors and the Shareholders of
the Company, the representatives of the Company executing this Agreement have
the authority to enter into and bind the Company to the terms of this
Agreement, the Company has the full legal right, power and authority to enter
into this Agreement and to effect the Merger, and this Agreement is a legal,
valid and binding obligation of the Company.
5.3 Capital Stock of the Company. The authorized stock of the Company is
as set forth in Section 2.4(i). All of the issued and outstanding shares of the
stock of the Company are owned by the Shareholders in the amounts set forth on
Schedule 5.3 and, except as set forth on Schedule 5.3, such shares are owned
free and clear of all liens, security interests, pledges, charges, voting
trusts, restrictions, encumbrances and claims of every kind. There are no
other Shareholders of the Company except as set forth on Schedule 5.3. All of
the issued and outstanding shares of the stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable, are owned of
record and beneficially by the Shareholders, and were offered, issued, sold and
delivered by the Company in compliance with all applicable state and Federal
securities and other laws. No shares were issued in violation of the
preemptive rights of any past or present shareholder.
5.4 Transactions in Capital Stock. Except as set forth on Schedule 5.4,
the Company has not acquired any Company Stock since January 1, 1992. No
option, warrant, call, conversion right or commitment of any kind exists which
obligates the Company to issue any of its authorized but unissued capital
stock. The Company has no obligation (contingent or otherwise) to purchase,
redeem or otherwise acquire any of its equity securities or any interests
8
therein or to pay any dividend or make any distribution in respect thereof.
Neither the voting stock structure of the Company nor the relative ownership of
shares among any of its respective shareholders has been altered or changed in
contemplation of the Merger.
5.5 Subsidiaries. The Company does not own, of record or beneficially,
any capital stock or other equity interest in any entity, nor is the Company,
directly or indirectly, a participant in any joint venture, partnership or
other non-corporate entity.
5.6 Predecessor Status, etc. Schedule 5.6 lists the names of all
predecessor companies of the Company, including the names of any entities
acquired by the Company (by stock purchase, merger, or otherwise) or from whom
the Company previously acquired material assets. Except as set forth on
Schedule 5.6, the Company has not been a subsidiary or division of another
corporation or a part of an acquisition which was later rescinded and the
Company has never operated under any trade or fictitious name in any
jurisdiction.
5.7 Spin-off by the Company. Except as set forth on Schedule 5.7, there
has never been any sale, spin-off, split-off or split-up of material assets of
either the Company or any other person or entity that directly or indirectly
controls, is controlled by, or is under common control with the Company.
5.8 Financial Statements. Schedule 5.8 contains copies of the following
financial statements of the Company (the "Company Financial Statements"): the
Company's preliminary and tentative audited Consolidated Balance Sheets as of
December 31, 1996 and 1995, and Statements of Income, Cash Flows and Retained
Earnings for each year in the three-year period ended December 31, 1996.
Except as set forth on Schedule 5.8, the Company Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated, and all such Consolidated
Balance Sheets, Statements of Income, Cash Flows and Retained Earnings present
fairly in all material respects the financial position and results of
operations of the Company as of the dates indicated thereon.
5.9 Liabilities and Obligations. Except as set forth on Schedule 5.9 or
reflected on or reserved against in the balance sheet of the Company as of the
Balance Sheet Date, the Company does not have any liabilities or obligations,
other than liabilities incurred in the ordinary course of business in
accordance with past practice which would not have a Material Adverse Effect on
the Company. Schedule 5.9 contains the following information with respect to
any liabilities for pending or threatened litigation or other liabilities for
which the amount thereof has not been fixed, accrued or reserved:
(i) a summary description of the liability, including amounts claimed and
any other action or relief sought;
(ii) copies of all relevant documentation relating thereto; and
9
(iii) in the case of litigation, the name of the claimants and all
other parties to the suit, the name of each court or agency before which such
suit is pending, and the date such suit was filed or instituted.
5.10 Accounts and Notes Receivable. Schedule 5.10 contains an accurate
list of each of the accounts and notes receivable of the Company as of a date
no later than 60 days prior to the date of this Agreement, and a list of all
receivables from and advances to employees and the Shareholders separately
indicated as such. All accounts and notes receivable are collectible in the
amount shown on Schedule 5.10, except as reserved against in the balance sheet
of the Company or as set forth on Schedule 5.10.
5.11 Permits, Intangibles, and Intellectual Property. (a) The Company
holds all licenses, franchises, permits, registrations, and other governmental
authorizations, licenses, franchises, and certificates, the absence of any of
which could have a Material Adverse Effect on its business (the "Permits").
Schedule 5.11 contains an accurate list and summary description of the Permits.
To the best of the Company's or the Shareholder's knowledge, the Permits are
valid and currently in effect, and the Company has not received any notice that
any governmental authority intends to cancel, terminate, or not renew any
Permit. The Company has conducted and is conducting its business in compliance
with the requirements, standards, criteria and conditions set forth in
applicable permits, licenses, orders, approvals, variances, rules and
regulations and is not in violation of any of the foregoing except where such
non-compliance or violation would not have a Material Adverse Effect on the
Company.
(b) Schedule 5.11 contains a list of (i) all trademarks, service marks,
and trade names owned, used, or licensed by the Company or in which Company
otherwise claims any rights, (ii) all state or federal registrations and
applications for registration of any trademark or service ▇▇▇▇ of the Company,
and (iii) all copyright applications and registrations, patents, and patent
applications pertaining to the Company, its business or affairs. Except as set
forth on Schedule 5.11, no such registration or application has been
challenged, opposed, or invalidated, and there are no known claims or
encumbrances against any of them. Schedule 5.11 contains a complete and
accurate list of all computer software, programs, and other proprietary
computer or other technology owned, developed, or licensed by the Company or in
which the Company otherwise claims any right, other than retail shrink-wrap
license software. To the best of the Company's or the Shareholder's knowledge,
except as set forth on Schedule 5.11, no such computer software, program or
other technology infringes upon any copyright, patent, trade secret, or other
intellectual property right of any third party. Except as set forth on
Schedule 5.11, all such computer programs, and all intellectual property rights
therein including copyrights, developed by or for the Company are owned solely
by the Company and have either been produced by employees of the Company as
works for hire under Federal copyright law or have been assigned to the Company
in enforceable technology transfer agreements. Except as set forth on Schedule
5.11, all such computer software, programs and other technology (i) function
properly and (ii) are capable of functioning and of recognizing and processing
dates after January 1, 2000, to the same extent that they currently function.
(c) Except as specifically provided on Schedule 5.11, the transactions
contemplated by this Agreement will not result in a default under, a breach or
violation of, or have a Material Adverse Effect on the rights and benefits
afforded to the Company by any item listed on Schedule 5.11.
10
5.12 Environmental Matters. Except as set forth on Schedule 5.12, to the
best of the Company's or the Shareholder's knowledge, (i) the Company has
complied with and is in compliance with all Federal, state, local and foreign
statutes (civil and criminal), laws, ordinances, regulations, rules, notices,
permits, judgments, orders and decrees applicable to it or any of its
respective properties, assets, operations and businesses relating to
environmental protection (collectively "Environmental Laws") including, without
limitation, Environmental Laws relating to air, water, land and the generation,
storage, use, handling, transportation, treatment or disposal of Hazardous
Wastes and Hazardous Substances (as such terms are defined in any applicable
Environmental Law); (ii) the Company has and is in compliance with all
necessary permits and other approvals necessary to treat, transport, store,
dispose of, and otherwise handle Hazardous Wastes and Hazardous Substances;
(iii) there have been no releases or threats of releases (as defined in
Environmental Laws) at, from, in, or on any property owned or operated by the
Company in violation of any Environmental Law; (iv) the Company knows of no on-
site or off-site location to which the Company has transported or disposed of
Hazardous Wastes or Hazardous Substances or arranged for the transportation of
Hazardous Wastes or Hazardous Substances, which site is the subject of any
Federal, state, local or foreign enforcement action or any other investigation
which could lead to any claim against the Company or ICCE for any clean-up
cost, remedial work, damage to natural resources or personal injury, including,
but not limited to, any claim under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; and (v) the Company has no
contingent liability in connection with any release of any Hazardous Waste or
Hazardous Substance into the environment.
5.13 Personal Property. Schedule 5.13 contains an accurate list of (i)
all personal property reflected on the balance sheet of the Company at the
Balance Sheet Date, (ii) each other item of personal property owned or used by
the Company which has a value in excess of $2,500 as of the Closing Date, and
(iii) all leases and agreements in respect of personal property. Schedule 5.13
contains (i) true, complete and correct copies of all such leases, (ii) a
listing of the capital costs of all assets subject to capital leases, and (iii)
an indication of which assets are currently owned, or were formerly owned, by
Shareholders or business or personal affiliates of the Company or Shareholders.
Except as set forth on Schedule 5.13, (i) all personal property used by the
Company in its business is either owned by the Company or leased by the Company
pursuant to a lease included on Schedule 5.13, (ii) all of the personal
property listed on Schedule 5.13 is in good working order and condition,
ordinary wear and tear excepted, and (iii) all leases and agreements included
on Schedule 5.13 are in full force and effect and constitute valid and binding
agreements of the parties (and their successors) thereto in accordance with
their respective terms.
5.14 Significant Customers; Material Contracts and Commitments. (a)
Schedule 5.14 contains an accurate list of all customers representing 5% or
more of the Company's annual revenues for the years ended December 31, 1995 and
1996. Except to the extent set forth on Schedule 5.14, no such customer has
canceled or substantially reduced or, to the best of the Company's or the
Shareholder's knowledge, is currently attempting or threatening to cancel a
contract or substantially reduce utilization of the services provided by the
Company.
11
(b) The Company has listed on Schedule 5.14 all material contracts,
commitments and similar agreements to which the Company is a party or by which
it or any of its properties are bound, including, but not limited to, contracts
with significant customers, joint venture or partnership agreements, contracts
with any labor organizations, strategic alliances, loan agreements, indemnity
or guaranty agreements, bonds, mortgages, options to purchase land, liens,
pledges or other security agreements, and licenses for software or other
intellectual property. The Company has delivered true, complete and correct
copies of such agreements to ICCE and to each of the other Companies. The
Company is not in default under any contracts or agreements and no notice of
default under any such contract or agreement has been received which default
would have a Material Adverse Effect on the Company. Schedule 5.14 contains a
summary description of all plans or projects involving the opening of new
operations, expansion of existing operations, the acquisition of any personal
property, business or assets requiring, in any event, the payment of more than
$20,000 by the Company.
5.15 Real Property. Schedule 5.15 includes a list of all real property
owned or leased by the Company and all other real property, if any, used by the
Company in the conduct of its business. The Company has good and insurable
title to the real property owned by it subject to no material mortgage, pledge,
lien, conditional sales agreement, encumbrance or charge, except as reflected
on Schedule 5.15. Schedule 5.15 shall, without limitation, contain true,
complete and correct copies of all title reports and title insurance policies
for real property owned by the Company. Schedule 5.15 contains a true,
complete, and correct copy of all leases and agreements in respect of real
property leased by the Company, and an indication as to which such properties,
if any, are currently owned, or were formerly owned, by Shareholders or
business or personal affiliates of the Company or Shareholders. Except as set
forth on Schedule 5.15, all of such leases are in full force and effect and
constitute valid and binding agreements of the parties and their successors in
accordance with their respective terms.
5.16 Insurance. Schedule 5.16 contains (i) an accurate list of all
insurance policies carried by the Company, (ii) an accurate list of all
insurance loss runs or workers compensation claims received since January 1,
1994, and (iii) true, complete and correct copies of all insurance policies
currently in effect. Such insurance policies are currently in full force and
effect and shall remain in full force and effect through the Closing Date.
Except as set forth on Schedule 5.16, no insurance carried by the Company has
ever been canceled by the insurer and the Company has never been denied
coverage.
5.17 Compensation; Employment Agreements; Organized Labor Matters.
Schedule 5.17 contains a list of all officers, directors, key employees and
staff of the Company, all employment agreements with any of them, and a
description of the compensation (and the portions thereof attributable to
salary, bonus and other compensation, respectively) of each such person. The
Company has provided to ICCE true, complete and correct copies of any
employment agreements for persons listed on Schedule 5.17. Except as set forth
on Schedule 5.17, since the Balance Sheet Date, there have been no increases in
the compensation payable or any special bonuses to any officer, director, key
employee or other employee, except salary increases in the ordinary course of
business implemented on a basis consistent with past practices. The Company is
not bound by or subject to any arrangement with any labor union. No employees
of the Company are represented by any labor union or covered by any collective
bargaining agreement. No campaign to establish such representation is in
progress. There is no pending or, to the best of the Company's and the
Shareholder's knowledge, threatened labor dispute involving the Company or any
group of its employees, nor has the Company experienced any labor interruptions
over the past three years. Neither the Company nor the Shareholder has any
knowledge of the intent of any employee (or employees) to leave the Company as
a result of the Merger or otherwise whose departure(s) would have a Material
Adverse Effect on the Company.
12
5.18 Employee Plans. Attached hereto as Schedule 5.18 are complete and
accurate copies, as of the date of this Agreement, of all employee benefit
plans, all employee welfare benefit plans, all employee pension benefit plans,
all multi-employer plans and all multi-employer welfare arrangements (as
defined in Sections 3(3), (1), (2), (37) and (40), respectively, of ERISA,
which are currently maintained and/or sponsored by the Company, or any benefit
plans or arrangements, formal or informal, that are not subject to ERISA,
including, without limitation, employment agreements and any other agreements
containing "golden parachute" provisions and deferred compensation agreements,
or to which any Company currently contributes, or has an obligation to
contribute in the future (including, without limitation, benefit plans or
arrangements that are not subject to ERISA, such as employment agreements and
any other agreements containing "golden parachute" provisions and deferred
compensation agreements), together with copies of any trusts related thereto
and a classification of employees covered thereby (collectively, the "Plans").
Schedule 5.18 sets forth all of the Plans that have been terminated within the
past three years.
5.19 Compliance with ERISA. (a) Except for the Plans, the Company does
not maintain or sponsor, and is not a contributing employer to, a pension,
profit-sharing, deferred compensation, stock option, employee stock purchase or
other employee benefit plan, employee welfare benefit plan, or any other
compensation or benefit arrangement, formal or informal, with any of their
respective employees, whether or not subject to ERISA.
(b) Except as set forth on the Schedule 5.19 to best of the Company's or
the Shareholder's knowledge, (i) all Plans are in substantial compliance with
all applicable provisions of ERISA and the regulations issued thereunder, as
well as with all other applicable laws, and, in all material respects, have
been administered, operated and managed in substantial accordance with the
governing documents; (ii) all Plans that are intended to qualify (the
"Qualified Plans") under Section 401(a) of the Code are so qualified and have
been determined by the IRS to be so qualified, and copies of the current plan
determination letters, most recent actuarial valuation reports, if any, most
recent Form 5500, or, as applicable, Form 5500-C/R filed with respect to each
such Qualified Plan or employee welfare benefit plan and most recent trustee or
custodian report, are included as part of Schedule 5.19; (iii) to the extent
that any Qualified Plans have not been amended to comply with applicable law,
the remedial amendment period permitting retroactive amendment of such
Qualified Plans has not expired and will not expire within 120 days after the
Closing Date; (iv) all reports and other documents required to be filed with
any governmental agency or distributed to plan participants or beneficiaries
13
(including, but not limited to, annual reports, summary annual reports,
actuarial reports, PBGC-1 Reports, audits or tax returns) have been timely
filed or distributed, or failure to timely file or deliver will not result in a
Material Adverse Effect to the Company; (v) none of the Shareholders, any Plan,
or the Company has engaged in any transaction prohibited under the provisions
of Section 4975 of the Code or Section 406 of ERISA; (vi) no Plan has incurred
an accumulated funding deficiency, as defined in Section 412(a) of the Code and
Section 302(1) of ERISA; (vii) no circumstances exist pursuant to which the
Company could have any direct or indirect liability whatsoever (including being
subject to any statutory lien to secure payment of any such liability), to the
PBGC under Title IV of ERISA or to the IRS for any excise tax or penalty with
respect to any plan now or hereafter maintained or contributed to by the
Company; (viii) the Company currently has (or at the Closing Date will have) no
obligation whatsoever to contribute to any "multi-employer pension plan" (as
defined in ERISA Section 4001(a)(14)), nor has any withdrawal liability
whatsoever (whether or not yet assessed) arising under, or capable of assertion
under, Title IV of ERISA (including, but not limited to, Sections 4201, 4202,
4203, 4204, or 4205 thereof) been incurred by any Plan; (ix) there have been no
terminations, partial terminations or discontinuance of contributions to any
Qualified Plan without notice to and approval by the IRS; (x) no Plan which is
subject to the provisions of Title IV of ERISA has been terminated; (xi) there
have been no "reportable events" (as that phrase is defined in Section 4043 of
ERISA) with respect to any Plan which were not properly reported; (xii) the
valuation of assets of any Qualified Plan, as of the Closing Date, will exceed
the actuarial present value of all accrued pension benefits under any such
Qualified Plan in accordance with the assumptions contained in the Regulations
of the PBGC governing the funding of terminated defined benefit plans; (xiii)
with respect to Plans which qualify as "group health plans" under Section 4980B
of the and Section 607(l) of ERISA and related regulations (relating to the
benefit continuation rights imposed by "COBRA"), the Company and the
Shareholders have complied (and on the Closing Date will have complied) in all
material respects with all reporting, disclosure, notice, election and other
benefit continuation requirements imposed thereunder as and when applicable to
such plans, and the Company has not incurred (and will not incur) any material
direct or indirect liability and is not (and will not be) subject to any
material loss, assessment, excise tax penalty, loss of Federal income tax
deduction or other sanction, arising on account of or in respect of any direct
or indirect failure by the Company or the Shareholders, at any time prior to
the Closing Date, to comply with any such Federal or state benefit continuation
requirement, which is capable of being assessed or asserted before or after the
Closing Date directly or indirectly against the Company or the Shareholders
with respect to such group health plans; (xiv) the Company is not now, nor has
it been within the past five years, a member of a "controlled group" as defined
in ERISA Section 4001(a)(14); (xv) there is no pending litigation, arbitration,
or disputed claim, settlement or adjudication proceeding, and to the best of
the Company's or any of its Shareholders' knowledge, there is no threatened
litigation, arbitration or disputed claim, settlement or adjudication
proceeding, or any governmental or other proceeding, or investigation with
respect to any Plan, or with respect to any fiduciary, administrator, or
sponsor thereof (in their capacities as such), or any party in interest
thereof; (xvi) the Company Financial Statements as of the Balance Sheet Date
reflect the approximate total pension, medical and other benefit expense for
all Plans, and no material funding changes or irregularities are reflected
thereon which would cause such Financial Statements to be not
representative of most prior periods; and (xvii) the Company has not incurred
liability under Section 4062 of ERISA.
14
(c) The Company has not entered into any contract under which it has
assumed any liability related to any other person's qualified retirement plan.
The Company has not made any representation or warranty to any person that the
use of the Company's temporary employees would not have an adverse impact on
such person's qualified benefit plan.
(d) The Company does not engage in "Employee Leasing." For purposes
hereof, "Employee Leasing" shall mean an arrangement whereby a client of a
Company places some or all of its workforce onto the payroll of the Company in
a co-employment relationship in which the Company assumes responsibility for
administration of payroll, benefits, and other human resources activities for
the client. "Employee Leasing" does not include a temporary help arrangement,
whereby an organization hires its own employees and assigns them to a client to
support or supplement the client's workforce in special work situations such as
employee absences, temporary skill shortages, seasonal workloads, and special
assignments and projects.
5.20 Conformity with Law, Litigation. Except to the extent set forth on
Schedule 5.20, the Company has conducted its business in accordance with, has
not violated, and is not in violation of any law, rule, statute, ordinance,
regulation, or any order of any court or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
including but not limited to the rules and regulations of the U.S. Department
of Justice Immigration and Naturalization Services regarding Employment
Eligibility Verification (a "Rule") which would have a Material Adverse Effect
on the Company. Except to the extent set forth on Schedule 5.20, there are no
material claims, actions, suits or proceedings, pending or, to the best of the
Company's or its Shareholder's knowledge, threatened, against or affecting the
Company, at law or in equity, or before or by any Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality and no notice of any claim, action, suit or proceeding, whether
pending or threatened, has been received. The delivery of this Agreement and
performance hereunder will not cause the Company to violate any Rule.
5.21 Taxes. Except as set forth on Schedule 5.21:
(i) All Returns required to have been filed with any Taxing Authority by
or with respect to the Company or any affiliated, combined, consolidated,
unitary or similar group of which the Company is or was a member (a "Relevant
Group") have been duly filed, and each such Return correctly and completely
reflects the income, franchise or other Tax liability and all other information
required to be reported thereon. All Taxes (whether or not shown on any
Return) owed by the Company, any subsidiary and any member of a Relevant Group
(individually, the "Acquired Party" and collectively, the "Acquired Parties")
have been paid.
(ii) The provisions for Taxes due by the Company and any subsidiaries (as
opposed to any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) in the Company Financial Statements
are sufficient for all unpaid Taxes.
15
(iii) No Acquired Party is a party to any agreement extending the time
within which to file any Return. No claim has ever been made by any Taxing
Authority in a jurisdiction in which an Acquired Party does not file Returns
that it is or may be subject to taxation by that jurisdiction.
(iv) Each Acquired Party has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, creditor, independent contractor or other third party.
(v) No Acquired Party expects any Taxing Authority to assess any
additional Taxes against or in respect of it for any past period. There is no
dispute or claim concerning any Tax liability of any Acquired Party either (i)
claimed or raised by any Taxing Authority or (ii) otherwise known to any
Acquired Party. No issues have been raised in any examination by any Taxing
Authority with respect to any Acquired Party which, by application of similar
principles, reasonably could be expected to result in a proposed deficiency for
any other period not so examined. Schedule 5.21(v) attached hereto lists all
Federal, state, local and foreign income Tax Returns filed by or with respect
to any Acquired Party for all taxable periods ended on or after January 1,
1991, indicates those Returns, if any, that have been audited, and indicates
those Returns that currently are the subject of audit. Each Acquired Party has
delivered to ICCE complete and correct copies of all federal, state, local and
foreign income Tax Returns filed by, and all Tax examination reports and
statements of deficiencies assessed against or agreed to by, such Acquired
Party since January 1, 1993.
(vi) No Acquired Party has waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to any Tax assessment or
deficiency.
(vii) No Acquired Party has made any payments, is obligated to make
any payments, or is a party to any agreement that under certain circumstances
could require it to make any payments, that are not deductible under Section
280G of the Code.
(viii) No Acquired Party is a party to any Tax allocation or sharing
agreement.
(ix) None of the assets of any Acquired Party constitutes tax-exempt bond
financed property or tax-exempt use property, within the meaning of Section 168
of the Code. No Acquired Party is a party to any "safe harbor lease" that is
subject to the provisions of Section 168(f)(8) of the Code as in effect prior
to the Tax Reform Act of 1986, or to any "long-term contract" within the
meaning of Section 460 of the Code.
(x) No Acquired Party is a "consenting corporation" within the meaning of
Section 341(f)(1) of the Code, or comparable provisions of any state statutes,
and none of the assets of any Acquired Party is subject to an election under
Section 341(f) of the Code or comparable provisions of any state statutes.
16
(xi) No Acquired Party is a party to any joint venture, partnership or
other arrangement that is treated as a partnership for Federal income Tax
purposes.
(xii) There are no proposed accounting method changes or, to the best
of the Company's or the Shareholder's knowledge, threatened accounting method
changes, of any Acquired Party that could give rise to an adjustment under
Section 481 of the Code for periods after the Closing Date.
(xiii) No Acquired Party has received any written ruling of a Taxing
Authority related to Taxes or entered into any written and legally binding
agreement with a Taxing Authority relating to Taxes.
(xiv) Each Acquired Party has disclosed (in accordance with Section
6662(d)(2)(B)(ii) of the Code) on its Federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of Federal
income Tax within the meaning of Section 6662(d) of the Code.
(xv) No Acquired Party has any liability for Taxes of any person other
than such Acquired Party (i) under Section 1.1502-6 of the regulations
promulgated pursuant to the Code (the "Treasury Regulations") (or any similar
provision of state, local or foreign law), (ii) as a transferee or successor,
(iii) by contract, or (iv) otherwise.
(xvi) There currently are no limitations on the utilization of the net
operating losses, built-in losses, capital losses, tax credits or other similar
items of any Acquired Party (collectively, the "Tax Losses") under (i) Section
382 of the Code, (ii) Section 383 of the Code, (iii) Section 384 of the Code,
(iv) Section 269 of the Code, (v) Section 1.1502-15 and Section 1.1502-15A of
the Treasury Regulations, (vi) Section 1.1502-21 and Section 1.1502-21A of the
Treasury Regulations, or (vii) Sections 1.1502-91 through 1.1502-99 of the
Treasury Regulations, in each case as in effect both prior to and following the
Tax Reform Act of 1986.
(xvii) At the Closing Date, the Company will not have outstanding any
warrants, options, convertible securities, or any other type of right pursuant
to which any person could acquire stock in the Company which, if exercised or
converted, would affect ICCE's acquisition or retention of ownership of more
than 100% of the total combined voting power of all classes of Company Stock
and more than 80% of the total number of shares of each class of Company non-
voting stock.
(xviii) The Company is not an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
(xix) The fair market value of the assets of the Company exceeds the
sum of its liabilities, plus the amount of liabilities, if any, to which the
assets are subject.
(xx) The Company is not under the jurisdiction of a court in a Title II or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
17
For purposes of this Section 5.21, the following definitions shall apply:
"Returns" means any returns, reports or statements (including any
information returns) required to be filed for purposes of any Tax or with any
Taxing Authority.
"Tax" or "Taxes" means all Federal, state, local or foreign net or gross
income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, sales, use,
property, deed, stamp, alternative or add-on minimum, environmental or other
taxes, assessments, duties, fees, levies or other governmental charges of any
nature whatever, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
"Taxing Authority" means any governmental agency, board, bureau, body,
department or authority of any United States Federal, state or local
jurisdiction or any foreign jurisdiction, having or purporting to exercise
jurisdiction with respect to any Tax.
5.22 No Violations. The Company is not in violation of its Articles of
Incorporation or Bylaws. Neither the Company nor, to best of the Company's or
the Shareholder's knowledge, any other party thereto, is in default under any
lease, instrument, agreement, license, or permit set forth on any Schedule
hereto, or any other material agreement to which it is a party or by which its
properties are bound (the "Material Documents"); and, except as set forth on
Schedule 5.22, the execution of this Agreement and the performance of the
obligations hereunder and the consummation of the transactions contemplated
hereby will not result in any violation or breach, or constitute a default
under, any of the terms or provisions of the Material Documents or the
Certificate or Articles of Incorporation or the Bylaws of the Company, which
violation, breach, or default would have a Material Adverse Effect on the
Company. Except as set forth on Schedule 5.22, none of the Material Documents
requires notice to, or the consent or approval of any third party with respect
to any of the transactions contemplated hereby, and consummation of the
transactions contemplated hereby will not give rise to any right to
termination, cancellation, acceleration, or loss of any right or benefit.
Except as set forth on Schedule 5.22, none of the Material Documents prohibits
the use or publication by the Company or ICCE of the name of any other party to
such Material Document, and none of the Material Documents prohibits or
restricts the Company from freely providing services to any other customer,
potential customer, the Company, or ICCE.
5.23 Government Contracts. Except as set forth on Schedule 5.23, the
Company is not now a party to any governmental contracts subject to price
redetermination or renegotiation.
5.24 Absence of Changes. Since the Balance Sheet Date, except as set
forth on Schedule 5.24, there has not been:
(i) any change in the financial condition, assets, liabilities
(contingent or otherwise), income or business of the Company which has had a
Material Adverse Effect on the Company;
18
(ii) any damage, destruction or loss (whether or not covered by insurance)
which had or may have a Materially Adverse Effect on the Company;
(iii) any change in the authorized capital of the Company or its
outstanding securities or any change in its ownership interests or any grant of
any options, warrants, calls, conversion rights or commitments with respect to
the Company's securities;
(iv) any declaration or payment of any dividend or distribution in respect
of the capital stock or any direct or indirect redemption, purchase or other
acquisition of any of the capital stock of the Company other than S corporation
dividends consistent with past practice;
(v) any increase in the compensation, bonus, sales commissions or fee
arrangement payable or to become payable by the Company to any of its officers,
directors, Shareholders, employees, consultants or agents, except for ordinary
and customary bonuses and salary increases for employees in accordance with
past practice;
(vi) any work interruptions, labor grievances, or claims filed, or any
event or condition of any character which had or may have a Material Adverse
Effect on the Company;
(vii) any sale or transfer, or any agreement to sell or transfer, any
material assets, property or rights of Company to any person, including,
without limitation, the Shareholders and their affiliates;
(viii) any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to the Company, including, without limitation, any
indebtedness or obligation of any Shareholders or any affiliate thereof;
(ix) any plan, agreement or arrangement granting any preferential rights
to purchase or acquire any interest in any of the assets, property, or rights
of the Company or requiring consent of any party to the transfer and assignment
of any such assets, property or rights;
(x) any purchase or acquisition of, or agreement, plan or arrangement to
purchase or acquire, any property, rights or assets outside of the ordinary
course of the Company's business;
(xi) any waiver of any material rights or claims of the Company;
(xii) any breach, amendment, or termination of any material contract,
agreement, license, permit or other right to which the Company is a party;
(xiii) any transaction by the Company outside the ordinary course of
its business;
19
(xiv) any cancellation or termination of a material contract with a
customer or client; or
(xv) any other distribution of property or assets by the Company.
5.25 Deposit Accounts, Powers of Attorney. Schedule 5.25 sets forth as of
the date of this Agreement:
(i) the name of each financial institution in which the Company has
accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account and account number; and
(iv) the name of each person authorized to draw thereon or have access
thereto.
Schedule 5.25 also sets forth the name of each person, corporation, firm
or other entity holding a general or special power of attorney from the Company
and a description of the terms of such power.
5.26 Disclosure. This Agreement, including the schedules hereto, presents
fairly the business and operations of the Company as addressed in the
representations and warranties. The Company's rights under the documents
delivered pursuant hereto would not be materially adversely affected by, and no
statement made herein by the Company of the Shareholder would be rendered
untrue by, any other document to which the Company or such Shareholder is a
party, or by which its properties are subject, or by any other fact or
circumstance known to the Company or to such Shareholder that is not otherwise
disclosed herein.
5.27 Pooling Information. All of the information provided by the Company
or the Shareholder to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P. in writing for purposes of its
pooling opinion is true and correct.
(B) Representations and Warranties of Shareholders
Each Shareholder severally and not jointly represents and warrants to ICCE
and to each of the Companies that, with respect to the Company in which such
Shareholder holds shares (but not with respect to any other Company), all of
the representations and warranties in this Article V(B) are true at the date of
this Agreement and shall be true on the Closing Date.
5.28 Authority, Ownership. Such Shareholder has the full legal right,
power and authority to enter into this Agreement. Such Shareholder owns
beneficially and of record all of the shares of the Company Stock identified on
Schedule 5.3 as being owned by such Shareholder, and, except as set forth on
Schedule 5.28, such Company Stock is owned free and clear of all liens,
encumbrances, and claims of every kind.
20
5.29 Preemptive Rights. Except as set forth in the ICCE Shareholders
Agreement, such Shareholder does not have, or hereby permanently waives, any
preemptive or other rights to acquire shares of Company Stock or ICCE Stock
that such Shareholder has or may have had other than the rights of any
Shareholder to acquire ICCE Stock pursuant to (i) this Agreement or (ii) any
option granted by ICCE.
VI. REPRESENTATIONS OF THE ACQUISITION COMPANIES AND ICCE
ICCE, and each of the Acquisition Companies, as applicable, represents and
warrants to each of the Companies and to the Shareholders that all of the
following representations and warranties in this Article VI are true at the
date of this Agreement.
6.1 Due Organization. Each of ICCE and the Acquisition Companies is a
corporation duly organized, validly existing and in good standing under the
laws of the state where it was organized, is duly authorized and qualified to
do business under all applicable laws, regulations, ordinances and orders of
public authorities to carry on its business in the places and in the manner as
now conducted except where the failure to be so authorized or qualified would
not have a Material Adverse Effect on the Company. True, complete and correct
copies of the Articles of Incorporation and Bylaws of ICCE are attached hereto
as Schedule 6.1.
6.2 Authorization. The execution and delivery of this Agreement by ICCE
and each of the Acquisition Companies and the completion of the transactions
contemplated herein have been duly and validly authorized by the Board of
Directors and the Shareholders of ICCE and each of the Acquisition Companies.
The representatives of ICCE and the Acquisition Companies executing this
Agreement have the authority to enter into and bind their respective
corporations to the terms of this Agreement, ICCE and each of the Acquisition
Companies has the full legal right, power and authority to enter into this
Agreement and the Merger, and this Agreement is a legal, valid and binding
obligation of ICCE and each of the Acquisition Companies.
6.3 Capital Stock of ICCE and the Acquisition Companies. The authorized
capital stock of ICCE and of each of the Acquisition Companies is as set forth
in Section 2.4(ii) and (iii). All of the issued and outstanding stock of each
of the Acquisition Companies is owned by ICCE. All of the issued and
outstanding shares of the capital stock of each of the Acquisition Companies
and of ICCE have been duly authorized and validly issued, are fully paid and
nonassessable, were offered, issued, sold and delivered by ICCE and the
Acquisition Companies in compliance with all applicable state and Federal laws
concerning the issuance of securities, and were not issued in violation of the
preemptive rights of any past or present shareholder.
6.4 Transactions in Capital Stock, Reorganization Accounting. Except as
set forth on Schedule 6.4, no option, warrant, call, conversion right or
commitment of any kind exists which obligates ICCE or any Acquisition Company
to issue any of its authorized but unissued capital stock. Neither ICCE nor
any Acquisition Company has any obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any of its equity securities or any
interests therein or to pay any dividend or make any distribution in respect
thereof. Schedule 6.4 contains a list of all stock option or stock purchase
21
plans for ICCE, including a list, accurate as of the date of this Agreement
hereof, of all outstanding options, warrants, or other rights to acquire shares
of ICCE's stock.
6.5 Subsidiaries. ICCE has no subsidiaries other than the Acquisition
Companies. The Acquisition Companies have no subsidiaries. Neither ICCE nor
any of the Acquisition Companies presently owns, of record or beneficially, any
capital stock or other equity interest in any entity, nor is ICCE or any of the
Acquisition Companies, directly or indirectly, a participant in any joint
venture, partnership, or other non-corporate entity.
6.6 Financial Statements. There are no prepared financial statements for
ICCE or any of the Acquisition Companies.
6.7 Liabilities and Obligations. Except as set forth on Schedule 6.7,
neither ICCE nor any of the Acquisition Companies has any material liabilities,
contingent or otherwise, except as set forth in or contemplated by this
Agreement and except for fees and expenses incurred in connection with the
transactions contemplated hereby and thereby.
6.8 Conformity with Law, Litigation. Except to the extent set forth on
Schedule 6.8, neither ICCE nor any of the Acquisition Companies is in violation
of any Rule which would have a Material Adverse Effect. Except to the extent
set forth on Schedule 6.8, there are no material claims, actions, suits or
proceedings, pending or, to the knowledge of ICCE or any of the Acquisition
Companies, threatened, against or affecting ICCE or any of the Acquisition
Companies, at law or in equity, or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over ICCE or any of the Acquisition
Companies, and no notice of any claim, action, suit or proceeding, whether
pending or threatened, has been received. The delivery of this Agreement and
performance hereunder will not cause ICCE or any Acquisition Company to violate
any Rule.
6.9 No Violations. Neither ICCE nor any of the Acquisition Companies is
(i) in violation of any of its Articles of Incorporation or Bylaws or (ii) in
default under any lease, instrument, agreement, license, or permit to which it
is a party, or by which any of them is bound (collectively, the "ICCE
Documents"). The rights and benefits of ICCE and the Acquisition Companies
under the ICCE Documents will not be adversely affected by the transactions
contemplated hereby, and the execution of this Agreement, the performance of
the obligations hereunder, and the consummation of the transactions
contemplated hereby will not result in any material violation or breach or
constitute a default under any of the terms or provisions of the ICCE Documents
or the Articles of Incorporation or the Bylaws of ICCE or the Acquisition
Companies. Except as set forth on Schedule 6.9, none of the ICCE Documents
requires notice to, or the consent or approval of, any third party with respect
to any of the transactions contemplated hereby in order to remain in full force
and effect, and consummation of the transactions contemplated hereby will not
give rise to any right to termination, cancellation, or acceleration or loss of
any right or benefit.
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6.10 ICCE Stock. Upon the issuance and delivery of the ICCE Stock to the
Shareholders pursuant to this Agreement, such shares will constitute valid and
legally issued shares of ICCE, fully paid and nonassessable.
6.11 No Side Agreements. Neither ICCE nor the Acquisition Companies have
entered nor will they, prior to the Closing, enter into any agreement with any
of the Companies or Shareholders other than this Agreement and the agreements
appearing as Exhibits hereto. ICCE and each of the Acquisition Companies has
made available to each of the Companies copies of all agreements entered into
between ICCE or the Acquisition Companies and the Companies or any of the
Shareholders.
6.12 Business; Real Property, Material Agreements. ICCE was formed on
March 10, 1997, Infinity Acquisition was formed on March 27, 1997, EKT
Acquisition was formed on March 26, 1997, DCCA Acquisition was formed on March
25, 1997 and ▇▇▇▇▇▇ Acquisition was formed on March 25, 1997. Each of them
conducted limited or no operations since that time. ICCE and the Acquisition
Companies have not conducted any material business since the date of their
inception, except in connection with this Agreement. Neither ICCE nor any of
the Acquisition Companies owns or has at any time owned any real property or
any material personal property or been a party to any other agreement, except
as listed on Schedule 6.12.
6.13 Permits and Intangibles. ICCE and each of the Acquisition Companies
hold all permits the absence of any of which could have a Material Adverse
Effect on their business. To the knowledge of ICCE and the Acquisition
Companies, the Permits are valid, and they have not received any notice that
any governmental authority intends to cancel, terminate or not renew any such
Permit. ICCE and the Acquisition Companies have conducted and are conducting
their business in compliance with the requirements, standards, criteria and
conditions set forth in applicable permits, licenses, orders, approvals,
variances, rules and regulations and are not in violation of any of the
foregoing except where such non-compliance or violation would not have a
Material Adverse Effect on ICCE or the Acquisition Companies. The transactions
contemplated by this Agreement will not result in a default under or a breach
or violation of, or adversely affect the rights and benefits afforded to, ICCE
or the Acquisition Companies by any such Permits.
6.14 Disclosure. This Agreement, including the schedules hereto, presents
fairly the business and operations of ICCE and the Acquisition Companies.
ICCE's and the Acquisition Companies' rights under the documents delivered
pursuant hereto would not be materially adversely affected by, and no statement
made herein would be rendered untrue by, any other document to which ICCE or
the Acquisition Companies is a party, or by which their properties are subject,
or by any other known fact or circumstance that is not disclosed pursuant
hereto.
VII. COVENANTS PRIOR TO CLOSING
7.1 Access and Cooperation; Due Diligence. (a) Each of the Companies
agrees to afford the officers and authorized representatives of ICCE and each
of the other Companies access to all of such Company's sites, properties, books
23
and records and to furnish ICCE and each other Company with such additional
financial and operating data and other information as to the business and
properties of such Companies as ICCE may from time to time reasonably request.
Each of the Companies agrees to cooperate with ICCE and its representatives,
auditors and counsel in the preparation of any documents or other material
which may be required in connection with any documents or materials
contemplated by this Agreement. ICCE, the Acquisition Companies, the
Shareholders, and each of the Companies agrees to treat all information
obtained in connection with the negotiation and performance of this Agreement,
or the due diligence investigations conducted with respect to each other, as
confidential.
(b) ICCE and the Acquisition Companies agree to afford the officers and
authorized representatives of the Companies access to all of their sites,
properties, books and records and to furnish the Companies with such additional
financial and operating data and other information as to the business and
properties of ICCE and the Acquisition Companies as the Companies may from time
to time reasonably request. ICCE and the Acquisition Companies agree to
cooperate with the Companies and their representatives, auditors and counsel in
the preparation of any documents or other material which may be required in
connection with any documents or materials contemplated by this Agreement. The
Companies will cause all information obtained in connection with the
negotiation and performance of this Agreement to be treated as confidential.
7.2 Conduct of Business Pending Closing. During the period commencing on
the date of this Agreement and ending with the earlier to occur of the Closing
Date or the termination of this Agreement in accordance with its terms, each of
the Companies agrees that it will, except as set forth on Schedule 7.2:
(i) carry on its respective businesses in substantially the same manner
as it has heretofore and not introduce any material new method of management,
operation or accounting;
(ii) maintain its respective properties and facilities, including those
held under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(iii) perform all of its respective obligations under agreements
relating to or affecting its respective assets, properties, or rights;
(iv) keep in full force and effect present insurance policies or other
comparable insurance coverage;
(v) use its best efforts to maintain and preserve its business
organization intact, retain its respective present key employees, and maintain
its respective relationships with suppliers, customers, and others having
business relations with it;
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(vi) maintain compliance with all permits, laws, rules and regulations,
consent orders, and all other orders of applicable courts, regulatory agencies,
and similar governmental authorities;
(vii) maintain present debt and lease instruments and not enter into
new or amended debt or lease instruments.; and
(viii) maintain present salaries and commission levels for all
officers, directors, employees and agents.
7.3 Prohibited Activities. During the period commencing on the date of
this Agreement and ending with the earlier to occur of the Closing Date or the
termination of this Agreement in accordance with its terms, each of the
Companies, ICCE, and the Acquisition Companies agrees that it will not, except
as set forth on Schedule 7.3:
(i) make any change in its Certificate or Articles of Incorporation or
Bylaws;
(ii) issue any securities, options, warrants, calls, conversion rights or
commitments relating to its securities of any kind;
(iii) declare or pay any dividend, or make any distribution in respect
of its stock whether now or hereafter outstanding, or purchase, redeem or
otherwise acquire or retire for value any shares of its stock or declare any
dividends or make any distributions (other than S Corporation distributions),
nor pay out any extraordinary bonuses in excess of pro rata bonuses customarily
paid, or fees, or commissions to the Shareholders, directors, management or
other personnel;
(iv) enter into any contract or commitment or incur, or agree to incur,
any liability or make any capital expenditures, except in the normal course of
business consistent with past practice, involving amounts less than $5,000;
(v) create, assume, or permit to exist any mortgage, pledge, or other
lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except (1) with respect to purchase money liens incurred in
connection with the acquisition of equipment with an aggregate cost not in
excess of $10,000 necessary or desirable for the conduct of the businesses of
the Company, (2) liens for taxes either not yet due or being contested in good
faith and by appropriate proceedings (and for which contested taxes adequate
reserves have been established and are being maintained) or materialmen's,
mechanics', workers', repairmen's, employees', or other like liens arising in
the ordinary course of business (the liens set forth in clause (2) being
referred to herein as "Statutory Liens"), or (3) liens set forth on Schedule
5.15 hereto;
(vi) sell, assign, lease, or otherwise transfer or dispose of any property
or equipment except in the normal course of business;
25
(vii) negotiate for the acquisition of any business or the start-up of
any new business;
(viii) merge or consolidate or agree to merge or consolidate with or
into any other corporation;
(ix) waive any material rights or claims;
(x) commit a material breach of or amend or terminate any material
agreement or Permit;
(xi) enter into any other transaction outside the ordinary course of its
business consistent with past business practice or prohibited hereunder; or
(xii) change its accounts receivable collection practice or factor its
accounts receivable in any way.
7.4 No Shop. Except as required under applicable law, each of the
Companies, and each of such Company's Shareholders, agrees that it will not,
and agrees to cause each agent, officer, director, trustee or any
representative of such Company not to, during the period commencing on the date
of this Agreement and ending with the earlier to occur of the Closing Date or
the termination of this Agreement in accordance with its terms, directly or
indirectly:
(i) solicit or initiate the submission of proposals or offers from any
person for,
(ii) participate in any discussions pertaining to, or
(iii) furnish any information to any person other than ICCE or its
authorized agents relating to,
any acquisition or purchase of all or a material amount of the assets of,
or any equity interest in, the Company or a merger, consolidation, or business
combination of the Company.
7.5 Notification of Certain Matters. Each party hereto shall notify ICCE
and each of the Companies of (i) the occurrence or non-occurrence of any event
would be likely to cause any representation or warranty of such party contained
herein to be untrue or inaccurate in any material respect at or prior to the
Closing and (ii) any material failure of such party to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by such
person hereunder. The delivery of any notice pursuant to this Section 7.5
shall not be deemed to (i) modify the representations or warranties hereunder
of the party delivering such notice, which modification may only be made
pursuant to Section 13.13, (ii) modify the conditions set forth in Articles
VIII or IX, or (iii) limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
26
7.6 Further Assurances. The parties hereto agree to execute and deliver,
or cause to be executed and delivered, such further instruments or documents or
take such other action as may be reasonably necessary or convenient to carry
out the transactions contemplated hereby.
7.7 Sale of Stock. No Shareholder shall sell any stock in any Company or
any stock in ICCE between the date of this Agreement and the date upon which
financial statements are published which cover at least 30 days of post-Merger
operations of ICCE on a consolidated basis.
VIII. CONDITIONS PRECEDENT TO OBLIGATIONS
OF EACH OF THE COMPANIES AND ITS SHAREHOLDERS
The obligations of each Shareholder and of each Company are subject to the
satisfaction or waiver on or prior to the Closing Date of all of the following
conditions.
8.1 Representations and Warranties; Performance of Obligations. All
representations and warranties of ICCE and the Acquisition Companies contained
in Article VI shall be true and correct in all material respects as of the
Closing Date as though such representations and warranties had been made as of
that time; all of the terms, covenants and conditions of this Agreement to be
complied with and performed by ICCE or the Acquisition Companies on or before
the Closing Date shall have been duly complied with and performed in all
material respects, and a certificate to the foregoing effect dated the Closing
Date and signed by the President or the Chief Financial Officer of ICCE shall
have been delivered to the Shareholders.
8.2 No Litigation. Prior to the Closing Date, no action or proceeding
before a court or any other governmental agency or body shall have been
instituted to restrain or prohibit the Merger, and no governmental agency or
body shall have taken any other action or made any request of any Company as a
result of which the management of such Company deems it inadvisable to proceed
with the transactions hereunder.
8.3 Opinion of Counsel. The Company shall have received an opinion from
counsel for ICCE, dated the Closing Date, in substantially the form in Exhibit
B.
8.4 Consents and Approvals. All necessary consents of and filings
required to be obtained from or made with the SEC, the NASD, the Federal Trade
Commission, the United States Department of Justice, or any other federal,
state, county, local or other governmental or regulatory, authority (including
any self-regulated authority), commission, board or body, required by any Rule,
or required from any third party under any material contract or otherwise
relating to the consummation of the transactions contemplated herein shall have
been obtained or filed and each such consent or filing shall be in full force
and effect as of the Closing Date and all waiting periods required by any Rule
shall have expired. No such consent shall be conditioned or restricted in a
manner which would have a Material Adverse Effect on the Company or the
transactions contemplated herein.
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8.5 Good Standing Certificates. ICCE and each of the Acquisition
Companies shall have delivered to the Companies a certificate or certificates,
dated no later than ten days prior to the Closing Date, duly issued by the
appropriate governmental authority in ICCE's and the Acquisition Companies'
respective states of incorporation, showing that ICCE and the Acquisition
Companies are in good standing and authorized to do business and that no state
franchise and/or income tax returns and taxes for ICCE and the Acquisition
Companies, respectively, required to be filed or paid prior to the Closing have
not been filed or paid, as the case may be.
8.6 No Material Adverse Change. No event or circumstance shall have
occurred with respect to ICCE or any of the other Companies or any of the
Acquisition Companies which would have a Material Adverse Effect on any of
them.
8.7 Secretary's Certificate. The Companies shall have received a
certificate or certificates, dated the Closing Date and signed by the Secretary
of ICCE, certifying the truth and correctness of attached copies of ICCE's and
the Acquisition Companies' respective Certificate or Articles of Incorporation
(including amendments thereto), Bylaws (including amendments thereto), and
resolutions of the boards of directors and, if required, the shareholders of
ICCE approving ICCE's and the Acquisition Companies' entering into this
Agreement and the consummation of the transactions contemplated hereby.
8.8 Employment Agreements. Each of the Shareholders (other than ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇) shall have entered into an employment agreement with
ICCE or such Shareholder's Company substantially in the form of Exhibit C
hereto.
8.9 Opinion of Accountants. Each of the Companies shall have received a
letter as of the Closing Date from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public
accountants, in such form and substance reasonably acceptable to them, to the
effect that the Merger should be treated as a pooling of interests in
conformity with GAAP if the Merger is closed and consummated in accordance with
this Agreement.
8.10 Tax Opinion. Each of the Companies shall have received a written
opinion as of the Closing Date from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P.,
substantially in the form of Exhibit G. In rendering such opinion, such
counsel shall be entitled to rely upon representations of the Shareholders and
of officers of the Companies and ICCE reasonably satisfactory in form and
substance to such counsel.
8.11 Registration Rights. ICCE shall have executed and delivered a
Registration Rights Agreement in substantially the form attached hereto as
Exhibit D.
8.12 Shareholders Agreement. ICCE and each of the other Shareholders
shall have executed and delivered the ICCE Shareholders Agreement in
substantially the form attached hereto as Exhibit E.
8.13 Financing. ICCE shall have secured financing upon such terms and
conditions as are acceptable to the Companies and ICCE sufficient to repay the
liabilities set forth on Schedule 8.13, and either (i) each such liability
28
shall be retired at or prior to the Closing, or (ii) ICCE shall have received a
waiver from each person as required under any instrument governing any such
debt sufficient to allow the consummation of the transactions contemplated
herein.
8.14 Agreements. The Shareholders and each of the Companies shall have
terminated (i) any shareholders agreements, voting agreements, voting trusts,
and (ii) any existing agreement between the Company and any Shareholder (not
including group medical, pension, profit-sharing or other plan), at or prior to
the Closing Date, provided, however, that the employment agreements of ▇▇▇▇▇▇
▇▇▇▇▇▇ and D. ▇▇▇▇▇ ▇▇▇▇▇ shall not be terminated.
IX. CONDITIONS PRECEDENT TO OBLIGATIONS OF ICCE
AND ACQUISITION COMPANIES
The obligations of ICCE and the Acquisition Companies at the Closing are
subject to the satisfaction or waiver on or prior to the Closing Date of all of
the following conditions.
9.1 Representations and Warranties; Performance of Obligations. All the
representations and warranties of each of the Shareholders and the Companies
contained in this Agreement shall be true and correct in all material respects
as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date; all of the terms, covenants
and conditions of this Agreement to be complied with or performed by the
Shareholders and the Companies on or before the Closing Date shall have been
duly performed or complied with in all material respects; and each of the
Companies and its respective Shareholders shall have delivered to ICCE a
certificate dated the Closing Date and signed by them to such effect.
9.2 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to
restrain or prohibit the merger of the Acquisition Companies with and into the
Companies.
9.3 Secretary's Certificate. ICCE shall have received a certificate from
each of the Companies, dated the Closing Date and signed by the secretary of
such Company, certifying the truth and correctness of attached copies of the
Company's Articles of Incorporation (including amendments thereto), Bylaws
(including amendments thereto), and resolutions of its board of directors and
Shareholders approving the Company's entering into this Agreement and the
consummation of the transactions contemplated hereby.
9.4 No Material Adverse Effect. No event or circumstance shall have
occurred with respect to any Company which would constitute a Material Adverse
Effect.
9.5 Shareholders' Release. The Shareholders shall have delivered to ICCE
an instrument dated the Closing Date releasing each of the Companies from any
and all claims of the Shareholders against such Company and ICCE and the
obligations of such Company and ICCE to the Shareholders, except for director
and officer indemnification claims as permitted by the Articles of
Incorporation and Bylaws of such Company or applicable state corporate law,
29
items specifically identified on Schedules 5.10 and 5.11 as being claims of or
obligations to the Shareholders, continuing obligations to Shareholders
relating to their employment by the Company, and obligations arising under this
Agreement or the transactions contemplated hereby.
9.6 Termination of Related Party Agreements. All existing agreements
described in Section 8.14 shall have been canceled effective prior to or as of
the Closing Date as required by Section 8.14.
9.7 Opinion of Counsel. ICCE shall have received an opinion from counsel
to each of the Companies, dated the Closing Date, in substantially the form
attached hereto as Exhibit F.
9.8 Consents and Approvals. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all
consents and approvals of third parties listed on Schedule 5.22 shall have been
obtained; and no action or proceeding shall have been instituted or threatened
to restrain or prohibit the Merger and no governmental agency or body shall
have taken any other action or made any request of ICCE which would have a
Material Adverse Effect on the transactions hereunder.
9.9 Good Standing Certificates. Each of the Companies shall have
delivered to ICCE a certificate, dated as of a date no earlier than ten days
prior to the Closing Date, duly issued by the appropriate governmental
authority in such Company's state of incorporation and, unless waived by ICCE,
in each state in which such Company is authorized to do business, showing such
Company is in good standing and authorized to do business and that all state
franchise and/or income tax returns and taxes for such Company for all periods
prior to the Closing have been filed and paid.
9.10 Employment Agreements. Each of the Shareholders (other than ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇) shall have executed and delivered an employment
agreement substantially in the form of Exhibit C hereto.
9.11 Registration Rights. Each of the Shareholders shall have executed
and delivered a Registration Rights Agreement in substantially the form
attached hereto as Exhibit D.
9.12 Shareholders Agreement. Each of the Shareholders shall have executed
and delivered the ICCE Shareholders Agreement in substantially the form
attached hereto as Exhibit E.
9.13 Opinion of Accountants. ICCE shall have received a letter as of the
Closing Date from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public accountants, in such
form and substance reasonably acceptable to it, to the effect that the Merger
should be treated as a pooling of interests in conformity with GAAP if the
Merger is closed and consummated in accordance with this Agreement.
30
9.14 Tax Opinion. ICCE shall have received a written opinion as of the
Closing Date from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P., substantially in
the form attached hereto as Exhibit G. In rendering such opinion, such counsel
shall be entitled to rely upon representations of the Shareholders and of
officers of the Companies and ICCE reasonably satisfactory in substance to such
counsel.
9.15 Affiliates Agreements. ICCE shall have received from all persons
whom it reasonably believes to be an "affiliate" of each of the Companies as
such term is defined under Rule 145 of the 1933 Act an Affiliates Agreement
substantially in the form attached hereto as Exhibit H.
X. COVENANTS OF ICCE AFTER CLOSING
10.1 Preservation of Tax and Accounting Treatment. Except as contemplated
by this Agreement, after the Closing Date, ICCE shall not and shall not permit
any of its subsidiaries to undertake any act that would jeopardize the tax-free
status of the reorganization, including:
(a) the retirement or reacquisition, directly or indirectly, of all or
part of the ICCE Stock issued in connection with the transactions contemplated
hereby;
(b) the entering into of financial arrangements for the benefit of the
Shareholders; or
(c) the disposition of any material part of the assets of ICCE within the
two years following the Closing Date except in the ordinary course of business
or to eliminate duplicate services or excess capacity.
10.2 Preparation and Filing of Tax Returns. (a) Each of the Companies
shall, if possible, file, or cause to be filed, all separate Returns of any
Acquired Party for all taxable periods that end on or before the Closing Date.
If such Company is an S Corporation, each Shareholder shall pay or cause to be
paid all Tax liabilities shown by such Returns to be due.
(b) ICCE shall file or cause to be filed all separate Returns of, or that
include, any Acquired Party for all taxable periods ending after the Closing
Date.
(c) Each party hereto shall, and shall cause its subsidiaries and
affiliates to, provide to each of the other parties hereto such cooperation and
information as any of them reasonably may request in filing any Return, amended
Return, or claim for refund, determining a liability for Taxes or a right to
refund of Taxes, or conducting any audit or other proceeding in respect of
Taxes. Such cooperation and information shall include providing copies of all
relevant portions of relevant Returns, together with relevant accompanying
schedules and relevant work papers, relevant documents relating to rulings or
other determinations by Taxing Authorities, and relevant records concerning the
ownership and Tax basis of property, which such party may possess. Each party
shall make its employees reasonably available on a mutually convenient basis at
its cost to provide explanation of any documents or information so provided.
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Subject to the preceding sentence, each party required to file Returns pursuant
to this Agreement shall bear all costs of filing such Returns.
(d) ICCE and each of the Companies and its Shareholders shall comply with
the tax reporting requirements of Section 1.351-3 of the Treasury Regulations
and treat the transaction as a tax-free reorganization under Section 351 and
368(a) of the Code.
10.3 Preservation of Employee Benefit Plans. Except as required under any
applicable Rule, following the Closing, ICCE shall not terminate any health
insurance, life insurance, profit sharing or 401(k) plan in effect at the
Companies until such time as ICCE is able to replace such plan with a plan that
is applicable to ICCE and all of its then existing subsidiaries. ICCE shall
have no obligation to provide replacement plans that have the same terms and
provisions as the existing plans, except that any new health insurance plan
shall provide for coverage for preexisting conditions.
XI. INDEMNIFICATION
The Shareholders and ICCE each make the following covenants that are
applicable to them, respectively:
11.1 Survival of Representations and Warranties. The representations and
warranties of each of the parties contained herein shall survive the Closing
until the earlier of (i) 15 days following the issuance of post-Merger audited
financial statements for ICCE and its subsidiaries on a consolidated basis
which cover at least 30 days of post-Merger operations, and (ii) the one year
anniversary of the Closing Date.
11.2 Indemnification by the Shareholders. Each Shareholder covenants and
agrees that he or she will severally and not jointly, indemnify, defend,
protect and hold harmless ICCE and each of the other Shareholders at all times,
from and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation)
incurred by ICCE or any Company as a result of or arising from (i) any breach
of the representations and warranties of such Shareholder or his Company set
forth herein, (ii) any breach of any obligation on the part of such Shareholder
or his Company under this Agreement, (iii) any Tax imposed upon or relating to
an Acquired Party for any pre-Closing Date period, or (iv) any Tax to which an
Acquired Party is subject imposed upon or relating to any third party for a
pre-Closing Date period, including, in each case, any such Tax for which an
Acquired Party may be liable under Section 1.1502-6 of the Treasury regulations
(or any similar provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
11.3 Indemnification by ICCE. ICCE covenants and agrees that it will
indemnify, defend, protect and hold harmless the Shareholders at all times from
and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses, including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation,
incurred by the Shareholders as a result of or arising from (i) any breach by
32
ICCE or any Acquisition Company of its representations and warranties set forth
herein, (ii) any material breach of any obligation of ICCE or any Acquisition
Company hereunder, or (iii) any liabilities which the Shareholders may incur
due to ICCE's failure to be responsible for the liabilities and obligations of
a Company (except to the extent that ICCE has claims against the Shareholders
by reason of such liabilities).
11.4 Claims. Each person to be indemnified pursuant to this Section 11
(an "Indemnitee") shall, within five days after the discovery by the Indemnitee
of any matters giving arise to a claim for indemnification pursuant to Section
11.2 or 11.3, give written notice to the person or persons responsible for
indemnifying such Indemnitee (an "Indemnifying Party") setting forth any claim
with respect to which the Indemnitee seeks indemnification, provided that the
failure of any Indemnitee to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Article XI except to the
extent that the Indemnifying Party is actually prejudiced by such failure to
give notice. In case any such action, proceeding or claim is brought against
any Indemnitee, the Indemnifying Party shall be entitled to participate in and,
unless in the reasonable good faith judgment of the Indemnitee a conflict of
interest between such Indemnitee and the Indemnifying Party may exist in
respect of such action, proceeding or claim, assume the defense thereof, with
counsel reasonably satisfactory to the Indemnitee. After notice from the
Indemnifying Party to the Indemnitee of their election so to assume such
defense, the Indemnifying Party shall not be liable to such Indemnitee for any
legal or other expenses subsequently incurred by the Indemnitee in connection
with such defense other than reasonable costs of investigation. In any event,
unless and until the Indemnifying Party elects in writing to assume and does so
assume the defense of any such claim, proceeding or action, the Indemnitee's
costs and expenses arising out of the defense, settlement or compromise of any
such action, claim or proceeding shall be considered losses subject to
indemnification hereunder. If the Indemnifying Party elects to defend any such
action or claim, then the Indemnitee shall be entitled to participate in such
defense with counsel of their choice at their sole cost and expense. The
Indemnifying Party shall not be liable for any settlement of any action, claim
or proceeding effected without its written consent, provided, however, that the
Indemnifying Party shall not unreasonably withhold, delay or condition its
consent. Anything in this Section 11.4 to the contrary notwithstanding, the
Indemnifying Party shall not, without the Indemnitee's prior written consent
(which consent shall not be unreasonably withheld), settle or compromise any
claim or consent to entry of any judgment in respect thereof which imposes any
future obligation on the Indemnitee or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
Indemnitee, a release from all liability in respect of such claim.
11.5 Exclusive Remedy. The indemnification provided in this Article XI
shall (except as prohibited by ERISA) be the exclusive remedy in any action
seeking damages or any other form of monetary relief brought by any party to
this Agreement against another party, provided that, nothing herein shall be
construed to limit the right of a party, in a proper case, to seek injunctive
relief for a breach of this Agreement.
11.6 Limitations on Indemnification. ICCE and the other persons
indemnified pursuant to Section 11.2 shall not assert any claim (other than a
claim arising from a third party claim) for indemnification hereunder against
any Shareholder until such time as, and solely to the extent that, the
aggregate of all claims which such persons may have against such Shareholders
33
shall exceed $50,000 (the "Indemnification Threshold"). Shareholders shall not
assert any claim (other than a claim arising from a third person's claim) for
indemnification hereunder against ICCE until such time as, and solely to the
extent that, the aggregate of all claims which Shareholders may have against
ICCE shall exceed $50,000.
Notwithstanding any other term of this Agreement (except the proviso to
this sentence), no Shareholder shall be liable under this Article XI for an
amount which exceeds the fair market value (at the time when the amount of
liability is determined) of the ICCE stock received by such Shareholder in
connection with the Merger, provided that a Shareholder's indemnification
obligations pursuant to Section 11.2(iv) shall not be so limited.
XII. TERMINATION OF AGREEMENT
12.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date by the unanimous mutual consent of the boards of directors of
ICCE and all of the Companies. Any Company may withdraw from this Agreement
after May 15, 1997, if the Closing has not occurred provided that such Company
has paid its pro rata share (based on the number of shares of ICCE Stock to be
received in the Merger pursuant hereto) of all expenses incurred in connection
herewith, including its share of all professional fees.
XIII. GENERAL
13.1 Cooperation. Each of the Companies, its Shareholders, and ICCE shall
deliver or cause to be delivered to the others on the Closing Date, and at such
other times and places as shall be reasonably agreed to, such additional
instruments as the other may reasonably request for the purpose of carrying out
this Agreement. Each of the Companies will cooperate and use its reasonable
efforts to have the present officers, directors and employees of such Company
cooperate with ICCE on and after the Closing Date in furnishing information,
evidence, testimony and other assistance in connection with any tax return
filing obligations, actions, proceedings, arrangements or disputes of any
nature with respect to matters pertaining to all periods prior to the Closing
Date.
13.2 Successors and Assigns. This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of law) and shall be binding
upon and shall inure to the benefit of the parties hereto, the successors of
ICCE and the Companies, and the heirs and legal representatives of the
Shareholders.
13.3 Entire Agreement. This Agreement (including the schedules and
exhibits attached hereto) and the documents delivered pursuant hereto
constitute the entire agreement and understanding among the parties hereto and
supersede any prior agreement and understanding relating to the subject matter
of this Agreement, except for paragraphs 4 (relating to confidential
information) and 5 (relating to announcements) of the Memo of Understanding,
which shall remain in effect. This Agreement, upon execution, constitutes a
valid and binding agreement of the parties hereto enforceable in accordance
with its terms and may be modified or amended only by a written instrument
34
executed by the parties hereto. Any disclosure made on any Schedule delivered
pursuant hereto shall be deemed to have been disclosed for purposes of any
other Schedule required hereby.
13.4 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
13.5 Brokers and Agents. Each party represents and warrants that it
employed no broker or agent in connection with this transaction and agrees to
indemnify the other parties hereto against all loss, cost, damages or expense
arising out of claims for fees or commission of brokers employed or alleged to
have been employed by such indemnifying party.
13.6 Expenses. Whether or not the transactions herein contemplated shall
be consummated, ICCE will pay all of the reasonable fees, expenses and
disbursements of ICCE and its agents, representatives, accountants and counsel
incurred in connection with the subject matter of this Agreement and any
amendments thereto, including all costs and expenses incurred in the
performance and compliance with all conditions to be performed by ICCE under
this Agreement, including the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P. provided, however, that ICCE shall
obtain the prior approval of each of the Companies for any expenses to be
incurred from and after the date hereof and prior to the Closing in excess of
$100,000. In connection therewith, each Company shall be responsible for
paying into ICCE a sufficient amount to cover its pro rata share of such
expenses, based on the percentage of ICCE Stock to be received by such
Company's Shareholder(s) pursuant to the Merger. Each Shareholder shall pay
his or her own personal professional fees necessary to consummate this
transaction, and all sales, use, transfer, and other similar taxes and fees
imposed in connection with the Merger. Each Shareholder shall file all
necessary documentation and Returns with respect to such taxes. Each Company
shall pay all legal and accounting fees incurred by such Company in connection
with this transaction. If the transactions herein contemplated are not
consummated, the remaining balance of the assets of ICCE after payment of all
transaction expenses will be reimbursed to the Companies on a pro rata basis
based on the percentage of ICCE Stock to be received by such Company's
Shareholder(s) pursuant to the Merger.
13.7 Notices. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the same in United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the
same in person to an officer or agent of such party.
(a) If to ICCE, addressed to it at:
ICCE, Inc.
Five Concourse Parkway
Suite 2700
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
35
with copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P.
First Union Plaza
999 Peachtree Street, N.E.
Suite 1400
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
(b) If to any Company or Shareholder, addressed to such party at its
address set forth on Schedule 1, with copies to such counsel as is set forth
with respect to such party on such Schedule 1; or to such other address or
counsel as any party hereto shall specify pursuant to this Section 13.7 from
time to time. Notice shall be effective upon receipt.
13.8 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Georgia.
13.9 Exercise of Rights and Remedies. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or
of any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
13.10 Time. Time is of the essence with respect to this Agreement.
13.11 Reformation and Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby unless severing such provision(s) results in this Agreement not
providing reasonable assurance to a party that he or it will receive
substantially all of the benefits he or it bargained for.
13.12 Captions. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
13.13 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived only
with the written consent of ICCE and the unanimous written consent of all of
the Companies which remain a party hereto. Any amendment or waiver effected in
accordance with this Section 13.13 shall be binding upon each of the parties
hereto, and their successors and assigns.
36
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"The Companies"
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Associates, Inc. DCCA Professional Temporaries, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
EKT, Inc. Infinity Enterprises, Inc.,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, President
"The Acquisition Companies"
▇▇▇▇▇▇ Acquisition, Inc. DCCA Acquisition, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇., President ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇., President
EKT Acquisition, Inc. Infinity Acquisition, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇., President ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇., President
ICCE, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇., President
[SIGNATURES CONTINUED ON THE NEXT PAGE]
37
"Shareholders"
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ D. ▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
D. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
38
SCHEDULE 1
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Associates, Inc.
DCCA Professional Temporaries, Inc.
Five Concourse Parkway
Suite 2700
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Counsel:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Isaf & ▇▇▇▇▇▇▇
Suite 1100
500 Northpark Town Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EKT, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Counsel:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Baucomb ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Infinity Enterprises, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇
Infinity Enterprises, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
39
D. ▇▇▇▇▇ ▇▇▇▇▇
Infinity Enterprises, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
Infinity Enterprises, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Infinity Enterprises, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Infinity Enterprises, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Counsel:
▇▇▇▇ ▇. Kitchen
Steptoe & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
40
