UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X Annual Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934 (No Fee Required)
For the fiscal year ended May 31, 1998
OR
Transition Report Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934 (No Fee Required)
For the transition period from to
Commission file number 1-14194
MORRISON HEALTH CARE, INC.
(Exact name of Registrant as specified in charter)
GEORGIA 63-1155966
(State or other jurisdiction of (I.R.S. Employer identification No.)
incorporation or organization)
1955 Lake Park Drive, Suite 400, Smyrna, GA 30080-8855
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 437-3300
Securities Registered Pursuant to Section 12(b) of The Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
$0.01 par value Common Stock New YorkStock Exchange
Rights to Purchase Series A Participative New York Stock Exchange
Preferred Stock
Securities Registered Pursuant to Section 12(g) of The Act:
None
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[ X ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of Common Stock on August 14, 1998
as reported on the New York Stock Exchange, was approximately $215,874,329.
Shares of Common Stock held by each executive officer and director and by each
person who owns 5% or more of the outstanding Common Stock have been excluded in
that such persons may be deemed to be affiliates.
This determination of affiliate status is not necessarily a conclusive
determination for other purposes.
The number of shares of the Registrant's common stock
outstanding at August 14, 1998 was 12,084,408.
Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended May 31, 1998 are incorporated by reference into Parts I and II.
Portions of the Registrant's definitive proxy statement dated August 31, 1998
are incorporated by reference into Part III.
INDEX
PART I
Page
Number
Item 1. Business.............................................. 3-6
Item 2. Properties............................................ 6
Item 3. Legal Proceedings..................................... 6
Item 4. Submission of Matters to a Vote of Security Holders... 7
Executive Officers of the Company..................... 7-8
PART II
Item 5. Market for the Registrant's Common Equity and
Related Shareholder Matters................... 9
Item 6. Selected Financial Data....................... 9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations........... 9
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk................................... 9
Item 8. Financial Statements and Supplementary Data... 9
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.......... 9
PART III
Item 10. Directors and Executive Officers of the Company. 10
Item 11. Executive Compensation........................ 10
Item 12. Security Ownership of Certain Beneficial Owners
and Management................................ 10
Item 13. Certain Relationships and Related Transactions........ 10
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.......................................... 11-14
PART I
ITEM 1. BUSINESS.
General
Morrison Health Care, Inc., a Georgia corporation (the"Company" or "MHCI"),
became an independent, publicly owned company in March 1996 as a result of the
distribution (the "Distribution") by Morrison Restaurants Inc., a Delaware
corporation ("MRI"), to its shareholders of all the issued and outstanding
shares of common stock of the Company. As a result of the Distribution, MRI's
shareholders received one share of Company common stock for every three shares
of MRI held.
MHCI is the largest independent company focused exclusively on providing food
and nutrition services to health care facilities. Its clients include acute care
hospitals, health systems, nursing homes and retirement facilities. The
Company's mission is to be the leading provider of food and nutrition services
to the health care industry, fully committed to maximizing quality and value in
everything the Company does for its clients, customers, team members and
shareowners. With contracts in 33 states and Washington D.C., MHCI is one of the
leading providers of food and nutrition services to hospitals, senior living
facilities and other health care facilities across North America.
The Company's health care foodservice operations originated in the early 1950s.
The Company has expanded through its own marketing and sales force and by
acquiring other foodservice businesses. In August 1994, the Company sold certain
of its education, business and industry ("B&I") contracts and assets and closed
the remaining B&I accounts. This divestiture left the Company with only health
care contracts and allowed the Company to concentrate its capital and management
team in the health care and senior living industry, which Management believes
have a better opportunity for growth and profitability.
The Company believes the senior living market is the fastest growing segment of
the health care industry, due to changing demographics and lifestyles and the
number of retirement facilities being constructed. The Company has emphasized
its commitment to provide food and nutrition services to the senior living
market by acquiring two companies in the field: Drake Management Services, Inc.
in January 1998 which services the Southwest and Spectra Services, Inc. in March
1998 which services the Mid-west. Believeing that this market is
under-penetrated and rapidly expanding, the Company plans for future growth in
the senior living market to result from acquisitions and internal deveopment.
Operations
The Company operates the food and nutrition services departments of hospitals
and other health care facilities. These departments typically include retail
outlets for staff and visitors and patient food and nutrition services. MHCI
health care accounts range in size from 100 bed specialty hospitals to
facilities with over 2,100 beds. Senior living accounts range in size from 100
residents to 750 residents. The Company has operations in 33 states and
Washington, D.C. Approximately 68% of the accounts are in hospitals, while over
24% of the accounts are in senior living facilities.
The Company provides its clients with the flexibility to adjust programs,
staffing and service plans to meet the changing needs of the industry. MHCI has
capitalized on its retail heritage of operating restaurants to bring a
retail-oriented mentality to health care and senior living clients. MHCI offers
its clients programs designed to reduce costs and increasecustomer (patients
and staff) satisfaction. To better serve its clients and provide them with
specialized expertise, MHCI's staff is organized into regional teams. Teams may
include a regional vice president, regional director of operations, regional
director of nutrition services, regional director of culinary, human resources
director, support services coordinator and a director of business development,
each of whom is dedicated to sharing the best industry practices and performance
improvement ideas. The regional teams are supported by a corporate staff that
includes nutrition services, marketing, sales, vending, human resources, legal,
finance, layout and design and culinary services.
MHCI offers its services pursuant to two general types of contracts:(i) profit
and loss (or guaranteed cost) contracts, where MHCI assumes the risk of profit
or loss for the foodservice operation and (ii) management fee contracts, where
the client reimburses MHCI for all or nearly all costs incurred in providing the
services contracted plus a negotiated management fee for supervising the
client's food and nutrition services operations. In addition, some management
fee contracts include incentives and penalties, pursuant to which MHCI manages
the client's food and nutrition operations on a management fee basis, with the
amount of the management fee determined in whole or in part by the achievement
of predetermined goals. Approximately 69% of MHCI's accounts are operated
pursuant to management fee contracts. Management fee contracts with incentives
and penalties are becoming more popular. The majority of MHCI's contracts were
awarded through bidding processes.
In addition, MHCI operates "branded concept" restaurants such as Pizza Hutr and
Taco Bellr on client premises. These branded concepts accounts are operated
pursuant to license arrangements with the appropriate restaurant company.
Currently, MHCI has 13 license arrangements with nationally and regionally
recognized restaurant companies.
The Company has created a new program to develop advanced food preparation and
delivery systems. These systems are designed to increase customer satisfaction
by enhancing production consistencies while generating significant cost
reductions and providing quality services for health care facilities nationwide.
MHCI markets its services nationwide through its business development directors.
Each business development director focuses on potential clients in a specific
territory pursuant to a marketing plan. The business development directors,
along with a vice president of sales and marketing, also market MHCI's services
to large national health care accounts. In addition, MHCI personnel market to
existing clients to expand its foodservice responsibilities and increase sales
of existing services to complement the facility's foodservices department. The
Company is planning to continue its expansion into the senior living market
through internal growth and development as well as through key acquisitions.
Research and Development
The Company does not engage in any material research and development activities.
Numerous studies are made, however, on a continuing basis, to improve menus,
equipment and methods of operations.
Raw Materials
Raw materials essential to the operation of the Company's business are obtained
principally through national food distributors. The Company uses short-term
purchase commitment contracts to stabilize the potentially volatile pricing
associated with certain commodities. Because of the relatively short storage
life of inventories, limited storage facilities at customer locations, MHCI's
requirements for freshness and the numerous sources of goods, a minimum amount
of inventory is maintained at customer locations. If necessary, all essential
food, beverage and operational products are available and can be obtained from
alternative suppliers in all cities where the Company operates. The Company has
entered into a purchasing arrangement with Ruby Tuesday, Inc. ("RTI"), successor
to MRI's casual dining business and Morrison Fresh Cooking, Inc. ("MFCI"), which
held the family dining assets of MRI and was spun off, along with the Company,
in the Distribution, to maintain the volume purchasing bargaining position
enjoyed by the Company prior to the Distribution.
Trademarks of the Company
The Company has registered certain trademarks and service
marks with the United States Patent and Trademark Office including the
Pro-Health Dining trademark.The Company believes that this and other related
marks are important to its business. Registrations of the Company's
trademarks expire from 2000 to 2009, unless renewed.
Seasonality
The Company's revenues are not seasonal to any significant
degree.
Working Capital Practices
Cash provided by operations, along with borrowings under the Company's revolving
lines of credit, are used to pay dividends, invest in new units and renovate
existing units.
Additional information concerning the working capital
of the Company is incorporated herein by reference to information presented
within the "Liquidity and Capital Resources" section of "Management's
Discussion and Analysis of Financial Condition and Results of Operations" of
the Company's 1998 Annual Report to Shareholders.
Customer Dependence
No material part of the business of the Company is dependent upon a single
customer, or a very few customers, the loss of any one of which would have a
material adverse effect on the Company.
Government Contracts
There is no material portion of the Company's business
that is subject to renegotiation of profits or termination of contracts or
sub-contracts at the election of the Government.
Competition
The health care food and nutrition services business is highly competitive. The
Company competes with national and regional food contract companies that offer
the same type of services as the Company. Management believes that competition
in health care food and nutrition services is based on pricing, quality of
services and reputation. Management believes that it compares favorably with its
competition in these areas.
Government Compliance
The Company is subject to various regulations at both the state and local levels
for items such as sanitation, health and fire safety, all of which could affect
the operation of existing accounts. The Company's business is also subject to
various other regulations at the federal level such as fair labor standards and
occupational safety and health regulations. Compliance with these regulations
has not had, and is not expected to have, a material adverse effect on the
Company's operations.
Environmental Compliance
Compliance with federal, state and local laws and regulations which have been
enacted or adopted regulating the discharge of materials into the environment,
or otherwise relating to the protection of the environment, is not expected to
have a material effect upon the capital expenditures, earnings or competitive
position of the Company.
Personnel
The Company employs approximately 4,300 full-time and part-time employees. The
Company believes that working conditions are favorable and employee compensation
is comparable with its competition.
ITEM 2. PROPERTIES.
MHCI professionally manages foodservice departments on client-owned properties
and, therefore, does not own any significant amounts of property. Vending
services on client-owned facilities complement the foodservice program. Under
the terms of certain contracts, MHCI is required to make rent payments to its
clients.
The corporate headquarters are located in approximately 15,000 square feet of a
leased building in a suburb of Atlanta, Georgia. The headquarters' lease term
ends in 2001 with remaining average annual lease payments of approximately
$278,000. The Company also has administrative offices in a leased building in
Mobile, Alabama. This office has a lease term ending in 2001 with remaining
average annual lease payments of approximately $108,000. In addition, there are
nine regional offices across the United States, each of which is generally less
than 1,500 square feet, with total average annual lease payments of less than
$145,000.
During the fiscal year, MHCI constructed of two advanced food preparation
facilities. The first facility, located in Tampa, Florida, provides for about
5,000 square feet of light industrial space with a lease term ending in 2002 and
average annual lease payments of about $29,000. The second facility, located in
Baltimore, Maryland, includes approximately 15,000 square feet of light
industrial and regional office space and has average annual lease payments of
about $98,000.
Facilities and equipment are repaired and maintained to assure their adequacy,
productive capacity and utilization.
ITEM 3. LEGAL PROCEEDINGS.
The Company is presently, and from time to time, subject to pending claims and
suits arising in the ordinary course of its business. In the opinion of
Management, the ultimate resolution of these pending legal proceedings will not
have a material adverse effect on the Company's operations or consolidated
financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Executive Officers of the Company
Executive officers of the Company are appointed by and
serve at the discretion of the Company's Board of Directors. Information
regarding the Company's executive officers as of August 14, 1998 is provided
below.
Name Age Position with the Company
G. A. Davenport 44 President, Chief Executive Officer and Director
K. W. Engwall 50 Senior Vice President, Finance and Assistant
Secretary
J. E. Fountain 47 Vice President, General Counsel and Secretary
J. D. Underhill 53 Senior Vice President, Operations
G. L. Gaddy 45 Senior Vice President, Sales and Marketing
F. G. Michels 60 Senior Vice President, Support Services
R. C. Roberson 54 Divisional Vice President
Glenn A. Davenport has been President and Chief Executive Officer of the Company
since the Distribution in March 1996. He was President
of the Health Care Division of MRI's Morrison Group from November 1993 until
the Distribution in March 1996. Prior thereto, he served as Senior Vice
President, Hospitality Group of MRI from February 1990 through November 1993
and in various other capacities since joining MRI in November 1973.
K. Wyatt Engwall has been Senior Vice President, Finance and
Assistant Secretary of the Company since the Distribution in March 1996. Prior
thereto, he was Vice President, Controller of MRI's Ruby Tuesday Group from
January 1994 until March 1996. He served as Vice President of Financial Planning
of MRI from January 1993 through January 1994, Vice President and Controller
of MRI's Contract Dining Division from October 1991 through January 1993
and as Controller of MRI's former Morrison's Management Services (Contract
Dining) Division from October 1986 through October 1991. Mr. Engwall joined MRI
in 1983 as a Financial Systems Analyst.
John E. Fountain has been Vice President, General Counsel and Secretary of the
Company since the Distribution in March 1996. He was Vice President, Legal of
MRI's Morrison Group from August 1994 until March 1996. He served as Senior
Attorney of MRI from December 1991 through August 1994. Prior thereto, he served
as Staff Attorney of MRI from October 1978 through December 1991.
Jerry D. Underhill has been Senior Vice President, Operations of the Company
since the Distribution in March 1996. He was Senior Vice President of Retail
Development of the Health Care Division of MRI's Morrison Group from September
1995 until March 1996. Prior thereto, he was Senior Vice President of
Development of the Family Dining Division of MRI's Morrison Group from March
1993 to September 1995. Mr. Underhill was President of Mid-Continent Restaurants
(currently known as Bravo Restaurants) from July 1988 to
March 1993.
Gary L. Gaddy has been Senior Vice President, Sales and Marketing of the Company
since March 1998. Prior thereto, he was Vice President of Health Systems for the
Company since July 1997. Mr. Gaddy was Vice President of Sales and Marketing for
EmCare, Inc., an emergency medicine contract management company from January
1995 to July 1997. He was Vice President/General Manager of Business Development
for HMSS Management, Inc., a home infusion company, from August 1990 to December
1994. Mr. Gaddy has over 20 years of sales and marketingexperience in the
healthcare industry.
Frances G. Michels has been Senior Vice President, Support Services of the
Company since the Distribution in March 1996. She was Senior Vice President of
Support Services of the Health Care Division of MRI's Morrison Group from
January 1996 until March 1996. Prior thereto, she served MRI's Health Care
Division in various capacities, including as Vice President of Nutrition
Services from December 1984 through January 1996, Area Manager for Operations
and Nutrition Services from January 1982 through December 1984, Consulting
Dietitian for the Health Care Division from June 1974 through January 1982,
Foodservice Director from July 1973 through June 1974, and Chief Therapeutic
Dietitian from June 1970 through July 1973.
Richard C. Roberson has been a Division Vice President of the Company since
October 1997. He was a Regional Vice President of the Company since the
Distribution in March 1996. Prior thereto, he served MRI's Health Care Division
in various capacities, including as a Regional Vice President, District Manager
and Foodservice Director.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED
SHAREHOLDER MATTERS.
Certain information required by this item is incorporated herein by reference to
information contained under the caption "Common Stock Market Prices and
Dividends" of the Registrant's Annual Report to Shareholders for the fiscal year
ended May 31, 1998. The Company intends to continue to pay dividends in the
future.
ITEM 6. SELECTED FINANCIAL DATA.
The information contained under the caption "Selected Financial Data" of the
Registrant's Annual Report to Shareholders for the fiscal year ended May 31,
1998 is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The information contained under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" of the Registrant's
Annual Report to Shareholders for the fiscal year ended May 31, 1998 is
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following consolidated financial statements and the related report of the
Company's independent auditors contained in the Registrant's Annual Report to
Shareholders for the fiscal year ended May 31, 1998, are incorporated herein by
reference:
Consolidated Statements of Income - Fiscal years ended
May 31, 1998, May 31, 1997 and June 1, 1996.
Consolidated Balance Sheets - As of May 31, 1998 and
May 31, 1997.
Consolidated Statements of Stockholders' Equity -
Fiscal years ended May 31, 1998, May 31, 1997 and June 1, 1996.
Consolidated Statements of Cash Flows - Fiscal years ended
May 31, 1998, May 31, 1997 and June 1, 1996.
Notes to Consolidated Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
(a) The information regarding directors of the Company is incorporated herein by
reference to the information set forth in the table captioned "Director and
Director Nominee Information" under "Election of Directors" in the definitive
proxy statement of the Registrant dated August 31, 1998, relating to the
Registrant's annual meeting of shareholders to be held on September 29, 1998.
(b) Pursuant to Form 10-K General Instruction G(3), the information regarding
executive officers of the Company has been included in Part I of this Report
under the caption "Executive Officers of the Company."
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item 11 is incorporated herein by reference to
the information set forth under the captions "Executive Compensation" and
"Election of Directors - Directors' Fees and Attendance" in the definitive proxy
statement of the Registrant dated August 31, 1998 relating to the Registrant`s
annual meeting of shareholders to be held on September 29, 1998.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this Item 12 is incorporated herein by reference to
the information set forth in the table captioned "Beneficial Ownership of Common
Stock" under "Election of Directors" in the definitive proxy statement of the
Registrant dated August 31, 1998, relating to the Registrant's annual meeting of
shareholders to be held on September 29, 1998.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K.
(a) The following documents are incorporated by reference
into or are filed as
part of this report:
1. Financial Statements:
The following consolidated financial statements and the independent
auditors' report thereon, included in the Registrant's Annual Report
to Shareholders for the fiscal year ended May 31, 1998, a copy of
which is contained in the exhibits to this report, are incorporated
herein by reference:
Page Reference
in paper version
of Annual Report
to Shareholders
Consolidated Statements of Income for
the fiscal years ended May 31, 1998,
May 31, 1997 and June 1, 1996...................18
Consolidated Balance Sheets as of
May 31, 1998 and May 31, 1997...................19
Consolidated Statements of Stockholders' Equity
for the fiscal years ended May 31, 1998,
May 31, 1997 and June 1, 1996...................21
Consolidated Statements of Cash Flows
for the fiscal years ended May 31, 1998,
May 31, 1997 and June 1, 1996...................20
Notes to Consolidated Financial Statements......22 - 31
Report of Independent Auditors..................32
Page Reference
in Form 10-K
2. Financial statement schedules:
Schedule II - Valuation and Qualifying
Accounts for the fiscal years ended
May 31, 1998 and May 31, 1997......................17
Financial statement schedules other than
those shown above are
omitted because they are either not
required or the required
information is shown in the financial
statements or notes
thereto.
3. Exhibits
The following exhibits are filed as part of this report:
MORRISON HEALTH CARE, INC.
LIST OF EXHIBITS
Exhibit
Number Description
3.1 Amended and Restated Articles of Incorporation of Morrison Health
Care, Inc.*
3.2 Bylaws, as amended, of Morrison Health Care, Inc.**
4.1 Specimen Common Stock Certificate.+
4.2 Amended and Restated Articles of Incorporation of Morrison Health
Care, Inc. (see Exhibit 3.1 hereto).
4.3 Bylaws, as amended, of Morrison Health Care, Inc. (see Exhibit
3.2 hereto).
4.4 Form of Rights Agreement between Morrison Health Care, Inc. and
AmSouth Bank of Alabama, as Rights Agent.+
4.5 Form of Rights Certificate (attached as Exhibit B to the Rights
Agreement filed as Exhibit 4.4 hereto).
4.6 Form of First Amendment to Rights Agreement
10.1 Form of Distribution Agreement among Morrison Restaurants Inc.,
Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc.*
10.2 Form of Amended and Restated Tax Allocation and
Indemnification Agreement among Morrison
Restaurants Inc., Custom Management Corporation of Pennsylvania,
Custom Management Corporation, John C. Metz & Associates,
Inc., Morrison International, Inc., Morrison Custom Management
Corporation of Pennsylvania, Morrison Fresh Cooking, Inc., Ruby
Tuesday, Inc., a Delaware corporation, Ruby Tuesday (Georgia),
Inc., a Georgia corporation, Galaxy Management, Inc., Manask Food
Service, Inc., Morrison of New Jersey, Inc., Tias, Inc. and
Morrison Health Care, Inc.*
10.3 Form of Agreement Respecting Employee BenefitMatters among
Morrison Restaurants Inc., Morrison Fresh Cooking, Inc. and
Morrison Health Care, Inc.+
10.4 Form of License Agreement between Morrison Fresh Cooking, Inc.
and Morrison Health Care, Inc.*
10.5 Form of License Agreement between Ruby Tuesday, Inc. and Morrison
Health Care, Inc.*
10.6 Form of Amended and Restated Operating Agreement of MRT
Purchasing, LLC among Morrison Restaurants Inc., Ruby Tuesday,
Inc., Morrison Fresh Cooking, Inc. and Morrison Health Care,
Inc.*
10.7*** Form of Morrison Health Care, Inc. 1996 Stock Incentive Plan.+
10.8*** Form of Morrison Health Care, Inc. Stock Incentive and Deferred
Compensation Plan for Directors.+
10.9*** Form of 1996 Non-Executive Stock Incentive Plan.+
10.10*** Form of Morrison Health Care, Inc. Executive Supplemental Pension
Plan.+
10.11*** Form of Morrison Health Care, Inc. Management Retirement Plan.+
10.12*** Form of Morrison Health Care, Inc. Salary Deferral Plan together
with related form of Trust Agreement.+
10.13*** Form of Morrison Health Care, Inc. Deferred Compensation Plan and
related form of Trust Agreement.+
10.14*** Form of Morrison Health Care, Inc. Executive Group Life and Executive
Accidental Death and Dismemberment Plan.+
10.15*** Form of Morrison Health Care, Inc. Executive Life Insurance Plan.+
10.16 Form of Indemnification Agreement to be entered into with executive
officers and directors.*
10.17*** Form of Change of Control Agreement to be entered into with executive
officers.+
10.18 Non-Qualified Stock Option Agreement between Morrison Restaurants
Inc.and Eugene E. Bishop.+
10.19 Non-Qualified Stock Option Agreement between Morrison Restaurants
Inc. and Samuel E. Beall, III.+
10.20 Form of Second Amendment to Credit Agreement dated June 14, 1997.++
10.21** Form of First Amendment to the Morrison Health Care, Inc.
Executive Supplemental Pension Plan.++
10.22*** Form of First Amendment to the Morrison Health Care,Inc.
Management Retirement Plan.++
10.23*** Form of First Amendment to the Morrison Health Care, Inc.Salary
Deferral Plan.++
10.24*** Form of Second Amendment to the Morrison Health Care, Inc.
Salary Deferral Plan.++
10.25*** Form of First Amendment to the Morrison Health Care, Inc.
Deferred Compensation Plan.++
10.26*** Form of Second Amendment to the Morrison Health Care, Inc.
Deferred Compensation Plan.++
10.27*** Form of Morrison Health Care, Inc. Salary Deferral Plan together with
related form of Amended Trust Agreement.+
10.28*** Form of Morrison Health Care, Inc. Deferred Compensation Plan and
related form of Amended Trust Agreement.+
10.29*** Form of First Amendment to the 1996 Executive Stock Incentive Plan.
10.30*** Form of First Amendment to the 1996 Non-Executive Stock Incentive
Plan.
10.31*** Form of Second Amendment to the 1996 Executive Stock Incentive Plan.
10.32*** Form of Second Amendment to the 199 Non-Executive Stock Incentive
Plan.
10.33*** Form of Third Amendment to the. Morrison Health Care, Inc. Salary
Deferral Plan.
10.34 Stock Purchase Agreement of Drake Management Services, Inc.
10.35 Asset Purchase Agreement of Spectra Services, Inc.
10.36 Form of Amended and Restated Credit Agreement
11 Statement regarding computation of per share earnings.
13 Annual Report to Shareholders for the fiscal year ended May 31, 1998
(Only portions specifically incorporated by reference in the
Form 10K are incorporated herewith.)
21.1 List of subsidiaries of Morrison Health Care, Inc.
23 Consent of Independent Auditors.
27 Financial Data Schedule.
* Incorporated by reference to Exhibit of the same number in the Registrant's
Registration Statement on Form 10 filed with the Commission on February 8,
1996.
** Incorporated by reference to Exhibit of the same number in the Registrant's
Quarterly Report on Form 10-Q for the quarter ended February 28, 1998.
*** Denotes a management contract or compensatory plan or arrangement.
+ Incorporated by reference to Exhibit of the same number in the Registrant's
amendment to Registration Statement on Form 10/A filed with the Commission
on February 29, 1996.
++ Incorporated by reference to Exhibit of the same number in the Registrant's
Annual report on Form 10-K for the fiscal year ended May 31, 1997.
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the most recent fiscal
quarter.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
MORRISON HEALTH CARE, INC.
Date 08/28/98 By:/s/ Glenn A. Davenport
Glenn A. Davenport
President, Chief Executive Officer
and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
Date 08/28/98 By:/s/ Glenn A. Davenport
Glenn A. Davenport
President, Chief Executive Officer and
Director
Date 08/28/98 By:/s/ K. Wyatt Engwall
K. Wyatt Engwall
Senior Vice President, Finance and
Assistant Secretary
(Principal Accounting Officer)
Date 08/28/98 By:/s/ John. B. McKinnon
John B. McKinnon
Chairman of the Board
Date 08/28/98 By:/s/ Claire L. Arnold
Claire L. Arnold
Director
Date 08/28/98 By:/s/ E. Eugene Bishop
E. Eugene Bishop
Director
Date 08/28/98 By:/s/ Fred L. Brown
Fred L. Brown
Director
Date 08/28/98 By:/s/ Arthur R. Outlaw, Jr.
Arthur R. Outlaw, Jr.
Director
Date 08/28/98 By:/s/ Dr. Benjamin F. Payton
Dr. Benjamin F. Payton
Director
<TABLE>
Morrison Health Care, Inc.
Schedule II - VALUATION AND QUALIFYING ACCOUNTS
For the Periods Ended May 31, 1998 and May 31, 1997
(Dollars in Thousands)
Column A Column B Column C Column D (A) Column E
Additions
Balance at Charged to Charged Balance at
Beginning Costs and to other End of
of Period Expenses Accounts Deductions Period
<CAPTION>
<S> <C> <C> <C> <C> <C>
Year ended May 31, 1998:
Trade receivables:
Allowance for
doubtful accounts $ 744 $ 0 $ 196 $ 53 $ 887
Year ended May 31, 1997:
Trade receivables:
Allowance for
doubtful accounts $1,122 $ 0 $ 0 $ 378 $ 744
Year ended June 1, 1996:
Trade receivables:
Allowance for
doubtful accounts $1,641 $ 0 $ 0 $519 $ 1,122
</TABLE>
Notes: (A) Write-off of trade receivables determined to be
uncollectible against
the allowance for doubtful accounts.
EXHIBIT 4.6
AMENDMENT NUMBER 1 TO
RIGHTS AGREEMENT
This Amendment, made this 29th day of May, 1998
between Morrison Health
Care, Inc., a Georgia corporation (the "Company"), and
SunTrust Bank, Atlanta
("SunTrust"), amends that certain Rights Agreement
between the Company and
AmSouth Bank of Alabama ("AmSouth"), dated as of March
2, 1996 (the "Rights
Agreement").
W I T N E S S E T H
WHEREAS, pursuant to Section 21 of the Rights
Agreement, the Company has
removed AmSouth as Rights Agent under the Rights Agreement,
effective as of June
1, 1998 (the "Effective Date"); and
WHEREAS, the Company desires to appoint SunTrust, and
SunTrust desires to
serve as, Successor Rights Agent under the Rights Agreement,
effective as of the
Effective Date.
NOW, THEREFORE, in consideration of the premises
contained herein, and
other good and valuable consideration, the receipt and
sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as
follows:
1. Appointment of Successor Rights Agent. The
Company hereby appoints
SunTrust to serve as the Successor Rights Agent under the
Rights Agreement, to
be effective as of the Effective Date, and SunTrust
hereby accepts such
appointment.
2. Amendment of Rights Agreement. The Rights
Agreement is hereby amended
effective as of the Effective Date such that all
references to the "Rights
Agent" under the Rights Agreement shall refer to SunTrust
rather than AmSouth.
3. Undertakings. Each of the parties hereto agrees
to take any and all
actions necessary to cause SunTrust to serve as Rights
Agent under the Rights
Agreement, including, without limitation, the Company
sending notice, prior to
the Effective Date, to AmSouth and each transfer agent of
the Company's stock
that SunTrust has been appointed Successor Rights
Agent under the Rights
Agreement.
4. Continuation of Rights Agreement. Except as
explicitly amended above,
the Rights Agreement shall continue in full force and
effect.
IN WITNESS WHEREOF, the undersigned have executed
and delivered this
Amendment as of the date first above writen.
MORRISON HEALTH
CARE, INC.
By:/s/John E. Fountain
Title:Vice President and General
Counsel
SUNTRUST BANK, ATLANTA
By:/s/ Sue Hampton
Title:Assistant Vice President
EXHIBIT 10.27
MORRISON HEALTH CARE, INC.
SALARY DEFERRAL PLAN
TRUST AGREEMENT
THIS AGREEMENT has been made as of the 30th day
of September, 1997,
between Morrison Health Care, Inc. (the "Company") and
Merrill Lynch Trust
Company of (Florida)(the "Trustee") with respect to a
trust (the "Trust")
forming part of the Morrison Health Care, Inc. Salary
Deferral Plan (the
"Plan").
WHEREAS, the Plan qualifies both as an "employee
stock ownership plan"
("ESOP") within the meaning of section 4975(e)(7) of the
Internal Revenue Code
of 1986 (the "Code") and as a cash or deferred profit
sharing plan under
sections 401(a) and 401(k) of the Code; and
WHEREAS, in order to effectuate the purposes of
the Plan, the Company
hereby establishes this Trust, designed to meet the
applicable requirements of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); and
WHEREAS, it is a principal purpose of the Trust to
maintain assets in the
form of and invest in stock of the Company ("Company
Stock") qualifying as
"employer securities" within the meaning of section
409(1) of the Code and
section 407(d)(5) of ERISA;
NOW, THEREFORE, in consideration of the premises
and of the mutual
covenants herein contained, the Company and the Trustee do
hereby covenant and
agree as follows:
SECTION I
THE TRUST
1.1 Establishment of the Trust. The Company hereby
establishes with the
Trustee the Trust, which shall be known as the Morrison
Health Care, Inc. Salary
Deferral Plan Trust, for the purposes of holding and
administering the Trust
Fund in accordance with this Agreement. Except as
provided in section 4.4 and
4.5 below, nothing contained in the Plan, either
expressly or by implication,
shall impose any additional powers, duties or
responsibilities upon the Trustee.
The Trustee shall not be responsible for the
administration of the Plan. The
"Trust Fund" shall at any time mean all property of every
kind then held by the
Trustee pursuant to this Trust Agreement, including the
contributions of cash or
Company Stock made to the Trust by the Company or any
employer participating in
the Plan (an "Employer"), any property into which such
contributions may from
time to time be converted, and any appreciation therein or
income thereon less
any depreciation therein, any losses thereon and any
distributions payments
therefrom. Except as otherwise provided herein, title to the
assets of the Trust
Fund shall at all times be vested in the Trustee, subject
to the right of the
Trustee to hold title in
bearer form or in the name of a nominee, and the
interests of others in the
Trust Fund shall only be the right to have such assets
received, held, invested,
administered and distributed in accordance with the
provisions of the Trust.
1.2 Appointment of Trustee. The Company represents
that all necessary
action has been taken for the appointment of the Trustee as
trustee of the Trust
and that the Trust Agreement constitutes a legal, valid
and binding obligation
of the Company. The Trustee accepts its appointment as
trustee of the Trust.
1.3 Status of Trust. The Trust is intended to be a
qualified trust under
section 401(a) of the Code and exempt from taxation
pursuant to section 501(a)
of the Code.
1.4 Exclusive Purpose. Notwithstanding anything to
the contrary in this
Agreement, or in any amendment thereto, except as
otherwise provided under
ERISA, the Named Fiduciaries (as defined in Section 2.1)
and the Trustee, as a
directed trustee shall discharge their respective duties
with respect to the
Trust Fund for, and the Trust Fund shall be used solely
for and not diverted
from, the exclusive purpose of providing benefits for
Plan participants and
their beneficiaries and defraying reasonable expenses of
administering the Plan.
Notwithstanding the preceding sentence, however,
contributions may be returned
by the Trustee at the direction of a Named Fiduciary if
the Named Fiduciary
certifies in writing to the Trustee that one or more
of the following
circumstances exist.
(a) if a contribution is made by the Company by
reason of a mistake of
fact, the contribution or the value thereof, if less, may be
returned within one
year after it was paid to the Trustee;
(b) if a contribution is conditioned upon its
deductibility under section
404 of the Code, to the extent the deduction is
disallowed by the Internal
Revenue Service, the contribution or the value thereof, if
less, may be returned
to the Company within one year after the disallowance; or
(c) if a contribution is conditioned upon initial
qualification of the
Plan, as amended, under sections 401, 409 and
4975(e)(7) of the Code, the
contribution or the value thereof, if less, may be
returned to the Company
within one year after such qualification has been denied.
1.5 Receipt of Contributions and Transfers of
Assets. The Trustee shall
receive in cash or Company Stock all contributions paid or
delivered to it which
are allocable under the Plan and to the Trust and all
transfers paid or
delivered under the Plan to the Trust from a predecessor
trustee or another
trust (including a trust forming part of another plan
qualified under section
401(a) of the Code), provided that the Trustee shall not be
obligated to receive
any such contribution or transfer unless prior thereto or
coincident therewith,
as the Trustee may specify, the Trustee has received
such reconciliation,
allocation, investment or other information concerning, or
such direction,
instruction or representation with respect to, the
contribution or transfer or
the source thereof as the Trustee may reasonably require.
The Trustee shall have
no duty or authority to (a) require any contributions or
transfers to be made
under the Plan or to the Trustee, (b) compute any amount to
be contributed or
transferred under the Plan to the Trustee, or (c)
determine whether amounts
received by the Trustee comply with the Plan.
1.6 Directed Trustee. The Trustee shall hold the
Trust Fund, without
distinction between principal and income, as a
nondiscretionary trustee pursuant
to the terms of this Trust Agreement. Assets of the Trust
may, absent direction
from the Named Investment Fiduciary (as defined in Section
2.1) to the contrary,
be held in an account maintained with an affiliate of the
Trustee. Except as
required by ERISA, the Trustee shall invest the Trust
Fund as directed by the
Named Investment Fiduciary, as defined herein, an Investment
Manager, as defined
herein, or a Plan participant or beneficiary, as the
case may be, and the
Trustee shall have no discretionary control over, nor
any other discretion
regarding, the investment or reinvestment of any asset of
the Trust Fund.
SECTION II
NAMED FIDUCIARIES
2.1 Named Administrative and Investment Fiduciaries.
For purposes of this
Trust Agreement, the term "Named Administrative Fiduciary"
refers to the person
or persons named or provided for under the Plan as
responsible for the
administration and operation of the Plan, and the term
"Named Investment
Fiduciary" refers to the person or persons provided
for under the Plan as
responsible for the investment and management of Plan
assets to the extent
provided for in this Trust Agreement (together, the "Named
Fiduciaries"). The
Named Administrative Fiduciary and the Named Investment
Fiduciary may be the
same person or persons. If no such person or persons is
named or provided for
under the Plan, or if so named or provided for but not then
serving, the Company
shall be the Named Administrative Fiduciary or the Named
Investment Fiduciary or
both, as the case may be.
2.2 Identification of Named Fiduciaries and
Designees. The Named
Administrative Fiduciary and the Named Investment Fiduciary
under the Plan shall
each be identified to the Trustee in writing by the
Company, and specimen
signatures of each, or of each member thereof, as
appropriate, shall be provided
to the Trustee by the Company. The Company shall promptly
give written notice to
the Trustee of a change in the identity either of the
Named Administrative
Fiduciary or the Named Investment Fiduciary, or any
member thereof, as
appropriate, and until such notice is received by the
Trustee, the Trustee shall
be fully protected in assuming that the identity of the
Named Administrative
Fiduciary or Named Investment Fiduciary, and the
members thereof, as
appropriate, is unchanged. Each person authorized in
accordance with the Plan to
give a direction to the Trustee on behalf of the Named
Administrative Fiduciary
or the Named Investment Fiduciary shall be identified to
the Trustee by written
notice from the Company or the Named Administrative
Fiduciary or the Named
Investment Fiduciary, as the case may be, and such
notice shall contain a
specimen of the signature. The Trustee shall be entitled to
rely upon each such written notice as evidence of the
identity and authority of
the persons appointed until a written cancellation of the
appointment, or the
written appointment of a successor, is received by the
Trustee from the Company,
the Named Administrative Fiduciary or the Named Investment
Fiduciary, as the
case may be.
2.3 Named Fiduciary's Directions. Directions from
or on behalf of the
Named Fiduciaries or their designees shall be communicated
to the Trustee or the
Trustee's designee only in accordance with procedures
acceptable to the Trustee
and the Named Administrative Fiduciary. Neither the
Trustee nor the Trustee's
designee shall be empowered to implement any such
directions except in
accordance with procedures acceptable to the
Trustee and the Named
Administrative Fiduciary. The Trustee shall have no
liability for following any
such directions or failing to act in the absence of any
such directions. The
Trustee shall have no liability for the acts or omissions
of any person making
or failing to make any direction under the Plan or this
Trust Agreement nor any
duty or obligation to review any such direction, act or
omission, SECTION III
POWERS OF TRUSTEE
3.1 Nondiscretionary Investment Powers. At the
direction of the Named
Administrative Fiduciary or the Named Investment Fiduciary
or such other person
authorized hereunder to direct such action, and in
accordance with the direction
of such person, the Trustee, or the Trustee's designee or
a broker/dealer as
referred to in section 4.3, is authorized and empowered:
(a) to invest and reinvest the Trust Fund,
together with the income
therefrom, in common stock, preferred stock, convertible
preferred stock, bonds,
debentures, convertible debentures and bonds, mortgages,
notes, commercial paper
and other evidences of indebtedness (including those
issued by the Trustee),
shares of mutual funds (which funds may be sponsored,
managed or offered by an
affiliate of the Trustee), guaranteed investment
contracts, bank investment
contracts, other securities, polices of life insurance,
annuity contracts,
options, options to buy or sell securities or other
assets, and all other
property of any type (personal, real or mixed, and tangible
or intangible);
(b) to deposit or invest all or any part of the
assets of the Trust in
savings accounts or certificates of deposit or other
deposits in a bank or
savings and loan association or other depository
institution, including the
Trustee or any of its affiliates; provided that, with
respect to such deposits
with the Trustee or an affiliate, the deposits bear a
reasonable interest rate;
(c) to hold, manage, improve, repair and control all
property, real or
personal, forming part of the Trust Fund; to sell, convey,
transfer, exchange,
partition, lease for any term, even extending beyond the
duration of this Trust,
and otherwise dispose of the same from time to time;
(d) to have, subject to sections 4.4 and 4.5 below,
respecting securities,
all the rights, powers and privileges of an owner,
including the power to give
proxies, pay assessments and other sums deemed by the
Trustee necessary for the
protection of the Trust Fund; to vote, subject to
sections 4.4 and 4,5 below,
any corporate stock either in person or by proxy, with
or without power of
substitution, for any purpose; to participate in
voting trusts, pooling
agreements, foreclosures, reorganizations,
consolidations, mergers and
liquidations, and in connection therewith to deposit
securities with or transfer
title to any protective or other committee; to
exercise or sell stock
subscriptions or conversion rights; and, regardless of any
limitation elsewhere
in this instrument relative to Investments by the Trustee
to accept and retain
as an investment any securities or other property received
through the exercise
of any of the foregoing powers;
(e) to hold in cash such portion of the Trust Fund
which it is directed to
so hold pending investments, or payment of expenses, or
the distribution of
benefits;
(f) to take such actions as may be necessary or
desirable to protect the
Trust from loss due to the default on mortgages held in the
Trust, including the
appointment of agents or trustees in such other
jurisdictions as may seem
desirable, to transfer property to such agents or
trustees, to grant to such
agents such powers as are necessary or desirable to protect
the Trust Fund, to
direct such agent or trustee, or to delegate such power to
direct, and to remove
such agent or trustee;
(g) to settle, compromise or abandon all claims and
demands in favor of or
against the Trust Fund;
(h) to invest in any common or collective trust fund
maintained by the
Trustee or its affiliate;
(i) to exercise all of the further rights, powers,
options and privileges
granted, provided for, or vested in trustees generally
under the laws of the
state in which the Trustee is incorporated, so that the
powers conferred upon
the Trustee herein shall not be in limitation of any
authority conferred by law,
but shall be in addition thereto;
(j) to borrow money from any source and to execute
promissory notes,
mortgages or other obligations and to pledge or mortgage
any trust assets as
security, subject to applicable requirements of the Code and
ERISA;
(k) to compromise, compound, and settle any debt or
obligation owing to or
from it as Trustee; to reduce or increase the rate of
interest on, extend or
otherwise modify, foreclose upon default, or otherwise
enforce any such
obligation; and
(l) to maintain accounts at, execute transactions
through, and lend on an
adequately secured basis stocks, bonds or other securities
to, any brokerage or
other firm, including any firm which is an affiliate of the
Trustee; and
(m) subject to Section 5, to borrow from any lender
(including the Company
or any shareholder of the Company) to acquire shares
of Company Stock as
authorized by this Agreement.
3.2 Additional Powers of Trustee. To the extent
necessary or which it
deems appropriate to implement its powers under Section
3.1 or otherwise to
fulfill any of its duties and responsibilities as trustee of
the Trust Fund, the
Trustee shall have the following additional powers and
authority:
(a) to register securities, or any other property,
in its name or in the
name of any nominee, including the name of any affiliate
or the nominee name
designated by any affiliate, with or without indication of
the capacity in which
property shall be held, or to hold securities in bearer
form and to deposit any
securities or other property in a depository or clearing
corporation;
(b) to designate and engage the services of and to
delegate powers and
responsibilities to, such agents, representatives,
advisers, counsel and
accountants as the Trustee considers necessary or
appropriate, any of whom may
be an affiliate of the Trustee or a person who renders
services to such an
affiliate, and, as a part of its expenses under this Trust
Agreement, to pay
their reasonable expenses and compensation;
(c) to make, execute and deliver, as Trustee, any and
all deeds, leases,
mortgages, conveyances, waivers, releases or other
instruments in writing
necessary or for the accomplishment of any of the powers
listed in this Trust
Agreement;
(d) to determine the market value of any securities or
other property held
by the Trustee in the Trust Fund. and where any securities
or other property are
determined by the Trustee not to be marketable, to
determine their value in
accordance with sound practice and standards for
evaluating such property,
including valuation by an independent appraiser selected
by the Trustee, for
whose services the Company shall be obligated to pay the
fees and expenses;
(e) to employ legal counsel, brokers and other
advisors, agents or
employees to perform services for the Trust Fund or to
advise it with respect to
its duties and obligations under this Agreement and in
connection with the
Trust, and to pay from the Trust Fund such compensation as
it deems appropriate;
and
(f) generally to do all other acts which the Trustee
deems necessary or
appropriate for the protection of the Trust Fund.
SECTION IV
INVESTMENTS
4.1 Investment in Company Stock. The assets of the
ESOP Fund (as defined
in the Plan) shall be invested primarily in Company Stock,
although up to 100%
of the
assets of the Trust Fund may be invested in Company Stock.
To the extent that
Company contributions are made in Company Stock, the Trustee
will be expected to
retain such Company Stock. To the extent Company
contributions or dividends are
made in cash and are not used to pay principal or interest
on an ESOP Loan (as
defined in Section 5) or to pay expenses of the Fund, the
Trustee will, at the
direction of the Named Investment Fiduciary, acquire
Company Stock either from
other shareholders or directly from the Company. The
Trustee will pay adequate
consideration for all Company Stock it acquires (other than
a contribution). If,
at the time of any purchase, Company Stock is not
actively traded on an
established securities market, the amount of such
consideration will be
determined by the Named Fiduciary, however, the Trustee
may also make such
determination or may retain, on the Company's behalf
and at the Company's
expense, an independent fiduciary to make such a
determination, in either case,
on the basis of the advice provided by an independent
appraiser selected by the
Trustee or independent fiduciary, as applicable, and
the Company shall be
obligated to pay the fees and expenses of such independent
appraiser.
If at the time Company Stock is to be
purchased, the Company has
outstanding more than one class of Stock, the Named
Investment Fiduciary shall
direct the Trustee as to which class of Stock shall be
purchased (which class
shall satisfy Code section 409(e)).
To the extent consistent with the foregoing, at the
direction of a Named
Fiduciary, the Fund may hold temporary investments other
than Company Stock, may
hold such portion of the Fund in such investments as may
be required under the
investment diversification provisions of the Plan, may hold
such portion of the
Fund uninvested as a Named Fiduciary directs for making,
distributions under the
Plan, may invest assets of the Fund in short-term
investments bearing a
reasonable rate of interest, including, without
limitation, any common or
collective investment trust (including one established at
the institution that
serves as Trustee hereunder or any of its affiliates)
which provides for the
pooling of assets of plans described in section 401(a) of
the Code and exempt
from tax under section 501(a) of the Code, the terms of
which are incorporated
by reference,
4.2 Investment Management. The Named Investment
Fiduciary shall manage the
investment of the Trust Fund except insofar as (a)
the Named Investment
Fiduciary appoints a person (an "Investment Manager") who
meets the requirements
of section 3(38) of ERISA to manage Trust assets, or (b)
the Plan provides for,
and the Named Administrative Fiduciary elects to allow,
Plan participant or
beneficiary direction of the investment of assets
allocable under the Plan to
the accounts of such participants and beneficiaries.
In situation (a) above, the Company or the Named
Investment Fiduciary may
appoint one or more Investment Managers, who may be
affiliate(s) of the Trustee,
to direct the Trustee in the investment of all or a
specified portion of the
assets of the Trust. The Named Investment Fiduciary shall
notify the Trustee in
writing before the effective date of the appointment
or removal of any
Investment Manager. If there is more than one
Investment Manager whose
appointment is effective under the Plan at any one time, the
Trustee shall, upon written instructions from the
Company or the Named
Investment Fiduciary, establish separate funds for
control by each such
Investment Manager. The funds shall consist of those Trust
assets designated by
the Company or the Named Investment Fiduciary.
In situation (b) above, a list of the participants and
beneficiaries and
such information concerning them as the Trustee may specify
shall be provided by
the Company or the Named Administrative Fiduciary to the
Trustee and/or such
other person(s) as are necessary for the implementation
of the participants'
directions in accordance with procedures reasonably
acceptable to the Trustee
and the Named Administrative Fiduciary.
4.3 Investment Directions. Directions for the
investment or reinvestment
of Trust Fund assets from the Named Investment Fiduciary,
an Investment Manager
or a Plan participant or beneficiary, as the case may be,
shall, in a manner and
in accordance with procedures reasonably acceptable to the
Trustee and the Named
Administrative Fiduciary, be communicated to and implemented
by, as the case may
be, the Trustee, the Trustee's designee or, with the
Trustee's consent, the
broker/dealer designated for the purpose by the Company or
the Named Investment
Fiduciary. Communication of any such direction to
such a designee or
broker/dealer shall conclusively be deemed an
authorization to the designee or
broker/dealer to implement the direction even though coming
from a person other
than the Trustee.
If the Trustee does not receive written directions with
respect to any part
of the Trust Fund subject to the Named Fiduciaries'
direction (including,
without limitation, income, sale proceeds, or
contributions), the Trustee shall,
pending receipt of such directions, be deemed to be
directed to hold and invest
such amount in short-term securities or other such short-
term investments that
the Trustee deems appropriate.
Except as required by ERISA, the Trustee shall have no
duty to determine or
inquire into whether any directions received from the
Named Fiduciaries in
accordance with the terms of this Agreement represent
proper and lawful
decisions or result in prohibited transactions as
defined in section 406 of
ERISA. The Trustee shall have no duty to review any
investment to be acquired,
held or disposed of pursuant to such instructions from the
Named Fiduciaries.
Except as required by ERISA, the Trustee shall have no
liability for following
or any other person's following such directions or failing
to act in the absence
of any such directions. The Trustee shall have no
liability for the acts or
omissions of any person directing the investment or
reinvestment of Trust Fund
assets or making or failing to make any direction referred
to in section 4.4.
Neither shall the Trustee have any duty or obligation
to review any such
investment or other direction, act or omission or,
except upon receipt of a
proper direction, to invest or otherwise manage any asset
of the Trust which is
subject to the control of any such person or to exercise
any voting or other
right referred to in Section 4.4.
4.4 Voting Rights
(a) With respect to Company Stock, each participant
(or beneficiary) is,
for purposes of this Section 4.4(a), hereby designated
a "named fiduciary"
(within the meaning of section 403(a)(l) of ERISA) with
respect to the shares of
Company Stock allocated to his account and shall have the
right to direct the
Trustee with respect to the vote of the shares of Company
Stock allocated to his
or her account on each matter brought before any meeting of
the stockholders of
the Company. Upon timely receipt of such directions from
each participant (or
beneficiary), the Trustee shall on each such matter
vote as directed by the
participant (or beneficiary) the number of shares (including
fractional shares)
of Company Stock allocated to each participant's (or
beneficiary's) account, and
except as otherwise required by ERISA, the Trustee shall
have no discretion in
the matter
(b) With respect to all Trust Fund assets not
described in section 4.4(a)
above, including shares of Company Stock not allocated
to the accounts of
participants or beneficiaries, and, with respect to
shares of Company Stock
where the Company (or any Employer) does not have a
"registration-type class of
securities" (as described in Section 409(e)(4) of the
Code), for matters that
the Plan does not pass through to participants (or
beneficiaries), the voting
and other rights in Company Stock, securities or other
assets held a the Trust
shall be exercised by the Trustee solely as directed by
the Named Investment
Fiduciary, Investment Manager or other person who at the
time has the right to
direct the investment or reinvestment of the Company
Stock, security or other
asset involved.
(c) The Company or Named Administrative Fiduciary
shall establish a
procedure reasonably acceptable to the Trustee for the
timely dissemination to
each person entitled to direct the Trustee or its designee
as to voting or other
decision called for thereby or referred to therein of
all proxy and other
materials hearing on the decision and a form requesting
confidential directions
to the Trustee as to how the Trustee should vote or
otherwise decide. In the
case of Company Stock, at such time as proxy or other
materials bearing thereon
are disseminated generally to owners of Company Stock
in accordance with
applicable law, the Company shall cause a copy of such
proxy or other materials
to be delivered directly to the Trustee and, thereafter,
shall promptly deliver
to the Trustee such number of additional copies of the
proxy or other materials
as the Trustee may request.
(d) In the event a Plan participant or beneficiary
or an Investment
Manager with the right to direct a voting or other decision
with respect to any
security or other asset held in the Trust does not
communicate any decision on
the matter to the Trustee or the Trustee's designee by the
time prescribed by
the Trustee or the Trustee's designee for that purpose,
or if the Trustee
notifies the Named Investment Fiduciary either that it
does not have precise
information as to the securities or other assets
involved allocated on the
applicable record date to the accounts of all participants
and beneficiaries, or
that time constraints make it unlikely that
participant, beneficiary or
Investment
Manager direction, as the case may be, can be received on
a timely basis, the
decision shall be the responsibility of the Named Investment
Fiduciary and shall
be communicated to the Trustee on a timelv basis. In
the event the Named
Investment Fiduciary with any right or responsibility
under the Plan or
hereunder to direct a voting or other decision with
respect to any security or
other asset held in the Trust does not, or is unable in
accordance with ERISA,
communicate any decision on the matter to the Trustee or the
Trustee's designee
by the time prescribed by the Trustee for that purpose
or to the extent the
Trustee determines that the Trustee must exercise discretion
with respect to any
decision, the Trustee may retain an independent
fiduciary, on behalf of the
Company, to direct it as to the voting of Company Stock or
other assets of the
Trust Fund, and the Company shall be obligated to pay the
fees and expenses of
such fiduciary, including fees of any advisor to the
independent fiduciary.
Except as required by ERISA, the Trustee shall follow all
directions referred to
above in this section and shall have no duty to exercise
voting or other rights
relating to any such Company Stock, security or other asset.
4.5 Tender and Exchange Offers. The provisions of
this section 4.5 shall
apply in the event of a tender or exchange offer including,
but not limited to,
a tender offer or exchange offer within the meaning of the
Securities Exchange
Act of 1934, as from time to time amended and in effect,
(hereinafter, a "tender
offer") for Company Stock is commenced by a person or
persons.
The Trustee shall have no discretion or authority
to sell, exchange or
transfer any of such shares pursuant to such tender offer
except to the extent,
and only to the extent, provided in this Agreement.
Each participant (or
beneficiary) is hereby designated a named fiduciary
within the meaning of
section 403(a)(l) of ERISA with respect to the shares of
Company Stock allocated
to his account. and shall have the right, to the extent of
the number of whole
shares of Company Stock allocated to his account, to
direct the Trustee as to
the manner in which to respond to a tender offer with
respect to shares of
Company Stock.
The Company shall use its best efforts to timely
distribute or cause to be
distributed to each participant (or beneficiary) such
information as will be
distributed to stockholders of the Company in connection
with any such tender
offer. The Trustee shall solicit confidentially from
each participant (or
beneficiary) the directions described in this section as
to whether shares are
to be tendered. The Trustee shall respond as instructed by
each participant (or
beneficiary) with respect to such shares of Company
Stock. The instructions
received by the Trustee from participants (or
beneficiaries) shall be held by
the Trustee in confidence and shall not be divulged or
released to any person,
including the Named Administrative Fiduciary or officers
or employees of the
Company or any affiliated company.
With respect to (1) any shares of Company Stock
allocated to a participant
or beneficiary's account for which the Trustee has
not received timely
instructions from the participant (or beneficiary) as to
the manner in which to
respond to such a tender offer. (2) unallocated shares of
Company Stock, and (3)
fractional shares of Company Stock
allocated to participants' (or beneficiaries') accounts,
such shares shall be
tendered or exchanged by the Trustee as directed by
the Named Investment
Fiduciary. If the Named Investment Fiduciary fails, or is
unable in accordance
with ERISA, to give such direction, or to the extent the
Trustee determines that
the Trustee must exercise discretion with respect to any
decision, the Trustee
may retain an independent fiduciary to direct it as to
whether to tender or
exchange Company Stock, and the Company shall be obligated
to pay the fees and
expenses of such fiduciary, including fees of any advisor to
the fiduciary.
SECTION V
LEVERAGED ACQUISITIONS OF STOCK
The Named Fiduciary may from time to time direct
the Trustee to incur
indebtedness (including indebtedness to the company) to
purchase Company Stock
(an "ESOP Loan") on such terms and conditions as the
Named Fiduciary shall
determine. Any such ESOP Loan shall meet all of the
requirements necessary to
constitute an "exempt loan" within the meaning of section
4975(d)(3) of the code
and Treasury Regulation section 54.4975-7(b)(1)(iii) and
shall be used primarily
for the benefit of the Plan participants and their
beneficiaries.
Payments of principal and interest on any such ESOP
Loan shall be made by
the Trustee (as directed by a Named Fiduciary) only
from (1) Company
contributions made under the Plan for the purpose of
satisfying such ESOP Loan
obligation, earnings on such contributions and earnings
on shares of Stock
acquired with the proceeds of such ESOP Loan, (2) the
proceeds of a subsequent
ESOP Loan made to repay a prior ESOP Loan, and/or (3) the
proceeds of the sale
of collateralized shares of Company Stock acquired with
the proceeds of such
ESOP Loan.
In the event of a default under an ESOP Loan, the
value of Trust assets
transferred to the lender shall not exceed the amount of
the default, provided
further that if the lender is a "party in interest" within
the meaning of ERISA
section 3(14), a transfer of Trust assets upon default
shall be made only if;
and to the extent of, the Trust's failure to meet the
ESOP Loan's payment
schedule.
To the extent that the Trustee determines that the
Trustee must exercise
discretion with respect to acts contemplated by this
Section V, the Trustee may
retain an independent fiduciary, on behalf of the Company,
to direct it as to
those acts, and the Company shall be obligated to pay the
fees and expenses of
such fiduciary, including fees of any advisor to the
fiduciary.
SECTION VI
PAYMENT OF BENEFITS, TRUSTEE'S COMPENSATION AND EXPENSES
6.1 Payments by Trustee. The Trustee shall pay
benefits unde the Plan
only when it receives (and in accordance with) written
instructions of the Named
Administrative Fiduciary, indicating the amount of the
payment and the name and
address of the recipient. The Trustee shall have no duty to
inquire into whether
any payment the Named Administrative Fiduciary
instructs it to make is
consistent with the terms of the Plan or applicable law or
otherwise proper. If
the Named Administrative Fiduciary advises the Trustee that
benefits have become
payable respecting a participant's (or beneficiary's)
interest in the Trust
Fund, but does not instruct the Trustee as to the manner of
payment, the Trustee
shall hold the participant's (or beneficiary's) interest
in the Trust until it
receives written instructions from the Named Administrative
Fiduciary as to the
manner of payment. The Trustee shall not pay benefits
from the Trust Fund
without such instructions, even though it may be informed
from other sources,
including, without limitation, a participant (or
beneficiary), that benefits are
payable under the Plan. The Trustee shall have no
responsibility to determine
when, to whom, or in what amounts benefits are payable under
the Plan,
The Trustee may pay any benefit or expense under
the Plan by mailing
certificates representing shares of Company Stock and/or
its check, as the case
may be, for the amount thereof to the person
designated by the Named
Administrative Fiduciary as entitled to receive such
payment to such address as
may have last been furnished to the Trustee by the
Named Administrative
Fiduciary. If no such address has been so furnished,
benefits or expenses may be
mailed by the Trustee to such person in care of the Company.
The Trustee is authorized to make any payments
directed by court order in
any action in which the Trustee is a party or pursuant to a
"qualified domestic
relations order" under section 414(p) of the Code or
pursuant to a court order
pertaining to the enforcement of a federal tax levy or
the collection by the
United States on a judgment resulting from an unpaid
tax assessment. The
determination of whether a court order constitutes a
"qualified domestic
relations order" shall be determined by the Named
Administrative Fiduciary and
the Trustee shall have no authority to make such a
determination. Except as may
otherwise be required by ERISA, the Trustee is not
obligated to defend actions
in which the Trustee is named but shall notify the
Company or Named
Administrative Fiduciary of any such action and may tender
defense of the action
to the Company, the Named Administrative Fiduciary or
the participant or
beneficiary whose interest is affected. The Trustee may in
its discretion defend
any action in which the Trustee is named and any expenses,
including reasonable
attorneys' fees, incurred by the Trustee in that
connection shall be paid or
reimbursed from the Trust Fund to the extent permitted under
ERISA.
6.2 Disputed Payment. If a dispute arises over
the propriety of the
Trustee's making any payment from the Trust Fund, the
Trustee may withhold the
payment until the dispute has been resolved by a court of
competent jurisdiction
or settled by the parties to the dispute. The Trustee may
consult legal counsel
and rely upon the advice of counsel.
6.3 Trustee's Compensation and Expenses. Except to the
extent specifically
provided otherwise herein, the Trustee's compensation
for its services under
this Trust Agreement shall be paid in accordance with the
Trustee's fee schedule
currently in effect.
Without the written consent of the Company, the Trustee's
fee schedule may not
be modified more than once every twelve months. Any
compensation or expenses
incurred by the Trustee in connection with or relating to
the performance of its
duties under this Trust Agreement or its status as Trustee,
including reasonable
attorneys' fees shall be paid from the Trust Fund, unless
the Company elects to
pay any of such compensation and expenses. If the
Company does not so elect,
such compensation and expenses shall be charged against
and withdrawn from the
Trust Fund as provided below.
The Trustee is authorized to charge the Trust Fund
for and withdraw from
the Trust Fund, without direction from the Named
Administrative Fiduciary or any
other person, the amount of any such fees or expenses 30
days after presentation
of a statement for such amount to the Company, except to
the extent the Company
pays such amounts before such date. Trust Fund assets
shall be applied to pay
such fees and expenses in the following priority by asset
category to the extent
thereof held at the time of withdrawal in the Trust Fund
subfund or account to
which the fee or expense is allocated: (i) uninvested cash
balances; (ii) shares
of any money market fund or funds held in the Trust Fund;
and (iii) any other
Trust Fund assets. The Trustee is authorized to allocate
its fees and expenses
among these subfunds or accounts to which the fees or
expenses pertain in such
manner as the Trustee deems appropriate under the
circumstances unless prior to
such allocation the Company or the Named Administrative
Fiduciary specifies the
manner in which the allocation is to be made. The Trustee is
also authorized but
not required to sell any shares or other assets referred to
above to the extent
necessary for the purpose.
By signing this Trust Agreement, the Company
authorizes the Trustee and/or
its affiliates to receive payments from certain mutual funds
(and/or collective
trusts) for which no affiliate of the Trustee acts as
investment manager or
adviser (or from the principal distributors and/or
advisors of those funds or
trusts), in connection with the performance of reasonable
and necessary services
(including recordkeeping, subaccounting, account
maintenance. administrative and
other shareholder services); provided such payments
are properly made in
accordance with applicable law. Because different mutual
funds (or collective
trusts) may be subject to different fee arrangements, the
Company should contact
the Trustee or its designee to obtain further details
on any specific fee
arrangements that may be applicable to investments
under the Plan, and the
Trustee or its designee shall provide such information upon
request.
6.4 Other Expenses.The Trustee is authorized upon
direction from the Named
Administrative Fiduciary or any other person, to withdraw
from the Trust Fund
and pay any federal, state or local taxes, charges or
assessments of any kind
levied or assessed against the Trust or assets thereof.
Until paid, such taxes
shall be a lien against the Trust Fund. The Trustee
shall give notice to the
Named Administrative Fiduciary of its receipt of a demand
for any such taxes,
charges or assessments. The Trustee shall not be personally
liable for any such
taxes, charges or assessments.
Expenses incurred by the Company, the Named
Administrative Fiduciary, the
Named Investment Fiduciary, any Investment Manager or any
other persons
designated to act on behalf of the Company, the Named
Administrative Fiduciary
or the Named Investment Fiduciary, including reimbursement
for expenses incurred
in the performance of their respective duties, may be paid
from the Trust Fund
upon the written direction to the Trustee by the Named
Administrative Fiduciary.
SECTION VII
LIABILITY AND INDEMNITY
7.1 Trustee's Reliance. Unless the Trustee has
actual knowledge to the
contrary, the Trustee shall have no duty to inquire
whether directions by the
Company, the Named Administrative Fiduciary, the Named
Investment Fiduciary or
any other person conform to the Plan, and the Trustee shall
be fully protected
in relying on any such direction, communicated in
accordance with procedures
acceptable to the Trustee and the Named Administrative
Fiduciary, from any
person who is a proper person to give the direction. The
Trustee shall be fully
protected in acting upon any instrument, certificate, or
paper delivered by the
Company, the Named Administrative Fiduciary, any
participant or beneficiary
(acting as a named fiduciary) and reasonably believed
by the Trustee to be
genuine and to be signed or presented by the proper person
or persons, and the
Trustee shall be under no duty to make investigation or
inquiry as to any
statement contained in any such writing, but may accept
the same as conclusive
evidence of the truth and accuracy of the statements therein
contained.
The Trustee shall have no liability to any participant,
any beneficiary or
any other person for payments made, any failure to
make payments, or any
discontinuance of payments, on direction of the Named
Administrative Fiduciary,
the Named Investment Fiduciary or any designee of
either of them or for any
failure to make payments in the absence of
directions from the Named
Administrative Fiduciary or any person responsible for
or purporting to be
responsible for directing the investment of Trust assets.
The Trustee shall have
no obligation to request proper directions from any
person. The Trustee may
request instructions from the Named Administrative
Fiduciary or the Named
Investment Fiduciary and shall have no duty to act or
liability for failure to
act if such instructions are not forthcoming. The
Trustee shall have no
responsibility to determine whether the Trust Fund is
sufficient to meet the
liabilities under the Plan, and shall not be liable
for payments or Plan
liabilities in excess of the Trust Fund. The Trustee in its
corporate capacity
shall not be liable for claims of any persons arising under
the Plan.
7.2 Advice of Counsel The Trustee may consult with
legal counsel with
respect to the meaning and construction of this Agreement or
its powers, duties
and conduct hereunder.
Notwithstanding any other provision of this
Agreement, the Trustee shall
not be required to take any action or refrain from
taking any action that
violates ERISA, and for this purpose, the determination of
whether such action
or inaction violates ERISA shall be determined by (a) a
written opinion or
advice of counsel based upon such
counsel's interpretation of any statute or final
regulation, or (b) an opinion
or order of a court of competent jurisdiction issued to the
Plan, the Company or
the Trustee.
7.3 Other Fiduciaries. Each fiduciary of the Plan
and the Trust shall be
solely responsible for its own acts or omissions. The
Trustee shall have no duty
to question any other Plan fiduciary's performance of
fiduciary duties allocated
to such other fiduciary pursuant to the Plan. The
Trustee shall not be
responsible for the breach of responsibility by any other
Plan fiduciary except
as provided under ERISA.
7.4 Indemnification. The Company hereby indemnifies
the Trustee against,
and shall hold the Trustee harmless from, any and all loss,
claims, liability,
and expense, including reasonable attorneys' fees, imposed
upon the Trustee or
incurred by the Trustee as a result of any acts taken in
accordance with the
directions from the Named Administrative Fiduciary, Named
Investment Fiduciary,
Investment Manager or any other person specified herein, or
any designee of any
such person, or by the failure to act due to a lack of
direction from such
parties or by reason of the Trustee's execution of its
duties with respect to
the Trust, including, but not limited to, its holding of
assets of the Trust,
the Company's obligations in the foregoing regard to be
satisfied promptly on
request by the Trustee, unless the loss, claim, liability
or expense involved
resulted from the negligence or willful misconduct of the
Trustee.
7.5 Protection of Designees.To the extent that any
designee of the Trustee
is performing a function of the Trustee under this Trust
Agreement, the designee
shall have the benefit of all of the applicable limitations
on the scope of the
Trustee's duties and liabilities, all applicable rights
of indemnification
granted hereunder to the Trustee and all other applicable
protections of any
nature afforded to the Trustee, except as provided under
ERISA.
SECTION VIII
ADMINISTRATION
8.1 Records. The Trustee shall maintain books of
account and records with
respect to the Trust Fund. Except to the extent required by
applicable law, the
Trustee shall not be required to maintain any separate
records or accounts with
respect to any participant, and any records or
accounts required to be
maintained pursuant to the Plan or to comply with
ERISA shall be the
responsibility of the Named Administrative Fiduciary or its
designee.
8.2 Accounting. Within 90 days following the close of
each fiscal year of
the Plan or the effective date of the removal or resignation
of the Trustee, the
Trustee shall file with the Named Administrative Fiduciary
a written accounting
setting forth all transactions since the end of the period
covered by the last
previous accounting. The accounting shall include a listing
of the assets of the
Trust showing the value of such assets at the close of the
period covered by the
accounting. On direction of the Named Administrative
Fiduciary, and if
previously agreed to by the Trustee, the Trustee shall
submit to the Named Administrative Fiduciary interim
valuations reports or other
information pertaining to the Trust.
The Named Administrative Fiduciary may approve the
accounting by written
approval delivered to the Trustee. Any such affirmative
approval shall be
binding on the Company, the Named Administrative Fiduciary,
the Named Investment
Fiduciary and, to the extent permitted by ERISA, all other
persons, and such
approval shall release and discharge the Trustee from
any liability or
accountability to the Company and the Named
Administrative Fiduciary with
respect to the transactions shown or reflected on the
account.
8.3 Valuation. The assets of the Trust shall be
valued a of each
valuation date under the Plan at fair market value as
determined by the Trustee
based upon such sources of information as it may deem
reliable, including, but
not limited to, stock market quotations, statistical
evaluation services,
newspapers of general circulation, financial
publications, advice from
investment counselors or brokerage firms, or any
combination of sources. The
Trustee may retain, on the Company's behalf and at the
Company's expense, an
independent fiduciary to make such a determination, in
either case, on the basis
of the advice provided by an Independent Appraiser" (as
described in section
401(a)(28)(C) of the Code) selected by the Trustee or the
independent fiduciary,
as applicable, and the reasonable costs incurred in
establishing values of the
Trust Fund shall be a charge against the Trust Fund, unless
paid by the Company.
If there is no generally recognized market (as described in
section 3(l8)(A) of
ERISA) for shares of Company Stock, all valuations of
shares of company stock
shall be made by an Independent Appraiser in accordance with
section 3(l8)(B) of
ERISA. If the Department of Labor issues final regulations
under ERISA regarding
the valuation of securities or other assets for purposes of
the reports required
by ERISA, the Trustee shall use such valuation methods.
SECTION IX
RESIGNATION AND REMOVAL OF TRUSTEE
9.1 Manner of Resignation or Removal. The Trustee
may resign as Trustee
under this Agreement at any time by a written statement
delivered to the Company
giving notice of such resignation, which shall be
effective 60 days after
receipt or at such other time as is agreed by the Company
and the Trustee. The
Trustee may be removed at any time by the Company by an
instrument in writing
and delivered to the Trustee, which shall be effective 60
days after receipt or
at such other time as is agreed between the Company and the
Trustee.
9.2 Appointment of Successor. Upon resignation or
removal of the Trustee,
the Company shall appoint a successor trustee and shall
deliver to the Trustee
copies of (a) a written instrument executed by the
Company appointing such
successor, and (b) a written instrument executed by the
successor in which it
accepts such appointment. Such instruments shall indicate
their effective date.
9.3 Settlement of Account. Upon resignation or removal
of the Trustee, the
Trustee shall have the right to a settlement of its
account, which settlement
shall be made, at the Trustee's option, either by an
agreement of settlement
between the Trustee and the Company or by a judicial
settlement in an action
instituted by the Trustee. The Trustee shall not be
obligated to transfer Trust
assets until the Trustee is provided written assurance by
the Company that all
fees and expenses reasonably anticipated will be paid.
9.4 Termination of Responsibility and Liability.
Upon settlement of the
account and transfer of the Trust Fund to the successor
trustee, all rights and
privileges under this Trust Agreement shall vest in the
successor trustee and
all responsibility and liability of the Trustee with
respect to the Trust and
assets thereof shall, except as otherwise required by
ERISA, terminate subject
only to the requirement that the Trustee execute all
necessary documents to
transfer the Trust assets to the successor trustee.
SECTION X
AMENDMENT AND TERMINATION OF TRUST
10.1 Amendment. The Company reserves the right
to amend this Trust
Agreement, provided that no amendment of this Trust
Agreement or the Plan shall
be effective which would (a) cause any assets of the Trust
Fund to be used for,
or diverted to, purposes other than the exclusive benefit
of Plan participants
or their beneficiaries other than an amendment
permissible under the Code and
ERISA, or (b) affect the rights duties,
responsibilities, obligations or
liabilities of the Trustee without notice to the Trustee and
the Trustee's prior
written consent. Subject to approval by the legal counsel
of the Company, the
Company shall amend this Trust Agreement as requested by
the Trustee to reflect
changes in law which counsel for the Trustee advises the
Trustee require such
changes. Amendments to the Trust Agreement or a certified
copy of the amendments
shall be delivered to the Trustee promptly after adoption,
and if practicable
under the circumstances, any proposed amendment under
consideration by the
Company shall be communicated to the Trustee to permit the
Trustee to review and
comment thereon in due course before the Company acts on the
proposed amendment.
10.2 Termination. The Trust may be terminated by the
Company in accordance
with the Plan. Upon such termination, the Trust Fund shall
be distributed by the
Named Administrative Fiduciary in accordance with the terms
of the Plan.
SECTION XI
MISCELLANEOUS
11.1 Restriction on Alienation. Except as provided in
section 6.1 or under
section 401(a)(13) of the Code, the interest of any
Plan participant or
beneficiary in the Trust Fund shall not be subject to
the claims of such
person's creditors and may not be assigned, sold,
transferred, alienated or
encumbered. Any attempt to do so shall be void; and the
Trustee shall disregard
any attempt. Trust assets shall not in any manner be liable
for or subject to debts, contracts, liabilities, engagement
or tons of any Plan
participant or beneficiary, and benefits shall not be
considered an asset of any
such a person in the event of the person's insolvency or
bankruptcy.
11.2 Successors and Assigns. This Agreement shall be
binding upon, and the
powers granted to the Company and the Trustee, respectively,
shall be exercised
by the respective successors and assigns of the Company
and the Trustee. Any
corporation which shall, by merger, consolidate, purchase
or otherwise, succeed
to substantially all the trust business of the Trustee
shall, upon such
succession and without any appointment or other action by
the Company, be and
become successor trustee hereunder, upon notification to the
Company.
11.3 Governing Law and Construction. This Trust
Agreement and the Trust
shall be construed, administered and governed under ERISA
and other pertinent
federal law, and to the extent that federal law is
inapplicable, under the laws
of the state in which the Trustee is incorporated. If any
provision of this
Trust Agreement is susceptible to more than one
interpretation, the
interpretation to be given is that which is consistent
with the Trust being a
qualified trust under section 401(a) of the Code. If any
provision of this Trust
Agreement is held by a court of competent jurisdiction
to be invalid or
unenforceable, the remaining provisions shall continue to
be fully effective to
the extent possible under the circumstances.
11.4 Equity Interest. Neither the creation of the
Trust nor anything
contained in the Trust shall be considered as giving
any person any equity
interest in the assets, business or affairs or the Company
except to the extent
that the Trust Fund is invested in Company Stock.
11.5 Refunds to Company. The Trustee shall, upon the
written direction of
the Named Administrative Fiduciary which shall include a
certification that such
action is proper under the Plan, ERISA and the Code
specifying any relevant
sections thereof, return to the Company any amount
referred to in section
403(c)(2) of ERISA.
11.6 Authorized Action. Any action to be taken under
this Trust Agreement
by a company or other person which is: (a) a corporation
shall be taken by the
board of directors of the corporation or any person or
persons duly empowered by
the board of directors to take the action involved, (b) a
partnership shall be
taken by an authorized general partner of the
partnership, and (c) a sole
proprietorship by the sole proprietor.
11.7 Text of Plan. The Company represents that, prior
to the execution of
this Trust Agreement by both parties, it delivered to the
Trustee's designee the
text of the Plan as in effect as of the date of this
Trust Agreement. The
Company shall deliver to the Trustee promptly after adoption
thereof a certified
copy of any amendment of the Plan.
11.8 Conflict with Plan. The rights, duties,
responsibilities, obligations
and liabilities of the Trustee are as set forth in this
Trust Agreement, and no
provision of the
Plan or any other document shall be deemed to affect
such rights, duties,
responsibilities, obligations and liabilities, except as
otherwise provided
herein. If there is a conflict between provisions of the
Plan and this Trust
Agreement with respect to any subject involving the
Trustee, including but not
limited to the responsibility, authority or powers of
the Trustee, the
provisions of this Trust Agreement shall be controlling,
except as otherwise
provided herein.
11.9 Failure to Maintain Qualification. If the Trust
fails to qualify as a
qualified trust under section 401(a) of the Code, or loses
its status as such a
qualified trust, the Company shall immediately so notify
the Trustee, and the
Trustee shall, without further notice or direction, remove
the Trust assets from
any common or collective trust fund maintained by the
Trustee or its affiliate
for investments by qualified trusts.
11.10 Gender. As used in this Trust Agreement, the
masculine gender shall
include the feminine and the neuter genders and the
singular shall include the
plural and the plural the singular, as the context requires.
11.11 Headings. Headings and subheadings in this
Trust Agreement are for
convenience of reference only and are not to be considered
in the construction
of the provisions of the Trust Agreement.
11.12 Counterparts. This Trust Agreement may be
executed in several
counterparts, each of which shall be deemed an original,
and these counterparts
shall constitute one and the same instrument which may be
sufficiently evidenced
by any one counterpart.
IN WITNESS WHEREOF, the Company and the Trustee have
executed this Trust
Agreement each by action of a duly authorized person.
MERRILL LYNCH TRUST MORRISON HEALTH CARE,
INC.
COMPANY (FLORIDA)
By: /s/ Melanie Madeira By: /s/ K. W.
Engwall
- ------------------------- -------------------
- -----
Name: Melanie Madeira Name: K. W. Engwall
Title: New Account Trust Officer Title: Senior Vice
President, Finance
EXHIBIT 10.28
TRUST AGREEMENT
FOR THE
MORRISON HEALTH CARE, INC.
DEFERRED COMPENSATION PLAN
THIS TRUST AGREEMENT is made this 2nd day of
October, 1997, by and
among MORRISON HEALTH CARE, INC., a corporation organized
under the laws of
the State of Georgia (the "Primary Sponsor"), each
related corporation or
business executing this Trust Agreement (the Primary
Sponsor and each related
corporation or business being sometimes hereinafter
referred to as a "Plan
Sponsor"); and MERRILL LYNCH TRUST COMPANY (FLORIDA) (the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Primary Sponsor maintains the Morrison
Health Care, Inc.
Deferred Compensation Plan (the "Plan"), which was
established by indenture
dated March 7, 1996, to provide benefits in the form of
deferred compensation
to a select group of management or highly compensated
employees of the
Primary Sponsor or any of its related corporations or
businesses; and
WHEREAS, the Primary Sponsor, by agreement
dated March 7, 1996
established an irrevocable grantor trust (the "Trust"),
within the meaning of
Section 671 of the Internal Revenue Code of 1986, as
amended (the "Code") to
assist it and any of its related corporations or
businesses in meeting its
obligations under the Plan; and
WHEREAS, the Primary Sponsor desires to amend and
restate the existing
trust agreement originally executed by and between Morrison
Health Care, Inc.
and AmSouth Bank of Alabama, which agreement, as
amended, contains the
existing terms of the Trust (the "Prior Trust Agreement");
and
WHEREAS, the Board of Directors of the Primary
Sponsor has authorized
the amendment and restatement of the Prior Trust Agreement
as embodied herein
(the "Trust Agreement");
NOW, THEREFORE, the Primary Sponsor hereby
restates the Trust,
effective as of October 1, 1997, as follows:
SECTION 1.
GOVERNING INSTRUMENT
The rights, duties, responsibilities, obligations
and liabilities of
the Trustee are as set forth in this Trust Agreement, and
no provision of the
Plan or any other document shall affect such
rights, duties,
responsibilities, obligations and liabilities. In the
event of a conflict
between the terms and provisions of the Trust Agreement
and those of the
Plan, the terms and provisions of the Trust Agreement shall
govern. However,
nothing contained in the Trust Agreement is intended to
diminish the amount
of benefits required to be paid for the benefit of any
participant under the
terms of the Plan.
SECTION 2.
ESTABLISHMENT OF THE FUND
The Primary Sponsor has established a fund with
the Trustee (the
"Fund") to be held and administered in accordance with
this Trust. The Fund
shall consist of all assets as may be delivered by a
Plan Sponsor to the
Trustee and reasonably accepted by the Trustee, and
shall also include all
income accruing thereon, except as otherwise
provided in this Trust
Agreement. The Trustee shall not be obligated to receive
any assets unless
prior thereto the Trustee has agreed that such
assets are reasonably
acceptable to it and the Trustee has received such
reconciliation,
allocation, investment or other information concerning,
or representations
with respect to, such assets as the Trustee may reasonably
require.
SECTION 3.
INVESTMENT OF THE FUND
(a) Subject to the provisions of Subsections (b)
and (c) below and
Section 4 hereof, the Trustees shall invest the principal
and income of the
Fund without distinction between principal and income in
securities or in
property, real or personal and wherever situated, as the
Trustee shall deem
advisable, in its sole discretion. Without limiting
the foregoing, the
Trustee may purchase, acquire, retain, sell, transfer,
pledge or encumber
common or preferred stocks, including stock of the
Primary Sponsor or any
affiliate, shares of mutual funds, including mutual
funds for which the
Trustee is an advisor, trust and participation
certificates, bonds and
mortgages, other evidences of indebtedness or ownership,
annuity contracts
and ordinary and term life insurance contracts of life
insurance companies,
savings accounts or plans, including savings accounts or
plans established or
to be established by the Trustee, and group trusts or
collective investment
funds including group trusts or collective investment
funds operated by the
Trustee.
(b) The Fund shall be invested by the Trustee
consistent with the
overall investment objectives of the Trust as
identified by the Primary
Sponsor and communicated to the Trustee in writing from
time to time and in
the absence of such communication, consistent with
the objective of
preservation of capital (the "Investment Goals"). The
Trustee shall incur no
liability merely for a failure to achieve the
Investment Goals for any
period; provided that during any such period the Fund
was invested in
accordance with applicable fiduciary standards and
with a view towards
achieving the Investment Goals.
(c) The Primary Sponsor may appoint one or more
investment managers
(the "Investment Managers") which shall be banks,
investment advisers
registered under the Investment Advisers Act of 1940, or
insurance companies,
to direct the Trustee as to the investment of all or a
portion of the Fund
for the exclusive benefit of the participants of the
Plan and their
beneficiaries. Notwithstanding the foregoing, the Primary
Sponsor may appoint
the Trustee (or any of its affiliates) as an Investment
Manager, if the
Trustee (or its affiliate) agrees to such appointment
and is otherwise
qualified to serve as an Investment Manager and in such
instance, the Trustee
(or its affiliate) shall have discretion over the
investment of the Fund,
subject to the provisions of Subsection (b) above.
The Primary Sponsor shall notify the Trustee of the
appointment of any
Investment Manager (other than the Trustee) under
this Subsection by
delivering to the Trustee (i) an executed copy of an
instrument under which
the Investment Manager was appointed to act hereunder and
setting forth the
investment powers of the Investment Manager and (ii) a
written instrument
executed by the Investment Manager in which it
acknowledges that it has
agreed to act as such and accepts fiduciary status.
Any notice of
appointment pursuant to this Subsection shall constitute a
representation and
warranty by the Primary Sponsor that the Investment
Manager is qualified
under and has been appointed in accordance with the
provisions hereof.
Notwithstanding anything herein contained to the contrary,
during the term of
its appointment, the Investment Manager shall have the
sole responsibility
for the investment and reinvestment of the portion of the
Fund for which it
was appointed to act, and, subject to the limitations
on the types of
appropriate investments set forth in Subsection (b)
hereof, shall have full
power and responsibility in its discretion to direct the
Trustee with respect
to the exercise by it of its investment powers,
including the voting of
shares (except as otherwise provided by Section 13(d)
hereof). Pending
receipt of instructions from any Investment Manager with
respect thereto and
subject to any investment guidelines agreed to in writing
from time to time
pursuant to Subsection (b) hereof, any cash received by the
Trustee from time
to time shall be invested by the Trustee in a money
market mutual fund
designated by the Primary Sponsor or the Investment Manager.
The Primary Sponsor may terminate its appointment
of an Investment
Manager at any time and shall in writing notify the
Trustee of such
termination, and may thereafter appoint a successor
Investment Manager in the
same manner as provided above in this Subsection. Any
successor Investment
Manager shall thereafter, until its appointment is
terminated, be deemed to
be an "Investment Manager" for all purposes of this
Agreement. If there
shall be more than one Investment Manager, the portion
of the Fund to be
invested by each Investment Manager shall be held in a
separate account and
the powers and authority of each Investment Manager shall
be divided as set
forth in the instruments appointing such Investment
Managers.
So long as an Investment Manager (other than the
Trustee or one of its
affiliates) is serving as such, the Trustee shall be
under no duty or
obligation to review the assets comprising any portion of
the Fund managed by
the Investment Manager, to make any recommendations
with respect to the
investment or reinvestment thereof, or to determine
whether any direction
received from any Investment Manager is proper or within
the terms of this
Trust Agreement or to monitor the activities of any
Investment Manager.
(d) The Trustee shall have no liability or
responsibility to the
Primary Sponsor or any persons claiming any interest in
the Fund for acting
without question on the direction of, or for failing to act
in the absence of
any direction from, any Investment Manager, unless the
Trustee participated
knowingly in, or knowingly undertook to conceal, an act
or omission of any
Investment Manager constituting a breach of its duties
hereunder, knowing
such act or omission was a breach of such duties; provided,
however, that the
Trustee shall not be deemed to have "participated" in
a breach by any
Investment Manager for the purposes of this undertaking
solely as a result of
the performance by the Trustee or its officers,
employees or agents of any
custodial, reporting, recording, and bookkeeping
functions with respect to
any assets of the Fund managed by any Investment
Manager or solely as a
result of settling purchase and sale transactions entered
into or directed by
any Investment Manager, or to have "knowledge" of any such
breach solely as a
result of the information received by the Trustee or its
officers, employees
or agents in the normal course in performing such
functions or settling such
transactions. If the Trustee has actual knowledge of a
breach committed by
any Investment Manager, it shall promptly notify the
Primary Sponsor in
writing thereof, and the Trustee, except as required by
applicable law, shall
thereafter have no responsibility to remedy such breach.
(e) In accordance with Section 5 below, the
Primary Sponsor may from
time to time direct the Trustee in writing as to the
specific investments of
the Fund and the Trustee shall invest and reinvest the
principal and income
of the Fund in accordance with such directions. The
Trustee shall have no
liability or responsibility to the Primary Sponsor or
any other person
claiming an interest in the Fund for actions taken in
accordance with such
directions of the Primary Sponsor.
SECTION 4.
POWERS OF THE TRUSTEE
In the administration of the Trust, in addition
to any powers or
authority of the Trustee under this Trust or which the
Trustee may have under
applicable law, the Trustee is authorized and empowered to
do the following,
without advertisement, without order of court and without
having to post bond
or make any returns or report of its doings to any court:
(a) To purchase or subscribe for any
securities or property
including, without limitation, securities of a Plan Sponsor
and real property
leased to or used by a Plan Sponsor;
(b) To sell, exchange, convey, transfer, or
otherwise dispose of any
securities or property held by it, by private contract or
at public auction,
with or without advertising, and no person dealing with
the Trustee shall be
bound to see to the application of the purchase money or
to inquire into the
validity, expediency or propriety of any disposition;
(c) Except as provided in Section 13(d) hereof,
to vote any stocks,
bonds or other securities, including securities of the
Plan Sponsor; to give
general or special proxies or powers of attorney with or
without power of
substitution; to exercise any conversion privileges,
subscription rights or
other options, and to make any payments incidental
thereto; to oppose,
consent to, or otherwise participate in corporate
reorganizations or other
changes affecting corporate securities, to
delegate discretionary powers, and to pay any
assessments or charges in
connection therewith; and generally to exercise any of the
powers of an owner
with respect to securities or other property held as part of
the Fund;
(d) To register any investment in its own name
or in the name of a
nominee, and-to hold any investment in bearer form or
through or by a central
clearing corporation maintained by institutions active
in the national
securities markets, but the records of the Trustee shall
at all times show
that all the investments are part of the Trust;
(e) To employ and act through suitable
agents, accountants,
appraisers, actuaries and attorneys (who may be counsel
for the Trustee) and
to pay their reasonable expenses and compensation, to
consult with counsel
(who, without limitation, may be counsel to the
Trustee).and shall be
protected to the extent the law permits in acting upon the
advice of counsel
in regard to legal questions, and the Trustee shall
periodically review the
performance of the persons to whom these duties have been
delegated, but the
Trustee shall not be liable for relying upon the advice and
expertise of any
such person to the extent permitted by law, provided the
Trustee's decisions
in selecting and retaining such person were prudently made;
(f) To borrow or raise moneys for the purposes
of the Trust in the
amounts, and upon the terms and conditions, as the Trustee
in its discretion
may deem advisable; and for any sums borrowed to issue its
promissory note as
Trustee, and to secure the repayment thereof by pledging
all or any part of
the Trust; and no person lending money to the Trustee
shall be bound to see
to the application of the money lent or to inquire
into the validity,
expediency or propriety of any borrowing;
(g) To make, execute, acknowledge and deliver
any documents of
transfer and conveyance and any other instruments or
agreements that may be
necessary or appropriate to carry out the powers of the
Trustee under the
Trust or incidental thereto;
(h) To settle, compromise or submit to arbitration
any claims, debts
or damages due or owing to or from the Trust, to commence
or defend any suits
or legal or administrative proceedings arising, necessary
or appropriate in
connection with the Trust, the administration and
operation thereof or the
powers or authority of the Trustee under the Trust, and
to represent the
Trust in all suits and legal and administrative proceedings;
(i) To keep portions of the Trust in cash or cash
balances as the
Trustee may deem to be in the best interest of the Trust;
(j) To register any investment in its own name
or in the name of a
nominee, and to hold any investment in bearer form or
through or by a central
clearing corporation maintained by institutions active
in the national
securities markets, but the records of the Trustee shall
at all times show
that all the investments are part of the Trust; and
(k) Generally, to do all acts and to execute
and deliver all
instruments as in the judgment of the Trustee may be
necessary or desirable
to carry out any powers or authority of the
Trustee.
SECTION 5.
INVESTMENT FUNDS
(a) The assets of the Fund shall be invested
in mutual funds
selected, from time to time, by the Primary Sponsor and
communicated in
writing to the Trustee and in a fund investing primarily in
securities of the
Primary Sponsor as directed by the Primary Sponsor
(each of which is
sometimes hereinafter referred to as an "Investment
Fund"), which Investment
Funds shall have varying investment objectives, as the
Primary Sponsor shall
determine and communicate in writing to the Trustee. The
Primary Sponsor by
written direction to the Trustee may eliminate the
availability of any
Investment Fund; provided that on and after a Change
of Control, no
Investment Fund in place immediately prior to the Change
of Control may be
eliminated although the Primary Sponsor may designate
additional Investment
Funds.
(b) Contributions shall be paid to the Trustee
within a reasonable
period of time after the date that salary deferrals under
the Plan otherwise
would have been paid to participants in an amount equal
to said deferral
amounts and any corresponding matching contributions under
the Plan shall be
paid to the Trustee at the same time.
(c) The Trustee shall be responsible for assets
actually received by
it as Trustee and shall have no duty or authority to
compute amounts to be
contributed or to review the computation of amounts
to be contributed
pursuant to this Section.
SECTION 6.
DUTIES OF THE TRUSTEE
(a) Except for records dealing solely with
the Trust and its
investments and disbursements, which shall be maintained by
the Trustee, the
Primary Sponsor shall maintain all records contemplated
by the Plan. The
Trustee shall have no responsibility to determine
whether the Fund is
sufficient to meet liabilities under the Plan, and shall
not be liable for
payments or Plan liabilities in excess of the assets held in
the Fund.
(b) The Primary Sponsor shall furnish to the
Trustee, in a form
reasonably acceptable to the Trustee, all the
information necessary to
determine the benefits payable to or with respect to each
participant in the
Plan, including any benefits payable after a
participant's death. The
Primary Sponsor shall from time to time, and at least
annually, and promptly
upon the request of the Trustee furnish updated
information to the Trustee.
In the event the Primary Sponsor refuses or neglects to
provide any updated
information as contemplated herein, the Trustee shall
rely upon the most
recent information furnished to it by the Primary Sponsor;
provided, however,
that on or after a Change of Control, where the Trustee
does not have updated
information or in the event the Trustee is aware of a
dispute between the
Primary Sponsor and any participant or beneficiary as to
the amount or timing
of benefits payable to the participant or beneficiary, the
Trustee shall rely
upon a direction from the Designated Accounting Firm (as
defined below) to
resolve the dispute. For purposes of this Agreement, the
term "Designated
Accounting Firm" shall mean Ernst & Young
LLP or any other accounting firm subsequently communicated
in writing to the
Trustee; provided, however, that no subsequent
designation of an accounting
firm shall be given effect by the Trustee if the designation
occurs after the
effective date of a Change of Control. The Trustee has no
responsibility to
verify information provided to it by the Primary Sponsor
or the Designated
Accounting Firm.
(c) When, in the opinion of the Primary
Sponsor or Designated
Accounting Firm, as applicable, a participant's benefits
under the Plan have
become payable, the Trustee shall be notified by the
Primary Sponsor or the
Designated Accounting Firm, as applicable. Such notice
shall include the
amount of such benefits, the terms of payment, the
amount of any taxes
required to be withheld from such amount, and the name,
address and social
security number of the recipient. Upon the receipt of a
notification, the
Trustee shall commence distributions from the Fund in
accordance therewith to
the person or persons so indicated and shall forward a
check to the Primary
Sponsor in the amount of the applicable withholdings.
(d) The Primary Sponsor shall have full
responsibility for the
payment of all taxes of any nature levied, assessed or
imposed upon the Fund,
including the payment of all withholding taxes to the
appropriate taxing
authority and shall provide the Trustee with such
information as necessary to
allow it to furnish each participant or beneficiary with
the appropriate tax
information form evidencing such payment and the amount
thereof.
(e) Prior to a Change of Control, the
Trustee shall have no
responsibility for determining whether any participant
or beneficiary has
died or whether a participant's rights under the terms of
the Plan have been
forfeited and shall be entitled to rely upon
information and direction
received from the Primary Sponsor; provided, that on or
after a Change of
Control, in the event of a dispute or lack of information,
the Trustee shall
rely on directions received from the Designated Accounting
Firm in accordance
with Subsection (b) hereof.
(f) Nothing provided in this Trust Agreement
shall relieve the
Primary Sponsor or any Plan Sponsor of its liabilities
to pay the benefits
provided under the Plan except to the extent such
liabilities are met by
application of Fund assets.
(g) Arbitration is final and binding on the
parties. The parties
waive their right to seek remedies in court, including
the right to jury
trial. In that regard, the parties acknowledge the
following: (i)
pre-arbitration discovery is generally more limited than
and different from
court proceedings; (ii) the arbitrators' award is not
required to include
factual findings or legal reasoning and any party's right
to appeal or seek
modification of rulings by the arbitrators is strictly
limited; and (iii) the
panel of arbitrators will typically include a minority of
arbitrators who
were or are affiliated with the securities industry.
The Primary Sponsor agrees that all controversies
which may arise
between it and the Trustee (or any of its affiliates)
with respect to
obligations arising under the Trust Agreement, including,
but not limited to,
those involving any transactions, or the construction,
performance, or breach
of this Agreement shall be determined by arbitration. Any
arbitration under
this Agreement shall be conducted only before the New
York Stock Exchange,
Inc., the American Stock Exchange,
Inc., or arbitration facility provided by any other
exchange of which any
affiliate of the Trustee is a member, the National
Association of Securities
Dealers, Inc, or the Municipal Securities Rulemaking Board,
and in accordance
with the arbitration rules then in force. The Primary
Sponsor may elect in
the first instance whether arbitration shall be conducted
before the New York
Stock Exchange, Inc., the American Stock Exchange, Inc.,
other exchange of
which any affiliate of the Trustee is a member, the
National Association of
Securities Dealers, Inc. or the Municipal Securities
Rulemaking Board, but if
the Primary Sponsor fails to make such election, by
registered letter or
telegram addressed to Merrill Lynch Trust Companies,
Employee Benefit Trust
Operations, P.O. Box 30532, New Brunswick, New Jersey 08989-
0532, before the
expiration of five days after receipt of a written
request from the Trustee
to make such election, then the Trustee may make such
election. Judgment
upon the award of arbitrators may be entered in any court,
state or federal,
having jurisdiction. No person shall bring a putative or
certified class
action to arbitration, nor seek to enforce any pre-
dispute arbitration
agreement against any person who has initiated in court
a putative class
action, who is a member of the putative class who has
not opted out of the
class with respect to any claims encompassed by the
putative class action
until: (i) the class certification is denied; (ii) the
class is decertified;
or (iii) the customer is excluded from the class by
the court. Such
forebearance to enforce an agreement to arbitrate shall
not constitute a
waiver of any rights under this Agreement except to the
extent stated herein.
SECTION 7.
DISTRIBUTIONS FROM THE FUND
(a) Consistent with the provisions of Section 9
hereof, the Trustee
is authorized to pay from the Fund reasonable expenses
of the Trustee,
including fees of accountants and legal counsel to
the Trust, and the
Trustee's compensation.
(b) The Trustee shall make any distribution
required pursuant to this
Trust Agreement by mailing its check or other evidence
of payment (less
applicable withholdings) to the person to whom such
distribution or payment
is to be made at such address as was last furnished to
the Trustee or, if
agreeable to the Trustee and the Primary Sponsor and the
affected participant
and so directed in a written notice to the Trustee by the
Primary Sponsor or
affected participants, by crediting the account of
such person or by
transferring funds to such person's account by bank or
wire transfer. The
Trustee shall not be required to make any investigation
to determine the
whereabouts or mailing address of any person. If the
person to receive a
distribution can not be found, the Trustee shall hold
payment or deposit same
in a bank (including the Trustee, if a financial
institution is serving as
such) for the credit of that person without liability for
interest thereon.
If a check or other evidence of payment of the benefit
hereunder has been
mailed to the last address of the person furnished
the Trustee and is
returned unclaimed, the Trustee shall notify the Primary
Sponsor and shall
discontinue further payments to the payee until it receives
instructions from
the Primary Sponsor.
(c) The Trustee shall not be bound by any
instruction, direction or
notice unless and until it has been received in writing
by the Trustee and
may rely upon any instruction, direction or notice of a
continuing nature
until the Trustee receives a writing which revokes
that instruction,
direction or notice. The Trustee may without liability
assume that any such
instruction, direction or notice is genuine
unless it has actual
knowledge or, after receiving notification of a
problem, has reasonably
determined that the instruction, direction or notice is not
genuine.
(d) The Trustee shall not be responsible for the
application of any
assets held as part of the Fund which have been
distributed pursuant to the
Plan and the Trust Agreement.
SECTION 8.
CLAIMS OF CREDITORS
(a) The Fund assets shall be treated as general
assets of the Plan
Sponsor and shall remain subject to claims of the general
creditors of the
Plan Sponsor under applicable state and federal law.
Nothing in the Trust
Agreement shall affect the rights of any participant as
general creditor of
the Plan Sponsor. No participant shall have a
preferred claim on or any
beneficial ownership in the Fund prior to the time for
distribution to the
participant under the terms of a Plan or the terms of this
Trust Agreement.
In the event that the Plan Sponsor becomes insolvent
as described in
Subsection (c) below, each participant shall be deemed to
waive any priority
the participant may have under law as an employee with
respect to any claim
against the Plan Sponsor and the Trust beyond the
rights the participant
would have as a general creditor of the Plan Sponsor.
(b) Except as otherwise provided by Subsection (c)
below, no benefit
which shall be payable under the Trust to any person shall
be subject in any
manner to anticipation, alienation, sale, transfer,
assignment, pledge,
encumbrance or charge, and any attempt to anticipate,
alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise
dispose of the same
shall be void. No benefit shall in any manner be
subject to the debts,
contracts, liabilities, engagements or torts of any
person, nor shall it be
subject to attachment or legal process for or against any
person, except to
the extent provided by Subsection C below and as may
otherwise be required by
law.
(c) The board of directors of a Plan Sponsor shall
immediately notify
the Trustee in writing of the insolvency of the Plan
Sponsor. For purposes of
this Subsection (c), the term "insolvency" shall mean
the inability of the
Plan Sponsor to pay its debts as they become due in the
usual course of its
business or that the liabilities of the Plan Sponsor
are in excess of its
assets or the Plan Sponsor becomes subject to a proceeding
as a debtor under
the United States Bankruptcy Code. Upon receipt of the
written notice, the
Trustee shall suspend all further payments to
participants or their
beneficiaries and shall hold the assets of the Trust for
the benefit of the
creditors of the Plan Sponsor in the manner directed by a
court of competent
jurisdiction. If the Trustee should receive any written
allegation of the
insolvency of the Plan Sponsor, the Trustee shall
suspend payments to
participants and hold the assets of the Trust for
the benefit of the
creditors of the Plan Sponsor and, within a period of
sixty (60) days after
the receipt of the written allegation, determine whether
the Plan Sponsor is
insolvent. If the Trustee determines that the Plan
Sponsor is solvent, it
shall immediately resume payments to the
participants or their
beneficiaries. In the event that the Trustee has actual
knowledge of the
insolvency of the Plan Sponsor, the Trustee shall hold
the assets of the
Trust for the benefit of the creditors of the Plan
Sponsor in the manner
directed by a court of competent jurisdiction. Unless
the Trustee (i) has
been notified in writing by the board of directors of a
Plan Sponsor of the
insolvency of a Plan Sponsor, (ii) has
received any written allegation of the insolvency of a
Plan Sponsor or (iii)
has actual knowledge of the insolvency of a Plan Sponsor,
the Trustee shall
have no duty to inquire whether a Plan Sponsor is insolvent.
SECTION 9.
FEES AND EXPENSES
The compensation and expenses of the Trustee
shall be paid from the
assets of the Fund. Expenses of the Trustee shall
include the reasonable
expenses and compensation of third parties employed by the
Trustee pursuant
to Section 4(f) hereof. However, the expenses and
compensation of the
Designated Accounting Firm shall not be payable from the
Fund.
SECTION 10.
ACCOUNTS
(a) The Trustee shall keep such records as the
Trustee considers
necessary for the management of the Trust. The Trustee's
books and records
of the Fund shall be open to inspection by the Primary
Sponsor and Designated
Accounting Firm during regular business hours of the
Trustee.
(b) The Plan Sponsors shall maintain or cause
to be maintained
accounting records for the Plan sufficient to allow the
determination of the
portion of the Fund which is allocable to each of
the Plan Sponsors.
Irrespective of the commingling of assets of the Plan for
investment in the
Fund, no portion of the Fund which is allocable to
any one of the Plan
Sponsors shall be used to pay benefits or discharge
liabilities or
obligations specifically allocable or attributable,
respectively, to any
other Plan or any other Plan Sponsor.
(c) Within ninety (90) days after the close of
each calendar year,
the date of the removal or resignation of the Trustee, or
the termination of
the Trust, the Trustee shall render to the Primary Sponsor
a written account
and report of its management of the Fund covering the
period (or relevant
portion thereof if the written account and report becomes
due on account of
the removal or resignation of the Trustee) since the
previous such written
account and report. The written approval of that
accounting and report by
the Primary Sponsor or the failure of the Primary
Sponsor to notify the
Trustee of its disapproval of such accounting within ten
(10) months after
the end of the relevant period shall be final and binding
as to the Trustee's
administration of the Trust for the period upon the
Primary Sponsor and all
persons who have or may thereafter have an interest in the
Fund. The Trustee
may satisfy its obligation under this Subsection (c) by
rendering to the
Primary Sponsor monthly statements setting forth the
information required by
this Subsection separately for the month covered by the
statement.
SECTION 11.
RESIGNATION, REMOVAL AND SUCCESSION
(a) The Trustee may resign at any time upon giving
sixty (60) days'
prior written notice to the Primary Sponsor.
(b) The Trustee may be removed by the Primary
Sponsor at any time
upon giving sixty (60) days' prior written notice to the
Trustee; provided,
however, that in the event of a Change of Control, the
Trustee may thereafter
be removed only after securing the written consent of
a majority of the
participants of the Plan and the designated
beneficiaries of deceased
participants.
(c) Upon the removal or resignation of the
Trustee, any successor
appointed shall have the same powers and duties as those
conferred upon the
Trustee under this Trust. Prior to a Change of Control,
the appointment of
any successor Trustee shall be in the sole discretion
of the Primary
Sponsor. On or after a Change of Control, any successor
Trustee shall be a
bank or trust company having assets under management
(including assets under
management by affiliates) of not less than
$1,000,000,000. Upon receipt by
the Trustee of a written acceptance of the appointment
by the successor
Trustee, the Trustee shall transfer to the successor
Trustee the assets
constituting the Trust; provided, however, the Trustee
shall not be required
to pay over assets to a successor Trustee unless the
Trustee shall be
discharged from all liability for any taxes which may be
due and owing by the
Trust, or unless the successor Trustee, who must be
acceptable to the
Trustee, indemnifies the Trustee and the Trustee in
its sole discretion
agrees to accept indemnification. In the event that within
ninety (90) days
after the removal or resignation of the Trustee the
Primary Sponsor shall
have failed to appoint a successor Trustee or the
Trustee shall not have
received a written acceptance from a successor Trustee,
then the Trustee may
file an appropriate action in a court of competent
jurisdiction and transfer
to the custody of the court the assets then held by the
Trustee constituting
the Trust. Upon transfer to a successor Trustee or to the
court, as the case
may be, the Trustee shall be relieved of all further
responsibilities and
liabilities in connection with the Trust. The
Trustee is authorized,
however, to reserve therefrom any assets as it may deem
advisable for payment
of its fees and expenses in connection with the settlement
of its account or
otherwise, and any balance of the reserve remaining after
the payment of the
Trustee's fees and expenses shall be paid over to the
successor Trustee or to
the court.
SECTION 12.
AMENDMENT AND TERMINATION
(a) Prior to a Change of Control, the Trust
Agreement may be amended
any time and to any extent by a written instrument
executed by the Primary
Sponsor, provided, however, that no such amendment shall
be effective to the
extent that it purports to make the Trust revocable. On or
after a Change of
Control, this Trust Agreement may be amended any time and
to any extent by a
written instrument executed by the Primary Sponsor,
provided, however, no
such amendment shall diminish the authority of the
Designated Accounting
Firm, diminish the obligation of the Trustee to follow the
directions of the
Designated Accounting Firm or provide for the elimination
of any Investment
Fund. In addition, whether before or after a Change of
Control, no such
amendment shall have the effect of reducing benefits
accrued by participants
under the Plan, delaying the times at which distributions
are made from the
Fund to participants and their beneficiaries or allowing
a Plan Sponsor or
any other person to receive distributions of the assets of
the Fund not then
permitted under the terms of the Trust Agreement. No
amendment that purports
to increase the duties or responsibilities of the
Trustee or to alter
materially the manner in which the Trustee is to
discharge any continuing
duties or responsibilities shall be given effect without
the consent of the
Trustee and no other amendment shall be given effect
without first providing
notice of same to the Trustee. The Trustee and Primary
Sponsor may amend the
Trust Agreement in any manner not otherwise specifically
precluded by this
Subsection, including any amendment regarding the
removal of an existing
Trustee or the appointment of a successor Trustee.
(b) Notwithstanding any other provisions of the
Trust Agreement to
the contrary, the Trust shall terminate and all Fund
assets shall be
distributed (i) on the complete distribution of the Fund
in accordance with
the terms and provisions of the Plan; (ii) upon the
delivery to the Trustee
of a writing terminating the Trust signed by the
Primary Sponsor, all
participants of the Plan and the designated
beneficiaries of deceased
participants; or (iii) in the event the Internal Revenue
Service makes a
final determination that the assets of the Fund
constitute compensation
currently taxable as income to participants. Any assets
remaining in the
Fund after satisfaction of all liabilities and expenses of
the Plan shall be
returned to the Plan Sponsors.
SECTION 13.
MISCELLANEOUS
(a) The Trustee shall under no circumstances be
required to recognize
any conveyance, transfer, assignment, mortgage, pledge or
encumbrance by any
participant or any person entitled to receive benefits
under the Plan, any
part of it, or any interest in it, or to pay any money or
thing of value to
any creditor or assignee of any participant or
person for any cause
whatsoever; provided, however, this Subsection (a)
does not affect the
provisions of Section 8 of the Trust Agreement.
(b) The Primary Sponsor hereby agrees to indemnify
and hold harmless
the Trustee from and against any and all losses,
claims, damages,
liabilities, costs and expenses, including but not limited
to, liability for
any judgments or settlements consented to in writing by
the Trustee, as
applicable, which consents will not be unreasonably
withheld, and reasonable
attorneys' fees arising
out of or in connection with or as a direct or
indirect result of its
serving, respectively, as the trustee (including but
not limited to the
Trustee's acts or omissions with respect to (i) the
voting of any share of
stock held as part of the assets of the Trust; (ii)
establishing or
maintaining investment funds or effecting investments
therein in accordance
with the terms and provisions of the Trust; or (iii) the
determinations by
the Trustee of insolvency or of a Change of Control
(including acts or
omissions in accordance with the terms and provisions of
the Trust following
any determination of insolvency or a Change of Control);
except those losses,
claims, damages, liabilities, costs and expenses, if any,
arising out of or
in connection with or as a direct or indirect result of
the Trustee's gross
negligence or willful misconduct. The Trustee shall
promptly notify the
Primary Sponsor of any claim, action or proceeding for
which it may seek
indemnity. This indemnity is a continuing obligation and
shall be binding on
the Primary Sponsor and its successors, whether by merger
or otherwise, and
assigns. In addition, this indemnity shall survive
the resignation or
removal of the Trustee, the liquidation of the Trust, or
both events. For
purposes of this Subsection (b), all references to the
Trustee shall be
deemed to include a reference to all affiliates of the
Trustee and any
officer, director or employee of the Trustee or any of its
affiliates.
(c) As used in this Trust Agreement, the term
"Change of Control"
means any event that pursuant to the requirements of
Article X of the Primary
Sponsor's Certificate of Incorporation, as amended
from time to time,
requires the affirmative vote of the holders of not less
than eighty percent
(80%) of the Voting Stock (as defined therein); provided,
however, that no
event shall constitute a Change of Control if
approved by the Board of
Directors of the Primary Sponsor a majority of whom are
"present directors"
and "new directors." For purposes of the preceding
sentence, "present
directors" shall mean individuals who as of the date of
this Trust Agreement
were members of the Board of Directors of the Primary
Sponsor and "new
directors" shall mean any director whose election by the
Board of Directors
of the Primary Sponsor (in the event of vacancy) or
whose nomination for
election by the Primary Sponsor's stockholders was
approved by a vote of at
least three-fourths of the directors then still in
office who are present
directors and new directors; provided that any director
elected to the Board
of Directors of the Primary Sponsor solely to settle a
threatened or actual
proxy contest shall in no event be deemed to be a new
director. The board of
directors of the Primary Sponsor shall immediately notify
the Trustee of the
occurrence of a Change of Control. Upon receipt of such
written notice or in
the event the Trustee has actual knowledge that a
Change of Control has
occurred, the Trustee shall take no action nor facilitate
the taking of any
action contemplated by the Trust Agreement as being taken
prior to a Change
of Control if (i) an alternative procedure for taking
such action is
prescribed on or after a Change of Control, or (ii) any
action of the type
described is expressly limited to the period prior to a
Change of Control.
If the Trustee should receive any written allegation to
the effect that a
Change of Control has occurred, the Trustee shall
take no action nor
facilitate the taking of any action described: in the
immediately preceding
sentence until making an independent determination as to
whether a Change of
Control has occurred. The Trustee shall make this
determination within a
period of thirty (30) days after the receipt of the
written allegation.
Following the determination, the Trustee shall discharge
its duties under the
Trust Agreement in a manner consistent with that
determination.
(d) The authority and responsibility with regard to
the voting of and
control over any securities of a Plan Sponsor held in
the Trust shall be
exercised by the Trustee pursuant to
directions in writing provided by the Primary Sponsor or
Investment Manager.
All other decisions affecting such securities, including,
without limitation,
decisions to oppose or consent to tender or exchange
offers, shall be
similarly directed by the Primary Sponsor or the
Investment Manager. The
Trustee shall take such steps as may be necessary or
appropriate to carry out
the directions of the Primary Sponsor or Investment
Manager, as applicable,
given pursuant to this Subsection.
(e) Whenever the context requires, words of the
masculine gender used
herein shall include the feminine and the neuter, and the
words used in the
singular shall include the plural.
(f) Each provision of the Trust Agreement is
severable and if any
provision is found to be void as against public policy
it shall not affect
the validity of any other provision hereof.
(g) The Trust Agreement shall be binding upon
the successors and
assigns of each Plan Sponsor and the Trustee.
(h) The provisions of the Trust shall be construed
according to the
laws of the State of Florida and, to the extent applicable,
according to the
laws of the United States.
[REMAINDER OF PAGE LEFT INTENTIONALLY
BLANK]
IN WITNESS WHEREOF, the parties have hereunto set
their hands and seals
the day and year first above written.
PRIMARY SPONSOR:
MORRISON HEALTH CARE,
INC.
By: /s/ John E.
Fountain
------------------------
- -
Title:V.P., Secretary
and General Counsel
ATTEST:
By: /s/ Henry Page
---------------------
Title: Director of Finance
[CORPORATE SEAL]
TRUSTEE:
MERRILL LYNCH COMPANY
(FLORIDA)
By: /s/ Melanie Madeira
---------------------
- --------
Title: New Account Trust
Officer
ATTEST:
By: _____________________________
Title:_____________________________
[SEAL]
E
Exhibit 10.29
FIRST AMENDMENT TO THE
MORRISON HEALTH CARE, INC. 1996 STOCK INCENTIVE
PLAN
THIS FIRST AMENDMENT is made this 26th day of
June, 1996, by
Morrison Health Care, Inc., a corporation duly
organized and existing
under the laws of the State of Georgia (hereinafter
called the
"Company").
W I T N E S S E T H:
WHEREAS, the Company maintains the Morrison Health
Care, Inc. 1996
Stock Incentive Plan under an indenture which was adopted
as of February
23, 1996 (the "Plan"); and
WHEREAS, the Company desires to amend the
Plan to reflect
increases in the number of shares authorized for issuance
thereunder and
to increase the limit on the number of shares that may be
the subject of
awards granted to certain executives during any single
fiscal year of
the Company; and
WHEREAS, the Board of Directors of the Company has
duly approved
and authorized these amendments to the Plan;
NOW, THEREFORE, the Company does hereby amend the Plan
as follows:
1. By deleting, effective March 26, 1996, the first
sentence of
Section 2.2 in its entirety and by substituting therefor the
following:
"Subject to adjustment in accordance with
Section 5.2,
750,000 shares of Stock (the `Maximum Plan
Shares') are
hereby reserved exclusively for issuance pursuant
to Stock
Incentives."
2. By deleting, effective June 26, 1996, the first
sentence of
Section 2.2 in its entirety and by substituting therefor the
following:
"Subject to adjustment in accordance with
Section 5.2,
850,000 shares of Stock (the `Maximum Plan
Shares') are
hereby reserved exclusively for issuance pursuant
to Stock
Incentives."
3. By deleting, effective March 26, 1996, the number
"100,000" where
it appears in the last sentence of Section 2.4 and by
substituting
therefor the number "300,000".
4. Except as specifically amended hereby, the Plan
shall remain in
full force and effect as prior to the adoption of this First
Amendment.
5. Notwithstanding the foregoing, the adoption
of this First
Amendment is subject to the approval of the stockholders
of the Company
and in the event that the stockholders of the Company
fail to approve
such adoption within twelve months of March 26, 1996,
the adoption of
this First Amendment shall be null and void.
IN WITNESS WHEREOF, the Company has caused this
First Amendment to
be executed on the day and year first above written.
MORRISON HEALTH CARE,
INC.
By: /s/Glenn Davenport
Title: President and
Chief Executive Officer
ATTEST:
By: /s/John E. Fountain
Title: Secretary
(CORPORATE SEAL)
EXHIBIT 10.30
FIRST AMENDMENT TO THE MORRISON HEALTH CARE,
INC.
1996 NON-EXECUTIVE STOCK INCENTIVE PLAN
THIS FIRST AMENDMENT is made as of this 26th day of
June, 1996, by
Morrison Health Care, Inc., a Georgia corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company maintains the Morrison Health
Care, Inc. 1996
Non-Executive Stock Incentive Plan under an indenture
which was adopted
as of February 23, 1996 (the "Plan"); and
WHEREAS, the Company desires to amend the
Plan to reflect
increases in the number of shares authorized for issuance
thereunder; and
WHEREAS, the Board of Directors of the Company has
duly approved
and authorized these amendments to the Plan;
NOW, THEREFORE, the Company does hereby amend the
Plan, effective
as of the date first set forth above, by deleting the
first sentence of
Section 2.2 in its entirety and by substituting therefor the
following:
"Subject to adjustment in accordance with
Section 5.2 below,
2,250,000 shares of Stock (the `Maximum Plan
Shares') are hereby
reserved exclusively for issuance pursuant to Stock
Incentives."
Except as specifically amended hereby, the Plan
shall remain in
full force and effect as prior to the adoption of this First
Amendment.
IN WITNESS WHEREOF, the Company has caused this
First Amendment to
be executed on the day and year first above written.
MORRISON HEALTH CARE,
INC.
By: /s/ Glenn Davenport
[CORPORATE SEAL]
Title:President and
Chief Executive Officer
ATTEST:
By: /s/John E. Fountain
Title: Secretary
EXHIBIT 10.31
SECOND AMENDMENT TO THE
MORRISON HEALTH CARE, INC. 1996 STOCK INCENTIVE
PLAN
THIS SECOND AMENDMENT is made as of this 26th day
of June, 1997, by
Morrison Health Care, Inc., a corporation duly organized
and existing under
the laws of the State of Georgia (hereinafter called the
"Company").
W I T N E S S E T H:
WHEREAS, the Company maintains the Morrison Health
Care, Inc. 1996
Stock Incentive Plan under an indenture which was adopted
as of February 23,
1996 (the "Plan");
WHEREAS, the Company desires to amend the Plan to
reflect an increase
in the number of shares authorized for issuance thereunder;
and
WHEREAS, the Board of Directors of the Company has
duly approved and
authorized this amendment to the Plan;
NOW, THEREFORE, the Company does hereby amend the
Plan, effective as of
the date first set forth above, as follows:
1. By deleting the first sentence of Section 2.2 in its
entirety and by
substituting therefor the following:
"Subject to adjustment in accordance with Section
5.2, 1,750,000
shares of Stock (the `Maximum Plan Shares') are
hereby reserved
exclusively for issuance pursuant to Stock
Incentives."
2. Except as specifically amended hereby, the Plan
shall remain in full
force and effect as prior to the adoption of this Second
Amendment.
3. Notwithstanding the foregoing, the adoption of this
Second Amendment is
subject to the approval of the stockholders of the
Company and in the event
that the stockholders of the Company fail to approve such
adoption within
twelve months from the date first set forth above, the
adoption of this
Second Amendment shall be null and void.
IN WITNESS WHEREOF, the Company has caused this
Second Amendment to be
executed on the day and year first above written.
MORRISON HEALTH CARE,
INC.
By: /s/ Glenn Davenport
-----------------------
Title:President and CEO
ATTEST:
By: /s/John E. Fountain
Title: Secretary
(CORPORATE SEAL)
EXHIBIT 10.32
SECOND AMENDMENT TO THE MORRISON HEALTH CARE,
INC.
1996 NON-EXECUTIVE STOCK INCENTIVE PLAN
THIS SECOND AMENDMENT is made as of this 26th day
of June, 1997,
by Morrison Health Care, Inc., a corporation duly
organized and existing
under the laws of the State of Georgia (hereinafter
called the
"Company").
W I T N E S S E T H:
WHEREAS, the Company maintains the Morrison Health
Care, Inc. 1996
Non-Executive Stock Incentive Plan under an indenture
which was adopted
as of February 23, 1996 (the "Plan");
WHEREAS, the Company desires to amend the Plan
to reflect a
decrease in the number of shares authorized for issuance
thereunder; and
WHEREAS, the Board of Directors of the Company has
duly approved
and authorized this amendment to the Plan;
NOW, THEREFORE, the Company does hereby amend the
Plan, effective
as of the date first set forth above, as follows:
1. By deleting the first sentence of Section 2.2 in its
entirety and
by substituting therefor the following:
"Subject to adjustment in accordance with
Section 5.2,
1,350,000 shares of Stock (the `Maximum Plan
Shares') are
hereby reserved exclusively for issuance pursuant
to Stock
Incentives."
2. Except as specifically amended hereby, the Plan
shall remain in
full force and effect as prior to the adoption of this
Second Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this
Second Amendment
to be executed on the day and year first above written.
MORRISON HEALTH CARE,
INC.
By: /s/ Glenn Davenport
-----------------------
Title:President and CEO
ATTEST:
By: /s/John E. Fountain
Title: Secretary
(CORPORATE SEAL)
Exhibit 10.33
THIRD AMENDMENT TO THE
MORRISON HEALTH CARE, INC.
SALARY DEFERRAL PLAN
THIS THIRD AMENDMENT is made on this 9th day of
January, 1998, by
MORRISON HEALTH CARE, INC., a corporation duly organized
and existing under
the laws of the State of Georgia (the "Primary Sponsor").
W I T N E S S E T H:
WHEREAS, the Primary Sponsor established by
indenture dated March 7,
1996, the Morrison Health Care, Inc. Salary Deferral Plan
(the "Plan"); and
WHEREAS, the Primary Sponsor requested a
determination letter from the
Internal Revenue Service as to the qualified status of
the Plan which has
resulted in some necessary changes to the Plan;
NOW, THEREFORE, the Primary Sponsor does hereby
amend the Plan,
effective as of March 7, 1996, as follows:
1. By substituting the following language for the last
sentence of Section
1.31 of the Plan:
"Notwithstanding the foregoing, the Primary
Sponsor may elect to
determine each Highly Compensated Employee using
the snapshot day of
December 31, in a manner consistent with Section 4 of
Revenue Procedure
93-42; provided that, for those Plan Years following
December 31, 1996,
the Plan Sponsor shall follow the procedures
published by the Internal
Revenue Service pursuant to Notice 97-45, Section
III(1)."
2. By substituting the following language for Section
3.4A of the Plan:
"3.4A Qualified Contributions. At the sole
discretion of the
Primary Sponsor, each Plan Sponsor shall make
`Qualified Nonelective
Contributions' and/or `Qualified Matching
Contributions,' as those
terms are defined in Section 1 of Appendix A, in
an amount together
with any supplement allocations under Plan Sections
4.2(b)(1) or (2) as
determined by the Primary Sponsor are necessary
to satisfy, as
applicable, the testing requirements of Code Section
401(m)(2)(A)."
3. By deleting Paragraph (1) of Section 4.1(b) of the
Plan in its entirety
and redesignating existing Paragraphs (2) and (3) as
new Paragraphs (1)
and (2), respectively.
4. By substituting the following language for Plan
Section 4.2(b)(3):
"(3) any remaining excess, to the
Supplemental Account of each
Member who is employed by a Plan Sponsor on the
last day of the Plan
Year in the proportion that the Member's Annual
Compensation bears to
the Annual Compensation of all Members entitled
to an allocation
pursuant to this Section 4.2(b)(3)."
5. By substituting the following language for Section
4.4(b) of the Plan:
"(b) Any shares of Company Stock which are
released from the
Loan Suspense Account that are attributable (1)
to Plan Sponsor
contributions under Plan Section 3.3 and
forfeitures; (2) to cash
dividends paid on shares of Company Stock
allocated to the Loan
Suspense Account that are used to make a payment on
an Acquisition Loan
and (3) to proceeds on the sale of shares of Company
Stock held in the
Loan Suspense Account that are used to make a payment
on an Acquisition
Loan (to the extent such proceeds are to be treated as
annual additions
for purposes of Appendix B in accordance with
Section 4.4(e) below)
shall be allocated to Company Matching Accounts in
accordance with Plan
Section 4.2(a). Proceeds on the sale of shares of
Company Stock held
in the Loan Suspense Account may be used to repay an
Acquisition Loan
if the transaction, based on all the
surrounding facts and
circumstances, satisfies the requirements of
Treasury Regulations
Section 54.4975-7(b)(3)."
6. By adding a new final sentence to Section 5.1(c) as
follows:
"Payments made with respect to an Acquisition Loan
must be made solely
from ESOP assets."
7. By substituting the following language for Section 8.4
of the Plan:
"8.4 Payment of the Member's Accrued Benefit
shall be made as
soon as administratively feasible after the
Member terminates
employment, but in no event later than, unless the
Member otherwise
elects, the 60th day after the latest of the close
of the Plan Year in
which the Member terminates his service with
the Plan Sponsor;
provided, however, if the Member's Accrued Benefit
exceeds $3,500 it
will not be distributed before the Member's 'required
beginning date,'
within the meaning of Plan Section 11.3(c),
without the Member's
consent."
8. By substituting the following language for Section 9.3
of the Plan:
"9.3 Payment of the Member's Accrued Benefit
shall be made as
soon as administratively feasible after the
Member terminates
employment, but in no event later than, unless the
Member otherwise
elects, the 60th day after the latest of the close
of the Plan Year in
which the Member terminates his service with
the Plan Sponsor;
provided, however, if the Member's Accrued Benefit
exceeds $3,500 it
will not be distributed before the Member's 'required
beginning date,'
within the meaning of Plan Section 11.3(c),
without the Member's
consent."
9. By substituting the following for Appendix A to the
Plan
"APPENDIX A
SPECIAL NONDISCRIMINATION RULES
SECTION 1
As used in this Appendix, the following words shall
have the following
meanings:
(a) 'Eligible Member' means a Member who is
an Employee during
any particular Plan Year.
(b) 'Highly Compensated Eligible Member'
means any Eligible
Member who is a Highly Compensated Employee.
(c) 'Matching Contribution' means any
contribution made by a
Plan Sponsor to a Company Matching Account and any
other contribution
made to a plan by a Plan Sponsor or an Affiliate
on behalf of an
Employee on account of a contribution made by an
Employee or on account
of an Elective Deferral.
(d) 'Qualified Matching Contributions'
means Matching
Contributions which are immediately nonforfeitable
when made, and which
would be nonforfeitable, regardless of the age
or service of the
Employee or whether the Employee is employed on a
certain date, and
which may not be distributed, except upon one of the
events described
under Code Section 401(k)(2)(B) and the regulations
thereunder.
(e) 'Qualified Nonelective Contributions'
means contributions
of the Plan Sponsor or an Affiliate, other than
Matching Contributions
or Elective Deferrals, which are nonforfeitable
when made, and which
would be nonforfeitable regardless of the age
or service of the
Employee or whether the Employee is employed on a
certain date, and
which may not be distributed, except upon one of the
events described
under Code Section 401(k)(2)(B) and the regulations
thereunder.
SECTION 2
In addition to any other limitations set forth in
the Plan, for each
Plan Year one of the following tests must be satisfied for
the Profit Sharing
Plan:
(a) the actual deferral percentage for the
Highly Compensated
Eligible Members for the Plan Year must not be more
than the actual
deferral percentage of all other Eligible Members
for the preceding
Plan Year multiplied by 1.25; or
(b) the excess of the actual deferral
percentage for the Highly
Compensated Eligible Members for the Plan Year over
that of all other
Eligible Members for the preceding Plan Year must
not be more than two
(2) percentage points, and the actual deferral
percentage for the
Highly Compensated Eligible Members for the Plan
Year must not be more
than the actual deferral percentage of all other
Eligible Members for
the preceding Plan Year multiplied by two (2).
Notwithstanding the foregoing, the Plan
Administrator may utilize any
transition rule permitted by Internal Revenue Service
97-2 or otherwise
regarding the use of current year data for calculating
actual deferral
percentages.
The 'actual deferral percentage' for the Highly
Compensated Eligible
Members and all other Eligible Members for a Plan Year is
the average in each
group of the ratios, calculated separately for each
Employee, of the Deferral
Amounts contributed by the Plan Sponsor on behalf of an
Employee for the Plan
Year to the Annual Compensation of the Employee in
the Plan Year. In
addition, for purposes of calculating the 'actual
deferral percentage' as
described above, Deferral Amounts of Employees who are not
Highly Compensated
Employees which are prohibited by Code Section 401(a)(30)
shall not be taken
into consideration.
SECTION 3
If the Deferral Amounts contributed on behalf of any
Highly Compensated
Eligible Member exceeds the amount permitted under the
'actual deferral
percentage' test described in Section 2 of this Appendix A
for any given Plan
Year, then before the end of the Plan Year following the
Plan Year for which
the Excess Deferral Amount was contributed, (a) the
amount of the Excess
Deferral Amount for the Plan Year, as adjusted to reflect
income, gain, or
loss attributable to it through the date the Excess
Deferral Amount is
distributed to the Member and reduced by any excess
Elective Deferrals as
determined pursuant to Plan Section 3.1 previously
distributed to the Member
for the Member's taxable year ending with or within the
Plan Year, may be
distributed to the Highly Compensated Eligible Member or
(b) to the extent
provided in regulations issued by the Secretary of the
Treasury, the Plan
Administrator may, in its discretion, allow each affected
Member to elect,
within two and one-half months after the end of the Plan
Year for which the
Excess Deferral Amount was contributed, to treat the
Excess Deferral Amount,
unadjusted for earnings, gains, and losses, but as so
reduced, as an amount
distributed to the Member and then contributed as an after-
tax contribution
by the Member to the Plan ('recharacterized amounts').
The income allocable
to such Excess Deferral Amount shall be determined in a
similar manner as
described in Plan Section 4.3(a). The portion of the
Matching Contributions
on which such Excess Deferral Amount was based shall be
forfeited upon the
distribution of such Excess Deferral Amount. The Excess
Deferral Amount to
be distributed or recharacterized shall be reduced by
Deferral Amounts
previously distributed or recharacterized for the taxable
year ending in the
same Plan Year, and shall also be reduced by Deferral
Amounts previously
distributed or recharacterized for the Plan Year
beginning in such taxable
year. For all other purposes under the Plan other than
this Appendix A,
recharacterized amounts shall continue to be treated as
Deferral Amounts. In
the event the multiple use of limitations contained in
Sections 2(b) and 5(b)
of this Appendix, pursuant to Treasury Regulations
Section 1.40(m)-2 as
promulgated by the Secretary of the Treasury,
requires a corrective
distribution, such distribution shall be made pursuant to
this Section 3, and
not Section 6 of Appendix A. The portion of the Matching
Contributions on
which such Excess Deferral Amount was based shall be
forfeited upon the
distribution or recharacterization, as the case may be,
of such Excess
Deferral Amount.
For purposes of this Section 3, 'Excess Deferral Amount'
means, with respect
to a Plan Year, the excess of:
(a) the aggregate amount of Deferral Amounts
contributed by a
Plan Sponsor on behalf of Highly Compensated
Eligible Members for the
Plan Year, over
(b) the maximum amount of Deferral Amounts
permitted under
Section 2 of this Appendix A for the Plan Year,
which shall be
determined by reducing the Deferral Amounts
contributed on behalf of
Highly Compensated Eligible Members in order of the
amount of Deferral
Amounts beginning with the greatest of such amounts.
Distribution of the Excess Deferral Amounts for any Plan
Year shall be made
to the Highly Compensated Eligible Members on the basis
of the respective
portions of the Excess Deferral Amount attributable
to each Highly
Compensated Eligible Member. As to any Highly
Compensated Employee who is
subject to the family aggregation rules of Subsection (b)
of the Plan Section
containing the definition of the term 'Highly
Compensated Employee,' any
distribution of such Highly Compensated Employee's
allocable portion of the
Excess Deferral Amount for a Plan Year shall be allocated
among the family
members of such Highly Compensated Employee who are
combined to determine the
actual deferral percentage in proportion to the Deferral
Amounts taken into
account under this Section 3.
SECTION 4
The Plan Administrator shall have the responsibility
of monitoring the
Plan's compliance with the limitations of this Appendix A
and shall have the
power to take all steps it deems necessary or
appropriate to ensure
compliance, including, without limitation, restricting
the amount which
Highly Compensated Eligible Members can elect to have
contributed pursuant to
Plan Section 3.1. Any actions taken by the Plan
Administrator pursuant to
this Section 4 shall be pursuant to non-
discriminatory procedures
consistently applied.
SECTION 5
In addition to any other limitations set forth in
the Plan, Matching
Contributions under the Plan and the amount of
nondeductible employee
contributions under the Plan, for each Plan Year, must
each separately
satisfy one of the following tests:
(a) The contribution percentage for the
Highly Compensated
Eligible Members for the Plan Year must not
exceed 125% of the
contribution percentage for all other Eligible
Members for the
preceding Plan Year; or
(b) The contribution percentage for Highly
Compensated Eligible
Members for the Plan Year must not exceed the lesser
of (1) 200% of the
contribution percentage for all other Eligible
Members for the
preceding Plan Year, and (2) the contribution
percentage for all other
Eligible Members for the preceding Plan Year plus
two (2) percentage
points.
Notwithstanding the foregoing, the Plan Administrator
may utilize any
transition rule permitted by Internal Revenue Service
97-2 or otherwise
regarding the use of current year data for calculating
actual contribution
percentages.
Notwithstanding the foregoing, for purposes of this
Section 5, the terms
Highly Compensated Eligible Member or Eligible Member
shall not include any
Member who is not eligible to receive a Matching
Contribution under the
provisions of the Plan, other than as a result of the
Member failing to
contribute to the Plan or failing to have an Elective
Deferral contributed to
the Plan on the Member's behalf. In applying the above
tests, the Plan
Administrator shall comply with any regulations
promulgated by the Secretary
of the Treasury which prevent or restrict the use of the
test contained in
Section 2(b) of this Appendix A and the test contained
in Section 5(b) of
this Appendix A. The 'contribution percentage' for
Highly Compensated
Eligible Members and for all other Eligible Members for a
Plan Year shall be
the average of the ratios, calculated separately for each
Member, of (A) to
(B), where (A) is, as the case may be, either the
amount of Matching
Contributions under the Plan (excluding Matching
Contributions which are used
to satisfy the minimum required contributions to the
Accounts of Eligible
Members who are not Key Employees pursuant to Section 1 of
Appendix C to the
Plan) or nondeductible employee contributions made
under the Plan for the
Eligible Member for the Plan Year, and where (B) is the
Annual Compensation
of the Eligible Member for the Plan Year. Except to the
extent limited by
Treasury Regulation Section 1.401(m)-1(b)(5) and any
other applicable
regulations promulgated by the Secretary of the Treasury,
a Plan Sponsor may
elect to treat Qualified Nonelective Contributions and/or
Qualified Matching
Contributions as Matching Contributions for purpose of
determining the
'contribution percentage.'
SECTION 6
If either (a) the Matching Contributions and, if
taken into account
under Section 5 of this Appendix A, the Qualified
Nonelective Contributions
and Qualified Matching Contributions made on behalf of
Highly Compensated
Eligible Members or (b) nondeductible employee
contributions made by Highly
Compensated Eligible Employees exceed the amount
permitted under the
`contribution percentage test' for any given Plan Year,
then, before the
close of the Plan Year following the Plan Year for which the
excess aggregate
contributions were made, the amount of the excess
aggregate contributions
attributable to the Plan for the Plan Year under either
Section 6(a) or 6(b),
or both, as adjusted to reflect any income, gain or loss
attributable to such
contributions through the date the excess aggregate
contributions are
distributed, shall be distributed. The income
allocable to such
contributions shall be determined in a similar manner as
described in Plan
Section 4.3. As between the Plan and any other plan or
plans maintained by
the Plan Sponsor in which excess aggregate contributions
for a Plan Year are
held, each such plan shall distribute a pro-rata share
of each class of
contribution based on the respective amounts of a class of
contribution made
to each plan during the Plan Year. The payment of the
excess aggregate
contributions shall be made without regard to any other
provision in the
Plan. In the event the multiple use of limitations
contained in Sections
2(b) and 5(b) of this Appendix, pursuant to Treasury
Regulation Section
1.401(m)-2 as promulgated by the Secretary of the
Treasury, requires a
corrective distribution, such distribution shall be made
pursuant to Section
3 of Appendix A, and not this Section 6.
For purposes of this Section 6, with respect to any
Plan Year, 'excess
aggregate contributions' means the excess of:
(a) the aggregate amount of either (i)
Matching Contributions,
Qualified Nonelective Contributions and
Qualified Matching
Contributions or (ii) nondeductible employee
contributions actually
made by or on behalf of Highly Compensated Eligible
Members for the
Plan Year, over
(b) the maximum amount of the contributions
permitted under the
limitations of Section 5 of this Appendix A,
determined by reducing
contributions made on behalf of Highly Compensated
Eligible Members
beginning with the greatest of such amounts.
Distribution of nondeductible employee
contributions or Matching
Contributions in the amount of the excess aggregate
contributions for any
Plan Year shall be made with respect to Highly Compensated
Employees on the
basis of the respective portions of each class of
excess aggregate
contributions attributable to each Highly Compensated
Employee. As to any
Highly Compensated Employee who is subject to the family
aggregation rules of
Subsection (b) of the Plan Section containing the
definition of the term
'Highly Compensated Employee,' any distribution of such
Highly Compensated
Employee's allocable portion of the excess aggregate
contributions for a Plan
Year shall be allocated among the family members of such
Highly Compensated
Employee which are combined to determine the
contribution percentage in
proportion to the contributions taken into account under
this Section 6.
SECTION 7
Except to the extent limited by rules promulgated
by the Secretary of
the Treasury, if a Highly Compensated Eligible Member is a
participant in any
other plan of the Plan Sponsor or any Affiliate which
includes Matching
Contributions, deferrals under a cash or deferred
arrangement pursuant to
Code Section 401(k), or nondeductible employee
contributions, any
contributions made by or on behalf of the Member to the
other plan shall be
allocated with the same class of contributions under the
Plan for purposes of
determining the 'actual deferral percentage' and
'contribution percentage'
under the Plan; provided, however, contributions that
are made under an
'employee stock ownership plan' (within the meaning
of Code Section
4975(e)(7)) shall not be combined with contributions under
any plan which is
not an employee stock ownership plan (within the
meaning of Code Section
4975(e)(7)).
Except to the extent limited by rules promulgated
by the Secretary of
the Treasury, if the Plan and any other plans which
include Matching
Contributions, deferrals under a cash or deferred
arrangement pursuant to
Code Section 401(k), or nondeductible employee
contributions are considered
as one plan for purposes of Code Section 401(a)(4)
and 410(b)(1), any
contributions under the other plans shall be allocated with
the same class of
contributions under the Plan for purposes of determining
the 'contribution
percentage' and 'actual deferral percentage' under the
Plan; provided,
however, contributions that are made under an 'employee
stock ownership plan'
(within the meaning of Code Section 4975(e)(7)) shall not
be combined with
contributions under any plan which is not an employee
stock ownership plan
(within the meaning of Code Section 4975(e)(7))."
1. By adding the following language to the end of
Section 4 of Appendix B
of the Plan:
"For purposes of applying the limitations set forth
in this Appendix B,
the term `Plan Sponsor' shall mean a Plan
Sponsor and any other
corporations which are members of the same
controlled group of
corporations (as described in Section 414(b) of the
Code, as modified
by Code Section 415(b)) as is a Plan Sponsor, any
other trades or
businesses (whether or not incorporated) under
common control (as
described in Code Section 414(c), as modified by
Code Section 415(h)
with a Plan Sponsor, any other corporations,
partnerships, or other
organizations which are members of an affiliated
service group (as
described in Section 414(m) of the Code) with a Plan
Sponsor, and any
other entity required to be aggregated with a Plan
Sponsor pursuant to
regulations under Code Section 414(o)."
2. By deleting the last sentence of Section 1(b)(1) of
Appendix C in its
entirety.
3. By substituting the following language for the last
sentence of Section
1(d)(3)(B) of Appendix C of the Plan:
"The actuarial assumptions utilized in calculating
the present value of
the accrued benefit for any participant in a defined
benefit plan for
purposes of this Subsection (b) shall be
established by the Plan
Administrator after consultation with the actuary
for the Plan, and
shall be reasonable in the aggregate and shall
comport with the
requirements set forth by the Internal Revenue
Service in Q&A T-26 and
T-27 of Regulation Section 1.416-1; provided that,
the accrued benefit
for any participant (other than a Key Employee) in
a defined benefit
plan shall be determined in accordance with Code
Section 416(g)(4)(F)."
4. By substituting the following language for Section
2(a) of Appendix C
of the Plan:
"(a) Notwithstanding anything contained in
the Plan to the
contrary, except as otherwise provided in
Subsection (b) of this
Section, in any Plan Year during which the
Plan is Top-Heavy,
allocations of Plan Sponsor contributions for the
Plan Year for the
Account of each Member which is not a Key
Employee and who has not
separated from service with the Plan Sponsor prior
to the end of the
Plan Year shall not be less than three (3) percent
of the Member's
Annual Compensation. The Plan Sponsor shall make
such allocations to
each Member who is not a Key Employee regardless of
whether such Member
has declined to make a contribution to the Plan.
For purposes of this
Subsection, an allocation to a Member's Account
resulting from any Plan
Sponsor contribution attributable to a salary
reduction or similar
arrangement shall not be taken into account."
5. By deleting Section 4 of Appendix C of the Plan in its
entirety.
Except as specifically provided herein, the Plan
shall remain in full
force and effect as prior to this Third Amendment.
IN WITNESS WHEREOF, the parties hereto have
caused this Third
Amendment to be executed as the day and year first above
written.
MORRISON HEALTH CARE,
INC.
By: /s/ Glenn Davenport
Title:President and
Chief Executive Officer
ATTEST:
By: /s/John E. Fountain
Title: Secretary
[CORPORATE SEAL]
EXHIBIT 10.34
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is
made this 9th day of
January, 1998, by Morrison Health Care, Inc., a
Georgia corporation
("Buyer"), the Drake Family Revocable Trust, Richard or
Dianne Drake Trustees
under agreement (the "Trust Agreement") dated September 17,
1991 (the "Drake
Trust"), Richard Drake, an individual resident of the
State of Arizona ("R.
Drake"), Dianne Drake, an individual resident of the
State of Arizona ("D.
Drake"), and Philippe Michelin, an individual resident
of the State of
Arizona ("Michelin" and, collectively with the Drake
Trust, R. Drake and D.
Drake, "Sellers") and Drake Management Services, Inc., an
Arizona corporation
(the "Company").
RECITALS
Sellers desire to sell, and Buyer desires to
purchase, all of the
issued and outstanding shares (the "Shares") of capital
stock of the Company,
for the consideration and on the terms set forth in this
Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms
have the meanings
specified or referred to in this Section DEFINITIONS:
"AAA"-- as defined in Section 11.2(c).
"Adjustment Amount"-- the principal and interest due
on the Promissory
Note on the Closing Date.
"Affiliate" -- with respect to an individual, any
family member, any
Person that is directly or indirectly controlled by such
individual or such
individual's family members, or any Person with
respect to which such
individual, or a member of such individual's family,
serves as a director,
officer, partner, executor, or trustee (or similar
capacity, and with respect
to any Person other than an individual, any person
that controls, in
controlled by or under common control with such Person,
and each Person that
serves as a director, officer, partners, executor or
trustee (or similar
capacity) of such Person.
"Agreement"-- as defined in the Preamble.
"Applicable Contract"-- any Contract (a) under which
the Company has or
may acquire any rights, (b) under which the Company has or
may become subject
to any obligation or liability, or (c) by which the
Company or any of the
assets owned or used by it is or may become bound.
"Balance Sheet"-- as defined in Section 0.
"Buyer"-- as defined in the Preamble.
"Buyer's Closing Documents"-- as defined in Section
4.2.
"Closing"-- as defined in Section 0.
"Closing Date"-- the date and time as of which the
Closing actually
takes place.
"COBRA Rights" - as defined in Section 3.13(k)
"Company"-- as defined in the Preamble.
"Company Plans"-- as defined in Section 3.13(b).
"Company Qualified Plans"-- as defined in Section
3.13(c).
"Competing Business"-- as defined in Section 3.25.
"Contemplated Transactions"-- all of the
transactions contemplated by
this Agreement, including: (a) the sale of the Shares by
Sellers to Buyer;
(b) the execution, delivery, and performance of the
Promissory Note, the
Employment Agreements, the Noncompetition Agreements, the
Earnout Agreement
and the Sellers' Releases; (c) the performance by Buyer
and Sellers of their
respective covenants and obligations under this
Agreement; and (d) Buyer's
acquisition and ownership of the Shares and exercise of
control over the
Company.
"Contract"-- any agreement, contract,
obligation, promise, or
undertaking (whether written or oral and whether express
or implied) that is
legally binding.
"Copyrights"-- as defined in Section 3.22(a)(ii).
"CPR" - as defined in Section 11.2(b).
"D. Drake"-- as defined in the Preamble.
"Damages"-- as defined in Section 0.
"Disclosure Letter"-- the disclosure letter
delivered by Sellers to
Buyer concurrently with the execution and delivery of this
Agreement.
"Dispute" -- as defined in Section 11.1.
"Drake Trust" - as defined in the Preamble.
"Efron Assignment" - assignment of a limited
partnership interest in
Efron Apartment Investors, an Indiana limited partnership,
as payment for a
debt to the Company.
"Earnout Agreement" -- as defined in Section
2.4(a)(vii).
"Employment Agreements"-- as defined in Section (iii)
employment
agreements in the form of Exhibit 2.4(a)(iii), executed
by R. Drake and
Michelin (collectively, the "Employment Agreements");.
"Employees" -- as defined in Section 3.13(b).
"Encumbrance"-- any charge, claim, community
property interest,
condition, equitable interest, lien, option, pledge,
security interest, right
of first refusal, or restriction of any kind, including
any restriction on
use, voting, transfer, receipt of income, or exercise of
any other attribute
of ownership.
"Environment"-- soil, land surface or subsurface
strata, surface waters
(including navigable waters, ocean waters, streams, ponds,
drainage basins,
and wetlands), groundwaters, drinking water supply, stream
sediments, ambient
air (including indoor air), plant and animal life,
and any other
environmental medium or natural resource.
"Environmental, Health, and Safety Liabilities"--
any cost, damages,
expense, liability, obligation, or other responsibility
arising from or under
Environmental Law or Occupational Safety and Health Law
including fines,
penalties, financial responsibility for cleanup costs,
corrective action,
removal, remedial actions and response actions, and any
other compliance,
corrective, investigative or remedial measures
required under any
Environmental Law or Occupational Safety and Health
Law. The terms
"removal," "remedial," and "response action," include the
types of activities
covered by the United States Comprehensive
Environmental Response,
Compensation, and Liability Act, 42 U.S.C. 9601 et
seq., as amended
("CERCLA").
"Environmental Law"-- any Legal Requirement that
requires or relates to
releases of pollutants or hazardous substances or
materials, violations of
discharge limits, or other prohibitions that relate to the
Environment.
"ERISA"-- the Employee Retirement Income Security
Act of 1974 or any
successor law, and regulations and rules issued pursuant
to that Act or any
successor law.
"Facilities"-- any real property, leaseholds, or
other interests
currently or formerly owned or operated by the Company
and any buildings,
plants, structures, or equipment (including motor
vehicles) currently or
formerly owned or operated by the Company.
"Governmental Authorization"-- any approval,
consent, license, permit,
waiver, or other authorization issued, granted, given,
or otherwise made
available by or under the authority of any Governmental
Body or pursuant to
any Legal Requirement.
"Governmental Body"-- any federal, state, local,
municipal, foreign, or
other government; or governmental or quasi-governmental
authority of any
nature (including any governmental agency, branch,
department, official, or
entity and any court or other tribunal);
"Hazardous Materials"-- any waste or other
substance that is listed,
defined, designated, or classified as, or otherwise
determined to be,
hazardous, radioactive, or toxic or a pollutant or a
contaminant under or
pursuant to any Environmental Law, including any
admixture or solution
thereof, and specifically including petroleum and all
derivatives thereof or
synthetic substitutes therefor and asbestos or asbestos-
containing materials.
"Indemnified Persons" -- as defined in Section 10.2.
"Initial Purchase Price"-- as defined in Section 2.2.
"Intellectual Property Assets" -- as defined in
Section 3.22
Intellectual Property..
"Interim Balance Sheet"-- as defined in Section 3.4
Financial
Statements.Sellers have delivered to Buyer: (a) unaudited
balance sheets of
the Company as at December 31 in each of the years 1995
and 1996, and the
related unaudited statements of income, changes in
stockholders'equity, and
cash flow for each of the fiscal years then ended, (b) an
unaudited balance
sheet of the Company as at September 30, 1997 (including
the notes thereto,
the "Balance Sheet"), and the related statements of
income, changes in
stockholders'equity, and cash flow for the fiscal year then
ended, and (c) an
unaudited balance sheet of the Company as at September 30,
1997 (the "Interim
Balance Sheet") and the related unaudited statements of
income, changes in
stockholders'equity, and cash flow for the nine (9) months
then ended. Such
financial statements and notes fairly present the financial
condition and the
results of operations, changes in stockholders'equity,
and cash flow of the
Company as at the respective dates of and for the periods
referred to in such
financial statements, all in accordance with TBA,
subject, in the case of
interim financial statements, to normal recurring year-end
adjustments (the
effect of which will not, individually or in the
aggregate, be materially
adverse); the financial statements referred to in this
Section Error! Not a
valid bookmark self-reference. reflect the consistent
application of TBA
accounting principles throughout the periods involved..
"IRC"-- the Internal Revenue Code of 1986 or any
successor law, and
regulations issued by the IRS pursuant to the Internal
Revenue Code or any
successor law.
"IRS"-- the United States Internal Revenue Service
or any successor
agency, and, to the extent relevant, the United States
Department of the
Treasury.
"Knowledge"-- an individual will be deemed to have
"Knowledge" of a
particular fact or other matter if: (a) such individual is
actually aware of
such fact or other matter; or (b) a prudent individual
could be expected to
discover or otherwise become aware of such fact or other
matter in the course
of conducting a reasonable investigation concerning the
existence of such
fact or other matter. A Person (other than an individual)
will be deemed to
have "Knowledge" of a particular fact or other matter if
any individual who
is serving, or who has at any time served, as a director,
officer, partner,
executor, or trustee of such Person (or in any similar
capacity) has, or at
any time had, Knowledge of such fact or other matter.
"Legal Requirement"-- any federal, state, local,
municipal, foreign,
international, multinational, or other administrative
order, constitution,
law, ordinance, principle of common law, regulation,
statute, or treaty.
"Marks"-- as defined in Section 3.22(a)(i).
"Mediation Request"-- as defined in Section 11.2(b).
"Michelin"-- as defined in the Preamble.
"Noncompetition Agreements"-- as defined in Section
(iv)
noncompetition agreements in the form of Exhibit
2.4(a)(iv), executed by R.
Drake and Michelin (collectively, the "Noncompetition
Agreements"); .
"Occupational Safety and Health Law"-- any Legal
Requirement designed
to provide safe and healthful working conditions and to
reduce occupational
safety and health hazards, and any program, whether
governmental or private
(including those promulgated or sponsored by industry
associations and
insurance companies), designed to provide safe and
healthful working
conditions.
"Order"-- any award, decision, injunction,
judgment, order, ruling,
subpoena, or verdict entered, issued, made, or
rendered by any court,
administrative agency, or other Governmental Body or by any
arbitrator.
"Ordinary Course of Business"-- an action taken by
a Person will be
deemed to have been taken in the "Ordinary Course of
Business" only if such
action is consistent with the past practices of such
Person and is taken in
the ordinary course of the normal day-to-day operations of
such Person.
"Organizational Documents"-- the articles or
certificate of
incorporation and the bylaws of a corporation and any
amendment to any of the
foregoing.
"Person"-- any individual, corporation
(including any non-profit
corporation), general or limited partnership, limited
liability company,
joint venture, estate, trust, association, organization,
labor union, or
other entity or Governmental Body.
"Proceeding"-- any action, arbitration, audit,
hearing, investigation,
litigation, or suit (whether civil, criminal,
administrative, investigative,
or informal) commenced, brought, conducted, or heard
by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Promissory Note"-- as defined in Section 6.2.
"R. Drake"-- as defined in the Preamble.
"Release"-- any spilling, leaking, emitting,
discharging, depositing,
escaping, leaching, dumping, or other releasing into the
Environment, whether
intentional or unintentional.
"Representative"-- with respect to a particular
Person, any director,
officer, employee, agent, consultant, advisor, or other
representative of
such Person, including legal counsel, accountants, and
financial advisors.
"Sellers"-- as defined in the Preamble.
"Sellers' Closing Documents"-- as defined in Section
3.2(a).
"Sellers' Releases"-- as defined in Section 2.4
Closing Obligations.At
the Closing:.
"Shares"-- as defined in the Preamble.
"Tax"-- all tax (including income tax, capital
gains tax, value added
tax, sales tax, property tax, gift tax or estate tax),
levy, assessment,
tariff, duty, deficiency or other fee and any related
charge or amount
(including fine, penalty and interest) imposed, assessed
or collected by or
under the authority of any Governmental Body.
"Tax Return"-- any return (including any information
return), report,
statement, schedule, notice, form, or other document or
information filed
with or submitted to, or required to be filed with or
submitted to, any
Governmental Body in connection with the
determination, assessment,
collection, or payment of any Tax or in connection with
the administration,
implementation, or enforcement of or compliance with any
Legal Requirement
relating to any Tax.
"TBA" -- tax basis of accounting required for
the preparation of
Federal Tax Returns, applied on a basis consistent with
the basis on which
the Balance Sheet and the other financial statements
referred to in Section
3.4 hereof were prepared.
"Threatened"-- a claim, Proceeding, dispute,
action, or other matter
will be deemed to have been "Threatened" if any demand or
statement has been
made (orally or in writing) or any notice has been
given (orally or in
writing), or if any other event has occurred or any
other circumstances
exist, that would lead a prudent Person to conclude
that such a claim,
Proceeding, dispute, action, or other matter is likely
to be asserted,
commenced, taken, or otherwise pursued in the future.
"Trade Secrets" -- as defined in Section 3.22(a)(iii).
"Trust Agreement" -- as defined in the Preamble.
2. SALE AND TRANSFER OF SHARES; CLOSING
2.1 Shares. Subject to the terms and conditions
of this Agreement,
at the Closing, Sellers will sell and transfer the Shares
to Buyer, and Buyer
will purchase the Shares from Sellers free and clear
of any and all
Encumbrances.
2.2 Purchase Price. The purchase price for the
Shares will be
(i) $5,000,000 minus the Adjustment Amount (the "Initial
Purchase Price")
plus (ii) any and all amounts payable to Sellers under the
Earnout Agreement.
2.3 Closing. The purchase and sale (the
"Closing") provided for in
this Agreement will take place at the offices of Powell,
Goldstein, Frazer &
Murphy LLP, Sixteenth Floor, 191 Peachtree St., N.E.,
Atlanta, Georgia, 30303
at 10:00 a.m. (local time) on January [5], 1998 or at
such other time and
place as the parties may agree. Subject to the provisions of
Article 9.
TERMINATION, failure to consummate the purchase and sale
provided for in this
Agreement on the date and time and at the place determined
pursuant to this
Section Error! Not a valid bookmark self-reference. will
not result in the
termination of this Agreement and will not relieve
any party of any
obligation under this Agreement.
2.4 Closing Obligations. At the Closing:
(a) Sellers will deliver to Buyer:
(i) certificates representing the
Shares accompanied by
duly executed stock powers;
(ii) releases in the form of Exhibit
2.4(a)(ii) executed
by D. Drake, R. Drake and Michelin
(collectively, the "Sellers'
Releases");
(iii) employment agreements in the
form of Exhibit
2.4(a)(iii), executed by R. Drake and Michelin
(collectively, the
"Employment Agreements");
(iv) noncompetition agreements in the
form of Exhibit
2.4(a)(iv), executed by R. Drake and Michelin
(collectively, the
"Noncompetition Agreements");
(v) resignations from all current
officers and directors
of the Company other than R. Drake who shall
remain President of
the Company and Michelin who shall remain Vice
President of the
Company;
(vi) a certificate executed by Sellers
to the effect that
(A) each of Sellers' representations and
warranties in this
Agreement was accurate in all respects as
of the date of this
Agreement and is accurate in all respects as
of the Closing Date
as if made on the Closing Date; and (B) each of
the covenants and
agreements of Sellers to be performed prior
to the Closing Date
has been duly performed or complied with by the
Seller;
(vii) a certificate from the Secretary
of the Company
attaching and certifying to (a) the
Company's Organizational
Documents and (b) resolutions of the board of
directors of the
Company approving the Contemplated Transactions;
(viii) the earnout agreement in
the form of Exhibit
2.4(a)(vii), execute by Sellers (the "Earnout
Agreement"); and
(ix) the documents contemplated by
Section 7.3 hereof.
(b) Buyer will deliver to Sellers:
(i) the Initial Purchase Price by bank
cashier's check or
by wire transfer to the accounts specified
by Sellers, to be
allocated among the Sellers pursuant to the
allocation schedule
set forth on Part 2.4 of the Disclosure Letter;
(ii) a certificate executed by Buyer to
the effect that,
(A) each of Buyer's representations and
warranties in this
Agreement was accurate in all respects as
of the date of this
Agreement and is accurate in all respects as
of the Closing Date
as if made on the Closing Date; and (B) each of
the covenants and
agreements of Buyer to be performed prior to
the Closing Date has
been duly performed and complied with by Buyer;
(iii) a certificate from the Secretary
of Buyer attaching
and certifying to (a) the Buyer's
Organizational Documents and
(b) resolutions of the board of directors of
Buyer authorizing
the Contemplated Transactions;
(iv) the Employment Agreements,
executed by the Company
and Buyer;
(v) the Noncompetition Agreements,
executed by Buyer;
(vi) the Earnout Agreement, executed by
Buyer; and
(vii) the documents contemplated by
Section 8.3 hereof.
3. REPRESENTATIONS AND WARRANTIES OF
SELLERS
Sellers, jointly and severally, represent and
warrant to Buyer as
follows:
3.1 Organization and Good Standing.
(a) Part 3.1 of the Disclosure Letter
contains a complete and
accurate list of the Company's name, its jurisdiction of
incorporation, other
jurisdictions in which it is authorized to do
business, and its
capitalization (including the identity of each stockholder
of the Company and
the number of shares held by each). The Company is a
corporation duly
organized, validly existing, and in good standing under
the laws of its
jurisdiction of incorporation, with full corporate
power and authority to
conduct its business as it is now being conducted, to
own or use the
properties and assets that it purports to own or use, and
to perform all its
obligations under Applicable Contracts. The Company is
duly qualified to do
business as a foreign corporation and is in good standing
under the laws of
each state or other jurisdiction in which either the
ownership or use of the
properties owned or used by it, or the nature of the
activities conducted by
it, requires such qualification. The Drake Trust is a
trust duly organized
and validly existing under the laws of the state in which it
was formed.
(b) Sellers have delivered to Buyer
copies of the
Organizational Documents of the Company and the Trust
Agreement, as currently
in effect.
(c) The Company has no subsidiaries and no
ownership interest
in any Person, except as may be deemed to exist as a
result of the Efron
Assignment.
3.2 Authority; No Conflict.
(a) The Agreement constitutes the legal,
valid and binding
obligation of the Company and the Sellers, enforceable
against the Company
and Sellers in accordance with its terms, and upon the
execution and delivery
by Sellers of the Employment Agreements, the Sellers'
Releases, the Earnout
Agreement, the Promissory Note and the Noncompetition
Agreements to which
each such Seller is a party (collectively, the "Sellers'
Closing Documents"),
Sellers' Closing Documents will constitute the legal,
valid, and binding
obligations of each Seller party thereto and the Company,
enforceable against
such Seller and/or the Company in accordance with their
respective terms.
Sellers and the Company have the absolute and
unrestricted right, power,
authority, and capacity to execute and deliver this
Agreement and the
Sellers' Closing Documents to which it is party and
to perform their
obligations under this Agreement and the Sellers' Closing
Documents.
(b) Except as set forth in Part 3.2 of the
Disclosure Letter,
neither the execution and delivery of this Agreement nor the
consummation or
performance of any of the Contemplated Transactions
will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or
result in a violation
of (A) any provision of the Organizational
Documents of the
Company or the Trust Agreement, or (B) any
resolution adopted by
the board of directors or the stockholders of
the Company;
(ii) in any material respect,
contravene, conflict with,
or result in a violation of, or give any
Governmental Body or
other Person the right to challenge any of
the Contemplated
Transactions or to exercise any remedy or
obtain any relief
under, any Legal Requirement or any Order to
which the Company or
any Seller, or any of the assets owned or
used by the Company,
may be subject;
(iii) in any material respect,
contravene, conflict with,
or result in a violation of any of the terms or
requirements of,
or give any Governmental Body the right to
revoke, withdraw,
suspend, cancel, terminate, or modify,
any Governmental
Authorization that is held by the Company
or that otherwise
relates to the business of, or any of the
assets owned or used
by, the Company;
(iv) cause Buyer or the Company to
become subject to, or
to become liable for the payment of, any
Tax except as the
Company or Buyer would otherwise be subject
to in the Ordinary
Course of Business;
(v) in any material respect, cause
any of the assets
owned the Company to be reassessed or
revalued by any taxing
authority or other Governmental Body;
(vi) in any material respect,
contravene, conflict with,
or result in a violation or breach of any
provision of, or give
any Person the right to declare a default or
exercise any remedy
under, or to accelerate the maturity or
performance of, or to
cancel, terminate, or modify, any Applicable
Contract; or
(vii) in any material respect, result in
the imposition or
creation of any Encumbrance upon or with
respect to any of the
assets owned or used by the Company.
Except as set forth in Part 3.2 of the Disclosure
Letter, no Seller nor
the Company is or will be required to give any notice
to or obtain any
consent from any Person in connection with the execution
and delivery of this
Agreement or the consummation or performance of any of
the Contemplated
Transactions.
3.3 Capitalization. The authorized equity
securities of the Company
consist of 1,000,000 shares of common stock, par value
$1.00 per share, of
which 3,157 shares are issued and outstanding, and
100,000 shares of eight
percent (8%) convertible, cumulative preferred stock, par
value $100.00 per
share, none of which is issued and outstanding, and
all issued and
outstanding shares as set forth above constitute the
Shares. Sellers are and
will be on the Closing Date the record and beneficial
owners and holders of
the Shares, free and clear of all Encumbrances, in the
amounts set forth on
Part 3.3 of the Disclosure Letter. No legend or other
reference to any
purported Encumbrance appears or will appear upon
any certificate
representing the Shares except as otherwise set forth in
Section 4.3. All of
the Shares have been duly authorized and validly issued
and are fully paid
and nonassessable. There are no Contracts relating to the
issuance, sale, or
transfer of the Shares or other securities of the
Company. None of the
outstanding equity securities or other securities of the
Company was issued
in violation of the Securities Act or any other Legal
Requirement. The
Company does not own, or have any Contract to acquire, any
equity securities
or other securities of any Person or any direct or
indirect equity or
ownership interest in any other business.
3.4 Financial Statements. Sellers have
delivered to Buyer:
(a) unaudited balance sheets of the Company as at
December 31 in each of the
years 1995 and 1996, and the related unaudited statements
of income, changes
in stockholders' equity, and cash flow for each of the
fiscal years then
ended, (b) an unaudited balance sheet of the Company as at
September 30, 1997
(including the notes thereto, the "Balance Sheet"),
and the related
statements of income, changes in stockholders' equity, and
cash flow for the
fiscal year then ended, and (c) an unaudited balance sheet
of the Company as
at September 30, 1997 (the "Interim Balance Sheet") and the
related unaudited
statements of income, changes in stockholders' equity, and
cash flow for the
nine (9) months then ended. Such financial statements
and notes fairly
present the financial condition and the results of
operations, changes in
stockholders' equity, and cash flow of the Company as at
the respective dates
of and for the periods referred to in such financial
statements, all in
accordance with TBA, subject, in the case of interim
financial statements, to
normal recurring year-end adjustments (the effect of
which will not,
individually or in the aggregate, be materially
adverse); the financial
statements referred to in this Section Error! Not
a valid bookmark
self-reference. reflect the consistent application
of TBA accounting
principles throughout the periods involved. Each of the
supporting documents
listed on Part 3.4 of the Disclosure Letter is true
and correct in all
material respects.
3.5 Books and Records. The books of account,
minute books, stock
record books, and other records of the Company, all of
which have been made
available to Buyer, are complete and correct and have
been maintained in
accordance with sound business practices, including the
maintenance of an
adequate system of internal controls for a company the
size of the Company
with the number of employees as the Company has. The
minute books of the
Company contains accurate and complete records of all
meetings held of, and
corporate action taken by, the stockholders, the Boards
of Directors, and
committees of the Boards of Directors of the Company. At
the Closing, all of
those books and records will be in the possession of the
Company.
3.6 Title to Properties; Encumbrances. Part 3.6
of the Disclosure
Letter contains a complete and accurate list of all
leaseholds or other
interests therein owned by the Company. Sellers have
delivered or made
available to Buyer copies of the deeds and other
instruments (as recorded) by
which the Company acquired such real property and
interests, and copies of
all title insurance policies, opinions, abstracts, and
surveys in the
possession of Sellers or the Company and relating to
such property or
interests. The Company owns all the properties and
assets (whether real,
personal, or mixed and whether tangible or intangible)
that they purport to
own located in the facilities owned or operated by the
Company or reflected
as owned in the books and records of the Company,
including all of the
properties and assets reflected in the Interim Balance
Sheet (except for
assets held under capitalized leases disclosed or not
required to be
disclosed in Part 3.6 of the Disclosure Letter and
personal property sold
since the date of the Interim Balance Sheet in the
Ordinary Course of
Business), and all of the properties and assets
purchased or otherwise
acquired by the Company since the date of the Interim
Balance Sheet (except
for personal property acquired and sold since the date of
the Balance Sheet
in the Ordinary Course of Business and consistent with
past practice). All
properties and assets reflected in the Balance Sheet and
the Interim Balance
Sheet are free and clear of all Encumbrances except
(a) mortgages or security
interests shown on the Balance Sheet or the Interim Balance
Sheet as securing
specified liabilities or obligations, with respect to
which no default (or
event that, with notice or lapse of time or both, would
constitute a default)
exists, (b) mortgages or security interests incurred in
connection with the
purchase of property or assets after the date of the
Interim Balance Sheet
(such mortgages and security interests being limited
to the property or
assets so acquired), with respect to which no default (or
event that, with
notice or lapse of time or both, would constitute a
default) exists, and
(c) liens for current taxes not yet due. The Company does
not currently own,
and has never owned, any real property.
3.7 Condition and Sufficiency of Assets. In all
material respects,
the buildings, structures, and equipment of the Company
are structurally
sound, are in good operating condition and repair, and
are adequate for the
uses to which they are being put, and none of such
buildings, structures, or
equipment is in need of maintenance or repairs except for
ordinary, routine
maintenance and repairs that are not material in
nature or cost. The
building, structures, and equipment of the Company are
sufficient for the
continued conduct of the Company's businesses after
the Closing in
substantially the same manner as conducted prior to the
Closing.
3.8 Accounts Receivable. All accounts receivable
of the Company that
are reflected on the Interim Balance Sheet or on the
accounting records of
the Company as of the Closing Date (collectively, the
"Accounts Receivable")
represent or will represent valid obligations arising
from sales actually
made or services actually performed in the Ordinary
Course of Business.
Unless paid prior to the Closing Date, the Accounts
Receivable are or will be
as of the Closing Date current and, to the Company's
and the Seller's
Knowledge, collectible (other than those accounts in
bankruptcy which are set
forth on Part 3.8 of the Disclosure Letter). There is no
contest, claim, or
right of set-off under any Contract with any obligor
of an Accounts
Receivable relating to the amount or validity of such
Accounts Receivable.
Part 3.8 of the Disclosure Letter contains a complete and
accurate list of
all Accounts Receivable as of the date of the Interim
Balance Sheet, which
list sets forth the aging of such Accounts Receivable.
3.9 Inventory. All inventory of the Company,
whether or not
reflected in the Balance Sheet or the Interim Balance
Sheet, consists of a
quality and quantity usable and salable in the Ordinary
Course of Business,
except for obsolete items and items of below-standard
quality, all of which
have been written off or written down to net realizable
value in the Balance
Sheet or the Interim Balance Sheet or on the
accounting records of the
Company as of the Closing Date, as the case may be. All
inventories not
written off have been priced at cost on a first in, first
out basis.
The quantities of each item of inventory (whether
raw materials,
work-in-process, or finished goods) are not excessive, but
are reasonable in
the present circumstances of the Company.
3.10 No Undisclosed Liabilities. Except as set
forth in Part 3.10 of
the Disclosure Letter, the Company has no material
liabilities or obligations
of any nature (whether known or unknown and whether
absolute, accrued,
contingent, or otherwise) except for liabilities or
obligations reflected or
reserved against in the Balance Sheet or the
Interim Balance Sheet,
liabilities associated with the Promissory Note and
current liabilities
incurred in the Ordinary Course of Business since the
date of the Interim
Balance Sheet and the respective dates thereof.
3.11 Taxes.
(a) The Company has filed or caused to be
filed, on a timely
basis, all Tax Returns that are or were required to be
filed by or with
respect to it, either separately or as a member of a group
of corporations,
pursuant to applicable Legal Requirements. Sellers have
delivered to Buyer
copies of, and Part 3.11 of the Disclosure Letter
contains a complete and
accurate list of, all such Tax Returns filed for 1994,
1995 and 1996. The
Company has paid, or made provision for the payment of,
all Taxes that have
or may have become due pursuant to those Tax Returns
or otherwise, or
pursuant to any assessment received by Sellers or the
Company, except such
Taxes, if any, as are listed in Part 3.11 of the
Disclosure Letter and are
being contested in good faith and as to which adequate
reserves, if any
(determined in accordance with TBA) have been provided in
the Balance Sheet
and the Interim Balance Sheet.
(b) Except as described in Part 3.11 of the
Disclosure Letter,
no Seller nor the Company has given or been requested
to give waivers or
extensions (or is or would be subject to a waiver or
extension given by any
other Person) of any statute of limitations relating to
the payment of Taxes
of the Company or for which the Company may be liable.
(c) The charges, accruals, and reserves
with respect to Taxes
on the respective books of the Company are adequate
(determined in accordance
with TBA). There exists no proposed tax assessment
against the Company
except as disclosed in the Balance Sheet or in Part 3.11
of the Disclosure
Letter. No consent to the application of
Section 341(f)(2) of the IRC has
been filed with respect to any property or assets held,
acquired, or to be
acquired by the Company. All Taxes that the Company is
or was required by
Legal Requirements to withhold or collect have been
duly withheld or
collected and, to the extent required, have been
paid to the proper
Governmental Body or other Person.
(d) All Tax Returns filed by (or that include
on a consolidated
basis) the Company are true, correct, and complete in all
material respects.
There is no tax sharing agreement that will require
any payment by the
Company after the date of this Agreement.
3.12 No Material Adverse Change. Since the date of
the Balance Sheet,
there has not been any material adverse change in the
business, operations,
properties, prospects, assets, or condition of the
Company, and no event has
occurred or circumstance exists that may result in such a
material adverse
change.
3.13 Employee Benefits
(a) Except as disclosed on Part 3.13 of the
Disclosure Letter,
no other corporation, trade, business, or other
entity, other than the
Company, together with the Company would now or in the
past constitute a
single employer within the meaning of Section 414 of the
IRC. The Company
and any other entities that now or in the past constitute
a single employer
within the meaning of IRC Section 414 are hereinafter
collectively referred
to as the "Company Group."
(b) Part 3.13(b) of the Disclosure Letter
contains a true and
complete list of all the following agreements or plans
which are presently in
effect or which have previously been in effect and which
cover employees of
any member of the Company Group ("Employees"), and
indicating, with respect
to each, the plans for which the Company maintains or
contributes to on
behalf of their employees:
(i) Any employee benefit plan as
defined in Section 3(3)
of ERISA and any trust or other funding
agency created
thereunder, or under which any member of the
Company Group, with
respect to Employees, has any outstanding,
present, or future
obligation or liability, or under which any
Employee or former
Employee has any present or future right to
benefits which are
covered by ERISA; or
(ii) Any other pension, profit
sharing, retirement,
deferred compensation, stock purchase, stock
option, incentive,
bonus, vacation, severance, disability,
hospitalization, medical,
life insurance or other employee benefit plan,
program, policy,
or arrangement, whether written or unwritten,
formal or informal,
which any member of the Company Group
maintains or to which any
member of the Company Group has any
outstanding, present or
future obligations to contribute or make
payments under, whether
voluntary, contingent or otherwise.
The plans, programs, policies, or
arrangements described in
subparagraph (i) or (ii) above are hereinafter
collectively referred to as
the "Company Plans." Sellers have delivered to Buyer
true and complete
copies of all written plan documents and contracts
evidencing the Company
Plans, as they may have been amended to the date hereof,
together with (A)
all documents, including without limitation, Forms
5500, relating to any
Company Plans required to have been filed prior to the
date hereof with
governmental authorities for each of the three most
recently completed plan
years; (B) attorney's response to any auditor's request
for information for
each of the three most recently completed plan years;
and (C) financial
statements and actuarial reports, if any, for each Company
Plan for the three
most recently completed plan years.
(c) Except as to those plans identified on
Part 3.13(c) of the
Disclosure Letter as tax-qualified Company Plans (the
"Company Qualified
Plans"), no member of the Company Group maintains or
previously maintained a
Company Plan which meets or was intended to meet the
requirements of IRC
Section 401(a). Except as set forth on Part 3.13(c)
of the Disclosure
Letter, the IRS has issued favorable determination letters
to the effect that
each Company Qualified Plan qualifies under IRC Section
401(a) and that any
related trust is exempt from taxation under IRC Section
501(a), and such
determination letters remain in effect and have not been
revoked or, in the
alternative, the members of the Company Group currently
maintain only one
Company Qualified Plan and such Company Qualified Plan is a
standardized form
plan, within the meaning of Revenue Procedure 97-6,
Section 8.05, with
respect to which the IRS has issued a favorable
determination letter and such
determination letter remains in effect and has not been
revoked. Copies of
the most recent determination letters and any
outstanding requests for a
determination letter with respect to each Company
Qualified Plan have been
delivered to Buyer. Except as disclosed on Part 3.13(c)
of the Disclosure
Letter, no Company Qualified Plan has been amended since
the issuance of each
respective determination letter. The Company Qualified
Plans currently
comply in form with the requirements under IRC Section
401(a), other than
changes required by statutes, regulations and rulings for
which amendments
are not yet required. To the Knowledge of Sellers and the
Company, no issue
concerning qualification of the Company Qualified Plans is
pending before or
is threatened by the IRS. To the Knowledge of Sellers and
the Company, the according to their terms
(except for those terms which are inconsistent with the
changes required by
statutes, regulations, and rulings for which changes are
not yet required to
be made, in which case the Company Qualified Plans have
been administered in
accordance with the provisions of those statutes,
regulations and rulings)
and in accordance with the requirements of IRC Section
401(a). No member of
the Company Group or any fiduciary of any Company
Qualified Plan has done
anything that would adversely affect the qualified
status of the Company
Qualified Plans or the related trusts. Any Company
Qualified Plan which is
required to satisfy IRC Section 401(k)(3) and 401(m)(2)
has been tested for
compliance with, and has satisfied the requirements of, IRC
Section 401(k)(3)
and 401(m)(2) for each plan year ending prior to the Closing
Date.
(d) Each member of the Company Group is in
compliance with the
requirements prescribed by any and all statutes, orders,
governmental rules
and regulations applicable to the Company Plans and
all reports and
disclosures relating to the Company Plans required to
be filed with or
furnished to any governmental entity, participants or
beneficiaries prior to
the Closing Date have been or will be filed or furnished
in a timely manner
and in accordance with applicable law.
(e) Except as expressly identified on
Part 3.13(e) of the
Disclosure Letter, no termination or partial
termination of any Company
Qualified Plan has occurred nor has a notice of intent
to terminate any
Company Qualified Plan been issued by a member of the
Company Group.
(f) No member of the Company Group maintains
or has maintained
an "employee benefit pension plan" within the meaning of
ERISA Section 3(2)
that is or was subject to Title IV of ERISA.
(g) Except as listed in Part 3.13(g) of the
Disclosure Letter,
any Company Plan can be terminated on or prior to the
Closing Date without
liability to any member of the Company Group or Buyer,
including without
limitation, any additional contributions, penalties,
premiums, fees or any
other charges as a result of the termination, except to
the extent of funds
set aside for such purpose or reflected as reserved for
such purpose on the
Balance Sheet.
(h) Each member of the Company Group has
made full and timely
payment of, or has accrued pending full and timely payment,
all amounts which
are required under the terms of each of the Company Plans
and in accordance
with applicable laws to be paid as a contribution to each
Company Plan and no
excise taxes are assessable as a result of any non-
deductible or other
contributions made or not made to a Company Plan. The
assets of all Company
Plans which are required under applicable laws to be
held in trust are in
fact held in trust and the assets of each Company Plan
equal or exceed the
liabilities of each such Company Plan. The assets of
each Company Plan are
reported at their fair market value on the books and records
of each plan.
(i) No member of the Company Group has any
past, present or
future obligation or liability to contribute or has
contributed to any
multiemployer plan as defined in ERISA Section 3(37).
(j) No member of the Company Group nor any
other "disqualified
person" or "party in interest" (as defined in IRC
Section 4975 and ERISA
Section 3(14), respectively) with respect to the Company
Plans, has engaged
in any "prohibited transaction" (as defined in IRC
Section 4975 or ERISA
Section 406). All members of the Company Group and all
"fiduciaries" (as
defined in ERISA Section 3(21)) with respect to the Company
Plans, including
any members of the Company Group which are fiduciaries as
to a Company Plan,
have complied in all respects with the requirements of
ERISA Section 404. No
member of the Company Group and no party in interest or
disqualified person
with respect to the Company Plans has taken or omitted any
action which could
lead to the imposition of an excise tax under the IRC or a
fine under ERISA.
(k) Each member of the Company Group has
complied with the
continuation coverage requirements of Section 1001 of
the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, and
ERISA Sections 601
through 608 (collectively, "COBRA Rights") and with the
portability, access
and renewability provisions of Subtitle K, Chapter 100 of
the IRC and Section
701 et. seq. of ERISA.
(l) Except as disclosed on Part 3.13(l)
of the Disclosure
Letter, no member of the Company Group has made or is
obligated to make any
nondeductible contributions to any Company Plan.
(m) Except as set forth in Part 3.13(m)
of the Disclosure
Letter, no member of the Company Group is obligated,
continently or
otherwise, under any agreement to pay any amount which
would be treated as a
"parachute payment," as defined in IRC Section 280G(b)
(determined without
regard to IRC Section 280G(b)(2)(A)(ii)).
(n) Other than routine claims for benefits,
to the Knowledge of
Sellers and the Company, there are no actions, audits,
investigations, suits
or claims pending, or threatened against any Company Plan,
any trust or other
funding agency created thereunder, or against any
fiduciary of any Company
Plan or against the assets of any Company Plan.
(o) The consummation of the transactions
contemplated hereby
will not accelerate or increase any liability under any
Company Plan because
of an acceleration or increase of any of the rights or
benefits to which
Employees may be entitled thereunder.
(p) No member of the Company Group has any
obligation to any
retired or former employee or any current employee of
the Company upon
retirement or termination of employment under any Company
Plan, other than
COBRA Rights.
(q) Except as set forth in Part 3.13(q)
of the Disclosure
Letter or otherwise provided in this Agreement, since the
last date through
which the Interim Balance Sheet reflects financial
information, no member of
the Company Group has (i) increased the rate of
compensation payable or to
become payable to any of the employees of the Company,
other than in the
normal course of business and consistent with past
practice; (ii) has not
made any commitment and has not incurred any liability
to any labor union;
(iii) has not paid or agreed to pay any bonuses or
severance pay; (iv) has
not increased any benefits or rights under any Company
Plan; and (v) has not
adopted any new plan, program, policy or arrangement,
which if it existed as
of the Closing Date, would constitute a Company Plan.
3.14 Compliance with Legal Requirements; Governmental
Authorizations.
(a) Except as set forth in Part 3.14 of the
Disclosure Letter:
(i) the Company is, and at all times
since September 30,
1997 has been, in full compliance in all
material respects with
each Legal Requirement that is or was
applicable to it or to the
conduct or operation of its business or the
ownership or use of
any of its assets;
(ii) no event has occurred or
circumstance exists that
(with or without notice or lapse of time) (A)
may constitute or
result in a material violation by the Company
of, or a material
failure on the part of the Company to comply
with, any Legal
Requirement, or (B) may give rise to any
obligation on the part
of the Company to undertake, or to bear all or
any portion of the
cost of, any remedial action of any nature; and
(iii) the Company has not received,
at any time since
September 30, 1997, any notice or other
communication (whether
oral or written) from any Governmental Body
or any other Person
regarding (A) any actual, alleged,
possible, or potential
violation of, or failure to comply with, any
Legal Requirement,
(B) any actual, alleged, possible, or potential
obligation on the
part of the Company to undertake, or to bear
all or any portion
of the cost of, any remedial action of any
nature, or (C) either
to revoke, withdraw or suspend any license to
operate the Company
or any of its assets, or to terminate or
decertify or exclude
from any participation of the Company in
Medicare, Medicaid,
CHAMPUS or other governmental health care
programs.
(b) Part 3.14 of the Disclosure Letter
contains a complete and
accurate list of each Governmental Authorization that is
held by the Company
or that otherwise relates to the business of, or to any
of the assets owned
or used by, the Company. Each Governmental Authorization
listed or required
to be listed in Part 3.14 of the Disclosure Letter is valid
and in full force
and effect. Except as set forth in Part 3.14 of the
Disclosure Letter:
(i) the Company is, and at all times
since January 1,
1994 has been, in full compliance in all
material respects with
all of the terms and requirements of
each Governmental
Authorization identified or required to be
identified in Part
3.14 of the Disclosure Letter;
(ii) no event has occurred or
circumstance exists that may
(with or without notice or lapse of time)
(A) constitute or
result directly or indirectly in a material
violation of or a
material failure to comply with any term or
requirement of any
Governmental Authorization listed or
required to be listed in
Part 3.14 of the Disclosure Letter, or (B)
result directly or
indirectly in the revocation,
withdrawal, suspension,
cancellation, or termination of, or any
modification to,
any Governmental Authorization listed or
required to be listed in
Part 3.14 of the Disclosure Letter;
(iii) the Company has not received,
at any time since
January 1, 1994, any notice or other
communication (whether oral
or written) from any Governmental Body or
any other Person
regarding (A) any actual, alleged,
possible, or potential
violation of or failure to comply with any term
or requirement of
any Governmental Authorization, or (B) any
actual, proposed,
possible, or potential revocation,
withdrawal, suspension,
cancellation, termination of, or modification
to any Governmental
Authorization; and
(iv) all applications required to have
been filed for the
renewal of the Governmental Authorizations
listed or required to
be listed in Part 3.14 of the Disclosure
Letter have been duly
filed on a timely basis with the appropriate
Governmental Bodies,
and all other filings required to have been
made with respect to
such Governmental Authorizations have been
duly made on a timely
basis with the appropriate Governmental Bodies.
The Governmental Authorizations listed in Part 3.14
of the Disclosure
Letter collectively constitute all of the
Governmental Authorizations
necessary to permit the Company to lawfully conduct
and operate their
businesses in the manner they currently conduct and
operate such businesses
and to permit the Company to own and use its assets in the
manner in which it
currently owns and uses such assets.
3.15 Legal Proceedings; Orders.
(a) Except as set forth in Part 3.15 of the
Disclosure Letter,
there is no pending Proceeding:
(i) that has been commenced by or
against the Company or
that otherwise relates to or may affect the
business of, or any
of the assets owned or used by, the Company; or
(ii) that challenges, or that may
have the effect of
preventing, delaying, making illegal, or
otherwise interfering
with, any of the Contemplated Transactions.
To the Knowledge of Sellers and the Company, (1) no
such Proceeding has
been Threatened, and (2) no event has occurred or
circumstance exists that
may give rise to or serve as a basis for the
commencement of any such
Proceeding. Sellers have delivered to Buyer copies
of all pleadings,
correspondence, and other documents relating to each
Proceeding listed in
Part 3.15 of the Disclosure Letter. The Proceedings
listed in Part 3.15 of
the Disclosure Letter will not have a material
adverse effect on the
business, operations, assets, condition, or prospects of the
Company.
(b) Except as set forth in Part 3.15 of the
Disclosure Letter:
(i) there is no Order to which the
Company, or any of the
assets owned or used by the Company, is subject;
(ii) no Seller is subject to any Order
that relates to the
business of, or any of the assets owned or
used by, the Company;
and
(iii) to the Knowledge of Sellers and
the Company, no
officer, director, agent, or employee of the
Company is subject
to any Order that prohibits such officer,
director, agent, or
employee from engaging in or continuing any
conduct, activity, or
practice relating to the business of the
Company.
3.16 Absence of Certain Changes and Events.
Except as set forth in
Part 3.16 of the Disclosure Letter, since the date of the
Interim Balance
Sheet, the Company has conducted its businesses only in
the Ordinary Course
of Business and there has not been any:
(a) change in the Company's authorized or
issued capital stock;
grant of any stock option or right to purchase shares of
capital stock of the
Company; issuance of any security convertible into such
capital stock; grant
of any registration rights; purchase, redemption,
retirement, or other
acquisition by the Company of any shares of any such
capital stock; or
declaration or payment of any dividend or other
distribution or payment in
respect of shares of capital stock;
(b) amendment to the Organizational Documents
of the Company;
(c) payment or increase by the Company
of any bonuses,
salaries, or other compensation to any stockholder,
director, officer, or
(except in the Ordinary Course of Business) employee
or entry into any
employment, severance, or similar Contract with any
director, officer, or
employee;
(d) adoption of, or increase in the
payments to or benefits
under, any Company Plans;
(e) damage to or destruction or loss of any
asset or property
of the Company, whether or not covered by insurance,
materially and adversely
affecting the properties, assets, business, financial
condition, or prospects
of the Company;
(f) entry into, termination of, or
receipt of notice of
termination of (i) any license, distributorship,
dealer, sales
representative, joint venture, credit, or similar
agreement, or (ii) any
Contract or transaction involving a total remaining
commitment by or to the
Company of at least $25,000;
(g) sale (other than sales of inventory in
the Ordinary Course
of Business), lease, or other disposition of any asset
or property of the
Company or mortgage, pledge, or imposition of any lien or
other encumbrance
on any material asset or property of the Company;
(h) cancellation or waiver of any claims or
rights with a value
to the Company in excess of $25,000;
(i) change in the accounting methods used by
the Company; or
(j) agreement, whether oral or written, by
the Company to do
any of the foregoing.
3.17 Contracts; No Defaults.
(a) Part 3.17(a) of the Disclosure Letter
contains a complete
and accurate list, and Sellers have delivered to Buyer
true and complete
copies, of:
(i) each Applicable Contract that
involves performance of
services or delivery of goods or materials by
the Company of an
amount or value in excess of $25,000;
(ii) each Applicable Contract that
involves performance of
services or delivery of goods or materials to
the Company of an
amount or value in excess of $25,000;
(iii) each Applicable Contract that was
not entered into in
the Ordinary Course of Business and that
involves expenditures or
receipts of the Company in excess of $25,000;
(iv) each lease, rental or occupancy
agreement, license,
installment and conditional sale agreement,
and other Applicable
Contract affecting the ownership of, leasing
of, title to, use
of, or any leasehold or other interest in,
any real or personal
property (except personal property leases
and installment and
conditional sales agreements having a value per
item or aggregate
payments of less than $10,000 and with
terms of less than one
year);
(v) each licensing agreement or other
Applicable Contract
with respect to patents, trademarks,
copyrights, or other
intellectual property, including agreements
with current or
former employees, consultants, or
contractors regarding the
appropriation or the non-disclosure of any of
the Intellectual
Property Assets;
(vi) each collective bargaining
agreement and other
Applicable Contract to or with any labor union
or other employee
representative of a group of employees;
(vii) each joint venture, partnership,
and other Applicable
Contract (however named) involving a sharing of
profits, losses,
costs, or liabilities by the Company with any
other Person;
(viii) each Applicable Contract
containing covenants
that in any way purport to restrict the
business activity of the
Company or any Affiliate of the Company or
limit the freedom of
the Company or any Affiliate of the Company to
engage in any line
of business or to compete with any Person;
(ix) each Applicable Contract providing
for payments to or
by any Person based on sales, purchases, or
profits, other than
direct payments for goods;
(x) each power of attorney that is
currently effective
and outstanding;
(xi) each Applicable Contract entered
into other than in
the Ordinary Course of Business that contains
or provides for an
express undertaking by the Company to be
responsible for
consequential damages;
(xii) each Applicable Contract for
capital expenditures in
excess of $25,000;
(xiii) each written warranty,
guaranty, and or other
similar undertaking with respect to
contractual performance
extended by the Company other than in the
Ordinary Course of
Business; and
(xiv) each amendment, supplement, and
modification (whether
oral or written) in respect of any of the
foregoing.
(b) Except as set forth in Part 3.17(b)
of the Disclosure
Letter, each Contract identified or required to be
identified in Part 3.17(a)
of the Disclosure Letter is in full force and effect
and is valid and
enforceable in accordance with its terms.
(c) Except as set forth in Part 3.17(c)
of the Disclosure
Letter:
(i) the Company is, and at all times
since September 30,
1997 has been, in full compliance with all
applicable material
terms and requirements of each Contract under
which it has or had
any obligation or liability or by which it or
any of the assets
owned or used by it is or was bound;
(ii) to Sellers' Knowledge, each other
Person that has or
had any obligation or liability under any
Contract under which
the Company has or had any rights is, and
at all times since
September 30, 1997 has been, in full
compliance with all
applicable terms and requirements of such
Contract;
(iii) no event has occurred or
circumstance exists that
(with or without notice or lapse of time)
may contravene,
conflict with, or result in a violation or
breach of, or give the
Company or other Person the right to
declare a default or
exercise any remedy under, or to accelerate
the maturity or
performance of, or to cancel, terminate,
or modify, any
Applicable Contract; and
(iv) the Company has not given to or
received from any
other Person, at any time since September 30,
1997, any notice or
other communication (whether oral or
written) regarding any
actual, alleged, possible, or potential
violation or breach of,
or default under, any Contract.
(d) There are no renegotiations of, attempts
to renegotiate, or
outstanding rights to renegotiate any material amounts paid
or payable to the
Company under current or completed Contracts with any
Person that would have
a material adverse effect on the business of the
Company and, to the
Knowledge of Sellers and the Company, no such Person has
made written demand
for such renegotiation.
3.18 Insurance.
(a) Sellers have delivered to Buyer:
(i) true and complete copies of all
policies of insurance
to which the Company is a party or under which
the Company, or
any director of the Company, is currently
covered; and
(ii) true and complete copies of all
pending applications
for policies of insurance.
(b) Part 3.18(b) of the Disclosure Letter
describes:
(i) any self-insurance arrangement by
or affecting the
Company, including any reserves established
thereunder;
(ii) any contract or arrangement,
other than a policy of
insurance, for the transfer or sharing of
any risk by the
Company; and
(iii) all obligations of the Company to
third parties with
respect to insurance (including such
obligations under leases and
service agreements) and identifies the
policy under which such
coverage is provided.
(c) Part 3.18(c) of the Disclosure Letter
sets forth, by year,
for the current policy year:
(i) a summary of the loss experience
under each policy;
(ii) a statement describing each claim
under an insurance
policy for an amount in excess of $10,000,
which sets forth:
(A) the name of the claimant;
(B) a description of the policy by
insurer, type of
insurance, and period of coverage; and
(C) the amount and a brief
description of the
claim; and
(iii) a statement describing the loss
experience for all
claims that were self-insured, including the
number and aggregate
cost of such claims.
(d) Except as set forth on Part 3.18(d)
of the Disclosure
Letter:
(i) All policies to which the Company
is a party or that
provide coverage to any Seller, the Company,
or any director or
officer of the Company: (A) are valid,
outstanding, and
enforceable; (B) are sufficient for
compliance with all Legal
Requirements and Contracts to which the
Company is a party or by
which it is bound; (C) will continue in full
force and effect
following the consummation of the
Contemplated Transactions or
Sellers will exert their best, good faith
efforts to continue
such policies and, to Sellers' Knowledge,
such policies will
continue in full force and effect; and (D) do
not provide for any
retrospective premium adjustment or other
experienced-based
liability on the part of the Company, except
that the Company's
general liability insurance issued by
Hartford is priced
according to the level of the Company's sales
and adjustments may
be made based upon a sales audit, although
any such adjustment
will not be of a material dollar amount.
(ii) No Seller or the Company has
received (A) any refusal
of coverage or any notice that a defense will
be afforded with
reservation of rights, or (B) any notice of
cancellation or any
other indication that any insurance policy is
no longer in full
force or effect or will not be renewed or that
the issuer of any
policy is not willing or able to perform
its obligations
thereunder.
(iii) The Company has paid all
premiums due, and has
otherwise performed its obligations, under
each policy to which
it is a party or that provides coverage to
the Company or
director thereof, except for an adjustment
as noted in Section
3.18(d)(i) hereof.
(iv) The Company has given notice to the insurer of all
claims that may be
insured thereby.
(v) For the five-year period prior to
the effective date
of all current policies listed on
Part 3.18(c) of the
Disclosure Letter, the Company has had
in effect coverage
at least equivalent to all current
coverages.
3.19 Environmental Matters. Except as set forth
in part 3.19 of the
Disclosure Letter:
(a) The Company is, and at all times has been,
in all material
respects, in full compliance with, and has not been and
is not in violation
of or liable under, any Environmental Law. No Seller nor
the Company has any
basis to expect, nor has any of them or any other Person
for whose conduct
they are or may be held to be responsible received, any
actual or Threatened
order, notice, or other communication from (i) any
Governmental Body or
private citizen acting in the public interest, or (ii)
the current or prior
owner or operator of any Facilities, of any actual or
potential violation or
failure to comply with any Environmental Law, or of any
actual or Threatened
obligation to undertake or bear the cost of any
Environmental, Health, and
Safety Liabilities with respect to any of the
Facilities or any other
properties or assets used by the Company.
(b) There are no pending or, to the
Knowledge of Sellers and
the Company, Threatened claims, Encumbrances, or other
restrictions of any
nature, resulting from any Environmental, Health, and
Safety Liabilities or
arising under or pursuant to any Environmental Law,
with respect to or
affecting any of the Facilities or any other properties
and assets used by
the Company.
(c) No Seller nor the Company has received
or has any basis to
expect any citation, directive, inquiry, notice, Order,
summons, warning, or
other communication that relates to Hazardous
Materials, or any alleged,
actual, or potential violation or failure to comply with
any Environmental
Law, or of any alleged, actual, or potential obligation to
undertake or bear
the cost of any Environmental, Health, and Safety
Liabilities with respect to
any of the Facilities or any other properties or assets
used by the Company,
or with respect to any property or facility to which
Hazardous Materials
generated, manufactured, refined, transferred, imported,
used, or processed
by Sellers, the Company, or any other Person for whose
conduct they are or
may be held responsible, have been transported, treated,
stored, handled,
transferred, disposed, recycled, or received.
(d) Neither Seller nor the Company
has any material
Environmental, Health, and Safety Liabilities with respect
to the Facilities.
(e) There are no Hazardous Materials
present on or in the
Environment at the Facilities except in full compliance
in all material
respects with all applicable Environmental Laws.
(f) There has been no Release or, to the
Knowledge of Sellers
and the Company, threat of Release, of any Hazardous
Materials at or from the
Facilities or at any other locations where any
Hazardous Materials were
generated, manufactured, refined, transferred, produced,
imported, used, or
processed from or by the Facilities, or from or by any
other properties and
assets used by the Company.
(g) Sellers have delivered to Buyer true and
complete copies
and results of any reports, studies, analyses, tests, or
monitoring possessed
or initiated by Sellers or any the Company pertaining to
Hazardous Materials
in, on, or under the Facilities, or concerning compliance
by Sellers or the
Company.
3.20 Employees.
(a) Part 3.20 of the Disclosure Letter
contains (i) a complete
and accurate list of the following information for each
employee or director
of the Company, including each employee on leave of absence
or layoff status:
employer; name; job title; current compensation paid or
payable and any
change in compensation since September 30, 1997; and
(ii) a list of all
written contracts of employment with the Company.
(b) No director or officer, or to the
Knowledge of Seller,
employee of the Company, is a party to, or is
otherwise bound by, any
agreement or arrangement, including any employment,
confidentiality,
noncompetition, or proprietary rights agreement,
between such employee or
director and any other Person ("Proprietary Rights
Agreement") that in any
way adversely affects or will affect (i) the performance
of his duties as an
employee or director of the Company, or (ii) the ability
of the Company to
conduct its business, including any Proprietary Rights
Agreement with Sellers
or the Company by any such employee or director. To
Sellers' Knowledge, no
director, officer, or other key employee of the Company
intends to terminate
his employment with the Company.
(c) There are no retired employees or
directors of the Company
or dependants who are receiving benefits or are scheduled
to receive benefits
in the future, except for Company Plan benefits set
forth in Section 3.13
which are properly accrued on the Financial Statements.
3.21 Labor Relations; Compliance. Since
September 30, 1997, the
Company has not been and is not a party to any collective
bargaining or other
labor Contract. Since September 30, 1997, there has not
been, there is not
presently pending or existing, and to Sellers' and the
Company's Knowledge
there is not Threatened, (a) any strike, slowdown,
picketing, work stoppage,
or employee grievance process, (b) any Proceeding
against or affecting the
Company relating to the alleged violation of any Legal
Requirement pertaining
to labor relations or employment matters, including any
charge or complaint
filed by an employee or union with the National Labor
Relations Board, the
Equal Employment Opportunity Commission, or any comparable
Governmental Body,
organizational activity, or other labor or employment
dispute against or
affecting the Company or its premises, or (c) any
application for
certification of a collective bargaining agent. To Sellers'
and the Company's
Knowledge, no event has occurred or circumstance exists
that could provide
the basis for any work stoppage or other labor dispute.
There is no lockout
of any employees by the Company, and no such action is
contemplated by the
Company. The Company has complied in all material
respects with all Legal
Requirements relating to employment, equal
employment opportunity,
nondiscrimination, immigration, wages, hours,
benefits, collective
bargaining, the payment of social security and similar
taxes, occupational
safety and health, and plant closing. The Company is
not liable for the
payment of any compensation, damages, taxes, fines,
penalties, or other
amounts, however designated, for failure to comply with
any of the foregoing
Legal Requirements.
3.22 Intellectual Property.
(a) Intellectual Property Assets -- The
term "Intellectual
Property Assets" includes:
(i) the name "Drake Management
Services, Inc.", all
fictional business names, trading names,
registered and
unregistered trademarks, service marks,
and applications
(collectively, "Marks");
(ii) all copyrights in both
published works and
unpublished works (collectively, "Copyrights");
and
(iii) all know-how, trade
secrets, confidential
information, customer lists, software,
technical information,
data, process technology, plans, drawings,
and blue prints
(collectively, "Trade Secrets"); owned, used,
or licensed by the
Company as licensee or licensor.
(b) Agreements. Part 3.22(b) of the
Disclosure Letter contains
a complete and accurate list and summary description,
including any royalties
paid or received by the Company, of all Contracts
relating to the
Intellectual Property Assets to which Company is a
party or by which any
Company is bound. There are no outstanding and, to
Sellers' and the
Company's Knowledge, no Threatened disputes or
disagreements with respect to
any such agreement.
(c) Know-How Necessary for the Business.
The Intellectual
Property Assets are all those necessary for the
operation of the Company's
businesses as it is currently conducted. The Company
is the owner of all
right, title, and interest in and to each of the
Intellectual Property
Assets, free and clear of all liens, security
interests, charges,
encumbrances, equities, and other adverse claims, and
has the right to use
without payment to a third party all of the Intellectual
Property Assets.
(d) Patents. The Company owns no patents.
(e) Trademarks.
(i) Part 3.22(e) of Disclosure Letter
contains a complete
and accurate list and summary description
of all Marks. The
Company is the owner of all right, title and
interest in and to
each of the Marks, free and clear of all
liens, security
interests, charges, encumbrances, equities,
and other adverse
claims.
(ii) No Mark has been or is now
involved in any
opposition, invalidation, or cancellation
and, to Sellers' and
the Company's Knowledge, no such action is
Threatened with the
respect to any of the Marks.
(iii) To Sellers' and the Company's
Knowledge, there is no
potentially interfering trademark or trademark
application of any
third party.
(iv) No Mark is infringed or, to
Sellers' and the
Company's Knowledge, has been challenged or
threatened in any
way. None of the Marks used by the Company
infringes or is
alleged to infringe any trade name, trademark,
or service mark of
any third party.
(f) Copyrights.
(i) Part 3.22(f) of the Disclosure
Letter contains a
complete and accurate list and summary
description of all
registered Copyrights. The Company is the
owner of all right,
title and interest in and to each of the
registered Copyrights,
free and clear of all liens, security
interests, charges,
encumbrances, equities, and other adverse
claims.
(ii) No Copyright is infringed or, to
Sellers' and the
Company's Knowledge, has been challenged or
threatened in any
way. None of the subject matter of any
of the registered
Copyrights infringes or is alleged to infringe
any copyright of
any third party or is a derivative work
based on the work of a
third party.
(iii) All works encompassed by the
registered Copyrights
have been marked with the proper copyright
notice.
(g) Trade Secrets.
(i) With respect to each Trade Secret,
the documentation
relating to such Trade Secret is current,
accurate, and
sufficient in detail and content to identify
and explain it and
to allow its full and proper use without
reliance on the
knowledge or memory of any individual.
(ii) Sellers and the Company have
taken all reasonable
precautions to protect the secrecy,
confidentiality, and value of
their Trade Secrets.
(iii) The Company has good title and an
absolute (but not
necessarily exclusive) right to use the Trade
Secrets. The Trade
Secrets are not part of the public knowledge or
literature, and,
to Sellers' and the Company's Knowledge,
have not been used,
divulged, or appropriated either for the
benefit of any Person or
to the detriment of the Company. No Trade
Secret is subject to
any adverse claim or has been challenged or
threatened in any way.
3.23 Certain Payments. Since January 1, 1994,
neither the Company nor
any director, officer, agent, or employee of the Company,
or any other Person
associated with or acting for or on behalf of the Company,
has directly or
indirectly (a) made, directly or indirectly, any
contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other
payment to any Person,
private or public, regardless of form, whether in
money, property, or
services (i) to obtain favorable treatment in securing
business, (ii) to pay
for favorable treatment for business secured, (iii)
to obtain special
concessions or for special concessions already obtained,
for or in respect of
the Company or any Affiliate of the Company, or (iv) in
violation of any
Legal Requirement, (b) received, directly or
indirectly, any rebates,
payments, commissions, promotional allowances or any other
economic benefits
from any vendor, governmental employee or other Person
with whom the Company
has done business, directly or indirectly, which would
reasonably be expected
to subject the Company to any damage or penalty in any
civil, criminal or
governmental litigation or proceeding, or (c) established
or maintained any
fund or asset that has not been recorded in the books
and records of the
Company.
3.24 Fraud and Abuse; Financial Relationships. The
Company does not
have any government contracts, and the Company has no
claims relating to
Medicare, Medicaid CHAMPUS or other governmental
reimbursements.
3.25 Relationships with Related Persons. No Seller
or any Affiliate
of Sellers or of the Company has, or since January 1,
1994, has had, any
interest in any property (whether real, personal, or
mixed and whether
tangible or intangible), used in or pertaining to the
Company's businesses.
No Seller or any Affiliate of Sellers or of the
Company is, or since
January 1, 1994 has owned (of record or as a beneficial
owner) an equity
interest or any other financial or profit interest in, a
Person that has (i)
had business dealings or a material financial interest
in any transaction
with the Company, or (ii) engaged in competition with
the Company with
respect to any line of the products or services of the
Company (a "Competing
Business") in any market presently served by the Company
except for less than
five percent (5%) of the outstanding capital stock of any
Competing Business
that is publicly traded on any recognized exchange or in the
over-the-counter
market. Except as set forth in Part 3.25 of the Disclosure
Letter, no Seller
nor any Affiliate of Sellers or of the Company is a
party to any Contract
with, or has any claim or right against, the Company.
3.26 Brokers or Finders. Sellers and their
Representatives have
incurred no obligation or liability, contingent or
otherwise, for brokerage
or finders' fees or agents' commissions or other
similar payment in
connection with the Contemplated Transactions.
3.27 Disclosure.
(a) No representation or warranty of Sellers
in this Agreement
and no statement in the Disclosure Letter omits to
state a material fact
necessary to make the statements herein or therein,
in light of the
circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 5.5
Notification.
Between the date of this Agreement and the Closing Date,
each Seller will
promptly notify Buyer in writing if such Seller or the
Company becomes aware
of any fact or condition that causes or constitutes a
Breach of any of
Sellers'representations and warranties as of the date of
this Agreement, or
if such Seller or the Company becomes aware of the
occurrence after the date
of this Agreement of any fact or condition that would
(except as expressly
contemplated by this Agreement) cause or constitute a
Breach of any such
representation or warranty had such representation or
warranty been made as
of the time of occurrence or discovery of such fact or
condition. During the
same period, each Seller will promptly notify Buyer of the
occurrence of any
Breach of any covenant of Sellers in this Article 5.
COVENANTS OF SELLERS
or of the occurrence of any event that may make the
satisfaction of the
conditions in Article 7. CONDITIONS PRECEDENT TO
BUYER'S OBLIGATION TO
CLOSE impossible or unlikely. will contain any untrue
statement or omit to
state a material fact necessary to make the statements
therein or in this
Agreement, in light of the circumstances in which they
were made, not
misleading.
(c) There is no fact known to any Seller
that has specific
application to any Seller or the Company (other than
general economic or
industry conditions) and that materially adversely
affects the assets,
business, prospects, financial condition, or results of
operations of the
Company (on a consolidated basis) that has not been
set forth in this
Agreement or the Disclosure Letter.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization and Good Standing. Buyer is a
corporation duly
organized, validly existing, and in good standing under the
laws of the State
of Georgia.
4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal,
valid, and binding
obligation of Buyer, enforceable against Buyer in
accordance with its terms.
Upon the execution and delivery by Buyer of the
Earnout Agreement, the
Employment Agreements, and the Noncompete Agreements
(collectively, the
"Buyer's Closing Documents"), the Buyer's Closing
Documents will constitute
the legal, valid, and binding obligations of Buyer,
enforceable against Buyer
in accordance with their respective terms. Buyer has
the absolute and
unrestricted right, power, and authority to execute
and deliver this
Agreement and the Buyer's Closing Documents and to
perform its obligations
under this Agreement and the Buyer's Closing Documents.
(b) Except as set forth in Part 4.2 of the
Disclosure Letter,
neither the execution and delivery of this Agreement
by Buyer nor the
consummation or performance of any of the Contemplated
Transactions by Buyer
will not materially breach and/or give any Person the
right to prevent,
delay, or otherwise interfere with any of the
Contemplated Transactions
pursuant to:
(i) any provision of Buyer's
Organizational Documents;
(ii) any resolution adopted by the
board of directors or
the shareholders of Buyer;
(iii) any Legal Requirement or Order to
which Buyer may be
subject;
(iv) any Governmental Authorization that
is held by Buyer;
or
(v) any Contract to which Buyer is a
party or by which
Buyer may be bound.
Except as set forth in Part 4.2 of the Disclosure
Letter, Buyer is not
and will not be required to obtain any consent from any
Person in connection
with the execution and delivery of this Agreement or the
consummation or
performance of any of the Contemplated Transactions.
4.3 Investment Intent. Buyer is acquiring the
Shares for its own
account and not with a view to their distribution within
the meaning of
Section 2(11) of the Securities Act of 1933, as amended.
Buyer understands
that any resale of the shares must be made in
compliance with the
registration requirements of the Securities Act of 1933,
as amended, or
pursuant to an exemption therefrom. Buyer understands
that the certificate
representing the Shares shall be endorsed with the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE
(A) HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF
1933, AS
AMENDED, AND (B) MAY NOT BE SOLD OR
TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR ANY
EXEMPTION
THEREFROM UNDER SAID ACT.
4.4 Certain Proceedings. There is no pending
Proceeding that has
been commenced against Buyer and that challenges, or may
have the effect of
preventing, delaying, making illegal, or otherwise
interfering with, any of
the Contemplated Transactions. To Buyer's Knowledge, no
such Proceeding has
been Threatened.
4.5 Brokers or Finders. Buyer and its agents
have incurred no
obligation or liability, contingent or otherwise, for
brokerage or finders'
fees or agents' commissions or other similar payment in
connection with the
Contemplated Transactions.
4.6 Disclosure.
(a) No representation or warranty of Buyer
in this Agreement
omits to state a material fact necessary to make the
statements herein, in
light of the circumstances in which they were made, not
misleading.
(b) No notice given pursuant to Section 6.4
will contain any
untrue statement or omit to state a material fact
necessary to make the
statements therein or in this Agreement, in light of the
circumstances in
which they were made, not misleading.
(c) There is no fact known to Buyer
that has specific
application to Buyer (other than general economic or
industry conditions) and
that materially adversely affects the assets, business,
prospects, financial
condition, or results of operations of Buyer (on a
consolidated basis) that
has not been set forth in this Agreement.
5. COVENANTS OF SELLERS
5.1 Access and Investigation. Between the date of
this Agreement and
the Closing Date, Sellers will, and will cause the
Company and its
Representatives to, (a) afford Buyer and its
Representatives full and free
access to the Company's offices, facilities,
properties, equipment,
inventories, books, contracts, commitments, records
and other relevant
information of the business and shall furnish such
persons with all
information concerning the business, assets and financial
condition of the
Company as Buyer and its Representatives shall reasonably
request; provided,
however, that no direct contact with Company customers
shall be made without
the consent of R. Drake and such access shall occur in a
manner that does not
disrupt Company employees or business.
5.2 Operation of the Businesses of the Company.
Between the date of
this Agreement and the Closing Date, Sellers will, and will
cause the Company
to:
(a) conduct the business of the Company
only in the Ordinary
Course of Business consistent with past practices;
(b) use their Best Efforts to preserve
intact the current
business organization of the Company, keep available
the services of the
current officers, employees, and agents of the Company,
and maintain the
relations and good will with suppliers, customers,
landlords, creditors,
employees, agents, and others having business relationships
with the Company;
(c) not make any material change in the
operation of the
business;
(d) not enter into any material agreement or
incur any material
liabilities;
(e) make all payments to vendors when due;
(f) confer with Buyer concerning
operational matters of a
material nature; and
(g) otherwise report periodically to
Buyer concerning the
status of the business, operations, and finances of the
Company.
5.3 Negative Covenant. Except as otherwise
expressly permitted by
this Agreement, between the date of this Agreement and
the Closing Date,
Sellers will not, and will cause the Company not to,
without the prior
consent of Buyer, take any affirmative action, or fail to
take any reasonable
action within their or its control, as a result of which
any of the changes
or events listed in Section 3.16 Absence of Certain
Changes and Events.
Except as set forth in Part 3.16 of the Disclosure Letter,
since the date of
the Interim Balance Sheet, the Company has conducted its
businesses only in
the Ordinary Course of Business and there has not been
any: is likely to
occur.
5.4 Required Approvals. As promptly as practicable
after the date of
this Agreement, Sellers will, and will cause the Company
to, make all filings
required by Legal Requirements to be made by them in order
to consummate the
Contemplated Transactions. Between the date of this
Agreement and the
Closing Date, Sellers will, and will cause the Company to,
(a) cooperate with
Buyer with respect to all filings that Buyer elects to make
or is required by
Legal Requirements to make in connection with the
Contemplated Transactions,
and (b) cooperate with Buyer in obtaining all consents
identified in Part 4.2
of the Disclosure Letter.
5.5 Notification. Between the date of this
Agreement and the Closing
Date, each Seller will promptly notify Buyer in writing if
such Seller or the
Company becomes aware of any fact or condition that causes
or constitutes a
Breach of any of Sellers' representations and warranties
as of the date of
this Agreement, or if such Seller or the Company
becomes aware of the
occurrence after the date of this Agreement of any fact
or condition that
would (except as expressly contemplated by this
Agreement) cause or
constitute a Breach of any such representation or
warranty had such
representation or warranty been made as of the time
of occurrence or
discovery of such fact or condition. During the same
period, each Seller will
promptly notify Buyer of the occurrence of any Breach of
any covenant of
Sellers in this Article 5. COVENANTS OF SELLERS or of
the occurrence of
any event that may make the satisfaction of the conditions
in Article 7.
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
impossible or unlikely.
5.6 Payment of Indebtedness by Related Persons.
Except as expressly
provided in this Agreement, Sellers will cause all
indebtedness owed to the
Company by its Seller or any Affiliate of any Seller to be
paid in full prior
to Closing.
5.7 No Negotiation. Sellers agree that until the
earlier of March 5,
1998 or such date upon which Buyer notifies Seller that it
has abandoned the
Contemplated Transactions, the Company and Sellers shall
deal exclusively
with Buyer with respect to the Contemplated Transactions
and the Company and
Sellers will not, and will direct the Company's
Representatives not to, (i)
solicit the submission of proposals or offers from any
person relating to any
acquisition or purchase of all or a material part of the
assets or stock of
the Company or any merger, consolidation, or similar
transaction with respect
to the Company; (ii) participate in any discussions
or negotiations
regarding, or furnish any information to any other
person other than Buyer
with respect to any such possible transaction; or
(iii) enter into any
agreement or understanding, whether oral or in writing,
that would prevent
the consummation of the Contemplated Transactions. If,
notwithstanding the
foregoing, the Company or the Sellers should receive any
such proposal from a
third party or any inquiry regarding any such proposal,
the Company shall
promptly inform Buyer thereof.
5.8 Satisfaction of Obligations. On or before
December 31, 1997, the
Company shall pay in full all amounts owed to Graeme
Crothall and R. Drake.
5.9 Payment of 1997 Profits. Prior to the
Closing, the Company may
pay out to its employees and shareholders as bonuses or
other compensation
such amounts as the Company deems appropriate, not to
exceed $447,445 in the
aggregate, provided that (i) there is sufficient cash in
the Company to pay
such bonuses and all related payroll taxes; (ii) if the
Villa DeAnza accounts
receivable is not collected at the time of such payment,
such receivable must
be written off and there shall be a dollar-for-dollar
reduction in the total
amount paid as bonuses hereunder; and (iii) all year-
end adjustments,
including without limitation expensing fixed assets
purchased during the
year, must be booked prior to the payment of such bonuses.
5.10 Termination of Company Qualified Plan. The
Company shall take
all appropriate corporate action no later than the day
before the Closing
Date to terminate the sole Company Qualified Plan
maintained by the Company,
effective no later than the day before the Closing
Date. Unless the
provisions of the Company Qualified Plan expressly
provide to the contrary,
appropriate corporate action shall mean duly authorized
action by the Board
of Directors of the Company.
6. COVENANTS OF BUYER
6.1 Approvals of Governmental Bodies. As
promptly as practicable
after the date of this Agreement, Buyer will, and will
cause each of its
Affiliate to, make all filings required by Legal
Requirements to be made by
them to consummate the Contemplated Transactions.
Between the date of this
Agreement and the Closing Date, Buyer will, and will cause
each Affiliate to,
(a) cooperate with Sellers with respect to all filings
that Sellers are
required by Legal Requirements to make in connection with
the Contemplated
Transactions, and (b) cooperate with Sellers in
obtaining all consents
identified in Part 3.2 of the Disclosure Letter; provided
that this Agreement
will not require Buyer to dispose of or make any change in
any portion of its
business or to suffer any other material adverse
effect to obtain a
Governmental Authorization.
6.2 Loan to the Company. On or before December 31,
1997, subject to
customary conditions, Buyer shall lend the Company
sufficient funds (or
arrange for financing) to pay off the obligations of
the Company due to
Graeme Crothall and R. Drake in the aggregate amount
of approximately
$289,750.06 as of December 31, 1997. The Company shall
execute and deliver
to Buyer a promissory note (the "Promissory Note") in
the form attached
hereto as Exhibit 6.2. The Note shall be secured by a
security interest in
all accounts receivable of the Company and the proceeds
thereof.
6.3 Notification. Between the date of this
Agreement and the Closing
Date, Buyer will promptly notify Seller in writing if
Buyer becomes aware of
any fact or condition that causes or constitutes a Breach
of any of Buyer's
representations and warranties as of the date of this
Agreement, or if Buyer
becomes aware of the occurrence after the date of this
Agreement of any fact
or condition that would (except as expressly contemplated
by this Agreement)
cause or constitute a Breach of any such representation or
warranty had such
representation or warranty been made as of the time
or occurrence of
discovery of such fact or condition. During the same
period, Buyer will
promptly notify Seller of the occurrence of any Breach
of any covenant of
Buyer in this Article 6 or of the occurrence of any event
that may make the
satisfaction of the conditions in Article 8 impossible or
unlikely.
6.4 Employment Matters.
(a) After the Closing, the Company will
maintain a bonus
program comparable to the existing bonus program of the
Company for a period
of two years following the Closing, and all employees of
the Company other
than Mr. Drake will be entitled to participate in such
program.
(b) David Hershberger, Julius Sacco, Joel
Strandgard, Ken Wohl
and Janet Keating shall be guaranteed employment with
the Company for one
year following the Closing, except that such individuals
may be terminated
for cause.
(c) Any employee of the Company who is
employed as of the
Closing Date and who is subsequently terminated
involuntarily by the Company
without cause during the one-year period following the
Closing shall receive
no less than three months of base salary as severance
pay, provided such
employee continues to work for the Company until the
termination date.
(d) Upon the Closing, Michelin shall
receive 5,000 options to
purchase shares of Buyer's common stock, $.01 par value,
pursuant to Buyer's
standard stock option agreement, and each of David
Hershberger, Julius Sacco,
Joel Strandgard, Ken Wohl and Janet Keating shall
receive 3,000 options to
purchase shares of Buyer's Common Stock, $.01 par value,
pursuant to Buyer's
standard stock option agreement.
(e) The Buyer shall provide credit for an
employee's service
with the Company prior to the Closing Date
with respect to those
employees of the Company who remain employed
with the Company
immediately after the Closing Date for the
following purposes:
(i) for purposes of determining both
eligibility to participate
and vesting under the Morrison Health Care,
Inc. Salary Deferral
Plan (the "SDP"), the Morrison Health
Care, Inc. Deferred
Compensation Plan (the "DCP"), the Morrison
Health Care, Inc.
Management Retirement Plan (the "MRP") and the
Morrison Health
Care, Inc. Executive Supplemental Pension Plan
(the "ESP"); (ii)
for purposes of determining the level of
matching contributions
under the SDP and DCP; and (iii) for purposes of
determining the
accrual of benefits under the MRP and ESP;
provided, however,
that for purposes of crediting service under
this clause (iii),
only one year of service credit shall be given
for every two full
years of service with the Company prior to the
Closing Date and
no more than a total of five years of service
credit shall be
granted to any Company employee for service
performed prior to
the Closing Date.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO
CLOSE
Buyer's obligation to purchase the Shares and to take
the other actions
required to be taken by Buyer at the Closing is subject to
the satisfaction,
at or prior to the Closing, of each of the following
conditions (any of which
may be waived by Buyer, in whole or in part):
7.1 Accuracy of Representations.
(a) All of Sellers' representations and
warranties in this
Agreement (considered collectively), and each of these
representations and
warranties (considered individually), must have been
accurate in all material
respects as of the date of this Agreement, and must be
accurate in all
material respects as of the Closing Date as if made on the
Closing Date.
(b) Each of Sellers' representations and
warranties in Sections
3.3, 3.4, 3.12, and 3.24 must have been accurate in all
respects as of the
date of this Agreement, and must be accurate in all
respects as of the
Closing Date as if made on the Closing Date.
7.2 Sellers' Performance.
(a) All of the covenants and obligations
that Sellers are
required to perform or to comply with pursuant to this
Agreement at or prior
to the Closing (considered collectively), and each of
these covenants and
obligations (considered individually), must have been
duly performed and
complied with in all material respects.
(b) Each document required to be
delivered pursuant to
Section 2.4 Closing Obligations. At the Closing:
must have been
delivered.
7.3 Due Diligence. Buyer shall have completed
its due diligence
inquiry into the business, affairs and financial condition
of the Company.
7.4 Consents. Each of the consents identified in
Part 3.2 of the
Disclosure Letter, and each consent identified in Part 4.2
of the Disclosure
Letter, must have been obtained and must be in full force
and effect.
7.5 Termination of Agreements. Each of (a) the
Shareholders and
Voting Agreement dated June 6, 1997, (b) the Stock
Cross Purchase and
Redemption Agreement dated June 6, 1997, and (c) the
Stock Retirement and
Subscription Agreement dated February 8, 1996, as
amended, shall be
terminated.
7.6 Additional Documents. Each of the following
documents must have
been delivered to Buyer:
(a) an opinion of Bonn, Luscher, Padden &
Wilkins, dated the
Closing Date, in the form of Exhibit 7.6(a);
(b) an certificate executed on behalf of the
Sellers dated as
of the Closing Date, in the form of Exhibit 7.6(b);
(c) a UCC-3 termination statement shall be
filed with respect
to all obligations of the Company previously owed to
Graeme Crothall and Mr.
Drake and any collateral held by such individuals shall be
released; and
(d) such other documents as Buyer may
reasonably request for
the purpose of (i) enabling its counsel to provide the
opinion referred to in
Section 8.4 Additional Documents. Buyer must have
caused the following
documents to be delivered to Sellers:(a), (ii) evidencing
the accuracy of any
of Sellers' representations and warranties,
(iii) evidencing the performance
by either Seller of, or the compliance by either Seller
with, any covenant or
obligation required to be performed or complied with
by such Seller,
(iv) evidencing the satisfaction of any condition
referred to in this
Section 7. CONDITIONS PRECEDENT TO BUYER'S
OBLIGATION TO CLOSE, or
(v) otherwise facilitating the consummation or
performance of any of the
Contemplated Transactions.
7.7 No Proceedings. Since the date of this
Agreement, there must not
have been commenced or Threatened against Buyer, or
against any Person
affiliated with Buyer, any Proceeding (a) involving any
challenge to, or
seeking damages or other relief in connection with, any of
the Contemplated
Transactions, or (b) that may have the effect of preventing,
delaying, making
illegal, or otherwise interfering with any of the
Contemplated Transactions.
7.8 No Claim Regarding Stock Ownership or Sale
Proceeds. There must
not have been made or Threatened by any Person any claim
asserting that such
Person (a) is the holder or the beneficial owner of,
or has the right to
acquire or to obtain beneficial ownership of, any
stock of, or any other
voting, equity, or ownership interest in, the Company, or
(b) is entitled to
all or any portion of the Initial Purchase Price payable for
the Shares.
7.9 No Prohibition. Neither the consummation nor
the performance of
any of the Contemplated Transactions will, directly or
indirectly (with or
without notice or lapse of time), materially contravene, or
conflict with, or
result in a material violation of, or cause Buyer or any
Person affiliated
with Buyer to suffer any material adverse consequence
under, (a) any
applicable Legal Requirement or Order, or (b) any Legal
Requirement or Order
that has been published, introduced, or otherwise
formally proposed by or
before any Governmental Body.
7.10 Board Approval. The contemplated transaction
must be approved by
the Board of Directors of Buyer.
8. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO
CLOSE
Sellers' obligation to sell the Shares and to take
the other actions
required to be taken by Sellers at the Closing is
subject to the
satisfaction, at or prior to the Closing, of each of the
following conditions
(any of which may be waived by Sellers, in whole or in
part):
8.1 Accuracy of Representations. All of Buyer's
representations and
warranties in this Agreement (considered collectively),
and each of these
representations and warranties (considered
individually), must have been
accurate in all material respects as of the date of this
Agreement and must
be accurate in all material respects as of the Closing Date
as if made on the
Closing Date.
8.2 Buyer's Performance.
(a) All of the covenants and obligations that
Buyer is required
to perform or to comply with pursuant to this Agreement
at or prior to the
Closing (considered collectively), and each of
these covenants and
obligations (considered individually), must have been
performed and complied
with in all material respects.
(b) Buyer must have delivered each of the
documents required to
be delivered by Buyer pursuant to Section 2.4 Closing
Obligations. At the
Closing: and must have made the cash payments required
to be made by Buyer
pursuant to Section (i) the Initial Purchase Price by bank
cashier's check or
by wire transfer to the accounts specified by Sellers, to
be allocated among
the Sellers pursuant to .
8.3 Consents. Each of the consents identified in
Part 4.2 of the
Disclosure Letter must have been obtained and must be
in full force and
effect.
8.4 Additional Documents. Buyer must have
caused the following
documents to be delivered to Sellers:
(a) an opinion of Powell, Goldstein, Frazer
& Murphy LLP dated
the Closing Date, in the form of Exhibit 8.4(a); and
(b) such other documents as Sellers may
reasonably request for
the purpose of (i) enabling their counsel to provide the
opinion referred to
in Section (a) an opinion of Bonn, Luscher, Padden &
Wilkins, dated the
Closing Date, in the form of Exhibit 7.6(a);,
(ii) evidencing the accuracy of
any representation or warranty of Buyer, (iii) evidencing
the performance by
Buyer of, or the compliance by Buyer with, any
covenant or obligation
required to be performed or complied with by Buyer,
(ii) evidencing the
satisfaction of any condition referred to in this Section 8.
CONDITIONS
PRECEDENT TO SELLERS'OBLIGATION TO CLOSE, or (v) otherwise
facilitating the
consummation of any of the Contemplated Transactions.
8.5 No Injunction. There must not be in effect any
Legal Requirement
or any injunction or other Order that (a) prohibits the
sale of the Shares by
Sellers to Buyer, and (b) has been adopted or issued, or
has otherwise become
effective, since the date of this Agreement.
8.6 No Prohibition. Neither the consummation nor
the performance of
any of the Contemplated Transactions will, directly or
indirectly (with or
without notice or lapse of time), materially contravene, or
conflict with, or
result in a material violation of, or cause any Seller to
suffer any material
adverse consequence under (a) any applicable Legal
Requirement or Order, or
(b) any Legal Requirement or Order that has been
published, introduced, or
otherwise formally proposed by or before any Governmental
Body.
9. TERMINATION
9.1 Termination Events. This Agreement may, by
notice given prior to
or at the Closing, be terminated:
(a) by either Buyer or Sellers if a
material Breach of any
provision of this Agreement has been committed by the
other party and such
Breach has not been waived;
(b) (i) by Buyer if any of the conditions in
Section 7.
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE has not
been satisfied as
of the Closing Date or if satisfaction of such a
condition is or becomes
impossible (other than through the failure of Buyer to
comply with its
obligations under this Agreement) and Buyer has not waived
such condition on
or before the Closing Date; or (ii) by Sellers, if any of
the conditions in
Section 8. CONDITIONS PRECEDENT TO
SELLERS'OBLIGATION TO CLOSE has not
been satisfied as of the Closing Date or if satisfaction
of such a condition
is or becomes impossible (other than through the failure of
Sellers to comply
with their obligations under this Agreement) and Sellers
have not waived such
condition on or before the Closing Date;
(c) by mutual consent of Buyer and Sellers; or
(d) by either Buyer or Sellers if the Closing
has not occurred
(other than through the failure of any party seeking
to terminate this
Agreement to comply fully with its obligations under this
Agreement) on or
before January 31, 1998, or such later date as the parties
may agree upon.
9.2 Effect of Termination. Each party's right of
termination under
Section 9.1 Termination Events. This Agreement may, by
notice given prior to
or at the Closing, be terminated: is in addition to any
other rights it may
have under this Agreement or otherwise, and the
exercise of a right of
termination will not be an election of remedies. If
this Agreement is
terminated pursuant to Section 9.1 Termination Events.
This Agreement may,
by notice given prior to or at the Closing, be
terminated:, all further
obligations of the parties under this Agreement will
terminate, except that
the obligations in Sections 12.1 Expenses. Except as
otherwise expressly
provided in this Agreement, each party to this
Agreement will bear its
respective expenses incurred in connection with the
preparation, execution,
and performance of this Agreement and the
Contemplated Transactions,
including all fees and expenses of agents,
representatives, counsel, and
accountants. and 12.3 Confidentiality. Between the date
of this Agreement
and the Closing Date, Buyer and Sellers will maintain in
confidence, and will
cause the directors, officers, employees, agents, and
advisors of Buyer and
the Company to maintain in confidence, any written,
oral, or other
information obtained in confidence, any written oral, or
other information
obtained in confidence from another party or the Company
in connection with
this Agreement or the Contemplated Transactions, unless
(a) such information
is already known to such party or to others not
bound by a duty of
confidentiality or such information becomes publicly
available through no
fault of such party, (b) the use of such information
is necessary or
appropriate in making any filing or obtaining any
consent or approval
required for the consummation of the Contemplated
Transactions, or (c) the
furnishing or use of such information is required by
or necessary or
appropriate in connection with legal proceedings. will
survive; provided,
however, that if this Agreement is terminated by a
party because of the
Breach of the Agreement by the other party or because
one or more of the
conditions to the terminating party's obligations under
this Agreement is not
satisfied as a result of the other party's failure to
comply with its
obligations under this Agreement, the terminating party's
right to pursue all
legal remedies will survive such termination unimpaired.
10. INDEMNIFICATION; REMEDIES
10.1 Survival; Right to Indemnification Not
Affected by Knowledge.
All representations, warranties, covenants, and
obligations in this
Agreement, the Disclosure Letter, and any other
certificate or document
delivered pursuant to this Agreement will survive the
Closing. The right to
indemnification, payment of Damages or other remedy
based on such
representations, warranties, covenants, and obligations
will not be affected
by any investigation conducted with respect to, or any
Knowledge acquired (or
capable of being acquired) at any time, whether before or
after the execution
and delivery of this Agreement or the Closing Date,
with respect to the
accuracy or inaccuracy of or compliance with, any
such representation,
warranty, covenant, or obligation. The waiver of any
condition based on the
accuracy of any representation or warranty, or on the
performance of or
compliance with any covenant or obligation, will not
affect the right to
indemnification, payment of Damages, or other
remedy based on such
representations, warranties, covenants, and obligations.
10.2 Indemnification and Payment of Damages by
Sellers. Sellers,
jointly and severally, will indemnify and hold harmless
Buyer, the Company,
and their respective Representatives, stockholders,
controlling persons, and
Affiliates (collectively, the "Indemnified Persons") for,
and will pay to the
Indemnified Persons the amount of, any loss,
liability, claim, damage
(including incidental and consequential damages), expense
(including costs of
investigation and defense and reasonable attorneys'
fees) or diminution of
value, whether or not involving a third-party
claim (collectively,
"Damages"), arising, directly or indirectly, from or in
connection with:
(a) any Breach of any representation or
warranty made by
Sellers in this Agreement, the Disclosure Letter, the
supplements to the
Disclosure Letter, or any other certificate or document
delivered by Sellers
pursuant to this Agreement;
(b) any Breach of any representation or
warranty made by
Sellers in this Agreement as if such representation or
warranty were made on
and as of the Closing Date;
(c) any Breach by any Seller of any covenant
or obligation of
such Seller in this Agreement;
(d) any product shipped or manufactured
by, or any services
provided by, any the Company prior to the Closing Date;
(e) any claim by any Person for brokerage or
finder's fees or
commissions or similar payments based upon any agreement
or understanding
alleged to have been made by any such Person with any
Seller or the Company
(or any Person acting on their behalf) in connection
with any of the
Contemplated Transactions.
The remedies provided in this Section 10.2
Indemnification and
Payment of Damages by Sellers. Sellers, jointly and
severally, will
indemnify and hold harmless Buyer, the Company, and
their respective
Representatives, stockholders, controlling persons,
and Affiliates
(collectively, the "Indemnified Persons") for, and
will pay to the
Indemnified Persons the amount of, any loss,
liability, claim, damage
(including incidental and consequential damages), expense
(including costs of
investigation and defense and reasonable attorneys'fees)
or diminution of
value, whether or not involving a third-party
claim (collectively,
"Damages"), arising, directly or indirectly, from or in
connection with: will
not be exclusive of or limit any other remedies that may
be available to
Buyer or the other Indemnified Persons.
10.3 Indemnification and Payment of Damages
by Sellers --
Environmental Matters. In addition to the provisions of
Section 10.2
Indemnification and Payment of Damages by Sellers.
Sellers, jointly and
severally, will indemnify and hold harmless Buyer, the
Company, and their
respective Representatives, stockholders, controlling
persons, and Affiliates
(collectively, the "Indemnified Persons") for, and
will pay to the
Indemnified Persons the amount of, any loss,
liability, claim, damage
(including incidental and consequential damages), expense
(including costs of
investigation and defense and reasonable attorneys'fees)
or diminution of
value, whether or not involving a third-party
claim (collectively,
"Damages"), arising, directly or indirectly, from or in
connection with:,
Sellers, jointly and severally, will indemnify and hold
harmless Buyer, the
Company, and the other Indemnified Persons for, and will
pay to Buyer, the
Company, and the other Indemnified Persons the amount
of, any Damages
(including costs of cleanup, containment, or other
remediation) arising,
directly or indirectly, from or in connection with any
Environmental, Health,
and Safety Liabilities arising out of or relating to: (i)
(A) the ownership,
operation, or condition at any time on or prior to the
Closing Date of the
Facilities or any other properties and assets used by the
Company, or any
Hazardous Materials or other contaminants that were present
on the Facilities
or such other properties and assets at any time on or
prior to the Closing
Date; or (ii) any Hazardous Materials or other
contaminants, wherever
located, that were, or were allegedly, generated,
transported, stored,
treated, Released, or otherwise handled by Sellers or the
Company or by any
other Person for whose conduct they are or may be held
responsible at any
time on or prior to the Closing Date.
10.4 Indemnification and Payment of Damages by
Buyer. Buyer will
indemnify and hold harmless Sellers, and will pay to
Sellers the amount of
any Damages arising, directly or indirectly, from or in
connection with (a)
any Breach of any representation or warranty made by Buyer
in this Agreement
or in any certificate delivered by Buyer pursuant to this
Agreement, (b) any
Breach by Buyer of any covenant or obligation of Buyer in
this Agreement, or
(c) any claim by any Person for brokerage or finder's fees
or commissions or
similar payments based upon any agreement or
understanding alleged to have
been made by such Person with Buyer (or any Person acting
on its behalf) in
connection with any of the Contemplated Transactions.
Notwithstanding the
foregoing, in the case of any Damages arising out of a
third party claim
brought against Parent based on the conduct of its
business as a whole (as
opposed to just the business of Drake), Parent will
pay any reasonable
defense costs related thereto. The remedies provided in
this Section 10.4
will not be exclusive of or limit any other remedies that
may be available to
Sellers.
10.5 Time Limitations. If the Closing occurs,
Sellers will have no
liability (for indemnification or otherwise) with
respect to any
representation or warranty, or covenant or obligation to
be performed and
complied with prior to the Closing Date, other than those
in Sections 3.3,
3.11, 3.13 (with respect to matters other than Tax),
3.19, 3.23 and 3.24
unless on or before the second anniversary of the Closing
Date Buyer notifies
Sellers of a claim specifying the factual basis of that
claim in reasonable
detail to the extent then known by Buyer; a claim with
respect to Section
3.11, 3.13, 3.23 or 3.24 shall be made within the
applicable statute of
limitations; a claim with respect to Sections 3.3 or
3.19 or a claim for
indemnification or reimbursement based upon any covenant
or obligation to be
performed and complied with after the Closing Date, may be
made at any time.
If the Closing occurs, Buyer will have no liability (for
indemnification or
otherwise) with respect to any representation or
warranty, or covenant or
obligation to be performed and complied with prior to
the Closing Date,
unless on or before the second anniversary from the
Closing Date, Sellers
notify Buyer of a claim specifying the factual basis
of that claim in
reasonable detail to the extent then known by
Sellers; a claim for
indemnification or reimbursement based upon any covenant
or obligation to be
performed or complied with after the Closing Date may be
made at any time.
Notwithstanding the foregoing, no party hereto shall
waive any applicable
statute of limitations with respect to any third party
claim.
10.6 Limitations on Amount -- Sellers. Sellers will
have no liability
(for indemnification or otherwise) with respect to the
matters described in
Section 10.2 Indemnification and Payment of
Damages by Sellers.
Sellers, jointly and severally, will indemnify and hold
harmless Buyer, the
Company, and their respective Representatives,
stockholders, controlling
persons, and Affiliates (collectively, the "Indemnified
Persons") for, and
will pay to the Indemnified Persons the amount of, any
loss, liability,
claim, damage (including incidental and consequential
damages), expense
(including costs of investigation and defense and
reasonable attorneys'fees)
or diminution of value, whether or not involving a
third-party claim
(collectively, "Damages"), arising, directly or
indirectly, from or in
connection with: until the total of all Damages with
respect to such matters
exceeds $25,000, and once such threshold is met, Sellers
shall be liable for
all Damages, including, without limitation, such
$25,000. However, this
Section Error! Not a valid bookmark self-reference.
will not apply to any
intentional Breach by any Seller of any representation,
warranty, covenant or
obligation, and Sellers will be jointly and severally
liable for all Damages
with respect to such Breaches.
10.7 Limitations on Amount -- Buyers. Buyer will
have no liability
(for indemnification or otherwise) with respect to the
matters described in
Section 10.4 Indemnification and Payment of Damages
by Buyer. Buyer
will indemnify and hold harmless Sellers, and will pay to
Sellers the amount
of any Damages arising, directly or indirectly, from or
in connection with
(a) any Breach of any representation or warranty made
by Buyer in this
Agreement or in any certificate delivered by Buyer
pursuant to this
Agreement, (b) any Breach by Buyer of any covenant or
obligation of Buyer in
this Agreement, or (c) any claim by any Person for
brokerage or finder's fees
or commissions or similar payments based upon any agreement
or understanding
alleged to have been made by such Person with Buyer (or any
Person acting on
its behalf) in connection with any of the Contemplated
Transactions. until
the total of all Damages with respect to such matters
exceeds $25,000, and
once such threshold is met, Buyer shall be liable for all
Damages, including,
without limitation, such $25,000. However, this Section
Error! Not a valid
bookmark self-reference. will not apply to any intentional
Breach by Buyer of
any representation, warranty, covenant or obligation,
and Buyer will be
liable for all Damages with respect to such Breaches.
10.8 Procedure For Indemnification -- Third Party
Claims.
(a) Promptly after receipt by an
indemnified party under
Section 10.2 Indemnification and Payment of
Damages by Sellers.
Sellers, jointly and severally, will indemnify and hold
harmless Buyer, the
Company, and their respective Representatives,
stockholders, controlling
persons, and Affiliates (collectively, the "Indemnified
Persons") for, and
will pay to the Indemnified Persons the amount of, any
loss, liability,
claim, damage (including incidental and consequential
damages), expense
(including costs of investigation and defense and
reasonable attorneys'fees)
or diminution of value, whether or not involving a
third-party claim
(collectively, "Damages"), arising, directly or
indirectly, from or in
connection with:, 10.4 Indemnification and Payment of
Damages by Buyer.
Buyer will indemnify and hold harmless Sellers, and will
pay to Sellers the
amount of any Damages arising, directly or indirectly,
from or in connection
with (a) any Breach of any representation or warranty
made by Buyer in this
Agreement or in any certificate delivered by Buyer
pursuant to this
Agreement, (b) any Breach by Buyer of any covenant or
obligation of Buyer in
this Agreement, or (c) any claim by any Person for
brokerage or finder's fees
or commissions or similar payments based upon any agreement
or understanding
alleged to have been made by such Person with Buyer (or any
Person acting on
its behalf) in connection with any of the Contemplated
Transactions., or (to
the extent provided in the last sentence of Section 10.3
Indemnification
and Payment of Damages by Sellers -- Environmental
Matters. In addition to
the provisions of Section 10.2 Indemnification and
Payment of Damages by
Sellers. Sellers, jointly and severally, will indemnify
and hold harmless
Buyer, the Company, and their respective
Representatives, stockholders,
controlling persons, and Affiliates (collectively, the
"Indemnified Persons")
for, and will pay to the Indemnified Persons the
amount of, any loss,
liability, claim, damage (including incidental and
consequential damages),
expense (including costs of investigation and
defense and reasonable
attorneys'fees) or diminution of value, whether or
not involving a
third-party claim (collectively, "Damages"), arising,
directly or indirectly,
from or in connection with:, Sellers, jointly and
severally, will indemnify
and hold harmless Buyer, the Company, and the other
Indemnified Persons for,
and will pay to Buyer, the Company, and the other
Indemnified Persons the
amount of, any Damages (including costs of cleanup,
containment, or other
remediation) arising, directly or indirectly, from or in
connection with)
Section 10.3 Indemnification and Payment of Damages
by Sellers --
Environmental Matters. In addition to the provisions of
Section 10.2
Indemnification and Payment of Damages by Sellers.
Sellers, jointly and
severally, will indemnify and hold harmless Buyer, the
Company, and their
respective Representatives, stockholders, controlling
persons, and Affiliates
(collectively, the "Indemnified Persons") for, and
will pay to the
Indemnified Persons the amount of, any loss,
liability, claim, damage
(including incidental and consequential damages), expense
(including costs of
investigation and defense and reasonable attorneys'fees)
or diminution of
value, whether or not involving a third-party
claim (collectively,
"Damages"), arising, directly or indirectly, from or in
connection with:,
Sellers, jointly and severally, will indemnify and hold
harmless Buyer, the
Company, and the other Indemnified Persons for, and will
pay to Buyer, the
Company, and the other Indemnified Persons the amount
of, any Damages
(including costs of cleanup, containment, or other
remediation) arising,
directly or indirectly, from or in connection with
of notice of the
commencement of any Proceeding against it, such indemnified
party will, if a
claim is to be made against an indemnifying party under
such Section, give
notice to the indemnifying party of the commencement of
such claim, but the
failure to notify the indemnifying party will not relieve
the indemnifying
party of any liability that it may have to any indemnified
party, except to
the extent that the indemnifying party demonstrates that
the defense of such
action is prejudiced by the indemnifying party's failure to
give such notice.
(b) If any Proceeding referred to in Section
(a) Promptly
after receipt by an indemnified party under Section 10.2
Indemnification
and Payment of Damages by Sellers. Sellers, jointly and
severally, will
indemnify and hold harmless Buyer, the Company, and
their respective
Representatives, stockholders, controlling persons,
and Affiliates
(collectively, the "Indemnified Persons") for, and
will pay to the
Indemnified Persons the amount of, any loss,
liability, claim, damage
(including incidental and consequential damages), expense
(including costs of
investigation and defense and reasonable attorneys'fees)
or diminution of
value, whether or not involving a third-party
claim (collectively,
"Damages"), arising, directly or indirectly, from or in
connection , 10.4
with:Indemnification and Payment of Damages by Buyer.
Buyer will indemnify
and hold harmless Sellers, and will pay to Sellers the
amount of any Damages
arising, directly or indirectly, from or in connection with
(a) any Breach of
any representation or warranty made by Buyer in this
Agreement or in any
certificate delivered by Buyer pursuant to this Agreement,
(b) any Breach by
Buyer of any covenant or obligation of Buyer in this
Agreement, or (c) any
claim by any Person for brokerage or finder's fees or
commissions or similar
payments based upon any agreement or understanding alleged
to have been made
by such Person with Buyer (or any Person acting on its
behalf) in connection
with any of the Contemplated Transactions., or (to the
extent provided in the
last sentence of Section 10.3 Indemnification and Payment
of Damages by
Sellers -- Environmental Matters. In addition to the
provisions of Section
10.2 Indemnification and Payment of
Damages by Sellers.
Sellers, jointly and severally, will indemnify and hold
harmless Buyer, the
Company, and their respective Representatives,
stockholders, controlling
persons, and Affiliates (collectively, the "Indemnified
Persons") for, and
will pay to the Indemnified Persons the amount of, any
loss, liability,
claim, damage (including incidental and consequential
damages), expense
(including costs of investigation and defense and
reasonable attorneys'fees)
or diminution of value, whether or not involving a
third-party claim
(collectively, "Damages"), arising, directly or
indirectly, from or in
connection with:, Sellers, jointly and severally, will
indemnify and hold
harmless Buyer, the Company, and the other Indemnified
Persons for, and will
pay to Buyer, the Company, and the other Indemnified
Persons the amount of,
any Damages (including costs of cleanup, containment, or
other remediation)
arising, directly or indirectly, from or in connection with)
Section 10.3
Indemnification and Payment of Damages by Sellers --
Environmental Matters.
In addition to the provisions of Section 10.2
Indemnification and Payment
of Damages by Sellers. Sellers, jointly and severally,
will indemnify and
hold harmless Buyer, the Company, and their respective
Representatives,
stockholders, controlling persons, and Affiliates
(collectively, the
"Indemnified Persons") for, and will pay to the
Indemnified Persons the
amount of, any loss, liability, claim, damage
(including incidental and
consequential damages), expense (including costs of
investigation and defense
and reasonable attorneys'fees) or diminution of value,
whether or not
involving a third-party claim (collectively, "Damages"),
arising, directly or
indirectly, from or in connection with:, Sellers, jointly
and severally, will
indemnify and hold harmless Buyer, the Company, and the
other Indemnified
Persons for, and will pay to Buyer, the Company, and the
other Indemnified
Persons the amount of, any Damages (including costs of
cleanup, containment,
or other remediation) arising, directly or indirectly,
from or in connection
with of notice of the commencement of any Proceeding
against it, such
indemnified party will, if a claim is to be made against
an indemnifying
party under such Section, give notice to the
indemnifying party of the
commencement of such claim, but the failure to notify the
indemnifying party
will not relieve the indemnifying party of any liability
that it may have to
any indemnified party, except to the extent that the
indemnifying party
demonstrates that the defense of such action is
prejudiced by the
indemnifying party's failure to give such notice. is
brought against an
indemnified party and it gives notice to the
indemnifying party of the
commencement of such Proceeding, the indemnifying party
will, unless the
claim involves Taxes, be entitled to participate in such
Proceeding and, to
the extent that it wishes (unless (i) the indemnifying
party is also a party
to such Proceeding and the indemnified party determines
in good faith that
joint representation would be inappropriate, or (ii) the
indemnifying party
fails to provide reasonable assurance to the
indemnified party of its
financial capacity to defend such Proceeding and provide
indemnification with
respect to such Proceeding), to assume the defense of such
Proceeding with
counsel reasonably satisfactory to the indemnified party
and, after notice
from the indemnifying party to the indemnified party of
its election to
assume the defense of such Proceeding, the indemnifying
party will not, as
long as it diligently conducts such defense, be liable
to the indemnified
party under this Section 10. INDEMNIFICATION; REMEDIES for
any fees of other
counsel or any other expenses with respect to the defense of
such Proceeding,
in each case subsequently incurred by the indemnified
party in connection
with the defense of such Proceeding, other than
reasonable costs of
investigation. If the indemnifying party assumes the
defense of a Proceeding,
(i) it will be conclusively established for purposes of
this Agreement that
the claims made in that Proceeding are within the scope
of and subject to
indemnification; (ii) no compromise or settlement of
such claims may be
effected by the indemnifying party without the
indemnified party's consent
unless (A) there is no finding or admission of any
violation of Legal
Requirements or any violation of the rights of any
Person and no effect on
any other claims that may be made against the indemnified
party, and (B) the
sole relief provided is monetary damages that are
paid in full by the
indemnifying party; and (iii) the indemnified party will
have no liability
with respect to any compromise or settlement of such claims
effected without
its consent. If notice is given to an indemnifying party
of the commencement
of any Proceeding and the indemnifying party does not,
within ten days after
the indemnified party's notice is given, give notice to the
indemnified party
of its election to assume the defense of such Proceeding,
the indemnifying
party will be bound by any determination made in such
Proceeding or any
compromise or settlement effected by the indemnified
party, absent gross
negligence or willful misconduct on the part of the
indemnified party.
Notwithstanding the foregoing, the indemnified party in
such cases shall use
its reasonable best efforts to provide notice of
material events in any
Proceeding and attempt to obtain the consent of the
indemnifying party to any
compromise or settlement.
(c) Notwithstanding the foregoing, if an
indemnified party
determines in good faith that there is a reasonable
probability that a
Proceeding may adversely affect it or its affiliates
other than as a result
of monetary damages for which it would be entitled to
indemnification under
this Agreement, the indemnified party may, by notice to
the indemnifying
party, assume the exclusive right to defend,
compromise, or settle such
Proceeding, but the indemnifying party will not be bound by
any determination
of a Proceeding so defended or any compromise or settlement
effected without
its consent (which may not be unreasonably withheld).
(d) Sellers and Buyer hereby consent to
the non-exclusive
jurisdiction of any court in which a Proceeding is
brought against any
Indemnified Person for purposes of any claim that an
Indemnified Person may
have under this Agreement with respect to such
Proceeding or the matters
alleged therein, and agree that process may be served
on Sellers or Buyer
with respect to such a claim anywhere in the world.
10.9 Procedure for Indemnification -- Other
Claims. A claim for
indemnification for any matter not involving a third-
party claim may be
asserted by notice to the party from whom indemnification is
sought.
10.10 Insurance Coverages. Notwithstanding any of
the foregoing, an
indemnifying party shall not be liable for the amount of
damages recovered by
the indemnified party from any insurance policies unless
otherwise agreed to
by the parties, and this indemnification shall not
be interpreted or
construed, and the parties do not intend it, to negate
or limit any such
coverages.
11. Dispute Resolution
11.1 Dispute Defined. As used in this Agreement,
"Dispute" shall mean
any dispute or disagreement between the Buyer and the
Sellers concerning the
interpretation of this Agreement, the validity of this
Agreement, any breach
or alleged breach by any party under this Agreement or
any other matter
relating in any way to this Agreement.
11.2 Dispute Resolution Procedures.
(a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation.
Either the Buyer or the
Sellers may initiate a nonbinding mediation proceeding
by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel.
(b) If the Dispute is not resolved by
negotiations pursuant to
Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation.
Either the Buyer or the
Sellers may initiate a nonbinding mediation proceeding
by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
(i) if the parties have not agreed
within 15 calendar
days of the Mediation Request on the
selection of a mediator
willing to serve, CPR, upon the request of
either the Buyer or
the Sellers, shall appoint a member of the CPR
Panels of Neutrals
as the mediator, and
(ii) efforts to reach a settlement will
continue until the
conclusion of the proceedings, which shall
be deemed to occur
upon the earliest of the date that: (A) a
written settlement is
reached, or (B) the mediator concludes and
informs the parties in
writing that further efforts would not be
useful, or (C) the
parties agree in writing that an impasse has
been reached, or (D)
a period of 30 calendar days has passed
since the Mediation
Request and none of the events specified in the
foregoing clauses
(A), (B) or (C) has occurred. No party may
withdraw before the
conclusion of the proceeding.
(c) If a Dispute is not resolved by
negotiation pursuant to
Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation.
Either the Buyer or the
Sellers may initiate a nonbinding mediation proceeding
by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel. of this Agreement
or by mediation
pursuant to Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation.
Either the Buyer or the
Sellers may initiate a nonbinding mediation proceeding
by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement within 70 calendar days after initiation
of the negotiation
process pursuant to Section (a) If a Dispute arises,
the parties shall
follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section 11.2(a), the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., such Dispute and
any other claims
arising out of or relating to this Agreement may be heard,
adjudicated and
determined by arbitration before a single arbitrator
pursuant to the rules of
the American Arbitration Association ("AAA").
Arbitration may be commenced
at any time by any party hereto giving written notice to
each other party to
a dispute that such a dispute has been referred to
arbitration under this
Section 11.2. The arbitrator shall be selected by the joint
agreement of the
parties, but if they do not so agree within 20 days
after the date of the
notice referred to in the preceding sentence, the
selection shall be made
pursuant to the rules from the panels of arbitrators
maintained by the AAA.
Any award rendered by the arbitrator shall be conclusive
and binding upon the
parties hereto; provided, however, that any such award
shall be accompanied
by a written opinion of the arbitrator giving the
reasons for the award.
This provision for arbitration shall be specifically
enforceable by the
parties, and the decision of the arbitrator in accordance
herewith shall be
final and binding and there shall be no right of appeal
therefrom. Unless
otherwise designated by the arbitrator as a result of
fault, each party shall
pay its own expenses of arbitration and the expenses of the
arbitrator shall
be equally shared.
11.3 Provisional Remedies. At any time during
the procedures
specified in Sections (a) If a Dispute arises, the
parties shall follow
the procedures specified in this Article 11. The
parties shall promptly
attempt to resolve any Dispute by negotiations between
themselves. Either the
Buyer or the Sellers may give the other party written
notice of any Dispute
not resolved in the normal course of business. The
parties shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation.
Either the Buyer or the
Sellers may initiate a nonbinding mediation proceeding
by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel. and (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement, a party may seek
a preliminary injunction or other provisional judicial
relief if in its
judgment such action is necessary to avoid irreparable
damage or to preserve
the status quo. Despite such action, the parties will
continue to participate
in good faith in the procedures specified in Section (a)
If a Dispute
arises, the parties shall follow the procedures specified
in this Article 11.
The parties shall promptly attempt to resolve any
Dispute by negotiations
between themselves. Either the Buyer or the Sellers may
give the other party
written notice of any Dispute not resolved in the normal
course of business.
The parties shall meet at a mutually acceptable time
and place within 15
calendar days after delivery of such notice, and
thereafter as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel. and
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to
Section 11.2(a), the
parties shall attempt in good faith to resolve any such
Dispute by nonbinding
mediation. Either the Buyer or the Sellers may
initiate a nonbinding
mediation proceeding by a request in writing to the
other party (the
"Mediation Request"), and both parties will then be
obligated to engage in a
mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions:.
11.4 Tolling Statue of Limitations. All
applicable statutes of
limitation and defenses based upon the passage of time
shall be tolled while
the procedures specified in Sections (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section 11.2(a), the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel. and (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement are pending. The
parties will take such action, if any, as is required to
effectuate such
tolling.
11.5 Performance to Continue. Each party shall
continue to perform
its or his obligations under this Agreement pending final
resolution of any
Dispute.
11.6 Extension of Deadlines. All deadlines
specified in this Article
11 may be extended by mutual agreement between the parties.
11.7 Enforcement. The parties regard the
obligations in this Article
11 to constitute an essential provision of this
Agreement and one that is
legally binding on them. In case of a violation of the
obligations in this
Article 11 by either the Buyer or the Sellers, the other
party may bring an
action to seek enforcement of such obligations in any
state or federal court
specified in Section (c) If a Dispute is not
resolved by negotiation
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation.
Either the Buyer or the
Sellers may initiate a nonbinding mediation proceeding
by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel. of this Agreement
or by mediation
pursuant to Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation.
Either the Buyer or the
Sellers may initiate a nonbinding mediation proceeding
by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement within 70 calendar days after initiation
of the negotiation
process pursuant to Section (a) If a Dispute arises,
the parties shall
follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either the Buyer or the Sellers may give the other party
written notice of
any Dispute not resolved in the normal course of business.
The parties shall
meet at a mutually acceptable time and place within 15
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within 30
calendar days of the disputing party's notice, or if the
parties fail to meet
within such 15 calendar days, either the Buyer or the
Sellers may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section 11.2(a), the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., such Dispute and
any other claims
arising out of or relating to this Agreement may be heard,
adjudicated and
determined by arbitration .
11.8 Costs. The parties shall pay their own costs,
fees, and expenses
incurred in connection with the application of the
provisions of Sections (a)
If a Dispute arises, the parties shall follow the
procedures specified in
this Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to
Section 11.2(a), the
parties shall attempt in good faith to resolve any such
Dispute by nonbinding
mediation. Either the Buyer or the Sellers may
initiate a nonbinding
mediation proceeding by a request in writing to the
other party (the
"Mediation Request"), and both parties will then be
obligated to engage in a
mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.
and (b) If the Dispute is not resolved by negotiations
pursuant to Section
(a) If a Dispute arises, the parties shall
follow the procedures
specified in this Article 11. The parties shall promptly
attempt to resolve
any Dispute by negotiations between themselves. Either
the Buyer or the
Sellers may give the other party written notice of any
Dispute not resolved
in the normal course of business. The parties shall
meet at a mutually
acceptable time and place within 15 calendar days after
delivery of such
notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between themselves.
Either the Buyer
or the Sellers may give the other party written notice
of any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within 15 calendar days
after delivery of
such notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within 30
calendar days of the
disputing party's notice, or if the parties fail to
meet within such 15
calendar days, either the Buyer or the Sellers may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation.
Either the Buyer or the
Sellers may initiate a nonbinding mediation proceeding
by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. In addition, the fees and expenses of
CPR and the mediator
in connection with the application of the provisions of
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to
Section 11.2(a), the
parties shall attempt in good faith to resolve any such
Dispute by nonbinding
mediation. Either the Buyer or the Sellers may
initiate a nonbinding
mediation proceeding by a request in writing to the
other party (the
"Mediation Request"), and both parties will then be
obligated to engage in a
mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of this
Agreement shall be
borne 50% by the Buyer and 50% by the Sellers.
11.9 Replacement. If CPR is no longer in business
or is unable or
refuses or declines to act or to continue to act under
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to Section
(a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either the Buyer or the
Sellers may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within 15 calendar days after delivery of such notice,
and thereafter as
often as they reasonably deem necessary, to exchange
relevant information and
to attempt to resolve the Dispute. If the Dispute has not
been resolved by
the parties within 30 calendar days of the disputing
party's notice, or if
the parties fail to meet within such 15 calendar days,
either the Buyer or
the Sellers may initiate mediation as provided in Section
(b) If the
Dispute is not resolved by negotiations pursuant to
Section 11.2(a), the
parties shall attempt in good faith to resolve any such
Dispute by nonbinding
mediation. Either the Buyer or the Sellers may
initiate a nonbinding
mediation proceeding by a request in writing to the
other party (the
"Mediation Request"), and both parties will then be
obligated to engage in a
mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of this
Agreement for any
reason, then the functions specified in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either the Buyer or the Sellers may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and place
within 15 calendar
days after delivery of such notice, and thereafter
as often as they
reasonably deem necessary, to exchange relevant information
and to attempt to
resolve the Dispute. If the Dispute has not been
resolved by the parties
within 30 calendar days of the disputing party's notice,
or if the parties
fail to meet within such 15 calendar days, either the
Buyer or the Sellers
may initiate mediation as provided in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three business days' notice of such
intention and may
also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding mediation.
Either the Buyer
or the Sellers may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three business
days' notice of such intention and may also be accompanied
by legal counsel.,
the parties shall attempt in good faith to resolve
any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either the Buyer or the Sellers may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: to be
performed by CPR shall be
performed by AAA.
11.10 Injunctive Relief Notwithstanding any
provision to the contrary
contained in this Article II, in the event a remedy
at law for a breach
of any provision would be inadequate, the non-
breaching party shall be
entitled to seek temporary or permanent injunctive
relief.
12. GENERAL PROVISIONS
12.1 Expenses. Except as otherwise expressly
provided in this
Agreement, each party to this Agreement will bear its
respective expenses
incurred in connection with the preparation, execution,
and performance of
this Agreement and the Contemplated Transactions,
including all fees and
expenses of agents, representatives, counsel, and
accountants.
12.2 Public Announcements. Any public
announcement or similar
publicity with respect to this Agreement or the
Contemplated Transactions
will be issued, if at all, at such time and in such
manner as Buyer
determines with prior notice, if possible, given to
Sellers. Unless
consented to by Buyer in advance or required by Legal
Requirements, prior to
the Closing Sellers shall, and shall cause the
Company to, keep this
Agreement strictly confidential and may not make any
disclosure of this
Agreement to any Person. Sellers and Buyer will
consult with each other
concerning the means by which the Company's
employees, customers, and
suppliers and others having dealings with the Company will
be informed of the
Contemplated Transactions, and Buyer will have the right
to be present for
any such communication.
12.3 Confidentiality. Between the date of this
Agreement and the
Closing Date, Buyer and Sellers will maintain in
confidence, and will cause
the directors, officers, employees, agents, and
advisors of Buyer and the
Company to maintain in confidence, any written, oral, or
other information
obtained in confidence, any written oral, or other
information obtained in
confidence from another party or the Company in
connection with this
Agreement or the Contemplated Transactions, unless (a)
such information is
already known to such party or to others not
bound by a duty of
confidentiality or such information becomes publicly
available through no
fault of such party, (b) the use of such information
is necessary or
appropriate in making any filing or obtaining any
consent or approval
required for the consummation of the Contemplated
Transactions, or (c) the
furnishing or use of such information is required by
or necessary or
appropriate in connection with legal proceedings.
If the Contemplated Transactions are not
consummated, each party will
return or destroy as much of such written information as
the other party may
reasonably request.
12.4 Notices. All notices, consents,
waivers, and other
communications under this Agreement must be in writing and
will be deemed to
have been duly given when (a) delivered by hand (with
written confirmation of
receipt), (b) sent by telecopier (with written
confirmation of receipt),
provided that a copy is mailed by registered mail, return
receipt requested,
or (c) when received by the addressee, if sent by a
nationally recognized
overnight delivery service (receipt requested), in
each case to the
appropriate addresses and telecopier numbers set forth
below (or to such
other addresses and telecopier numbers as a party may
designate by notice to
the other parties):
The Company or Sellers:
Drake Management Services,
Inc.
6263 North Scottsdale Road
Suite 210
Scotsdale, Arizona 85250
Facsimile: (602) 951-9372
with a copy to:
Bonn, Luscher, Padden &
Wilkins
805 North Second Street
Phoenix, Arizona 85004
Attn: Jon D. Ehlinger
Facsimile: (602) 254-0656
Buyer:
Morrison Health Care, Inc.
Suite 400
1955 Lake Park Drive, S.E.
Smyrna, Georgia 30080-3300
Attn: General Counsel
Facsimile: (770) 437-3342
with a copy to:
Powell, Goldstein, Frazer &
Murphy LLP
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn.: Thomas R. McNeill,
Esq.
Facsimile: (404) 572-6999
12.5 Further Assurances. The parties agree
(a) to furnish upon
request to each other such further information, (b) to
execute and deliver to
each other such other documents, and (c) to do such other
acts and things,
all as the other party may reasonably request for the
purpose of carrying out
the intent of this Agreement and the documents referred to
in this Agreement.
12.6 Waiver. The rights and remedies of the parties
to this Agreement
are cumulative and not alternative. Neither the failure
nor any delay by any
party in exercising any right, power, or privilege under
this Agreement or
the documents referred to in this Agreement will operate
as a waiver of such
right, power, or privilege, and no single or partial
exercise of any such
right, power, or privilege will preclude any other or
further exercise of
such right, power, or privilege or the exercise of any
other right, power, or
privilege. To the maximum extent permitted by applicable
law, (a) no claim or
right arising out of this Agreement or the documents
referred to in this
Agreement can be discharged by one party, in whole or in
part, by a waiver or
renunciation of the claim or right unless in writing
signed by the other
party; (b) no waiver that may be given by a party will be
applicable except
in the specific instance for which it is given; and
(c) no notice to or
demand on one party will be deemed to be a waiver of any
obligation of such
party or of the right of the party giving such notice
or demand to take
further action without notice or demand as provided in
this Agreement or the
documents referred to in this Agreement.
12.7 Entire Agreement and Modification. This
Agreement supersedes all
prior agreements between the parties with respect to
its subject matter
(including the Letter of Intent between Buyer and Sellers
dated December 5,
1997) and constitutes (along with the documents
referred to in this
Agreement) a complete and exclusive statement of the terms
of the agreement
between the parties with respect to its subject matter.
This Agreement may
not be amended except by a written agreement executed
by the party to be
charged with the amendment.
12.8 Disclosure Letter.
(a) The disclosures in the Disclosure
Letter must relate only
to the representations and warranties in the Section of
the Agreement to
which they expressly relate and not to any other
representation or warranty
in this Agreement.
(b) In the event of any inconsistency between
the statements in
the body of this Agreement and those in the Disclosure
Letter (other than an
exception expressly set forth as such in the Disclosure
Letter with respect
to a specifically identified representation or warranty),
the statements in
the body of this Agreement will control.
12.9 Assignments, Successors, and No Third-Party
Rights. Neither
party may assign any of its rights under this Agreement
without the prior
consent of the other parties except that Buyer may assign
any of its rights
under this Agreement to any subsidiary of Buyer. Subject
to the preceding
sentence, this Agreement will apply to, be binding in all
respects upon, and
inure to the benefit of the successors and permitted
assigns of the parties.
Nothing expressed or referred to in this Agreement will be
construed to give
any Person other than the parties to this Agreement any
legal or equitable
right, remedy, or claim under or with respect to this
Agreement or any
provision of this Agreement. This Agreement and all of
its provisions and
conditions are for the sole and exclusive benefit of the
parties to this
Agreement and their successors and assigns.
12.10 Severability. If any provision of this
Agreement is held invalid
or unenforceable by any court of competent jurisdiction,
the other provisions
of this Agreement will remain in full force and effect. Any
provision of this
Agreement held invalid or unenforceable only in part or
degree will remain in
full force and effect to the extent not held invalid or
unenforceable.
12.11 Section Headings, Construction. The headings
of Sections in this
Agreement are provided for convenience only and will
not affect its
construction or interpretation. All references to
"Section" or "Sections"
refer to the corresponding Section or Sections of this
Agreement. All words
used in this Agreement will be construed to be of such
gender or number, as
the circumstances require. Unless otherwise expressly
provided, the word
"including" does not limit the preceding words or terms.
12.12 Time of Essence. With regard to all dates and
time periods set
forth or referred to in this Agreement, time is of the
essence.
12.13 Governing Law. This Agreement will be
governed by the laws of
the State of Arizona without regard to conflicts of laws
principles.
12.14 Counterparts. This Agreement may be executed
in one or more
counterparts, each of which will be deemed to be an
original copy of this
Agreement and all of which, when taken together, will be
deemed to constitute
one and the same agreement.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY
LEFT BLANK.]
IN WITNESS WHEREOF, the parties have executed
and delivered this
Agreement as of the date first written above.
BUYER:
MORRISON HEALTH CARE,
INC.
By: /s/ Glenn Davenport
------------------------
Name: Glenn Davenport
Title: President & CEO
THE COMPANY:
DRAKE MANAGEMENT
SERVICES, INC.
By: /s/ Richard
Drake
------------------
- --------
Name: Richard
Drake
Title: President
SELLERS:
Richard
Drake
------------
- -------------------
Drake Family
Revocable Trust, Richard
or Dianne Drake
Trustee under agreement
dated September 17,
1991
By: Richard Drake,
Trustee
/s/ Richard
Drake
------------
- ------------------
RICHARD
DRAKE
/s/ Dianne
L. Drake
------------
- ------------------
DIANNE DRAKE
/s/
Philippe Michelin
------------
- ------------------
PHILIPPE
MICHELIN
EXHIBIT 10.35
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is
made this 20th day
of March, 1998, by Morrison Health Care, Inc., a Georgia
corporation (the
"Buyer") and Spectra Services, Inc., a Delaware corporation
(the "Company").
RECITALS
The Company desires to sell, and Buyer
desires to purchase,
substantially all of the assets of the Company and the
business as a going
concern (collectively, the "Business"), for the
consideration and on the
terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms
have the meanings
specified or referred to in this Article DEFINITIONS:
"Accounts Receivable" - as defined in Section 3.6.
"Affiliate" - with respect to an individual, any
family member, any
Person that is directly or indirectly controlled by such
individual or such
individual's family members, or any Person with
respect to which such
individual, or a member of such individual's family,
serves as a director,
officer, partner, executor, or trustee (or similar
capacity, and with respect
to any Person other than an individual, any person
that controls, is
controlled by or under common control with such Person,
and each Person that
serves as a director, officer, partner, executor or
trustee (or similar
capacity) of such Person.
"Agreement" - as defined in the Preamble.
"Applicable Contract" - any Contract (a) under
which the Business has
or may acquire any rights, (b) under which the Business
has or may become
subject to any obligation or liability, or (c) by which
the Business or any
of the Assets is or may become bound.
"Assets" - shall mean all of the assets of the
Business including,
without limitation,
(a) The Company's leasehold interests in
any buildings,
facilities and other structures or improvements located at
or related to the
Business;
(b) All machinery, equipment, office
furniture and tools,
leasehold improvements and other tangible personal
property owned by the
Company;
(c) All franchises, licenses, permits,
consents and
certificates of any regulatory, administrative, or other
governmental agency
or body issued to or held by the Company related to the
Business;
(d) All contracts, agreements, understandings,
contract rights,
license agreements, purchase and sales orders and other
executory commitments
of the Company, including, without limitation, all
management or service
agreements.
(e) All inventories and supplies located at
or related to the
Business;
(f) All customer lists, vendor lists,
distributor or agency
agreements, catalogues, and advertising materials owned by
the Company;
(g) The Company's books and records related to
the Business;
(h) All prepaid items related to the
Business that will accrue
to the Company's benefit;
(i) All accounts, notes, and other
receivables of the Company
or prepaid accounts or notes, but only to the extent
such receivables or
payments relate to services to be provided by the Business
from and after the
Effective Date;
(j) The name "Spectra Services;" and
(k) All goodwill relating to the Business;
provided, however, that Assets shall not include any
Excluded Assets
held by the Company or any Company Plans.
"Assumed Liabilities" - the liabilities and
obligations of the Company
arising from and after the Effective Date under the
Applicable Contracts, and
such other liabilities as are set forth in Part 2.2 of the
Disclosure Letter.
"Balance Sheet" - as defined in Section 0.
"Bill of Sale" - as defined in Section 2.5(a)(i).
"Business" - as defined in the Recitals.
"Buyer" - as defined in the Preamble.
"Buyer's Closing Documents" - as defined in Section
4.2(a).
"Closing" - as defined in Section 0.
"Closing Date" - the date and time as of which the
Closing actually
takes place.
"Company" - as defined in the Preamble.
"Company Plans" - any (a) "employee welfare
benefit plans" and
"employee pension benefit plans" as defined in Section
3(1) and 3(2) of
ERISA; or (b) any other pension, profit sharing,
retirement, deferred
compensation, stock purchase, stock option, incentive,
bonus, vacation,
severance, disability, health, hospitalization, automobile,
fringe benefit or
other employee benefit plan or arrangement, whether
written or unwritten,
formal or informal, which the Company maintains or to
which the Company has
any outstanding present or future obligation to
contribute or to make
payments under.
"Company's Closing Documents" - as defined in Section
3.2(a).
"Competing Business" - as defined in Section 3.24.
"Contemplated Transactions" - all of the
transactions contemplated by
this Agreement, including: (a) the sale of the Business
by the Company to
Buyer; (b) the execution, delivery, and performance
of the Employment
Agreements, the Noncompetition Agreements, the Earnout
Agreement and the Bill
of Sale; (c) the performance by Buyer and the Company of
their respective
covenants and obligations under this Agreement; and
(d) Buyer's acquisition
and ownership of the Business.
"Contract" - any agreement, contract,
obligation, promise, or
undertaking (whether written or oral and whether express
or implied) that is
legally binding.
"Copyrights" - as defined in Section 3.20(a)(ii).
"CPR" - as defined in Section 11.2(b).
"Damages" - as defined in Section 0.
"Disclosure Letter" - the disclosure letter delivered
by the Company to
Buyer concurrently with the execution and delivery of this
Agreement.
"Dispute" - as defined in Section 11.1.
"Earnout Agreement" - as defined in Section 2.5(a)(v).
"Effective Date" - March 1, 1998, which shall be the
effective date of
the Closing.
"Employment Agreements" - as defined in Section (ii)
employment
agreements in the form of Exhibit 2.5(a)(ii),
executed by James W.
HemphillandMark De Iorio (collectively, the "Employment
Agreements");.
"Encumbrance" - any charge, claim, community
property interest,
condition, equitable interest, lien, option, pledge,
security interest, right
of first refusal, or restriction of any kind, including
any restriction on
use, voting, transfer, receipt of income, or exercise of
any other attribute
of ownership.
"Environment" - soil, land surface or subsurface
strata, surface waters
(including navigable waters, ocean waters, streams, ponds,
drainage basins,
and wetlands), groundwaters, drinking water supply, stream
sediments, ambient
air (including indoor air), plant and animal life,
and any other
environmental medium or natural resource.
"Environmental, Health, and Safety Liabilities" -
any cost, damages,
expense, liability, obligation, or other responsibility
arising from or under
Environmental Law or Occupational Safety and Health Law
including fines,
penalties, financial responsibility for cleanup costs,
corrective action,
removal, remedial actions and response actions, and any
other compliance,
corrective, investigative or remedial measures
required under any
Environmental Law or Occupational Safety and Health
Law. The terms
"removal," "remedial," and "response action," include the
types of activities
covered by the United States Comprehensive
Environmental Response,
Compensation, and Liability Act, 42 U.S.C. 9601 et
seq., as amended
("CERCLA").
"Environmental Law" - any Legal Requirement that
requires or relates to
releases of pollutants or hazardous substances or
materials, violations of
discharge limits, or other prohibitions that relate to the
Environment.
"ERISA" - the Employee Retirement Income Security
Act of 1974 or any
successor law, and regulations and rules issued pursuant
to that Act or any
successor law.
"Excluded Assets" - (a) all cash and accounts
receivable held by the
Company related to services rendered prior to the
Effective Date, (b) all
Company Plans, (c) the microwave, (d) the refrigerator,
and (e) pictures and
other personal effects located at the Company's principal
place of business
in Naperville, Illinois.
"Facilities" - any real property, leaseholds, or
other interests
currently or formerly owned or operated by the Company
and any buildings,
plants, structures, or equipment (including motor
vehicles) currently or
formerly owned or operated by the Company.
"GAAP" - generally accepted United States
accounting principles,
applied on a basis consistent with the basis which the
Balance Sheet and
other financial statements referred to in Section 3.3 were
prepared.
"Governmental Authorization" - any approval,
consent, license, permit,
waiver, or other authorization issued, granted, given,
or otherwise made
available by or under the authority of any Governmental
Body or pursuant to
any Legal Requirement.
"Governmental Body" - any federal, state, local,
municipal, foreign, or
other government; or governmental or quasi-governmental
authority of any
nature (including any governmental agency, branch,
department, official, or
entity and any court or other tribunal).
"Hazardous Materials" - any waste or other
substance that is listed,
defined, designated, or classified as, or otherwise
determined to be,
hazardous, radioactive, or toxic or a pollutant or a
contaminant under or
pursuant to any Environmental Law, including any
admixture or solution
thereof, and specifically including petroleum and all
derivatives thereof or
synthetic substitutes therefor and asbestos or asbestos-
containing materials.
"Initial Purchase Price" - as defined in Section 2.3.
"Intellectual Property Assets" - as defined in Section
3.20(a).
"Interest" - shall be the highest one-year rate
available at Citibank
for a cash or certificate of deposit account as of the
Closing Date to be
applied to the Conditional Sales Price from the Closing
Date through the date
that the Conditional Sales Price is paid to the Company.
"IRC" - the Internal Revenue Code of 1986 or any
successor law, and
regulations issued by the IRS pursuant to the Internal
Revenue Code or any
successor law.
"IRS" - the United States Internal Revenue Service
or any successor
agency, and, to the extent relevant, the United States
Department of the
Treasury.
"Knowledge" - an individual will be deemed to have
"Knowledge" of a
particular fact or other matter if: (a) such individual is
actually aware of
such fact or other matter; or (b) with respect to an
officer or director of a
Person, a prudent individual acting in such capacity
could reasonably be
expected to discover or otherwise become aware of such
fact or other matter
in the ordinary course of conducting his duties as an
officer or director. A
Person (other than an individual) will be deemed to have
"Knowledge" of a
particular fact or other matter if any individual who is
serving, or who has
at any time served, as a director, officer, partner,
executor, or trustee of
such Person (or in any similar capacity) has, or at any
time had, Knowledge
of such fact or other matter.
"Legal Requirement" - any federal, state, local,
municipal, foreign,
international, multinational, or other administrative
order, constitution,
law, ordinance, principle of common law, regulation,
statute, or treaty.
"Marks" - as defined in Section 3.20(a)(i).
"Mary Hospital Account" - the Little Company of Mary
Hospital
(Evergreen Park, Illinois) account.
"Mediation Request" - as defined in Section 11.2(b).
"Noncompetition Agreements" - as defined in Section
(iii)
noncompetition agreements in the form of Exhibit
2.5(a)(iii), executed by
James W. Hemphill and Mark De Iorio (collectively,
the "Noncompetition
Agreements");.
"Occupational Safety and Health Law" - any Legal
Requirement designed
to provide safe and healthful working conditions and to
reduce occupational
safety and health hazards.
"Order" - any award, decision, injunction,
judgment, order, ruling,
subpoena, or verdict entered, issued, made, or
rendered by any court,
administrative agency, or other Governmental Body or by any
arbitrator.
"Ordinary Course of Business" - an action taken by
a Person will be
deemed to have been taken in the "Ordinary Course of
Business" only if such
action is consistent with the past practices of such
Person and is taken in
the ordinary course of the normal day-to-day operations of
such Person.
"Organizational Documents" - the articles or
certificate of
incorporation and the bylaws of a corporation and any
amendment to any of the
foregoing.
"Person" - any individual, corporation
(including any non-profit
corporation), general or limited partnership, limited
liability company,
joint venture, estate, trust, association, organization,
labor union, or
other entity or Governmental Body.
"Proceeding" - any action, arbitration, audit,
hearing, investigation,
litigation, or suit (whether civil, criminal,
administrative, investigative,
or informal) commenced, brought, conducted, or heard
by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Purchase Price" - as defined in Section 2.3.
"Release" - any spilling, leaking, emitting,
discharging, depositing,
escaping, leaching, dumping, or other releasing into the
Environment, whether
intentional or unintentional.
"Replacement" - as defined in Section 11.9.
"Representative" - with respect to a particular
Person, any director,
officer, employee, agent, consultant, advisor, or other
representative of
such Person, including legal counsel, accountants, and
financial advisors.
"Stock Option" - an option to purchase a designated
number of shares of
common stock of the Buyer, $.01 par value per share. All
Stock Options in
favor of any employee will vest and become fully
exercisable on the third
anniversary of the date of grant (provided that the option
holder remains an
employee of Buyer at that time) and expire on the earlier
of (i) ninety (90)
days following termination of employment, or (ii) the
tenth anniversary of
the date of grant. All Stock Options shall have an
exercise price equal to
the closing price of Buyer's common stock on the day
before the date of
grant; provided that if the day before the date of grant
is not a trading
day, the exercise price shall be the closing price of
Buyer's common stock on
the last previous trading day prior to the grant.
"Tax" - all tax (including income tax, capital
gains tax, value added
tax, sales tax, property tax, gift tax or estate tax),
levy, assessment,
tariff, duty, deficiency or other fee and any related
charge or amount
(including fine, penalty and interest) imposed, assessed
or collected by or
under the authority of any Governmental Body.
"Tax Return" - any return (including any information
return), report,
statement, schedule, notice, form, or other document or
information filed
with or submitted to, or required to be filed with or
submitted to, any
Governmental Body in connection with the
determination, assessment,
collection, or payment of any Tax or in connection with
the administration,
implementation, or enforcement of or compliance with any
Legal Requirement
relating to any Tax.
"Threatened" - a claim, Proceeding, dispute,
action, or other matter
will be deemed to have been "Threatened" if any demand or
statement has been
made (orally or in writing) or any notice has been
given (orally or in
writing), or if any other event has occurred or any
other circumstances
exist, that would lead a prudent Person acting in the
capacity of such Person
to conclude that such a claim, Proceeding, dispute,
action, or other matter
is reasonably likely to be asserted, commenced, taken, or
otherwise pursued
in the future.
"Trade Secrets" - as defined in Section 3.20(a)(iii).
2. TRANSFER OF ASSETS AND ASSUMED LIABILITIES;
CLOSING
2.1 Agreement to Sell and Purchase Assets.
Subject to the terms and
conditions of this Agreement, at the Closing, the
Company shall sell,
transfer, convey, assign and deliver to Buyer the
Assets, and Buyer shall
purchase, acquire and accept from the Company the Assets.
2.2 Assumed Liabilities. Subject to the terms and
conditions of this
Agreement, the Company shall transfer and assign to
Buyer the Assumed
Liabilities and Buyer shall assume the Assumed
Liabilities and only the
Assumed Liabilities.
2.3 Purchase Price. The purchase price (the
"Purchase Price") for the
Assets will be (a) $1,100,000 (the "Initial Purchase
Price") payable at the
Closing; plus (b) $400,000 on the tems and conditional
set forth in Section
2.7 below (the "Conditional Purchase Price"); plus (c)
any and all amounts
payable to the Company under the Earnout Agreement;
plus or minus (d)
prorations for Assets, Assumed Liabilities, income and
expenses as of the
Effective Date.
2.4 Closing. The purchase and sale (the
"Closing") provided for in
this Agreement will take place at the offices of Nagle &
Higgins, P.C., 1755
Park Street, Suite 360, Naperville, Illinois at 10:00
a.m. (local time) on
March 20, 1998, or at such other time and place as the
parties may agree
effective as of the Effective Date. Subject to the
provisions of Article 9.
TERMINATION, failure to consummate the purchase and sale
provided for in this
Agreement on the date and time and at the place determined
pursuant to this
Section Error! Not a valid bookmark self-reference. will
not result in the
termination of this Agreement and will not relieve
any party of any
obligation under this Agreement.
2.5 Closing Obligations. At the Closing:
(a) The Company will deliver to Buyer:
(i) a bill of sale, assignment and
assumption agreement
with respect to the Assets and the Assumed
Liabilities in the
form of Exhibit 2.5(a)(i) (the "Bill of Sale")
executed by the
Company;
(ii) employment agreements in the
form of Exhibit
2.5(a)(ii), executed by James W. Hemphill
and Mark De Iorio
(collectively, the "Employment Agreements");
(iii) noncompetition agreements in the
form of Exhibit
2.5(a)(iii), executed by James W. Hemphill
and Mark De Iorio
(collectively, the "Noncompetition Agreements");
(iv) a certificate executed by the
Company to the effect
that: (A) each of the Company's
representations and warranties
in this Agreement was accurate in all respects
as of the date of
this Agreement and is accurate in all respects
as of the Closing
Date as if made on the Closing Date; and
(B) each of the
covenants and agreements of the Company to be
performed prior to
the Closing Date has been duly performed or
complied with by the
Company;
(v) the earnout agreement in the
form of Exhibit
2.5(a)(v), executed by the Company (the "Earnout
Agreement"); and
(vi) the documents contemplated by
Section 7.5 hereof; and
(b) Buyer will deliver to the Company:
(i) the Initial Purchase Price,
plus or minus such
prorations of Assets, Assumed Liabilities,
income and expenses
from the Effective Date to the Closing Date as
may reasonably be
determined and agreed to by the parties
prior to the Closing
Date, by bank cashier's check or by wire
transfer to the accounts
specified by the Company;
(ii) a certificate executed by Buyer to
the effect that:
(A) each of Buyer's representations and
warranties in this
Agreement was accurate in all respects as
of the date of this
Agreement and is accurate in all respects as
of the Closing Date
as if made on the Closing Date; and (B) each of
the covenants and
agreements of Buyer to be performed prior to
the Closing Date has
been duly performed and complied with by Buyer;
(iii) the Bill of Sale, executed by Buyer;
(iv) the Employment Agreements, executed
by Buyer;
(v) the Earnout Agreement, executed by
Buyer; and
(vi) the documents contemplated by
Section 8.4 hereof.
2.6 Post-Closing Purchase Price Adjustment. As
soon as practicable
following the Closing Date, but in no event later than
thirty (30) days
following the Closing Date, Buyer and the Company shall
re-determine all
prorations of Assets, Assumed Liabilities, income and
expenses from the
Effective Date to the Closing Date, and shall settle any
upward or downward
adjustments in the Purchase Price required by such re-
determination. If the
parties cannot reach agreement within such thirty (30)
day period, the
dispute shall be settled pursuant to the provisions of
Article 11 hereof.
2.7 Conditional Purchase Price Payment. The
Conditional Sales Price,
plus Interest thereon, shall be paid by cashiers check
or wire transfer to
the Company as follows:
(a) If Little Company Mary Hospital ("Mary
Hospital") rescinds
its termination of the Mary Hospital Account on or
before June 30, 1998,
within seven (7) days of receipt by the Company of such
notice of rescission;
or
(b) If Mary Hospital enters into a new
contract for a minimum
term of one (1) year with the Company on or before March
1, 1999, within
seven (7) days of execution of such contract.
If neither of the foregoing events occur, then the
Company shall not be
entitled to receive the Conditional Purchase Price.
3. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
The Company represents and warrants to Buyer as
follows:
3.1 Organization and Good Standing.
(a) The Company is a corporation duly
organized, validly
existing, and in good standing under the laws of the State
of Delaware, with
full corporate power and authority to conduct its business
as it is now being
conducted, to own or use the properties and assets that it
purports to own or
use, and to perform all its obligations under the
Applicable Contracts. The
Company is duly qualified to do business as a foreign
corporation and is in
good standing under the laws of each state or other
jurisdiction in which
either the ownership or use of its properties, or
the nature of the
activities conducted by it, requires such qualification,
which jurisdictions
are set forth on Part 3.1 of the Disclosure Letter.
(b) The Company has delivered to Buyer
copies of the
Organizational Documents of the Company, as currently in
effect.
(c) The Company has no subsidiaries and no
ownership interest
in any Person.
3.2 Authority; No Conflict.
(a) The Agreement constitutes the legal,
valid and binding
obligation of the Company, enforceable against the Company
in accordance with
its terms, and upon the execution and delivery by
the Company of the
Employment Agreements, the Earnout Agreement, the Bill
of Sale and the
Noncompetition Agreements (collectively, the "Company's
Closing Documents"),
the Company's Closing Documents will constitute the legal,
valid, and binding
obligations of the Company, enforceable against it in
accordance with their
respective terms. The Company has the absolute and
unrestricted right, power,
authority, and capacity to execute and deliver this
Agreement and the
Company's Closing Documents and to perform its
obligations under this
Agreement and the Company's Closing Documents.
(b) Except as set forth in Part 3.2(b)
of the Disclosure
Letter, neither the execution and delivery of this
Agreement nor the
consummation or performance of any of the Contemplated
Transactions will,
directly or indirectly (with or without notice or lapse of
time):
(i) contravene, conflict with, or
result in a violation
of: (A) any provision of the Organizational
Documents of the
Company; or (B) any resolution adopted by the
board of directors
or the stockholders of the Company;
(ii) contravene, conflict with, or
result in a violation
of, or give any Governmental Body or other
Person the right to
challenge any of the Contemplated Transactions
or to exercise any
remedy or obtain any relief under any Legal
Requirement or any
Order to which the Company or any of the
Assets may be subject,
the breach of which would result in Damages to
Buyer;
(iii) contravene, conflict with, or
result in a violation
of any of the terms or requirements of, or give
any Governmental
Body the right to revoke, withdraw, suspend,
cancel, terminate,
or modify, any Governmental Authorization
that is held by the
Business or that otherwise relates to any of the
Assets;
(iv) cause Buyer or the Business to
become subject to, or
to become liable for the payment of, any Tax
imposed with respect
to the transfer of the Assets, or
otherwise imposed on the
Company;
(v) contravene, conflict with, or
result in a violation
or breach of any provision of, or give any
Person the right to
declare a default or exercise any remedy under,
or to accelerate
the maturity or performance of, or to
cancel, terminate, or
modify, any Applicable Contract; or
(vi) result in the imposition or
creation of any
Encumbrance upon or with respect to any of
the Assets arising
from any mortgage, lease, contract or other
agreement to which
the Company or any of its stockholders is a
party.
Except as set forth in Part 3.2(b) of the
Disclosure Letter, the
Company is not or will not be required to give any
notice to or obtain any
consent from any Person in connection with the execution
and delivery of this
Agreement or the consummation or performance of any of
the Contemplated
Transactions.
3.3 Financial Statements. The Company has
delivered to Buyer:
unaudited balance sheets of the Business as at December
31 in each of the
years 1995, 1996 and 1997 and the related unaudited
statements of income and
changes in stockholders' equity for each of the fiscal
years then ended,
including a balance sheet of the Business as at December
31, 1997 (including
the notes thereto, the "Balance Sheet"), and the
related statements of
income, changes in stockholders' equity and cash flow
for the year then
ended. Such financial statements and notes fairly
present the financial
condition and the results of operations, changes in
stockholders' equity and
cash flow of the Company as at the respective dates of
and for the periods
referred to in such financial statements, all in
accordance with GAAP, with
the following exceptions: (a) there are no notes;
(b) there are no accounts
receivable reflected; (c) there is no accrued
vaction reflected; and
(d) depreciation is determined on a tax basis. The
financial statements
referred to in this Section Error! Not a valid
bookmark self-reference.
reflect the consistent application of such accounting
principles throughout
the periods involved.
3.4 Title to Properties; Encumbrances. Part 3.4
of the Disclosure
Letter contains a complete and accurate list of all
leaseholds or other
interests therein owned by the Company. The Company
does not own and has
never owned any real property. The Company owns all the
Assets (whether
tangible or intangible) including all of the properties and
assets reflected
in the Balance Sheet (except for Assets held under
capitalized leases
disclosed or not required to be disclosed in Part 3.4
of the Disclosure
Letter and personal property sold since the date of the
Balance Sheet in the
Ordinary Course of Business), and all of the properties and
assets purchased
or otherwise acquired by the Company since the date of
the Interim Balance
Sheet (except for personal property acquired and sold
since the date of the
Balance Sheet in the Ordinary Course of Business and
consistent with past
practice). All properties and assets reflected in the
Balance Sheet are free
and clear of all Encumbrances except for liens for current
taxes not yet due.
3.5 Condition and Sufficiency of Assets. Except
for the vehicles
which are being conveyed in their "as is" condition,
to the Company's
Knowledge, the Assets are in good operating condition
and repair, and are
adequate for the uses to which they are being put, and none
of such Assets is
in need of maintenance or repairs except for ordinary,
routine maintenance
and repairs that are not material in nature or cost. The
Assets constitute
every thing that the Company used to conduct the Business.
3.6 Accounts Receivable. All accounts receivable
of the Company to
be conveyed herein, if any, relate to services to be
provided from and after
the Effective Date.
3.7 Inventory. The only inventory of the Company
is miscellaneous
office supplies.
3.8 No Undisclosed Liabilities. Except as set
forth in Part 3.8 of
the Disclosure Letter, to the Company's Knowledge,
the Company has no
liabilities or obligations of any nature (whether
known or unknown and
whether absolute, accrued, contingent, or otherwise)
except for liabilities
or obligations reflected or reserved against in the Balance
Sheet and current
liabilities incurred in the Ordinary Course of
Business since the date
thereof.
3.9 Taxes.
(a) The Company has elected and is, and has
at all times been
fully eligible to be taxed in accordance with the
provisions of subchapter S
of the IRC.
(b) The Company has filed or caused to be
filed, on a timely
basis, all Tax Returns that are or were required to be
filed by or with
respect to it, either separately or as a member of a group
of corporations,
pursuant to applicable Legal Requirements (all of which
returns were true,
correct and complete in all material respects), the
failure of which to file
would result in Damages to Buyer. The Company has
delivered to Buyer copies
of, and Part 3.9 of the Disclosure Letter contains a
complete and accurate
list of, all such Tax Returns filed for the past three
years. The Company
has paid, or made provision for the payment of, all
Taxes that have or may
have become due pursuant to those Tax Returns or
otherwise, or pursuant to
any assessment received by the Company.
(c) Except as described in Part 3.9 of the
Disclosure Letter,
the Company has not given or been requested to give waivers
or extensions (or
is or would be subject to a waiver or extension given by
any other Person) of
any statute of limitations relating to the payment of Taxes
of the Company or
for which the Business may be liable.
(d) There exists no proposed tax assessment
against the Company
except as disclosed in the Balance Sheet or in Part 3.9
of the Disclosure
Letter. No consent to the application of
Section 341(f)(2) of the IRC has
been filed with respect to any property or assets held,
acquired, or to be
acquired by the Company. All Taxes that the Company is
or was required by
Legal Requirements to withhold or collect have been
duly withheld or
collected and, to the extent required, have been
paid to the proper
Governmental Body or other Person, the breach of which
would result in
Damages to Buyer.
3.10 No Material Adverse Change. Since the date of
the Balance Sheet,
there has not been any material adverse change in the
Business, operations,
properties, Assets, or condition of the Company, and
to the Company's
Knowledge, no event has occurred or circumstance exists
with respect to the
Contracts or vendor relationships that is reasonably likely
to result in such
a material adverse change other than those events which
effect the health
care or food service industry as a whole.
3.11 Employee Benefits.
(a) Part 3.11 of the Disclosure Letter
contains an accurate and
complete description of, and sets forth the annual amount
payable pursuant
to, each Company Plan, whether formal or informal,
relating to the Business.
The Company has no commitment, whether formal or informal
and whether legally
binding or not, to create any additional such plan or
arrangement.
(b) The Assets are not, and the Company
does not reasonably
expect them to become, subject to a lien imposed under
IRC Section 412 or
ERISA Section 4068.
(c) Neither the Company nor any entity which
together with the
Company is required to be treated as a single employer
under IRC Section 414
has ever had and neither currently has any obligation to
contribute to any
Multi-Employer Plan (as defined in ERISA Section 3(37).
(d) Neither the Company nor any entity which
together with the
Company is required to be treated as a single employer
under IRC Section 414
has ever maintained and does not currently maintain any
Company Plan which is
or was subject to Title IV of ERISA.
(e) The Company and each entity which
together with the Company
is required to be treated as a single employer under IRC
Section 414 have
complied with the continuation coverage requirements of IRC
Section 4980B and
ERISA Sections 601 through 608 and with the
portability, access and
renewability provisions of Subtitle K, Chapter 100 of the
IRC and Section 701
et seq. of ERISA.
(f) No assets of the Company, including the
Assets, have been,
and the Company does not reasonably expect them to be,
provided as security
to any Company Plan pursuant to IRC Section 401(a)(29).
(g) The Company has not received any
notice of any actions,
audits, or claims pending or to the Company's Knowledge,
threatened against
the Assets or the Business with respect to the
maintenance of any Company
Plans.
3.12 Compliance with Legal Requirements; Governmental
Authorizations.
(a) Except as set forth in Part 3.12 of the
Disclosure Letter:
(i) the Company is, and at all
times since its
incorporation has been, in full compliance
with each Legal
Requirement that is or was applicable to it or
to the conduct or
operation of its Business or the ownership or
use of any of the
Assets, the breach of which would result in
Damages to Buyer;
(ii) no event has occurred or
circumstance exists that
(with or without notice or lapse of time) (A)
may constitute or
result in a violation by the Company of, or a
failure on the part
of the Company to comply with, any Legal
Requirement, or (B) may
give rise to any obligation on the part of
the Company to
undertake, or to bear all or any portion of
the cost of, any
remedial action of any nature, the breach of
which would result
in Damages to Buyer; and
(iii) the Company has not received, at
any time since its
incorporation, any notice or other
communication (whether oral or
written) from any Governmental Body or any
other Person regarding
(A) any actual, alleged, possible, or
potential violation of, or
failure to comply with, any Legal Requirement,
or (B) any actual,
alleged, possible, or potential obligation
on the part of the
Company to undertake, or to bear all or any
portion of the cost
of, any remedial action of any nature.
(b) Part 3.12 of the Disclosure Letter
contains a complete and
accurate list of each Governmental Authorization that is
held by the Company
or that otherwise relates to the Business or to
the Assets. Each
Governmental Authorization listed or required to be
listed in Part 3.12 of
the Disclosure Letter is valid and in full force and
effect. Except as set
forth in Part 3.12 of the Disclosure Letter:
(i) the Company is, and at all
times since its
incorporation has been, in full compliance
with all of the terms
and requirements of each Governmental
Authorization identified or
required to be identified in Part 3.12 of the
Disclosure Letter,
the breach of which would result in Damages to
Buyer;
(ii) no event has occurred or
circumstance exists that may
(with or without notice or lapse of time)
(A) constitute or
result directly or indirectly in a violation
of or a failure to
comply with any term or requirement of
any Governmental
Authorization listed or required to be listed
in Part 3.12 of the
Disclosure Letter, or (B) result directly or
indirectly in the
revocation, withdrawal, suspension,
cancellation, or termination
of, or any modification to, any Governmental
Authorization listed
or required to be listed in Part 3.12 of the
Disclosure Letter,
the breach of which would result in Damages to
Buyer;
(iii) the Company has not received, at
any time since its
incorporation, any notice or other
communication (whether oral or
written) from any Governmental Body or any
other Person regarding
(A) any actual, alleged, possible, or
potential violation of or
failure to comply with any term or
requirement of any
Governmental Authorization, or (B) any
actual, proposed,
possible, or potential revocation,
withdrawal, suspension,
cancellation, termination of, or modification
to any Governmental
Authorization; and
(iv) all applications required to have
been filed for the
renewal of the Governmental Authorizations
listed or required to
be listed in Part 3.12 of the Disclosure
Letter have been duly
filed on a timely basis with the appropriate
Governmental Bodies,
and all other filings required to have been
made with respect to
such Governmental Authorizations have been
duly made on a timely
basis with the appropriate Governmental
Bodies, the breach of
which would result in Damages to Buyer.
The Governmental Authorizations listed in Part 3.12
of the Disclosure
Letter collectively constitute all of the
Governmental Authorizations
necessary to permit the Company to lawfully conduct and
operate the Business
in the manner it currently conducts and operates the
Business and to permit
the Company to own and use the Assets in the manner in
which it currently
owns and uses such Assets.
3.13 Legal Proceedings; Orders.
(a) Except as set forth in Part 3.13 of the
Disclosure Letter,
the Company has not received any notice of any pending
Proceeding:
(i) that has been commenced by or
against the Company or
that otherwise relates to or may affect the
Business or the
Assets; or
(ii) that challenges, or that may
have the effect of
preventing, delaying, making illegal, or
otherwise interfering
with, any of the Contemplated Transactions.
To the Company's Knowledge, (1) no such Proceeding
has been Threatened,
and (2) no event has occurred or circumstance exists that
may give rise to or
serve as a basis for the commencement of any such
Proceeding. The Company has
delivered to Buyer copies of all pleadings,
correspondence, and other
documents relating to each Proceeding listed in Part 3.13
of the Disclosure
Letter. The Proceedings listed or required to be listed
in Part 3.13 of the
Disclosure Letter will not have a material adverse effect
on the business,
operations, assets, or condition, of the Company, the
Business or the Assets.
(b) Except as set forth in Part 3.13 of the
Disclosure Letter:
(i) No Order has been received by
the Company that
relates to the Business or any of the Assets;
and
(ii) to the Company's Knowledge, no
officer, director,
agent, or employee of the Company is subject
to any Order that
prohibits such officer, director, agent,
or employee from
engaging in or continuing any conduct,
activity, or practice
relating to the Business.
3.14 Absence of Certain Changes and Events.
Except as set forth in
Part 3.14 of the Disclosure Letter, since the date of the
Balance Sheet, the
Company has conducted its business only in the Ordinary
Course of Business
and there has not been any:
(a) amendment to the Organizational Documents
of the Company;
(b) payment or increase by the Company
of any bonuses,
salaries, or other compensation to any stockholder,
director, officer, or
(except in the Ordinary Course of Business) employee
or entry into any
employment, severance, or similar Contract with any
director, officer, or
employee;
(c) adoption of, or increase in the
payments to or benefits
under, any Company Plan;
(d) damage to or destruction or loss of any
personal property
of the Company, whether or not covered by insurance,
materially and adversely
affecting the properties, Assets, Business, or financial
condition of the
Company;
(e) entry into, termination of, or
receipt of notice of
termination of (i) any license, distributorship,
dealer, sales
representative, joint venture, credit, or similar
agreement, or (ii) any
Contract or transaction involving a total remaining
commitment by or to the
Company of at least $5,000;
(f) sale, lease, or other disposition of any
asset or property
of the Company or mortgage, pledge, or imposition of
any lien or other
encumbrance on any asset or property of the Company;
(g) cancellation or waiver of any claims or
rights with a value
to the Company in excess of $5,000;
(h) change in the accounting methods used by
the Company; or
(i) agreement, whether oral or written, by
the Company to do
any of the foregoing.
3.15 Contracts; No Defaults.
(a) Part 3.15(a) of the Disclosure Letter
contains a complete
and accurate list, and the Company have delivered to Buyer
true and complete
copies, of:
(i) each Applicable Contract that
involves performance of
services or delivery of goods or materials by
the Business of an
amount or value in excess of $5,000;
(ii) each Applicable Contract that
involves performance of
services or delivery of goods or materials to
the Business of an
amount or value in excess of $5,000;
(iii) each Applicable Contract that was
not entered into in
the Ordinary Course of Business and that
involves expenditures or
receipts of the Business in excess of $5,000;
(iv) each lease, rental or occupancy
agreement, license,
installment and conditional sale agreement,
and other Applicable
Contract affecting the ownership of, leasing
of, title to, use
of, or any leasehold or other interest in,
any real or personal
property (except personal property leases
and installment and
conditional sales agreements having a value per
item or aggregate
payments of less than $5,000 and with terms
of less than one
year);
(v) each licensing agreement or other
Applicable Contract
with respect to patents, trademarks,
copyrights, or other
intellectual property, including agreements
with current or
former employees, consultants, or
contractors regarding the
appropriation or the non-disclosure of any of
the Intellectual
Property Assets;
(vi) each collective bargaining
agreement and other
Applicable Contract to or with any labor union
or other employee
representative of a group of employees;
(vii) each joint venture, partnership,
and other Applicable
Contract (however named) involving a sharing of
profits, losses,
costs, or liabilities by the Company with any
other Person;
(viii) each Applicable Contract
containing covenants
that in any way purport to restrict the
business activity of the
Business or limit the freedom of the Business
to engage in any
line of business or to compete with any Person;
(ix) each Applicable Contract providing
for payments to or
by any Person based on sales, purchases, or
profits, other than
direct payments for goods;
(x) each power of attorney that is
currently effective
and outstanding;
(xi) each Applicable Contract entered
into other than in
the Ordinary Course of Business that contains
or provides for an
express undertaking by the Business to be
responsible for
consequential damages;
(xii) each Applicable Contract for
capital expenditures in
excess of $5,000;
(xiii) each written warranty,
guaranty, and or other
similar undertaking with respect to
contractual performance
extended by the Company other than in the
Ordinary Course of
Business; and
(xiv) each amendment, supplement, and
modification (whether
oral or written) in respect of any of the
foregoing.
(b) Except as set forth in Part 3.15(b)
of the Disclosure
Letter, each Contract identified or required to be
identified in Part 3.15(a)
of the Disclosure Letter is in full force and effect
and is valid and
enforceable in accordance with its terms.
(c) Except as set forth in Part 3.15(c)
of the Disclosure
Letter:
(i) the Company is, and at all
times has been, in
material compliance with all applicable terms
and requirements of
each Contract under which it has or had
any obligation or
liability or by which it or any of the assets
owned or used by it
is or was bound, and any material non-compliance
has been cured;
(ii) each other Person that has or had
any obligation or
liability under any Contract under which the
Company has or had
any rights is, and at all times has been, in
material compliance
with all applicable terms and requirements of
such Contract, and
any previous non-compliance has been cured;
(iii) no event has occurred or
circumstance exists that
(with or without notice or lapse of time)
may contravene,
conflict with, or result in a violation or
breach of, or give the
Company or other Person the right to
declare a default or
exercise any remedy under, or to accelerate
the maturity or
performance of, or to cancel, terminate,
or modify, any
Applicable Contract; and
(iv) the Company has not given to or
received from any
other Person, at any time, any notice or
other communication
(whether oral or written) regarding any
actual, alleged,
possible, or potential violation or breach of,
or default under,
any Contract.
(d) There are no renegotiations of, attempts
to renegotiate, or
outstanding rights to renegotiate any material amounts paid
or payable to the
Company under current or completed Contracts with any
Person and, to the
Knowledge of the Company, no such Person has made
written demand for such
renegotiation.
3.16 Insurance. Except as set forth on Part 3.16
of the Disclosure
Letter:
(a) All policies to which the Company is
a party or that
provide coverage to the Company: (i) are, to the Company's
Knowledge, valid,
outstanding, and enforceable; (ii) are, to the Company's
Knowledge, issued by
an insurer that is financially sound and reputable;
(iii) to the Company's
Knowledge, provide adequate insurance coverage for the
Assets and the
Business of the Company for all risks normally insured
against by a Person
carrying on the same business as the Company;
(iv) are sufficient for
compliance with all Legal Requirements and Contracts to
which the Company is
a party or by which it is bound, the breach of which would
result in Damages
to Buyer; and (v) do not provide for any retrospective
premium adjustment or
other experienced-based liability on the part of the
Company.
(b) The Company has not received (i) any
refusal of coverage or
any notice that a defense will be afforded with
reservation of rights, or
(ii) any notice of cancellation or any other indication
that any insurance
policy is no longer in full force or effect or will not be
renewed or that
the issuer of any policy is not willing or able to perform
its obligations
thereunder.
(c) The Company has paid all premiums due,
and to the Company's
Knowledge has otherwise performed its obligations, under
each policy to which
it is a party or that provides coverage to the Company.
(d) The Company has given notice to the
insurer of all known
claims that may be insured thereby.
3.17 Environmental Matters. Except as set forth
in part 3.17 of the
Disclosure Letter:
(a) The Company is, and at all times
has been, in full
compliance with, and has not been and is not in violation
of or liable under,
any Environmental Law. The Company has no basis to expect,
nor has it or any
other Person for whose conduct they are or may be held
to be responsible
received, any actual or Threatened order, notice, or other
communication from
(i) any Governmental Body or private citizen acting in the
public interest,
or (ii) the current or prior owner or operator of any
Facilities, of any
actual or potential violation or failure to comply with
any Environmental
Law, or of any actual or Threatened obligation to
undertake or bear the cost
of any Environmental, Health, and Safety Liabilities with
respect to any of
the Facilities or any other properties or assets used by the
Company.
(b) There are no pending or, to the
Company's Knowledge,
Threatened claims, Encumbrances, or other restrictions
of any nature,
resulting from any Environmental, Health, and Safety
Liabilities or arising
under or pursuant to any Environmental Law, with respect
to or affecting any
of the Facilities or any other properties and assets used by
the Company.
(c) The Company has not received nor has
any basis to expect,
any citation, directive, inquiry, notice, Order, summons,
warning, or other
communication that relates to Hazardous Materials, or any
alleged, actual, or
potential violation or failure to comply with any
Environmental Law, or of
any alleged, actual, or potential obligation to undertake
or bear the cost of
any Environmental, Health, and Safety Liabilities with
respect to any of the
Facilities or any other properties or assets used by the
Company, or with
respect to any property or facility to which Hazardous
Materials generated,
manufactured, refined, transferred, imported, used, or
processed by the
Company, or any other Person for whose conduct they
are or may be held
responsible, have been transported, treated, stored,
handled, transferred,
disposed, recycled, or received.
(d) The Company has no Environmental,
Health, and Safety
Liabilities with respect to the Facilities.
(e) There are no Hazardous Materials
present on or in the
Environment at the Facilities except in full compliance
with all applicable
Environmental Laws.
(f) There has been no Release or, to the
Knowledge of the
Company, threat of Release, of any Hazardous Materials
at or from the
Facilities or at any other locations where any
Hazardous Materials were
generated, manufactured, refined, transferred, produced,
imported, used, or
processed from or by the Facilities, or from or by any
other properties and
assets used by the Company.
(g) The Company has delivered to Buyer true
and complete copies
and results of any reports, studies, analyses, tests, or
monitoring possessed
or initiated by the Company pertaining to Hazardous
Materials in, on, or
under the Facilities, or concerning compliance by the
Company.
3.18 Employees.
(a) Part 3.18 of the Disclosure Letter
contains: (i) a
complete and accurate list of the following information
for each employee or
director of the Company, including each employee on
leave of absence or
layoff status: employer name; job title; current
compensation paid or payable
and any change in compensation since January 1, 1996; and
(ii) a list of all
written contracts of employment with the Company.
(b) To the Company's Knowledge, no employee
or director of the
Company is a party to, or is otherwise bound by,
any agreement or
arrangement, including any employment, confidentiality,
noncompetition, or
proprietary rights agreement, between such employee or
director and any other
Person ("Proprietary Rights Agreement") that in any way
adversely affects or
will affect (i) the performance of his duties as an
employee or director of
the Company, or (ii) the ability of the Company to
conduct its business,
including any Proprietary Rights Agreement with the
Company by any such
employee or director. To the Company's Knowledge, no
account managers of the
Business nor James Hemphill, Mark De Iorio or Elizabeth
Kolkman intends not
to accept employment with the Buyer following the Closing.
(c) There are no retired employees or
directors of the Company.
3.19 Labor Relations; Compliance. The Company
has not been in the
past and is not now a party to any collective bargaining
or other labor
Contract. There has not been, there is not presently
pending or existing,
and to the Company's Knowledge there is not Threatened,
(a) any strike,
slowdown, picketing, work stoppage, or employee grievance
process, (b) any
Proceeding against or affecting the Company relating to the
alleged violation
of any Legal Requirement pertaining to labor relations or
employment matters,
including any charge or complaint filed by an employee
or union with the
National Labor Relations Board, the Equal Employment
Opportunity Commission,
or any comparable Governmental Body, organizational
activity, or other labor
or employment dispute against or affecting the Company or
its premises, the
breach of which would result in Damages to Buyer, or (c)
any application for
certification of a collective bargaining agent. To the
Company's Knowledge,
no event has occurred or circumstance exists that could
provide the basis for
any work stoppage or other labor dispute. There is
no lockout of any
employees by the Company, and no such action is
contemplated by the Company.
The Company has complied in all respects with all Legal
Requirements relating
to employment, equal employment opportunity,
nondiscrimination, immigration,
wages, hours, benefits, collective bargaining, the payment
of social security
and similar taxes, occupational safety and health, and
plant closing where
the failure of such compliance would have an adverse
effect on the Buyer.
The Company is not liable for the payment of any
compensation, damages,
taxes, fines, penalties, or other amounts, however
designated, for failure to
comply with any of the foregoing Legal Requirements where
the failure of such
compliance would result in Damages to Buyer.
3.20 Intellectual Property.
(a) Intellectual Property Assets. The
term "Intellectual
Property Assets" includes:
(i) the name "Spectra Services,
Inc.", all fictional
business names, trading names, registered
and unregistered
trademarks, service marks, and
applications (collectively,
"Marks");
(ii) all copyrights in both
published works and
unpublished works (collectively, "Copyrights");
and
(iii) all know-how, trade
secrets, confidential
information, customer lists, software,
recipes, technical
information, data, process technology, plans,
drawings, and blue
prints (collectively, the "Trade Secrets");
owned, used, or
licensed by the Company as licensee or licensor.
(b) Agreements. Part 3.20(b) of the
Disclosure Letter contains
a complete and accurate list and summary description,
including any royalties
paid or received by the Company, of all Contracts
relating to the
Intellectual Property Assets to which Company is a
party or by which any
Company is bound, except for any license implied by the
sale of a product and
perpetual, paid-up licenses for commonly available
software programs with a
value of less than $5,000 under which the Company is the
licensee. There are
no outstanding and, to the Company's Knowledge, no
Threatened disputes or
disagreements with respect to any such agreement.
(c) Know-How Necessary for the Business.
The Intellectual
Property Assets are all those used in the operation of the
Business as it is
currently conducted. The Company is the owner of all
right, title, and
interest in and to each of the Intellectual Property
Assets, free and clear
of all liens, security interests, charges, encumbrances,
equities, and other
adverse claims, and has the right to use without payment to
a third party all
of the Intellectual Property Assets.
(d) Patents. The Company does not own any
patents.
(e) Trademarks. Other than a common-law
trademark in the name
"Spectra Services," the Company does not own any trademarks.
(f) Copyrights. The Company does not own any
Copyrights.
(g) Trade Secrets.
(i) The Company has taken reasonable
precautions to
protect the secrecy, confidentiality and
value of its Trade
Secrets.
(ii) To the Company's Knowledge, the
Company has good
title and an absolute (but not necessarily
exclusive) right to
use the Trade Secrets. To the Company's
Knowledge, the Trade
Secrets are not part of the public knowledge or
literature, and,
to the Company's Knowledge, have not been
used, divulged, or
appropriated either for the benefit of any
Person or to the
detriment of the Company. To the Company's
Knowledge, no Trade
Secret is subject to any adverse claim or has
been challenged or
threatened in any way.
3.21 Certain Payments. Except as set forth in
Part 3.21 of the
Disclosure Letter, since the Company's incorporation,
neither the Company nor
any director, officer, agent, or employee of the Company,
or any other Person
associated with or acting for or on behalf of the Company,
has directly or
indirectly (a) made, directly or indirectly, any
contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other
payment to any Person,
private or public, regardless of form, whether in
money, property, or
services, in violation of any Legal Requirement with
respect to federal or
state laws, rules or regulations relating to payments to
or from health care
providers or financial reporting or accounting
requirements in connection
therewith including without limitation applicable medicare
and medicaid laws,
rules and regulations, the breach of which would result in
Damages to Buyer,
(b) received, directly or indirectly, any rebates,
payments, commissions,
promotional allowances or any other economic benefits
from any vendor,
governmental employee or other Person with whom the
Company has done
business, directly or indirectly, which would
reasonably be expected to
subject the Company to any damage or penalty in any
civil, criminal or
governmental litigation or proceeding, or (c) established
or maintained any
fund or asset that has not been recorded in the books
and records of the
Company.
3.22 Fraud and Abuse; Financial Relationships. The
Company does not
have any government contract, and the Company has not
made any claims
relating to Medicare, Medicaid CHAMPUS or other governmental
reimbursements.
3.23 Disclosure.
(a) To the Company's Knowledge, no
representation or warranty
of the Company in this Agreement and no statement in the
Disclosure Letter
omits to state a material fact necessary to make the
statements herein or
therein, in light of the circumstances in which they
were made, not
misleading.
(b) No notice given pursuant to Section 5.6
Notification.Between the date of this Agreement and the
Closing Date, the
Company will promptly notify Buyer in writing if it becomes
aware of any fact
or condition that causes or constitutes a Breach of any
of the Company's
representations and warranties as of the date of this
Agreement, or if the
Company becomes aware of the occurrence after the date of
this Agreement of
any fact or condition that would (except as expressly
contemplated by this
Agreement) cause or constitute a Breach of any such
representation or
warranty had such representation or warranty been made
as of the time of
occurrence or discovery of such fact or condition.
During the same period,
the Company will promptly notify Buyer of the occurrence of
any Breach of any
covenant of the Company in this Article 5. COVENANTS
OF THE COMPANY or
of the occurrence of any event that may make the
satisfaction of the
conditions in Article 7. CONDITIONS PRECEDENT TO
BUYER'S OBLIGATION TO
CLOSE impossible or unlikely. will contain any untrue
statement or omit to
state a material fact necessary to make the statements
therein or in this
Agreement, in light of the circumstances in which they
were made, not
misleading.
(c) To the Company's Knowledge, there is
no fact that has
specific application to the Company (other than general
economic or industry
conditions) that materially adversely affects the Assets,
Business, financial
condition, or results of operations of the Company (on a
consolidated basis)
that has not been set forth in this Agreement or the
Disclosure Letter.
3.24 Relationships with Related Persons. Except
for the microwave,
refrigerator, pictures and other personal effects
located at the principal
office of the Company, neither the Company nor any
Affiliate of the Company
has, or in the past three (3) years has had, any interest
in any property
(whether real, personal, or mixed and whether tangible or
intangible), used
in or pertaining to the Business. Neither the Company
nor any Affiliate of
the Company owns, or in the past three years has owned
(of record or as a
beneficial owner) an equity interest or any other
financial or profit
interest in, a Person that has (i) had business
dealings or a material
financial interest in any transaction with the Company,
or (ii) engaged in
competition with the Company with respect to any line of
the products or
services of the Company (a "Competing Business") in any
market presently
served by the Company except for less than one percent
of the outstanding
capital stock of any Competing Business that is
publicly traded on any
recognized exchange or in the over-the-counter market.
Except as set forth in
Part 3.23 of the Disclosure Letter, neither the Company
nor any Affiliate of
the Company is a party to any Contract with, or has
any claim or right
against, the Company.
3.25 Brokers or Finders. The Company and its
Representatives have
incurred no obligation or liability, contingent or
otherwise, for brokerage
or finders' fees or agents' commissions or other
similar payment in
connection with the Contemplated Transactions.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Company as
follows:
4.1 Organization and Good Standing. Buyer is a
corporation duly
organized, validly existing, and in good standing under the
laws of the State
of Georgia.
4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal,
valid, and binding
obligation of Buyer, enforceable against Buyer in
accordance with its terms.
Upon the execution and delivery by Buyer of the
Earnout Agreement, the
Employment Agreements, the Bill of Sale and the
Noncompetition Agreements
(collectively, the "Buyer's Closing Documents"), the
Buyer's Closing
Documents will constitute the legal, valid, and binding
obligations of Buyer,
enforceable against Buyer in accordance with their
respective terms. Buyer
has the absolute and unrestricted right, power, and
authority to execute and
deliver this Agreement and the Buyer's Closing Documents
and to perform its
obligations under this Agreement and the Buyer's Closing
Documents.
(b) Except as set forth in Part 4.2 of the
Disclosure Letter,
neither the execution and delivery of this Agreement
by Buyer nor the
consummation or performance of any of the Contemplated
Transactions by Buyer
will give any Person the right to prevent, delay, or
otherwise interfere with
any of the Contemplated Transactions pursuant to:
(i) any provision of Buyer's
Organizational Documents;
(ii) any resolution adopted by the
board of directors or
the shareholders of Buyer;
(iii) any Legal Requirement or Order to
which Buyer may be
subject; or
(iv) any Contract to which Buyer is a
party or by which
Buyer may be bound.
Except as set forth in Part 4.2 of the Disclosure
Letter, Buyer is not
and will not be required to obtain any consent from any
Person in connection
with the execution and delivery of this Agreement or the
consummation or
performance of any of the Contemplated Transactions.
4.3 Certain Proceedings. There is no pending
Proceeding that has
been commenced against Buyer and that challenges, or may
have the effect of
preventing, delaying, making illegal, or otherwise
interfering with, any of
the Contemplated Transactions. To Buyer's Knowledge, no
such Proceeding has
been Threatened.
4.4 Brokers or Finders. Buyer and its agents
have incurred no
obligation or liability, contingent or otherwise, for
brokerage or finders'
fees or agents' commissions or other similar payment in
connection with the
Contemplated Transactions.
5. COVENANTS OF THE COMPANY
5.1 Access and Investigation. Between the date of
this Agreement and
the Closing Date, the Company will, and will cause its
Representatives to,
(a) afford Buyer and its Representatives full and
free access to the
Company's properties, contracts, books and records, and
other documents and
data at the Company's principal office in Naperville,
Illinois, (b) furnish
Buyer and it Representatives with copies of all such
contracts, books and
records, and other existing documents and data as
Buyer may reasonably
request, and (c) furnish Buyer and its Representatives
with such additional
financial, operating, and other data and information as
Buyer may reasonably
request.
5.2 Operation of the Businesses of the
Company. Between the
Effective Date and the Closing Date, the Company will:
(a) conduct the Business only in the
Ordinary Course of
Business;
(b) use its good faith efforts to preserve
intact the current
business organization of the Company, keep available
the services of the
current officers, employees, and agents of the Company,
and maintain the
relations and good will with suppliers, customers,
landlords, creditors,
employees, agents, and others having business relationships
with the Company;
(c) confer with Buyer concerning
operational matters of a
material nature; and
(d) upon request of Buyer, report to
Buyer concerning the
status of the business, operations, and finances of the
Company.
5.3 No Distributions. Prior to the Closing, the
Company shall not
make or declare any dividend or distribution to any of its
stockholders, or
grant or declare any raises or bonuses to any employee of
the Company, except
in the Ordinary Course of Business, and except for any
distributions to Mr.
Hemphill of cash (which cash would otherwise constitute an
Excluded Asset) in
the form of salary or dividends. Following the Closing,
the Company may make
distributions of the Purchase Price, provided, however,
that if the Company
distributes some or all of the Purchase Price to its
shareholder, the
shareholder shall reimburse the Company for the amount of
said distributions
as may be necessary in order for the Company to pay any
amounts due to Buyer
pursuant to this Agreement.
5.4 Negative Covenant. Except as otherwise
expressly permitted by
this Agreement, between the date of this Agreement and the
Closing Date, the
Company will not, without the prior consent of Buyer,
take any affirmative
action, or fail to take any reasonable action within its
control, as a result
of which any of the changes or events listed in Section
3.12 is likely to
occur.
5.5 Required Approvals. As promptly as practicable
after the date of
this Agreement, the Company will make all filings
required by Legal
Requirements to be made by it in order to consummate
the Contemplated
Transactions. Between the date of this Agreement and the
Closing Date, the
Company will (a) cooperate with Buyer with respect to all
filings that Buyer
elects to make or is required by Legal Requirements to
make in connection
with the Contemplated Transactions, and (b) cooperate with
Buyer in obtaining
all consents identified in Part 4.2 of the Disclosure
Letter; provided that
this Agreement will not require the Company to dispose of
or make any change
in any portion of its business or to incur any other
burden to obtain a
Governmental Authorization.
5.6 Notification. Between the date of this
Agreement and the Closing
Date, the Company will promptly notify Buyer in writing
if it becomes aware
of any fact or condition that causes or constitutes a
Breach of any of the
Company's representations and warranties as of the date of
this Agreement, or
if the Company becomes aware of the occurrence after
the date of this
Agreement of any fact or condition that would
(except as expressly
contemplated by this Agreement) cause or constitute a
Breach of any such
representation or warranty had such representation or
warranty been made as
of the time of occurrence or discovery of such fact or
condition. During the
same period, the Company will promptly notify Buyer of the
occurrence of any
Breach of any covenant of the Company in this Article 5.
COVENANTS OF THE
COMPANY or of the occurrence of any event that may make the
satisfaction of
the conditions in Article 7. CONDITIONS PRECEDENT TO
BUYER'S OBLIGATION TO
CLOSE impossible or unlikely.
5.7 Payment of Indebtedness by Related Persons.
Except as expressly
provided in this Agreement, the Company will cause all
indebtedness owed to
the Company by the Company or any Affiliate of the Company
to be paid in full
prior to its due date.
5.8 Name Change. As soon as reasonable
practicable following the
Closing, the Company shall change its name to a name not
containing the word
"Spectra" or any word or phrase substantially similar
to "Spectra" or
"Spectra Services."
5.9 No Negotiation. Until the earlier of April 15,
1998 or such date
on which Buyer notifies the Company that it has abandoned
the Contemplated
Transactions, the Company shall deal exclusively with
Buyer with respect to
the Contemplated Transactions and the Company will not,
and will direct its
representatives not to, (a) solicit the submission of
proposals or offers
from any person relating to any acquisition or
purchase of all or any
material part of the assets or stock of the Company
or any merger,
consolidation or similar transaction with respect
to the Company;
(b) participate in any discussions or negotiations
regarding, or furnish any
information to any other person other than the Company
with respect to such
possible transaction, or (c) enter into any agreement
or understanding,
whether oral or in writing, that would prevent the
consummation of the
Contemplated Transactions. If, notwithstanding the
foregoing, the Company
should receive any such proposal from a third party or any
inquiry regarding
any such proposal, the Company shall promptly inform Buyer
thereof.
6. COVENANTS OF BUYER
6.1 Required Approvals. As promptly as practicable
after the date of
this Agreement, Buyer will make all filings required by
Legal Requirements to
be made by it to consummate the Contemplated Transactions.
Between the date
of this Agreement and the Closing Date, Buyer will, (a)
cooperate with the
Company with respect to all filings that the Company is
required by Legal
Requirements to make in connection with the Contemplated
Transactions, and
(b) cooperate with the Company in obtaining all consents
identified in Part
3.2 of the Disclosure Letter; provided that this
Agreement will not require
Buyer to dispose of or make any change in any portion of
its business or to
incur any other burden to obtain a Governmental
Authorization.
6.2 Employment Matters.
(a) All employees of the Company who accept
Buyer's offer of
employment shall be eligible for participation in Buyer's
employee benefit
programs on the same terms and conditions as similarly
situated persons and
will receive credit for service with the Company prior
to the Closing for
participation and vesting purposes under Buyer's employee
benefit programs
and for purposes of determining paid-time off
benefits and matching
contributions under the Morrison Health Care, Inc. Salary
Deferral Plan and
the Morrison Health Care, Inc. Deferred Compensation Plan.
(b) Each full time employee of the
Company who accepts
employment with Buyer (other than Mr. DeIorio and Mr.
Hemphill) shall enter
into an employment agreement with Buyer pursuant to
which, among other
things, such individuals shall receive a Stock Option to
purchase two hundred
(200) shares of Buyer's Common Stock upon the Closing.
Mr. De Iorio and Mr.
Hemphill shall receive Stock Options to purchase that
number of shares of
Buyer's Common Stock as set forth in their respective
Employment Agreements.
6.3 Post Closing Covenants. Buyer agrees to
assume all of the
Assumed Liabilities from and after the Closing Date.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO
CLOSE
Buyer's obligation to purchase the Business and
to take the other
actions required to be taken by Buyer at the Closing
is subject to the
satisfaction, at or prior to the Closing, of each of the
following conditions
(any of which may be waived by Buyer, in whole or in part):
7.1 Accuracy of Representations. All of
the Company's
representations and warranties in this Agreement
(considered collectively),
and each of these representations and warranties
(considered individually),
must have been accurate in all material respects as
of the date of this
Agreement, and must be accurate in all material respects
as of the Closing
Date as if made on the Closing Date.
7.2 The Company's Performance.
(a) All of the covenants and obligations
that the Company is
required to perform or to comply with pursuant to this
Agreement at or prior
to the Closing (considered collectively), and each of
these covenants and
obligations (considered individually), must have been
duly performed and
complied with in all material respects.
(b) Each document required to be
delivered pursuant to
SectioClosing Obligations.At the Closing:(a) must have been
delivered.
7.3 Due Diligence. Buyer shall have completed
its due diligence
inquiry into the business, affairs and financial condition
of the Company.
7.4 Consents. Each of the consents identified in
Part 3.2 of the
Disclosure Letter, and each consent identified in Part 4.2
of the Disclosure
Letter, must have been obtained and must be in full force
and effect.
7.5 Additional Documents. Each of the following
documents must have
been delivered to Buyer:
(a) an opinion of Nagle & Higgins, P.C.,
dated the Closing
Date, in the form of Exhibit 7.4(a);
(b) estoppel certificates executed on
behalf of the landlord
dated as of a date not more than twenty (20) days prior to
the Closing Date,
in the form of Exhibit 7.4(b);
(c) such other documents as Buyer may
reasonably request for
the purpose of (i) enabling its counsel to provide the
opinion referred to in
Section 8.4 Additional Documents.Buyer must have
caused the following
documents to be delivered to the Company;(a), (ii)
evidencing the accuracy of
any of the Company's representations and warranties,
(iii) evidencing the
performance by the Company of, or the compliance by either
the Company with,
any covenant or obligation required to be performed or
complied with by it,
(iv) evidencing the satisfaction of any condition
referred to in this
SectioCONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE,
or (v) otherwise
facilitating the consummation or performance of any of
the Contemplated
Transactions.
7.6 No Proceedings. Since the date of this
Agreement, there must not
have been commenced or Threatened against Buyer, or
against any Person
affiliated with Buyer, any Proceeding (a) involving any
challenge to, or
seeking damages or other relief in connection with, any of
the Contemplated
Transactions, or (b) that may have the effect of preventing,
delaying, making
illegal, or otherwise interfering with any of the
Contemplated Transactions.
7.7 No Claim Regarding Stock Ownership or Sale
Proceeds. There must
not have been made or Threatened by any Person any claim
asserting that such
Person (a) is the holder or the beneficial owner of,
or has the right to
acquire or to obtain beneficial ownership of, any
stock of, or any other
voting, equity, or ownership interest in, the Company, or
(b) is entitled to
all or any portion of the Initial Purchase Price payable for
the Business.
7.8 No Prohibition. Neither the consummation nor
the performance of
any of the Contemplated Transactions will, directly or
indirectly (with or
without notice or lapse of time), materially contravene, or
conflict with, or
result in a material violation of, or cause Buyer or any
Person affiliated
with Buyer to suffer any material adverse consequence
under, (a) any
applicable Legal Requirement or Order, or (b) any Legal
Requirement or Order
that has been published, introduced, or otherwise
formally proposed by or
before any Governmental Body.
8. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION
TO CLOSE
The Company's obligation to sell the Assets of the
Business and to take
the other actions required to be taken by the Company
at the Closing is
subject to the satisfaction, at or prior to the
Closing, of each of the
following conditions (any of which may be waived by the
Company, in whole or
in part):
8.1 Accuracy of Representations. All of Buyer's
representations and
warranties in this Agreement (considered collectively),
and each of these
representations and warranties (considered
individually), must have been
accurate in all material respects as of the date of this
Agreement and must
be accurate in all material respects as of the Closing Date
as if made on the
Closing Date.
8.2 Buyer's Performance.
(a) All of the covenants and obligations that
Buyer is required
to perform or to comply with pursuant to this Agreement
at or prior to the
Closing (considered collectively), and each of
these covenants and
obligations (considered individually), must have been
performed and complied
with in all material respects.
(b) Buyer must have delivered each of the
documents required to
be delivered by Buyer pursuant to Section 2.5 Closing
Obligations.At the
Closing:(b) and must have made the cash payments required
to be made by Buyer
pursuant to Section (i) the Initial Purchase Price,
plus or minus such
prorations of Assets, Assumed Liabilities, income and
expenses from the
Effective Date to the Closing Date as may reasonably be
determined and agreed
to by the parties prior to the Closing Date, by bank
cashier's check or by
wire transfer to the accounts specified by the Company;.
8.3 Consents. Each of the consents identified in
Part 3.2 of the
Disclosure Letter must have been obtained and must be
in full force and
effect.
8.4 Additional Documents. Buyer must have
caused the following
documents to be delivered to the Company;
(a) an opinion of Powell, Goldstein, Frazer
& Murphy LLP dated
the Closing Date, in the form of Exhibit 8.4(a);
(b) stock option agreements executed by
Buyer in the form of
Exhibit Error! Not a valid bookmark self-reference. with
all employees of the
Company (other than Mr. De Iorio and Mr. Hemphill) who
accept employment with
Buyer; and
(c) such other documents as the Company may
reasonably request
for the purpose of (i) enabling their counsel to provide the
opinion referred
to in Section 7.5(a), (ii) evidencing the accuracy of any
representation or
warranty of Buyer, (iii) evidencing the performance
by Buyer of, or the
compliance by Buyer with, any covenant or obligation
required to be performed
or complied with by Buyer, (iv) evidencing the
satisfaction of any condition
referred to in this Section, or (v) otherwise facilitating
the consummation
of any of the Contemplated Transactions.
8.5 No Injunction. There must not be in effect any
Legal Requirement
or any injunction or other Order that (a) prohibits the
sale of the Business
by the Company to Buyer, and (b) has been adopted or issued,
or has otherwise
become effective, since the date of this Agreement.
9. TERMINATION
9.1 Termination Events. This Agreement may, by
notice given prior to
or at the Closing, be terminated:
(a) by either Buyer or the Company if a
material Breach of any
provision of this Agreement has been committed by the
other party and such
Breach has not been waived;
(b) by Buyer if any of the conditions in
Section 7. CONDITIONS
PRECEDENT TO BUYER'S OBLIGATION TO CLOSE has not been
satisfied as of the
Closing Date or if satisfaction of such a condition is or
becomes impossible
(other than through the failure of Buyer to comply with its
obligations under
this Agreement) and Buyer has not waived such condition
on or before the
Closing Date;
(c) by the Company, if any of the conditions
in Section 8.
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO
CLOSE has not been
satisfied of the Closing Date or if satisfaction of such
a condition is or
becomes impossible (other than through the failure of the
Company to comply
with its obligations under this Agreement) and the
Company has not waived
such condition on or before the Closing Date;
(d) by mutual consent of Buyer and the
Company; or
(e) by either Buyer or the Company if the
Closing has not
occurred (other than through the failure of any party
seeking to terminate
this Agreement to comply fully with its obligations under
this Agreement) on
or before April 30, 1998, or such later date as the parties
may agree upon.
9.2 Effect of Termination. Each party's right of
termination under
Section 9.1 Termination Events.This Agreement may, by
notice given prior to
or at the Closing, be terminated: is in addition to any
other rights it may
have under this Agreement or otherwise, and the
exercise of a right of
termination will not be an election of remedies. If
this Agreement is
terminated pursuant to Section 9.1 Termination Events.This
Agreement may, by
notice given prior to or at the Closing, be
terminated:, all further
obligations of the parties under this Agreement will
terminate, except that
the obligations in Sections 12.1 and 12.2 will survive;
provided, however,
that if this Agreement is terminated by a party because of
the Breach of the
Agreement by the other party or because one or more of the
conditions to the
terminating party's obligations under this Agreement is
not satisfied as a
result of the other party's failure to comply with its
obligations under this
Agreement, the terminating party's right to pursue all
legal remedies will
survive such termination unimpaired.
10. INDEMNIFICATION; REMEDIES
10.1 Survival; Right to Indemnification Not
Affected by
Investigation. All representations, warranties,
covenants, and obligations
in this Agreement, the Disclosure Letter, and any
other certificate or
document delivered pursuant to this Agreement will survive
the Closing. The
right to indemnification, payment of Damages or other
remedy based on such
representations, warranties, covenants, and obligations
will not be affected
by any investigation conducted with respect to the
accuracy or inaccuracy of
or compliance with, any such representation,
warranty, covenant, or
obligation. The waiver of any condition based on the
accuracy of any
representation or warranty, or on the performance of or
compliance with any
covenant or obligation, will not affect the right to
indemnification, payment
of Damages, or other remedy if such representations or
warranties prove to be
inaccurate, or if such covenants and obligations prove to be
nonfulfilled.
10.2 Indemnification and Payment of Damages by
the Company. The
Company will indemnify and hold harmless Buyer for, and
will pay to the Buyer
the amount of, any loss, liability, claim, damage, or
expense (including
costs of investigation and defense and reasonable
attorneys' fees), whether
or not involving a third-party claim (collectively,
"Damages"), arising,
directly or indirectly, from or in connection with:
(a) any Breach of any representation or
warranty made by the
Company in this Agreement, the Disclosure Letter, the
supplements to the
Disclosure Letter, or any other certificate or document
delivered by the
Company pursuant to this Agreement;
(b) any Breach of any representation or
warranty made by the
Company in this Agreement as if such representation or
warranty were made on
and as of the Closing Date;
(c) any Breach by the Company of any covenant
or obligation of
the Company in this Agreement;
(d) any services provided by the Company
prior to the Closing
Date; or
(e) any claim by any Person for brokerage or
finder's fees or
commissions or similar payments based upon any agreement
or understanding
alleged to have been made by any such Person with the
Company (or any Person
acting on its behalf) in connection with any of the
Contemplated Transactions.
10.3 Indemnification and Payment of Damages by
the Company -
Environmental Matters. In addition to the provisions of
Section 10.2
Indemnification and Payment of Damages by the
Company.The Company will
indemnify and hold harmless Buyer for, and will pay to
the Buyer the amount
of, any loss, liability, claim, damage, or expense
(including costs of
investigation and defense and reasonable
attorneys'fees), whether or not
involving a third-party claim (collectively, "Damages"),
arising, directly or
indirectly, from or in connection with:, the Company will
indemnify and hold
harmless Buyer for, and will pay to Buyer the amount
of, any Damages
(including costs of cleanup, containment, or other
remediation) arising,
directly or indirectly, from or in connection with any
Environmental, Health,
and Safety Liabilities arising out of or relating to: (i)
(A) the ownership,
operation, or condition at any time on or prior to the
Closing Date of any
properties and assets used by the Company, or any
Hazardous Materials or
other contaminants that were present on such properties
and assets at any
time on or prior to the Closing Date; or (ii) any
Hazardous Materials or
other contaminants, wherever located, that were, or
were allegedly,
generated, transported, stored, treated, Released, or
otherwise handled by
the Company or by any other Person for whose conduct they
are or may be held
responsible at any time on or prior to the Closing Date.
10.4 Indemnification and Payment of Damages by
the Company -
Liabilities which are not Assumed Liabilities.
Notwithstanding anything to
the contrary contained herein, (a) the Company will
indemnify and hold
harmless Buyer for, and will pay Buyer the amount of, any
Damages arising
from liabilities or obligations of the Company which
are not Assumed
Liabilities, and (b) such indemnification shall not be
limited in time or
amount or subject to any deductible or cap.
10.5 Indemnification and Payment of Damages by
Buyer. Buyer will
indemnify and hold harmless the Company, and will pay
to the Company the
amount of any Damages arising, directly or indirectly,
from or in connection
with:
(a) any Breach of any representation or
warranty made by Buyer
in this Agreement or in any certificate delivered by
Buyer pursuant to this
Agreement;
(b) any Breach of any representation or
warranty made by the
Company in the Agreement as if such representation or
warranty were made on
and as of the Closing Date;
(c) any Breach by Buyer of any covenant or
obligation of Buyer
in this Agreement;
(d) any services provided by the Buyer
from and after the
Closing Date;
(e) any claim by any Person for brokerage or
finder's fees or
commissions or similar payments based upon any agreement
or understanding
alleged to have been made by such Person with Buyer (or any
Person acting on
its behalf) in connection with any of the Contemplated
Transactions;
(f) any liabilities or obligations of the
Buyer; or
(g) the Assumed Liabilities.
10.6 Limitations on Indemnification.
Notwithstanding the provisions
of Sections 10.2, 10.3, 10.4, and 10.5 hereof, a party
shall not be entitled
to be indemnified to the extent:
(a) that such party acted in bad faith with
respect to a claim
or failed to reasonably attempt to mitigate damages with
respect to a claim;
(b) that such party receives indemnity and
collects for any
Damages under the terms of any insurance policy then in
force; or
(c) of the net amount of any income tax
deduction available to
such party in the year in which the claim is made or any
previous year.
10.7 Time Limitations. If the Closing occurs, the
Company will have
no liability (for indemnification or otherwise) for a
claim with respect to
any representation or warranty, or covenant or obligation
to be performed and
complied with prior to the Closing Date, other than those
in Sections 3.4,
3.9 Taxes., 3.11 Employee Benefits. (with respect
to matters other
than Tax), 3.17 Environmental Matters.Except as set
forth in part 3.17 of
the Disclosure Letter:, 3.21 and 3.22 unless on or
before the third
anniversary of the Closing Date Buyer notifies the
Company of a claim
specifying the factual basis of that claim in reasonable
detail to the extent
then known by Buyer; a claim with respect to Sections 3.9
Taxes. or 3.11
Employee Benefits., shall be made within the applicable
statute of limitation
for Tax matters; a claim with respect to Sections 3.21 or
3.22 shall be made
within the applicable statute of limitations, provided,
however, that in no
event may such a claim be brought after the seventh
anniversary of the
Closing Date; a claim with respect to Sections 3.4,
3.17, or a claim for
indemnification or reimbursement based upon any covenant
or obligation to be
performed and complied with after the Closing Date, may be
made at any time.
If the Closing occurs, Buyer will have no liability (for
indemnification or
otherwise) with respect to any representation or
warranty, or covenant or
obligation to be performed and complied with prior to
the Closing Date,
unless on or before the third anniversary from the Closing
Date, the Company
notifies Buyer of a claim specifying the factual basis
of that claim in
reasonable detail to the extent then known by the Company,
provided, however,
that a claim for indemnification under Section 10.5(f)
or (g) shall not be
limited in time or amount or subject to any deductible or
cap.
10.8 Limitations on Amount - the Company.
(a) The Company will have no liability (for
indemnification or
otherwise) with respect to the matters described in
clause (a), clause
(b) or, to the extent relating to any failure to perform
or comply prior to
the Closing Date, clause (c) of Section 10.2
Indemnification and Payment
of Damages by the Company.The Company will indemnify and
hold harmless Buyer
for, and will pay to the Buyer the amount of, any loss,
liability, claim,
damage, or expense (including costs of investigation
and defense and
reasonable attorneys'fees), whether or not involving a
third-party claim
(collectively, "Damages"), arising, directly or
indirectly, from or in
connection with: and Section 10.3 Indemnification and
Payment of Damages by
the Company -Environmental Matters. In addition to the
provisions of Section
10.2 Indemnification and Payment of Damages by the
Company.The Company will
indemnify and hold harmless Buyer for, and will pay to
the Buyer the amount
of, any loss, liability, claim, damage, or expense
(including costs of
investigation and defense and reasonable
attorneys'fees), whether or not
involving a third-party claim (collectively, "Damages"),
arising, directly or
indirectly, from or in connection with:, the Company will
indemnify and hold
harmless Buyer for, and will pay to Buyer the amount
of, any Damages
(including costs of cleanup, containment, or other
remediation) arising,
directly or indirectly, from or in connection with any
Environmental, Health,
and Safety Liabilities arising out of or relating to: (i)
(A) the ownership,
operation, or condition at any time on or prior to the
Closing Date of any
properties and assets used by the Company, or any
Hazardous Materials or
other contaminants that were present on such properties
and assets at any
time on or prior to the Closing Date; or (ii) any
Hazardous Materials or
other contaminants, wherever located, that were, or
were allegedly,
generated, transported, stored, treated, Released, or
otherwise handled by
the Company or by any other Person for whose conduct they
are or may be held
responsible at any time on or prior to the Closing Date.
until the total of
all Damages with respect to such matters exceeds $15,000,
and then only for
the amount by which such Damages exceed $15,000.
However, this Section
Error! Not a valid bookmark self-reference.Error! Not
a valid bookmark
self-reference. will not apply to any intentional Breach
by the Company of
any representation, warranty, covenant or obligation
contained in this
Agreement, and the Company will be liable for all Damages
with respect to
such Breaches.
(b) The maximum liability the Company shall
have under Section
10.2 shall be the $500,000; provided, however, that the
foregoing limitation
shall not apply to any intentional Breach by the
Company of any
representation, warranty, covenant or obligation contained
in this Agreement,
and the Company will be liable for all Damages with respect
to such Breaches.
10.9 Limitations on Amount - Buyers. Buyer will
have no liability
(for indemnification or otherwise) with respect to the
matters described in
clause (a) or (b) or, to the extent relating to any
failure to perform or
comply prior to the Closing Date, cluase (c) of Section 10.5
Indemnification and Payment of Damages by Buyer.Buyer will
indemnify and hold
harmless the Company, and will pay to the Company the
amount of any Damages
arising, directly or indirectly, from or in connection with:
(a) any Breach of any representation or
warranty made by Buyer
in this Agreement or in any certificate delivered by
Buyer pursuant to this
Agreement;
(b) any Breach of any representation or
warranty made by the
Company in the Agreement as if such representation or
warranty were made on
and as of the Closing Date;
(c) any Breach by Buyer of any covenant or
obligation of Buyer
in this Agreement;
(d) any services provided by the Buyer
from and after the
Closing Date;
(e) any claim by any Person for brokerage or
finder's fees or
commissions or similar payments based upon any agreement
or understanding
alleged to have been made by such Person with Buyer (or any
Person acting on
its behalf) in connection with any of the Contemplated
Transactions until the
total of all Damages with respect to such matters exceeds
$15,000, and then
only for the amount by which such Damages exceed
$15,000. However, this
Section Error! Not a valid bookmark self-reference.
will not apply to any
intentional Breach by Buyer of any representation,
warranty, covenant or
obligation contained in this Agreement, and Buyer will
be liable for all
Damages with respect to such Breaches.
10.10 Procedure For Indemnification - Third Party
Claims.
(a) Promptly after receipt by an
indemnified party under
Section 10.2 Indemnification and Payment of Damages
by the Company.The
Company will indemnify and hold harmless Buyer for, and
will pay to the Buyer
the amount of, any loss, liability, claim, damage, or
expense (including
costs of investigation and defense and reasonable
attorneys'fees), whether or
not involving a third-party claim (collectively,
"Damages"), arising,
directly or indirectly, from or in connection with:, 10.4
Indemnification
and Payment of Damages by the Company -Liabilities which
are not Assumed
Liabilities.Notwithstanding anything to the contrary
contained herein,
(a) the Company will indemnify and hold harmless Buyer
for, and will pay
Buyer the amount of, any Damages arising from liabilities
or obligations of
the Company which are not Assumed Liabilities, and
(b) such indemnification
shall not be limited in time or amount or subject to any
deductible or cap.,
10.5 Indemnification and Payment of Damages by
Buyer.Buyer will
indemnify and hold harmless the Company, and will pay
to the Company the
amount of any Damages arising, directly or indirectly,
from or in connection
with:
(a) any Breach of any representation or
warranty made by Buyer
in this Agreement or in any certificate delivered by
Buyer pursuant to this
Agreement;
(b) any Breach of any representation or
warranty made by the
Company in the Agreement as if such representation or
warranty were made on
and as of the Closing Date;
(c) any Breach by Buyer of any covenant or
obligation of Buyer
in this Agreement;
(d) any services provided by the Buyer
from and after the
Closing Date;
(e) any claim by any Person for brokerage or
finder's fees or
commissions or similar payments based upon any agreement
or understanding
alleged to have been made by such Person with Buyer (or any
Person acting on
its behalf) in connection with any of the Contemplated
Transactions, or (to
the extent provided in the last sentence of Section 10.3
Indemnification
and Payment of Damages by the Company -Environmental
Matters.In addition to
the provisions of Section 10.2 Indemnification and
Payment of Damages by
the Company.The Company will indemnify and hold harmless
Buyer for, and will
pay to the Buyer the amount of, any loss, liability,
claim, damage, or
expense (including costs of investigation and
defense and reasonable
attorneys'fees), whether or not involving a third-party
claim (collectively,
"Damages"), arising, directly or indirectly, from or in
connection with:, the
Company will indemnify and hold harmless Buyer for, and
will pay to Buyer the
amount of, any Damages (including costs of cleanup,
containment, or other
remediation) arising, directly or indirectly, from or in
connection with)
Section 10.3 Indemnification and Payment of Damages
by the Company
- -Environmental Matters.In addition to the provisions of
Section 10.2
Indemnification and Payment of Damages by the
Company.The Company will
indemnify and hold harmless Buyer for, and will pay to
the Buyer the amount
of, any loss, liability, claim, damage, or expense
(including costs of
investigation and defense and reasonable
attorneys'fees), whether or not
involving a third-party claim (collectively, "Damages"),
arising, directly or
indirectly, from or in connection with:, the Company will
indemnify and hold
harmless Buyer for, and will pay to Buyer the amount
of, any Damages
(including costs of cleanup, containment, or other
remediation) arising,
directly or indirectly, from or in connection with
of notice of the
commencement of any Proceeding against it, such indemnified
party will, if a
claim is to be made against an indemnifying party under
such Section, give
notice to the indemnifying party of the commencement of
such claim, but the
failure to notify the indemnifying party will not relieve
the indemnifying
party of any liability that it may have to any indemnified
party, except to
the extent that the indemnifying party demonstrates that
the defense of such
action is prejudiced by the indemnifying party's failure to
give such notice.
(b) If any Proceeding referred to in Section
(a) Promptly
after receipt by an indemnified party under Section 10.2
Indemnification
and Payment of Damages by the Company.The Company will
indemnify and hold
harmless Buyer for, and will pay to the Buyer the
amount of, any loss,
liability, claim, damage, or expense (including costs of
investigation and
defense and reasonable attorneys'fees), whether or
not involving a
third-party claim (collectively, "Damages"), arising,
directly or indirectly,
from or in connection with:, 10.4 Indemnification and
Payment of Damages by
the Company -Liabilities which are not Assumed
Liabilities.Notwithstanding
anything to the contrary contained herein, (a) the Company
will indemnify and
hold harmless Buyer for, and will pay Buyer the amount
of, any Damages
arising from liabilities or obligations of the Company
which are not Assumed
Liabilities, and (b) such indemnification shall not be
limited in time or
amount or subject to any deductible or cap., 10.5
Indemnification and
Payment of Damages by Buyer.Buyer will indemnify and
hold harmless the
Company, and will pay to the Company the amount of any
Damages arising,
directly or indirectly, from or in connection with:
(a) any Breach of any representation or
warranty made by Buyer
in this Agreement or in any certificate delivered by
Buyer pursuant to this
Agreement;
(b) any Breach of any representation or
warranty made by the
Company in the Agreement as if such representation or
warranty were made on
and as of the Closing Date;
(c) any Breach by Buyer of any covenant or
obligation of Buyer
in this Agreement;
(d) any services provided by the Buyer
from and after the
Closing Date;
(e) any claim by any Person for brokerage or
finder's fees or
commissions or similar payments based upon any agreement
or understanding
alleged to have been made by such Person with Buyer (or any
Person acting on
its behalf) in connection with any of the Contemplated
Transactions, or (to
the extent provided in the last sentence of Section 10.3
Indemnification
and Payment of Damages by the Company -Environmental
Matters.In addition to
the provisions of Section 10.2 Indemnification and
Payment of Damages by
the Company.The Company will indemnify and hold harmless
Buyer for, and will
pay to the Buyer the amount of, any loss, liability,
claim, damage, or
expense (including costs of investigation and
defense and reasonable
attorneys'fees), whether or not involving a third-party
claim (collectively,
"Damages"), arising, directly or indirectly, from or in
connection with:, the
Company will indemnify and hold harmless Buyer for, and
will pay to Buyer the
amount of, any Damages (including costs of cleanup,
containment, or other
remediation) arising, directly or indirectly, from or in
connection with)
Section 10.3 Indemnification and Payment of Damages
by the Company
- -Environmental Matters.In addition to the provisions of
Section 10.2
Indemnification and Payment of Damages by the
Company.The Company will
indemnify and hold harmless Buyer for, and will pay to
the Buyer the amount
of, any loss, liability, claim, damage, or expense
(including costs of
investigation and defense and reasonable
attorneys'fees), whether or not
involving a third-party claim (collectively, "Damages"),
arising, directly or
indirectly, from or in connection with:, the Company will
indemnify and hold
harmless Buyer for, and will pay to Buyer the amount
of, any Damages
(including costs of cleanup, containment, or other
remediation) arising,
directly or indirectly, from or in connection with
of notice of the
commencement of any Proceeding against it, such indemnified
party will, if a
claim is to be made against an indemnifying party under
such Section, give
notice to the indemnifying party of the commencement of
such claim, but the
failure to notify the indemnifying party will not relieve
the indemnifying
party of any liability that it may have to any indemnified
party, except to
the extent that the indemnifying party demonstrates that
the defense of such
action is prejudiced by the indemnifying party's failure to
give such notice.
is brought against an indemnified party and it
gives notice to the
indemnifying party of the commencement of such Proceeding,
the indemnifying
party will, unless the claim involves Taxes, be entitled
to participate in
such Proceeding and, to the extent that it wishes
(unless (i) the
indemnifying party is also a party to such Proceeding
and the indemnified
party determines in good faith that joint
representation would be
inappropriate, or (ii) the indemnifying party fails to
provide reasonable
assurance to the indemnified party of its financial
capacity to defend such
Proceeding and provide indemnification with respect to
such Proceeding), to
assume the defense of such Proceeding with counsel
satisfactory to the
indemnified party and, after notice from the
indemnifying party to the
indemnified party of its election to assume the defense of
such Proceeding,
the indemnifying party will not, as long as it
diligently conducts such
defense, be liable to the indemnified party under this
Section 10.
INDEMNIFICATION; REMEDIES for any fees of other counsel or
any other expenses
with respect to the defense of such Proceeding, in each
case subsequently
incurred by the indemnified party in connection with
the defense of such
Proceeding, other than reasonable costs of investigation.
If the indemnifying
party assumes the defense of a Proceeding, (i) it will
be conclusively
established for purposes of this Agreement that the
claims made in that
Proceeding are within the scope of and subject to
indemnification; (ii) no
compromise or settlement of such claims may be effected by
the indemnifying
party without the indemnified party's consent unless (A)
there is no finding
or admission of any violation of Legal Requirements or
any violation of the
rights of any Person and no effect on any other claims
that may be made
against the indemnified party, and (B) the sole relief
provided is monetary
damages that are paid in full by the indemnifying
party; and (iii) the
indemnified party will have no liability with respect to
any compromise or
settlement of such claims effected without its consent. If
notice is given to
an indemnifying party of the commencement of any
Proceeding and the
indemnifying party does not, within ten days after the
indemnified party's
notice is given, give notice to the indemnified party of
its election to
assume the defense of such Proceeding, the indemnifying
party will be bound
by any determination made in such Proceeding or any
compromise or settlement
effected by the indemnified party.
(c) Notwithstanding the foregoing, if an
indemnified party
determines in good faith that there is a reasonable
probability that a
Proceeding may adversely affect it or its affiliates
other than as a result
of monetary damages for which it would be entitled to
indemnification under
this Agreement, the indemnified party may, by notice to
the indemnifying
party, assume the exclusive right to defend,
compromise, or settle such
Proceeding, but the indemnifying party will not be bound by
any determination
of a Proceeding so defended or any compromise or settlement
effected without
its consent (which may not be unreasonably withheld).
10.11 Procedure for Indemnification - Other
Claims. A claim for
indemnification for any matter not involving a third-
party claim may be
asserted by notice to the party from whom indemnification is
sought.
10.12 Exclusive Remedy. The remedies provided in
this Article 10 shall
be exclusive of and limit any other remedies that may be
available at law or
in equity.
11. DISPUTE RESOLUTION
11.1 Dispute Defined. As used in this Agreement,
"Dispute" shall mean
any dispute or disagreement between the Buyer and the
Company concerning the
interpretation of this Agreement, the validity of this
Agreement, any breach
or alleged breach by any party under this Agreement or
any other matter
relating in any way to this Agreement.
11.2 Dispute Resolution Procedures.
(a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section 11.2(a), the
parties shall attempt in good faith to resolve any such
Dispute by nonbinding
mediation. Either Buyer or the Company may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three (3) business days' notice of
such intention and
may also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding
mediation. Either Buyer or
the Company may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel.
(b) If the Dispute is not resolved by
negotiations pursuant to
Section (a) If a Dispute arises, the parties shall
follow the procedures
specified in this Article 11. The parties shall promptly
attempt to resolve
any Dispute by negotiations between themselves. Either
Buyer or the Company
may give the other party written notice of any Dispute
not resolved in the
normal course of business. The parties shall meet at a
mutually acceptable
time and place within fifteen (15) calendar days after
delivery of such
notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within thirty
(30) calendar days
of the disputing party's notice, or if the parties fail
to meet within such
fifteen (15) calendar days, either Buyer or the
Company may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either Buyer or the Company may give the other party
written notice of any
Dispute not resolved in the normal course of business. The
parties shall meet
at a mutually acceptable time and place within fifteen
(15) calendar days
after delivery of such notice, and thereafter as often
as they reasonably
deem necessary, to exchange relevant information and to
attempt to resolve
the Dispute. If the Dispute has not been resolved by
the parties within
thirty (30) calendar days of the disputing party's notice,
or if the parties
fail to meet within such fifteen (15) calendar days,
either Buyer or the
Company may initiate mediation as provided in Section (b)
If the Dispute is
not resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions:
(i) if the parties have not agreed
within thirty (30)
calendar days of the Mediation Request on
the selection of a
mediator willing to serve, CPR, upon the
request of either Buyer
or the Company, shall appoint a member of
the CPR Panels of
Neutrals as the mediator, and
(ii) efforts to reach a settlement will
continue until the
conclusion of the proceedings, which shall
be deemed to occur
upon the earliest of the date that: (A) a
written settlement is
reached, or (B) the mediator concludes and
informs the parties in
writing that further efforts would not be
useful, or (C) the
parties agree in writing that an impasse has
been reached, or (D)
a period of sixty (60) calendar days has
passed since the
Mediation Request and none of the events
specified in the
foregoing clauses (A), (B) or (C) has
occurred. No party may
withdraw before the conclusion of the
proceeding.
(c) If a Dispute is not resolved by
negotiation pursuant to
Section (a) If a Dispute arises, the parties shall
follow the procedures
specified in this Article 11. The parties shall promptly
attempt to resolve
any Dispute by negotiations between themselves. Either
Buyer or the Company
may give the other party written notice of any Dispute
not resolved in the
normal course of business. The parties shall meet at a
mutually acceptable
time and place within fifteen (15) calendar days after
delivery of such
notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within thirty
(30) calendar days
of the disputing party's notice, or if the parties fail
to meet within such
fifteen (15) calendar days, either Buyer or the
Company may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either Buyer or the Company may give the other party
written notice of any
Dispute not resolved in the normal course of business. The
parties shall meet
at a mutually acceptable time and place within fifteen
(15) calendar days
after delivery of such notice, and thereafter as often
as they reasonably
deem necessary, to exchange relevant information and to
attempt to resolve
the Dispute. If the Dispute has not been resolved by
the parties within
thirty (30) calendar days of the disputing party's notice,
or if the parties
fail to meet within such fifteen (15) calendar days,
either Buyer or the
Company may initiate mediation as provided in Section (b)
If the Dispute is
not resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel. of this Agreement or by mediation pursuant to
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement within
one hundred (100) calendar days after initiation of the
negotiation process
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section 11.2(a), the
parties shall attempt in good faith to resolve any such
Dispute by nonbinding
mediation. Either Buyer or the Company may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three (3) business days' notice of
such intention and
may also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding
mediation. Either Buyer or
the Company may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., such Dispute and any other claims arising out
of or relating to
this Agreement shall be resolved pursuant to Section
12.2(d).
(d) The parties shall submit the dispute to
binding arbitration
in accordance with the following procedures:
(i) Any arbitration proceeding
shall take place in
Nashville, Tennessee, and shall be conducted
in accordance with
the then current rules of the Nashville
Chapter of the American
Arbitration Association.
(ii) The parties shall have ten (10)
days after the first
to occur of the events in Sections 11.2(b)(ii)
(B), (C) or (D) or
Section 11.2(c) to agree upon an arbitrator
to conduct such
proceeding. If the parties fail to so agree
within such ten (10)
day period, then within five (5) days after
the end of such ten
(10) day period, each party shall select an
arbitrator and,
within ten (10) days after the end of such
five (5) day period,
such two (2) arbitrators shall select a third
arbitrator. Each
arbitrator shall have professional experience
relating to the
business, accounting or legal aspects of
the subject of the
arbitration. No arbitrators shall have any
material interest in
the result of the arbitration or be, or shall
ever have been, an
affiliate, equity holder or creditor of,
or an attorney,
accountant, agent or consultant, for any
Party to such
arbitration proceeding.
(iii) Each arbitration proceeding shall
start as soon as
reasonably practical after the selection of
the arbitrator(s).
Specific timing, including the setting of the
dates for hearings,
shall be subject to the mutual agreement of each
party, including
the arbitrator(s); provided, however, that if
agreement cannot be
reached within a reasonable time, the
arbitrator(s) shall have
the sole authority to settle all timing issues
after taking into
account the needs of each party to prepare
for, resolve and
dispose of the matter as soon as reasonably
practicable.
(iv) The decision of the arbitrator or,
if there are three
(3) arbitrators, the decision of any two (2)
arbitrators, shall
be final and binding upon the Parties, and
judgment may be
entered upon any such decision in any court
having jurisdiction.
(v) Except as otherwise specifically
provided herein, all
costs incurred in connection with any
arbitration proceeding,
including the American Arbitration
Association fees, the
arbitrator(s) fees, the cost of using any
facilities for the
arbitration hearings and the reasonable fees
and expenses of
expert witnesses, legal counsel and accountants
of the prevailing
party may be included in whole or in part in
the award to be paid
by the non-prevailing party.
11.3 Provisional Remedies. At any time during
the procedures
specified in Sections (a) If a Dispute arises, the
parties shall follow
the procedures specified in this Article 11. The
parties shall promptly
attempt to resolve any Dispute by negotiations between
themselves. Either
Buyer or the Company may give the other party written
notice of any Dispute
not resolved in the normal course of business. The
parties shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section 11.2(a), the
parties shall attempt in good faith to resolve any such
Dispute by nonbinding
mediation. Either Buyer or the Company may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three (3) business days' notice of
such intention and
may also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding
mediation. Either Buyer or
the Company may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel. and (b) If the Dispute is not resolved by
negotiations pursuant to
Section (a) If a Dispute arises, the parties shall
follow the procedures
specified in this Article 11. The parties shall promptly
attempt to resolve
any Dispute by negotiations between themselves. Either
Buyer or the Company
may give the other party written notice of any Dispute
not resolved in the
normal course of business. The parties shall meet at a
mutually acceptable
time and place within fifteen (15) calendar days after
delivery of such
notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within thirty
(30) calendar days
of the disputing party's notice, or if the parties fail
to meet within such
fifteen (15) calendar days, either Buyer or the
Company may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either Buyer or the Company may give the other party
written notice of any
Dispute not resolved in the normal course of business. The
parties shall meet
at a mutually acceptable time and place within fifteen
(15) calendar days
after delivery of such notice, and thereafter as often
as they reasonably
deem necessary, to exchange relevant information and to
attempt to resolve
the Dispute. If the Dispute has not been resolved by
the parties within
thirty (30) calendar days of the disputing party's notice,
or if the parties
fail to meet within such fifteen (15) calendar days,
either Buyer or the
Company may initiate mediation as provided in Section (b)
If the Dispute is
not resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of this
Agreement, a party
may seek a preliminary injunction or other provisional
judicial relief if in
its judgment such action is necessary to avoid
irreparable damage or to
preserve the status quo. Despite such action, the parties
will continue to
participate in good faith in the procedures specified in
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel. and (b) If the Dispute is not resolved by
negotiations pursuant to
Section (a) If a Dispute arises, the parties shall
follow the procedures
specified in this Article 11. The parties shall promptly
attempt to resolve
any Dispute by negotiations between themselves. Either
Buyer or the Company
may give the other party written notice of any Dispute
not resolved in the
normal course of business. The parties shall meet at a
mutually acceptable
time and place within fifteen (15) calendar days after
delivery of such
notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within thirty
(30) calendar days
of the disputing party's notice, or if the parties fail
to meet within such
fifteen (15) calendar days, either Buyer or the
Company may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either Buyer or the Company may give the other party
written notice of any
Dispute not resolved in the normal course of business. The
parties shall meet
at a mutually acceptable time and place within fifteen
(15) calendar days
after delivery of such notice, and thereafter as often
as they reasonably
deem necessary, to exchange relevant information and to
attempt to resolve
the Dispute. If the Dispute has not been resolved by
the parties within
thirty (30) calendar days of the disputing party's notice,
or if the parties
fail to meet within such fifteen (15) calendar days,
either Buyer or the
Company may initiate mediation as provided in Section (b)
If the Dispute is
not resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions:.
11.4 Tolling Statute of Limitations. All
applicable statutes of
limitation and defenses based upon the passage of time
shall be tolled while
the procedures specified in Sections (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either Buyer or the Company may give the other party
written notice of any
Dispute not resolved in the normal course of business. The
parties shall meet
at a mutually acceptable time and place within fifteen
(15) calendar days
after delivery of such notice, and thereafter as often
as they reasonably
deem necessary, to exchange relevant information and to
attempt to resolve
the Dispute. If the Dispute has not been resolved by
the parties within
thirty (30) calendar days of the disputing party's notice,
or if the parties
fail to meet within such fifteen (15) calendar days,
either Buyer or the
Company may initiate mediation as provided in Section (b)
If the Dispute is
not resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section 11.2(a), the
parties shall attempt in good faith to resolve any such
Dispute by nonbinding
mediation. Either Buyer or the Company may initiate a
nonbinding mediation
proceeding by a request in writing to the other party
(the "Mediation
Request"), and both parties will then be obligated to
engage in a mediation.
The proceeding will be conducted in accordance with the
then current Center
for Public Resources ("CPR") Model Procedure for
Mediation of Business
Disputes, with the following exceptions: of this
Agreement. If a negotiator
intends to be accompanied at a meeting by legal counsel,
the other negotiator
shall be given at least three (3) business days' notice of
such intention and
may also be accompanied by legal counsel., the parties
shall attempt in good
faith to resolve any such Dispute by nonbinding
mediation. Either Buyer or
the Company may initiate a nonbinding mediation
proceeding by a request in
writing to the other party (the "Mediation Request"), and
both parties will
then be obligated to engage in a mediation. The proceeding
will be conducted
in accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel. and (b) If the Dispute is not resolved by
negotiations pursuant to
Section (a) If a Dispute arises, the parties shall
follow the procedures
specified in this Article 11. The parties shall promptly
attempt to resolve
any Dispute by negotiations between themselves. Either
Buyer or the Company
may give the other party written notice of any Dispute
not resolved in the
normal course of business. The parties shall meet at a
mutually acceptable
time and place within fifteen (15) calendar days after
delivery of such
notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within thirty
(30) calendar days
of the disputing party's notice, or if the parties fail
to meet within such
fifteen (15) calendar days, either Buyer or the
Company may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either Buyer or the Company may give the other party
written notice of any
Dispute not resolved in the normal course of business. The
parties shall meet
at a mutually acceptable time and place within fifteen
(15) calendar days
after delivery of such notice, and thereafter as often
as they reasonably
deem necessary, to exchange relevant information and to
attempt to resolve
the Dispute. If the Dispute has not been resolved by
the parties within
thirty (30) calendar days of the disputing party's notice,
or if the parties
fail to meet within such fifteen (15) calendar days,
either Buyer or the
Company may initiate mediation as provided in Section (b)
If the Dispute is
not resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided
in Section (b) If
the Dispute is not resolved b negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement are
pending. The parties will take such action, if any,
as is required to
effectuate such tolling.
11.5 Performance to Continue. Each party shall
continue to perform
its or his obligations under this Agreement and the Earnout
Agreement pending
final resolution of any Dispute.
11.6 Extension of Deadlines. All deadlines
specified in this Article
11 may be extended by mutual agreement between the parties.
11.7 Enforcement. The parties regard the
obligations in this Article
11 to constitute an essential provision of this
Agreement and one that is
legally binding on them. In case of a violation of the
obligations in this
Article 11 by either Buyer or the Company, the other
party may bring an
action to seek enforcement of such obligations in the
United States District
Court for the Middle District of Tennessee.
11.8 Costs. The parties shall pay their own costs,
fees, and expenses
incurred in connection with the application of the
provisions of Sections (a)
If a Dispute arises, the parties shall follow the
procedures specified in
this Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel. and (b) If the Dispute is not resolved by
negotiations pursuant to
Section (a) If a Dispute arises, the parties shall
follow the procedures
specified in this Article 11. The parties shall promptly
attempt to resolve
any Dispute by negotiations between themselves. Either
Buyer or the Company
may give the other party written notice of any Dispute
not resolved in the
normal course of business. The parties shall meet at a
mutually acceptable
time and place within fifteen (15) calendar days after
delivery of such
notice, and thereafter as often as they reasonably
deem necessary, to
exchange relevant information and to attempt to resolve
the Dispute. If the
Dispute has not been resolved by the parties within thirty
(30) calendar days
of the disputing party's notice, or if the parties fail
to meet within such
fifteen (15) calendar days, either Buyer or the
Company may initiate
mediation as provided in Section (b) If the Dispute is
not resolved by
negotiations pursuant to Section (a) If a Dispute
arises, the parties
shall follow the procedures specified in this Article 11.
The parties shall
promptly attempt to resolve any Dispute by negotiations
between themselves.
Either Buyer or the Company may give the other party
written notice of any
Dispute not resolved in the normal course of business. The
parties shall meet
at a mutually acceptable time and place within fifteen
(15) calendar days
after delivery of such notice, and thereafter as often
as they reasonably
deem necessary, to exchange relevant information and to
attempt to resolve
the Dispute. If the Dispute has not been resolved by
the parties within
thirty (30) calendar days of the disputing party's notice,
or if the parties
fail to meet within such fifteen (15) calendar days,
either Buyer or the
Company may initiate mediation as provided in Section (b)
If the Dispute is
not resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. In
addition, the fees and expenses of CPR and the mediator in
connection with
the application of the provisions of Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement shall be borne
fifty percent (50%) by
Buyer and fifty percent (50%) by the Company.
11.9 Replacement. If CPR is no longer in business
or is unable or
refuses or declines to act or to continue to act under
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section 11.2(a),
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of this
Agreement for any
reason, then the functions specified in Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: to be performed by CPR shall be
performed by another
Person engaged in a business equivalent to that conducted
by CPR as is agreed
to by the parties (the "Replacement"). If the parties
cannot agree on the
identity of the Replacement within ten (10), calendar
days after a Request,
the Replacement shall be selected by the Chief Judge of
the United States
District Court for the Northern District of Georgia upon
application. If a
Replacement is selected by either means, Section (b) If
the Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section (a) If a Dispute arises, the parties
shall follow the
procedures specified in this Article 11. The parties shall
promptly attempt
to resolve any Dispute by negotiations between
themselves. Either Buyer or
the Company may give the other party written notice of
any Dispute not
resolved in the normal course of business. The parties
shall meet at a
mutually acceptable time and place within fifteen (15)
calendar days after
delivery of such notice, and thereafter as often as they
reasonably deem
necessary, to exchange relevant information and to
attempt to resolve the
Dispute. If the Dispute has not been resolved by the
parties within thirty
(30) calendar days of the disputing party's notice, or if
the parties fail to
meet within such fifteen (15) calendar days, either Buyer
or the Company may
initiate mediation as provided in Section (b) If the
Dispute is not
resolved by negotiations pursuant to Section (a) If a
Dispute arises,
the parties shall follow the procedures specified in
this Article 11. The
parties shall promptly attempt to resolve any Dispute by
negotiations between
themselves. Either Buyer or the Company may give the
other party written
notice of any Dispute not resolved in the normal course
of business. The
parties shall meet at a mutually acceptable time and
place within fifteen
(15) calendar days after delivery of such notice, and
thereafter as often as
they reasonably deem necessary, to exchange relevant
information and to
attempt to resolve the Dispute. If the Dispute has not
been resolved by the
parties within thirty (30) calendar days of the disputing
party's notice, or
if the parties fail to meet within such fifteen (15)
calendar days, either
Buyer or the Company may initiate mediation as provided in
Section (b) If
the Dispute is not resolved by negotiations pursuant to
Section (a) If a
Dispute arises, the parties shall follow the procedures
specified in this
Article 11. The parties shall promptly attempt to
resolve any Dispute by
negotiations between themselves. Either Buyer or the
Company may give the
other party written notice of any Dispute not resolved in
the normal course
of business. The parties shall meet at a mutually
acceptable time and place
within fifteen (15) calendar days after delivery of
such notice, and
thereafter as often as they reasonably deem necessary, to
exchange relevant
information and to attempt to resolve the Dispute. If
the Dispute has not
been resolved by the parties within thirty (30)
calendar days of the
disputing party's notice, or if the parties fail to meet
within such fifteen
(15) calendar days, either Buyer or the Company may
initiate mediation as
provided in Section (b) If the Dispute is not resolved
by negotiations
pursuant to Section 11.2(a), the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: of this Agreement. If a
negotiator intends to be
accompanied at a meeting by legal counsel, the other
negotiator shall be
given at least three (3) business days' notice of such
intention and may also
be accompanied by legal counsel., the parties shall
attempt in good faith to
resolve any such Dispute by nonbinding mediation. Either
Buyer or the Company
may initiate a nonbinding mediation proceeding by a request
in writing to the
other party (the "Mediation Request"), and both
parties will then be
obligated to engage in a mediation. The proceeding will
be conducted in
accordance with the then current Center for Public
Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the
following exceptions:
of this Agreement. If a negotiator intends to be
accompanied at a meeting by
legal counsel, the other negotiator shall be given at
least three (3)
business days' notice of such intention and may also be
accompanied by legal
counsel., the parties shall attempt in good faith to
resolve any such Dispute
by nonbinding mediation. Either Buyer or the Company
may initiate a
nonbinding mediation proceeding by a request in writing
to the other party
(the "Mediation Request"), and both parties will then be
obligated to engage
in a mediation. The proceeding will be conducted in
accordance with the then
current Center for Public Resources ("CPR") Model
Procedure for Mediation of
Business Disputes, with the following exceptions: of
this Agreement. If a
negotiator intends to be accompanied at a meeting by legal
counsel, the other
negotiator shall be given at least three (3) business
days' notice of such
intention and may also be accompanied by legal counsel.,
the parties shall
attempt in good faith to resolve any such Dispute by
nonbinding mediation.
Either Buyer or the Company may initiate a nonbinding
mediation proceeding by
a request in writing to the other party (the "Mediation
Request"), and both
parties will then be obligated to engage in a mediation.
The proceeding will
be conducted in accordance with the then current Center for
Public Resources
("CPR") Model Procedure for Mediation of Business
Disputes, with the
following exceptions: shall be deemed appropriately
amended to refer to such
Replacement.
12. GENERAL PROVISIONS
12.1 Expenses. Except as otherwise expressly
provided in this
Agreement, each party to this Agreement will bear its
respective expenses
incurred in connection with the preparation, execution,
and performance of
this Agreement and the Contemplated Transactions,
including all fees and
expenses of agents, representatives, counsel, and
accountants.
12.2 Public Announcements. Any public
announcement or similar
publicity with respect to this Agreement or the
Contemplated Transactions
will be issued, if at all, at such time and in such
manner as Buyer
determines. Unless consented to by Buyer and the
Company in advance or
required by Legal Requirements, prior to the Closing the
parties shall keep
this Agreement strictly confidential and may not make any
disclosure of this
Agreement to any Person other than their representatives.
The Company and
Buyer will consult with each other concerning the
means by which the
Company's employees, customers, and suppliers and others
having dealings with
the Company will be informed of the Contemplated
Transactions, and Buyer will
have the right to be present for any such communication.
12.3 Confidentiality. The Confidentiality Agreement
dated October 27,
1997, executed by Buyer shall remain in full force and
effect, and to the
extent the following does not contradict such
Confidentiality Agreement,
between the date of this Agreement and the Closing
Date, Buyer and the
Company will maintain in confidence, and will cause the
directors, officers,
employees, agents, and advisors of Buyer and the
Company to maintain in
confidence, any written oral, or other information
obtained in confidence
from another party or the Company in connection with this
Agreement or the
Contemplated Transactions, unless (a) such information
is already known to
such party or to others not bound by a duty of
confidentiality or such
information becomes publicly available through no fault
of such party, (b)
the use of such information is necessary or appropriate in
making any filing
or obtaining any consent or approval required for the
consummation of the
Contemplated Transactions, or (c) the furnishing or use of
such information
is required by or necessary or appropriate in
connection with legal
proceedings. If the Contemplated Transactions are not
consummated, each
party will return or destroy as much of such written
information as the other
party may reasonably request.
12.4 Notices. All notices, consents,
waivers, and other
communications under this Agreement must be in writing and
will be deemed to
have been duly given:
(a) when personally delivered;
(b) upon delivery by United States
Express Mail or other
nationally recognized overnight courier service which
provides evidence of
delivery when sent by such courier;
(c) five (5) days after posting when sent
by registered or
certified mail, postage prepaid, return receipt requested;
or
(d) upon confirmation of transmission
when delivered by
facsimile transmission, provided a copy thereof is also
delivered by regular
mail;
in each case to the appropriate addresses and
facsimile numbers set
forth below (or to such other addresses and facsimile
numbers as a party may
designate by notice to the other parties):
Notice to the Buyer shall be sufficient if given to:
Morrison Health Care, Inc.
Suite 400
1955 Lake Park Drive, SE
Smyrna, Georgia 30080-3300
Attn: General Counsel
Phone: 770-437-3300
Facsimile: 770-437-3342
with a copy to:
Powell, Goldstein, Frazer & Murphy, LLP
191 Peachtree Street, N.E.
Sixteenth Floor
Atlanta, Georgia 30303
Attn.: Thomas R. McNeill, Esq.
Phone: 404-572-6681
Facsimile: 404-572-6999
Notice to the Company shall be sufficient if given to:
Spectra Systems, Inc.
300 East 5th Avenue
Suite 340
Naperville, Illinois 60563
Attn: James W. Hemphill
Phone: 630-961-2555
Facsimile: 630-961-3785
with a copy to:
Nagle & Higgins, P.C.
1755 Park Street
Suite 260
Naperville, Illinois 60563
Attn: Brien J. Nagle
Phone 630-355-8100
Facsimile : 630-355-8185
12.5 Further Assurances. The parties agree (a)
to furnish upon
request to each other such further information, (b) to
execute and deliver to
each other such other documents, and (c) to do such other
acts and things,
all as the other party may reasonably request for the
purpose of carrying out
the intent of this Agreement and the documents referred to
in this Agreement.
12.6 Waiver. The rights and remedies of the parties
to this Agreement
are cumulative and not alternative. Neither the failure
nor any delay by any
party in exercising any right, power, or privilege under
this Agreement or
the documents referred to in this Agreement will operate
as a waiver of such
right, power, or privilege, and no single or partial
exercise of any such
right, power, or privilege will preclude any other or
further exercise of
such right, power, or privilege or the exercise of any
other right, power, or
privilege. To the maximum extent permitted by applicable
law, (a) no claim or
right arising out of this Agreement or the documents
referred to in this
Agreement can be discharged by one party, in whole or in
part, by a waiver or
renunciation of the claim or right unless in writing
signed by the other
party; (b) no waiver that may be given by a party will be
applicable except
in the specific instance for which it is given; and
(c) no notice to or
demand on one party will be deemed to be a waiver of any
obligation of such
party or of the right of the party giving such notice
or demand to take
further action without notice or demand as provided in
this Agreement or the
documents referred to in this Agreement.
12.7 Entire Agreement and Modification. This
Agreement supersedes all
prior agreements between the parties with respect to
its subject matter
(including the Letter of Intent between Buyer and the
Company, dated December
17, 1997, but excluding the Confidentiality Agreement dated
October 27, 1997)
and constitutes (along with the documents referred to in
this Agreement) a
complete and exclusive statement of the terms of the
agreement between the
parties with respect to its subject matter. This Agreement
may not be amended
except by a written agreement executed by the party to be
charged with the
amendment.
12.8 Disclosure Letter.
(a) The disclosures in the Disclosure
Letter must relate only
to the representations and warranties in the Section of
the Agreement to
which they expressly relate and not to any other
representation or warranty
in this Agreement except that a disclosure may specifically
cross-reference a
duplicate disclosure.
(b) In the event of any inconsistency between
the statements in
the body of this Agreement and those in the Disclosure
Letter (other than an
exception expressly set forth as such in the Disclosure
Letter with respect
to a specifically identified representation or warranty),
the statements in
the body of this Agreement will control.
12.9 Assignments, Successors, and No Third-Party
Rights. Neither
party may assign any of its rights under this Agreement
without the prior
consent of the other parties except that Buyer may assign
any of its rights
under this Agreement to any subsidiary of Buyer. Subject
to the preceding
sentence, this Agreement will apply to, be binding in all
respects upon, and
inure to the benefit of the successors and permitted
assigns of the parties.
Nothing expressed or referred to in this Agreement will be
construed to give
any Person other than the parties to this Agreement any
legal or equitable
right, remedy, or claim under or with respect to this
Agreement or any
provision of this Agreement. This Agreement and all of
its provisions and
conditions are for the sole and exclusive benefit of the
parties to this
Agreement and their successors and assigns.
12.10 Severability. If any provision of this
Agreement is held invalid
or unenforceable by any court of competent jurisdiction,
the other provisions
of this Agreement will remain in full force and effect. Any
provision of this
Agreement held invalid or unenforceable only in part or
degree will remain in
full force and effect to the extent not held invalid or
unenforceable.
12.11 Section Headings, Construction. The headings
of Sections in this
Agreement are provided for convenience only and will
not affect its
construction or interpretation. All references to
"Section" or "Sections"
refer to the corresponding Section or Sections of this
Agreement. All words
used in this Agreement will be construed to be of such
gender or number, as
the circumstances require. Unless otherwise expressly
provided, the work
"including" does not limit the preceding words or terms.
12.12 Time of Essence. With regard to all dates and
time periods set
forth or referred to in this Agreement, time is of the
essence.
12.13 Governing Law. This Agreement will be
governed by the laws of
the State of Illinois without regard to the laws of
conflicts.
12.14 Counterparts. This Agreement may be executed
in one or more
counterparts, each of which will be deemed to be an
original copy of this
Agreement and all of which, when taken together, will be
deemed to constitute
one and the same agreement..
IN WITNESS WHEREOF, the parties have executed
and delivered this
Agreement as of the date first written above.
BUYER:
MORRISON HEALTH CARE,
INC.
By: /s/ John E. Fountain
Name: John E. Fountain
Title: Vice President,
General Counsel and
Secretary
THE COMPANY:
SPECTRA SERVICES, INC.
By: /s/ James W.
hemphill
Name: James W. Hemphill
Title: President
I, James W. Hemphill, the sole shareholder of Spectra
Services, Inc.,
hereby agree that in the event the Company distributes
some or all of the
Purchase Price, I shall reimburse the Company for
such amount of said
distributions as may be necessary in order for the Company
to pay any amounts
due to Buyer pursuant to the Agreement.
/s/ James W. Hemphill
James W. Hemphill
/s/ Jarrett Franklin
Jarrett Franklin
WITNESS
EXHIBIT 10.36
EXECUTION COUNTERPART
============================================================
======
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of July 2, 1998
among
MORRISON HEALTH CARE, INC.,
THE LENDERS LISTED HEREIN,
SUNTRUST BANK, ATLANTA, as Issuing Bank,
SUNTRUST BANK, ATLANTA, as Agent, and
WACHOVIA BANK, N.A., as Co-Agent
for the Issuing Bank and the Lenders
============================================================
======
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS; CONSTRUCTION
........................................1
Section 1.01
Definitions...............................................1
Section 1.02 Accounting Terms and
Determination...................... 16
Section 1.03 Other Definitional
Terms.................................16
Section 1.04 Exhibits and
Schedules...................................16
ARTICLE II. LOANS AND LETTERS OF
CREDIT.....................................17
Section 2.01 Commitments; Use of
Proceeds.............................17
Section 2.02 Swing Line
Subfacility...................................18
Section 2.03 Letter of Credit
Subfacility.............................20
Section 2.04 Notes; Repayment of
Principal............................23
Section 2.05 Voluntary Reduction of
Commitments.......................23
Section 2.06 Increase of the
Commitments..............................24
ARTICLE III. GENERAL LOAN
TERMS.............................................25
Section 3.01 Funding
Notices..........................................25
Section 3.02 Disbursement of
Funds....................................26
Section 3.03
Interest.................................................28
Section 3.04 Interest
Periods.........................................29
Section 3.05
Fees.....................................................29
Section 3.06 Voluntary Prepayments of
Borrowings......................30
Section 3.07 Payments,
etc............................................31
Section 3.08 Interest Rate Not Ascertainable,
etc.....................34
Section 3.09
Illegality...............................................34
Section 3.10 Increased
Costs..........................................35
Section 3.11 Lending
Offices..........................................36
Section 3.12 Funding
Losses...........................................37
Section 3.13 Assumptions Concerning Funding of
Eurodollar Advances....37
Section 3.14 Apportionment of
Payments................................37
Section 3.15 Termination of
Commitments...............................38
Section 3.16 Sharing of Payments,
Etc.................................38
Section 3.17 Capital
Adequacy.........................................38
Section 3.18 Letter of Credit Obligations
Absolute....................39
ARTICLE IV. CONDITIONS TO
BORROWINGS........................................40
Section 4.01 Conditions Precedent to Initial
Loans....................40
Section 4.02 Conditions to Each
Loan..................................42
ARTICLE V. REPRESENTATIONS AND
WARRANTIES...................................43
Section 5.01 Corporate Existence; Compliance with
Law.................43
Section 5.02 Corporate Power;
Authorization...........................43
Section 5.03 Possession of Franchises, Licenses,
Etc..................43
Section 5.04 Enforceable
Obligations..................................44
Section 5.05 No Legal
Bar.............................................44
Section 5.06 No Material
Litigation...................................44
Section 5.07 Investment Company Act,
Etc..............................44
Section 5.08 Margin
Regulations.......................................44
Section 5.09 Compliance With Environmental
Laws.......................44
Section 5.10
Insurance................................................45
Section 5.11 No
Default...............................................45
Section 5.12 No Burdensome
Restrictions...............................46
Section 5.13
Taxes....................................................46
Section 5.14
Subsidiaries.............................................46
Section 5.15 Financial
Statements.....................................46
Section 5.16
ERISA....................................................47
Section 5.17 Patents, Trademarks, Licenses,
Etc.......................48
Section 5.18 Ownership of
Property....................................48
Section 5.19
Indebtedness.............................................48
Section 5.20 Financial
Condition......................................48
Section 5.21 Labor
Matters............................................49
Section 5.22 Payment or Dividend
Restriction..........................49
Section 5.23 Sharing
Agreements.......................................49
Section 5.24
Disclosure...............................................49
Section 5.25. Year 2000
Compliant......................................50
ARTICLE VI. AFFIRMATIVE COVENANTS
..........................................50
Section 6.01 Corporate Existence,
Etc.................................50
Section 6.02 Compliance with Laws,
Etc................................50
Section 6.03 Payment of Taxes and Claims,
Etc.........................50
Section 6.04 Keeping of
Books.........................................50
Section 6.05 Visitation, Inspection,
Etc..............................50
Section 6.06 Insurance; Maintenance of
Properties.....................51
Section 6.07 Reporting
Covenants......................................51
Section 6.08 Financial
Covenants......................................55
Section 6.09 Notices Under Certain Other
Indebtedness.................55
Section 6.10 Additional Credit Parties and
Collateral.................55
ARTICLE VII. NEGATIVE
COVENANTS.............................................56
Section 7.01
Indebtedness.............................................56
Section 7.02
Liens....................................................57
Section 7.03 Mergers, Sales,
Acquisitions.............................58
Section 7.04 Investments, Loans,
Etc..................................59
Section 7.05 Letters of
Credit........................................60
Section 7.06 Sale and Leaseback
Transactions..........................61
Section 7.07 Transactions with
Affiliates.............................61
Section 7.08 Changes in
Business......................................61
Section 7.09
ERISA....................................................61
Section 7.10. Limitation on Payment Restrictions
Affecting Consolidated
Companies................................................62
Section 7.11 Actions Under Certain
Documents..........................62
Section 7.12 Additional Negative
Pledges..............................62
Section 7.13 Changes in Fiscal
Year...................................62
Section 7.14 Issuance of Stock by
Subsidiaries........................62
Section 7.15
Dividends................................................62
ARTICLE VIII. EVENTS OF
DEFAULT.............................................63
Section 8.01
Payments.................................................63
Section 8.02 Covenants Without
Notice.................................63
Section 8.03 Other
Covenants..........................................63
Section 8.04
Representations..........................................63
Section 8.05 Non-Payments of Other
Indebtedness.......................63
Section 8.06. Defaults Under Other Agreements; Change
In Control
Provisions...............................................63
Section 8.07
Bankruptcy...............................................64
Section 8.08
ERISA....................................................64
Section 8.09
Judgments................................................65
Section 8.10 Ownership of Credit
Parties..............................65
Section 8.11 Change in Control of
Borrower............................65
Section 8.12 Default Under Other Credit Documents;
Sharing Agreements.66
ARTICLE IX. THE
AGENT.......................................................
66
Section 9.01 Appointment of
Agent.....................................66
Section 9.02 Authorization of Agent with Respect to
the Security
Documents................................................67
Section 9.03 Nature of Duties of
Agent................................67
Section 9.04 Lack of Reliance on the
Agent............................67
Section 9.05 Certain Rights of the
Agent..............................68
Section 9.06 Reliance by
Agent........................................68
Section 9.07 Indemnification of
Agent.................................68
Section 9.08 The Agent in its Individual
Capacity.....................69
Section 9.09 Holders of
Notes.........................................69
Section 9.10 Successor
Agent..........................................69
ARTICLE X.
MISCELLANEOUS...............................................
.....70
Section 10.01
Notices.................................................70
Section 10.02 Amendments,
Etc.........................................70
Section 10.03 No Waiver; Remedies
Cumulative..........................71
Section 10.04 Payment of Expenses,
Etc................................71
Section 10.05 Right of
Setoff.........................................73
Section 10.06 Benefit of Agreement; Assignments;
Participations.......73
Section 10.07 Governing Law; Submission to
Jurisdiction...............75
Section 10.08 Independent Nature of Lenders'
Rights...................76
Section 10.09
Counterparts............................................76
Section 10.10 Effectiveness; Termination of
Commitments; Survival.....77
Section 10.11
Severability............................................77
Section 10.12 Independence of
Covenants...............................77
Section 10.13 Change in Accounting Principles, Fiscal
Year or Tax
Laws....................................................77
Section 10.14 Headings Descriptive; Entire
Agreement..................78
SCHEDULES
Schedule 5.01 Organization and Ownership of
Subsidiaries
Schedule 5.05 Certain Pending and Threatened
Litigation
Schedule 5.09(a) Environmental Compliance
Schedule 5.09(b) Environmental Notices
Schedule 5.09(c) Environmental Permits
Schedule 5.11 No Defaults
Schedule 5.12 Burdensome Restrictions
Schedule 5.13 Tax Filings and Payments
Schedule 5.14 Material Subsidiaries
Schedule 5.16 Employee Benefit Matters
Schedule 5.17 Patent, Trademark, License, and
Other Intellectual Property
Matters
Schedule 5.18 Ownership of Properties
Schedule 5.19 Labor and Employment Matters
Schedule 5.22 Dividend Restrictions
Schedule 5.23 Disclosure
Schedule 7.01 Existing Indebtedness
Schedule 7.02 Existing Liens
EXHIBITS
Exhibit A - Form of Amended and Restated
Revolving Credit Note
Exhibit B - Form of Amended and Restated Swing
Line Note
Exhibit C - Subsidiary Guaranty Agreement
Exhibit D - Form of Closing Certificate
Exhibit E - Form of Opinion of Powell,
Goldstein,
Frazer & Murphy, LLP
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Letter of Credit Application
Exhibit H - Form of Compliance Certificate
Exhibit A
AMENDED AND RESTATED CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") made
and entered into as
of July 2, 1998, by and among MORRISON HEALTH CARE,
INC., a Georgia
corporation (the "Borrower"), SUNTRUST BANK, ATLANTA, a
banking corporation
organized under the laws of the State of Georgia
("SunTrust"), the other
banks and lending institutions listed on the signature
pages hereof, and any
assignees of SunTrust, or such other banks and lending
institutions which
become "Lenders" as provided herein (SunTrust and such
other banks, lending
institutions, and assignees referred to collectively
herein as the
"Lenders"), SUNTRUST BANK, ATLANTA, as the issuing bank
(the "Issuing Bank"),
SUNTRUST BANK, ATLANTA, as Agent (the "Agent") for the
Issuing Bank and the
Lenders, and WACHOVIA BANK, N.A., as Co-Agent (the
"Co-Agent") for the
Issuing Bank and the Lenders;
W I T N E S S E T H:
WHEREAS, on March 6, 1996, Borrower
entered into a Credit
Agreement by and among Borrower, SunTrust, the other
banks and lending
institutions listed on the signature pages thereof,
and SunTrust Bank,
Atlanta in its capacity as agent for such banks and lending
institutions (the
"Original Credit Agreement");
WHEREAS, in connection with this Agreement,
Borrower, the
Lenders, and the Agent wish to amend and restate the
Original Credit
Agreement to increase the revolving credit facility
thereunder and provide
for a letter of credit subfacility, all as more particularly
evidenced herein;
NOW, THEREFORE, in consideration of the
premises and the mutual
covenants herein contained, Borrower, the Lenders, the
Issuing Bank, the
Agent and the Co-Agent agree, upon the terms and subject
to the conditions
set forth herein as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
Section I.1. Definitions. In addition to
the other terms
defined herein, the following terms used herein shall
have the meanings
herein specified (to be equally applicable to both the
singular and plural
forms of the terms defined):
"Account Party" shall mean the Borrower or any
Guarantor in whose
account a Letter of Credit is to be or has been issued.
"Advance" shall mean any principal amount
advanced and remaining
outstanding at any time as (i) the Revolving Loans, which
Advances shall be
made or outstanding as Base Rate Advances or Eurodollar
Advances, as the case
may be, or (ii) a Swing Line Loan, which Advances
shall be made or
outstanding as Swing Rate Advances.
"Affiliate" of any Person means any other
Person directly or
indirectly controlling, controlled by, or under common
control with, such
Person, whether through the ownership of voting
securities, by contract or
otherwise. For purposes of this definition, "control"
(including with
correlative meanings, the terms "controlling",
"controlled by", and "under
common control with") as applied to any Person, means
the possession,
directly or indirectly, of the power to direct or cause
the direction of the
management and policies of that Person.
"Agent" shall mean, SunTrust Bank, Atlanta,
a Georgia banking
corporation, as Agent for the Lenders and the Issuing
Bank under this
Agreement and the other Loan Documents and any successor
agent appointed
pursuant to Section 9.10 hereto.
"Agreement" shall mean this Credit
Agreement, as hereafter
amended, restated, supplemented or otherwise modified from
time to time.
"Applicable Margin" shall mean the percentage
designated below
based on the Leverage Ratio of the Consolidated
Companies, measured
quarterly, effective in the next fiscal quarter
immediately following the
date of delivery of the Compliance Certificate to the Agent:
-----------------------------------------
- -
Applicable Margin
Leverage Ratio (LIBOR Advance)
=========================================-
Less than 1.00:1.00 0.50%
-----------------------------------------
- -
Greater than or equal
to 1.00:1.00 and less
than 2.00:1.00 0.625%
-----------------------------------------
- -
Greater than or equal
to 2.00:1.00 and less
than 2.50:1.00 0.75%
-----------------------------------------
- -
Greater than or equal
to 2.50:1.00 and less
than 3.00:1.00 1.00%
-----------------------------------------
- -
For purposes of the foregoing, (i) the Applicable
Margin as of the
Closing Date is 1.00% and shall remain 1.00% through and
including August 31,
1998 (by way of example, as of the first day of the second
fiscal quarter of
the Borrower the Applicable Margin shall be
calculated based upon the
Leverage Ratio of the Consolidated Companies in the
Compliance Certificate
delivered by the Borrower for the first fiscal quarter
of such year); and
(ii) if the Borrower fails to provide the Compliance
Certificate and related
financial statements required under Section 6.07(c)
within the applicable
time period set forth therein, the Applicable Margin
shall be adjusted to
1.00% on the first day of the following fiscal quarter
until such Compliance
Certificate and related financial statements are delivered.
"Assignment and Acceptance" shall mean
an assignment and
acceptance entered into by the Issuing Bank or a Lender
and an Eligible
Assignee in accordance with the terms of this Agreement and
substantially in
the form of Exhibit F.
"Bankruptcy Code" shall mean The Bankruptcy
Code of 1978, as
amended and in effect from time to time (11 U.S.C. 101 et
seq.).
"Base Rate" shall mean (with any change in
the Base Rate to be
effective as of the date of change of either of the
following rates) the
higher of (i) the rate which the Agent publicly announces
from time to time
as its prime lending rate, as in effect from time to
time, and (ii) the
Federal Funds Rate, as in effect from time to time,
plus one-half of one
percent (0.50%) per annum. The Agent's prime lending
rate is a reference
rate and does not necessarily represent the lowest or
best rate actually
charged to customers; the Agent may make commercial loans
or other loans at
rates of interest at, above or below the Agent's prime
lending rate.
"Base Rate Advance" shall mean an Advance made
or outstanding as
a Revolving Loan bearing interest based on the Base Rate.
"Base Rate Borrowing" shall mean a Borrowing
made up of Base Rate
Advances.
"Borrower" shall mean Morrison Health Care,
Inc., a Georgia
corporation, its successors and permitted assigns.
"Borrowing" shall mean the incurrence by
Borrower under the
Commitments of Advances of one Type concurrently having
the same Interest
Period or the continuation or conversion of an
existing Borrowing or
Borrowings in whole or in part.
"Business Day" shall mean any day excluding
Saturday, Sunday and
any other day on which banks are required or authorized to
close in Atlanta,
Georgia and, if the applicable Business Day relates to
Eurodollar Advances,
any day on which trading is not carried on by and between
banks in deposits
of the applicable currency in the applicable interbank
Eurocurrency market.
"Capital Lease" shall mean, as applied to any
Person, any lease
of any property (whether real, personal or mixed) by
such Person as lessee
which would, in accordance with GAAP, be required to
be classified and
accounted for as a capital lease on a balance sheet of
such Person, other
than, in the case of Borrower or any of its
Subsidiaries, any such lease
under which Borrower or a wholly-owned Subsidiary of
Borrower is the lessor.
"Capital Lease Obligation" shall mean, with
respect to any
Capital Lease, the amount of the obligation of the lessee
thereunder which
would, in accordance with GAAP, appear on a balance sheet
of such lessee in
respect of such Capital Lease.
"Change in Control Provision" shall mean any
term or provision
contained in any indenture, debenture, note, or other
agreement or document
evidencing or governing Indebtedness of Borrower
evidencing debt or a
commitment to extend loans in excess of $500,000.00
which requires, or
permits the holder(s) of such Indebtedness of Borrower to
require that such
Indebtedness of Borrower be redeemed, repurchased,
defeased, prepaid or
repaid, either in whole or in part, or the maturity of such
Indebtedness of
Borrower to be accelerated in any respect, as a result
of a change in
ownership of the capital stock of Borrower or voting
rights with respect
thereto.
"Closing Certificate" shall mean that
certificate of an officer
of the Borrower substantially in the form of Exhibit D
attached hereto.
"Closing Date" shall mean July 2, 1998 or
such later date on
which the conditions to the initial loans set forth in
Sections 4.01 and 4.02
are satisfied.
"Co-Agent" shall mean, Wachovia Bank, N.A., a
national banking
association, as Co-Agent for the Lenders and the
Issuing Bank under this
Agreement and the other Loan Documents.
"Commitment" shall mean, for any Lender
at any time, the
revolving credit facility severally established by such
Lender pursuant to
Section 2.01, including, without duplication, such
Lender's Pro Rata Share
of the Letter of Credit Subfacility and, in the case of
SunTrust, the Swing
Line Subfacility, as the same may be decreased from time
to time as a result
of any reduction thereof pursuant to Section 2.05, or
increased from time to
time as a result of any increase thereof pursuant to
Section 2.06, any
assignment thereof pursuant to Section 10.06, or any
amendment thereof
pursuant to Section 10.02.
"Commitment Fee" shall have the meaning ascribed
to it in Section
3.05(a).
"Compliance Certificate" shall mean the
certificate delivered by
the Borrower to the Agent substantially in the form of
Exhibit H attached
hereto.
"Consolidated Companies" shall mean,
collectively, Borrower and
all of its Subsidiaries.
"Consolidated EBITDA" shall mean for any
period, an amount equal
to the sum for the trailing four fiscal quarter period of
Consolidated Net
Income (Loss), plus, to the extent deducted therefrom in
determining such
Consolidated Net Income (Loss), the sum of (i) taxes based
on income (whether
paid or deferred), (ii) Consolidated Interest Expense,
(iii) depreciation of
assets, and (iv) amortization.
"Consolidated EBITR" shall mean for any
period, an amount equal
to the sum for the trailing four fiscal quarter period of
Consolidated Net
Income (Loss) of the Consolidated Companies, plus, to
the extent deducted
therefrom in determining Consolidated Net Income
(Loss), the sum of (i)
Consolidated Interest Expense, (ii) taxes based on income
(whether paid or
deferred), and (iii) Rental Obligations for such period.
"Consolidated Funded Debt" shall mean, as
of any date of
determination, the Funded Debt of the Consolidated
Companies.
"Consolidated Interest Expense" shall mean, for
any period, total
interest expense of the Consolidated Companies (including
without limitation,
interest expense attributable to Capital Leases, all
capitalized interest,
all commissions, discounts and other fees and charges
owed with respect to
bankers acceptance financing, net costs (i.e., costs
minus benefits) under
Interest Rate Contracts, and total interest expense
(whether shown as
interest expense or as loss and expenses on sales of
receivables) under a
receivables purchase facility) determined on a
consolidated basis in
accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean,
with reference to
any period, the net income (or deficit) of the
Consolidated Companies for
such period (taken as a cumulative whole), after
deducting all operating
expenses, provisions for all taxes and reserves
(including reserves for
deferred income taxes) and all other proper deductions,
all determined in
accordance with GAAP on a consolidated basis, after
eliminating all
intercompany transactions and after deducting portions
of income properly
attributable to minority interests, if any, in the stock
and surplus of the
Subsidiaries of the Borrower.
"Consolidated Net Worth" shall mean the
shareholders' equity of
the Borrower calculated in accordance with GAAP, less
treasury stock.
"Contractual Obligation" of any Person shall
mean any provision
of any security issued by such Person or of any
agreement, instrument or
undertaking under which such Person is obligated or by
which it or any of the
property owned by it is bound.
"Credit Documents" shall mean, collectively,
this Agreement, the
Notes, the Guaranty Agreement, all Letter of Credit
Applications and all
other instruments, documents, certificates, agreements and
writings executed
in connection herewith, each as amended, restated,
supplemented or otherwise
modified from time to time.
"Credit Parties" shall mean, collectively,
each of the Borrower
and the Guarantor.
"Default" shall mean any condition or event
which, with notice or
lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$"
shall mean lawful
money of the United States of America.
"Eligible Assignee" shall mean (i) a
commercial bank organized
under the laws of the United States or any state thereof
having total assets
in excess of $1,000,000,000.00 or any commercial
finance or asset-based
lending Affiliate of any such commercial bank and (ii) any
Lender.
"Environmental Laws" shall mean all federal,
state, local and
foreign statutes and codes or regulations, rules or
ordinances issued,
promulgated, or approved thereunder, now or hereafter in
effect (including,
without limitation, those with respect to asbestos or
asbestos containing
material or exposure to asbestos or asbestos containing
material), relating
to pollution or protection of the environment and
relating to public health
and safety, relating to (i) emissions, discharges,
releases or threatened
releases of pollutants, contaminants, chemicals or
industrial toxic or
hazardous constituents, substances or wastes, including
without limitation,
any Hazardous Substance, petroleum including crude oil
or any fraction
thereof, any petroleum product or other waste,
chemicals or substances
regulated by any Environmental Law into the environment
(including, without
limitation, ambient air, surface water, ground water,
land surface or
subsurface strata), or (ii) the manufacture, processing,
distribution, use,
generation, treatment, storage, disposal, transport or
handling of any
Hazardous Substance, petroleum including crude oil or any
fraction thereof,
any petroleum product or other waste, chemicals or
substances regulated by
any Environmental Law, and (iii) underground storage
tanks and related
piping, and emissions, discharges and releases or
threatened releases
therefrom, such Environmental Laws to include, without
limitation (a) the
Clean Air Act (42 U.S.C. 7401 et seq.), (b) the Clean
Water Act (33 U.S.C.
1251 et seq.), (c) the Resource Conservation and
Recovery Act (42 U.S.C.
6901 et seq.), (d) the Toxic Substances Control Act (15
U.S.C. 2601 et
seq.), (e) the Comprehensive Environmental Response
Compensation and
Liability Act, as amended by the Superfund Amendments and
Reauthorization Act
(42 U.S.C. 9601 et seq.), and (f) all applicable national
and local laws or
regulations with respect to environmental control.
"ERISA" shall mean the Employee Retirement
Income Security Act of
1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to
any Person, each
trade or business (whether or not incorporated) which is a
member of a group
of which that Person is a member and which is under common
control within the
meaning of the regulations promulgated under Section 414 of
the Tax Code.
"Eurodollar Advance" shall mean an Advance made
or outstanding as
a Revolving Loan bearing interest equal to LIBOR plus the
Applicable Margin
for such Advance.
"Eurodollar Borrowing" shall mean a
Borrowing made up of
Eurodollar Advances.
"Event of Default" shall have the meaning
provided in Article
VIII.
"Executive Officer" shall mean with respect
to any Person, the
President, Vice Presidents, Chief Financial Officer,
Treasurer, Secretary and
any Person holding comparable offices or duties.
"Federal Funds Rate" shall mean for any
period, a fluctuating
interest rate per annum equal for each day during such
period to the weighted
average of the rates on overnight Federal funds
transactions with member
banks of the Federal Reserve System arranged by Federal
funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next
preceding Business Day) by the Federal Reserve Bank of
Atlanta, or, if such
rate is not so published for any day which is a Business
Day, the average of
the quotations for such day on such transactions received
by the Agent from
three Federal funds brokers of recognized standing selected
by the Agent.
"Fiscal Year" shall mean any twelve calendar
month period ending
on May 31 of any year; references to a Fiscal
Year with a number
corresponding to any calendar year (e.g., "Fiscal Year
1996") refer to the
Fiscal Year ending on the first Saturday occurring after May
30 of that year.
"Fiscal Year End" shall mean the last day of any
Fiscal Year.
"Fixed Charge Coverage Ratio" shall mean,
for any period, the
ratio of (i) Consolidated EBITR to (ii) Fixed Charges for
such period.
"Fixed Charges" shall mean, with reference
to any period,
determined in accordance with GAAP on a consolidated
basis, the sum of the
following for the Consolidated Companies, after
eliminating all intercompany
items:
(a) Consolidated Interest Expense for such period;
and
(b) all Rental Obligations payable as lessee
under any operating
lease properly charged or chargeable to income
during such period
in accordance with GAAP;
provided that any interest charges or rentals paid or
accrued by any Person
acquired by the Borrower or any of its Subsidiaries
during such period,
through purchase, merger, consolidation or otherwise,
shall be included in
"Fixed Charges" only to the extent that the earnings
of such Person are
taken into account in determining EBITR for such period.
"Funded Debt" shall mean, as applied to
any Person, all
Indebtedness of such Person which by its terms or by
the terms of any
instrument or agreement relating thereto matures, or
which is otherwise
payable or unpaid, one year or more from, or is
directly or indirectly
renewable or extendable at the option of the debtor to
a date one year or
more (including an option of the debtor under a revolving
credit or similar
agreement obligating the lender or lenders to extend
credit over a period of
one year or more) from, the date of the creation
thereof, provided that
Funded Debt shall include, as at any date of
determination, any portion of
such Indebtedness outstanding on such date which matures
on demand or within
one year from such date (whether by sinking fund, other
required prepayment,
or final payment at maturity) and shall also include all
Indebtedness of such
Person for borrowed money outstanding under a line of
credit, guidance line,
revolving credit, bankers acceptance facility or similar
arrangement for
borrowed money, including, without limitation, all
unpaid drawings under
letters of credit and unreimbursed amounts pursuant
to letter of credit
reimbursement agreements, regardless of the maturity date
thereof.
"GAAP" shall mean generally accepted
accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board
of the American Institute of Certified Public Accountants
and statements and
pronouncements of the Financial Accounting Standards
Board or, if no such
statements are promulgated, then such other statements by
such other entity
as may be approved by a significant segment of the
accounting profession,
which are applicable to the circumstances as of the date of
determination.
"Guarantors" shall mean, (i) Culinary
Solutions, Inc. and (ii)
all other Material Subsidiaries of the Borrower, and
their respective
successors and permitted assigns.
"Guaranty" shall mean any contractual
obligation, contingent or
otherwise (other than letters of credit), of a Person
with respect to any
Indebtedness or other obligation or liability of another
Person, including
without limitation, any such Indebtedness, obligation or
liability directly
or indirectly guaranteed, endorsed, co-made or
discounted or sold with
recourse by that Person, or in respect of which that
Person is otherwise
directly or indirectly liable, including contractual
obligations (contingent
or otherwise) arising through any agreement to
purchase, repurchase, or
otherwise acquire such Indebtedness, obligation or
liability or any security
therefor, or any agreement to provide funds for the
payment or discharge
thereof (whether in the form of loans, advances, stock
purchases, capital
contributions or otherwise), or to maintain solvency,
assets, level of
income, or other financial condition, or to make any
payment other than for
value received. The amount of any Guaranty shall be
deemed to be an amount
equal to the stated or determinable amount of the
primary obligation in
respect of which guaranty is made or, if not so stated or
determinable, the
maximum reasonably anticipated liability in respect
thereof (assuming such
Person is required to perform thereunder) as determined
by such Person in
good faith.
"Guaranty Agreement" shall mean the Subsidiary
Guaranty Agreement
executed initially by Culinary Solutions, Inc. and
thereafter by any and all
Material Subsidiaries of the Borrower in favor of the
Lenders, the Issuing
Bank and the Agent, substantially in the form of Exhibit C
as the same may be
amended, restated or supplemented from time to time.
"Hazardous Substances" shall have the meaning
assigned to that
term in the Comprehensive Environmental Response
Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and
Reauthorization Acts
of 1986.
"Hostile Acquisition" shall mean any
Investment resulting in
control of a Person involving a tender offer or proxy
contest that has not
been recommended or approved by the board of directors of
the Person that is
the subject of the Investment prior to the first public
announcement or
disclosure relating to such Investment.
"Indebtedness" of any Person shall mean,
without duplication (i)
all obligations of such Person which in accordance with
GAAP would be shown
on the balance sheet of such Person as a liability
(including, without
limitation, obligations for borrowed money and for the
deferred purchase
price of property or services, and obligations
evidenced by bonds,
debentures, notes or other similar instruments); (ii)
all Capital Lease
Obligations; (iii) all Guaranties of such Person; (iv)
Indebtedness of others
secured by any Lien upon property owned by such
Person, whether or not
assumed; and (v) obligations or other liabilities under
currency contracts,
Interest Rate Contracts, or similar agreements or
combinations thereof.
Notwithstanding the foregoing, in determining the
Indebtedness of any Person,
there shall be included all obligations of such Person
of the character
referred to in clauses (i) through (v) above deemed to be
extinguished under
GAAP but for which such Person remains legally liable
except to the extent
that such obligations (x) have been defeased in accordance
with the terms of
the applicable instruments governing such obligations
and (y) the accounts
or other assets dedicated to such defeasance are not
included as assets on
the balance sheet of such Person.
"Interest Period" shall mean (i) as to any
Eurodollar Advances,
the interest period selected by the Borrower pursuant
to Section 3.04(a)
hereof, and (ii) as to any Swing Rate Advances, the
interest period requested
by the Borrower and agreed to by the Swing Line Lender
pursuant to Section
3.01(a)(ii) hereof.
"Interest Rate Contract" shall mean all
interest rate swap
agreements, interest rate cap agreements, interest rate
collar agreements,
interest rate insurance and other agreements and
arrangements designed to
provide protection against fluctuations in interest
rates, in each case as
the same may be from time to time amended, restated,
renewed, supplemented or
otherwise modified.
"Investment" shall mean, when used with
respect to any Person,
any direct or indirect advance, loan or other extension of
credit (other than
the creation of receivables in the ordinary course of
business) or capital
contribution by such Person (by means of transfers of
property to others or
payments for property or services for the account or
use of others, or
otherwise) to any Person, or any direct or indirect
purchase or other
acquisition by such Person of, or of a beneficial interest
in, capital stock,
partnership interests, bonds, notes, debentures or other
securities issued by
any other Person.
"Issuing Bank" shall mean SunTrust Bank,
Atlanta or any other
Lender who hereafter may be designated as an Issuing
Bank pursuant to an
Assignment and Acceptance Agreement or otherwise.
"Lender" or "Lenders" shall mean SunTrust,
the other banks and
lending institutions listed on the signature pages hereof,
and each assignee
thereof, if any, pursuant to Section 10.06(c).
"Lending Office" shall mean for each Lender,
the office such
Lender may designate in writing from time to time to
Borrower and the Agent
with respect to each Type of Loan.
"Letter of Credit Application" shall mean an
"Application and
Agreement for Standby Letter of Credit" duly executed and
delivered by the
Borrower or any of its Subsidiaries substantially in the
form of Exhibit G
attached hereto.
"Letter of Credit Obligations" shall mean,
with respect to
Letters of Credit, as at any date of determination,
the sum of (a) the
maximum aggregate amount which at such date of
determination is available to
be drawn by the beneficiaries thereof (assuming the
conditions for drawing
thereunder have been met) under all Letters of Credit
outstanding, plus (b)
the aggregate amount of all drawings under Letters of
Credit honored by the
Agent not theretofore reimbursed by the Borrower.
"Letter of Credit Subfacility" shall mean the
$5,000,000 letter
of credit facility established by the Lenders pursuant to
which the Issuing
Bank will issue Letters of Credit for the account of
an Account Party
pursuant to Section 2.03 hereof.
"Letters of Credit" shall mean all letters
of credit issued
pursuant to Article II hereof after the Closing Date by
the Issuing Bank for
the account of the Borrower pursuant to the Commitments.
"Leverage Ratio" shall mean for any period
the ration of (i)
Total Funded Debt to (ii) EBITDA.
"LIBOR" shall mean, for any Interest Period,
with respect to
Eurodollar Advances the offered rate for deposits in
U.S. Dollars, for a
period comparable to the Interest Period and in an amount
comparable to the
Agent's portion of such Advances, appearing on the
Telerate Screen Page 3750
as of 11:00 A.M. (London, England time) on the day
that is two London
Business Days prior to the first day of the Interest
Period. If two or more
of such rates appear on the Reuters Screen LIBO Page,
the rate for that
Interest Period shall be the arithmetic mean of such
rates. If the foregoing
rate is unavailable from the Telerate Page for any
reason, then such rate
shall be determined by the Agent from Reuters Screen
LIBO Page or, if such
rate is also unavailable on such service, then on any
other interest rate
reporting service of recognized standing designated in
writing by the Agent
to Borrower and the other Lenders; in any such case rounded,
if necessary, to
the next higher 1/16 of 1.0%, if the rate is not such a
multiple.
"Lien" shall mean any mortgage, pledge,
security interest, lien,
charge, hypothecation, assignment, deposit arrangement,
title retention,
preferential property right, trust or other arrangement
having the practical
effect of the foregoing and shall include the interest of
a vendor or lessor
under any conditional sale agreement, capitalized
lease or other title
retention agreement.
"Loans" shall mean, collectively, the
Revolving Loans and the
Swing Line Loans.
"Margin Regulations" shall mean Regulation
G, Regulation T,
Regulation U and Regulation X of the Board of
Governors of the Federal
Reserve System, as the same may be in effect from time to
time.
"Material Subsidiary" shall mean (i) each
Credit Party other than
the Borrower, and (ii) each other Subsidiary of the
Borrower, now existing or
hereafter established or acquired, that at any time
prior to the Maturity
Date, has or acquires total assets in excess of
$1,000,000.00, or that
accounted for or produced more than 5% of the Consolidated
Net Income (Loss)
of the Borrower on a consolidated basis during any of the
three most recently
completed Fiscal Years of the Borrower, or that is
otherwise material to the
operations or business of the Borrower or another Material
Subsidiary.
"Materially Adverse Effect" shall mean any
materially adverse
change in (i) the business, results of operations,
financial condition,
assets or prospects of the Consolidated Companies, taken as
a whole, (ii) the
ability of Borrower to perform its obligations under this
Agreement, or (iii)
the ability of the other Credit Parties (taken as a whole)
to perform their
respective obligations under the Credit Documents.
"Maturity Date" shall mean the earlier of (i)
July 2, 2003, and
(ii) the date on which all amounts outstanding under this
Agreement have been
declared or have automatically become due and payable
pursuant to the
provisions of Article VIII.
"MFCI" shall mean Morrison Fresh Cooking,
Inc., a wholly-owned
subsidiary of Morrison.
"Morrison" shall mean Morrison Restaurants,
Inc., a Delaware
corporation.
"Moody's" shall mean Moody's Investors Service,
Inc.
"Multiemployer Plan" shall have the meaning
set forth in Section
4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any
equity offering or
issuance of Subordinated Debt, (i) all cash received with
respect thereto,
whether by way of deferred payment pursuant to a
promissory note, a
receivable or otherwise (and interest paid thereon), plus
(ii) the higher of
the book value or the fair market value of any assets
(including any stock)
received with respect thereto, in each case, net of
reasonable and customary
sale expenses, fees and commissions incurred and taxes paid
or expected to be
payable within the next twelve months in connection
therewith.
"Notes" shall mean, collectively, the
Revolving Credit Notes and
the Swing Line Note.
"Notice of Borrowing" shall have the meaning
provided in Section
3.01(a)(i).
"Notice of Conversion/Continuation" shall
have the meaning
provided in Section 3.01(b)(i).
"Notice of Swing Line Loan" shall have the
meaning provided in
Section 3.01(b)(ii).
"Obligations" shall mean all amounts owing
to the Agent, the
Co-Agent, the Issuing Bank or any Lender pursuant to
the terms of this
Agreement or any other Credit Document, including, without
limitation, all
Loans (including all principal and interest payments due
thereunder), Letter
of Credit Obligations, fees, expenses, indemnification
and reimbursement
payments, indebtedness, liabilities, and obligations of
the Credit Parties,
direct or indirect, absolute or contingent, liquidated or
unliquidated, now
existing or hereafter arising, together with all
renewals, extensions,
modifications or refinancings thereof.
"Payment Office" shall mean with respect
to payments of
principal, interest, fees or other amounts relating to
the Revolving Loans,
the Swing Line Loans, Letter of Credit Obligations and all
other Obligations,
the office specified as the "Payment Office" for the Agent
on the signature
page of the Agent, or such other location as to which the
Agent shall have
given written notice to the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation, or
any successor thereto.
"Permitted Liens" shall mean those Liens
expressly permitted by
Section 7.02.
"Person" shall mean any individual,
partnership, firm,
corporation, association, joint venture, trust or
other entity, or any
government or political subdivision or agency, department
or instrumentality
thereof.
"Plan" shall mean any "employee benefit
plan" (as defined in
Section 3(3) of ERISA), including, but not limited to,
any defined benefit
pension plan, profit sharing plan, money purchase pension
plan, savings or
thrift plan, stock bonus plan, employee stock ownership
plan, Multiemployer
Plan, or any plan, fund, program, arrangement or
practice providing for
medical (including post-retirement medical),
hospitalization, accident,
sickness, disability, or life insurance benefits.
"Pro Rata Share" shall mean, with respect
to each of the
Commitments of each Lender, each Revolving Loan to be
made by, and each
payment (including, without limitation, any payment of
principal, interest or
fees) to be made to each Lender with respect to the
Revolving Loans, the
percentage designated as such Lender's Pro Rata Share of
such Commitments,
such Loans or such payments, as applicable, set forth in
Section 2.01, in
each case as such Pro Rata Share may change from time to
time as a result of
assignments or amendments made pursuant to this Agreement.
"Regulation D" shall mean Regulation D of the
Board of Governors
of the Federal Reserve System, as the same may be in effect
from time to time.
"Rental Obligations" shall mean, with
reference to any period,
the aggregate amount of all rental obligations for which
the Consolidated
Companies are directly or indirectly liable (as lessee
or as guarantor or
other surety but without duplication) under all leases in
effect at any time
during such period (other than operating leases for
motor vehicles,
computers, office equipment and other similar items
used in the ordinary
course of business of the Consolidated Companies),
including all such amounts
for which any Person was liable during the period
immediately prior to the
date such Person became a Subsidiary of the Borrower or
was merged into or
consolidated with the Borrower or a Subsidiary of the
Borrower, as determined
in accordance with GAAP.
"Requested Commitment Amount" shall have the
meaning set forth in
Section 2.06(a).
"Required Lenders" shall mean at any time, the
Lenders holding at
least 66 2/3% of the committed funds under the
Commitments, whether or not
advanced, or, following the termination of all of the
Commitments, the
Lenders holding at least 66 2/3% of the aggregate
outstanding Advances at
such time.
"Requirement of Law" for any person shall mean
the articles or
certificate of incorporation and bylaws or other
organizational or governing
documents of such Person, and any law, treaty, rule
or regulation, or
determination of an arbitrator or a court or other
governmental authority, in
each case applicable to or binding upon such Person or any
of its property or
to which such Person or any of its property is subject.
"Reuters Screen" shall mean, when used in
connection with any
designated page and LIBOR, the display page so
designated on the Reuters
Monitor Money Rates Service (or such other page as may
replace that page on
that service for the purpose of displaying rates comparable
to LIBOR).
"Revolving Credit Notes" shall mean,
collectively, the amended
and restated promissory notes evidencing the Revolving
Loans in the form
attached hereto as Exhibit A, either as originally
executed or as hereafter
amended, modified or supplemented.
"Revolving Loans" shall mean, collectively,
the revolving loans
made to the Borrower by the Lenders pursuant to Section
2.01.
"RTI" shall mean Ruby Tuesday, Inc., a Georgia
corporation.
"Security Documents" shall mean,
collectively, the Guaranty
Agreement and each other guaranty agreement, mortgage,
deed of trust,
security agreement, pledge agreement, or other
security or collateral
document guaranteeing or securing the Obligations, now or
hereafter executed,
as the same may be amended, restated, supplemented or
otherwise modified from
time to time.
"Sharing Agreements" shall mean, collectively,
(i) that certain
Distribution Agreement, dated as of March 2, 1996 by and
among Morrison, MFCI
and Borrower, as amended (ii) that certain License
Agreement, dated as of
March 2, 1996, by and between MFCI and Borrower, as
amended (iii) that
certain License Agreement, dated as of March 2, 1996,
by and between
Borrower and RTI, as amended (iv) that certain Amended
and Restated Tax
Allocation and Indemnification Agreement, dated as of
March 2, 1996, by and
among Morrison, Borrower, MFCI and certain other
subsidiaries of Morrison, as
amended and (v) that certain Agreement Respecting
Employee Benefit Matters,
dated as of March 2, 1996, by and among Morrison, MFCI
and Borrower, as
amended.
"Subordinated Debt" shall mean all
Indebtedness of Borrower
subordinated to all obligations of Borrower or any other
Credit Party arising
under this Agreement, the Notes, and the Guaranty
Agreement, created,
incurred or assumed on terms and conditions satisfactory
in all respects to
the Agent, the Issuing Bank and the Lenders, including
without limitation,
with respect to interest rates, payment terms,
maturities, amortization
schedules, covenants, defaults, remedies, and
subordination provisions, as
evidenced by the written approval of the Agent, the
Issuing Bank and the
Lenders.
"Subsidiary" shall mean, with respect to
any Person, any
corporation or other entity (including, without
limitation, partnerships,
joint ventures, and associations) regardless of its
jurisdiction of
organization or formation, at least a majority of the
total combined voting
power of all classes of voting stock or other ownership
interests of which
shall, at the time as of which any determination is being
made, be owned by
such Person, either directly or indirectly through
one or more other
Subsidiaries.
"Swing Line Lender" shall mean SunTrust and
its successors and
assigns.
"Swing Line Note" shall mean the amended and
restated promissory
note of the Borrower payable to the order of the Swing
Line Lender, in
substantially the form of Exhibit B hereto, evidencing the
maximum aggregate
principal indebtedness of the Borrower to the Swing Line
Lender with respect
to outstanding Swing Line Loans made by the Swing Line
Lender pursuant to the
Swing Line Subfacility, either as originally executed or
as it may be from
time to time supplemented, modified, amended, renewed or
extended.
"Swing Line Subfacility" shall mean
$10,000,000, as such amount
may be reduced pursuant to Section 2.05 or amended or
modified pursuant to
Section 10.02 hereof.
"Swing Rate" shall mean, as to any Swing Line
Loan, the interest
rate per annum agreed to by the Borrower and the Swing
Line Lender for such
Loan for the requested Interest Period pursuant to the
procedure set forth in
Section 3.01(a)(ii).
"Swing Rate Advance" shall mean any Advance
outstanding hereunder
bearing interest based upon the Swing Rate.
"Swing Line Loan" shall mean a Loan made by the
Swing Line Lender
pursuant to Section 2.02 hereof.
"Tax Code" shall mean the Internal Revenue
Code of 1986, as
amended and in effect from time to time.
"Taxes" shall mean any present or future taxes,
levies, imposts,
duties, fees, assessments, deductions, withholdings or
other charges of
whatever nature, including without limitation, income,
receipts, excise,
property, sales, transfer, license, payroll, withholding,
social security and
franchise taxes now or hereafter imposed or levied by the
United States, or
any state, local or foreign government or by any
department, agency or other
political subdivision or taxing authority thereof or
therein and all
interest, penalties, additions to tax and similar
liabilities with respect
thereto.
"Telerate" shall mean, when used in
connection with any
designated page and LIBOR, the display page so designated
on the Dow Jones
Telerate Service (or such other page as may replace that
page on that service
for the purpose of displaying rates comparable to LIBOR).
"Total Capitalization" shall mean, as
of any date of
determination, the sum of (i) Total Funded Debt, plus (ii)
Consolidated Net
Worth.
"Total Funded Debt" shall mean, for any
Person Consolidated
Funded Debt plus the present value of all minimum lease
commitments to make
payments with respect to operating leases of such Person,
determined based
upon a discount of ten percent (10%) in accordance with the
Standard & Poor's
methodology.
"Type" of Borrowing shall mean a Borrowing
consisting of Base
Rate Advances, Eurodollar Advances or Swing Rate Advances.
"Voting Stock" shall mean securities of any
class or classes, the
holders of which are entitled to elect all of the
corporate directors (or
Persons performing similar functions).
"Year 2000 Compliant" shall mean that neither
the performance nor
functionality of the operating systems for Borrower's or
its Subsidiaries'
computers, all software applications that run on
Borrower's and its
Subsidiaries' computers, and all of Borrower's and
its Subsidiaries'
machinery and equipment, is affected by dates prior to,
during, spanning or
after January 1, 2000, and shall include, but not
be limited to (a)
accurately processing (including, but not limited to
calculating, comparing
and sequencing) date and time data from, into, and between
the years 1999 and
2000 and leap year calculations, (b) functioning without
error, interruption
or decreased performance relating to such date and time
data, (c) accurately
processing such date and time data when used in
combination with other
technology, if the other technology properly exchanges
date and time data,
(d) accurate date and time data century recognition, (e)
calculations that
accurately use same century and multi-century formulas
and date and time
values, (f) date and time data interface values which
reflect the correct
century, and (g) processing, storing, receiving and
outputting all date and
time data in a format that accurately indicates the
century of the date and
time data.
Section I.2. Accounting Terms and
Determination. Unless
otherwise defined or specified herein, all accounting
terms shall be
construed herein, all accounting determinations hereunder
shall be made, all
financial statements required to be delivered hereunder
shall be prepared,
and all financial records shall be maintained in accordance
with, GAAP.
Section I.3. Other Definitional Terms. The
words "hereof",
"herein" and "hereunder" and words of similar import
when used in this
Agreement shall refer to this Agreement as a whole and not
to any particular
provision of this Agreement, and Article, Section,
Schedule, Exhibit and like
references are to this Agreement unless otherwise specified.
Section I.4. Exhibits and Schedules.
All Exhibits and
Schedules attached hereto are by reference made a part
hereof.
ARTICLE II.
LOANS AND LETTERS OF CREDIT
Section II.1. Commitments; Use of Proceeds.
(a) Commitments. Subject to and upon the
terms and conditions
herein set forth, each Lender severally
establishes in favor of the
Borrower, from on and after the Closing Date, but
prior to the Maturity
Date, a revolving credit facility in favor of the
Borrower in aggregate
principal at any one time outstanding not to exceed
the sum set forth
opposite such Lender's name below, ("Commitment"),
as the same may be
reduced from time to time pursuant to the terms
hereof:
ProRata Share of
Commitments
Commitments
SunTrust Bank, Atlanta $25,000,000.00
33.3333%
Wachovia Bank, N.A. $20,000,000.00
26.6667%
NationsBank, N.A. $15,000,000.00
20.0000%
First Union National Bank $15,000,000.00
20.0000%
--------------
- ---------
Total $75,000,000.00
100.0000%
==============
=========
The Lenders, subject to and upon the terms and
conditions set forth
herein, from time to time, agree to make to the
Borrower Revolving
Loans in an aggregate principal amount outstanding
at any time not to
exceed such Lender's Commitment. Borrower shall be
entitled to repay
and reborrow Revolving Loans in accordance with the
provisions hereof.
In addition to Revolving Loans, the Borrower may
request, from on and
after the Closing Date but prior to the Maturity
Date, that the Swing
Line Lender extend to the Borrower Swing Line Loans
subject to and upon
the terms and conditions herein set forth.
Notwithstanding any
provision of this Agreement to the contrary, within
the limits of the
Commitments, the Borrower may borrow, repay and
reborrow under the
terms of this Agreement, provided however, that
(i) the Borrower may
neither borrow nor reborrow should there exist a
Default or an Event of
Default, (ii) the aggregate outstanding amount of
Advances after giving
effect to each Borrowing plus the Letter of Credit
Obligations shall
not exceed the aggregate Commitments.
(b) Amount and Terms of Loans. Each
Revolving Loan shall, at
the option of Borrower, be made or continued as, or
converted into,
part of one or more Borrowings that shall consist
entirely of Base Rate
Advances or Eurodollar Advances. Each Swing Line
Loan shall consist of
Swing Rate Advances made by the Swing Line Lender in
accordance with
the procedure described in Section 2.02. Each
Eurodollar Borrowing
shall be in a principal amount of not less than
$5,000,000 or a greater
integral multiple of $1,000,000, and each Base Rate
Borrowing shall be
in a principal amount of not less than $1,000,000 or
a greater integral
multiple of $100,000. At no time shall the
aggregate number of
Eurodollar Borrowings outstanding under this Article
II exceed six (6).
(c) Use of Proceeds. The proceeds of
Revolving Loans, Swing
Line Loans and Letters of Credit shall be used
solely to refinance
Indebtedness of Borrower existing on the
Closing Date, to make
Investments and finance acquisitions permitted by
the terms hereof, to
fund working capital needs of the Borrower and
for other general
corporate purposes of the Borrower.
Section II.2. Swing Line Subfacility.
(a) Swing Line Subfacility. Subject to and
upon the terms and
conditions herein set forth, the Swing Line
Lender severally
establishes in favor of the Borrower, from on and
after the Closing
Date, but prior to the Maturity Date, its Swing Line
Subfacility within
its Commitment. Sections 3.01 and 3.02 shall
apply equally to
Borrowings made under the Swing Line
Subfacility and Borrowings
requested or made through Section 2.01. The Swing
Line Lender, subject
to and upon the terms and conditions set forth
herein, from time to
time, agrees to make to the Borrower Swing Line
Loans in an aggregate
principal amount outstanding at any time not to
exceed the Swing Line
Subfacility. Borrower shall be entitled to repay
and reborrow Swing
Line Loans in accordance with the provisions
hereof. Notwithstanding
any provision of this Agreement to the contrary,
the sum of (x) the
aggregate principal amount of the Revolving
Loans, plus (y) the
aggregate principal amount of the Swing Line
Loans at any one time
outstanding, plus (z) the Letter of Credit
Obligations, shall not
exceed the aggregate Commitments.
(b) Amount and Terms of Swing Line Loans.
Each Swing Line Loan
shall be made as a Swing Rate Advance from the Swing
Line Lender at the
Swing Rate and Interest Period established by the
Borrower and the
Swing Line Lender on the date of each request for a
Swing Line Loan in
accordance with Section 3.01(a)(ii). Each Swing
Line Loan shall be in
a principal amount of not less than $100,000 or a
greater integral
multiple of $10,000. At no time shall the
aggregate number of Swing
Line Loans outstanding under this Article II exceed
two.
(c) Repayment by Revolving Loans. If (i)
any Swing Line Loan
shall be outstanding upon the occurrence of an
Event of Default, or
(ii) after giving effect to any request for a
Swing Line Loan or a
Revolving Loan, the aggregate principal amount of
the Revolving Loans,
Swing Line Loans and Letter of Credit Obligations
outstanding to the
Swing Line Lender would exceed the Swing Line Lender's
Commitment, then
each Lender hereby agrees, upon request from the
Swing Line Lender, to
make a Revolving Loan (which shall be initially
funded as a Base Rate
Borrowing) in an amount equal to such Lender's Pro
Rata Share of the
outstanding principal amount of the Swing Line
Loans (the "Refunded
Swing Line Loans") outstanding on the date such
notice is given. On or
before 11:00 a.m. (local time for the Agent) on the
first Business Day
following receipt by each Lender of a request to make
Revolving Loans
as provided in the preceding sentence, each such
Lender (other than the
Swing Line Lender) shall deposit in an account
specified by the Agent
to the Lenders from time to time the amount so
requested in same day
funds, whereupon such funds shall be immediately
delivered to the Swing
Line Lender (and not the Borrower) and applied to
repay the Refunded
Swing Line Loans. On the day such Revolving Loans
are made, the Swing
Line Lender's Pro Rata Share of the Refunded Swing
Line Loans shall be
deemed to be paid with the proceeds of the Revolving
Loans made by the
Swing Line Lender. Upon the making of any Revolving
Loan pursuant to
this clause, the amount so funded shall become due
under such Lender's
Revolving Credit Note and shall no longer be owed
under the Swing Line
Note. Each Lender's obligation to make the Revolving
Loans referred to
in this clause shall be absolute and unconditional
and shall not be
affected by any circumstance, including, without
limitation, (i) any
setoff, counterclaim, recoupment, defense or other
right which such
Lender may have against the Swing Line Lender, the
Borrower or any
other Person for any reason whatsoever; (ii)
the occurrence or
continuance of any Default or Event of Default;
(iii) any adverse
change in the condition (financial or otherwise) of
the Borrower or any
other Credit Party; (iv) the acceleration or
maturity of any Loans or
the termination of the Commitments after the making
of any Swing Line
Loan; (v) any breach of this Agreement by the
Borrower or any other
Lender; or (vi) any other circumstance, happening or
event whatsoever,
whether or not similar to any of the foregoing.
(d) Purchase of Participations. In the
event that (i) the
Borrower or any Subsidiary is subject to any
bankruptcy or insolvency
proceedings as provided in Section 8.07 or (ii)
if the Swing Line
Lender otherwise requests, each Lender shall
acquire without recourse
or warranty an undivided participation interest
equal to such Lender's
Pro Rata Share of the Commitments of any Swing
Line Loan otherwise
required to be repaid by such Lender pursuant to the
preceding clause
by paying to the Swing Line Lender on the date on
which such Lender
would otherwise have been required to make a
Revolving Loan in respect
of such Swing Line Loan pursuant to the preceding
clause, in same day
funds, an amount equal to such Lender's Pro Rata
Share of such Swing
Line Loan, and no Revolving Loans shall be made by
such Lender pursuant
to the preceding clause. From and after the date on
which any Lender
purchases an undivided participation interest in
a Swing Line Loan
pursuant to this clause, the Swing Line Lender shall
distribute to such
Lender (appropriately adjusted, in the case of
interest payments, to
reflect the period of time during which such
Lender's participation
interest is outstanding and funded) its ratable
amount of all payments
of principal and interest in respect of such Swing
Line Loan in like
funds as received; provided, however, that in the
event such payment
received by the Swing Line Lender is required to
be returned to the
Borrower, such Lender shall return to the Swing Line
Lender the portion
of any amounts which such Lender had received
from the Swing Line
Lender in like funds.
(e) Swing Line Loans Following Notice of
Event of Default.
Notwithstanding the foregoing provisions of this
Section 2.02, no
Lender shall be required to make a Revolving Loan to
Borrower for the
purpose of refunding a Refunded Swing Line Loan
pursuant to Section
2.02(c) above or to purchase a participating
interest in a Swing Line
Loan pursuant to Section 2.02(d) above if a Default
or Event of Default
has occurred and is continuing, and, prior to the
making by the Swing
Line Lender of such Swing Line Loan, the Swing Line
Lender had received
written notice from the Borrower or any Lender
specifying that such
Default or Event of Default had occurred and was
continuing (and
identifying the same as a Default or Event of Default
hereunder).
Section II.3. Letter of Credit Subfacility.
(a) Terms of Issuance of Letters of Credit.
Subject to, and
upon the terms and conditions set forth herein,
the Borrower may
request, in accordance with the provisions of this
Section 2.03 and the
other terms of this Agreement, that on and after the
Closing Date but
prior to the Maturity Date, that the Issuing Bank,
on behalf of the
Lenders, and in reliance on the agreements of the
Lenders set forth
below, issue a Letter of Credit or Letters of Credit
for the account of
the Borrower or any Guarantor; provided that the
Borrower or such
Guarantor executes and delivers to the Agent and
the Issuing Bank a
Letter of Credit Application, provided further that
(i) no Letter of
Credit shall have an expiration date that is later
than one year after
the date of issuance thereof (provided that a
Letter of Credit may
provide that it is extendible for consecutive one
year periods); (ii)
the Borrower shall not request that the Issuing
Bank issue any Letter
of Credit, if, after giving effect to such
issuance, the sum of the
aggregate Letter of Credit Obligations plus the
aggregate outstanding
principal amount of the Advances would exceed the
aggregate amount of
the Commitments; and (iii) the Borrower shall not
request that the
Issuing Bank issue any Letter of Credit if after
giving effect to such
issuance, the aggregate Letter of Credit Obligations
would exceed the
amount of the Letter of Credit Subfacility. To
the extent of any
conflict between the terms of this Agreement and
any Letter of Credit
Application, this Agreement shall control.
(b) Notice of Issuance of Letter of
Credit; Agreement to
Issue. Whenever the Borrower desires the
issuance of a Letter of
Credit, it shall, in addition to any application
and documentation
procedures reasonably required by the Agent and the
Issuing Bank for
the issuance of such Letter of Credit, deliver to
the Agent and the
Issuing Bank a written notice no later than 11:00
AM (local time for
the Agent) at least two (2) Business Days in
advance of the proposed
date of issuance and the Agent shall promptly
forward a copy of such
notice to each Lender. Each such notice shall specify
(i) the Account
Party, (ii) the proposed date of issuance (which
shall be a Business
Day); (iii) the face amount of the Letter of
Credit; (iv) the
expiration date of the Letter of Credit; and (v) the
name and address
of the beneficiary with respect to such Letter of
Credit and shall
attach a precise description of the documentation
and a verbatim text
of any certificate to be presented by the beneficiary
of such Letter of
Credit which would require the Issuing Bank to make
payment under the
Letter of Credit, provided that the Issuing Bank may
require reasonable
changes in any such documents and certificates in
accordance with its
customary letter of credit practices, and provided
further, that no
Letter of Credit shall require payment against a
conforming draft to be
made thereunder on the same Business Day that such
draft is presented
if such presentation is made after 11:00 AM
(Atlanta, Georgia time).
In determining whether to pay any draft under any
Letter of Credit, the
Issuing Bank shall be responsible only to determine
that the documents
and certificate required to be delivered under
its Letter of Credit
have been delivered, and that they comply on
their face with the
requirements of the Letter of Credit. Promptly
after receiving the
notice of issuance of a Letter of Credit, the Agent
shall notify each
Lender of such Lender's respective participation
therein, determined in
accordance with its respective Pro Rata Share of the
Commitments.
(c) Agreement to Issue Letters of Credit.
The Issuing Bank
agrees, subject to the terms and conditions
set forth in this
Agreement, to issue for the account of such Account
Party a Letter of
Credit in a face amount equal to the face amount
requested under
paragraph (b) above, following its receipt of a
notice required by
paragraph (d) below. Immediately upon the issuance
of each Letter of
Credit, each Lender shall be deemed to, and hereby
agrees to, have
irrevocably purchased from the Issuing Bank a
participation in such
Letter of Credit and any drawing thereunder in an
amount equal to such
Lender's Pro Rata Share of the Commitments
multiplied by the face
amount of such Letter of Credit. Upon issuance
and amendment or
extension of any Letter of Credit, the Issuing
Bank shall provide a
copy of each such Letter of Credit issued,
amended or extended
hereunder to the Agent and each Lender.
(d) Payment of Amounts Drawn Under Letters
of Credit. In the
event of any request for a drawing under any
Letter of Credit by the
beneficiary thereof, the Issuing Bank shall notify
the Borrower, the
Agent and the Lenders on or before the date on which
the Agent intends
to honor such drawing, and the Borrower and the
Account Party (if other
than the Borrower) jointly and severally agree to
reimburse the Issuing
Bank on the day on which such drawing is honored
in an amount, in
same day funds, equal to the amount of such drawing.
(i) Notwithstanding any provision of
this Agreement to
the contrary, to the extent that any Letter of
Credit or portion
thereof remains outstanding on the Maturity
Date, for any reason
whatsoever, the Borrower, each Guarantor and
the Lenders hereby
agree that the beneficiary or beneficiaries
thereof shall be
deemed to have made a drawing under the
Commitments of all
available amounts outstanding pursuant to such
Letters of Credit
on the Maturity Date, which amount shall be
held by the Issuing
Bank as cash collateral for its remaining
obligations pursuant to
such Letters of Credit. provided however,
that if any such
Letter of Credit Outstanding on the
Maturity Date is
(i) surrendered for cancellation by
the beneficiary,
(ii) expires, or (iii) is terminated for any
reason, prior to the
Issuing Bank honoring a request for a drawing
under such Letter
of Credit for less than the full amount
available under such
Letter of Credit, the Issuing Bank shall
promptly refund (x) the
cash collateral to the extent of the
undrawn amount of each
Letter of Credit plus (y) the amount of each
Letter of Credit
honored by the Issuing Bank not theretofore
reimbursed by the
Borrower. The immediately preceding
sentence will survive
termination of this Agreement.
(ii) As between the Borrower, any
Account Party and the
Issuing Bank, the Borrower and such Account
Party assume all risk
of the acts and omissions of, or misuse of, the
Letters of Credit
issued by the Issuing Bank, by the respective
beneficiaries of
such Letters of Credit, other than losses
resulting from the
gross negligence or willful misconduct of
the Issuing Bank. In
furtherance and not in limitation of the
foregoing but subject to
the exception for the Issuing Bank's gross
negligence or willful
misconduct set forth above, the Issuing
Bank shall not be
responsible (i) for the form, validity,
sufficiency, accuracy,
genuineness or legal effect of any document
submitted by any
party in connection with the application for
and issuance of such
Letters of Credit, even if it should in fact
prove to be in any
or all respects insufficient, inaccurate,
fraudulent or forged or
otherwise invalid; (ii) for the validity or
sufficiency of any
instrument transferring or assigning or
purporting to transfer or
assign any such Letter of Credit or the
rights or benefits
thereunder or proceeds thereof in whole or
in part which may
prove to be invalid or ineffective for any
reason; (iii) for
failure of the beneficiary of any such Letter
of Credit to comply
fully with the conditions required in order
to draw upon such
Letter of Credit; (iv) for errors, omissions,
interruptions or
delays in transmission or delivery of any
messages, by mail,
cable, telegraph, telex, telecopy or
otherwise; (v) for good
faith errors in interpretation of technical
terms; (vi) for any
loss or delay in the transmission or
otherwise of any document
required in order to make a drawing under
any such Letter of
Credit or the proceeds thereof; (vii) for the
misapplication by
the beneficiary of any such Letter of Credit;
and (viii) for any
consequences arising from causes beyond the
control of the
Issuing Bank.
(e) Payment of Letter of Credit Draws by
Banks. In the event
that the Borrower or the Account Party shall fail
to reimburse the
Issuing Bank as provided in paragraph (d) above, the
Issuing Bank shall
promptly notify each Lender of the unreimbursed
amount of such drawing
and of such Lender's respective participation
therein. Each Lender
shall make available to the Issuing Bank an
amount equal to its
respective participation, in immediately available
funds, at the office
of the Issuing Bank specified in such notice not
later than 1:00 P.M.
(Atlanta, Georgia time) on the Business Day after
the date notified by
the Issuing Bank and such amount shall be deemed
to be outstanding
hereunder as an Advance. Each Lender shall be
obligated to make such
Advance hereunder regardless of whether the
conditions precedent in
Article IV are satisfied and regardless of
whether such Advance
complies with the minimum borrowing requirements
hereunder. In the
event that any such Lender fails to make available
to the Issuing Bank
the amount of such Lender's participation in such
Letter of Credit, the
Issuing Bank shall be entitled to recover such
amount on demand from
such Lender together with interest. The Issuing Bank
shall distribute
to each Lender which has paid all amounts
payable under this
Section with respect to any Letter of Credit, such
Lender's Pro Rata
Share of all payments received by the Issuing
Bank from the Account
Party in reimbursement of drawings honored by the
Issuing Bank under
such Letter of Credit when such payments are received.
Section II.4. Notes; Repayment of Principal.
(a) The Borrower's obligations to pay the
principal of, and
interest on, the Revolving Loans to each Lender
shall be evidenced by
the records of the Agent and such Lender and by the
Revolving Credit
Note payable to such Lender (or the assignor of
such Lender) in the
amount of such Lender's Commitment completed in
conformity with this
Agreement.
(b) The Borrower's obligations to pay the
principal of, and
interest on, the Swing Line Loans to the Swing Line
Lender shall be
evidenced by the records of the Swing Line Lender
and the Swing Line
Note payable to such Lender (or the assignor of such
Lender) completed
in conformity with this Agreement.
(c) All outstanding Borrowings outstanding
under the Notes
shall be due and payable in full on the Maturity Date.
Section II.5. Voluntary Reduction of
Commitments. Upon at least
three (3) Business Days' prior telephonic notice
(promptly confirmed in
writing) to the Agent, Borrower shall have the right,
without premium or
penalty, to terminate the unutilized Commitments, in
part or in whole,
provided that (i) any such termination shall apply to
proportionately and
permanently reduce the Commitments of each of the
Lenders, and (ii) any
partial termination pursuant to this Section 2.05 shall be
in an amount of at
least $5,000,000 and integral multiples of $1,000,000.
Unless otherwise
specified by the Borrower in the applicable notice, each
of the Swing Line
Subfacility and the Letter of Credit Subfacility shall not
be reduced by any
such reduction unless and until the aggregate Commitments
are reduced to an
amount less than the sum of the Swing Line Subfacility
and the Letter of
Credit Subfacility in which case each of the Swing Line
Subfacility shall be
reduced as determined by the Borrower and the Agent.
Section II.6. Increase of the Commitments.
(a) Borrower may, at any time by written
notice to the Agent
and the Lenders, request that the Commitments be
increased up to an amount
not to exceed $100,000,000 in the aggregate (the
"Requested Commitment
Amount") on a pro rata basis based on the Pro Rata Shares of
the Lenders. No
Lender (or any successor thereto) shall have any
obligation to increase its
Commitment or its other obligations under this Agreement
and the other Credit
Documents, and any decision by a Lender to increase its
Commitment shall be
made in its sole discretion independently from any other
Lender, the Agent or
the Co-Agent. Within fifteen (15) Business Days from each
Lender's receipt
of such request from the Borrower, each Lender shall
notify the Agent in
writing of whether or not it will agree to increase its
Commitment and by
what amount it will agree to increase its Commitment,
up to its Pro Rata
Share of the Requested Commitment Amount. Decisions to
increase a Commitment
must be affirmatively communicated in writing and shall not
be presumed based
upon a failure to respond to Borrower's request.
(b) In the event that the aggregate amount to
which the Lenders
are willing to increase their Commitments is less
than the Requested
Commitment Amount based on the written notices delivered
by the Lenders to
the Agent, the Agent shall first offer to the Lenders
who have agreed to
increase their Commitments the opportunity to further
increase their
Commitments up to an amount equal to the Requested
Commitment Amount. Such
Lenders shall promptly respond in writing to the Agent of
whether or not it
will agree to further increase its Commitment and by
what amount it will
agree to further increase its Commitment. Within five
(5) Business Days
after receipt of all responses from such Lenders, the
Agent shall inform the
Borrower and all Lenders in writing of the amount by which
each Lender will
increase its Commitment.
(c) In the event that the aggregate amount to
which the Lenders
are willing to increase their Commitments is less
than the Requested
Commitment Amount based on the notice from the Agent to
the Borrower and all
Lenders, the Borrower shall have the right, within
sixty days (60) after
receipt of such notice from the Agent, to obtain
commitments from one or more
new banks or financial institutions in an aggregate
amount such that the
existing Commitments, plus the aggregate principal
amount by which the
Lenders are willing to increase their Commitments,
plus the aggregate
principal amount of the new commitments by the new
banks or financial
institutions does not exceed the Requested Commitment
Amount; provided,
however, that (1) the new banks or financial institutions
must be acceptable
to the Agent and Required Lenders in their sole discretion,
which acceptance
will not be unreasonably withheld or delayed, and (2)
the new banks or
financial institutions must become parties to this
Agreement pursuant to a
joinder agreement in form and substance satisfactory to
the Agent and the
Required Lenders, pursuant to which (x) they shall be
granted all of the
rights that existing Lenders have under this Agreement
and the other Credit
Documents, (y) they shall assume the same liabilities and
obligations that
the existing Lenders have under this Agreement and (z) the
existing Lenders
and such new banks or financial institutions shall agree
to either purchase
or sell outstanding Advances, as the case may be such
that each Lender
(existing and new) shall have outstanding Advances in an
amount equal to its
Pro Rate Share of all Advances then outstanding.
ARTICLE III.
GENERAL LOAN TERMS
Section III.1. Funding Notices.
(a) (i) Whenever Borrower desires to make
a Borrowing with
respect to the Commitments (other than one resulting
from a conversion
or continuation pursuant to Section 3.01(b)(i)),
it shall give the
Agent prior written notice (or telephonic notice
promptly confirmed in
writing) of such Borrowing (a "Notice of
Borrowing"), such Notice of
Borrowing to be given prior to 12:00 noon (local time
for the Agent) at
the Payment Office of the Agent (x) one Business
Day prior to the
requested date of such Borrowing in the case of Base
Rate Advances, and
(y) three Business Days prior to the requested date
of such Borrowing
in the case of Eurodollar Advances. Notices
received after 12:00 noon
shall be deemed received on the next Business
Day. Each Notice of
Borrowing shall be irrevocable and shall
specify the aggregate
principal amount of the Borrowing, the date of
Borrowing (which shall
be a Business Day), and whether the Borrowing is
to consist of Base
Rate Advances or Eurodollar Advances and (in the
case of Eurodollar
Advances) the Interest Period to be applicable
thereto.
(ii) Whenever Borrower desires to obtain a
Swing Line Loan, it
shall give the Swing Line Lender prior written
notice (or telephonic
notice promptly confirmed in writing) of such
Swing Line Loan (a
"Notice of Swing Line Loan"), such Notice of
Swing Line Loan to be
given prior to 11:00 A.M. (local time for Agent) at
the Payment Office
of the Swing Line Lender on the Business Day of
the such Swing Line
Loan. Notices received after 11:00 A.M. shall be
deemed received on
the next Business Day. Each Notice of Swing Line
Loan shall specify
the aggregate principal amount of the Swing Line
Loan, the date of the
Swing Line Loan (which shall be a Business Day)
and the requested
Interest Period to be applicable thereto. The Swing
Line Lender, shall
within two (2) hours of receipt of such notice,
provide to the Borrower
telephonic or written notice of a quote of the
Swing Rate to be
applicable to such Swing Line Loan for the amount
and the Interest
Period requested by the Borrower. Within one (1)
hour of receipt of
such quote, the Borrower shall notify the Swing Line
Lender whether or
not it has elected to accept the offered Swing Rate
and if accepted,
the Swing Line Lender shall confirm such Borrowing in
writing.
(b) (i) Whenever Borrower desires to
convert all or a portion
of an outstanding Borrowing under the Commitments
consisting of Base
Rate Advances into a Borrowing consisting of
Eurodollar Advances, or to
continue outstanding a Borrowing consisting of
Eurodollar Advances for
a new Interest Period, it shall give the Agent at
least three Business
Days' prior written notice (or telephonic notice
promptly confirmed in
writing) of each such Borrowing to be converted
into or continued as
Eurodollar Advances. Such notice (a
"Notice of
Conversion/Continuation") shall be given prior to
11:00 A.M. (local
time for the Agent) on the date specified at the
Payment Office of the
Agent. Each such Notice of
Conversion/Continuation shall be
irrevocable and shall specify the aggregate
principal amount of the
Advances to be converted or continued, the date of
such conversion or
continuation and the Interest Period to be
applicable thereto. If,
upon the expiration of any Interest Period in
respect of any Borrowing
consisting of Eurodollar Advances, Borrower shall
have failed to
deliver the Notice of Conversion/Continuation,
Borrower shall be deemed
to have elected to convert or continue such
Borrowing to a Borrowing
consisting of Base Rate Advances. So long as any
Executive Officer of
Borrower has knowledge that any Default or Event of
Default shall have
occurred and be continuing, no Borrowing may be
converted into or
continued as (upon expiration of the current
Interest Period)
Eurodollar Advances unless the Agent and each of the
Lenders shall have
otherwise consented in writing. No conversion of
any Borrowing of
Eurodollar Advances shall be permitted except on
the last day of the
Interest Period in respect thereof.
(ii) Upon the expiration of the applicable
Interest Period with
respect to any Swing Line Loan, the Borrower shall
repay such Swing
Line Loan to the Swing Line Lender, and in the
event that the other
Lenders have purchased a participation in such Swing
Line Loan pursuant
to Section 2.02 hereof, the Swing Line Lender shall
distribute such
payments pro rata amongst the Lenders participating
therein.
(c) Without in any way limiting
Borrower's obligation to
confirm in writing any telephonic notice, the Agent
and the Swing Line
Lender may act without liability upon the basis of
telephonic notice
believed by the Agent or the Swing Line Lender in
good faith to be from
Borrower prior to receipt of written confirmation.
In each such case,
Borrower hereby waives the right to dispute the
Agent's or the Swing
Line Lender's record of the terms of such telephonic
notice.
(d) The Agent shall promptly give each
Lender notice by
telephone (confirmed in writing) or by telex,
telecopy or facsimile
transmission of the matters covered by the notices
given to the Agent
pursuant to this Section 3.01 with respect to the
Commitments.
Section III.2. Disbursement of Funds.
(a) No later than 12:00 noon (local time for
the Agent) on the
date of each Borrowing pursuant to the Commitments
(other than one
resulting from a conversion or continuation
pursuant to Section
3.01(b)(i)), each Lender will make available its Pro
Rata Share of the
amount of such Borrowing in immediately available
funds at the Payment
Office of the Agent. The Agent will make available
to Borrower the
aggregate of the amounts (if any) so made available
by the Lenders to
the Agent in a timely manner by crediting such
amounts to Borrower's
demand deposit account maintained with the Agent
or at Borrower's
option, by effecting a wire transfer of such
amounts to Borrower's
account specified by the Borrower, by the close of
business on such
Business Day. In the event that the Lenders do not
make such amounts
available to the Agent by the time prescribed above,
but such amount is
received later that day, such amount may be credited
to Borrower in the
manner described in the preceding sentence on the
next Business Day
(with interest on such amount to begin accruing
hereunder on such next
Business Day).
(b) No later than 3:00 p.m. (local time
for the Swing Line
Lender) on the date of each Swing Line Loan (other
than one resulting
from a continuation of a Swing Line Loan pursuant to
3.01(b)(ii)), the
Swing Line Lender will make available the amount
of such Swing Line
Loan in immediately available funds by crediting
such amount to the
Borrower's demand deposit account maintained with the
Swing Line Lender
or, at Borrower's option, by effecting a wire
transfer of such amounts
to Borrower's account specified by the Borrower.
(c) Unless the Agent shall have been
notified by any Lender
prior to the date of a Borrowing that such Lender
does not intend to
make available to the Agent such Lender's portion
of the Borrowing to
be made on such date, the Agent may assume that
such Lender has made
such amount available to the Agent on such date and
the Agent may make
available to Borrower a corresponding amount. If
such corresponding
amount is not in fact made available to the Agent by
such Lender on the
date of Borrowing, the Agent shall be entitled
to recover such
corresponding amount on demand from such Lender
together with interest
at the Federal Funds Rate. If such Lender
does not pay such
corresponding amount forthwith upon the Agent's
demand therefor, the
Agent shall promptly notify Borrower, and Borrower
shall immediately
pay such corresponding amount to the Agent together
with interest at
the rate specified for the Borrowing which
includes such amount paid
and any amounts due under Section 3.12 hereof.
Nothing in this
subsection shall be deemed to relieve any Lender from
its obligation to
fund its Commitments or its obligations pursuant
to Section 2.02
hereunder or to prejudice any rights which
Borrower may have against
any Lender as a result of any default by such Lender
hereunder.
(d) All Borrowings under the Commitments
(other than Swing Line
Loans) shall be loaned by the Lenders on the basis
of their Pro Rata
Share of the Commitments. No Lender shall be
responsible for any
default by any other Lender in its obligations
hereunder, and each
Lender shall be obligated to make the Loans
provided to be made by it
hereunder, regardless of the failure of any other
Lender to fund its
Commitments hereunder.
Section III.3. Interest.
(a) Borrower agrees to pay interest in
respect of all unpaid
principal amounts of the Revolving Loans from the
respective dates such
principal amounts were advanced to maturity (whether
by acceleration,
notice of prepayment or otherwise) at rates per
annum equal to the
applicable rates indicated below:
(i) For Base Rate Advances--The Base
Rate in effect from
time to time; and
(ii) For Eurodollar Advances--LIBOR
plus the Applicable
Margin.
(b) Borrower agrees to pay interest in
respect of all unpaid
principal amounts of the Swing Line Loans made to
Borrower from the
respective dates such principal amounts were
advanced to maturity
(whether by acceleration, notice of prepayment or
otherwise) at the
Swing Rate agreed to by the Borrower and the Swing
Line Lender for each
such Swing Line Loan.
(c) Overdue principal and, to the extent
not prohibited by
applicable law, overdue interest, in respect of
the Loans, and all
other overdue amounts owing hereunder, shall bear
interest from each
date that such amounts are overdue at the
applicable rate plus two
percent (2%) per annum, provided however that
for any Eurodollar
Advance or Swing Line Loan, at the end of the
applicable Interest
Period, interest shall accrue at the Base Rate plus
two percent (2%).
(d) Interest on each Loan shall accrue from
and including the
date of such Loan to but excluding the date of any
repayment thereof;
provided that, if a Loan is repaid on the same day
made, one day's
interest shall be paid on such Loan. Interest on all
outstanding Base
Rate Advances shall be payable quarterly in arrears
on the last day of
each fiscal quarter, commencing on August 31,
1998. Interest on all
outstanding Eurodollar Advances shall be payable
on the last day of
each Interest Period applicable thereto, and, in the
case of Eurodollar
Advances having an Interest Period in excess of
three months, on each
three month anniversary of the initial date of such
Interest Period.
Interest on all outstanding Swing Rate Advances
shall be payable
monthly in arrears on the last day of each fiscal
quarter, commencing
on August 31, 1998. Interest on all Loans shall
be payable on any
conversion of any Advances comprising such Loans
into Advances of
another Type, prepayment (on the amount prepaid), at
maturity (whether
by acceleration, notice of prepayment or
otherwise) and, after
maturity, on demand.
(e) The Agent, upon determining LIBOR for
any Interest Period,
shall promptly notify by telephone (confirmed in
writing) or in writing
Borrower and the other Lenders. Any such
determination shall, absent
manifest error, be final, conclusive and binding for
all purposes.
Section III.4. Interest Periods.
(a) In connection with the making or
continuation of, or
conversion into, each Borrowing of Eurodollar
Advances, Borrower shall
select an Interest Period to be applicable to such
Eurodollar Advances,
which Interest Period shall be either a 1, 2, 3 or 6
month period.
(b) In connection with the making or
continuation of each Swing
Line Loan, Borrower shall request an Interest
Period to be applicable
to such Swing Line Loan for a period equal to a
minimum of one (1) day
and a maximum of thirty (30) days which request may
be accepted by the
Swing Line Lender as provided herein.
(c) Notwithstanding paragraphs (a) and (b) of
this Section 3.04:
(i) The initial Interest Period for
any Borrowing of
Eurodollar Advances shall commence on the date
of such Borrowing
(including the date of any conversion from a
Borrowing consisting
of Base Rate Advances) and each Interest
Period occurring
thereafter in respect of such Borrowing shall
commence on the day
on which the next preceding Interest Period
expires;
(ii) If any Interest Period would
otherwise expire on a
day which is not a Business Day, such
Interest Period shall
expire on the next succeeding Business Day,
provided that if any
Interest Period in respect of Eurodollar
Advances would otherwise
expire on a day that is not a Business Day
but is a day of the
month after which no further Business Day
occurs in such month,
such Interest Period shall expire on the next
preceding Business
Day;
(iii) Any Interest Period in respect of
Eurodollar Advances
which begins on a day for which there is
no numerically
corresponding day in the calendar month at
the end of such
Interest Period shall, subject to part (v)
below, expire on the
last Business Day of such calendar month; and
(iv) No Interest Period with respect
to the Loans shall
extend beyond the Maturity Date.
Section III.5. Fees.
(a) Commitment Fee. Borrower shall pay to
the Agent, for the
ratable benefit of each Lender, a commitment fee (the
"Commitment Fee")
for the period commencing on the Closing Date to
and including the
Maturity Date, payable quarterly in arrears on
the last day of each
fiscal quarter, commencing on August 31, 1998,
and on the Maturity
Date, equal to the percentage per annum designated
below based on the
Leverage Ratio of the Consolidated Companies,
multiplied by the average
daily unused portion of the Commitment of each Lender:
-----------------------------------------------
- ------
Leverage Ratio Commitment Fee
=====================================================
Less than 2.00:1.00 0.20%
-----------------------------------------------
- ------
Greater than or equal to 0.25%
2.00:1.00 and less than
2.50:1.00
-----------------------------------------------
- ------
Greater than or equal to 0.30%
2.50:1.00 and less than
3.0:1.00
-----------------------------------------------
- ------
For the purposes of computing the Commitment Fee,
(i) outstanding
Letter of Credit Obligations shall not be usage of
the Commitment, and
(ii) in addition to the utilization by Revolving
Loans, the Commitment
of each Lender shall be deemed to be utilized by
the amount of Swing
Line Loans extended by such Lender (or in which
such Lender has
purchased a participation) but in no event shall the
computation of any
other Lender's Commitment Fee be affected by the
Swing Line Loans
extended by the Swing Line Lender unless and until a
participation in
such Swing Line Loans is purchased by the other
Lenders pursuant to
Section 2.02(d) hereof, and (iii) if the Borrower
fails to provide the
Compliance Certificate and related financial
statements required under
Section 6.07(c) within the applicable time period
set forth therein,
the Commitment Fee shall be adjusted to 0.30% on
the first day of the
following fiscal quarter until such Compliance
Certificate and related
financial statements are delivered.
(b) Administrative Fees. The Borrower
shall pay to the Agent
an administrative fee in the amount and on the dates
previously agreed
in writing by Borrower with the Agent. The Borrower
shall also pay to
each Issuing Bank, following receipt of an
invoice, in reasonable
detail therefor, any customary fees charged by
such Issuing Bank for
issuance and administration of its Letters of Credit,
which fees shall
be fully earned when due, and non-refundable when
paid.
Section III.6. Voluntary Prepayments of
Borrowings.
(a) Borrower may, at its option, prepay
Borrowings consisting
of Base Rate Advances at any time in whole, or
from time to time in
part, in amounts aggregating $1,000,000 or any
greater integral
multiple of $100,000, by paying the principal
amount to be prepaid
together with interest accrued and unpaid
thereon to the date of
prepayment. Borrowings consisting of Swing Rate
Advances may be prepaid
at any time in whole, or from time to time in
part, in amounts
aggregating $100,000 or any greater integral
multiple of $10,000, by
paying the principal amount to be prepaid
together with interest
accrued and unpaid thereon to the date of
prepayment. Borrowings
consisting of Eurodollar Advances may be prepaid, at
Borrower's option,
in whole, or from time to time in part, in
amounts aggregating
$5,000,000 or any greater integral multiple of
$1,000,000, by paying
the principal amount to be prepaid, together with
interest accrued and
unpaid thereon to the date of prepayment, and all
compensation payments
pursuant to Section 3.12 if such prepayment is
made on a date other
than the last day of an Interest Period applicable
thereto. Each such
optional prepayment shall be applied in accordance
with Section 3.06(c)
below.
(b) Borrower shall give written notice (or
telephonic notice
confirmed in writing) to the Agent of any intended
prepayment of the
Revolving Loans not less than three Business
Days prior to any
prepayment of Base Rate Advances or Eurodollar
Advances. Borrower shall
give written notice (or telephonic notice confirmed
in writing) to the
Agent of any intended prepayment of the Swing Line
Loans not less than
one (1) Business Day prior to such prepayment of
such Swing Line
Loans. Such notice, once given, shall be
irrevocable. Upon receipt
of such notice of prepayment pursuant to the first
sentence of this
paragraph (b), the Agent shall promptly notify
each Lender of the
contents of such notice and of such Lender's Pro
Rata Share of such
prepayment. Upon receipt of any notice of
prepayment pursuant to the
second sentence of this paragraph (b), the Agent
shall promptly notify
each Lender participating in such Swing Line Loan
of the contents of
such notice and of such Lender's Pro Rata Share of
such prepayment.
(c) Borrower, when providing notice of
prepayment pursuant to
Section 3.06(b), may designate the Types of
Advances and the specific
Borrowing or Borrowings which are to be prepaid,
provided that (i) if
any prepayment of Eurodollar Advances made
pursuant to a single
Borrowing of the Revolving Loans shall reduce the
outstanding Advances
made pursuant to such Borrowing to an amount less than
$5,000,000, such
Borrowing shall immediately be converted into Base
Rate Advances; and
(ii) each prepayment made pursuant to a single
Borrowing shall be
applied pro rata among the Advances comprising such
Borrowing. In the
absence of a designation by Borrower, the Agent
shall, subject to the
foregoing, make such designation in its discretion
but using reasonable
efforts to avoid funding losses to the Lenders
pursuant to Section
3.12. All voluntary prepayments shall be applied
to the payment of
interest before application to principal.
Section III.7. Payments, etc.
(a) Except as otherwise specifically
provided herein, all
payments under this Agreement and the other Credit
Documents shall be
made without defense, set-off or counterclaim to
the Agent not later
than 11:00 A.M. (local time for the Agent) on the
date when due and
shall be made in Dollars in immediately available
funds at its Payment
Office.
(b) (i) All such payments shall be made
free and clear of and
without deduction or withholding for any Taxes in
respect of this
Agreement, the Notes or other Credit Documents, or
any payments of
principal, interest, fees or other amounts
payable hereunder or
thereunder (but excluding, except as provided in
paragraph (iii)
hereof, any Taxes imposed on the overall net income
of the Lenders or
the Issuing Bank pursuant to the laws of the
jurisdiction in which the
principal executive office or appropriate Lending
Office of such Lender
or the Issuing Bank is located). If any Taxes
are so levied or
imposed, Borrower agrees (A) to pay the full amount
of such Taxes, and
such additional amounts as may be necessary so that
every net payment
of all amounts due hereunder and under the Notes
and other Credit
Documents, after withholding or deduction for or on
account of any such
Taxes (including additional sums payable under this
Section 3.07), will
not be less than the full amount provided for
herein had no such
deduction or withholding been required, (B) to make
such withholding or
deduction and (C) to pay the full amount deducted
to the relevant
authority in accordance with applicable law.
Borrower will furnish to
the Agent, the Co-Agent and the Issuing Bank and each
Lender, within 30
days after the date the payment of any Taxes is
due pursuant to
applicable law, certified copies of tax receipts
evidencing such
payment by Borrower. Borrower will indemnify and
hold harmless the
Agent, the Co-Agent, the Issuing Bank and each Lender
and reimburse the
Agent, the Co-Agent, the Issuing Bank and each
Lender upon written
request for the amount of any Taxes so levied or
imposed and paid by
the Agent, the Co-Agent, the Issuing Bank or
such Lender and any
liability (including penalties, interest and
expenses) arising
therefrom or with respect thereto, whether or not
such Taxes were
correctly or illegally asserted. A certificate
as to the amount of
such payment by such Lender, the Issuing Bank,
the Agent or the
Co-Agent absent manifest error, shall be final,
conclusive and binding
for all purposes provided that the Agent, the Co-
Agent, the Issuing
Bank and each Lender shall use reasonable efforts to
furnish Borrower
notice of the imposition of any Taxes as soon
as practicable
thereafter; provided, however, that no delay or
failure to furnish such
notice shall in any event release or discharge
Borrower from its
obligations to the Agent, the Co-Agent, the Issuing
Bank or such Lender
pursuant to Section 3.07(b) or otherwise result in
any liability of the
Agent, the Co-Agent, the Issuing Bank or such
Lender; provided that
such notice is provided to the Borrower within forty-
five (45) days of
such Lender or the Issuing Bank obtaining knowledge
of the application
of such Taxes to payments under this Agreement.
(ii) Each Lender or Issuing Bank that is
organized under the laws of
any jurisdiction other than the United States of
America or any State
thereof (including the District of Columbia) agrees to
furnish to Borrower
and the Agent, prior to the time it becomes a
Lender or Issuing Bank
hereunder, two copies of either U.S. Internal Revenue
Service Form 4224 or
U.S. Internal Revenue Service Form 1001 or any
successor forms thereto
(wherein such Lender claims entitlement to complete
exemption from or
reduced rate of U.S. Federal withholding tax on
interest paid by Borrower
hereunder) and to provide to Borrower and the Agent a
new Form 4224 or Form
1001 or any successor forms thereto if any previously
delivered form is
found to be incomplete or incorrect in any material
respect or upon the
obsolescence of any previously delivered form;
provided, however, that no
Lender or Issuing Bank shall be required to
furnish a form under this
paragraph (ii) after the date that it becomes a
Lender or Issuing Bank
hereunder if it is not entitled to claim an
exemption from or a reduced
rate of withholding under applicable law.
(iii) Borrower shall also reimburse each
Lender and the Issuing
Bank, upon written request, for any Taxes
imposed (including,
without limitation, Taxes imposed on the overall
net income of such
Lender or Issuing Bank or its respective Lending
Office pursuant to the
laws of the jurisdiction in which the principal
executive office or the
applicable Lending Office of such Lender or the
Issuing Bank is
located) as such Lender or the Issuing Bank shall
determine are payable
by such Lender or the Issuing Bank in respect of
amounts paid by or on
behalf of Borrower to or on behalf of such Lender or
the Issuing Bank
pursuant to paragraph (i) hereof.
(c) Subject to Section 3.04(c)(ii), whenever
any payment to be
made hereunder or under any Note shall be stated
to be due on a day
which is not a Business Day, the due date thereof
shall be extended to
the next succeeding Business Day and, with
respect to payments of
principal, interest thereon shall be payable at the
applicable rate
during such extension.
(d) All computations of interest and fees
shall be made on the
basis of a year of 360 days for the actual number
of days (including
the first day but excluding the last day) occurring
in the period for
which such interest or fees are payable (to the
extent computed on the
basis of days elapsed). Interest on Base Rate
Advances shall be
calculated based on the Base Rate from and including
the date of such
Loan to but excluding the date of the repayment or
conversion thereof.
Interest on Eurodollar Advances and Swing Rate
Advances shall be
calculated as to each Interest Period from and
including the first day
thereof to but excluding the last day thereof. Each
determination by
the Agent of an interest rate or fee hereunder
shall be made in good
faith and, except for manifest error, shall be
final, conclusive and
binding for all purposes.
(e) Payment by the Borrower to the Agent in
accordance with the
terms of this Agreement shall, as to the Borrower,
constitute payment
to the Lenders under this Agreement.
Section III.8. Interest Rate Not
Ascertainable, etc. In the
event that the Agent shall have determined (which
determination shall be made
in good faith and, absent manifest error, shall be
final, conclusive and
binding upon all parties) that on any date for
determining LIBOR for any
Interest Period, by reason of any changes arising
after the date of this
Agreement affecting the London interbank market, or the
Agent's position in
such market, adequate and fair means do not exist for
ascertaining the
applicable interest rate on the basis provided for in
the definition of
LIBOR, then, and in any such event, the Agent shall
forthwith give notice (by
telephone confirmed in writing) to Borrower and to the
Lenders, of such
determination and a summary of the basis for such
determination. Until the
Agent notifies Borrower that the circumstances giving rise
to the suspension
described herein no longer exist, the obligations of the
Lenders to make or
permit portions of the Revolving Loans to remain
outstanding past the last
day of the then current Interest Periods as Eurodollar
Advances shall be
suspended, and such affected Advances shall bear the
same interest as Base
Rate Advances.
Section III.9. Illegality.
(a) In the event that any Lender or the
Issuing Bank shall have
determined (which determination shall be made in good
faith and, absent
manifest error, shall be final, conclusive and
binding upon all
parties) at any time that the making or continuance
of any Eurodollar
Advance or Letter of Credit has become unlawful by
compliance by such
Lender or Issuing Bank in good faith with any
applicable law,
governmental rule, regulation, guideline or order
(whether or not
having the force of law and whether or not failure to
comply therewith
would be unlawful), then, in any such event, the
Lender or Issuing Bank
shall give prompt notice (by telephone confirmed
in writing) to
Borrower and to the Agent of such determination and
a summary of the
basis for such determination (which notice the
Agent shall promptly
transmit to the other Lenders).
(b) Upon the giving of the notice to
Borrower referred to in
subsection (a) above, (i) Borrower's right to request
and such Lender's
obligation to make Eurodollar Advances or
participate in such Letters
of Credit, as the case may be, or the Issuing
Bank's obligation to
issue Letters of Credit shall be immediately
suspended, and such Lender
shall make an Advance as part of the requested
Borrowing of Eurodollar
Advances as a Base Rate Advance, which Base Rate
Advance shall, for all
other purposes, be considered part of such
Borrowing, and (ii) if the
affected Eurodollar Advance or Advances are then
outstanding, Borrower
shall immediately, or if permitted by applicable
law, no later than
the date permitted thereby, upon at least one
Business Day's written
notice to the Agent and the affected Lender, convert
each such Advance
into a Base Rate Advance or Advances, provided
that if more than one
Lender is affected at any time, then all affected
Lenders must be
treated the same pursuant to this Section 3.09(b).
(c) Notwithstanding any other provision
contained in this
Agreement, the Issuing Bank shall not be obligated
to issue any Letter
of Credit, nor shall any Lender be obligated
to purchase its
participation in any Letter of Credit to be issued
hereunder, if the
issuance of such Letter of Credit or purchase of
such participation
shall have become unlawful or prohibited by
compliance by the Issuing
Bank or such Lender in good faith with any law,
governmental rule,
guideline, request, order, injunction, judgment or
decree (whether or
not having the force of law); provided that in
the case of the
obligation of a Lender to purchase such
participation, such Lender
shall have notified the Issuing Bank to such effect
at least three (3)
Business Days' prior to the issuance thereof by the
Issuing Bank, which
notice shall relieve the Issuing Bank of its
obligation to issue such
Letter of Credit pursuant to Section 2.03 hereof.
Section III.10. Increased Costs.
(a) If, by reason of (x) after the
date hereof, the
introduction of or any change (including, without
limitation, any
change by way of imposition or increase of reserve
requirements) in or
in the interpretation of any law or regulation, or
(y) the compliance
with any guideline or request from any
central bank or other
governmental authority or quasi-governmental
authority exercising
control over banks or financial institutions
generally made after the
date hereof (whether or not having the force of law):
(i) any Lender (or its applicable
Lending Office) shall
be subject to any tax, duty or other charge
with respect to its
Eurodollar Advances or its obligation to make
Eurodollar Advances
or the basis of taxation of payments to
any Lender of the
principal of or interest on its Eurodollar
Advances or its
obligation to make Eurodollar Advances shall
have changed (except
for changes in the tax on the overall net
income of such Lender
or its applicable Lending Office imposed by the
jurisdiction in
which such Lender's principal executive
office or applicable
Lending Office is located); or
(ii) any reserve (including, without
limitation, any
imposed by the Board of Governors of the Federal
Reserve System),
special deposit or similar requirement
against assets of,
deposits with or for the account of, or credit
extended by, any
Lender's applicable Lending Office shall be
imposed or deemed
applicable or any other condition
affecting its Eurodollar
Advances or its obligation to make Eurodollar
Advances shall be
imposed on any Lender or its applicable
Lending Office or the
London interbank market;
and as a result thereof there shall be any increase
in the cost to such
Lender of agreeing to make or making, funding or
maintaining Eurodollar
Advances (except to the extent already included in the
determination of the
applicable interest rate for Eurodollar Advances) or its
obligation to make
Eurodollar Advances, or there shall be a reduction in the
amount received or
receivable by such Lender or its applicable Lending
Office, then Borrower
shall from time to time (subject, in the case of
certain Taxes, to the
applicable provisions of Section 3.07(b)), upon written
notice from and
demand by such Lender on Borrower (with a copy of such
notice and demand to
the Agent), pay to the Agent for the account of such
Lender within five
Business Days after the date of such notice and demand,
additional amounts
sufficient to indemnify such Lender against such
increased cost. A
certificate as to the amount of such increased cost,
submitted to Borrower
and the Agent by such Lender in good faith and
accompanied by a statement
prepared by such Lender describing in reasonable detail
the basis for and
calculation of such increased cost, shall, except for
manifest error, be
final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Agent
that at any time,
because of the circumstances described in clauses (x)
or (y) in Section
3.10(a) or any other circumstances beyond such
Lender's reasonable
control arising after the date of this Agreement
affecting such Lender
or the London interbank market or such Lender's
position in such
market, LIBOR as determined by the Agent will not
adequately and fairly
reflect the cost to such Lender of funding its
Eurodollar Advances,
then, and in any such event:
(i) the Agent shall forthwith give
notice (by telephone
confirmed in writing) to Borrower and to the
other Lenders of
such advice;
(ii) Borrower's right to request
and such Lender's
obligation to make or permit portions of the
Loans to remain
outstanding past the last day of the then
current Interest
Periods as Eurodollar Advances shall be
immediately suspended; and
(iii) such Lender shall make a Loan
as part of the
requested Borrowing of Eurodollar Advances
as a Base Rate
Advance, which such Base Rate Advance
shall, for all other
purposes, be considered part of such Borrowing.
Section III.11. Lending Offices.
(a) Each Lender agrees that, if requested by
Borrower, it will
use reasonable efforts (subject to overall policy
considerations of
such Lender) to designate an alternate Lending
Office with respect to
any of its Eurodollar Advances affected by the
matters or circumstances
described in Sections 3.07(b), 3.08, 3.09 or
3.10 to reduce the
liability of Borrower or avoid the results provided
thereunder, so long
as such designation is not disadvantageous to such
Lender as reasonably
determined by such Lender, which determination shall
be conclusive and
binding on all parties hereto. Nothing in this
Section 3.11 shall
affect or postpone any of the obligations of
Borrower or any right of
any Lender provided hereunder.
(b) If the Issuing Bank or any Lender that is
organized under
the laws of any jurisdiction other than the United
States of America or
any State thereof (including the District of
Columbia) issues a public
announcement with respect to the closing of its
lending offices in the
United States such that any withholdings or
deductions and additional
payments with respect to Taxes may be required to
be made by Borrower
thereafter pursuant to Section 3.07(b), such Lender
or the Issuing Bnak
shall use reasonable efforts to furnish Borrower
notice thereof as soon
as practicable thereafter; provided, however, that
no delay or failure
to furnish such notice shall in any event release or
discharge Borrower
from its obligations to such Lender or the Issuing
Bank pursuant to
Section 3.07(b) or otherwise result in any liability
of such Lender or
the Issuing Bank; provided that such notice is
provided to the Borrower
within forty-five (45) days of such Lender or
the Issuing Bank
obtaining knowledge of the application of such Taxes
to payments under
this Agreement.
Section III.12. Funding Losses. Borrower
shall compensate each
Lender, upon its written request to Borrower (which
request shall set forth
the basis for requesting such amounts in reasonable detail
and which request
shall be made in good faith and, absent manifest error,
shall be final,
conclusive and binding upon all of the parties hereto),
for all losses,
expenses and liabilities (including, without limitation,
any interest paid by
such Lender to lenders of funds borrowed by it to
make or carry its
Eurodollar Advances to the extent not recovered by such
Lender in connection
with the re-employment of such funds and including
loss of anticipated
profits), which the Lender may sustain: (i) if for any
reason (other than a
default by such Lender) a borrowing of, or conversion to or
continuation of,
Eurodollar Advances to Borrower does not occur on the date
specified therefor
in a Notice of Borrowing, a Notice of
Conversion/Continuation (whether or not
withdrawn), (ii) if any repayment (including mandatory
prepayments and any
conversions pursuant to Section 3.09(b)) of any
Eurodollar Advances to
Borrower occurs on a date which is not the last day of an
Interest Period
applicable thereto, or (iii), if, for any reason,
Borrower defaults in its
obligation to repay its Eurodollar Advances when
required by the terms of
this Agreement.
Section III.13. Assumptions Concerning
Funding of Eurodollar
Advances. Calculation of all amounts payable to a Lender
under this Article
IV shall be made as though that Lender had actually
funded its relevant
Eurodollar Advances through the purchase of deposits in
the relevant market
bearing interest at the rate applicable to such
Eurodollar Advances in an
amount equal to the amount of the Eurodollar Advances and
having a maturity
comparable to the relevant Interest Period and through
the transfer of such
Eurodollar Advances from an offshore office of that
Lender to a domestic
office of that Lender in the United States of America;
provided, however,
that each Lender may fund each of its Eurodollar Advances
in any manner it
sees fit and the foregoing assumption shall be used only
for calculation of
amounts payable under this Article IV.
Section III.14. Apportionment of Payments.
Aggregate principal
and interest payments in respect of Revolving Loans and
Commitment Fees shall
be apportioned among all outstanding Commitments and
Revolving Loans to which
such payments relate, proportionately to the Lenders'
respective Pro Rata
Share of such Commitments and outstanding Revolving
Loans. Each payment of
principal and interest of any Swing Line Loan shall be
payable solely to the
Swing Line Lender except as provided in Section
2.02(d). The Agent shall
promptly distribute to each Lender at its payment office
set forth beside its
name on the appropriate signature page hereof or such
other address as any
Lender may request its share of all such payments received
by the Agent.
Section III.15. Termination of
Commitments The unpaid
principal balance and all accrued and unpaid interest on
the Notes will be
due and payable upon the first of the following dates or
events to occur: (i)
acceleration of the maturity of any Note in accordance
with the remedies
contained in Article VIII of this Agreement, or (ii) upon
the expiration of
the Commitments.
Section III.16. Sharing of Payments, Etc. If
any Lender or the
Issuing Bank shall obtain any payment or reduction
(including, without
limitation, any amounts received as adequate protection of
a deposit treated
as cash collateral under the Bankruptcy Code) of the
Obligations (whether
voluntary, involuntary, through the exercise of any
right of set-off, or
otherwise) in excess of its Pro Rata Share of payments
or reductions on
account of such obligations obtained by all the Lenders
(other than payments
of principal, interest and fees with respect to the
Swing Line Loans which
are payable solely to the Swing Line Lender or Lenders
participating therein
pursuant to Section 2.02(d)), such Lender or the Issuing
Bank shall forthwith
(i) notify each of the other Lenders, the Issuing
Bank, Agent and the
Co-Agent of such receipt, and (ii) purchase from the
other Lenders or the
Issuing Bank such participations in the affected
obligations as shall be
necessary to cause such purchasing Lender or the Issuing
Bank to share the
excess payment or reduction, net of costs incurred in
connection therewith,
ratably with each of them, provided that if all or any
portion of such excess
payment or reduction is thereafter recovered from such
purchasing Lender or
the Issuing Bank or additional costs are incurred, the
purchase shall be
rescinded and the purchase price restored to the extent
of such recovery or
such additional costs, but without interest unless the
Lender or the Issuing
Bank is obligated to return such funds is required to pay
interest on such
funds. Borrower agrees that any Lender or the Issuing
Bank so purchasing a
participation from another Lender or the Issuing Bank
pursuant to this
Section 3.16 may, to the fullest extent permitted by law,
exercise all its
rights of payment (including the right of set-off) with
respect to such
participation as fully as if such Lender or the Issuing
Bank were the direct
creditor of Borrower in the amount of such participation.
Section III.17. Capital Adequacy. Without
limiting any other
provision of this Agreement, in the event that any Lender
or the Issuing Bank
shall have determined that any law, treaty,
governmental (or
quasi-governmental) rule, regulation, guideline or order
regarding capital
adequacy not currently in effect or fully applicable as of
the Closing Date,
or any change therein or in the interpretation or
application thereof, or
compliance by such Lender or Issuing Bank with any
request or directive
regarding capital adequacy not currently in effect or
fully applicable as of
the Closing Date (whether or not having the force of law
and whether or not
failure to comply therewith would be unlawful) from a
central bank or
governmental authority or body having jurisdiction, does
or shall have the
effect of reducing the rate of return on such Lender's
or Issuing Bank's
capital as a consequence of its obligations hereunder to
a level below that
which such Lender or Issuing Bank could have achieved
but for such law,
treaty, rule, regulation, guideline or order, or such
change or compliance
(taking into consideration such Lender's or Issuing
Bank's policies with
respect to capital adequacy) by an amount deemed by such
Lender or Issuing
Bank to be material, then within ten (10) Business Days
after written notice
and demand by such Lender or Issuing Bank (with copies
thereof to the Agent),
Borrower shall from time to time pay to such Lender
or Issuing Bank
additional amounts sufficient to compensate such Lender
or Issuing Bank for
such reduction (but, in the case of outstanding Base Rate
Advances, without
duplication of any amounts already recovered by such
Lender or Issuing Bank
by reason of an adjustment in the applicable Base Rate).
Each certificate as
to the amount payable under this Section 3.17 (which
certificate shall set
forth the basis for requesting such amounts in reasonable
detail), submitted
to Borrower by any Lender or Issuing Bank in good
faith, shall, absent
manifest error, be final, conclusive and binding for all
purposes.
Section III.18. Letter of Credit
Obligations Absolute. The
obligation of each Account Party to reimburse the Issuing
Bank for drawings
made under Letters of Credit issued for the account of the
Account Party and
the Lenders' obligation to honor their participations
purchased therein shall
be unconditional and irrevocable and shall be paid
strictly in accordance
with the terms of this Agreement under all circumstances,
including without
limitation, the following circumstances:
(a) Any lack of validity or enforceability
of any Letter of
Credit;
(b) The existence of any claim, set-off,
defense or other right
which the Borrower or any Subsidiary or Affiliate of the
Borrower may have at
any time against a beneficiary or any transferee of any
Letter of Credit (or
any Persons or entities for whom any such beneficiary or
transferee may be
acting), any Lender or any other Person, whether in
connection with this
Agreement, the transactions contemplated herein or any
unrelated transaction
(including without limitation any underlying transaction
between the Borrower
or any of its Subsidiaries and Affiliates and the
beneficiary for which such
Letter of Credit was procured);
(c) Any draft, demand, certificate or
any other document
presented under any Letter of Credit proving to be
forged, fraudulent or
invalid in any respect or any statement therein being
untrue or inaccurate in
any respect;
(d) Payment by the Issuing Bank under any
Letter of Credit
against presentation of a demand, draft or certificate
or other document
which does not comply with the terms of such Letter of
Credit;
(e) Any other circumstance or happening
whatsoever which is
similar to any of the foregoing; or
(f) the fact that a Default or an Event of
Default shall have
occurred and be continuing.
Nothing in this Section 3.17 shall prevent an action
against the Issuing Bank
for its gross negligence or willful misconduct in honoring
drafts under the
Letters of Credit.
ARTICLE IV.
CONDITIONS TO BORROWINGS
The obligations of each Lender to make
Advances to Borrower
hereunder is subject to the satisfaction of the following
conditions:
Section IV.1. Conditions Precedent to
Initial Loans. At the
time of the making of the initial Loans hereunder on the
Closing Date, all
obligations of Borrower hereunder incurred prior to the
initial Loans and
prior to the obligation of the Issuing Bank to issue the
initial Letter of
Credit (including, without limitation, Borrower's
obligations to reimburse
fees and expenses payable to the Agent as previously
agreed with Borrower),
shall have been paid in full, and the Agent shall
have received the
following, in form and substance reasonably satisfactory
in all respects to
the Agent:
(a) the duly executed counterparts of this
Agreement;
(b) the duly executed Revolving Credit
Notes evidencing the
Revolving Credit Commitments and the duly executed
Swing Line Note
evidencing the Swing Line Subfacility;
(c) the duly executed Guaranty Agreement;
(d) the duly executed Closing Certificate;
(e) certificates of the Secretaries or
Assistant Secretaries of
the Credit Parties attaching and certifying copies
of the resolutions
of the board of directors of the Credit
Parties, authorizing as
applicable the execution, delivery and
performance of the Credit
Documents by the Credit Parties party thereto;
(f) certificates of the Secretaries or an
Assistant Secretary
of the Credit Parties certifying (i) the name, title
and true signature
of each officer of the Credit Parties executing the
Credit Documents,
and (ii) the bylaws of the Credit Parties;
(g) certified copies of the articles or
certificate of
incorporation of the Credit Parties certified by
the Secretaries of
State and by the Secretaries or Assistant
Secretaries of the Credit
Parties, together with certificates of good standing
or existence, as
may be available from the Secretaries of State of the
jurisdiction of
incorporation or organization of the Credit
Parties and each other
jurisdiction where the Credit Parties ownership of
property or the
conduct of its business require it to be
qualified, except where a
failure to be so qualified would not have a Materially
Adverse Effect;
(h) acknowledgments from CSC Corporation as
to its appointment
as agent for service of process for the Credit
Parties;
(i) the favorable opinion of Powell,
Goldstein, Frazer &
Murphy, LLP, counsel to the Borrower in the
form of Exhibit E,
addressed to the Agent, the Co-Agent and each of the
Lenders.
(j) copies of all documents and
instruments, including all
consents, authorizations and filings, required or
advisable under any
Requirement of Law or by any material Contractual
Obligation of the
Credit Parties, in connection with the
execution, delivery,
performance, validity and enforceability of the
Credit Documents and
the other documents to be executed and delivered
hereunder, and such
consents, authorizations, filings and orders shall be
in full force and
effect and all applicable waiting periods shall have
expired;
(k) certificates, reports and other
information as the Agent
may reasonably request from any Consolidated
Company in order to
satisfy the Lenders as to the absence of any
material liabilities or
obligations arising from matters relating to
employees of the
Consolidated Companies, including employee
relations, collective
bargaining agreements, Plans and other
compensation and employee
benefit plans;
(l) [Reserved]
(m) certified copies of the Sharing
Agreements;
(n) certificate of insurance issued by the
Borrower's insurers,
describing in reasonable detail the insurance maintained by
the Borrower.
(o) the Agent shall have received, for its
own account, all
costs and expenses incurred which have been invoiced and
are payable on the
date hereof, including without limitation, all costs and
expenses actually
incurred associated with the execution and delivery of this
Agreement and the
other documents contemplated hereby. The Agent shall
have received for the
account of King & Spalding, counsel to the Agent, all
reasonable costs and
expenses actually incurred which have been invoiced and
are due and payable
as of the date hereof.
(p) certificates, reports and other
information as the Agent
may reasonably request from any Consolidated Company
in order to satisfy
the Lenders as to the absence of any material
liabilities or obligations
arising from litigation (including without limitation,
products liability and
patent infringement claims) pending or threatened against
the Consolidated
Companies; and
(q) evidence assuring the Agent, the Co-
Agent and the Lenders
that all corporate proceedings and all other legal matters
in connection with
the authorization, legality, validity and
enforceability of the Credit
Documents and the Transaction are in form and substance
satisfactory to the
Lenders.
Section IV.2. Conditions to Each Loan. At
the time of the
making of each Loan (but not including the continuation or
conversion of any
Revolving Loan or in the same principal amount or any
Revolving Loan pursuant
to Section 2.02(c)), including the initial Loans
hereunder, (before as well
as immediately after giving effect to such Loans and to
the proposed use of
the proceeds thereof), the following conditions shall have
been satisfied or
shall exist:
(a) there shall exist no Default or Event
of Default and no
Default or Event of Default shall result after
giving effect to such
Loan;
(b) all representations and warranties by
Borrower contained
herein shall be true and correct in all material
respects with the same
effect as though such representations and
warranties had been made on
and as of the date of such Loans;
(c) the Loans to be made and the use of
proceeds thereof shall
not contravene, violate or conflict with, or
involve the Agent, the
Co-Agent or any Lender in a violation of, any law,
rule, injunction, or
regulation, or determination of any court of law or
other governmental
authority applicable to Borrower;
(d) since the date of the most recent
financial statements of
the Consolidated Companies described in Section
5.15 or delivered to
the Agent pursuant to Section 6.07, there shall
have been no change
which has had or could reasonably be expected to
have a Materially
Adverse Effect; and
(e) the Agent shall have received such other
documents or legal
opinions as the Agent or any Lender may reasonably
request, all in form
and substance reasonably satisfactory to the Agent.
Each request for a Borrowing or a Swing
Line Loan and the
acceptance by Borrower of the proceeds thereof
shall constitute a
representation and warranty by Borrower, as of the
date of the Loans
comprising such Borrowing, that the applicable
conditions specified in
Sections 4.01 and 4.02 have been satisfied.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Borrower (as to itself and all other
Consolidated Companies)
represents and warrants as follows.
Section V.1. Corporate Existence; Compliance
with Law. Each of
the Consolidated Companies is a corporation duly organized,
validly existing,
and in good standing under the laws of the jurisdiction of
its incorporation,
and each of the Consolidated Companies has the corporate
power and authority
and the legal right to own and operate its property
and to conduct its
business. Each of the Consolidated Companies (i) has the
corporate power and
authority and the legal right to own and operate its
property and to conduct
its business, (ii) is duly qualified as a foreign
corporation and in good
standing under the laws of each jurisdiction where its
ownership of property
or the conduct of its business requires such
qualification, and (iii) is in
compliance with all Requirements of Law, where (a) the
failure to have such
power, authority and legal right as set forth in clause
(i), (b) the failure
to be so qualified or in good standing as set forth in
clause (ii), or (c)
the failure to comply with Requirements of Law as set
forth in clause (iii),
would reasonably be expected, in the aggregate, to have a
Materially Adverse
Effect. The jurisdiction of incorporation or organization,
and the ownership
of all issued and outstanding capital stock, for each
Subsidiary as of the
date of this Agreement is accurately described on Schedule
5.01.
Section V.2. Corporate Power;
Authorization. Each of the
Credit Parties has the corporate power and authority to
make, deliver and
perform the Credit Documents to which it is a party
and has taken all
necessary corporate action to authorize the
execution, delivery and
performance of such Credit Documents. No consent or
authorization of, or
filing with, any Person (including, without limitation,
any governmental
authority), is required in connection with the
execution, delivery or
performance by any Credit Party, or the validity or
enforceability against
any Credit Party, of the Credit Documents, other
than such consents,
authorizations or filings which have been made or obtained.
Section V.3. Possession of Franchises,
Licenses, Etc. Except
as set forth on Schedule 5.03 or as otherwise wuld not
have a Material
Adverse Effect, (a) each of the Credit Parties possesses
all franchises,
certificates, licenses, permits and other authorizations
from governmental
political subdivisions or regulatory authorities that
are necessary in any
material respect for the ownership, maintenance and
operation of its
properties and assets, and (b) no Credit Party is in
violation of any thereof
in any material respect.
Section V.4. Enforceable Obligations. This
Agreement has been
duly executed and delivered, and each other Credit
Document will be duly
executed and delivered, by the respective Credit Parties,
and this Agreement
constitutes, and each other Credit Document when executed
and delivered will
constitute, legal, valid and binding obligations of the
Credit Parties,
respectively, enforceable against the Credit Parties in
accordance with their
respective terms, except as may be limited by
applicable bankruptcy,
insolvency, reorganization, moratorium, or similar
laws affecting the
enforcement of creditors' rights generally and by
general principles of
equity.
Section V.5. No Legal Bar. The
execution, delivery and
performance by the Credit Parties of the Credit Documents
will not violate
any Requirement of Law or cause a breach or default
under any of their
respective material Contractual Obligations.
Section V.6. No Material Litigation. Except
as set forth on
Schedule 5.06 or in any notice furnished to the Lenders
and the Issuing Bank
pursuant to Section 6.07(e) at or prior to the
respective times the
representations and warranties set forth in this Section
5.06 are made or
deemed to be made hereunder, no litigation, investigations
or proceedings of
or before any courts, tribunals, arbitrators or
governmental authorities are
pending or, to the knowledge of Borrower, threatened by or
against any of the
Consolidated Companies, or against any of their
respective properties or
revenues, which, if adversely determined would reasonably
be expected to have
a Material Adverse Effect.
Section V.7. Investment Company Act, Etc.
None of the Credit
Parties is an "investment company" or a company
"controlled" by an
"investment company" (as each of the quoted terms is
defined or used in the
Investment Company Act of 1940, as amended). None of the
Credit Parties is
subject to regulation under the Public Utility Holding
Company Act of 1935,
the Federal Power Act, or any foreign, federal or local
statute or regulation
limiting its ability to incur indebtedness for money
borrowed, guarantee such
indebtedness, or pledge its assets to secure such
indebtedness, as
contemplated hereby or by any other Credit Document.
Section V.8. Margin Regulations. No part of
the proceeds of
any of the Loans will be used for any purpose which
violates, or which would
be inconsistent or not in compliance with, the provisions
of the applicable
Margin Regulations.
Section V.9. Compliance With Environmental
Laws.
(a) The Consolidated Companies have
received no notices of
claims or potential liability under, and are in
compliance with, all
applicable Environmental Laws, where such claims and
liabilities under,
and failures to comply with, such statutes,
regulations, rules,
ordinances, laws or licenses, would reasonably be
expected to result in
penalties, fines, claims or other liabilities to
the Consolidated
Companies in amounts in excess of $2,500,000, either
individually or in
the aggregate (including any such penalties,
fines, claims, or
liabilities relating to the matters set forth on
Schedule 5.09(a)),
except as set forth on Schedule 5.09(a) or in any
notice furnished to
the Lenders and the Issuing Bank pursuant to
Section 6.07(f) at or
prior to the respective times the representations
and warranties set
forth in this Section 5.09(a) are made or deemed to be
made hereunder.
(b) Except as set forth on Schedule 5.09(b)
or in any notice
furnished to the Lenders and the Issuing Bank
pursuant to Section
6.07(f) at or prior to the respective times the
representations and
warranties set forth in this Section 5.09(b) are
made or deemed to be
made hereunder, none of the Consolidated Companies
has received any
notice of violation, or notice of any action,
either judicial or
administrative, from any governmental authority
(whether United States
or foreign) relating to the actual or alleged
violation of any
Environmental Law, including, without limitation,
any notice of any
actual or alleged spill, leak, or other release
of any Hazardous
Substance, waste or hazardous waste by any
Consolidated Company or its
employees or agents, or as to the existence of any
contamination on any
properties owned by any Consolidated Company, where
any such violation,
spill, leak, release or contamination would
reasonably be expected to
result in penalties, fines, claims or other
liabilities to the
Consolidated Companies in amounts in excess of
$2,500,000, either
individually or in the aggregate.
(c) Except as set forth on Schedule 5.09(c),
the Consolidated
Companies have obtained all necessary governmental
permits, licenses
and approvals which are material to the operations
conducted on their
respective properties, including without
limitation, all required
material permits, licenses and approvals for (i)
the emission of air
pollutants or contaminants, (ii) the treatment or
pretreatment and
discharge of waste water or storm water, (iii) the
treatment, storage,
disposal or generation of hazardous wastes, (iv)
the withdrawal and
usage of ground water or surface water, and (v) the
disposal of solid
wastes.
Section V.10. Insurance. The Consolidated
Companies currently
maintain insurance with respect to their respective
properties and
businesses, with financially sound and reputable insurers,
having coverages
against losses or damages of the kinds customarily
insured against by
reputable companies in the same or similar businesses,
such insurance being
in amounts no less than those amounts which are customary
for such companies
under similar circumstances. The Consolidated
Companies have paid all
material amounts of insurance premiums now due and owing
with respect to
such insurance policies and coverages, and such policies
and coverages are in
full force and effect.
Section V.11. No Default. Except as set forth
on Schedule 5.11,
none of the Consolidated Companies is in default under or
with respect to any
Contractual Obligation in any respect which default or
defaults would be
reasonably expected in the aggregate to have a Materially
Adverse Effect.
Section V.12. No Burdensome Restrictions.
Except as set forth
on Schedule 5.12 or in any notice furnished to the
Lenders and the Issuing
Bank pursuant to Section 6.07(k) at or prior to the
respective times the
representations and warranties set forth in this Section
5.12 are made or
deemed to be made hereunder, none of the Consolidated
Companies is a party to
or bound by any Contractual Obligation or Requirement of
Law which has had or
would reasonably be expected to have a Materially Adverse
Effect.
Section V.13. Taxes. Except as set forth on
Schedule 5.13, each
of the Consolidated Companies have filed or caused
to be filed all
declarations, reports and tax returns which are required
to have been filed,
and has paid all taxes, custom duties, levies,
charges and similar
contributions ("taxes" in this Section 5.13) shown to be
due and payable on
said returns or on any assessments made against it or its
properties, and all
other taxes, fees or other charges imposed on it or any of
its properties by
any governmental authority (other than those the amount or
validity of which
is currently being contested in good faith by appropriate
proceedings and
with respect to which reserves in conformity with GAAP
have been provided in
its books); and no tax liens have been filed and, to
the knowledge of
Borrower, no claims are being asserted with respect to any
such taxes, fees
or other charges.
Section V.14. Subsidiaries. Except as
disclosed on Schedule
5.01, on the date of this Agreement, Borrower has no
Subsidiaries and neither
Borrower nor any Subsidiary is a joint venture partner or
general partner in
any partnership. Except as disclosed on Schedule 5.14
or in any notice
furnished to the Lenders and the Issuing Bank pursuant to
Section 6.07(l) at
or prior to the respective times the representations and
warranties set forth
in this Section 5.14 are made or deemed to be made
hereunder, Borrower has no
Material Subsidiaries.
Section V.15. Financial Statements. Borrower
has furnished to
the Agent, the Co-Agent, the Issuing Bank and the Lenders:
(a) Audited Reports. The audited
consolidated balance sheet as
of May 31, 1997 of the Consolidated Companies
and the related
consolidated statements of income, shareholders'
equity and cash flows
for the Fiscal Years then ended, including in each
case the related
schedules and notes, setting forth in each case in
comparative form the
figures for the previous Fiscal Year of the
Consolidated Companies.
The foregoing financial statements fairly present
in all material
respects the consolidated financial condition of
the Consolidated
Companies as at the dates thereof and results of
operations for such
periods in conformity with GAAP consistently applied;
(b) No Material Adverse Change. Since
the date of the
preparation of the financial statements set forth
above, there have
been no changes with respect to the Consolidated
Companies which has
had or would reasonably be expected to have a
Materially Adverse
Effect.
Section V.16. ERISA. Except as disclosed on
Schedule 5.16 or in
any notice furnished to the Lenders and the Issuing Bank
pursuant to Section
6.07(g) at or prior to the respective times the
representations and
warranties set forth in this Section 5.16 are made or
deemed to be made
hereunder:
(1) Identification of Plans. None of
the Consolidated
Companies nor any of their respective ERISA
Affiliates maintains or
contributes to, or has during the past seven years
maintained or contributed
to, any Plan that is subject to Title IV of ERISA;
(2) Compliance. Each Plan maintained by
the Consolidated
Companies have at all times been maintained, by their terms
and in operation,
in compliance with all applicable laws, and the
Consolidated Companies are
subject to no tax or penalty with respect to any Plan of
such Consolidated
Company or any ERISA Affiliate thereof, including without
limitation, any tax
or penalty under Title I or Title IV of ERISA or under
Chapter 43 of the Tax
Code, or any tax or penalty resulting from a loss of
deduction under Sections
162, 404, or 419 of the Tax Code, where the failure to
comply with such laws,
and such taxes and penalties, together with all other
liabilities referred to
in this Section 5.16 (taken as a whole), would in the
aggregate have a
Materially Adverse Effect;
(3) Liabilities. The Consolidated Companies
are subject to no
liabilities (including withdrawal liabilities) with
respect to any Plans of
such Consolidated Companies or any of their ERISA
Affiliates, including
without limitation, any liabilities arising from Titles
I or IV of ERISA,
other than obligations to fund benefits under an
ongoing Plan and to pay
current contributions, expenses and premiums with
respect to such Plans,
where such liabilities, together with all other
liabilities referred to in
this Section 6.15 (taken as a whole), would in the
aggregate have a
Materially Adverse Effect;
(4) Funding. The Consolidated Companies
and, with respect to
any Plan which is subject to Title IV of ERISA, each of
their respective
ERISA Affiliates, have made full and timely payment of
all amounts (A)
required to be contributed under the terms of each Plan and
applicable law,
and (B) required to be paid as expenses (including PBGC or
other premiums) of
each Plan, where the failure to pay such amounts (when
taken as a whole,
including any penalties attributable to such amounts) would
have a Materially
Adverse Effect. No Plan subject to Title IV of
ERISA (other than a
Multiemployer Plan) has an "amount of unfunded benefit
liabilities" (as
defined in Section 4001(a)(18) of ERISA), determined
as if such Plan
terminated on any date on which this representation and
warranty is deemed
made, in any amount which, together with all other
liabilities referred to in
this Section 5.16 (taken as a whole), would have a
Materially Adverse Effect
if such amount were then due and payable. None of the
Consolidated Companies
would be subject to withdrawal liability with respect to
any Multiemployer
Plan, determined as if the event resulting in such
withdrawal liability
occurred on any date on which this representation is
made or deemed to be
made based on the most recent actuarial valuation data
made available to
employers participating in the Multiemployer Plan, in
any amount which,
together with all other liabilities referred to in this
Section 5.16 (taken
as a whole), would have a Materially Adverse Effect if such
amounts were then
due and payable. The Consolidated Companies are subject
to no liabilities
with respect to post-retirement medical benefits in
any amounts which,
together with all other liabilities referred to in this
Section 5.16 (taken
as a whole), would have a Materially Adverse Effect if such
amounts were then
due and payable.
Section V.17. Patents, Trademarks, Licenses,
Etc. Except as
set forth on Schedule 5.17, (i) the Consolidated Companies
have obtained and
hold in full force and effect all material patents,
trademarks, service
marks, trade names, copyrights, licenses and other such
rights, free from
material burdensome restrictions, which are necessary
for the operation of
their respective businesses as presently conducted, and
(ii) to the best of
Borrower's knowledge, no product, process, method,
service or other item
presently sold by or employed by any Consolidated Company
in connection with
such business infringes any patents, trademark, service
mark, trade name,
copyright, license or other right owned by any other
person and there is not
presently pending, or to the knowledge of Borrower,
threatened, any claim or
litigation against or affecting any Consolidated Company
contesting such
Person's right to sell or use any such product, process,
method, substance or
other item where the result of such failure to obtain and
hold such benefits
or such infringement would have a Materially Adverse Effect.
Section V.18. Ownership of Property. Except
as set forth on
Schedule 5.18, each Consolidated Company has good and
marketable fee simple
title to or a valid leasehold interest in all of its real
property and good
title to, or a valid leasehold interest in, all of its
other property, as
such properties are reflected in the financial
statements referred to in
Section 5.15(a), other than properties disposed of in the
ordinary course of
business since such date or as otherwise permitted by
the terms of this
Agreement, subject to no Lien or title defect of any kind,
except Permitted
Liens. The Consolidated Companies enjoy peaceful and
undisturbed possession
under all of their respective material leases.
Section V.19. Indebtedness. As of the Closing
Date, except for
the Indebtedness set forth on Schedule 7.01, none of
the Consolidated
Companies is an obligor in respect of any Indebtedness for
borrowed money or
any commitment to create or incur any Indebtedness for
borrowed money.
Section V.20. Financial Condition. On the
Closing Date,
including without limitation, the use of the proceeds
of the Loans as
provided in Section 2.01, (i) the assets of each
Credit Party at fair
valuation and based on their present fair saleable value
(including, without
limitation, the fair and realistic value of any
contribution or subrogation
rights in respect of any Guaranty Agreement given by such
Credit Party) will
exceed such Credit Party's debts, including contingent
liabilities (as such
liabilities may be limited under the express terms of any
Guaranty Agreement
of such Credit Party), (ii) the remaining capital of such
Credit Party will
not be unreasonably small to conduct the Credit Party's
business, and (iii)
such Credit Party will not have incurred debts, or have
intended to incur
debts, beyond the Credit Party's ability to pay such
debts as they mature.
For purposes of this Section 5.20, "debt" means any
liability on a claim, and
"claim" means (a) the right to payment, whether or not
such right is reduced
to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured,
disputed, undisputed, legal, equitable, secured or
unsecured, or (b) the
right to an equitable remedy for breach of performance if
such breach gives
rise to a right to payment, whether or not such right to an
equitable remedy
is reduced to judgment, fixed, contingent, matured,
unmatured, disputed,
undisputed, secured or unsecured.
Section V.21. Labor Matters. Except as set
forth in Schedule
5.21 or in any notice furnished to the Lenders and the
Issuing Bank pursuant
to Section 6.07(k) at or prior to the respective times
the representations
and warranties set forth in this Section 5.21 are made or
deemed to be made
hereunder, the Consolidated Companies have experienced
no strikes, labor
disputes, slow downs or work stoppages due to labor
disagreements which have
had, or would reasonably be expected to have, a Materially
Adverse Effect,
and, to the best knowledge of Borrower, there are no such
strikes, disputes,
slow downs or work stoppages threatened against any
Consolidated Company.
The hours worked and payment made to employees of the
Consolidated Companies
have not been in violation in any material respect
of the Fair Labor
Standards Act or any other applicable law dealing with
such matters. All
payments due from the Consolidated Companies, or for
which any claim may be
made against the Consolidated Companies, on account of
wages and employee
health and welfare insurance and other benefits have been
paid or accrued as
liabilities on the books of the Consolidated Companies
where the failure to
pay or accrue such liabilities would reasonably be
expected to have a
Materially Adverse Effect.
Section V.22. Payment or Dividend
Restrictions. Except as
described on Schedule 5.22, none of the Consolidated
Companies is party to or
subject to any agreement or understanding restricting or
limiting the payment
of any dividends or other distributions by any such
Consolidated Company.
Section V.23. Sharing Agreements. Each
of the Sharing
Agreements is in full force and effect and no
material default exists
thereunder.
Section V.24. Disclosure. No
representation or warranty
contained in this Agreement (including the Schedules
attached hereto) or in
any other document furnished from time to time pursuant to
the terms of this
Agreement, contains or will contain any untrue statement
of a material fact
or omits or will omit to state any material fact
necessary to make the
statements herein or therein not misleading in any material
respect as of the
date made or deemed to be made. Except as may be set forth
herein (including
the Schedules attached hereto), there is no fact known to
Borrower which has
had, or is reasonably expected to have, a Materially Adverse
Effect.
Section V.25. Year 2000 Compliant.
Borrower and its
Subsidiaries shall be Year 2000 Compliant by December 31,
1999, except where
a failure to be Year 2000 Compliant will not have a
Materially Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Commitment remains in effect
hereunder or any Note
shall remain unpaid, Borrower will:
Section VI.1. Corporate Existence, Etc.
Preserve and maintain,
and cause each of its Material Subsidiaries to preserve
and maintain, its
corporate existence, its material rights, franchises, and
licenses, and its
material patents and copyrights (for the scheduled
duration thereof),
trademarks, trade names, and service marks, necessary
or desirable in the
normal conduct of its business, and its qualification
to do business as a
foreign corporation in all jurisdictions where it conducts
business or other
activities making such qualification necessary, where
the failure to be so
qualified would reasonably be expected to have a Materially
Adverse Effect.
Section VI.2. Compliance with Laws, Etc.
Comply, and cause each
of its Subsidiaries to comply with all Requirements
of Law (including,
without limitation, the Environmental Laws subject to the
exception set forth
in Section 5.09 where the penalties, claims, fines, and
other liabilities
resulting from noncompliance with such Environmental
Laws do not involve
amounts in excess of $2,500,000 in the aggregate) and
Contractual Obligations
applicable to or binding on any of them where the failure
to comply with such
Requirements of Law and Contractual Obligations would
reasonably be expected
to have a Materially Adverse Effect.
Section VI.3. Payment of Taxes and Claims,
Etc. Pay, and cause
each of its Subsidiaries to pay, (i) all taxes,
assessments and governmental
charges imposed upon it or upon its property, and (ii) all
claims (including,
without limitation, claims for labor, materials, supplies
or services) which
might, if unpaid, become a Lien upon its property, unless,
in each case, the
validity or amount thereof is being contested in good
faith by appropriate
proceedings and adequate reserves are maintained with
respect thereto.
Section VI.4. Keeping of Books. Keep, and
cause each of its
Subsidiaries to keep, proper books of record and account,
containing complete
and accurate entries of all their respective
financial and business
transactions.
Section VI.5. Visitation, Inspection, Etc.
Permit, and cause
each of its Subsidiaries to permit, any representative
of the Agent, the
Co-Agent, the Issuing Bank or any Lender to visit and
inspect any of its
property, to examine its books and records and to make
copies and take
extracts therefrom, and to discuss its affairs, finances
and accounts with
its officers, all at such reasonable times and as often
as the Agent, the
Co-Agent, the Issuing Bank or such Lender may reasonably
request.
Section VI.6. Insurance; Maintenance of
Properties.
(a) Maintain or cause to be maintained with
financially sound
and reputable insurers, insurance with respect to
its properties and
business, and the properties and business of its
Subsidiaries, against
loss or damage of the kinds customarily insured
against by reputable
companies in the same or similar businesses, such
insurance to be of
such types and in such amounts as is customary for
such companies under
similar circumstances; provided, however, that in
any event Borrower
shall use its best efforts to maintain, or cause
to be maintained,
insurance in amounts and with coverages not
materially less favorable
to any Consolidated Company as in effect on the date
of this Agreement.
(b) Cause, and cause each of the
Consolidated Companies to
cause, all properties used or useful in the conduct
of its business to
be maintained and kept in good condition, repair and
working order and
supplied with all necessary equipment and will
cause to be made all
necessary repairs, renewals, replacements,
settlements and improvements
thereof, all as in the judgment of Borrower may be
necessary so that
the business carried on in connection therewith
may be properly and
advantageously conducted at all times.
Section VI.7. Reporting Covenants. Furnish
to each Lender and
the Issuing Bank:
(a) Annual Financial Statements. As soon as
available and in
any event within 90 days after each Fiscal Year
End of Borrower,
balance sheets of the Consolidated Companies as
at the end of such
year, presented on a consolidated basis, and the
related statements of
income, shareholders' equity, and cash flows of
the Consolidated
Companies for such Fiscal Year, presented on a
consolidated basis,
setting forth in each case in comparative form the
figures for the
previous Fiscal Year, all in reasonable detail and
accompanied by a
report thereon of Ernst & Young, L.L.P. or other
independent public
accountants of comparable recognized national
standing, which such
report shall be unqualified as to going concern and
scope of audit and
shall state that such financial statements
present fairly in all
material respects the financial condition as at the
end of such Fiscal
Year on a consolidated basis, and the results
of operations and
statements of cash flows of the Consolidated
Companies for such Fiscal
Year in accordance with GAAP and that the
examination by such
accountants in connection with such consolidated
financial statements
has been made in accordance with generally accepted
auditing standards;
(b) Quarterly Financial Statements. As soon
as available and
in any event within 45 days after the end of each
fiscal quarter of
Borrower (other than the fourth fiscal quarter),
balance sheets of the
Consolidated Companies as at the end of such
quarter presented on a
consolidated basis and the related statements of
income, shareholders'
equity, and cash flows of the Consolidated
Companies for such fiscal
quarter and for the portion of Borrower's Fiscal
Year ended at the end
of such quarter, presented on a consolidated basis
setting forth in
each case in comparative form the figures for the
corresponding quarter
and the corresponding portion of Borrower's
previous Fiscal Year, all
in reasonable detail and certified by the chief
financial officer or
principal accounting officer of Borrower that
such financial
statements fairly present in all material
respects the financial
condition of the Consolidated Companies as at the
end of such fiscal
quarter on a consolidated basis, and the results
of operations and
statements of cash flows of the Consolidated
Companies for such fiscal
quarter and such portion of Borrower's Fiscal Year,
in accordance with
GAAP consistently applied (subject to normal year-end
audit adjustments
and the absence of certain footnotes);
(c) No Default/Compliance Certificate.
Together with the
financial statements required pursuant to
subsections (a) and (b)
above, a certificate of the treasurer or chief
financial officer of
Borrower (i) to the effect that, based upon a review
of the activities
of the Consolidated Companies and such financial
statements during the
period covered thereby, there exists no Event of
Default and no Default
under this Agreement, or if there exists an Event
of Default or a
Default hereunder, specifying the nature thereof
and the proposed
response thereto, and (ii) demonstrating in
reasonable detail
compliance as at the end of such Fiscal Year or
such fiscal quarter
with Section 6.08 and Sections 7.01 through 7.05;
(d) Notice of Default. Promptly after any
Executive Officer of
Borrower has notice or knowledge of the
occurrence of an Event of
Default or a Default, a certificate of the chief
financial officer or
principal accounting officer of Borrower specifying
the nature thereof
and the proposed response thereto;
(e) Litigation. Promptly after (i) the
occurrence thereof,
notice of the institution of or any material adverse
development in any
material action, suit or proceeding or any
governmental investigation
or any arbitration, before any court or arbitrator
or any governmental
or administrative body, agency or official,
against any Consolidated
Company, or any material property of any thereof
seeking money damages
in excess of $2,500,000 or which, if adversely
determined, would
otherwise reasonably be expected to have a Materially
Adverse Effect,
or (ii) actual knowledge thereof, notice of the
threat of any such
action, suit, proceeding, investigation or
arbitration;
(f) Environmental Notices. Promptly after
receipt thereof,
notice of any actual or alleged violation, or
notice of any action,
claim or request for information, either judicial
or administrative,
from any governmental authority relating to any
actual or alleged
claim, notice of potential responsibility under or
violation of any
Environmental Law, or any actual or alleged spill,
leak, disposal or
other release of any waste, petroleum product, or
hazardous waste or
Hazardous Substance by any Consolidated Company
which could result in
penalties, fines, claims or other liabilities to
any Consolidated
Company in amounts in excess of $2,500,000;
(g) ERISA. (i) Promptly after the
occurrence thereof with
respect to any Plan of any Consolidated Company or
any ERISA Affiliate
thereof, or any trust established thereunder,
notice of (A) a
"reportable event" described in Section 4043
of ERISA and the
regulations issued from time to time thereunder
(other than a
"reportable event" not subject to the provisions
for 30-day notice to
the PBGC under such regulations), or (B) any other
event which could
subject any Consolidated Company to any tax,
penalty or liability
under Title I or Title IV of ERISA or Chapter 43 of
the Tax Code, or
any tax or penalty resulting from a loss of
deduction under Sections
162, 404 or 419 of the Tax Code, where any such
taxes, penalties or
liabilities exceed or could exceed $2,500,000 in the
aggregate;
(ii) Promptly after such notice must
be provided to the
PBGC, or to a Plan participant, beneficiary or
alternative payee, any
notice required under Section 101(d),
302(f)(4), 303, 307,
4041(b)(1)(A) or 4041(c)(1)(A) of ERISA or under
Section 401(a)(29) or
412 of the Tax Code with respect to any Plan of
any Consolidated
Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any
notice received by any
Consolidated Company or any ERISA Affiliate
thereof concerning the
intent of the PBGC or any other governmental
authority to terminate a
Plan of such Company or ERISA Affiliate thereof
which is subject to
Title IV of ERISA, to impose any liability on such
Company or ERISA
Affiliate under Title IV of ERISA or Chapter 43 of the
Tax Code;
(iv) Upon the request of the Agent,
promptly upon the
filing thereof with the Internal Revenue Service
("IRS") or the
Department of Labor ("DOL"), a copy of IRS Form
5500 or annual report
for each Plan of any Consolidated Company or ERISA
Affiliate thereof
which is subject to Title IV of ERISA;
(v) Upon the request of the Agent, (A)
true and complete
copies of any and all documents, government
reports and IRS
determination or opinion letters or rulings for
any Plan of any
Consolidated Company from the IRS, PBGC or DOL, (B)
any reports filed
with the IRS, PBGC or DOL with respect to a Plan of
the Consolidated
Companies or any ERISA Affiliate thereof, or (C) a
current statement of
withdrawal liability for each Multiemployer Plan of
any Consolidated
Company or any ERISA Affiliate thereof;
(h) Liens. Promptly upon any Consolidated
Company becoming
aware thereof, notice of the filing of any federal
statutory Lien, tax
or other state or local government Lien or any
other Lien affecting
their respective properties, other than Permitted
Liens;
(i) Public Filings, Etc. Promptly upon the
filing thereof or
otherwise becoming available, copies of all
financial statements,
annual, quarterly and special reports, proxy
statements and notices
sent or made available generally by Borrower to
its public security
holders, of all regular and periodic reports and
all registration
statements and prospectuses, if any, filed by any
of them with any
securities exchange, and of all press releases and
other statements
made available generally to the public containing
material developments
in the business or financial condition of
Borrower and the other
Consolidated Companies;
(j) Accountants' Reports. Promptly upon
receipt thereof,
copies of all financial statements of, and all
reports submitted by,
independent public accountants to Borrower in
connection with each
annual, interim, or special audit of Borrower's
financial statements,
including without limitation, the comment letter
submitted by such
accountants to management in connection with their
annual audit;
(k) Burdensome Restrictions, Etc. Promptly
upon the existence
or occurrence thereof, notice of the existence or
occurrence of (i) any
Contractual Obligation or Requirement of Law
described in Section 5.12,
(ii) failure of any Consolidated Company to hold
in full force and
effect those material trademarks, service marks,
patents, trade names,
copyrights, licenses and similar rights necessary in
the normal conduct
of its business, and (iii) any strike, labor dispute,
slow down or work
stoppage as described in Section 5.21;
(l) New Material Subsidiaries. Within 30
days after the
formation or acquisition of any Material Subsidiary,
or any other event
resulting in the creation of a new Material
Subsidiary, notice of the
formation or acquisition of such Material
Subsidiary or such
occurrence, including a description of the assets of
such entity, the
activities in which it will be engaged, and such
other information as
the Agent, the Co-Agent, the Issuing Bank and any
of the Lenders may
request;
(m) Intercompany Asset Transfers. Promptly
upon the occurrence
thereof, notice of the transfer of any assets from
any Credit Party to
any other Consolidated Company that is not a
Credit Party in any
transaction or series of related transactions,
where either the book
value or the fair market value of such assets
is greater than
$2,500,000 (excluding sales or other transfers
of assets in the
ordinary course of business); and
(n) Other Information. With reasonable
promptness, such other
information about the Consolidated Companies as
the Agent, the
Co-Agent, the Issuing Bank or any Lender may
reasonably request from
time to time.
Section VI.8. Financial Covenants.
(a) Fixed Charge Coverage. Maintain a Fixed
Charge Coverage
Ratio at all times greater than 3.00:1.00, measured
as of the last day
of each fiscal quarter of the Borrower, commencing
on the last day of
the fiscal quarter ending on August 31, 1998,
for the immediately
preceding four quarters ending on such date.
(b) Leverage Ratio. Maintain a Leverage
Ratio at all times of
not more than 3.00:1.0, measured as of the last
day of each fiscal
quarter of the Borrower, commencing on the last
day of the fiscal
quarter ending on August 31, 1998, for the
immediately preceding four
quarters ending on such date.
Section VI.9. Notices Under Certain
Other Indebtedness.
Immediately upon its receipt thereof, Borrower shall
furnish the Agent a copy
of any notice received by it or any other Consolidated
Company from the
holder(s) of Indebtedness referred to in Section 7.01(b),
(c), (f), (g) or
(i) (or from any trustee, agent, attorney, or other party
acting on behalf of
such holder(s)) in an amount which, in the aggregate,
exceeds $2,500,000,
where such notice states or claims (i) the existence or
occurrence of any
default or event of default with respect to such
Indebtedness under the terms
of any indenture, loan or credit agreement, debenture,
note, or other
document evidencing or governing such Indebtedness, or
(ii) the existence or
occurrence of any event or condition which requires or
permits holder(s) of
any Indebtedness to exercise rights under any Change in
Control Provision.
Section VI.10. Additional Credit Parties
and Collateral.
Promptly after (i) the formation or acquisition of any
Material Subsidiary
not listed on Schedule 5.14, (ii) the transfer of assets to
any Consolidated
Company if notice thereof is required to be given pursuant
to Section 6.07(m)
and as a result thereof the recipient of such assets
becomes a Material
Subsidiary, or (iii) the occurrence of any other
event creating a new
Material Subsidiary, Borrower shall cause to be executed
and delivered a
Supplement to Subsidiary Guaranty Agreement from
each such Material
Subsidiary, together with related corporate
authorization documents,
organizational documents, secretary's certificates and
opinions, all in form
and substance satisfactory to the Agent and the Required
Lenders.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Commitment remains in effect
hereunder or any Note
shall remain unpaid, Borrower will not and will not permit
any Subsidiary to:
Section VII.1. Indebtedness. Create, incur,
assume, guarantee,
suffer to exist or otherwise become liable on or with
respect to, directly or
indirectly, any Indebtedness, other than:
(a) Indebtedness of the Borrower under this
Agreement and of
the Material Subsidiary of Borrower pursuant to the
Guaranty Agreement;
(b) Indebtedness outstanding or incurred on
the Closing Date
and described on Schedule 7.01
(c) purchase money Indebtedness to the extent
secured by a Lien
permitted by Section 7.02(b) in an aggregate
principal amount at any
time outstanding not to exceed $5,000,000;
(d) unsecured current liabilities (other
than liabilities for
borrowed money or liabilities evidenced by promissory
notes, bonds or
similar instruments) incurred in the ordinary
course of business and
either (i) not more than 30 days past due, or (ii)
being disputed in
good faith by appropriate proceedings with reserves
for such disputed
liability maintained in conformity with GAAP;
(e) Indebtedness of Borrower or any of its
Subsidiaries under
Interest Rate Contracts;
(f) Subordinated Debt of the Borrower (but
not Subsidiaries of
the Borrower) expressly approved in writing by the
Lenders;
(g) Guarantees of advances to officers and
employees in the
ordinary course of business, or Guarantees otherwise
disclosed to and
approved in writing by the Agent and the Required
Lenders;
(h) Endorsements of instruments for deposit
or collection in
the ordinary course of business;
(i) Unsecured Indebtedness of the Borrower
pursuant to short
term lines of credit in an aggregate principal
amount at any one time
outstanding not to exceed $5,000,000;
(j) Indebtedness with respect to letters of
credit permitted by
Section 7.05;
(k) Up to $25,000,000 of additional
Indebtedness at any time
outstanding for the purpose of issuing variable or
fixed rate demand
notes or bonds for the benefit of Borrower or any of
its Subsidiaries
to finance one or more advanced culinary center.
Section VII.2. Liens. Create, incur, assume
or suffer to exist
any Lien on any of its property now owned or hereafter
acquired to secure any
Indebtedness other than:
(a) Liens existing on the Closing Date
and disclosed on
Schedule 7.02;
(b) any Lien on any property and proceeds
thereof securing
Indebtedness permitted by Section 7.01(c) or 7.01(k)
above incurred or
assumed for the purpose of financing all or any
part of the cost of
acquiring, developing, constructing, installing
or equipping such
property and any refinancing thereof, provided that
such Lien does not
extend to any other property (other than the proceeds
of such property);
(c) Liens for taxes not yet due, and Liens
for taxes or Liens
imposed by ERISA which are being contested in good
faith by appropriate
proceedings and with respect to which adequate
reserves are being
maintained in accordance with GAAP;
(d) statutory Liens of landlords and
Liens of carriers,
warehousemen, mechanics, materialmen and other Liens
imposed by law and
created in the ordinary course of business for
amounts not yet due or
which are being contested in good faith by
appropriate proceedings and
with respect to which adequate reserves are
being maintained in
accordance with GAAP;
(e) Liens incurred or deposits made in the
ordinary course of
business in connection with workers'
compensation, unemployment
insurance and other types of social security,
or to secure the
performance of tenders, statutory obligations, surety
and appeal bonds,
bids, leases, government contracts, performance
and return-of-money
bonds and other similar obligations (exclusive of
obligations for the
payment of borrowed money);
(f) zoning, easements and restrictions on
the use of real
property which do not materially impair the use of
such property; and
(g) rights in property reserved or vested in
any governmental
authority which do not materially impair the use of
such property.
Section VII.3. Mergers, Sales, Acquisitions.
(a) Merge or consolidate with any other
Person, except that
this Section 7.03 shall not apply to:
(i) any merger or consolidation of
Borrower with any
other Person provided that the Borrower
is the surviving
corporation after such merger or consolidation,
(ii) any merger or consolidation of any
of the Borrower's
Subsidiaries with any other Person
provided that any such
Subsidiary shall be the surviving corporation
after such merger
or consolidation, or
(iii) any merger between Subsidiaries of
Borrower; or
(b) sell, lease, transfer or otherwise
dispose of its
accounts, property or other assets (including
capital stock of any
Subsidiary of Borrower), except that this Section
7.03 shall not apply
to:
(i) any sale, lease, transfer or
other disposition of
assets of any Subsidiary of the Borrower to
the Borrower or any
of its Material Subsidiaries,
(ii) sales of inventory in the ordinary
course of business
of the Borrower and its Subsidiaries,
(iii) disposition of equipment or
inventory determined in
good faith to be obsolete or unusable by the
Borrower or its
Subsidiaries, or
(iv) any other sale of the Borrower's
assets during the
term of this Agreement; provided that, such
assets (x) have an
aggregate book value, which when aggregated
with all other such
sales since the Closing Date, do not exceed
seven and one-half
percent (7.5%) of the aggregate book value
of all of the
Borrower's assets on the date of such
transfer, and (y) when
aggregated with all other assets of Borrower
sold during such
Fiscal Year, did not produce or otherwise
account for more than
ten percent (10%) of Consolidated EBITDA
during the preceding
Fiscal Year (or in the case of the first year
of this Agreement,
any of the four preceding fiscal quarters of the
Borrower);
(c) purchase, lease or otherwise acquire
for cash, stock or
other consideration, the stock of any Person or all
or any substantial
portion of the assets of any Person, unless such
stock, assets or other
considerations have fair market value in any one
transaction less than
$10,000,000, or less than $20,000,000 in the
aggregate per Fiscal Year,
and the Borrower provides to the Lenders the following
information:
(i) a description in reasonable
detail of the assets
proposed to be purchased in the transaction; and
(ii) a certificate by the Chief
Financial Officer of the
Borrower stating that (1) after giving
effect any such
transaction in this Section 7.03(c) the
covenants described in
Section 6.08 have been met and (2) that no
Default or Event of
Default will exist as a result of the
transaction;
provided, however, that no transaction pursuant to clause
(a), clause (b)(i),
clause (b)(iv) or clause (c) above shall be permitted if
any Default or Event
of Default exists at the time of such transaction or would
exist as a result
of such transaction.
Section VII.4. Investments, Loans, Etc. Make,
permit or hold any
Investments in any Person, or otherwise acquire or hold
any Subsidiaries,
other than:
(a) Investments in (i) Subsidiaries of
Borrower existing as of
the Closing Date, (ii) Material Subsidiaries with
respect to which the
Borrower has complied with Section 6.10, and (iii)
Subsidiaries created
or acquired thereafter in connection with any
acquisition permitted by
Section 7.03(c) to the extent permitted by
Section 7.03 in any Fiscal
Year.
(b) Investments in the stock or other
assets of any other
Person that is engaged in a business permitted by
Section 7.08 hereof
that, as a result of such Investment, becomes a
wholly-owned Subsidiary
of Borrower (other than Hostile Acquisitions);
provided, however, that
the aggregate amount of Investments made pursuant
to this subsection
(b) shall not exceed, (x) in the case of the
acquisition of the stock
or assets of any Person or related Persons, an
aggregate amount of
$1,500,000, and (y) an aggregate amount of $5,000,000
during any Fiscal
Year of the Borrower;
(c) marketable direct obligations of the
United States or any
agency thereof, or obligations guaranteed by the
United States or any
agency thereof, in each case supported by the full
faith and credit of
the United States and maturing within one year
from the date of
creation thereof;
(d) Investments received in settlement of
Indebtedness created
in the ordinary course of business;
(e) marketable direct obligations issued
by any state of the
United States of America or any political subdivision
of any such state
or any public instrumentality thereof, the
interest from which is
exempt from Federal income taxes, maturing within
one year from the
date of acquisition thereof and either having
as at any date of
determination the one of the two highest ratings
obtainable from either
Standard & Poor's or Moody's;
(f) unsecured commercial paper, the
interest from which is
exempt from Federal income taxes, maturing no more
than 270 days from
the date of creation and having as at any date of
determination either
the highest rating obtainable from either Standard &
Poor's or Moody's;
(g) commercial paper issued by corporations,
each of which has
a consolidated net worth of not less than
$500,000,000, and conducts a
substantial portion of its business in the United
States of America,
maturing no more than 365 days from the date of
acquisition thereof and
having as at any date of determination the highest
rating obtainable
from either Standard & Poor's or Moody's; and
(h) money market or similar depository
accounts, certificates
of deposit or bankers acceptances, in each case
redeemable upon demand
or maturing within one year from the date of
acquisition thereof,
issued by commercial banks incorporated under the
laws of the United
States of America or any state thereof or the
District of Columbia,
provided (x) each such bank has at any date of
determination combined
capital and surplus of not less than $1,000,000,000
and a rating of its
long-term debt of at least A by Standard & Poor's
or at least A by
Moody's or a long-term deposit rating of at least A
issued by Standard
& Poor's or at least A issued by Moody's, (y) the
aggregate amount of
all such certificates of deposit issued by such bank
are fully insured
at all times by the Federal Deposit Insurance Company;
provided however, notwithstanding the foregoing, the
Borrower and any
Subsidiary may continue to own any Investment which (A)
complied with the
provisions of clauses (f), (g) or (h) at the time such
Investment was made
and (B) at any date of determination does not so comply
solely because (x)
such Investment no longer has the rating required from
Standard & Poor's or
Moody's or (y) the bank having the money market or
depository account or
issuing the certificate of deposit or bankers acceptance
ceases to have the
required level of capital and surplus or to have a rating
of its long-term
debt of at least A by Standard & Poor's or at least A by
Moody's or to have a
long-term deposit rating of at least A by Standard &
Poor's or at least A by
Moody's, if, and for so long as, in the good faith
judgment of the relevant
Executive Officer, no loss of the principal amount of
such Investment would
occur as the result of the Borrower or such Subsidiary
continuing to own such
Investment to maturity. Nothing contained in the foregoing
proviso shall be
deemed to be applicable to any new or renewed Investment
at the time such
Investment is made or renewed.
Section VII.5. Letters of Credit. Create,
incur, issue, assume,
guarantee, suffer to exist or otherwise become liable on
or with respect to,
directly or indirectly, letters of credit other than
Letters of Credit issued
pursuant to this Agreement and letters of credit issued to
provide credit or
liquidity support, or both in connection with
Indebtedness permitted by
Section 7.01(k), where the maximum amount available to
be drawn under all
such letters of credit would exceed, at any one time
outstanding, $20,000,000
in the aggregate.
Section VII.6. Sale and Leaseback Transactions.
Sell or transfer
any property, real or personal, whether now owned or
hereafter acquired, and
thereafter rent or lease such property or other
property which any
Consolidated Company intends to use for substantially
the same purpose or
purposes as the property being sold or transferred.
Section VII.7. Transactions with Affiliates.
(a) Enter into any transaction or
series of related
transactions which in the aggregate would be
material, whether or not
in the ordinary course of business, with any
Affiliate of any
Consolidated Company (but excluding any Affiliate
which is also a
wholly-owned Subsidiary of Borrower and any
compensation arrangement
with an officer or director of the Borrower or any
other Consolidated
Company entered into in the ordinary course of
business), other than on
terms and conditions substantially as favorable to
such Consolidated
Company as would be obtained by such Consolidated
Company at the time
in a comparable arm's-length transaction with a
Person other than an
Affiliate.
(b) Convey or transfer to any other Person
(including any other
Consolidated Company) any real property, buildings,
or fixtures used in
the manufacturing or production operations of any
Consolidated Company,
or convey or transfer to any other Consolidated
Company any other
assets (excluding conveyances or transfers in the
ordinary course of
business) if at the time of such conveyance or
transfer any Default or
Event of Default exists or would exist as a result
of such conveyance
or transfer.
Section VII.8. Changes in Business. Enter
into or engage in any
business which is substantially different from the business
engaged in by the
Borrower and its Subsidiaries on the Closing Date.
Section VII.9. ERISA. Take or fail to take
any action with
respect to any Plan of any Consolidated Company or, with
respect to its ERISA
Affiliates, any Plans which are subject to Title IV
of ERISA or to
continuation health care requirements for group health
plans under the Tax
Code, including without limitation (i) establishing
any such Plan, (ii)
amending any such Plan (except where required to comply with
applicable law),
(iii) terminating or withdrawing from any such Plan, or
(iv) incurring an
amount of unfunded benefit liabilities, as defined in
Section 4001(a)(18) of
ERISA, or any withdrawal liability under Title IV of
ERISA with respect to
any such Plan, which together with any other action or
omission referred to
in this Section 7.09 (taken as a whole) would have a
Materially Adverse
Effect, without first obtaining the written approval of the
Required Lenders.
Section VII.10. Limitation on Payment
Restrictions Affecting
Consolidated Companies. Create or otherwise cause or
suffer to exist or
become effective, any consensual encumbrance or restriction
on the ability of
any Consolidated Company to (i) pay dividends or make any
other distributions
on any stock of a Subsidiary of the Borrower, or (ii) pay
any intercompany
debt owed to Borrower or any other Consolidated Company,
or (iii) transfer
any of its property or assets to Borrower or any other
Consolidated Company,
except any consensual encumbrance or restriction existing
as of the Closing
Date.
Section VII.11. Actions Under Certain
Documents. Without the
prior written consent of the Required Lenders (i) modify,
amend, cancel or
rescind any agreements or documents evidencing or governing
Subordinated Debt
or intercompany debt, (ii) make any payment with
respect to Subordinated
Debt, except that current interest accrued on such
Subordinated Debt as of
the date of this Agreement and all interest subsequently
accruing thereon
(whether or not paid currently) may be paid unless a
Default or Event of
Default has occurred and is continuing, (iii) voluntarily
prepay any portion
of intercompany debt, or (iv) amend or modify any of the
Sharing Agreements
to materially increase the obligations or liabilities of
the Consolidated
Companies thereunder.
Section VII.12. Additional Negative
Pledges. Create or
otherwise cause or suffer to exist or become
effective, directly or
indirectly, any prohibition or restriction on the
creation or existence of
any Lien upon any asset of any Consolidated Company,
other than pursuant to
(i) Section 7.02, (ii) the terms of any agreement,
instrument or other
document pursuant to which any Indebtedness permitted by
Sections 7.01(k) or
7.02(b) is incurred by any Consolidated Company, so long
as such prohibition
or restriction (in the case of Indebtedness
permitted pursuant to
Section 7.02(b)) applies only to the property or asset
being financed by such
Indebtedness, and (iii) any requirement of applicable law
or any regulatory
authority having jurisdiction over any of the Consolidated
Companies.
Section VII.13. Changes in Fiscal Year.
Change the calculation
of the Fiscal Year of the Borrower.
Section VII.14. Issuance of Stock by
Subsidiaries. Permit any
Subsidiary (either directly or indirectly by the
issuance of rights or
options for, or securities convertible into such shares)
to issue, sell or
dispose of any shares of its stock of any class (other
than directors'
qualifying shares, if any) except to the Borrower or another
Subsidiary.
Section VII.15. Dividends. In any Fiscal
Year the Borrower
shall not pay or declare dividends in an aggregate amount
in excess of twenty
percent (20%) of its Consolidated Net Income.
ARTICLE VIII.
EVENTS OF DEFAULT
Upon the occurrence and during the
continuance of any of the
following specified events (each an "Event of Default"):
Section VIII.1. Payments. Borrower shall
fail to make
promptly when due (including, without limitation, by
mandatory prepayment)
any principal payment with respect to the Loans, or
Borrower shall fail to
make any payment of interest, fee or other amount payable
hereunder within
five (5) days of its due date;
Section VIII.2. Covenants Without Notice.
Borrower shall fail
to observe or perform any covenant or agreement contained
in Sections 6.01,
6.05, 6.07, 6.08, 6.09 or Article VII;
Section VIII.3. Other Covenants. Borrower
shall fail to
observe or perform any covenant or agreement contained
in this Agreement,
other than those referred to in Sections 8.01 and 8.02,
and, if capable of
being remedied, such failure shall remain unremedied for
30 days after the
earlier of (i) Borrower's obtaining knowledge thereof, or
(ii) written notice
thereof shall have been given to Borrower by Agent, the Co-
Agent, the Issuing
Bank or any Lender;
Section VIII.4. Representations. Any
representation or
warranty made or deemed to be made by Borrower or any other
Credit Party or
by any of its officers under this Agreement or any other
Credit Document
(including the Schedules attached thereto), or any
certificate or other
document submitted to the Agent, the Co-Agent, the
Issuing Bank or the
Lenders by any such Person pursuant to the terms of this
Agreement or any
other Credit Document, shall be incorrect in any material
respect when made
or deemed to be made or submitted;
Section VIII.5. Non-Payments of Other
Indebtedness. Any
Consolidated Company shall fail to make when due (whether
at stated maturity,
by acceleration, on demand or otherwise, and after
giving effect to any
applicable grace period) any payment of principal of
or interest on any
Indebtedness (other than the Obligations) exceeding
$2,500,000 individually
or in the aggregate;
Section VIII.6. Defaults Under Other
Agreements; Change In
Control Provisions. (a) Any Consolidated Company shall
fail to observe or
perform any covenants or agreements (whether or not waived)
contained in any
agreements or instruments relating to any of its
Indebtedness exceeding
$500,000 individually or in the aggregate, or any other
event shall occur if
the effect of such failure or other event is to accelerate,
or with notice or
passage of time or both, to permit the holder of such
Indebtedness or any
other Person to accelerate, the maturity of such
Indebtedness; or any such
Indebtedness shall be required to be prepaid (other
than by a regularly
scheduled required prepayment) in whole or in part
prior to its stated
maturity; or (b) any event or condition shall occur or
exist which, pursuant
to the terms of any Change in Control Provision, requires
or permits the
holder(s) of the Indebtedness subject to such Change in
Control Provision to
require that such Indebtedness be redeemed, repurchased,
defeased, prepaid or
repaid, in whole or in part, or the maturity of such
Indebtedness to be
accelerated;
Section VIII.7. Bankruptcy. The Borrower
or any Material
Subsidiary shall commence a voluntary case concerning
itself under the
Bankruptcy Code or applicable foreign bankruptcy laws; or
an involuntary case
for bankruptcy is commenced against Borrower or any
Material Subsidiary and
the petition is not controverted within 10 days, or is not
dismissed within
60 days, after commencement of the case; or a custodian
(as defined in the
Bankruptcy Code) or similar official under applicable
foreign bankruptcy laws
is appointed for, or takes charge of, all or any
substantial part of the
property of the Borrower or any Material Subsidiary; or
the Borrower or any
Material Subsidiary commences proceedings of its own
bankruptcy or to be
granted a suspension of payments or any other
proceeding under any
reorganization, arrangement, adjustment of debt,
relief of debtors,
dissolution, insolvency or liquidation or similar law of
any jurisdiction,
whether now or hereafter in effect, relating to the
Borrower or any Material
Subsidiary or there is commenced against the Borrower
or any Material
Subsidiary any such proceeding which remains undismissed
for a period of 60
days; or the Borrower or any Material Subsidiary is
adjudicated insolvent or
bankrupt; or any order of relief or other order approving
any such case or
proceeding is entered; or the Borrower or any Material
Subsidiary suffers any
appointment of any custodian or the like for it or any
substantial part of
its property to continue undischarged or unstayed for a
period of 60 days; or
the Borrower or any Material Subsidiary makes a general
assignment for the
benefit of creditors; or the Borrower or any Material
Subsidiary shall fail
to pay, or shall state that it is unable to pay, or shall
be unable to pay,
its debts generally as they become due; or the Borrower
or any Material
Subsidiary shall call a meeting of its creditors with a
view to arranging a
composition or adjustment of its debts; or the Borrower
or any Material
Subsidiary shall by any act or failure to act indicate
its consent to,
approval of or acquiescence in any of the foregoing; or any
corporate action
is taken by the Borrower or any Material Subsidiary
for the purpose of
effecting any of the foregoing;
Section VIII.8. ERISA. A Plan of either a
Consolidated Company
or of any of its ERISA Affiliates which is subject to Title
IV of ERISA:
(i) shall fail to be funded in accordance
with the minimum
funding standard required by applicable
law, the terms of
such Plan, Section 412 of the Tax Code
or Section 302 of
ERISA for any plan year or a waiver of
such standard is
sought or granted with respect to
such Plan under
applicable law, the terms of such Plan
or Section 412 of
the Tax Code or Section 303 of ERISA; or
(ii) is being, or has been, terminated or
the subject of
termination proceedings under
applicable law or the terms
of such Plan; or
(iii) shall require a Consolidated Company to
provide security
under applicable law, the terms of such
Plan, Section 401
or 412 of the Tax Code or Section 306 or
307 of ERISA; or
(iv) results in a liability to a
Consolidated Company under
applicable law, the terms of such
Plan, or Title IV of
ERISA;
and there shall result from any such failure, waiver,
termination or other
event described in clauses (i) through (iv) above a
liability to the PBGC or
a Plan that would have a Materially Adverse Effect;
Section VIII.9. Judgments. Judgments or
orders for the payment
of money in excess of $2,500,000 individually or in
the aggregate or
otherwise having a Materially Adverse Effect shall be
rendered against
Borrower or any other Consolidated Company and such
judgment or order shall
continue unsatisfied (in the case of a money judgment)
and in effect for a
period of 30 days during which execution shall not be
effectively stayed or
deferred (whether by action of a court, by agreement or
otherwise);
Section VIII.10. Ownership of Credit Parties.
If Borrower shall
at any time fail to own and control the shares of
Voting Stock of any
Guarantor which it owned or controlled at the time such
Guarantor became a
Credit Party hereunder other than due to sale of the
Voting Stock of such
Guarantor permitted pursuant to Section 7.03 hereof;
Section VIII.11. Change in Control of
Borrower. (x) With the
exception of Morrison prior to the Closing Date, any
person or group (within
the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in
effect on the date hereof) shall become the owner,
beneficially or of record,
of shares representing more than twenty-five percent
(25%) of the aggregate
ordinary voting power represented by the issued and
outstanding capital stock
of the Borrower, or (y) a change in the board of
directors of the Borrower
shall occur such that the individuals who constituted the
board of directors
of the Borrower at the beginning of the two-year period
immediately preceding
such change (together with any other director whose
election by the board of
directors of the Borrower or whose nomination for
election by the
shareholders of the Borrower was approved by a vote of at
least a majority of
the directors then in office who either were directors at
the beginning of
such period or whose election or nomination for election
was previously so
approved) cease for any reason to constitute a majority of
the directors then
in office; or
Section VIII.12. Default Under Other Credit
Documents; Sharing
Agreements. (x) There shall exist or occur any "Event
of Default" as
provided under the terms of any other Credit Document, or
any Credit Document
ceases to be in full force and effect or the validity
or enforceability
thereof is disaffirmed by or on behalf of Borrower or any
other Credit Party,
or at any time it is or becomes unlawful for Borrower or
any other Credit
Party to perform or comply with its material obligations
under any Credit
Document, or the material obligations of Borrower or any
other Credit Party
under any Credit Document are not or cease to be legal,
valid and binding on
Borrower or any such Credit Party; or (y) any party to the
Sharing Agreements
shall default with respect to its covenants or obligations
thereunder where
such default results in a Materially Adverse Effect
with respect to the
Credit Parties;
then, and in any such event, and at any time thereafter
if any Event of
Default shall then be continuing, the Agent may, and
upon the written or
telex request of the Required Lenders, shall, take
any or all of the
following actions, without prejudice to the rights of
the Agent, the
Co-Agent, the Issuing Bank, any Lender or the holder of
any Note to enforce
its claims against Borrower or any other Credit Party:
(i) declare all
Commitments terminated, whereupon the Commitments of
each Lender shall
terminate immediately and any commitment fee shall
forthwith become due and
payable without any other notice of any kind; (ii) declare
the principal of
and any accrued interest on the Loans, and all other
Obligations owing
hereunder to be, whereupon the same shall become,
forthwith due and payable
without presentment, demand, protest or other notice of
any kind, all of
which are hereby waived by the Borrower; provided,
that, if an Event of
Default specified in Section 8.07 shall occur, the result
which would occur
upon the giving of notice by the Agent to any Credit
Party, shall occur
automatically without the giving of any such notice, and
(iii) may exercise
any other rights or remedies available under the Credit
Documents, at law or
in equity.
ARTICLE IX.
THE AGENT
Section IX.1. Appointment of Agent. The
Issuing Bank and each
Lender hereby designates SunTrust as Agent to
administer all matters
concerning the Loans and Letters of Credit and to act as
herein specified.
The Issuing Bank and each Lender hereby irrevocably
authorizes, and each
holder of any Note by the acceptance of a Note shall be
deemed irrevocably to
authorize, the Agent to take such actions on its behalf
under the provisions
of this Agreement, the other Credit Documents, and all
other instruments and
agreements referred to herein or therein, and to exercise
such powers and to
perform such duties hereunder and thereunder as are
specifically delegated to
or required of the Agent by the terms hereof and
thereof and such other
powers as are reasonably incidental thereto. The Agent
may perform any of
its duties hereunder by or through their agents or
employees.
Section IX.2. Authorization of Agent with
Respect to the
Security Documents. (a) The Issuing Bank and each Lender
hereby authorizes
the Agent to enter into each of the Security Documents
substantially in the
form attached hereto, and to take all action
contemplated thereby. All
rights and remedies under the Security Documents may be
exercised by the
Agent for the benefit of the Agent, the Issuing Bank and
the Lenders and the
other beneficiaries thereof upon the terms thereof. The
Issuing Bank and the
Lenders further agree that the Agent may assign its
rights and obligations
under any of the Security Documents to any affiliate of
the Agent or to any
trustee, if necessary or appropriate under applicable law,
which assignee in
each such case shall (subject to compliance with any
requirements of
applicable law governing the assignment of such
Security Documents) be
entitled to all the rights of the Agent under and
with respect to the
applicable Security Document.
(b) In each circumstance where, under any
provision of any
Security Document, the Agent shall have the right to grant
or withhold any
consent, exercise any remedy, make any determination or
direct any action by
the Agent under such Security Document, the Agent shall
act in respect of
such consent, exercise of remedies, determination or
action, as the case may
be, with the consent of and at the direction of the
Required Lenders;
provided, however, that no such consent of the Required
Lenders shall be
required with respect to any consent, determination or
other matter that is,
in the Agent's judgment, ministerial or administrative
in nature. In each
circumstance where any consent of or direction from the
Required Lenders is
required, the Agent shall send to the Issuing Bank and
the Lenders a notice
setting forth a description in reasonable detail of the
matter as to which
consent or direction is requested and the Agent's proposed
course of action
with respect thereto. In the event the Agent shall not
have received a
response from any Lender or the Issuing Bank within five
(5) Business Days
after such Lender's or the Issuing Bank's receipt of such
notice, such Lender
or the Issuing Bank shall be deemed to have agreed to
the course of action
proposed by the Agent.
Section IX.3. Nature of Duties of Agent. The
Agent shall have
no duties or responsibilities except those expressly
set forth in this
Agreement and the other Credit Documents. None of the
Agent nor any of its
respective officers, directors, employees or agents shall
be liable for any
action taken or omitted by it as such hereunder or in
connection herewith,
unless caused by its or their gross negligence or willful
misconduct. The
duties of the Agent shall be ministerial and
administrative in nature; the
Agent shall not have by reason of this Agreement a fiduciary
relationship in
respect of any Lender or the Issuing Bank; and nothing
in this Agreement,
express or implied, is intended to or shall be so construed
as to impose upon
the Agent any obligations in respect of this Agreement
or the other Credit
Documents except as expressly set forth herein.
Section IX.4. Lack of Reliance on the Agent.
(a) Independently and without reliance
upon the Agent, each
Lender and the Issuing Bank, to the extent each deems
appropriate, has
made and shall continue to make (i) its own
independent investigation
of the financial condition and affairs of the
Credit Parties in
connection with the taking or not taking of any
action in connection
herewith, and (ii) its own appraisal of the
creditworthiness of the
Credit Parties, and, except as expressly provided
in this Agreement,
the Agent shall have no duty or responsibility,
either initially or on
a continuing basis, to provide any Lender or the
Issuing Bank with any
credit or other information with respect thereto,
whether coming into
its possession before the making of the Loans or the
issuance of the
Letters of Credit or at any time or times thereafter.
(b) The Agent shall not be responsible to
any Lender or the
Issuing Bank for any recitals, statements,
information, representations
or warranties herein or in any document, certificate
or other writing
delivered in connection herewith or for the
execution, effectiveness,
genuineness, validity, enforceability,
collectibility, priority or
sufficiency of this Agreement, the Notes, the
Guaranty Agreement or any
other documents contemplated hereby or thereby,
or the financial
condition of the Credit Parties, or be required
to make any inquiry
concerning either the performance or observance of
any of the terms,
provisions or conditions of this Agreement, the
Notes, the Guaranty
Agreement or the other documents contemplated hereby
or thereby, or the
financial condition of the Credit Parties, or the
existence or possible
existence of any Default or Event of Default.
Section IX.5. Certain Rights of the Agent.
If the Agent shall
request instructions from the Required Lenders with
respect to any action or
actions (including the failure to act) in connection with
this Agreement, the
Agent shall be entitled to refrain from such act or taking
such act, unless
and until the Agent shall have received instructions
from the Required
Lenders; and the Agent shall not incur liability in any
Person by reason of
so refraining. Without limiting the foregoing, no Lender
or the Issuing Bank
shall have any right of action whatsoever against the
Agent as a result of
the Agent acting or refraining from acting hereunder in
accordance with the
instructions of the Required Lenders.
Section IX.6. Reliance by Agent. The Agent
shall be entitled to
rely, and shall be fully protected in relying, upon
any note, writing,
resolution, notice, statement, certificate, telex,
teletype or telecopier
message, cable gram, radiogram, order or other documentary,
teletransmission
or telephone message believed by it to be genuine and
correct and to have
been signed, sent or made by the proper Person. The
Agent may consult with
legal counsel (including counsel for any Credit Party),
independent public
accountants and other experts selected by it and shall not
be liable for any
action taken or omitted to be taken by it in good faith in
accordance with
the advice of such counsel, accountants or experts.
Section IX.7. Indemnification of Agent. To
the extent the Agent
is not reimbursed and indemnified by the Credit Parties,
each Lender will
reimburse and indemnify the Agent, ratably according
to the respective
amounts of the Loans outstanding under all Commitments (or
if no amounts are
outstanding, ratably in accordance with the Commitments),
in either case, for
and against any and all liabilities, obligations, losses,
damages, penalties,
actions, judgments, suits, costs, expenses (including
counsel fees and
disbursements) or disbursements of any kind or nature
whatsoever which may be
imposed on, incurred by or asserted against the Agent
in performing its
duties hereunder, in any way relating to or arising out of
this Agreement or
the other Credit Documents; provided that no Lender or the
Issuing Bank shall
be liable to the Agent for any portion of such
liabilities, obligations,
losses, damages, penalties, actions, judgments, suits,
costs, expenses or
disbursements resulting from the Agent's gross
negligence or willful
misconduct.
Section IX.8. The Agent in its Individual
Capacity. With
respect to its obligation to lend under this Agreement,
the Loans made by it
and the Notes issued to it, the Agent shall have the same
rights and powers
hereunder as any other Lender or holder of a Note and may
exercise the same
as though it were not performing the duties specified
herein; and the terms
"Lenders", "Required Lenders", "holders of Notes", or
any similar terms
shall, unless the context clearly otherwise indicates,
include the Agent in
its individual capacity. The Agent may accept deposits
from, lend money to,
and generally engage in any kind of banking, trust,
financial advisory or
other business with the Consolidated Companies or any
affiliate of the
Consolidated Companies as if it were not performing the
duties specified
herein, and may accept fees and other consideration from
the Consolidated
Companies for services in connection with this
Agreement and otherwise
without having to account for the same to the Lenders or the
Issuing Bank.
Section IX.9. Holders of Notes. The Agent
may deem and treat
the payee of any Note as the owner thereof for all purposes
hereof unless and
until a written notice of the assignment or transfer
thereof shall have been
filed with the Agent. Any request, authority or consent
of any Person who,
at the time of making such request or giving such
authority or consent, is
the holder of any Note shall be conclusive and binding
on any subsequent
holder, transferee or assignee of such Note or of any Note
or Notes issued in
exchange therefor.
Section IX.10. Successor Agent.
(a) The Agent may resign at any time by
giving written notice
thereof to the Lenders, the Issuing Bank and
Borrower and may be
removed at any time with or without cause by the
Required Lenders;
provided, however, the Agent may not resign or be
removed until a
successor Agent has been appointed and shall
have accepted such
appointment. Upon any such resignation or
removal, the Required
Lenders shall have the right to appoint a successor
Agent subject to
Borrower's prior written approval. If no successor
Agent shall have
been so appointed by the Required Lenders, and shall
have accepted such
appointment, within 30 days after the retiring
Agent's giving of notice
of resignation or the Required Lenders' removal of
the retiring Agent,
then the retiring Agent may, on behalf of the
Lenders, appoint a
successor Agent subject to Borrower's prior written
approval, which
shall be a bank which maintains an office in the
United States, or a
commercial bank organized under the laws of the
United States of
America or any State thereof, or any Affiliate of
such bank, having a
combined capital and surplus of at least
$1,000,000,000.
(b) Upon the acceptance of any
appointment as the Agent
hereunder by a successor Agent, such successor
Agent shall thereupon
succeed to and become vested with all the rights,
powers, privileges
and duties of the retiring Agent, and the
retiring Agent shall be
discharged from its duties and obligations under this
Agreement. After
any retiring Agent's resignation or removal
hereunder as Agent, the
provisions of this Article IX shall inure to its
benefit as to any
actions taken or omitted to be taken by it while it
was an Agent under
this Agreement.
ARTICLE X.
MISCELLANEOUS
Section X.1. Notices. All notices,
requests and other
communications to any party hereunder shall be in writing
(including bank
wire, telex, telecopy or similar teletransmission or
writing) and shall be
given to such party at its address or applicable
teletransmission number set
forth on the signature pages hereof, or such other
address or applicable
teletransmission number as such party may hereafter
specify by notice to the
Agent and Borrower. Each such notice, request or other
communication shall
be effective (i) if given by telex, when such telex is
transmitted to the
telex number specified in this Section and the
appropriate answerback is
received, (ii) if given by mail, 72 hours after such
communication is
deposited in the mails with first class postage
prepaid, addressed as
aforesaid, (iii) if given by telecopy, when such telecopy
is transmitted to
the telecopy number specified in this Section and
the appropriate
confirmation is received, or (iv) if given by any other
means (including,
without limitation, by air courier), when delivered or
received at the
address specified in this Section; provided that notices
to the Agent shall
not be effective until received.
Section X.2. Amendments, Etc. No amendment
or waiver of any
provision of this Agreement or the other Credit Documents,
nor consent to any
departure by any Credit Party therefrom, shall in any
event be effective
unless the same shall be in writing and signed by the
Required Lenders (and
in the case of any amendment, the applicable Credit
Party), and then such
waiver or consent shall be effective only in the specific
instance and for
the specific purpose for which given; provided that no
amendment, waiver or
consent shall, unless in writing and signed by all the
Lenders and the
Issuing Bank to do any of the following: (i) waive any
of the conditions
specified in Section 4.01 or 4.02, (ii) increase
the Commitments or
contractual obligations of the Lenders or the Issuing Bank
to Borrower under
this Agreement, (iii) reduce the principal of, or
interest on, the Notes or
any fees hereunder, (iv) postpone any date fixed for the
payment in respect
of principal of, or interest on, the Notes or any fees
hereunder, (v) change
the percentage of the Commitments or of the aggregate
unpaid principal amount
of the Notes, or the number or identity of Lenders which
shall be required
for the Lenders or any of them to take any action
hereunder, (vi) agree to
release any Guarantor from its obligations under any
Guaranty Agreement,
(vii) modify the definition of "Required Lenders," or
(viii) modify this
Section 10.02. Notwithstanding the foregoing, no
amendment, waiver or
consent shall, unless in writing and signed by the Agent and
the Co-Agent, in
addition to the Lenders and the Issuing Bank required
hereinabove to take
such action, affect the rights or duties of the Agent under
this Agreement or
under any other Credit Document.
Section X.3. No Waiver; Remedies
Cumulative. No failure or
delay on the part of the Agent, the Co-Agent, any Lender,
the Issuing Bank or
any holder of a Note in exercising any right or remedy
hereunder or under any
other Credit Document, and no course of dealing between
any Credit Party and
the Agent, any Lender, the Issuing Bank or the holder
of any Note shall
operate as a waiver thereof, nor shall any single or
partial exercise of any
right or remedy hereunder or under any other Credit
Document preclude any
other or further exercise thereof or the exercise of
any other right or
remedy hereunder or thereunder. The rights and remedies
herein expressly
provided are cumulative and not exclusive of any rights or
remedies which the
Agent, the Co-Agent, any Lender, the Issuing Bank or the
holder of any Note
would otherwise have. No notice to or demand on any
Credit Party not
required hereunder or under any other Credit Document
in any case shall
entitle any Credit Party to any other or further notice or
demand in similar
or other circumstances or constitute a waiver of the rights
of the Agent, the
Co-Agent, the Lenders, the Issuing Bank or the holder
of any Note to any
other or further action in any circumstances without notice
or demand.
Section X.4. Payment of Expenses, Etc.
Borrower shall:
(i) whether or not the transactions
hereby contemplated
are consummated, pay all reasonable, out-of-
pocket costs and
expenses of the Agent in the administration
(both before and
after the execution hereof and including
reasonable expenses
actually incurred relating to advice of
counsel as to the
rights and duties of the Agent, the Co-Agent,
the Issuing Bank
and the Lenders with respect thereto) of,
and in connection
with the preparation, execution and delivery
of, preservation
of rights under, enforcement of, and, after
a Default or Event
of Default, refinancing, renegotiation or
restructuring of,
this Agreement and the other Credit
Documents and the
documents and instruments referred to
therein, and any
amendment, waiver or consent relating
thereto (including,
without limitation, the reasonable fees
actually incurred and
disbursements of counsel for the Agent),
and in the case of
enforcement of this Agreement or any Credit
Document after an
Event of Default, all such reasonable, out-
of-pocket costs and
expenses (including, without limitation,
the reasonable fees
actually incurred and reasonable
disbursements and changes of
counsel), for any of the Lenders or the
Issuing Bank;
(ii) subject, in the case of
certain Taxes, to the
applicable provisions of Section 3.07(b),
pay and hold each of
the Lenders and the Issuing Bank harmless
from and against any
and all present and future stamp,
documentary, and other
similar Taxes with respect to this
Agreement, the Notes and
any other Credit Documents, any collateral
described therein,
or any payments due thereunder, and save
the Issuing Bank and
each Lender harmless from and against any
and all liabilities
with respect to or resulting from any delay
or omission to pay
such Taxes; and
(iii) indemnify the Agent, the Co-Agent,
the Issuing Bank
and each Lender, and their respective
officers, directors,
employees, representatives and agents from,
and hold each of
them harmless against, any and all costs,
losses, liabilities,
claims, damages or expenses incurred by any
of them (whether
or not any of them is designated a
party thereto) (an
"Indemnitee") arising out of or by
reason of any
investigation, litigation or other
proceeding related to any
actual or proposed use of the proceeds of
any of the Loans or
any Credit Party's entering into and
performing of the
Agreement, the Notes, or the other
Credit Documents,
including, without limitation, the
reasonable fees actually
incurred and disbursements of counsel
incurred in connection
with any such investigation, litigation or
other proceeding;
provided, however, Borrower shall not
be obligated to
indemnify any Indemnitee for any of the
foregoing arising out
of such Indemnitee's gross negligence or
willful misconduct;
(iv) without limiting the
indemnities set forth in
subsection (iii) above, indemnify each
Indemnitee for any and
all expenses and costs (including
without limitation,
remedial, removal, response,
abatement, cleanup,
investigative, closure and monitoring
costs), losses, claims
(including claims for contribution or
indemnity and including
the cost of investigating or defending any
claim and whether
or not such claim is ultimately defeated,
and whether such
claim arose before, during or after
any Credit Party's
ownership, operation, possession or
control of its business,
property or facilities or before, on or
after the date
hereof, and including also any amounts paid
incidental to any
compromise or settlement by the Indemnitee
or Indemnitees to
the holders of any such claim),
lawsuits, liabilities,
obligations, actions, judgments,
suits, disbursements,
encumbrances, liens, damages (including
without limitation
damages for contamination or
destruction of natural
resources), penalties and fines of any
kind or nature
whatsoever (including without limitation
in all cases the
reasonable fees actually incurred,
other charges and
disbursements of counsel in connection
therewith) incurred,
suffered or sustained by that Indemnitee
based upon, arising
under or relating to Environmental Laws
based on, arising out
of or relating to in whole or in part,
the existence or
exercise of any rights or remedies by any
Indemnitee under
this Agreement, any other Credit
Document or any related
documents.
If and to the extent that the obligations of
Borrower under this
Section 10.04 are unenforceable for any reason,
Borrower hereby agrees
to make the maximum contribution to the payment and
satisfaction of
such obligations which is permissible under applicable
law.
Section X.5. Right of Setoff. In addition
to and not in
limitation of all rights of offset that any Lender, the
Issuing Bank or other
holder of a Note may have under applicable law, each
Lender, Issuing Bank or
other holder of a Note shall, upon the occurrence of any
Event of Default and
whether or not such Lender, Issuing Bank or such holder
has made any demand
or any Credit Party's obligations have matured, have the
right to appropriate
and apply to the payment of any Credit Party's
obligations hereunder and
under the other Credit Documents, all deposits of any
Credit Party (general
or special, time or demand, provisional or final) then or
thereafter held by
and other indebtedness or property then or thereafter
owing by such Lender,
the Issuing Bank or other holder to any Credit Party,
whether or not related
to this Agreement or any transaction hereunder.
Section X.6. Benefit of Agreement;
Assignments; Participations.
(a) This Agreement shall be binding upon
and inure to the
benefit of and be enforceable by the respective
successors and assigns
of the parties hereto, provided that Borrower
may not assign or
transfer any of its interest hereunder without
the prior written
consent of the Lenders and the Issuing Bank.
(b) Any Lender may make, carry or transfer
Loans at, to or for
the account of, any of its branch offices or the
office of an Affiliate
of such Lender.
(c) Each Lender and may assign all or a
portion of its
interests, rights and obligations under this
Agreement (including all
or a portion of any of its Commitments and the Loans
at the time owing
to it and the Notes held by it) to any Eligible
Assignee; provided,
however, that (i) the Borrower and the Agent each
must give its prior
written consent to such assignment (which
consent shall not be
unreasonably withheld or delayed) unless such
assignment is an
Affiliate of the assigning Lender or unless (in the
case of Borrower's
consent) an Event of Default has occurred and is
continuing hereunder,
(ii) the amount of the Commitments of the assigning
Lender subject to
each assignment (determined as of the date
the assignment and
acceptance with respect to such assignment is
delivered to the Agent)
shall not be less than an amount equal to
$10,000,000 or greater
integral multiplies of $1,000,000 unless such
assignment is to an
Affiliate of the assigning Lender or such Lender
is assigning it
commitment in its entirety, (iii) the parties to
each such assignment
shall execute and deliver to the Agent an Assignment
and Acceptance,
together with a Note or Notes subject to such
assignment and, unless
such assignment is to an Affiliate of such Lender,
a processing and
recordation fee of $3,000. Borrower shall not be
responsible for such
processing and recordation fee or any costs or
expenses incurred by any
Lender or the Agent in connection with such
assignment. From and after
the effective date specified in each Assignment and
Acceptance, which
effective date shall be at least five (5) Business
Days after the
execution thereof, the assignee thereunder shall be
a party hereto and
to the extent of the interest assigned by
such Assignment and
Acceptance, have the rights and obligations of a
Lender under this
Agreement. Within five (5) Business Days after
receipt of the notice
and the Assignment and Acceptance, Borrower shall
execute and deliver
to the Agent, in exchange for the surrendered Note or
Notes, a new Note
or Notes to the order of such assignee in a principal
amount equal to
the applicable Commitments assumed by it pursuant
to such Assignment
and Acceptance and new Note or Notes to the
assigning Lender in the
amount of its retained Commitment or Commitments.
Such new Note or
Notes shall be in an aggregate principal amount
equal to the aggregate
principal amount of such surrendered Note or Notes,
shall be dated the
date of the surrendered Note or Notes which they
replace, and shall
otherwise be in substantially the form attached
hereto.
(d) Each Lender may, without the consent
of Borrower or the
Agent, sell participations to one or more banks or
other entities in
all or a portion of its rights and obligations
under this Agreement
(including all or a portion of its Commitments in the
Loans owing to it
and the Notes held by it), provided, however, that
(i) such Lender's
obligations under this Agreement shall remain
unchanged, (ii) such
Lender shall remain solely responsible to the other
parties hereto for
the performance of such obligations, (iii) the
participating bank or
other entity shall not be entitled to the benefit
(except through its
selling Lender) of the cost protection provisions
contained in Article
III of this Agreement, and (iv) Borrower and the
Agent and other
Lenders shall continue to deal solely and directly
with each Lender in
connection with such Lender's rights and
obligations under this
Agreement and the other Credit Documents, and such
Lender shall retain
the sole right to enforce the obligations of
Borrower relating to the
Loans and to approve any amendment, modification
or waiver of any
provisions of this Agreement. Each Lender shall
promptly notify in
writing the Agent and the Borrower of any sale
of a participation
hereunder.
(e) Any Lender or participant may, in
connection with the
assignment or participation or proposed assignment
or participation,
pursuant to this Section, disclose to the assignee
or participant or
proposed assignee or participant any information
relating to Borrower
or the other Consolidated Companies furnished to
such Lender by or on
behalf of Borrower or any other Consolidated
Company. With respect to
any disclosure of confidential, non-public,
proprietary information,
such proposed assignee or participant shall
agree to use the
information only for the purpose of making any
necessary credit
judgments with respect to this credit facility
and not to use the
information in any manner prohibited by any law,
including without
limitation, the securities laws of the United
States. The proposed
participant or assignee shall agree not to
disclose any of such
information except (i) to directors, employees,
auditors or counsel to
whom it is necessary to show such information,
each of whom shall be
informed of the confidential nature of the
information, (ii) in any
statement or testimony pursuant to a subpoena or
order by any court,
governmental body or other agency asserting
jurisdiction over such
entity, or as otherwise required by law (provided
prior notice is given
to Borrower and the Agent unless otherwise
prohibited by the subpoena,
order or law), and (iii) upon the request or demand
of any regulatory
agency or authority with proper jurisdiction. The
proposed participant
or assignee shall further agree to return all
documents or other
written material and copies thereof received from
any Lender, the
Agent, the Co-Agent or Borrower relating to
such confidential
information unless otherwise properly disposed of by
such entity.
(f) Any Lender may at any time assign all or
any portion of its
rights in this Agreement and the Notes issued
to it to a Federal
Reserve Bank; provided that no such assignment shall
release the Lender
from any of its obligations hereunder.
(g) If (i) any Taxes referred to in Section
3.07(b) have been
levied or imposed so as to require withholdings and
reductions by the
Borrower and payment by the Borrower of
additional amounts to any
Lender as a result thereof or any Lender shall make
demand for payment
of any material additional amounts as compensation
for increased cost
pursuant to Section 3.10, then and in such event,
upon request from the
Borrower delivered to such Lender, such Lender
shall assign, in
accordance with the provisions of Section 10.06(c),
all of its rights
and obligations under this Agreement and the other
Credit Documents to
an Eligible Assignee selected by the Borrower and
consented to by the
Agent in consideration for the payment by such
assignee to the Lender
of the principal of and interest on the outstanding
Loans accrued to
the date of such assignment, the assumption
of such Lender's
Commitments hereunder, together with any and all
other amounts owing to
such Lender under any provisions of this Agreement
or the other Credit
Documents accrued to the date of such assignment.
Section X.7. Governing Law; Submission to
Jurisdiction.
(a) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE
PARTIES HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN
ACCORDANCE WITH
AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAW
PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS
AGREEMENT, THE NOTES OR ANY OTHER CREDIT DOCUMENT MAY
BE BROUGHT IN THE
SUPERIOR COURT OF FULTON COUNTY, GEORGIA, OR ANY OTHER
COURT OF THE STATE OF
GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE
NORTHERN DISTRICT OF
GEORGIA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
BORROWER HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND
BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) BORROWER HEREBY IRREVOCABLY DESIGNATES
CSC CORPORATION
SERVICES, ATLANTA, GEORGIA, AS ITS DESIGNEE, APPOINTEE
AND LOCAL AGENT TO
RECEIVE, FOR AND ON BEHALF OF BORROWER, SERVICE OF PROCESS
IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS
AGREEMENT OR THE NOTES OR ANY DOCUMENT RELATED THERETO.
IT IS UNDERSTOOD
THAT A COPY OF SUCH PROCESS SERVED ON SUCH LOCAL AGENT
WILL BE PROMPTLY
FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF SUCH
PROCESS BY MAIL TO
BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, BUT THE
FAILURE OF BORROWER TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS. BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
OR CERTIFIED MAIL,
POSTAGE PREPAID, TO BORROWER AT ITS SAID ADDRESS, SUCH
SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right
of the Agent, the
Co-Agent, the Issuing Bank any Lender, any holder of a
Note or any Credit
Party to serve process in any other manner permitted by
law or to commence
legal proceedings or otherwise proceed against
Borrower in any other
jurisdiction.
Section X.8. Independent Nature of
Lenders' Rights. The
amounts payable at any time hereunder to each Lender shall
be a separate and
independent debt, and each Lender shall be entitled to
protect and enforce
its rights pursuant to this Agreement and its Notes,
and it shall not be
necessary for any other Lender to be joined as an
additional party in any
proceeding for such purpose.
Section X.9. Counterparts. This Agreement
may be executed in
any number of counterparts and by the different parties
hereto on separate
counterparts, each of which when so executed and
delivered shall be an
original, but all of which shall together constitute
one and the same
instrument.
Section X.10. Effectiveness; Termination of
Commitments;
Survival.
(a) This Agreement shall become effective on
the date on which
all of the parties hereto shall have signed a copy
hereof (whether the
same or different copies) and shall have
delivered the same to the
Agent or, in the case of the Lenders or the Issuing
Bank, shall have
given to the Agent written or telex notice (actually
received) that the
same has been signed and mailed to them; provided
that, the Lenders
have no obligation to make a Loan and the
Issuing Bank has no
obligation is issue Letters of Credit hereunder
until the Closing
Date. In the event that the Closing Date does not
occur by July 2,
1998 , the Commitments and this Agreement shall
terminate, subject to
the survival of the Sections referenced below.
(b) The obligations of Borrower under
Sections 3.07(b), 3.10,
3.12, 3.13, 3.16 and 10.04 hereof shall survive the
payment in full of
the Notes after the Maturity Date. All
representations and warranties
made herein, in the certificates, reports, notices,
and other documents
delivered pursuant to this Agreement shall survive
the execution and
delivery of this Agreement, the other Credit
Documents, and such other
agreements and documents, the making of the Loans
hereunder, and the
execution and delivery of the Notes.
Section X.11. Severability. In case any
provision in or
obligation under this Agreement or the other Credit
Documents shall be
invalid, illegal or unenforceable, in whole or in part, in
any jurisdiction,
the validity, legality and enforceability of the
remaining provisions or
obligations, or of such provision or obligation in any
other jurisdiction,
shall not in any way be affected or impaired thereby.
Section X.12. Independence of Covenants.
All covenants
hereunder shall be given independent effect so that if a
particular action or
condition is not permitted by any of such covenants, the
fact that it would
be permitted by an exception to, or be otherwise within
the limitation of,
another covenant, shall not avoid the occurrence of a
Default or an Event of
Default if such action is taken or condition exists.
Section X.13. Change in Accounting
Principles, Fiscal Year or
Tax Laws. If (i) any preparation of the financial
statements referred to in
Section 6.07 hereafter occasioned by the promulgation of
rules, regulations,
pronouncements and opinions by or required by the
Financial Accounting
Standards Board or the American Institute of Certified
Public Accounts (or
successors thereto or agencies with similar functions)
result in a material
change in the method of calculation of financial
covenants, standards or
terms found in this Agreement, (ii) there is any change in
Borrower's fiscal
quarter or Fiscal Year, or (iii) there is a material
change in federal tax
laws which materially affects any of the Consolidated
Companies' ability to
comply with the financial covenants, standards or
terms found in this
Agreement, Borrower and the Required Lenders agree to enter
into negotiations
in order to amend such provisions so as to equitably
reflect such changes
with the desired result that the criteria for
evaluating any of the
Consolidated Companies' financial condition shall be the
same after such
changes as if such changes had not been made. Unless
and until such
provisions have been so amended, the provisions of this
Agreement shall
govern.
Section X.14. Headings Descriptive; Entire
Agreement. The
headings of the several sections and subsections of
this Agreement are
inserted for convenience only and shall not in any way
affect the meaning or
construction of any provision of this Agreement. This
Agreement, the other
Credit Documents, and the agreements and documents
required to be delivered
pursuant to the terms of this Agreement constitute the
entire agreement among
the parties hereto and thereto regarding the subject
matters hereof and
thereof and supersede all prior agreements,
representations and
understandings related to such subject matters.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement
to be duly executed and delivered in Atlanta,
Georgia, by their duly
authorized officers as of the day and year first above
written.
Address for Notices: MORRISON HEALTH
CARE, INC.
1955 Lake Park Drive
Atlanta, Georgia 30080-8855 By:/s/ K.
W.Engwall
Attn: K. Wyatt Engwall Name: K. Wyatt
Engwall
Senior Vice President, Finance and Title: Senior Vice
President, Finance
Assistant Secretary and
Assistant Secretary
Telecopy: (770) 437-3349
[CORPORATE
SEAL]
[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT
AGREEMENT]
Address for Notices: SUNTRUST BANK,
ATLANTA,
As Agent
25 Park Place, N.E.
23rd Floor
Atlanta, Georgia 30303 By:/s/ Daniel S.
Komitor
Attention: Dan Komitor Name: Daniel S.
Komitor
Title: Vice
President
Telecopy No.: (404) 588-8833
By:/s/ R.Michael
Dunlap
Name: R. Michael
Dunlap
Title: Vice
President
Payment Office:
25 Park Place, N.E.
23rd Floor
Atlanta, Georgia 30303
[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT
AGREEMENT]
Address for Notices:
WACHOVIA BANK, N.A., as
Co-Agent
191 Peachtree Street, N.E.
29th Floor
Atlanta, Georgia 30303
By:/s/ John C. Canty
Name: John C. Canty
Title: Banking Officer
Attention: Mr. John Canty
Telecopy: (404) 332-5016
[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT
AGREEMENT]
Address for Notices: SUNTRUST BANK,
ATLANTA
25 Park Place, N.E.
23rd Floor
Atlanta, Georgia 30303 By:/s/ Daniel S.
Komitor
Attention: Dan Komitor Name: Daniel S.
Komitor
Title: Vice
President
Telecopy No.: (404)588-8833
By:/s/R. Michael
Dunlap
Name: R. Michael
Dunlap
Title:Vice
President
[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT
AGREEMENT]
Address for Notices:
NATIONSBANK, N.A.
600 Peachtree Street, N.E.
19th Floor
Atlanta, Georgia 30308 By:/s/Melinda M.
Bergbom
Name: Melinda M.
Bergbom
Title:Senior Vice
President
Attention: Melinda Bergbom
Telecopy: (404) 407-6343
[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT
AGREEMENT]
Address for Notices:
WACHOVIA BANK, N.A.
191 Peachtree Street, N.E.
29th Floor
Atlanta, Georgia 30303
By:/s/ John C.Canty
Name: John C. Canty
Title: Banking Officer
Attention: Mr. John Canty
Telecopy: (404) 332-5016
[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT
AGREEMENT]
Address for Notices:
FIRST UNION NATIONAL
BANK
First Union National Bank
999 Peachtree Street
12th Floor
Atlanta, Georgia 30309
By:/s/ Kimberly Daniel
Name: Kimberly Daniel
Title: Corporate Banking
Officer
Assistant
Secretary
Attention: Ms. Kimberly Daniel
Telecopy:
[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT
AGREEMENT]
MHCI SCHEDULES
MHCI SCHEDULES
Schedule 5.01
Organization and Ownership of Subsidiaries
1. The following corporations are wholly-owned
subsidiaries of Borrower:
State of
Corporation
Incorporation
------------------------------------------------------
- ----------------
Custom Management Corporation
Pennsylvania
John C. Metz & Associates, Inc.
Pennsylvania
Culinary Solutions, Inc.
Georgia
Drake Management Services, Inc.
Arizona
2. The following are wholly-owned subsidiaries of Custom
Management
Corporation:
Place of
Corporation
Incorporation
------------------------------------------------------
- ----------------
Custom Management Corporation of
Pennsylvania
Pennsylvania
Morrison Custom Management Corporation
Pennsylvania
of Pennsylvania
3. Borrower owns a 49% interest in Marcorp Diversified,
Inc., a joint
venture between the Borrower and Harry Miller, who
beneficially owns
the remaining 51% interest.
Schedule 5.05
Certain Pending and Threatened Litigation
A. Borrower has assumed the liability for the following
claims from
Morrison Restaurants Inc. and has indemnified Morrison
Restaurants Inc. with
respect to the following claims pursuant to the Sharing
Agreements:
1. The EEOC charge brought by Karol Suskey alleges
sex harassment by
the CEO of Jackson Memorial Hospital and alleges
that Morrison
failed to take appropriate steps to prevent the
harassment.
2. A claim of race discrimination has been brought
by five employees
of Fort Sanders Regional Medical Center in
Knoxville, Tennessee.
B. Please see the attached schedule of pending or
threatened litigation,
claims and assessments against the Borrower.
PENDING OR THREATENED LITIGATION, CLAIMS AND ASSESSMENTS
AGAINST MORRISON
HEALTH CARE, INC.
A. Suskey, Karol v. Morrison Restaurants Inc. et al. A
lawsuit was filed
by an employee, Karol Suskey, against both the Company
and our client,
Jackson Memorial Hospital and its CEO, alleging sexual
harassment against
our client and alleging further that Morrison failed to
take appropriate
steps to prevent the harassment and retaliated against
plaintiff. The
Company has investigated the matter and believes the
claims are not
valid. Plaintiff has filed an amended complaint.
Defendants filed
motions to dismiss which were denied. Discovery will be
suspended pending
appeal of co-defendants to the denial of motions to
dismiss. The Company
intends to vigorously defend itself against these claims.
B. Burems, Cozart, Dupree, Robinson & Stepherson v.
Morrison Restaurants
Inc. A claim of race discrimination and retaliation was
made to the State
of Tennessee Human Rights Commission by five employees of
Fort Sanders
Regional Medical Center in Knoxville, Tennessee. The
Commission dismissed
the claims and issued Right to Sue letters. Suit has
been filed and an
answer by the Company has been made. Discovery is in
progress.
Plaintiffs were deposed on July 2, 1997. Plaintiffs have
offered to
settle for $20,000. Discovery is continuing. The
Company intends to
vigorously defend this claim.
C. Bines, Melvin v. Realty South Investors, Inc. and
Morrison Health
Care. This suit was filed in U.S. District Court,
Southern District of
Florida and Morrison first received notice of its
existence on April 23,
1997 (the suit was originally filed in December, 1996
with misnamed
defendants that were never properly served). An answer
has been filed.
Discovery is continuing. The plaintiff was formerly
employed by
Fountainview Retirement Center, West Palm Beach, Florida,
a former account
of Morrison, and alleges race discrimination by
Fountainview and Morrison
under federal and Florida law. The Company has retained
outside counsel.
The Company does not believe the claim has any merit and
intends to
vigorously defend itself against it.
D. Marcillac v. Morrison Restaurants, Inc. - A
management employee filed
a disability discrimination charge with the California
Fair Employment and
Housing Commission, San Francisco, California related to
a worker's
compensation injury. The Company believes there is no
merit to this
claim. It filed a position statement with the Commission
on May 28,
1996. The California Commission closed its investigation
and case on
March 3, 1997. Marcillac filed an EEOC charge on March
21, 1997, but then
filed a lawsuit on June 27, 1997 (served July 9, 1997)
alleging
disability, discrimination and contract breach. On May
6, 1998, the Court
granted the Company's Motion for Summary Judgment.
Absent appeal, this
matter will be concluded.
E. Morrison Health Care, Inc. v. Efthymios Hristopoulos.
Morrison filed
suit in Circuit Court, Pinellas County, Florida, for
recovery of unpaid
rent and right to possession against Efthymios
Hristopoulos ("EH"), a
tenant of Morrison's leased property located in St.
Petersburg, Florida.
On May 6, 1997, EH submitted an Answer and counter-
claimed against
Morrison, alleging breach of contract and intentional
interference with a
business relationship. At this time, the Company
believes that its claims
against EH have merit, that EH's counter-claims are
without merit, and
intends to vigorously protect and pursue its interests in
this matter.
The parties shortly may enter into an agreement whereby
EH will purchase
the property which will effectively resolve these
matters.
F. Kramer, William L. v. Morrison Health Care, Inc. A
former employee was
terminated in August, 1997. An EEOC Charge was filed and
a Right to Sue
Letter requested on December 22, 1997. On June 4, 1998,
the Company
received a suit alleging wrongful discharge, breach of
implied contract,
breach of implied covenant of good faith and fair
dealing, age
discrimination and tortious termination in violation of
public policy.
The suit is in its early stages, but the Company believes
this claim is
without merit and intends to vigorously defend these
claims.
G. State of Tennessee Tax Assessment. Morrison received
an audit report
from the State of Tennessee Department of Revenue issuing
a estimated
sales tax assessment in the original amount of
approximately $3.29
million, based primarily upon Morrison's use of client-
provided capital
assets and supply expenses. The sales tax application to
client-provided
capital assets and expenses has not been applied to
Morrison in the past.
Morrison believes at this time that the estimated
assessment amount for
client-provided assets and expenses is arbitrary and for
the most part
based upon estimates of the value of capital assets and
expenses of an
unrelated hospital audit. Further, the Company believes
that the language
in most, if not all, of the contracts for the applicable
accounts provides
that the clients are responsible for a material portion
of any tax which
may ultimately be paid as a result of this assessment.
The State thus far
has reduced the assessment amount to $995,983. In order
to protect its
interest, the Company filed suit contesting the
assessment in January,
1998. Morrison intends to vigorously defend itself
against this claim and
has engaged outside counsel.
H. State of Florida Tax Assessment. The Company received
on August 18,
1997, an assessment from the State of Florida in the
amount of $109, 000.
The Company intends to vigorously protect its interest in
this matter.
Outside counsel has filed the appropriate protest.
I. Trannon, Comminita v. Morrison's Cafeterias, et al.,
Circuit Court,
Jefferson County, Alabama. A workers' compensation
benefit complaint was
forwarded to GAB for handling. An amended complaint was
filed alleging
wrongful termination. The workers' compensation claim
was subsequently
settled. The Plaintiff was granted a partial summary
judgment related to
a defense by the Company related to issues resolved in a
hearing held by
the State of Alabama Department of Industrial Relations.
Plaintiff's
counsel has stated he is unwilling to reconvene mediation
unless the
Company is willing to come to the table with at least
$50,000. The
Company believes the claim to be without merit and
intends to vigorously
defend itself.
J. Crawley v. Morrison's Health Care, Inc. A former
management employee
filed a race and sex discrimination charge with the EEOC
on April 25,
1996, arising out of removal from her assignment at
Metropolitan Hospital,
Richmond, Virginia. The Company has no reason to believe
that the charge
has any merit, and intends to vigorously defend the
claim. A response was
sent to the EEOC on April 28, 1998.
K. Theodore, Pierre v. Morrison Health Care, Inc. A
former employee was
terminated in November, 1997. A charge was filed for age
and disability
discrimination with the Ohio Civil Rights Commission and
the EEOC on
December 23, 1997 and a Notice of Right to Sue issued on
March 31, 1998.
An Amended Complaint (original complaint never served)
was filed May 12,
1998. The Company believes this claim is without merit
and intends to
vigorously defend itself.
L. Johnson, Robert v. Morrison Health Care, Inc. The
Company received
notice of this disability discrimination charge on June
18, 1997. It was
filed with the EEOC and the South Carolina Human Affairs
Commission on
June 10, 1997 by an employee in Columbia, South Carolina.
The Company
responded to this allegation and a Determination Letter
of No Reasonable
Cause Found was issued in our favor on February 2, 1998.
M. Metts, Calvin v. Morrison Health Care. This is an age
discrimination
charge filed on May 23, 1997, with the Jacksonville,
Florida office of the
Equal Employment Opportunity Commission (EEOC). Metts'
employment as an
Assistant Manager terminated in April, 1997, pursuant to
a reduction in
personnel at Methodist Hospital, Jacksonville, Florida.
The Company has
no reason to believe that the charge has merit, and
intends to vigorously
defend the charge.
N. Patterson, Uhra v. Morrison Health Care, Inc. This is
a charge of
disability discrimination filed in April, 1997 with the
EEOC and the City
of St. Louis Civil Rights Enforcement Agency (SLCREA) in
St. Louis,
Missouri. The Company received notice of
investigation/processing by the
SLCREA on May 5, 1997. Patterson is a former cashier
whose employment
terminated in January, 1997. At present, Company does
not believe this
claim has merit and intends to vigorously defend against
it. The
Company's response to the claim was filed on December 24,
1997.
O. Odom, Christopher v. Covenant Medical Center, Morrison
Restaurants Inc.
and Morrison-Crothall. A Notice of Substantial Evidence
& Initiation of
Conciliation was very recently received by the Company in
December, 1996
from the Illinois Human Rights Commission. This involves
a claim by
another employer's former employee alleging race
discrimination by
Covenant Medical Center, Morrison and the employer
company. Morrison
intends to vigorously defend this claim.
P. Winston, Keith L. v. Morrison's Health Care, Inc.
This is a race
discrimination charge filed on May 6, 1997 with the
Tennessee Human Rights
Commission. The Company received notice of this charge
on June 30, 1997
via letter dated June 27, 1997. It was filed by a former
assistant
manager of Morrison at Methodist Medical Center, Oak
Ridge, TN. The
Company has begun its investigation of the claim, is not
aware of any
reason to suggest that the claim has merit, and intends
vigorously defend
against it.
Q. Robinson, Sherrie v. Morrison Health Care, Inc. The
Company received
in November, 1997 a copy of a charge previously filed in
November, 1995,
alleging race, sex and color discrimination. Since the
allegations may
reference circumstances in the Burems, et al. suit
referenced above, this
claim has been sent to outside counsel in the Burems suit
for handling.
The Company intends to vigorously defend itself against
these claims.
R. Petillo, Michael O. v. Morrison Health Care, Inc. The
Company received
notice of a complaint being referred to the EEOC on
January 6, 1998
alleging sex and national origin discrimination. The
Company's
investigation was begun. On April 24, 1998, the Company
received a Notice
of Right to Sue. The Complainant has ninety (90) days
from receipt of the
Right to Sue to file suit. The Company believes the
claims to be without
merit and intends to vigorously defend itself against
these claims.
S. Cole, Arthur v. Morrison Health Care, Inc. The
Company received on
March 6, 1998 a complaint with the Ohio Civil Rights
Commissions alleging
race and age discrimination. The Company's investigation
is in the early
stages but the Company believes the claims are without
merit and it
intends to vigorously defend itself against these claims.
T. Conner, Demetruis J. v. Morrison Health Care, Inc. In
April, 1998, the
Company received a charge of discrimination filed with
the EEOC alleging
sex discrimination. The Company has investigated the
matter and believes
the allegations are without merit. A response to the
charge was sent by
the Company on May 22, 1998. The Company intends to
vigorously defend
itself against this claim.
U. Onyeberechi, Francisca v. Morrison Health Care, Inc.
This is a
national origin discrimination charge filed in May, 1997
with the EEOC in
Washington, D.C. Onyeberechi was an assistant manager at
Stoddard Baptist
Nursing Home in Washington, D.C. whose employment was
terminated effective
December, 1997. The Company submitted a response to the
EEOC on December
8, 1997, and has not been notified of further action.
The Company does
not believe that the charge has merit and intends to
continue to
vigorously defend against it.
V. McIntosh, Carrie Ann v. Morrison Health Care, Inc.
This is a race
discrimination complaint filed in December, 1996, with
the New York State
Division of Human Rights (through the Suffolk County
Human Rights
Commission). McIntosh was an assistant manager at
University Hospital
(SUNY), Stony Brook, New York, who was terminated in May,
1996. The
Company has begun investigation of this claim, retained
outside counsel to
assist in its response and defense, and has informed the
Commission of
this. At this early stage of the investigation, it is
too early to
determine the merit or value of the claim, but the
Company intends to
vigorously defend against it.
W. Ladson, Avemaria v. Morrison Health Care, Inc. This
is a sex and
disability discrimination complaint filed with the
District of Columbia
Department of Human Rights and Minority Business
Development in July, 1997
and received by the Company in September, 1997. Ladson
was an hourly
employee at Lisner Louise Nursing Home, Washington, D.C.,
and her claims
relate to an alleged on the job slip and fall type
injury. The Company
has begun investigating the claim, believes it is without
merit and
intends to vigorously defend its interests. A mediation
meeting took
place on March 13, 1998, and the Company may attempt to
settle for
nuisance value.
X. Hall, Barbara v. Morrison Health Care, Inc. This is a
claim of sex
discrimination and retaliation for a complaint of
discrimination filed
with the New York State Division of Human Rights in
March, 1998, by a
former employee at University Hospital (SUNY), Stony
Brook, New York. The
Company has begun investigating this claim and has
enlisted the assistance
of outside counsel. The Company cannot yet determine
with certainty as to
any potential merit of value, but it intends to
vigorously defend against
it.
Y. Shaw, Harold v. Morrison Heathcare Services. This is
a race and sex
discrimination claim filed in March, 1997 with the EEOC
in Atlanta,
Georgia. Shaw was an applicant from a placement agency
that was not
selected for a clerk position in the corporate
headquarters in Smyrna,
Georgia. The Company has conducted its initial
investigation and does not
believe the claim has merit. The Company plans to submit
a response to
the EEOC before the end of June, 1998, and intends to
vigorously defend
itself.
Z. Pla, Rosa Maria v. Morrison Health Service. The
Company received notice
of this age and national origin discrimination charge on
June 1, 1998. It
was filed with the City of Tampa Department of Community
Affairs, Office
of Human Rights/ Community Services (and EEOC) in May,
1998 by an employee
in Tampa, Florida. The Company has begun investigating,
intends to
respond to this allegation and vigorously protect its
interests, but at
this time cannot determine the merits or potential
liability of the claims
since all relevant facts are not yet known.
Section 5.09(a)
Environmental Compliance
NONE
Section 5.09(b)
Environmental Notices
NONE
Schedule 5.09(c)
Environmental Permits
NONE
Schedule 5.11
No Default
None, other than alleged defaults which are the
subject of pending or
threatened litigation disclosed in Schedule 5.05.
Schedule 5.12
Burdensome Restrictions
NONE
Schedule 5.13
Tax Filings and Payments
1. Borrower periodically receives notices of assessment
from the IRS and
other taxing authorities, the aggregate amount of which at
any time is
immaterial. These notices generally relate to
misunderstandings regarding
Borrower's tax situation, payments which have crossed in the
mail with
notices, and disputes which have been or are in the process
of being resolved.
2. The Borrower owes the state of Arkansas $350.42 for
franchise taxes due
for years 1997 and 1998.
3. See also Schedule 5.05 - Certain Pending and
Threatened Litigation.
Section 5.14
Material Subsidiaries
None
Section 5.16
Employee Benefit Matters
1. Title IV Plans. The Consolidated Companies and its
ERISA Affiliates
maintain or contribute to the following Plans subject
to Title IV of
ERISA:
a. Morrison Restaurants Inc. Retirement Plan
b. Local 1115 District Council Pension Fund
2. Funding.
a. The Morrison Inc. Retirement Plan (the
"Retirement Plan"), if
terminated as of June 6, 1998, would have had an
amount of
unfunded benefit liabilities equal to
approximately
$____________, projected using a ___% interest
rate and the
GATT-required mortality tables.
b. As of June 6, 1998, Morrison Health Care has
accrued $1,051,246
with respect to post-retirement medical
expenses.
Section 5.17
Patents, Trademarks, Licenses, and
Other Intellectual Property Matters
The National Livestock and Meat Board, a/k/a The Meat Board,
The American
Meat Institute and the Food Marketing Institute opposed
Borrower's
application for federal registration of the mark NUTRI-
FACTS, which Borrower
uses for certain computer software programs. Morrison
entered into a license
agreement with those parties under which Borrower may
continue to use the
mark NUTRI-FACTS, and Morrison has filed an abandonment of
the subject
trademark application.
22682295.W51
Section 5.18
Ownership of Properties
NONE
Section 5.19
Labor and Employment Matters
NONE
Section 5.22
Dividend Restrictions
NONE
Schedule 7.01
Existing Indebtedness
As of May 31, 1998
(In
thousands)
Revolving Credit Loans under
Original Credit Facility $
5,000/1
Term Loans under Original
Credit Facility
31,000/1
------
- ----------
$
36,000
================
The Borrower has entered into the Sharing
Agreements with MFCI and RTI
providing for the assumptions of liabilities and cross-
indemnities designed
to allocate, generally, among these three
companies, financial
responsibility for liabilities arising out of or
in connection with
business activities prior to Distribution.
/1To be refinanced by initial borrowing under this Agreement
on the Closing
Date.
Schedule 7.02
Existing Liens
NONE
EXHIBIT A
AMENDED AND RESTATED REVOLVING CREDIT NOTE
July 2, 1998
$15,000,000.00
Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, MORRISON
HEALTH CARE, INC.,
a Georgia corporation ("Borrower"), promises to pay to
the order of FIRST
UNION NATIONAL BANK, a national banking association
("Lender") at the
principal office of the Agent at 25 Park Place, Atlanta,
Georgia 30303, or at
such other place as the holder hereof may designate in
immediately available
funds in lawful money of the United States, the principal
sum of (i) FIFTEEN
MILLION AND NO/100 DOLLARS ($15,000,000.00) or (ii) so
much as shall have
been advanced hereunder as Eurodollar Advances and
Base Rate Advances
pursuant to Article II of the Credit Agreement and
remaining outstanding as
shown on the records of the Agent and the Lender, plus all
accrued and unpaid
interest thereon as set forth in that certain Amended and
Restated Credit
Agreement dated as of July 2, 1998 among the
Borrower, the financial
institutions from time to time a party thereto (the
"Lenders"), SunTrust
Bank, Atlanta, as the issuing bank (the "Issuing
Bank"), SunTrust Bank,
Atlanta, as Agent for the Issuing Bank and the Lenders
(the "Agent"), and
Wachovia Bank, N.A. as Co-Agent for the Issuing Bank and
the Lenders (the
"Co-Agent") (as the same may hereafter be amended,
modified, extended or
supplemented from time to time, the "Agreement"). Interest
shall accrue from
the date hereof up to and through the date on which
all principal and
interest hereunder is paid in full, shall be computed on
the basis of actual
days elapsed in a 360-day year, and shall be calculated
on the outstanding
principal balance hereunder at the interest rates
specified in Section 3.03
of the Agreement.
Principal and interest hereunder shall be
paid on the dates
specified in the Agreement and shall be due and
payable in full on the
Maturity Date (as defined in the Agreement). Any
installment of principal
and, to the extent permitted by law, interest due under
this Amended and
Restated Revolving Credit Note (the "Note") that is not
paid on the due date
therefor whether on the Maturity Date, or resulting from
the acceleration of
maturity upon the occurrence of an Event of Default
(as defined in the
Agreement), shall bear interest from the date due until
payment in full at
the default rate specified in Section 3.03(c) of the
Agreement.
This Note is one of the Notes defined in, and
evidences Advances
incurred pursuant to, the Agreement, to which Agreement
reference is hereby
made for a full and complete description of such terms
and conditions,
including, without limitation, provisions for the
acceleration of the
maturity hereof upon the existence or occurrence of
certain conditions or
events, and the terms of any permitted prepayments
hereof. All capitalized
terms used in this Note shall have the same meanings
as set forth in the
Agreement.
Upon the existence or occurrence of any
Event of Default, the
principal and all accrued interest hereof shall
automatically become, or may
be declared, due and payable in the manner and with the
effect provided in
the Agreement.
Lender shall at all times have a right of set-
off against any
deposit balances of Borrower in the possession of
Lender, and Lender may
apply the same against payment of this Note or any other
indebtedness of
Borrower to Lender arising under the Credit Documents.
The payment of any
indebtedness evidenced by this Note shall not affect the
enforceability of
this Note as to any future, different or other
indebtedness evidenced
hereby. In the event the indebtedness evidenced by this
Note is collected by
legal action or through an attorney-at-law, or in
bankruptcy or other
judicial proceedings, Lender shall be entitled to recover
from Borrower all
costs of collection, including, without limitation,
reasonable attorneys'
fees actually incurred.
Failure or forbearance of Lender to exercise any
right hereunder,
or otherwise granted by the Agreement or by law, shall not
affect or release
the liability of Borrower hereunder, and shall not
constitute a waiver of
such right unless so stated by Lender in writing. This
Note shall be deemed
to be made under, and shall be construed in accordance
with and governed by,
the laws of the State of Georgia (without giving effect
to the conflict of
laws provisions thereof).
DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF
DISHONOR AND PROTEST
ARE HEREBY WAIVED.
Time is of the essence hereunder.
EXECUTED AND DELIVERED under seal of
Borrower by its duly
authorized officers as of the day and year first above
written in Atlanta,
Georgia.
MORRISON HEALTH CARE,
INC.
[CORPORATE SEAL] By: /s/ K. W.
Engwall
Name: K. Wyatt Engwall
Title: Senior Vice
President
Attest: /s/ John E.
Fountain
Name: John E.
Fountain
Title: Secretary
EXHIBIT B
FORM OF AMENDED AND RESTATED SWING LINE
NOTE
July 2, 1998
$10,000,000.00
Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, MORRISON
HEALTH CARE, INC.,
a Georgia corporation ("Borrower"), promises to pay to the
order of SUNTRUST
BANK, ATLANTA, a Georgia banking corporation ("Swing
Line Lender") at its
principal office at 25 Park Place, Atlanta, Georgia
30303, or at such other
place as the holder hereof may designate in immediately
available funds in
lawful money of the United States, the principal sum of
(i) TEN MILLION AND
NO/100 DOLLARS ($10,000,000.00) or (ii) so much as shall
have been advanced
hereunder as Swing Rate Advance pursuant to Article
II of the Credit
Agreement and remaining outstanding as shown on the records
of the Swing Line
Lender, plus all accrued and unpaid interest thereon as
set forth in that
certain Amended and Restated Credit Agreement dated as of
July 2, 1998 among
the Borrower, SunTrust Bank, Atlanta, a banking
corporation organized under
the laws of the State of Georgia, the other banks and
lending institutions
from time to time a party thereto (the "Lenders"), SunTrust
Bank, Atlanta, as
the issuing bank (the "Issuing Bank"), and SunTrust Bank,
Atlanta, as Agent
(the "Agent") for the Issuing Bank and the Lenders, and
Wachovia Bank, N.A.
as Co-Agent (the "Co-Agent") for the Issuing Bank and
the Lenders (as the
same may hereafter be amended, modified, extended or
supplemented from time
to time, the "Agreement"). Interest shall accrue from the
date hereof up to
and through the date on which all principal and interest
hereunder is paid in
full, shall be computed on the basis of actual days
elapsed in a 360-day
year, and shall be calculated on the outstanding principal
balance hereunder
at the interest rates specified in Section 3.03 of the
Agreement.
Principal and interest hereunder shall be
paid on the dates
specified in the Agreement and shall be due and
payable in full on the
Maturity Date (as defined in the Agreement). Any
installment of principal
and, to the extent permitted by law, interest due under
this Amended and
Restated Swing Line Note (the "Note") that is not
paid on the due date
therefor whether on the maturity date, or resulting from
the acceleration of
maturity upon the occurrence of an Event of Default
(as defined in the
Agreement), shall bear interest from the date due until
payment in full at
the default rate specified in Section 3.03(c) of the
Agreement.
This Note evidences the Swing Line Loans made
pursuant to the
terms and conditions of the Agreement, to which Agreement
reference is hereby
made for a full and complete description of such terms
and conditions,
including, without limitation, provisions for the
acceleration of the
maturity hereof upon the existence or occurrence of
certain conditions or
events, and the terms of any permitted prepayments hereof.
This Note is being
delivered by the Borrower and accepted by the Borrower as a
substitution for
that certain Swing Line Note, dated as of March 6, 1996
by the Borrower in
favor of the Swing Line Lender, but not as payment of such
indebtedness or as
a novation with respect thereto. All capitalized terms
used in this Note
shall have the same meanings as set forth in the Agreement.
Upon the existence or occurrence of any
Event of Default, the
principal and all accrued interest hereof shall
automatically become, or may
be declared, due and payable in the manner and with the
effect provided in
the Agreement.
Swing Line Lender shall at all times have a
right of set-off
against any deposit balances of Borrower in the
possession of Swing Line
Lender, and Swing Line Lender may apply the same against
payment of this Note
or any other indebtedness of Borrower to Swing Line Lender
arising under the
Credit Documents. The payment of any indebtedness
evidenced by this Note
shall not affect the enforceability of this Note as to any
future, different
or other indebtedness evidenced hereby. In the event
the indebtedness
evidenced by this Note is collected by legal
action or through an
attorney-at-law, or in bankruptcy or other judicial
proceedings, Swing Line
Lender shall be entitled to recover from Borrower all
costs of collection,
including, without limitation, reasonable attorneys' fees
actually incurred.
Failure or forbearance of Swing Line Lender to
exercise any right
hereunder, or otherwise granted by the Agreement or by
law, shall not affect
or release the liability of Borrower hereunder, and shall
not constitute a
waiver of such right unless so stated by Lender in
writing. This Note shall
be deemed to be made under, and shall be construed in
accordance with and
governed by, the laws of the State of Georgia.
DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF
DISHONOR AND PROTEST
ARE HEREBY WAIVED.
Time is of the essence hereunder.
EXECUTED AND DELIVERED under seal of
Borrower by its duly
authorized officers as of the day and year first above
written in Atlanta,
Georgia.
MORRISON HEALTH CARE,
INC.
[CORPORATE SEAL] By: /s/ K. W.
Engwall
Name: K. Wyatt
Engwall
Title: Senior Vice
President
Attest:/s/ John E.
Fountain
Name: John E.
Fountain
Title: Secretary
EXHIBIT C
SUBSIDIARY GUARANTY AGREEMENT
This SUBSIDIARY GUARANTY AGREEMENT (this
"Guaranty"), dated as of
July 2, 1998 is made by CULINARY SOLUTIONS, INC., a
corporation organized and
existing under the laws of Georgia (hereinafter,
collectively with all
Additional Guarantors hereafter becoming a party hereto, the
"Guarantor"), in
favor of SUNTRUST BANK, ATLANTA, a Georgia banking
corporation, as Agent (the
"Agent"), and WACHOVIA BANK, N.A., a national banking
association, as
Co-Agent (the "Co-Agent) for the banks and other lending
institutions parties
to the Credit Agreement (as hereinafter defined) and each
assignee thereof
becoming a "Lender" as provided therein (the "Lenders"),
and SUNTRUST BANK,
ATLANTA, in its capacity as Issuing Bank (the "Issuing
Bank") (the Lenders,
the Issuing Bank, the Agent and the Co-Agent being
collectively referred to
herein as the "Guaranteed Parties");
W I T N E S S E T H:
WHEREAS, MORRISON HEALTH CARE, INC., a
corporation organized and
existing under the laws of the State of Georgia (the
"Borrower"), the
Lenders, the Issuing Bank, the Agent and the Co-Agent have
entered into that
certain Amended and Restated Credit Agreement dated as
of July 2, 1998 (as
the same may hereafter be amended, restated,
supplemented or otherwise
modified from time to time, and including all
schedules, riders, and
supplements thereto, the "Credit Agreement"; terms
defined therein and not
otherwise defined herein being used herein as therein
defined);
WHEREAS, the Borrower owns, directly or
indirectly, all or a
majority of the outstanding capital stock of the Guarantor;
WHEREAS, the Borrower and the Guarantor
share an identity of
interest as members of a consolidated group of
companies engaged in
substantially similar businesses with the Borrower
providing certain
centralized financial, accounting and management services to
the Guarantor;
WHEREAS, consummation of the transactions
pursuant to the Credit
Agreement will facilitate expansion and enhance the
overall financial
strength and stability of the Borrower's entire corporate
group, including
the Guarantor; and
WHEREAS, it is a condition precedent to the
Lenders' and Issuing
Bank's obligations to enter into the Credit Agreement and
to make extensions
of credit thereunder that the Guarantor execute and
deliver this Guaranty,
and the Guarantor desires to execute and deliver this
Guaranty to satisfy
such condition precedent;
NOW, THEREFORE, in consideration of the
premises and in order to
induce the Issuing Bank and the Lenders to enter into
and perform their
obligations under the Credit Agreement, the Guarantor
hereby agrees as
follows:
SECTION 1. Guaranty. The Guarantor hereby,
irrevocably and
unconditionally, guarantees the punctual payment when due,
whether at stated
maturity, by acceleration or otherwise, of all Loans,
Letter of Credit
Obligations and all other Obligations owing by the
Borrower to the Lenders,
the Issuing Bank, the Agent or the Co-Agent, or any of
them, under the Credit
Agreement, the Notes, any Letter of Credit and the other
Credit Documents,
including all renewals, extensions, modifications and
refinancings thereof,
now or hereafter owing, whether for principal, interest,
fees, expenses or
otherwise, and any and all reasonable out-of-pocket
expenses (including
reasonable attorneys' fees actually incurred and
expenses) incurred by the
Agent in enforcing any rights under this Guaranty
(collectively, the
"Guaranteed Obligations"), including without limitation,
all interest which,
but for the filing of a petition in bankruptcy with
respect to the Borrower,
would accrue on any principal portion of the Guaranteed
Obligations. Any and
all payments by the Guarantor hereunder shall be made
free and clear of and
without deduction for any set-off, counterclaim, or
withholding so that, in
each case, each Guaranteed Party will receive, after
giving effect to any
Taxes (as such term is defined in the Credit Agreement,
but excluding Taxes
imposed on overall net income of the Guaranteed Party to
the same extent as
excluded pursuant to the Credit Agreement), the full
amount that it would
otherwise be entitled to receive with respect to the
Guaranteed Obligations
(but without duplication of amounts for Taxes already
included in the
Guaranteed Obligations). The Guarantor acknowledges and
agrees that this is
a guarantee of payment when due, and not of
collection, and that this
Guaranty may be enforced up to the full amount of the
Guaranteed Obligations
without proceeding against the Borrower, against any
security for the
Guaranteed Obligations or under any other guaranty
covering any portion of
the Guaranteed Obligations.
SECTION 2. Guaranty Absolute. The Guarantor
guarantees that the
Guaranteed Obligations will be paid strictly in accordance
with the terms of
the Credit Documents, regardless of any law, regulation
or order now or
hereafter in effect in any jurisdiction affecting any of
such terms or the
rights of any Guaranteed Party with respect thereto. The
liability of the
Guarantor under this Guaranty shall be absolute and
unconditional in
accordance with its terms and shall remain in full force
and effect without
regard to, and shall not be released, suspended,
discharged, terminated or
otherwise affected by, any circumstance or occurrence
whatsoever, including,
without limitation, the following (whether or not the
Guarantor consents
thereto or has notice thereof):
(a) any change in the time, place or manner
of payment of, or
in any other term of, all or any of the Guaranteed
Obligations, any
waiver, indulgence, renewal, extension, amendment or
modification of or
addition, consent or supplement to or deletion from
or any other action
or inaction under or in respect of the Credit
Agreement, the other
Credit Documents, or any other documents,
instruments or agreements
relating to the Guaranteed Obligations or any
other instrument or
agreement referred to therein or any assignment or
transfer of any
thereof;
(b) any lack of validity or
enforceability of the Credit
Agreement, the other Credit Documents, or any
other document,
instrument or agreement referred to therein or
any assignment or
transfer of any thereof;
(c) any furnishing to the Guaranteed Parties
of any additional
security for the Guaranteed Obligations, or any sale,
exchange, release
or surrender of, or realization on, any security
for the Guaranteed
Obligations;
(d) any settlement or compromise of any
of the Guaranteed
Obligations, any security therefor, or any liability
of any other party
with respect to the Guaranteed Obligations, or any
subordination of the
payment of the Guaranteed Obligations to the
payment of any other
liability of the Borrower;
(e) any bankruptcy, insolvency,
reorganization, composition,
adjustment, dissolution, liquidation or other like
proceeding relating
to the Guarantor or the Borrower, or any action
taken with respect to
this Guaranty by any trustee or receiver, or by any
court, in any such
proceeding;
(f) any nonperfection of any security
interest or lien on any
collateral, or any amendment or waiver of or consent
to departure from
any guaranty or security, for all or any of the
Guaranteed Obligations;
(g) any application of sums paid by the
Borrower or any other
Person with respect to the liabilities of the
Borrower to the
Guaranteed Parties, regardless of what liabilities
of the Borrower
remain unpaid;
(h) any act or failure to act by any
Guaranteed Party which may
adversely affect the Guarantor's subrogation
rights, if any, against
the Borrower to recover payments made under this
Guaranty; and
(i) any other circumstance which might
otherwise constitute a
defense available to, or a discharge of, the
Guarantor.
If claim is ever made upon any Guaranteed Party for
repayment or recovery of
any amount or amounts received in payment or on
account of any of the
Guaranteed Obligations, and any Guaranteed Party repays
all or part of said
amount by reason of (a) any judgment, decree or order
of any court or
administrative body having jurisdiction over the
Guaranteed Party or any of
its property, or (b) any settlement or compromise of any
such claim effected
by the Guaranteed Party with any such claimant (including
the Borrower or a
trustee in bankruptcy for the Borrower), then and in such
event the Guarantor
agrees that any such judgment, decree, order, settlement
or compromise shall
be binding on it, notwithstanding any revocation hereof
or the cancellation
of the Credit Agreement, the other Credit Documents, or
any other instrument
evidencing any liability of the Borrower, and the
Guarantor shall be and
remain liable to the Guaranteed Party for the amounts so
repaid or recovered
to the same extent as if such amount had never originally
been paid to the
Guaranteed Party.
SECTION 3. Waiver. The Guarantor hereby waives
notice of acceptance
of this Guaranty, notice of any liability to which it may
apply, and further
waives presentment, demand of payment, protest, notice
of dishonor or
nonpayment of any such liabilities, suit or taking of
other action by the
Guaranteed Parties against, and any other notice to, the
Borrower or any
other party liable with respect to the Guaranteed
Obligations (including the
Guarantor or any other Person executing a guaranty of the
obligations of the
Borrower).
SECTION 4. Waiver of Subrogation; Rights of
Contribution. No
Guarantor will exercise any rights against the Borrower
which it may acquire
by way of subrogation or contribution, by any payment
made hereunder or
otherwise and each Guarantor hereby expressly waives
any claim, right or
remedy which such Guarantor may now have or hereafter
acquire against the
Borrower that arises hereunder and/or from the
performance by the Guarantor
hereunder, including, without limitation, any claim,
right or remedy of any
Guaranteed Party against the Borrower or any security
which any Guaranteed
Party now has or hereafter acquires, whether or not such
claim, right or
remedy arises in equity, under contract, by statute,
under color of law or
otherwise unless and until the Guaranteed Obligations have
been indefeasibly
paid in full.
The following provisions of this Section 4
shall be effective at
all times when there are multiple guarantors party hereto.
In the event that
any Guarantor (the "Funding Guarantor") shall make any
payment or payments
under this Guaranty or shall suffer any loss as a result
of any realization
upon any collateral granted by it to secure its obligations
hereunder, each
other Guarantor (each, a "Contributing Guarantor")
hereby agrees to
contribute to the Funding Guarantor an amount equal to
such Contributing
Guarantor's pro rata share of such payment or payments
made, or losses
suffered, by such Funding Guarantor determined by
reference to the ratio of
(a) the dollar amount of the percentage of each such
Contributing Guarantor's
Net Assets (without giving effect to any right to receive
any contribution or
subrogation or obligation to make any contribution
hereunder), to (b) the sum
of the Net Assets of all Guarantors (including the
Funding Guarantor)
hereunder (without giving effect to any right to receive
contribution or
subrogation hereunder or any obligation to make any
contribution hereunder);
provided, that the Contributing Guarantor shall not be
obligated to make any
such payment to the Funding Guarantor if the Contributing
Guarantor is not
solvent at the time of such contribution or if the
Contributing Guarantor
would be rendered not solvent as a result thereof.
Nothing in this Section
shall affect each Guarantor's several liability for the
entire amount of the
Guaranteed Obligations, subject only to the
limitations set forth in
Section 14. For the purposes of this Section 4, (x) the
"Net Assets" of any
Guarantor shall mean the highest amount, as of any
Determination Date, by
which (A) the aggregate present fair saleable value of
the assets of such
Guarantor exceeds (B) the amount of all the debts and
liabilities of such
Guarantor (including contingent, subordinated, unmatured
and unliquidated
liabilities, but excluding the obligations of such
Guarantor hereunder), and
(y) "Determination Date" shall mean each of (1) the
Closing Date, (2) the
date of commencement of a case under the Bankruptcy Code in
which a Guarantor
is a debtor, and (3) the date enforcement hereunder is
sought with respect
to such Guarantor. Each Funding Guarantor covenants
and agrees that its
right to receive any contribution from any Contributing
Guarantor hereunder
shall be subordinated and junior in right of payment in
full of all of the
Guaranteed Obligations.
SECTION 5. Severability. Any provision of this
Guaranty which is
prohibited or unenforceable in any jurisdiction
shall, as to such
jurisdiction, be ineffective to the extent of such
prohibition or
unenforceability without invalidating the remaining
provisions hereof, and
any such prohibition or unenforceability in any
jurisdiction shall not
invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 6. Amendments, Etc. No amendment or waiver
of any provision
of this Guaranty nor consent to any departure by the
Guarantor therefrom
shall in any event be effective unless the same shall be in
writing executed
by the Agent.
SECTION 7. Notices. All notices and other
communications provided for
hereunder shall be given in the manner specified in the
Credit Agreement (i)
in the case of the Agent, at the address specified for
the Agent in the
Credit Agreement, and (ii) in the case of the Guarantor,
at the addresses
specified for the Guarantor in this Guaranty or the
applicable supplement
hereto.
SECTION 8. No Waiver; Remedies. No failure on the
part of the Agent
or other Guaranteed Parties to exercise, and no delay in
exercising, any
right hereunder shall operate as a waiver thereof; nor
shall any single or
partial exercise of any right hereunder preclude any
other or further
exercise thereof or the exercise of any other right. No
notice to or demand
on the Guarantor in any case shall entitle the Guarantor to
any other further
notice or demand in any similar or other circumstances or
constitute a waiver
of the rights of the Agent or other Guaranteed Parties
to any other or
further action in any circumstances without notice or
demand. The remedies
herein provided are cumulative and not exclusive of any
remedies provided by
law.
SECTION 9. Right Of Set Off. In addition to and not
in limitation of
all rights of offset that the Agent or other Guaranteed
Parties may have
under applicable law, the Agent or other Guaranteed
Parties shall, upon the
occurrence of any Event of Default and whether or not
the Agent or other
Guaranteed Parties have made any demand or the Guaranteed
Obligations are
matured, have the right to appropriate and apply to
the payment of the
Guaranteed Obligations, all deposits of the Guarantor
(general or special,
time or demand, provisional or final) then or thereafter
held by and other
indebtedness or property then or thereafter owing by
the Agent or other
Guaranteed Parties to the Guarantor, whether or not
related to this Guaranty
or any transaction hereunder. The Guaranteed Parties
shall promptly notify
the Guarantor of any offset hereunder.
SECTION 10. Continuing Guaranty; Transfer Of
Obligations. This
Guaranty is a continuing guaranty and shall (i) remain
in full force and
effect until payment in full of the Guaranteed
Obligations and all other
amounts payable under this Guaranty and the termination of
the Commitments,
(ii) be binding upon the Guarantor, its successors and
assigns, and (iii)
inure to the benefit of and be enforceable by the Agent,
its successors,
transferees and assigns, for the benefit of the Guaranteed
Parties.
SECTION 11. Governing Law; Appointment Of Agent For
Service Of Process;
Submission To Jurisdiction; Waiver of Jury Trial.
(a) THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE
LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT
TO THE CONFLICT OF
LAW PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS
GUARANTY OR OTHERWISE RELATED HERETO MAY BE
BROUGHT IN THE SUPERIOR
COURT OF FULTON COUNTY OF THE STATE OF GEORGIA OR OF
THE UNITED STATES
OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA,
AND, BY EXECUTION AND
DELIVERY OF THIS GUARANTY, THE GUARANTOR HEREBY
CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION
OF THE AFORESAID
COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS
RIGHTS OR THE RIGHTS
OF THE AGENT AND OTHER GUARANTEED PARTIES WITH
RESPECT TO THIS GUARANTY
OR ANY DOCUMENT RELATED HERETO. THE GUARANTOR
HEREBY IRREVOCABLY
DESIGNATES PRENTICE HALL CORPORATION OF ATLANTA,
GEORGIA, AS THE
DESIGNEE, APPOINTEE AND AGENT OF THE GUARANTOR TO
RECEIVE, FOR AND ON
BEHALF OF THE GUARANTOR, SERVICE OF PROCESS IN SUCH
JURISDICTION IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR ANY
DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE
DEEMED COMPLETED
THIRTY DAYS AFTER MAILING THEREOF TO SAID AGENT. IT
IS UNDERSTOOD THAT
A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE
PROMPTLY FORWARDED
BY SUCH LOCAL AGENT AND BY THE SERVER OF
PROCESS BY MAIL TO THE
GUARANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT
THE FAILURE OF THE
GUARANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE
EXTENT PERMITTED BY
APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF
SUCH PROCESS. THE
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO
THE BRINGING OF ANY ACTION OR PROCEEDING IN
SUCH RESPECTIVE
JURISDICTIONS IN RESPECT OF THIS GUARANTY OR ANY
DOCUMENT RELATED
THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE AGENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
GUARANTOR IN ANY OTHER
JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE GUARANTOR
HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY
JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS
GUARANTY OR ANY OTHER CREDIT DOCUMENT OR ANY
MATTER ARISING IN
CONNECTION HEREUNDER OR THEREUNDER.
SECTION 12. Subordination Of the Borrower's
Obligations To the
Guarantor. As an independent covenant, the Guarantor
hereby expressly
covenants and agrees for the benefit of the Agent and
other Guaranteed
Parties that all obligations and liabilities of the
Borrower to the
Guarantor of whatsoever description including, without
limitation, all
intercompany receivables of the Guarantor from the Borrower
("Junior Claims")
shall be subordinate and junior in right of payment to all
obligations of the
Borrower to the Agent and other Guaranteed Parties
under the terms of the
Credit Agreement and the other Credit Documents ("Senior
Claims").
If an Event of Default shall occur, then,
unless and until such
Event of Default shall have been cured, waived, or
shall have ceased to
exist, no direct or indirect payment (in cash, property,
securities by setoff
or otherwise) shall be made by the Borrower to the
Guarantor on account of or
in any manner in respect of any Junior Claim except
such payments and
distributions the proceeds of which shall be applied to the
payment of Senior
Claims.
In the event of a Proceeding (as hereinafter
defined), all Senior
Claims shall first be paid in full before any direct or
indirect payment or
distribution (in cash, property, securities by setoff or
otherwise) shall be
made to any Guarantor on account of or in any manner in
respect of any Junior
Claim except such payments and distributions the proceeds
of which shall be
applied to the payment of Senior Claims. For the purposes
of the previous
sentence, "Proceeding" means the Borrower or the Guarantor
shall commence a
voluntary case concerning itself under the Bankruptcy
Code or any other
applicable bankruptcy laws; or any involuntary case is
commenced against the
Borrower or the Guarantor; or a custodian (as defined in
the Bankruptcy Code
or any other applicable bankruptcy laws) is appointed
for, or takes charge
of, all or any substantial part of the property of the
Borrower or the
Guarantor, or the Borrower or the Guarantor commences any
other proceedings
under any reorganization arrangement, adjustment of debt,
relief of debtor,
dissolution, insolvency or liquidation or similar law of
any jurisdiction
whether now or hereafter in effect relating to the Borrower
or the Guarantor,
or any such proceeding is commenced against the Borrower or
the Guarantor, or
the Borrower or the Guarantor is adjudicated insolvent or
bankrupt; or any
order of relief or other order approving any such case
or proceeding is
entered; or the Borrower or the Guarantor suffers any
appointment of any
custodian or the like for it or any substantial part of its
property; or the
Borrower or the Guarantor makes a general assignment
for the benefit of
creditors; or the Borrower or the Guarantor shall fail to
pay, or shall state
that it is unable to pay, or shall be unable to pay, its
debts generally as
they become due; or the Borrower or the Guarantor shall
call a meeting of its
creditors with a view to arranging a composition or
adjustment of its debts;
or the Borrower or the Guarantor shall by any act or
failure to act indicate
its consent to, approval of or acquiescence in any of the
foregoing; or any
corporate action shall be taken by the Borrower or the
Guarantor for the
purpose of effecting any of the foregoing.
In the event any direct or indirect payment or
distribution is
made to the Guarantor in contravention of this Section
12, such payment or
distribution shall be deemed received in trust for the
benefit of the Agent
and other Guaranteed Parties and shall be immediately paid
over to the Agent
for application against the Guaranteed Obligations in
accordance with the
terms of the Credit Agreement.
The Guarantor agrees to execute such additional
documents as the
Agent may reasonably request to evidence the
subordination provided for in
this Section 12.
SECTION 13. Automatic Acceleration in Certain
Events. Upon the
occurrence of an Event of Default specified in Section
8.07 of the Credit
Agreement, all Guaranteed Obligations shall automatically
become immediately
due and payable by the Guarantor, without notice or other
action on the part
of the Agent or other Guaranteed Parties, and regardless
of whether payment
of the Guaranteed Obligations by the Borrower has then been
accelerated. In
addition, if any event of the types described in Section
8.07 of the Credit
Agreement should occur with respect to the Guarantor,
then the Guaranteed
Obligations shall automatically become immediately due
and payable by the
Guarantor, without notice or other action on the part of
the Agent or other
Guaranteed Parties, and regardless of whether payment
of the Guaranteed
Obligations by the Borrower has then been accelerated.
SECTION 14. Savings Clause. (a) It is the intent of
the Guarantor and
the Guaranteed Parties that the Guarantor's maximum
obligations hereunder
shall be, but not in excess of:
(i) in a case or proceeding commenced
by or against the
Guarantor under the Bankruptcy Code on or
within one year from
the date on which any of the Guaranteed
Obligations are incurred,
the maximum amount which would not otherwise
cause the Guaranteed
Obligations (or any other obligations of the
Guarantor to the
Guaranteed Parties) to be avoidable or
unenforceable against the
Guarantor under (A) Section 548 of the
Bankruptcy Code or (B) any
state fraudulent transfer or fraudulent
conveyance act or statute
applied in such case or proceeding by virtue
of Section 544 of
the Bankruptcy Code; or
(ii) in a case or proceeding commenced
by or against the
Guarantor under the Bankruptcy Code
subsequent to one year from
the date on which any of the Guaranteed
Obligations are incurred,
the maximum amount which would not
otherwise cause the
Guaranteed Obligations (or any other
obligations of the Guarantor
to the Guaranteed Parties) to be avoidable
or unenforceable
against the Guarantor under any state
fraudulent transfer or
fraudulent conveyance act or statute applied
in any such case or
proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(iii) in a case or proceeding commenced
by or against the
Guarantor under any law, statute or
regulation other than the
Bankruptcy Code (including, without
limitation, any other
bankruptcy, reorganization, arrangement,
moratorium, readjustment
of debt, dissolution, liquidation or similar
debtor relief laws),
the maximum amount which would not otherwise
cause the Guaranteed
Obligations (or any other obligations of the
Guarantor to the
Guaranteed Parties) to be avoidable or
unenforceable against the
Guarantor under such law, statute or
regulation including,
without limitation, any state fraudulent
transfer or fraudulent
conveyance act or statute applied in any such
case or proceeding.
(The substantive laws under which the possible avoidance or
unenforceability
of the Guaranteed Obligations (or any other obligations
of the Guarantor to
the Guaranteed Parties) shall be determined in any such
case or proceeding
shall hereinafter be referred to as the "Avoidance
Provisions").
(b) To the end set forth in Section 14(a),
but only to the
extent that the Guaranteed Obligations would
otherwise be subject to
avoidance under the Avoidance Provisions if the
Guarantor is not deemed
to have received valuable consideration, fair
value or reasonably
equivalent value for the Guaranteed Obligations, or
if the Guaranteed
Obligations would render the Guarantor
insolvent, or leave the
Guarantor with an unreasonably small capital to
conduct its business,
or cause the Guarantor to have incurred debts (or
to have intended to
have incurred debts) beyond its ability to pay
such debts as they
mature, in each case as of the time any of the
Guaranteed Obligations
are deemed to have been incurred under the
Avoidance Provisions and
after giving effect to the contribution by the
Guarantor, the maximum
Guaranteed Obligations for which the Guarantor
shall be liable
hereunder shall be reduced to that amount which,
after giving effect
thereto, would not cause the Guaranteed
Obligations (or any other
obligations of the Guarantor to the Guaranteed
Parties), as so reduced,
to be subject to avoidance under the Avoidance
Provisions. This
Section 14(b) is intended solely to preserve
the rights of the
Guaranteed Parties hereunder to the maximum extent
that would not cause
the Guaranteed Obligations of the Guarantor to be
subject to avoidance
under the Avoidance Provisions, and neither the
Guarantor nor any
other Person shall have any right or claim under
this Section 14 as
against the Guaranteed Parties that would not
otherwise be available to
such Person under the Avoidance Provisions.
(c) None of the provisions of this Section
14 are intended in
any manner to alter the obligations of any holder of
Subordinated Debt
or the rights of the holders of "senior
indebtedness" as provided by
the terms of the Subordinated Debt. Accordingly,
it is the intent of
the Guarantor that, in the event that any payment or
distribution is
made with respect to the Subordinated Debt prior to
the payment in full
of the Guaranteed Obligations by virtue of the
provisions of this
Section 14, in any case or proceeding of the kinds
described in clauses
(i)-(iii) of Section 14(a), the holders of the
Subordinated Debt shall
be obligated to pay or deliver such payment or
distribution to or for
the benefit of the Guaranteed Parties. Furthermore,
in respect of the
Avoidance Provisions, it is the intent of the
Guarantor that the
subrogation rights of the holders of Subordinated
Debt with respect to
the obligations of the Guarantor under this Guaranty,
be subject in all
respects to the provisions of Section 14(b).
SECTION 15. Information. The Guarantor assumes all
responsibility for
being and keeping itself informed of the Borrower's
financial condition and
assets, and of all other circumstances bearing upon the
risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent
of the risks that
the Guarantor assumes and incurs hereunder, and agrees
that none of the
Guaranteed Parties will have any duty to advise the
Guarantor of information
known to it or any of them regarding such circumstances or
risks.
SECTION 16. Representations and Warranties. The
Guarantor represents
and warrants as to itself that all representations and
warranties relating to
it contained in Sections 6.01 through 6.06 of the Credit
Agreement are true
and correct.
SECTION 17. Survival of Agreement. All agreements,
representations and
warranties made herein shall survive the execution and
delivery of this
Guaranty and the Credit Agreement, the making of the
Loans, the issuance of
the Letters of Credit, and the execution and delivery of
the Notes and the
other Credit Documents.
SECTION 18. Counterparts. This Guaranty and any
amendments, waivers,
consents or supplements may be executed in any number of
counterparts and by
different parties hereto in separate counterparts, each
of which when so
executed and delivered shall be deemed an
original, but all such
counterparts together shall constitute but one and the same
instrument.
SECTION 19. Additional Guarantors. Upon execution
and delivery by any
Subsidiary of the Borrower of an instrument in the form
of Annex 1, such
Subsidiary of the Borrower shall become a Guarantor
hereunder with the same
force and effect as if originally named a Guarantor
herein (each an
"Additional Guarantor") and its obligations hereunder
shall be joint and
several with the Guarantor. The execution and
delivery of any such
instrument shall not require the consent of any other
Guarantor hereunder.
The rights and obligations of the Guarantor hereunder
shall remain in full
force and effect notwithstanding the addition of any
Additional Guarantor as
a party to this Guaranty.
IN WITNESS WHEREOF, the Guarantor and the
Agent have caused this
Guaranty to be duly executed and delivered by their
respective duly
authorized officers as of the date first above written in
Atlanta, Georgia.
Address for Notices: CULINARY SOLUTIONS, INC.
1955 Lake Park Dr., S.E.
Suite 400
Smyrna, Georgia 30080
By:/s/ K. W.Engwall
Name: K. Wyatt Engwall
Attn: Wyatt Engwall Title: Senior Vice
President, Finance
Telecopy: (770) 437-3349
Attest:/s/ John E.
Fountain
Name: John E.
Fountain
Title: Secretary
[CORPORATE SEAL]
STATE OF GEORGIA
COUNTY OF COBB
Signed, sealed and delivered
in the presence of:
NICOLE DORNBUSCH
Notary Public
Date Executed by Notary:
July 1, 1998
My commission expires:
November 11, 2000
[NOTARIAL SEAL]
SUNTRUST BANK, ATLANTA
("Agent")
By:/s/ Daniel S.
Komitor
Name: Daniel S.
Komitor
Title: Vice
President
By:/s/ R. Michael Dunlap
Name: R. Michael
Dunlap
Title:Vice
President
WACHOVIA BANK, N.A.
("Co-Agent")
By:/s/ John C. Canty
Name: John C.
Canty
Title:Banking
Officer
By:
Name:
Title:
SECTION 12 OF THE
FOREGOING GUARANTY
ACKNOWLEDGED AND
AGREED TO:
MORRISON HEALTH CARE, INC.
By:/s/ K. W. Engwall
Name: K. Wyatt Engwall
Title:Senior Vice President, Finance
and Assistant Secretary
SUPPLEMENT
TO
SUBSIDIARY GUARANTY AGREEMENT
THIS SUPPLEMENT TO SUBSIDIARY GUARANTY
AGREEMENT (this
"Supplement to Guaranty Agreement"), dated as of
___________, _____, made by
______________________, a ________ corporation (the
"Additional Guarantor"),
in favor of SUNTRUST BANK, ATLANTA, a Georgia banking
corporation, as Agent
(the "Agent") and WACHOVIA BANK, N.A., a national bank
association, as
Co-Agent (the "Co-Agent") for the banks and other
lending institutions
parties to the Credit Agreement (as hereinafter defined)
and each assignee
thereof becoming a "Lender" as provided therein (the
"Lenders"), and SUNTRUST
BANK ATLANTA, as Issuing Bank (the "Issuing Bank"), the
Lenders, the Issuing
Bank, the Agent and the Co-Agent being collectively
referred to herein as the
"Guaranteed Parties").
W I T N E S S E T H:
WHEREAS, MORRISON HEALTH CARE, INC. (the
"Borrower"), the
Lenders, the Issuing Bank, the Agent and the Co-Agent
are parties to an
Amended and Restated Credit Agreement, dated as of July 2,
1998 (as the same
may hereafter be amended, restated, supplemented or
otherwise modified from
time to time, the "Credit Agreement") pursuant to which the
Lenders have made
commitments to make loans and the Issuing Bank has
committed to issue Letters
of Credit to the Borrower;
WHEREAS, Culinary Solutions, Inc., a Subsidiary
of the Borrower (
the "Subsidiary Guarantor") has executed and delivered a
Subsidiary Guaranty
Agreement dated as of July 2, 1998 (the "Subsidiary
Guaranty") pursuant to
which the Subsidiary Guarantor has agreed to guarantee all
of the obligations
of the Borrower under the Credit Agreement and the other
Credit Documents (as
defined in the Credit Agreement);
WHEREAS, the Borrower, the Subsidiary
Guarantor and the
Additional Guarantor share an identity of interests
as members of a
consolidated group of companies engaged in substantially
similar businesses;
the Borrower provides certain centralized financial,
accounting and
management services to the Additional Guarantor; and the
making of the loans
will facilitate expansion and enhance the overall
financial strength and
stability of the Borrower's corporate group,
including the Additional
Guarantor;
WHEREAS, it is a condition subsequent to the
Lenders' obligation
to make loans to the Borrower and the Issuing Bank's
obligation to issue
letters of credit on behalf of the Borrower under the
Credit Agreement that
the Additional Guarantor execute and deliver to the Agent
this Supplement to
Guaranty Agreement, and the Additional Guarantor
desires to execute and
deliver this Supplement to Guaranty Agreement to
satisfy such condition
subsequent;
NOW, THEREFORE, in consideration of the
premises and in order to
induce the Lenders to make the loans to the Borrower and
the Issuing Bank to
issue letters of credit on behalf of the Borrower under the
Credit Agreement,
the Additional Guarantor hereby agrees as follows:
1. Defined Terms. Capitalized terms not otherwise
defined herein which
are used in the Subsidiary Guaranty are used herein
with the meanings
specified for such terms in the Subsidiary Guaranty.
2. Additional Guarantor. The Additional Guarantor
agrees that it shall be
and become a Guarantor for all purposes of the Subsidiary
Guaranty and shall
be fully liable, jointly and severally thereunder to
the Agent and other
Guaranteed Parties to the same extent and with the same
effect as though the
Additional Guarantor had been a Guarantor originally
executing and delivering
the Subsidiary Guaranty. Without limiting the
foregoing, the Additional
Guarantor hereby jointly and severally (with respect to
the guaranties made
by the Subsidiary Guarantor under the Subsidiary
Guaranty), irrevocably and
unconditionally, guarantees the punctual payment when due,
whether at stated
maturity by acceleration of otherwise, of the
Borrowings and all other
Obligations (as defined in the Credit Agreement, and
including all renewals,
extensions, modifications and refinancings thereof,
now or hereafter
existing, whether for principal, interest, fees, expenses
or otherwise, and
any and all expenses (including reasonable attorneys' fees
actually incurred
and reasonable out-of-pocket expenses) incurred by the
Agent and other
Guaranteed Parties in enforcing any rights under the
Subsidiary Guaranty (as
supplemented hereby), subject, however, to the limitations
expressly provided
in the Subsidiary Guaranty in Section 14 thereof. All
references in the
Subsidiary Guaranty to the "Guarantor" shall be deemed
to include and to
refer to the Additional Guarantor.
3. Governing Law; Appointment of Agent for Service of
Process;
Submission to Jurisdiction; Waiver of Jury Trial.
(a) THIS SUPPLEMENT TO GUARANTY AGREEMENT
AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED
IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAWS OF THE STATE OF GEORGIA
(WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAW PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS
SUPPLEMENT TO GUARANTY AGREEMENT RELATED HERETO MAY
BE BROUGHT IN THE
SUPERIOR COURT OF FULTON COUNTY OF THE STATE OF GEORGIA
OR OF THE UNITED
STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA,
AND, BY EXECUTION AND
DELIVERY OF THIS SUPPLEMENT TO GUARANTY AGREEMENT, THE
ADDITIONAL GUARANTOR
HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE
JURISDICTION OF THE AFORESAID COURTS SOLELY FOR THE
PURPOSE OF ADJUDICATING
ITS RIGHTS OR THE RIGHTS OF THE AGENT OR OTHER
GUARANTEED PARTIES WITH
RESPECT TO THIS SUPPLEMENT TO GUARANTY AGREEMENT OR ANY
DOCUMENT RELATED
HERETO. THE ADDITIONAL GUARANTOR HEREBY IRREVOCABLY
DESIGNATES CSC
CORPORATION SERVICES OF ATLANTA, GEORGIA, AS THE
DESIGNEE, APPOINTEE AND
AGENT OF THE ADDITIONAL GUARANTOR TO RECEIVE, FOR AND
ON BEHALF OF THE
ADDITIONAL GUARANTOR, SERVICE OF PROCESS IN SUCH
JURISDICTION IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS SUPPLEMENT TO
GUARANTY AGREEMENT OR
ANY DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE
DEEMED COMPLETED THIRTY
(30) DAYS AFTER MAILING THEREOF TO SAID AGENT. IT IS
UNDERSTOOD THAT A COPY
OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY
FORWARDED BY SUCH LOCAL
AGENT AND BY THE SERVER OF PROCESS BY MAIL TO THE ADDITIONAL
GUARANTOR AT ITS
ADDRESS SET FORTH HEREIN, BUT THE FAILURE OF THE
ADDITIONAL GUARANTOR TO
RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW,
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE
ADDITIONAL GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING,
WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT
OF THIS SUPPLEMENT
TO GUARANTY AGREEMENT OR ANY DOCUMENT RELATED THERETO.
NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE AGENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE
ADDITIONAL GUARANTOR IN ANY OTHER JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE ADDITIONAL
GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY
JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS
SUPPLEMENT TO GUARANTY AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR ANY MATTER
ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
IN WITNESS WHEREOF, the Additional Guarantor
has caused this
Supplement to Guaranty to be duly executed and delivered
under seal by its
duly authorized officers as of the date first above written.
Address for Notices: ADDITIONAL
GUARANTOR:
By:
Title:
Attest:
Title:
[CORPORATE SEAL]
EXHIBIT D
CLOSING CERTIFICATE
The undersigned, being the ______________ of MORRISON
HEALTH CARE,
INC., a Georgia corporation (the "Borrower"), hereby gives
this certificate
to induce SUNTRUST BANK, ATLANTA, a Georgia banking
corporation, and the
other Lenders party to the Credit Agreement described below
(referred to
collectively as the "Lenders"), SUNTRUST BANK, ATLANTA, as
the issuing bank
(the "Issuing Bank"), and SUNTRUST BANK, ATLANTA, as Agent
(the "Agent") for
the Issuing Bank and the Lender, and WACHOVIA BANK, N.A. as
Co-Agent (the
"Co-Agent") for the Issuing Bank and the Lender, to
consummate certain
financial accommodations with the Borrower pursuant to the
terms of the
Amended and Restated Credit Agreement dated as of July 2,
1998 by and among
the Borrower, Lenders, the Issuing Bank, the Agent and the
Co-Agent (the
"Credit Agreement"). Capitalized terms used herein and not
defined herein
have the same meanings assigned to them in the Credit
Agreement:
The undersigned hereby certifies to the Agent, the Co-
Agent, the
Issuing Bank and the Lenders that:
1. In his aforesaid capacity as the
______________________ of the
Borrower, he has knowledge of the business and financial
affairs of the
Borrower sufficient to issue this certificate and is
authorized and empowered
to issue this certificate for and on behalf of the Borrower.
2. All representations and warranties contained in
Article V of the Credit
Agreement are true and correct in all material respects on
and as of the date
hereof.
3. After giving effect to the initial Loans to be made
to, or initial
Letters of Credit to be issued on behalf of, the Borrower
pursuant to the
Credit Agreement on the Closing Date, no Default or Event of
Default has
occurred and is continuing.
4. Since the date of the unaudited proforma financial
statements of the
Consolidated Companies described in Section 5.15 of the
Credit Agreement,
there has been no change which has had or could reasonably
be expected to
have a Materially Adverse Effect.
5. The Advances to be made or Letters of Credit issued on
the date hereof
are being used solely for the purposes provided in the
Credit Agreement, and
such Advances and Letters of Credit and use of proceeds
thereof will not
contravene, violate or conflict with, or involve the Agent,
the Issuing Bank
or any Lender in a violation of, any law, rule, injunction,
or regulation, or
determination of any court of law or other governmental
authority, applicable
to the Borrower.
1.
6. The conditions precedent set forth in Sections 4.01
and 4.02 of the
Credit Agreement have been or will be satisfied (or have
been waived pursuant
to the terms of the Credit Agreement) prior to or
concurrently with the
making of the initial Loans or issuance of initial Letters
of Credit under
the Credit Agreement.
7. The execution, delivery and performance by the Credit
Parties of the
Credit Documents will not violate any Requirement of Law or
cause a breach or
default under any of their respective Contractual
Obligations.
8. Each of the Credit Parties has the corporate power and
authority to
make, deliver and perform the Credit Documents to which it
is a party and has
taken all necessary corporate action to authorize the
execution, delivery and
performance of such Credit Documents. No consents or
authorization of, or
filing with, any Person (including, without limitation, any
governmental
authority), is required in connection with the execution,
delivery or
performance by any Credit Party, or the validity or
enforceability against
any Credit Party, of the Credit Documents, other than such
consents,
authorizations or filings which have been made or obtained.
IN WITNESS WHEREOF, the undersigned has executed this
certificate in
his aforesaid capacity as of this 2nd day of July, 1998.
By:
Title:
EXHIBI E
--------
July 2, 1998
To: Each of the Lenders who are parties to the Credit
Agreement referenced
below and each assignee thereof that becomes a
"Lender" as provided
therein, SunTrust Bank, Atlanta, as Swing Line Lender,
Issuing Bank and
Agent, and Wachovia Bank, N.A., as Co-Agent
Re: Amended and Restated Credit Agreement dated as
of July 2, 1998
(the "Credit Agreement"), among Morrison Health
Care, Inc., each
of the Lenders listed on the signature pages
thereto, SunTrust
Bank, Atlanta, as Swing Line Lender , Issuing
Bank and Agent, and
Wachovia Bank, N.A., as Co-Agent
Ladies and Gentlemen:
This opinion is furnished pursuant to Section 4.01(i)
of the Credit
Agreement. Terms used herein which are defined in the
Credit Agreement shall
have the respective meanings set forth or referred to in the
Credit
Agreement, unless otherwise defined herein.
We have acted as counsel for Morrison Health Care,
Inc., a Georgia
corporation (the "Borrower"), and Culinary Solutions, Inc.,
a Georgia
corporation (the "Guarantor"; and together with the
Borrower, the "Credit
Parties"), in connection with the preparation, negotiation,
execution and
delivery of the following documents (the "Credit
Documents"):
1. The Credit Agreement;
2. The Revolving Credit Notes;
3. The Swing Line Note; and
4. The Guaranty Agreement.
In connection with our opinion we have examined the
Credit Documents
and the corporate proceedings of the Boards of Directors of
the Credit
Parties. We have also examined originals or copies,
certified or otherwise
identified to our satisfaction, of such documents, corporate
records,
certificates of public officials and other instruments and
have conducted
such other investigations of fact and law as we have deemed
necessary or
advisable for purposes of this opinion.
This opinion letter is limited by, and is rendered in
accordance with,
the January 1, 1992 edition of the Interpretive Standards
applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted
by the Legal
Opinion Committee of the Corporate and Banking Law Section
of the State Bar
of Georgia ("Interpretive Standards"), which Interpretative
Standards are
incorporated in this opinion letter by this reference.
We have assumed the genuineness of all signatures
(other than those on
behalf of the Credit Parties) on, and authenticity of, all
documents
submitted to as originals and the conformity to original
documents of all
documents submitted to us as copies.
With respect to any element of mutuality which may be
required in order
to support the enforceability of the Credit Documents, we
have assumed that
all parties thereto other than the Credit Parties (the
"Other Parties") have
all requisite power and authority to enter into and perform
their respective
obligations under the Credit Agreement and the other Credit
Documents to
which they are parties, that the Credit Agreement and such
other Credit
Documents have been duly authorized, executed and delivered
by the Other
Parties, and that the Credit Agreement and such other Credit
Documents
constitute the legal, valid and binding obligations of the
Other Parties.
Based on the foregoing, and subject to the
qualifications hereunder set
forth, we are of the opinion that:
1. Each of the Credit Parties is a
corporation duly organized,
validly existing and in good standing under the laws of the
state of its
incorporation.
2. Each of the Credit Parties has the
corporate power to own
and operate its property and to conduct its business as now
conducted and to
make, deliver and perform the Credit Documents to which it
is a party and has
taken all necessary corporate action to authorize the
execution, delivery and
performance of such Credit Documents. Each of the Credit
Parties has duly
authorized, executed and delivered each Credit Document to
which it is a
party.
3. No consent, approval or authorization of,
or registration,
declaration or filing with any governmental authority of the
United States of
America or the State of Georgia is required in connection
with the execution,
delivery, performance, validity or enforceability of the
Credit Documents.
4. (a) The execution, delivery and
performance by each of
the Credit Parties of the Credit Documents to which it is a
party do not and
will not violate (i) the articles of incorporation of such
Credit Party,
(ii) any existing Requirement of Law (other than any
determination of an
arbitrator or a court or other governmental authority) of
the United States
of America or the State of Georgia applicable to such Credit
Party, or
(iii) insofar as known to us, any determination of an
arbitrator or a court
or other governmental authority applicable to such Credit
Party.
(b) The execution, delivery and performance by the
Borrower of the
Credit Documents to which it is a party do not and will not
result in a
breach of or default under any material written agreements
or the creation or
imposition of a contractual lien or security interest in, on
or against any
of its properties under any material written agreements.
With your
permission we have assumed the term "material written
agreements" as used in
the preceding sentence includes only the Sharing Agreements.
5. Each of the Credit Documents constitutes
the legal, valid
and binding obligation of each of the Credit Parties that is
a party thereto,
enforceable against each such Credit Party in accordance
with its terms. The
provisions of the Credit Documents with respect to payment
of interest, fees,
costs and other charges for the use of money deemed to be
interest under
Georgia law (collectively "Interest Charges") do no violate
the interest and
usury laws as in effect in the State of Georgia.
6. None of the Credit Parties is an
"investment company" or a
company "controlled" by an "investment company" within the
meaning of the
Investment Company Act of 1940, as amended, or a "subsidiary
company" of a
"holding company" or an "affiliate" of a "holding company"
or of a
"subsidiary company" of a "holding company" within the
meaning of the Public
Utility Holding Company Act of 1935, as amended.
7. The making of any Loans and the
application of the proceeds
thereof as provided in the Credit Agreement do not violate
Regulation G, T, U
or X of the Board of Governors of the Federal Reserve
System.
Our opinions set forth above are subject to the
following
qualifications:
A. Our opinions are limited to the laws of the
United States of
America and the State of Georgia.
B. With respect to the opinions contained in
paragraph 1 above, we
have not obtained tax clearance certificates from the taxing
authorities of
the relevant jurisdictions.
C. With respect to the opinion expressed in
paragraph 5 above, we
have assumed that:
i) the Interest Charges have been or will be
applied for the
purposes described in the Credit Documents; and
ii) all such Interest Charges have been or
will be applied for
purposes described in the Credit Documents;
iii) interest will not be charged on overdue
interest, in
violation of O.C.G.A. 7-4-17; and
iv) the Interest Charges shall not exceed five
percent (5%) per
month in violation of O.C.G.A. 7-4-18;
Based upon the limitations and qualifications set
forth above, we
confirm to you that:
i) Except for the claims described in
Schedule 5.05 to the
Credit Agreement, to our knowledge (but without independent
investigation),
no litigation, investigation or proceeding of or before any
court, tribunal,
arbitrator or governmental authority is pending or overtly
threatened by a
written communication by or against any of the Credit
Parties or against any
of their respective properties or revenues or with respect
to the Credit
Documents or any of the transactions contemplated thereby
which would have a
Materially Adverse Effect.
ii) Each of the Credit Parties is qualified to
transact
business as a foreign corporation in the states set forth in
Exhibit A
hereto, except as noted to the contrary hereinbelow. The
foregoing statement
is based solely upon certificates provided by agencies of
those states,
copies of which Borrower has delivered to you on the date
hereof, and is
limited to the meaning ascribed to such certificates by each
applicable state
agency. In this connection, we draw to your attention that
we were unable to
obtain certificates of authority for the Borrower from the
District of
Columbia and Arkansas, due to the apparent failure of the
Borrower to file
its annual reports and/or pay any applicable franchise taxes
in those
jurisdictions. We have been advised that curative measures
are being taken
by the Borrower to bring itself into good standing in those
two jurisdictions.
This opinion has been delivered solely for the benefit
of the Lenders,
the Issuing Bank, the Agent and the Co-Agent, and their
permitted successors
and assigns under the Credit Agreement, and may not be
relied upon by any
other person or entity or for any other purpose without the
express written
permission of the undersigned.
Very truly yours,
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
EXHIBIT A
Morrison Health Care, Inc. (GA)
Foreign Qualifications:
Alabama
Arizona
Arkansas*
California
Colorado
Connecticut
Delaware
District of Columbia*
Florida
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Mississippi
Missouri
New Hampshire
New Jersey
New York
North Carolina
Ohio (d/b/a Morrison Food and Nutrition
Services)
Oklahoma
Pennsylvania
South Carolina
Tennessee
Texas
Vermont
Virginia
West Virginia
Culinary Solutions, Inc. (GA)
Foreign Qualifications:
Maryland
* Not in good standing.
EXHIBIT_F
FORM OF ASSIGNMENT AND ACCEPTANCE
AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT (the
"Assignment Agreement")
dated as of _____________,
19__ between
______________________________________________
("Assignor") and
__________________________________ ("Assignee"). All
capitalized terms used
herein and not otherwise defined shall have the respective
meanings provided
such terms in the Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, Assignor is a party to an Amended and
Restated Credit
Agreement, dated as of July 2, 1998 (as amended to the
date hereof, the
"Credit Agreement"), among Morrison Health Care, Inc. (the
"Borrower"), the
financial institutions from time to time party thereto
(including Assignor,
the "Lenders") SunTrust Bank, Atlanta, as the Issuing
Bank (the "Issuing
Bank"), SunTrust Bank, Atlanta, as Agent (the "Agent")
for the Issuing Bank
and the Lenders, and Wachovia Bank, N.A., as Co-Agent
("Co-Agent") for the
Issuing Bank and Lenders (the "Co-Agent");
WHEREAS, Assignor has a Revolving Loan
Commitment of $___________
under the Credit Agreement pursuant to which it has made
outstanding Advances
of $_____________; and
WHEREAS, Assignor and Assignee wish
Assignor to assign to
Assignee its rights under the Credit Agreement with
respect to all or a
portion of its Commitment and its outstanding Advances;
WHEREAS, Assignor and Assignee wish
Assignee to assume the
obligations of Assignor under the Credit Agreement to
the extent of the
rights so assigned;
NOW THEREFORE, in consideration of the mutual
agreements herein
contained, the parties hereto agree as follows:
1. Assignment. Assignor hereby assigns to
Assignee, without
recourse, or representation or warranty (other than
expressly provided
herein) and subject to Section 4(b) hereof, ___% as the
"Assignee's Share"
("Assignee's Share") of all of Assignor's rights, title
and interest arising
under the Credit Agreement relating to Assignor's
Commitment, including with
respect to Assignee's Share of the Advances heretofore
made by the Assignor
under the Credit Agreement. The dollar amount of
Assignee's Share of
Assignor's Commitment is $__________, the dollar amount of
Assignee's Share
of Assignor's outstanding Advances pursuant thereto is
$__________.
2. Assumption. Assignee hereby assumes
from Assignor all of
Assignor's obligations arising under the Credit
Agreement relating to
Assignee's Share of Assignor's Commitment and of the
Advances. It is the
intent of the parties hereto that Assignor shall be
released from all of its
obligations under the Credit Agreement relating to
Assignee's Share.
3. Assignments; Participations. Assignee
may not assign all
or any part of the rights granted to it hereunder.
Assignee may sell or
grant participations in all or any part of the rights
granted to it hereunder
in accordance with the provisions of Section 10.06 of the
Credit Agreement.
4. Payment of Interest and Fees to Assignee.
(a) As of the date hereof interest
is payable by the
Borrower in respect of Assignee's Share of the Eurodollar
Advances at a rate
equal to ___% per annum above LIBOR for Revolving Loans and
a Commitment Fee
equal to ___% per annum on the Assignee's Share of the
average daily unused
portion of the Commitments.
(b) Notwithstanding anything to the
contrary contained in
this Assignment Agreement, if and when Assignor
receives or collects any
payment of interest on any Advance attributable to
Assignee's Share or any
payment of the Commitment Fee attributable to Assignee's
Share which, in any
such case, are required to be paid to Assignee pursuant to
clause (a) above,
Assignor shall distribute to Assignee such payment but
only to the extent
such interest or fee accrued after the Assignment
Effective Date (as
hereinafter defined).
(c) Notwithstanding anything to the
contrary contained in
this Assignment Agreement, if and when Assignee
receives or collects any
payment of interest on any Advance or any payment of
the Commitment Fee
which, in any such case, is required to be paid to
Assignor pursuant to
clause (a) above, Assignee shall distribute to Assignor such
payment.
5. Payments on Assignment Effective Date. In
consideration of
the assignment by Assignor to Assignee of Assignee's
Share of Assignor's
Revolving Loan Commitment, Term Loan and Advances as
set forth above,
Assignee agrees to pay to Assignor on or prior to the
Assignment Effective
Date an amount specified by Assignor in writing on or prior
to the Assignment
Effective Date which represents Assignee's Share of the
principal amount of
the respective Advances made by Assignor pursuant to the
Credit Agreement and
outstanding on the Assignment Effective Date.
6. Effectiveness. (a) This Assignment
Agreement shall become
effective on the date (the "Assignment Effective Date")
(which is at least
five days after the date hereof) on which (i) Assignor
and Assignee shall
have signed a copy hereof (whether the same or different
copies) and, in the
case of Assignee, shall have delivered the same to
Assignor, (ii) the
Borrower shall have consented hereto, (iii) a copy of
the fully executed
Assignment, a fee of $2,500 and the Note evidencing
the Commitment and
assigned hereby shall have been delivered to the Agent,
and (iv) Assignee
shall have paid to Assignor the amount set forth in Section
5.
(b) It is agreed that all interest
on any Advance
attributable to Assignee's Share and all Commitment Fees
attributable to
Assignee's Share, which, in each case, accrues on and
after the Assignment
Effective Date shall be paid directly to the Assignee in
accordance with the
Credit Agreement.
7. Amendment of Credit Agreement. On the
Assignment Effective
Date the Credit Agreement shall be amended by deeming
the signature of
Assignee herein as a signature to the Credit Agreement.
The Assignee shall
be deemed a "Lender" for all purposes under the Credit
Agreement and shall be
subject to and shall benefit from all of the rights and
obligations of a
Lender under the Credit Agreement. The address of the
Assignee for notice
purposes shall be as set forth below, and the Credit
Agreement shall be
amended by deeming such signature page and address to be
included thereon.
Without limiting the generality of the foregoing,
Assignee agrees that it
will perform its obligations as a Lender under the
Credit Agreement as
required by the terms thereof and Assignee appoints and
authorizes the Agent
to take such actions as Agent on its behalf and exercise
such powers under
the Credit Agreement and the other loan documents as are
delegated to the
Agent by the terms of the Credit Agreement and the other
credit documents,
together with such powers as are reasonably incidental
thereto.
8. Representations and Warranties. Each of
the Assignor and
the Assignee represents and warrants to the other party as
follows:
(a) it has full power and authority,
and has taken all
action necessary, to execute and deliver this Assignment
Agreement and to
fulfill its obligations under, and to consummate
the transactions
contemplated by, this Assignment Agreement;
(b) the making and performance by it
of this Assignment
Agreement and all documents required to be executed and
delivered by it
hereunder do not and will not violate any law or
regulation of the
jurisdiction of its incorporation or any other law or
regulation applicable
to it;
(c) this Assignment Agreement has been
duly executed and
delivered by it and constitutes its legal, valid and
binding obligation,
enforceable in accordance with its terms; and
(d) all consents, licenses,
approvals, authorizations,
exemptions, registrations, filings, opinions and
declarations from or with
any agency, department, administrative authority,
statutory corporation or
judicial entity necessary for the validity or
enforceability of its
obligations under this Assignment Agreement have been
obtained, and no
governmental authorizations other than any already
obtained are required in
connection with its execution, delivery and performance
of this Assignment
Agreement.
9. Expenses. The Assignor and the
Assignee agree that each
party shall bear its own expenses in connection with the
preparation and
execution of this Assignment Agreement.
10. Miscellaneous. (a) Assignor shall not
be responsible to
Assignee for the execution (by any party other than
the Assignor),
effectiveness, genuineness, validity, enforceability,
collectibility or
sufficiency of the Credit Agreement, the Note or the
Guaranty Agreement or
for any representations, warranties, recitals or
statements made therein or
in any written or oral statement or in any financial or
other statements,
instruments, reports, certificates or any other documents
made or furnished
or made available by Assignor to Assignee or by or on
behalf of the Borrower
or any Guarantor to Assignor or Assignee in
connection with the Credit
Agreement, the Note or the Guaranty Agreement and
the transactions
contemplated thereby. Assignor shall not be required to
ascertain or inquire
as to the performance or observance of any of the
terms, conditions,
provisions, covenants or agreements contained in the
Credit Agreement, the
Note or the Guaranty Agreement or as to the use of the
proceeds of the
Advances or as to the existence or possible existence
of any event which
constitutes an Event of Default or which with the
giving of notice or the
passage of time or both would constitute an Event of
Default.
(b) Assignee represents and warrants
that it has made its
own independent investigation of the financial condition
and affairs of the
Borrower and each Guarantor in connection with the making
of the Advances and
the assignment of Assignee's Share of Assignor's
Commitments and of
Assignor's Advances to Assignee hereunder and has made and
shall continue to
make its own appraisal of the creditworthiness of the
Borrower and each
Guarantor. Assignor shall have no duty or responsibility
either initially or
on a continuing basis to make any such investigation or any
such appraisal on
behalf of Assignee or to provide Assignee with any
credit or other
information with respect thereto, whether coming into its
possession before
the making of the Advances or at any time or times
thereafter and shall
further have no responsibility with respect to the
accuracy of, or the
completeness of, any information provided to Assignee,
whether by Assignor or
by or on behalf of either the Borrower or any Guarantor.
(c) THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS
ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF GEORGIA.
(d) No term or provision of this
Assignment Agreement may
be changed, waived, discharged or terminated orally,
but only by an
instrument in writing signed by both parties.
(e) This Assignment Agreement may be
executed in one or
more counterparts, each of which shall be an original but
all of which, taken
together, shall constitute one and the same instrument.
(f) The Assignor may at any time or
from time to time
grant to others assignments or participations in its
Commitments or the
Advances but not in the portions thereof assigned to
Assignee pursuant to
this Assignment Agreement. The Assignor represents and
warrants that it has
not at any time prior to the Assignment Effective Date
encumbered or assigned
the portion of its Commitments or Advances being assigned
hereunder.
(g) All payments hereunder or in
connection herewith
shall be made in Dollars and in immediately available
funds, if payable to
the Assignor, to the account of the Assignor at its
address as designated in
the Credit Agreement, and, if payable to the Assignee, to
the account of the
Assignee's address, as designated on the signature page
hereof.
(h) This Assignment Agreement shall
be binding upon and
inure to the benefit of the parties hereto and their
respective successors
and assigns. Neither of the parties hereto may assign or
transfer any of its
rights or obligations under this Assignment Agreement
without the prior
consent of the other party.
(i) All representations and
warranties made herein and
indemnities provided for herein shall survive the
consummation of the
transaction contemplated hereby.
(j) The Assignee acknowledges receipt
of copies of the
documents received in connection with the transactions
contemplated by the
Credit Agreement, the Guaranty Agreement and this Assignment
Agreement.
IN WITNESS WHEREOF, the parties hereto
have executed this
Assignment Agreement as of the date first above written.
[NAME OF ASSIGNOR]
By:
Title:
Assignee's Share of [NAME OF ASSIGNEE]
Revolving Loan Commitment:
$ By:
Title:
Address:
Tel. No:
Fax No:
CONSENTED TO AS OF THE
DATE SET FORTH ABOVE:
MORRISON HEALTH CARE, INC.
By:
Title:
MORRISON HEALTH CARE, INC.
EXHIBIT 11 - STATEMENT REGARDING COMPUTATION OF PER SHARE
EARNINGS
(Amounts in thousands, except per share data)
Year ended
May 31, 1998
May 31, 1997
---------------- --
- ---------------
Basic
Average shares
outstanding.......................... 11,938
11,785
Net
income............................... $11,552
$10,286
================
=================
Per share
amount............................... $ 0.97
$ 0.87
================
=================
Diluted
Average shares
outstanding.......................... 11,938
11,785
Net effect of dilutive stock
options-based on the treasury stock
method using average market
price................................. 254
56
---------------- --
- ---------------
Total................................ 12,192
11,841
================
=================
Net
income.............................. $11,552
$10,286
================
=================
Per share
amount.............................. $ 0.95
$ 0.87
================
=================
EXHIBIT 13
Morrison Financials
1998 Financial Review
Morrison Health Care, Inc. and Subsidiaries
Selected Financial Data
14
Management's Discussion and Analysis of
Financial Condition and Results of Operations
15
Consolidated financial Statements
18
Notes to Consolidated Financial Statements
22
Report of Independent Auditors
32
Directors and Officers
33
Shareowner Information
33
Selected Financial Data
Morrison Health Care, Inc. and Subsidiaries
The following table summarizes certain selected financial
information with
respect to Morrison Health Care, Inc. (the Company or MHCI)
and is derived
from the Financial Statements of MHCI. The Selected
Financial Data of MHCI is
presented as if MHCI had been a separate entity for fiscal
years 1996, 1995
and 1994. The financial information presented below for
1996, 1995 and 1994,
may not be indicative of MHCI's future performance as an
independent company.
The information set forth below should be read in
conjunction with
"Management's Discussion and Analysis of Financial Condition
and Results of
Operations," the Financial Statements of MHCI and notes
thereto, and the
Unaudited Pro Forma Financial Information of MHCI included
in Note 2 of the
Notes to Consolidated Financial Statements. Weighted average
shares for 1996
were determined as if the shares issued in connection with
the Distribution
were outstanding from the beginning of the year. Earnings
per share and
dividend data have not been presented for fiscal years 1995
and 1994 as MHCI
was not a separate publicly held company prior to March
1996.
Net income for fiscal year 1994 includes the results of
education, business
and industry ("B&I") operations which were sold in fiscal
year 1995. Net
income for fiscal year 1995 includes an after-tax gain of
$25.8 million from
the sale of certain B&I contracts and assets to Gardner
Merchant Services,
Inc. for a cash payment of $100 million. The remaining B&I
accounts were
closed.
For the
fiscal year+
(in thousands, except per share data) 1998
1997 1996 1995 1994
Consolidated statements of income data:
Managed volume (estimated and unaudited) $504,400
$464,800 $435,600 $408,300 *
Revenues $250,371
$221,011 $219,995 $225,392 $461,780
Income before provision for income taxes $ 19,065 $
17,576 $ 16,011 $ 65,295 $ 21,588
Provision for federal and state income taxes 7,513
7,290 6,731 28,469 8,351
Net income $ 11,552 $
10,286 $ 9,280 $ 36,826** $ 13,237
Earnings per share - Basic $ 0.97 $
0.87 $ 0.79
Earnings per share - Diluted $ 0.95 $
0.87 $ 0.79
Weighted average common shares - Basic 11,938
11,785 11,673
Net dilutive effect of stock options and
nonvested stock awards 254
56 51
Weighted average common shares - Diluted 12,192
11,841 11,724
+ Fiscal year 1998 is a 12-month year. Fiscal years 1997,
1996, 1995 and
1994 are composed of 52 weeks.
* Fiscal year 1994 information is not presented because
it included B&I
information.
** Includes an after-tax gain of $25.8 million from the sale
of the B&I
operations.
Other Financial Data:
Total assets $ 84,374 $
60,203 $ 61,101 $ 69,028 $105,964
Long-term debt $ 31,690 $
15,022 $ 20,034 $ 19,245 $ 3,128
Stockholders' equity $ 8,372 $
5,628 $ 4,716 $ 9,015 $ 51,164
Cash dividends per share of common stock$ 0.82 $
0.82 $ 0.205*** - -
Working capital $ 7,344 $
3,891 $ 8,677 $ 13,318 $ 9,239
Current ratio 1.2:1
1.1:1 1.3:1 1.5:1 1.2:1
***Dividends were not paid prior to the fourth quarter of
fiscal year 1996.
Management's Discussion and Analysis of Financial Condition
and Results of
Operations
Morrison Health Care, Inc. and Subsidiaries
This discussion should be read in conjunction with the
Financial Statements
and related notes found on pages 18 to 31.
RESULTS OF OPERATIONS
Effects of Distribution on Results of Operations
Effective March 9, 1996, Morrison Health Care, Inc. (the
Company or MHCI) was
spun-off (the Distribution) from Morrison Restaurants Inc.
(MRI), becoming an
independent corporation trading under the symbol MHI on the
New York Stock
Exchange. Management believes that the Distribution (see
Note 2 of the Notes
to Consolidated Financial Statements) has had a material
impact on the
results of operations due to the added separate company
costs that are
incurred by MHCI. The estimated effect of the Distribution
on the results of
operations of MHCI for the fiscal year ended June 1, 1996,
is presented in
the Unaudited Pro Forma Financial Information on pages 23 to
24. Such pro
forma financial information is presented as if the
Distribution had been
effective as of June 3, 1995.
1998 Compared To 1997
Overview
In MHCI's second full year as an independent company, fiscal
year 1998 again
demonstrated strong financial results, with increases in
managed volume,
revenue, operating profit and net income. The
accomplishments are due to
continued focus on cost reductions in all accounts, growth
in existing
accounts, strong new account sales, and the acquisitions of
Drake Management
Services, Inc. (January 1998) and Spectra Services, Inc.
(March 1998) in the
senior living market. (See Note 3 of the Notes to
Consolidated Financial
Statements for more information.)
MHCI is the only national, publicly held company which
specializes exclusively in health care food and nutrition
services.
MHCI's client base includes some of the largest and most
prestigious
hospitals in the United States.
Managed Volume/Revenue
The Company performs its services pursuant to one of two
types of contracts,
either management fee or profit and loss. While actual
services performed are
the same, revenue recognition varies by type of contract. In
a management fee
account, MHCI manages the services and facilities, but the
client is
responsible for all or nearly all the costs. Revenues and
fees are recognized
for the amount of the contractually agreed-upon management
fee plus any
earned incentives plus the amount of any expenses or
employee payroll costs
paid by the Company and charged back to the client. In a
profit and loss
account, MHCI assumes the risk of profit or loss for the
foodservice
operation. For such accounts, the amount of revenue reported
is the actual
revenue generated from meals served to patients, client
employees and
visitors. Because of the difference between the amount of
revenue that is
reported for the fee account (net management fees plus
reimbursed expenses)
and the profit and loss account (gross revenues of meal
sales), Management
uses the concept of managed volume to evaluate the Company's
true growth.
Managed volume is defined by MHCI as the total cost of
operating the
foodservices, regardless of which type of contract exists
with the client.
Management believes managed volume is a better indicator of
performance
because it measures total activity from all client accounts
and provides an
indication of what gross revenues would be if the Company
performed all
services pursuant to profit and loss contracts.
Managed volume increased $39.6 million or 8.5% in
fiscal year 1998 when
compared to fiscal year 1997. Revenue increased $29.4
million or 13.3% in
1998 as compared to 1997. The primary sources of these
increases were growth
at existing accounts, including adding vending operations
and increasing
employee payrolls, opening more accounts and larger accounts
than accounts
which were closed, and key acquisitions.
Gross Profit
Gross profit, defined as revenue less operating expenses,
increased $3.3
million or 8.4% for 1998. Growth of existing account
business, continued
emphasis on food and labor cost reductions, and acquisitions
all contributed
to the favorable results.
Selling, General and Administrative
Although selling, general and administrative expenses
increased compared to
the prior year, they decreased as a percentage of managed
volume and revenue.
The expenses were 4.5% of managed volume in fiscal year 1998
and were 4.6% of
managed volume in fiscal year 1997. In fiscal year 1998,
these expenses were
9.2% of revenues versus 9.7% in fiscal year 1997. Compared
to fiscal year
1997, the expenses increased $1.5 million or 7.1%, versus
the revenue
increase of 13.3% for the same period.
Interest Expense, Net
Interest expense increased 39.0% compared to the prior year
due
to higher debt levels associated with the Company's
acquisitions
and increased capital expenditures for both the Advanced
Culinary
CentersT and improvements to the management information
systems.
Federal and State Income Taxes
The combined federal and state effective tax rate decreased
to 39.4% in 1998
from 41.5% in 1997. The higher effective income tax rate in
fiscal 1997 as
compared to fiscal 1998 is primarily due to higher non-
deductible expenses in
fiscal 1997.
1997 COMPARED TO UNAUDITED PRO FORMA 1996
Overview
In MHCI's first full year as an independent company, fiscal
year 1997
showed strong financial results with increases in managed
volume,
revenue, operating profit and net income. These achievements
were
due to continued focus on cost reduction in accounts and
growth
in existing accounts.
Managed Volume/Revenue
Managed volume is the Company's method of measuring total
growth by
determining the total amount of foodservices that the
Company manages. In
fiscal year 1997, managed volume increased $29.2 million or
6.7% when
compared to fiscal year 1996. This increase was due to
growth at existing
accounts and to opening accounts with larger managed volumes
than at accounts
which were closed.
Revenue increased $1.0 million or 0.5% in fiscal year
1997 when
compared to fiscal year 1996. The increase was due to the
increases in
revenues at existing accounts, attributable primarily to
adding vending
operations and employee payroll at those accounts.
Gross Profit
Gross profit, defined as revenue less operating expenses,
increased $0.4
million or 1% for 1997. The continuing emphasis on food and
labor cost
reductions combined with the general business growth at
numerous existing
accounts generated the improvements in gross profit.
Selling, General and Administrative
Selling, general and administrative expenses decreased
slightly as
a percentage of managed volume and revenue due to improved
control of expenses.
Interest Expense, Net
Interest expense decreased 47% as the Company funded most of
its activities with internally-generated funds, resulting in
lower
debt levels in fiscal year 1997.
Federal and State Income Taxes
The combined federal and state effective tax rate decreased
to
41.5% in 1997 from 42.1% in 1996.
IMPACT OF YEAR 2000
Currently, there is significant uncertainty within the
software industry and
among software users regarding the impact of installed
software that has been
programmed to accept only two-digit entries in the date code
fields and use
such two-digit entries in the software's calculation and
report generation
formats. Current versions of the Company's products have
been and are being
assessed to determine the impact of becoming "Year 2000"
compliant.
Similarly, as part of its continuing review and improvement
of systems and
operations, the Company is in the process of modifying or
replacing certain
software programs to avoid any detrimental effects in its
installed software
programs while upgrading and enhancing the overall
effectiveness of its
information management systems. The project is expected to
be completed well
in advance of December 31, 1999. While this project includes
both Year 2000
issues and general improvements, the estimate of the costs
to address both
issues is less than $5 million, most of which has already
been spent. The
Company does not expect this project to pose significant
operational problems
for the Company. However, the Company cannot make any
assurances that the
Company will
not be exposed to any potential claims resulting from the
system problems
associated with the century change. See "Special Note
Regarding
Forward-Looking Information."
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow, Capital Expenditures and Financing
Due to the nature of its contract foodservice business, MHCI
is able to
maintain a relatively steady cash flow. Cash flow from
operations has
historically financed MHCI's capital investments. MHCI plans
for controlled
expansion over the next several years and anticipates that
cash flow from
operations plus utilization of the existing lines of credit
will be
sufficient to provide for this expansion. See "Special Note
Regarding
Forward-Looking Information."
To partially finance its activities in fiscal 1998,
MHCI used a $50
million, five-year credit facility from various financial
institutions. Of
the total facility, $30 million was revolving lines of
credit. The Company
had $17.5 million outstanding under the terms of these lines
of credit at May
31, 1998. The remaining $20 million of the credit facility
was a five-year
term note which was being repaid in quarterly installments
of $1.25 million
since June 30, 1997. The credit facility contained
restrictions on incurring
additional indebtedness and certain funded debt, net worth
and fixed charge
coverage requirements.
The Company managed the interest costs of the term
note through an
interest rate swap agreement. This swap agreement
effectively fixed the
interest rate for the period of the term note at 6.7%.
For day-to-day operating activities, additional lines
of credit allow
borrowing up to $5 million. The Company had $4.2 million
under this agreement
at May 31, 1998.
On May 31, 1998, MHCI had $36.7 million outstanding in
total debt, an
increase of $16.7 million from the prior year.
Subsequent to May 31, 1998, the Company replaced its
$50 million credit
facility with a $75 million revolving credit line from four
financial
institutions. Concurrent with this transaction, the Company
cancelled the
related interest rate swap agreement that had effectively
fixed the interest
rate for the term portion of that facility. The new credit
line has a
variable interest rate based upon LIBOR and variable
interest payment
requirements. The principal is due no later than June 30,
2003. The initial
amount borrowed was $35.4 million, all of which was used to
repay the balance
due on the $50 million and $5 million credit facilities.
Also in June 1998, the Company entered into two
interest rate swap
agreements to reduce the impact of changes in the interest
rates on its
floating rate debt and to exchange floating rate for fixed
rate payments at
certain dates. These swap agreements expire in June 2003 and
June 2008 and
effectively convert $20 million of variable rate borrowings
to fixed.
Trade accounts receivable make up the majority of
MHCI's total current
assets. Historically, the average days outstanding in trade
accounts
receivable is less than one month and bad debt expense has
been minimal.
MHCI requires capital principally for acquisitions,
new accounts,
equipment replacement and remodeling of existing accounts
and the
construction of Advanced Culinary Centers,T a food
preparation and delivery
system that was initiated in fiscal 1998. Cash provided by
operating
activities approximated $10.3 million for fiscal year 1998.
Capital
expenditures were approximately $8.9 million, an increase of
$4.1 million or
83% compared to the prior year period. Capital expenditures
are anticipated
to total $12 million to
$15 million in fiscal year 1999. MHCI plans to finance this
amount primarily through internally generated funds. See
"Special Note
Regarding Forward-Looking Information."
Working Capital
As of May 31, 1998, working capital was $7.3 million while
the current ratio
was 1.2:1. Working capital increased $3.5 million and the
current ratio
increased 0.1 when compared to the prior year.
Dividends
MHCI paid approximately $9.9 million in cash dividends to
stockholders during
fiscal year 1998. The Company plans to pay annual dividends
of approximately
$1.9 million in the next fiscal year. See "Special Note
Regarding
Forward-Looking Information."
Deferred Tax Assets
The recognition of deferred tax assets depends on the
anticipated existence
of taxable income in future periods in amounts sufficient to
realize the
assets. A valuation allowance must be provided for the
deferred tax asset if
such future income is not likely to be generated. Management
believes that
future taxable income should be sufficient to realize all of
MHCI's deferred
tax assets based on historical earnings of MHCI; therefore,
a valuation
allowance has not been established.
KNOWN EVENTS, UNCERTAINTIES AND TRENDS
Impact of Inflation
In the past, MHCI has been able to recover inflationary cost
increases
through contract inflation adjustments, increased
productivity and menu
changes. There have been and there may be in the future,
delays in contract
inflation adjustments and competitive pressures which limit
MHCI's ability to
recover such cost increases in their entirety. Historically,
the effects of
inflation on MHCI's net income have not been materially
adverse. See "Special
Note Regarding Forward-Looking Information."
Management's Outlook
In fiscal year 1997, Management began an extensive program
of expanding,
restructuring and training of the sales team. Management
anticipates that its
continued focus on the sales team will facilitate increases
in the number and
economic value of accounts sold in fiscal year 1999 and
beyond. Management
believes that growth will also occur through expanding
services at existing
accounts and the Advanced Culinary Centers,T a food
preparation and delivery
system that was initiated in fiscal 1998. In addition,
Management believes
the acquisition of companies that complement its core
competencies will allow
the Company to increase its presence in the senior living
market while
providing quality services for health care facilities
nationwide.
Several MHCI accounts are among the largest acute care
and teaching
hospitals in the United States. The Company strives to
maintain its long-term
partnerships with these facilities while continuing to
increase quality and
lower costs. MHCI believes that ongoing investments in
people and programs
designed to enhance its aggressive sales drive will add new
clients while
building stronger relationships with current accounts. By
focusing on its
primary market of hospitals and expanding into the senior
living market, the
Company believes that it is strategically positioned to
maintain its steady
growth. See "Special Note Regarding Forward-Looking
Information."
Special Note Regarding Forward-Looking Information
The foregoing section contains various "forward-looking
statements" which
represent the Company's expectations or beliefs concerning
future events,
including the following: statements regarding account
growth, impact of the
Year 2000, future capital expenditures and borrowings, the
payment of
dividends, the impact of inflation and the effects of
Management's strategies
for growth. The Company cautions that a number of important
factors could,
individually or in the aggregate, cause actual results to
differ materially
from those included in the forward-looking statements,
including, without
limitation, the following: health care spending trends; the
growth of systems
and group purchasing organizations; changes in health care
regulations;
increased competition in the health care food and nutrition
market;
customers' acceptance of the Company's cost saving programs;
and laws and
regulations affecting labor and employee benefit costs.
Consolidated Statements of Income
Morrison Health Care, Inc. and Subsidiaries
For the Fiscal
Year Ended
(In thousands, except per share data) May 31, 1998
May 31, 1997 June 1, 1996
Revenues $250,371
$221,011 $219,995
Operating costs and expenses:
Operating expenses 207,265
181,233 180,607
Selling, general and administrative 22,919
21,395 20,670
Restructuring costs 0
0 1,398
Asset impairment 0
0 193
Interest expense, net of interest
income of $406 in 1998, $687
in 1997 and $428 in 1996 1,122
807 1,116
Total costs and expenses 231,306
203,435 203,984
Income before provision for income taxes 19,065
17,576 16,011
Provision for federal and state income taxes 7,513
7,290 6,731
Net income $ 11,552
$ 10,286 $ 9,280
Earnings per share - Basic $ 0.97
$ 0.87 $ 0.79
Earnings per share - Diluted $ 0.95
$ 0.87 $ 0.79
Weighted average common shares - Basic 11,938
11,785 11,673
Net dilutive effect of stock options
and non-vested stock awards 254
56 51
Weighted average common shares - Diluted 12,192
11,841 11,724
The accompanying notes are an integral part of the financial
statements.
Consolidated Balance Sheets
Morrison Health Care, Inc. and Subsidiaries
(In thousands) May 31, 1998
May 31, 1997
Assets
Current assets:
Cash and short-term investments $ 5,720
$ 6,347
Receivables:
Trade, less allowance for
doubtful accounts of $887 at
May 31, 1998 and $744 at
May 31, 1997 21,381
16,387
Other 6,372
4,884
Inventories 2,936
2,686
Prepaid expenses 1,262
1,006
Deferred income tax benefits 1,949
1,929
Total current assets 39,620
33,239
Property and equipment - at cost:
Buildings and improvements 3,425
2,326
Equipment 16,037
13,251
Construction in progress 4,729
766
24,191
16,343
Less accumulated depreciation 10,232
8,471
13,959
7,872
Deferred income tax benefits 2,503
1,610
Cost in excess of net assets acquired, net 12,097
4,582
Notes receivable, less current portion 3,729
3,817
Deferred charges 4,083
2,830
Other assets 8,383
6,253
Total assets $84,374
$60,203
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $14,545
$12,977
Accrued liabilities:
Taxes, other than income taxes 1,818
1,546
Payroll and related costs 6,395
4,133
Insurance 2,289
3,436
Other 2,207
2,245
Current portion of long-term debt 5,022
5,011
Total current liabilities 32,276
29,348
Long-term debt 31,690
15,022
Other liabilities 12,036
10,205
Stockholders' equity:
Common stock, $0.01 par value
(authorized 100,000 shares;
issued: 1998 - 12,379 shares,
1997 - 12,165 shares) 124
122
Capital in excess of par value 12,859
9,717
Unearned ESOP shares (3,195)
(3,517)
Retained earnings 2,322
647
12,110
6,969
Less cost of treasury stock 3,738
1,341
Total stockholders' equity 8,372
5,628
Total liabilities and
stockholders' equity $84,374
$60,203
The accompanying notes are an integral part of the financial
statements.
Consolidated Statements of Cash Flows
Morrison Health Care, Inc. and Subsidiaries
For the Fiscal Year Ended
(In thousands) May
31, 1998 May 31, 1997 June 1, 1996
Operating activities:
Net income
$ 11,552 $ 10,286 $ 9,280
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
2,538 1,992 2,330
Amortization of intangibles
377 153 152
Other, net
0 1,066 1,172
Deferred income taxes
(811) 514 4,927
(Gain)/Loss on disposition of assets
(19) 29 170
Changes in operating assets and liabilities:
(Increase)/Decrease in receivables
(6,359) 2,486 1,345
(Increase)/Decrease in inventories
(246) (24) 218
(Increase)/Decrease in prepaid and other
assets
(675) 631 (2,005)
Increase/(Decrease) in accounts payable,
accrued and other liabilities
3,936 6,046 (12,112)
Increase/(Decrease) in income taxes payable
0 (935) 6,928
Net cash provided by operating activities
10,293 22,244 12,405
Investing activities:
Purchases of property and equipment
(8,850) (4,843) (2,170)
Proceeds from disposal of assets
268 459 387
Acquisition of businesses, net of cash acquired
(7,464) 0 0
Other, net
(2,745) (1,456) 764
Net cash used by investing activities
(18,791) (5,840) (1,019)
Financing activities:
Net proceeds from long-term debt
21,690 0 800
Principal payments on long-term debt
(5,011) (11) (11)
Net change in short-term borrowings
0 (6,760) 6,760
Proceeds from exercise of stock options and issuance
of stock, net of income tax benefits
3,054 679 1,544
Dividends paid
(9,877) (9,725) (2,403)
Payments to acquire Treasury Stock
(1,891) 0 0
(Increase)/Decrease in Treasury Stock held by Deferred
Compensation Plan
(506) (412) 29
ESOP shares released
412 84 0
Net transfers to Morrison Restaurants Inc.
0 0 (12,749)
Net cash provided/(used) by financing activities
7,871 (16,145) (6,030)
(Decrease)/Increase in cash and short-term investments
(627) 259 5,356
Cash and short-term investments at the beginning of the year
6,347 6,088 732
Cash and short-term investments at the end of the year
$ 5,720 $ 6,347 $ 6,088
Supplemental disclosure of cash flow information -
cash paid for:
Interest
1,696 1,190 1,533
Income taxes
7,933 8,000 18,586
The accompanying notes are an integral part of the financial
statements.
Consolidated Statements of Stockholders' Equity
Morrison Health Care, Inc. and Subsidiaries
For the Fiscal Year Ended
(In Thousands except per share data) May 31,
1998 May 31, 1997 June 1, 1996
Shares
Amounts Shares Amounts Shares Amounts
Common Stock
Beginning balance 12,165 $
122 11,791 $ 118 0 $ 0
Shares issued pursuant to spin-off from
Morrison Restaurants Inc. 0
0 0 0 11,678 117
Shares issued to ESOP 0
0 255 3 0 0
Shares issued under Stock Incentive Plans 214
2 119 1 113 1
Ending balance 12,379
124 12,165 122 11,791 118
Capital in Excess of Par Value
Beginning balance
9,717 5,441 0
Shares issued to ESOP
0 3,592 0
Shares issued under Stock Incentive Plans,
net of income tax benefits
3,052 678 1,543
Shares released from ESOP
90 6 0
Distribution of Morrison Restaurants
Inc.'s investment in the Company
to Morrison Restaurants Inc. stockholders
0 0 3,898
Ending balance
12,859 9,717 5,441
Morrison Restaurants Inc. Equity Investment
Beginning balance
0 0 9,015
Net income
0 0 6,791
Cash transfers to Morrison Restaurants Inc.
0 0 (12,749)
Distribution of Morrison Restaurants Inc.'s
investment in the Company to Morrison
Restaurants Inc. stockholders
0 0 (3,057)
Ending balance
0 0 0
Unearned ESOP Shares
Beginning balance (249)
(3,517) (255) (3,595) 0
Shares issued to ESOP 0
0 0 0 0
Shares released from ESOP 23
322 6 78 0
Ending balance (226)
(3,195) (249) (3,517) 0
Retained Earnings
Beginning balance
647 86 0
Net income
11,552 10,286 2,489
Cash dividends of $0.82 per share in fiscal
1998 and 1997 and $0.205 per share in
fiscal 1996
(9,877) (9,725) (2,403)
Ending balance
2,322 647 86
Treasury Stock
Beginning balance
(1,341) (929) 0
Distribution of Morrison Restaurants
Inc.'s investment in the Company to
Morrison Restaurants Inc. stockholders
0 0 (958)
Purchase of Treasury Stock
(1,891) 0 0
(Purchase)/Sale of Treasury Stock -
held by Deferred Compensation Plan
(506) (412) 29
Ending balance
(3,738) (1,341) (929)
Total Stockholders' Equity $
8,372 $ 5,628 $4,716
The accompanying notes are an integral part of the financial
statements.
NOTE 1 Summary of Significant Accounting Policies
Basis of Presentation
On March 9, 1996, Morrison Health Care, Inc. and
Subsidiaries (the "Company"
or "MHCI") was spun off ("the Distribution") from Morrison
Restaurants Inc.
("MRI"). Prior to the Distribution, MHCI was a wholly owned
health care
contract food and nutrition business of MRI.
The accompanying financial statements for fiscal 1998
and 1997 reflect
MHCI as a stand-alone entity. The financial statements for
fiscal 1996 have
been prepared as if MRI's health care contract food and
nutrition business
had operated as a stand-alone entity for fiscal year 1996.
The fiscal 1996
statements include the assets, liabilities, revenues and
expenses that are
directly related to the Company's operations. They also
include an allocation
of certain assets, liabilities and general corporate
expenses of MRI, such as
executive payroll, legal, data processing and interest,
which are related to
the Company. Amounts were allocated on a specific
identification method where
appropriate and on a pro rata basis otherwise. Management
believes the
allocation methods used are reasonable.
Use of estimates
The preparation of financial statements in accordance with
generally accepted
accounting principles requires Management to make estimates
and assumptions
that affect the reported amounts of assets and liabilities
at the date of the
financial statements, and the reported amounts of revenues
and expenses
during the reporting period. Actual results could differ
from those estimates.
Concentration of Credit Risk
The Company primarily competes in the health care food and
nutrition services
industry, and encounters significant competition in the
market in which it
operates. The length of contract varies by customer.
Concentration of credit
risk with respect to accounts receivable are limited due to
the large number
of customers that make up the Company's customer base, thus
spreading trade
credit risk. The Company maintains reserves for potential
uncollectible
amounts which, in the aggregate, have not exceeded
Management's expectations.
Principles of Consolidation
The accompanying consolidated financial statements include
the accounts of
MHCI and its wholly owned subsidiaries. All significant
intercompany accounts
and transactions have been eliminated.
Fiscal Year
Effective with the fiscal year ended in 1998, the Company's
fiscal year ends
on May 31. The fiscal years ended May 31, 1997 and June 1,
1996 were each
comprised of 52 weeks. Starting with fiscal year 1998, the
Company changed
from a 52-53 week fiscal year to a 12-month fiscal year
ending May 31 each
year.
Cash and Short-Term Investments
The Company's cash management program provides for the
investment of excess
cash balances in short-term money market instruments. Short-
term investments
are stated at cost, which approximates market. The Company
considers
marketable securities with a maturity of three months or
less when purchased
to be short-term investments.
Inventories
Inventories consist of materials, food supplies, china and
silver and are
stated at the lower of cost (first in-first out) or market.
Property and Equipment and Depreciation
Property and equipment are stated at cost and are being
depreciated for
financial reporting purposes using the straight-line method
over the
estimated useful lives of the assets. Annual rates of
depreciation range from
3% to 5% for buildings and from 8% to 34% for kitchen and
other equipment.
Costs incurred in connection with the construction at major
facilities or of
Advanced Culinary CentersT are capitalized as construction
in progress until
such facilities or centers become operational. Interest is
capitalized in
connection with these capitalized construction costs. The
capitalized
interest is recorded as part of the asset to which it
relates and is
amortized over the asset's estimated useful life. In fiscal
1998, $127,000 of
interest cost was capitalized. No interest was capitalized
in fiscal 1997 and
1996.
Property and equipment are periodically reviewed for
impairment based
on an assessment of future operations. The Company records
impairment losses
on long-lived assets used in operations when indicators of
impairment are
present and the undiscounted cash flows estimated to be
generated by those
assets are less than the assets' carrying amount.
Intangible Assets
Excess of costs over the fair value of net assets acquired
with purchased
businesses generally is amortized on a straight-line basis
over periods
ranging from 10 to 40 years. At May 31, 1998, May 31, 1997
and June 1, 1996,
the accumulated amortization for costs in excess of net
assets acquired was
$1.9 million, $1.6 million and $1.4 million, respectively.
The carrying value of goodwill and other intangibles
is evaluated
periodically in relation to the operating performance and
future undiscounted
cash flows of each operating business acquired. Adjustments
are made if the
sum of expected future net cash flows is less than net book
value. The
Company believes that the remaining amounts of these assets
have continuing
value.
Revenue Recognition
Revenue is recognized upon performance of services. The
Company performs its
services pursuant to one of two types of contracts, either
management fee or
profit and loss. While actual services performed are the
same, revenue
recognition varies by type of contract. In a management fee
account, MHCI
manages the services and facilities, but the client is
responsible for all or
nearly all the costs. Revenues and fees are recognized for
the amount of the
contractually agreed-upon management fee plus any earned
incentives plus the
amount of any expenses or employee payroll costs paid by the
Company and charged
back to the client. In a profit and loss account, MHCI
assumes the risk of
profit or loss for the foodservice operation. For such
accounts, the amount of
revenue reported is the actual revenue generated from meals
served to
patients, client employees and visitors.
Income Taxes
For the first three quarters of 1996, the 1996 statement of
income reflects
an income tax expense representing the Company's allocated
share of MRI's tax
expense, which approximates the tax expense of the Company
on a stand-alone
basis. Beginning with the fourth quarter of fiscal year
1996, the
accompanying statements of income reflect the Company's
actual tax expenses.
Deferred income taxes are determined utilizing a
liability approach.
This method gives consideration to the future tax
consequences associated
with differences between financial accounting and tax bases
of assets and
liabilities.
Stock-Based Compensation
Stock options are recorded in accordance with Accounting
Principles Board
Opinion ("APB") No. 25, with pro forma disclosures of net
income and earnings
per share as if Statement of Financial Accounting Standards
("SFAS") No. 123
had been applied.
Earnings Per Share
The Company has adopted Statement of Financial Accounting
Standards No.
128, "Earnings Per Share" (SFAS No. 128), and has restated
earnings per share
amounts reported in prior periods in accordance with SFAS
No. 128. Basic
earnings per share is based on the weighted average number
of shares
outstanding during each quarter. Diluted earnings per share
is based on the
weighted average number of shares outstanding during each
quarter plus the
effect of outstanding stock options using the treasury stock
method.
New Accounting Standards
In 1997, the Financial Accounting Standards Board issued
Statements of
Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" and
No. 131, "Disclosures about Segments of an Enterprise and
Related
Information." In 1998, the Financial Accounting Standards
Board issued
Statements of Financial Accounting Standards No. 132,
"Employer's
Disclosures about Pensions and other Postretirement
Benefits." These
statements, which are effective for fiscal years beginning
after December 15,
1997, expand or modify disclosures and will have no impact
on the Company's
consolidated financial position, results of operations or
cash flow. In June
1998, the Financial Accounting Standards Board issued
Statement No. 133,
"Accounting for Derivative Instruments and Hedging
Activities," which
establishes accounting and reporting standards for
derivative instruments.
The statement is effective for all fiscal quarters of fiscal
years beginning
after June 15, 1999 and will be adopted by the Company in
fiscal year 2001.
Based upon the Company's current limited use of derivative
instruments and
hedging activities, Management does not believe the
statement will have a
material impact on the Company's consolidated financial
position, results of
operations or cash flows.
Pre-Opening Expenses
Pre-opening costs, such as salaries, personnel training
costs and other
expenses of opening a new account, are often reimbursed by
the client. In
circumstances when they are not reimbursed, these costs are
charged to
expense as incurred.
Financial Instruments
The Company's financial instruments at May 31, 1998, May 31,
1997 and June 1,
1996 consisted of cash and short-term investments, accounts
and notes
receivable, long-term debt and interest rate swap
agreements. The fair value
of these financial instruments approximated the carrying
amounts reported in
the balance sheets. Cash is deposited in financial
institutions which carry
FDIC insurance. From time to time, the cash balances at
these institutions
exceed the insured amount. Management does not believe that
this is a
significant risk to the Company.
Although substantially all of the Company's trade
accounts receivable
are from health care institutions, Management believes that
concentrations of
credit risk are limited due to the geographic diversity of
the Company's
customer base. The Company performs periodic credit
evaluations of its
customers' financial condition and generally does not
require collateral.
Historically, the Company has not experienced significant
losses related to
trade accounts receivable from individual customers or from
groups of
customers in any geographic area.
Reclassification
Certain prior year amounts and balances have been
reclassified to conform to
the current year presentation.
NOTE 2 DISTRIBUTION
On March 7, 1996, the stockholders of MRI approved the
Distribution by MRI of
all the outstanding shares of common stock of MHCI,
a wholly owned subsidiary of MRI. The Board of Directors of
MRI believed that
the Distribution was in the best interests of MRI and its
stockholders
because the separation of MRI's three lines of business,
among other things,
(i) allowed management of each of the three companies to
concentrate its full
attention on its business and allowed each company to reward
management and
employees based on the performance of its business; (ii)
allowed each company
to access the capital markets directly to raise capital;
(iii) established a
value for each company that is independent of the other
businesses and
provided investors and securities analysts a clearer basis
on which to
understand and analyze the three businesses; and (iv)
allowed each company to
establish equity-based benefit plans which can hold its own
common stock.
The following Unaudited Pro Forma Consolidated
Statement of Income has
been prepared to illustrate certain estimated effects of the
Distribution.
This statement includes adjustments for the effect of costs
and expenses
which might have been incurred had the Distribution occurred
June 3, 1995.
Adjustments are based on the assumptions set forth below the
statement.
(In thousands, except per share data)
For the fiscal year ended June
1, 1996
UNAUDITED
PRO FORMA UNAUDITED
HISTORICAL
ADJUSTMENTS PRO FORMA
Revenues $219,995 $
0 $219,995
Operating costs and expenses:
Operating expenses 180,607
0 180,607
Selling, general and
administrative 20,670
1,420(a) 22,090
Restructuring cost 1,398
0 1,398
Asset impairment 193
0 193
Interest expense, net 1,116
400(b) 1,516
203,984
1,820 205,804
Income before provision for
income taxes 16,011
(1,820) 14,191
Provision for federal and state
income taxes 6,731
(760)(c) 5,971
Net income $ 9,280 $
(1,060) $8,220
Earnings per common and common
equivalent share
$ 0.70
Weighted average common and common equivalent shares
11,811(d)
The pro forma adjustments to the accompanying historical
statements of income
for the fiscal year ended June 1, 1996 are described below:
(a) To record the increase in selling and general and
administrative expenses
which presumably would have been incurred by MHCI had MHCI
been a separate
and stand-alone entity.
(b) To record the increase in interest expense which would
have been incurred
by MHCI had MHCI been a separate and stand-alone entity.
(c) To record the estimated income tax benefit associated
with pro forma
adjustments (a) and (b) at an assumed combined state and
federal effective
income tax rate of 41.8% for the year ended June 1, 1996.
The assumed effective
income tax rate is comprised of a 35% statutory federal
income tax rate plus
applicable state income taxes and permanent differences,
less applicable tax
credits.
(d) The number of equivalent shares for periods prior to the
spin-off is
based on the number of MRI's common and common equivalent
shares adjusted for
the 1 for 3 distribution ratio.
NOTE 3 ACQUISITIONS
In January 1998, the Company acquired all of the outstanding
common stock of
Phoenix-based Drake Management Services, Inc. In March 1998,
the Company
acquired substantially all of the assets of Chicago-based
Spectra Services,
Inc. Both companies, which provide nutrition services in the
senior living
market, were acquired for cash, with a total acquisition
price of $6.1
million. Additional contingent payments of $950,000 (of
which $400,000 was
paid during June 1998) may be earned by the sellers in
fiscal year 1999. The
acquisitions were accounted for using the purchase method.
The resulting
goodwill of $6.7 million is being amortized over 20 years
using the
straight-line method. The operating results of these
companies have been
included from their respective acquisition dates. Pro forma
results are not
presented for these acquisitions as they are not significant
during the
periods presented.
NOTE 4 NOTES PAYABLE
Notes payable consists of the following:
(In thousands) Fiscal Year
Ended
May 31, 1998
May 31, 1997
Variable rate revolving credit facility
due in full 3/11/01 $17,500 $
0
Variable rate demand lines of credit 4,190
0
Term note due in equal quarterly
installments of $1,250 from
1998-2001 15,000
20,000
Other notes and mortgages 22
33
36,712
20,033
Less current maturities 5,022
5,011
$31,690
$15,022
Aggregate maturities of long-term borrowings over the
next
five years are as follows: 1999 - $5,022; 2000 - $5,000; and
2001 - $26,690.
In March 1996, the Company entered into a five-year
$50 million
unsecured credit facility with various banks. The credit
facility includes a
$30 million revolving line of credit which allows the
Company to borrow under
various interest rate options. Commitment fees of 0.25% per
annum are payable
on the unused portion of the credit facility. At May 31,
1998, the Company
had $17.5 million in borrowings under the revolver, with a
weighted average
variable rate of approximately 6.6%.
The balance of the $50 million credit facility, $20
million, is a term
note which will be repaid in quarterly installments of $1.25
million
commencing June 30, 1997. At May 31, 1998, the balance on
the term note was
$15 million. In order to control the interest cost on the
term note, the
Company entered into an interest rate swap agreement. This
swap agreement
effectively fixes the interest rate on the outstanding term
note balance at
6.7% per annum for the period of the term note.
In addition, the Company had uncommitted demand lines
of credit
amounting to $5 million. At May 31, 1998, the Company had
$4.2 million
outstanding under these lines, at a rate of 6.4%.
The credit facility contains certain restrictions on
incurring
additional indebtedness and certain funded debt, net worth
and fixed charge
coverage requirements.
See Note 11 regarding Subsequent Events.
NOTE 5 INCOME TAXES
The components of income tax expense are as follows:
(In thousands) For the Fiscal Year Ended
May 31, 1998 May 31, 1997
June 1, 1996
Current:
Federal $6,875 $5,960
$1,479
State 1,449 816
325
8,324 6,776
1,804
Deferred:
Federal (670) 440
4,127
State (141) 74
800
(811) 514
4,927
$7,513 $7,290
$6,731
Deferred tax assets and liabilities are comprised of the
following:
(In thousands) Fiscal Year
Ended
May 31, 1998
May 31, 1997
Deferred tax assets:
Employee benefits $4,346
$3,547
Insurance reserves 1,366
1,841
Bad debt reserve 349
293
Other 487
438
Total deferred tax assets 6,548
6,119
Deferred tax liabilities:
Depreciation 282
254
Retirement plans 479
452
Prepaid deductions 131
133
Other 1,204
1,741
Total deferred tax liabilities 2,096
2,580
Net deferred tax asset $4,452
$3,539
SFAS 109 specifies that deferred tax assets are to be
reduced by a
valuation allowance if it is more likely than not that some
portion of the
deferred tax assets will not be realized. Management
believes that future
taxable income will be sufficient to realize all of the
Company's deferred
tax assets based on historical earnings of the Company and,
therefore, a
valuation allowance has not been established.
A reconciliation from the statutory federal income tax
expense to the
reported income tax expense is shown below:
(In thousands) For the Fiscal
Year Ended
May 31, 1998 May 31, 1997
June 1, 1996
Statutory federal income taxes $6,673 $6,152
$5,604
State income taxes, net of
federal income tax benefit 853 804
732
Other, net (13) 334
395
$7,513 $7,290
$6,731
The effective income tax rate was 39.4%, 41.5% and
42.0% in 1998, 1997
and 1996, respectively. The higher effective income tax
rates in fiscal years
1997 and 1996 were due to the nondeductibility of certain
expenses.
In connection with the Distribution, the Company
entered into a tax
allocation agreement with Morrison Fresh Cooking, Inc.
("MFC") and Ruby
Tuesday, Inc. ("RTI"). This agreement provides that the
Company will pay its
share of RTI's consolidated tax liability for the periods in
which the
Company was included in MRI's consolidated federal income
tax return. It also
provides for sharing, where appropriate, of state, local and
foreign taxes
attributable to periods prior to the date of Distribution.
Management does
not believe this agreement will have a material effect on
the Company.
NOTE 6 Employee Benefit Plans
Salary Deferral Plan
Under the Morrison Health Care, Inc. Salary Deferral Plan,
each eligible
employee may elect to make pre-tax contributions to a trust
fund in amounts
ranging from 2% to 10% of their annual earnings. Employees
contributing a
pre-tax contribution of at least 2% may elect to make after-
tax contributions
not in excess of 10% of annual earnings. The Company's
contribution to the
Plan is based on the employee's pre-tax contribution and
years of service.
After three years of service (including service with MRI
prior to the
Distribution), the Company contributes 20% of the employee's
pre-tax
contribution, 30% after ten years of service and 40% after
20 years of
service. Normally, the full amount of each participant's
interest in the
trust fund will be paid upon retirement or total disability.
However, the
Plan allows participants to make early withdrawals of pre-
tax and after-tax
contributions, subject to certain restrictions. Under the
provisions of the
plan, highly compensated employees, as defined by the
Internal Revenue Code,
are limited to contributions of 3% and receive a maximum of
a 20% match. The
Company's contributions to the trust fund approximated
$414,000, $257,000
and $244,000 for 1998, 1997 and 1996, respectively.
During fiscal year 1997, the Company began sponsorship
of an employee
stock ownership feature ("ESOP") covering participants in
the Salary Deferral
Plan. The Company loaned the Plan $3.6 million (with
outstanding balances of
$3.2 million and $3.5 million at May 31, 1998 and May 31,
1997, respectively)
to purchase approximately 255,000 shares of common stock, at
an interest rate
of 5.47%. The loan is payable in 120 monthly installments of
principal and
interest. The Company makes monthly contributions sufficient
to cover
principal and interest on the loan made to the Plan. Shares
are released and
allocated to participant accounts monthly as loan repayments
are made.
The Company adopted the provisions of AICPA Statement
of Position No.
93-6 which requires that compensation expense be measured
based on the fair
value of the shares over the period the shares are earned.
Dividends paid on
unallocated shares held by the Plan are used to make
principal and interest
payments and are not charged to retained earnings, and
shares not yet
committed to be released are not considered outstanding in
the calculation of
earnings per share. The fair value of unearned shares at May
31, 1998 and May
31, 1997 was approximately $3,874,000 and $4,046,000,
respectively.
Deferred Compensation Plan
The Company maintains the Morrison Health Care, Inc.
Deferred Compensation
Plan for certain selected employees. The provisions of this
Plan are similar
to those of the Salary Deferral Plan. Differences include
which employees are
eligible to participate and the limitations on the amount of
deferrals that
may be elected by participants. The Company's contributions
under the Plan
approximated $104,000, $125,000 and $137,000, for 1998, 1997
and 1996,
respectively. Assets of the Plan are held by a rabbi trust.
Under current
accounting rules, assets and liabilities of a rabbi trust
must be accounted
for as if they are assets and liabilities of the Company.
Therefore, all
earnings and expenses of the rabbi trust are recorded in the
Company's
financial statements. Assets and liabilities of the Plan
approximated
$6,043,000 and $4,667,000 at May 31, 1998 and 1997,
respectively, and include
$1,848,000 and $1,341,000, respectively, of MHCI common
stock, which is
accounted for as treasury stock at cost.
Retirement Plan
The Retirement Plan was frozen by RTI (formerly Morrison
Restaurants Inc.) on
December 31, 1987. The Company is a joint sponsor of the
Retirement Plan. No
additional benefits accrued and no new participants entered
the Plan after
that date. The Company will continue to share in future
expenses of the Plan.
Participants will receive benefits based upon salary and
length of service.
The Plan's assets include common stock, fixed income
securities, short-term
investments and cash. There were no contributions made to
the Plan in 1998,
1997 or 1996.
Executive Supplemental Pension Plan
Under the Morrison Health Care, Inc. Executive Supplemental
Pension Plan,
employees with average compensation of at least $100,000 for
five consecutive
years (including service with MRI prior to the Distribution)
in a qualifying
position become eligible to earn supplemental retirement
payments based upon
salary and length of service (including service as part of
MRI prior to the
Distribution), reduced by Social Security benefits and
amounts otherwise
receivable under the Retirement Plan.
Management Retirement Plan
Under the Morrison Health Care, Inc. Management Retirement
Plan, individuals
who have 15 years of credited service (including service
with MRI prior to
the Distribution) and earn an average annual compensation of
at least $40,000
for the immediately preceding three years become
participants. Participants
receive benefits based upon salary and length of service
(including service
with MRI prior to the Distribution), reduced by social
security benefits and
benefits payable under the Retirement Plan and Executive
Supplemental Pension
Plan.
To provide a funding source for the payment of
benefits under the
Executive Supplemental Pension Plan and the Management
Retirement Plan, the
Company owns various life insurance contracts on some of the
participants.
The cash value of these policies, net of loans, was
$1,897,000 at May 31,
1998, and $1,256,000 at May 31, 1997. The policies have been
placed in a
rabbi trust which will hold the policies and death benefits
as they are
received.
The following table presents the components of pension
expense, the
funded status and amounts recognized in the Company's
financial statements
for the Retirement Plan, the Executive Supplemental Pension
Plan and the
Management Retirement Plan.
Accumulated Benefits Exceed Assets -
Assets Exceed Accumulated
Benefits - Executive Supplemental Pension Plan
(IN THOUSANDS) Retirement Plan
and Management ReTirement Plan
For the Fiscal Year Ended May 31, May 31, June
1, May 31, May 31, June 1,
1998 1997
1996 1998 1997 1996
Components of pension
(income)/expense:
Service cost $ 0 $ 0 $
0 $ 108 $ 81 $ 63
Interest cost 347 341
354 270 230 251
Actual return on plan assets (1,046) (700)
(833) 0 0 0
Amortization and deferral 629 341
526 149 122 122
$ (70) $ (18) $
47 $ 527 $ 433 $ 436
Plan assets at fair value $ 4,425 $4,859
$4,766 $ 0 $ 0 $ 0
Actuarial present value of
projected benefit
obligations:
Accumulated benefit
obligations:
Vested 3,895 4,210
4,691 2,615 1,950 1,606
Nonvested 0 0
0 274 0 0
Provision for future salary
increases 0 0
0 1,429 1,296 1,116
Total projected benefit
obligations 3,895 4,210
4,691 4,318 3,246 2,722
Excess (deficit) of plan
assets over projected
benefit obligations 530 649
75 (4,318) (3,246) (2,722)
Unrecognized net loss (gain) 407 150
642 913 258 216
Unrecognized prior service cost 0 0
0 276 289 351
Unrecognized net transition
obligations 280 348
412 516 576 541
Additional minimum liability 0 0
0 (658) (452) (376)
Prepaid (accrued)
pension cost $ 1,217 $1,147
$1,129 (3,271) $(2,575) $(1,990)
The weighted average discount rate for all three plans was
7.5%, 8.25% and
7.75% for 1998, 1997 and 1996, respectively. The rate of
increase in
compensation levels for the Executive Supplemental Pension
Plan and
Management Retirement Plan was 4% for all three years
presented. The expected
long-term rate of return on Plan assets for the Retirement
Plan was 10% for
all three years.
NOTE 7 Postretirement Benefits Other Than Pensions
The Company provides health care benefits and life insurance
benefits to
eligible retirees. Benefits are funded as medical claims and
life insurance
premiums are incurred. Retirees become eligible for
retirement benefits if
they have met certain service and minimum age requirements
at date of
retirement. The Company accrues expenses related to
postretirement health
care and life insurance benefits during the years an
employee provides
services.
The actuarial present value of accumulated
postretirement
benefit obligations and the amounts recognized in the
Company's
balance sheet are as follows:
(In thousands) Fiscal Year
Ended
May 31, 1998
May 31, 1997
Retirees $1,504
$1,609
Fully eligible active plan participants 245
202
Other active plan participants 170
123
Accumulated postretirement
benefit obligation 1,919
1,934
Unrecognized net loss (366)
(328)
Accrued postretirement benefit cost $1,553
$1,606
The postretirement benefit cost is as follows:
(In thousands) For the Fiscal
Year Ended
May 31, 1998 May 31, 1997
June 1, 1996
Service cost $ 7 $ 7
$ 8
Interest cost 147 140
155
Amortization of
unrecognized net loss 4 23
28
Postretirement benefit
cost $ 158 $ 170
$ 191
The assumed health care cost trend rate used in
measuring the
accumulated postretirement benefit obligation was 0% because
the Company has
frozen current and future contribution levels. Increases in
health care cost
due to factors such as inflation, changes in health care
utilization or
delivery patterns, technological advances and changes in the
health status of
Plan participants will be borne by the participants.
Measurement of the
accumulated postretirement benefit obligation was based on
an assumed 7.50%,
8.25% and 7.75% discount rate for fiscal years 1998, 1997
and 1996,
respectively.
NOTE 8 Preferred Stock
Under its Certificate of Incorporation, the Company is
authorized to issue
preferred stock with a par value of $0.01 in an amount not
to exceed 250,000
shares which may be divided into and issued in designated
series, with
dividend rates, rights of conversion, redemption,
liquidation prices and
other terms or conditions as determined by the Board of
Directors. No
preferred shares have been issued as of May 31, 1998. The
Board of Directors
has designated 50,000 of such shares as Series A Junior
Participating
Preferred Stock and has issued rights to acquire such
shares, upon certain
events, with an exercise price to be determined, but
substantially above the
expected trading price. The rights will expire ten years
after the date such
rights are issued, and may be redeemed prior to ten days
after the
acquisition of 20% or more of the Company's common stock.
NOTE 9 Stock Incentive Plans
Under the Company's stock incentive plans, incentive and non-
qualified stock
options may be granted to Management, key employees and
outside directors to
purchase shares of Company stock. The Morrison Health Care,
Inc. 1996 Stock
Incentive Plan and the Morrison Health Care, Inc. 1996 Non-
Executive Stock
Incentive Plan (the "Plans") are administered by a
Committee, appointed by
the Board, which has complete discretion to determine
participants and the
terms and provisions of stock incentives, subject to the
Plans. The Plans
permit the Committee to make awards of a variety of stock
incentives,
including (but not limited to) dividend equivalent rights,
incentive stock
options, non-qualified stock options, performance unit
awards, phantom
shares, stock appreciation rights and stock awards. These
discretionary
awards may be made on an individual basis or pursuant to a
program approved
by the Committee for the benefit of a group of eligible
persons. All options
awarded under the Plans have been at the prevailing market
value at the time
of issue or grant. All options granted have five- or ten-
year terms and
become exercisable at the end of two or three years of
continued employment.
At May 31, 1998 and 1997, the Company had reserved a total
of 1,704,376 and
804,376 shares, respectively, of common stock under the
Company's 1996 Stock
Incentive Plan.
In March 1997, the Board of Directors approved a
resolution to offer
the Company's non-executive employees the opportunity to
reprice certain
options which were originally granted under the Company's
1996 Non-Executive
Stock Incentive Plan. The repricing occurred on March 25,
1997, and resulted
in the cancellation of approximately 290,000 options and the
granting of
approximately 174,000 new options with an exercise price
equal to $13.125,
the closing price on March 24, 1997. The canceled options
were replaced with
fewer new options in accordance with a formula to result in
economic
equivalence between the old and new options. The new options
were granted
with two-year vesting periods and ten-year terms. At May 31,
1998 and 1997,
the Company had reserved a total of 1,464,820 and 2,582,127
shares,
respectively, of common stock for this Plan.
The Morrison Health Care, Inc. Stock Incentive and
Deferred
Compensation Plan for Directors provides nonmanagement
directors with
opportunities to defer the receipt of their retainer fees or
to allocate
their retainer fees to purchase shares of the Company. In
general, the Plan
sets a target ownership level for nonmanagement directors.
To facilitate
attaining the target ownership level, the Plan provides that
the directors
must use at least 60% of their retainer to purchase shares
of the Company
until they reach the target ownership level. Each director
purchasing stock
receives additional shares equal to 15% of the shares
purchased and three
times the total shares in options, which vest after six
months and become
exercisable for five years from the grant date. All options
awarded under the
Plan have been at the prevailing market value at the time of
grant. Pursuant
to this Plan, a one-time restricted stock award totaling
5,000 shares was
made in fiscal year 1997 to a nonmanagement director. A
Committee, appointed
by the Board, administers the Plan on behalf of the Company.
At May 31, 1998
and 1997, the Company had reserved 81,917 and 85,251 shares,
respectively, of
common stock for this Plan.
Under the terms of the Distribution, holders of MRI
stock options
received adjusted, substitute options in MHCI, MFC and RTI
which, in the
aggregate, preserved the economic value as well as the
material terms, such
as option period, vesting provisions and payment terms, the
optionee had in
the original MRI options prior to the Distribution. For SFAS
No. 123
disclosure purposes, these options, if granted in fiscal
year 1996, were
valued as of the original grant date.
The Company applies APB No. 25 and related
interpretations in
accounting for its stock incentive plans. Under APB No. 25,
because the
exercise price of the Company's employee stock options
equals the market
price of the stock on the date of grant, no compensation
expense is
recognized.
Pro forma information regarding net income and
earnings per share has
been determined as if the Company had accounted for its
employee stock
options under the fair value method of SFAS No. 123. The
fair value for these
options was estimated at the date of grant using a Black-
Scholes option
pricing model with the following weighted average
assumptions for 1998, 1997
and 1996, respectively: risk-free interest rates of 5.7%,
6.6% and 6.0%;
volatility factors of .24, .19 and .22; dividend yields of
0.9%, 4.3% and
4.7%; and weighted average expected lives of 7.5, 7.6 and
4.8 years.
For purposes of pro forma disclosures, the estimated
fair value of the
options is amortized to expense over the options' vesting
period. The
Company's pro forma information follows (in thousands,
except earnings per
share amounts):
For the
Fiscal Year Ended
May 31, 1998
May 31, 1997 June 1, 1996
Pro forma net income $10,771
$9,618 $9,157
Pro forma earnings per share - Basic $ 0.90
$ 0.82 $ 0.78
Pro forma earnings per share - Diluted $ 0.89
$ 0.82 $ 0.78
The effects of applying SFAS No. 123 in this pro forma
disclosure are not
indicative of future amounts. SFAS No. 123 does not apply to
awards made
prior to fiscal year 1996, and additional awards are
anticipated.
A summary of the Company's stock option activity and
related
information for the years ended May, 31, 1998, May 31, 1997
and June 1, 1996
follows:
May 31, 1998 May
31, 1997 June 1, 1996
Weighted
Weighted Weighted
Average
Average Average
Options Exercise
Options Exercise Option Exercise
(000) Price (000)
Price (000) Price
Outstanding -
Beginning of year 2,307 $15.82 2,368
$15.97 0 $ 0.00
Converted MRI options 0 0.00 0
0.00 1,493 15.55
Granted 357 17.76 493
13.21 950 16.50
Exercised (274) 12.05
(200) 9.69 (57) 11.38
Forfeited (144) 15.55
(354) 16.78 (18) 24.44
Outstanding - End of year 2,246 $16.45 2,307
$15.82 2,368 $15.97
Exercisable at end of year 1,110 $17.09 1,068
$15.95 1,056 $14.52
Weighted average fair value of options
granted during the year $ 6.66
$ 1.89 $ 2.70
The following table summarizes information about stock
options outstanding at
the end of:
May 31, 1998
Options Outstanding Options
Exercisable
Weighted
Average
Range of Number Weighted Average
Remaining Number Weighted Average
Exercise Prices Outstanding Exercise Price
Contractual Life Exercisable Exercise Price
$ 8.98 - $14.38 567 $12.77 5.70
187 $11.93
$14.50 - $16.38 469 $14.78 1.83
432 $14.68
$16.50 - $16.50 578 $16.50 3.11
110 $16.50
$16.56 - $31.59 632 $20.94 4.48
381 $22.51
2,246 $16.45 3.88
1,110 $17.09
May 31, 1997
Options Outstanding Options
Exercisable
Weighted
Average
Range of Number Weighted Average
Remaining Number Weighted Average
Exercise Prices Outstanding Exercise Price
Contractual Life Exercisable Exercise Price
$ 8.98 - $13.13 676 $12.16 5.96
317 $11.15
$13.50 - $15.75 596 $14.56 2.70
475 $14.62
$16.50 - $16.50 622 $16.50 3.84
0 $ 0.00
$17.03 - $31.59 413 $22.61 2.40
276 $23.72
2,307 $15.82 3.91
1,068 $15.95
NOTE 10 Contingencies
At May 31, 1998, the Company was contingently liable for
approximately $4.6 million in letters of credit, issued
primarily
in connection with its Workers' Compensation and Casualty
insurance programs.
The Company is presently, and from time to time,
subject to pending
claims and lawsuits arising in the ordinary course of its
business. In the
opinion of Management, the ultimate resolution of these
pending legal
proceedings will not have a material adverse effect on the
Company's
operations or financial position.
Prior to the Distribution, the Company entered into an
agreement with
MFC and RTI providing for assumptions of liabilities and
cross-indemnities.
The agreements are designed to allocate generally, among the
three companies,
effective as of the Distribution date, financial
responsibility for
liabilities arising out of or in connection with business
activities prior to
the Distribution. No significant amounts were incurred under
this agreement
during fiscal year
1998 or 1997.
NOTE 11 Subsequent Events
Subsequent to May 31, 1998, the Company replaced its $50
million credit
facility with a $75 million revolving credit line from four
financial
institutions. Concurrent with this transaction, the Company
cancelled the
related interest rate swap agreement that had effectively
fixed the interest
rate for the term portion of that facility. The new credit
line has a
variable interest rate based upon LIBOR and variable
interest payment
requirements. The principal is due no later than June 30,
2003. The initial
amount borrowed was $35.4 million, all of which was used to
repay the balance
due on the $50 million and $5 million credit facilities.
Also in June 1998, the Company entered into two
interest rate swap
agreements to reduce the impact of changes in the interest
rates on its
floating rate debt and to exchange floating rate for fixed
rate payments at
certain dates. These swap agreements expire in June 2003 and
June 2008 and
effectively convert $20,000,000 of variable rate borrowings
to fixed.
NOTE 12 Supplemental Quarterly Financial Data
(Unaudited)
Quarterly financial results for the years ended May 31, 1998
and May 31, 1997
are summarized below. For the year ended May 31, 1998,
all quarters are composed of three months. For the year
ended May 31, 1997,
all quarters are composed of 13 weeks.
First
Second Third Fourth
(Amounts presented are in thousands) Quarter
Quarter Quarter Quarter Total
For the year ended May 31, 1998
Revenues $57,754
$60,646 $63,337 $68,634 $250,371
Gross profit* $10,027
$10,688 $10,541 $11,850 $ 43,106
Income before income taxes $ 4,674 $
5,035 $ 4,292 $ 5,064 $ 19,065
Provision for federal and state
income taxes 1,846
1,989 1,695 1,983 7,513
Net income $ 2,828 $
3,046 $ 2,597 $ 3,081 $ 11,552
Earnings per share:
Basic $ 0.24 $
0.25 $ 0.22 $ 0.26 $ 0.97
Diluted $ 0.24 $
0.25 $ 0.21 $ 0.25 $ 0.95
For the year ended May 31, 1997
Revenues $52,658
$54,355 $57,483 $56,515 $221,011
Gross profit* $ 9,634
$10,291 $ 9,416 $10,437 $ 39,778
Income before income taxes $ 4,619 $
4,648 $ 3,695 $ 4,614 $ 17,576
Provision for federal and state
income taxes 1,923
1,922 1,533 1,912 7,290
Net income $ 2,696 $
2,726 $ 2,162 $ 2,702 $ 10,286
Earnings per share:
Basic $ 0.23 $
0.23 $ 0.18 $ 0.23 $ 0.87
Diluted $ 0.23 $
0.23 $ 0.18 $ 0.23 $ 0.87
*The Company defines gross profit as revenue less operating
expenses.
Common Stock Market Prices and Dividends
Morrison Health Care, Inc. common stock is publicly traded
on the New York
Stock Exchange (NYSE) under the ticker symbol MHI. The
following table sets
forth the reported high and low prices on the NYSE or the
high and low bid
prices for each quarter during fiscal years 1998 and 1997.
First Second Third
Fourth
Quarter Quarter Quarter
Quarter
1998 market price per share:
High $17.250 $19.750 $20.188
$22.875
Low $15.375 $15.750 $17.063
$16.250
1997 market price per share:
High $15.000 $14.375 $14.875
$16.500
Low $11.125 $10.750 $13.250
$13.000
Cash dividends on the common stock of Morrison Health
Care, Inc. were
paid during each quarter of fiscal years 1998 and 1997 as
follows:
First Second Third
Fourth
Quarter Quarter Quarter
Quarter Total
1998 cash dividends
per share $0.205 $0.205 $0.205
$0.205 $0.820
1997 cash dividends
per share $0.205 $0.205 $0.205
$0.205 $0.820
On July 1, 1998, the Company's Board of Directors
declared a quarterly
dividend of $0.04 per share, payable July 31, 1998, to 5,525
shareowners of
record on July 13, 1998.
Report of Independent Auditors
Morrison Health Care, Inc. and Subsidiaries
Stockholders and Board of Directors
Morrison Health Care, Inc. and Subsidiaries
We have audited the accompanying consolidated
balance sheets of Morrison
Health Care, Inc. and Subsidiaries as of May 31, 1998 and
1997, and the related
consolidated statements of income, shareowners' equity and
cash flows for each
of the three fiscal years in the period ended May 31,
1998. These financial
statements are the responsibility of the Company's
Management. Our
responsibility is to express an opinion on these financial
statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing
standards. Those standards require that we plan and perform
the audit to obtain
reasonable assurance about whether the financial statements
are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes
assessing the accounting principles used and significant
estimates made by
Management, as well as evaluating the overall financial
statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to
above present fairly,
in all material respects, the consolidated financial
position of Morrison Health
Care, Inc. and Subsidiaries at May 31, 1998 and 1997,
and the consolidated
results of their operations and their cash flows for each
of the three fiscal
years in the period ended May 31, 1998, in conformity with
generally accepted
accounting principles.
Atlanta, Georgia
June 23, 1998
MORRISON HEALTH CARE, INC.
EXHIBIT 21.1 List of Subsidiaries
State of Incorporation - Arizona
Drake Management Services, Inc.
State of Incorporation - Georgia
Culinary Solutions, Inc.
State of Incorporation - Tennessee
Culinary Concepts, Inc.
State of Incorporation - Pennsylvania
Custom Management Corporation
Custom Management Corporation of Pennsylvania
Morrison Custom Management Corporation of
Pennsylvania
John C. Metz & Associates, Inc.
State of Incorporation - Texas
Morrison's Health Care of Texas, Inc.
MORRISON HEALTH CARE, INC.
EXHIBIT 23 Consent of Independent Auditors
We consent to the incorporation by reference in this
Annual Report (Form 10-K) of Morrison Health Care, Inc. and Subsidiaries
of our report dated June 23, 1998, included in the 1998 Annual Report
to Stockholders of Morrison Health Care, Inc. and Subsidiaries.
Our audits also included the financial statement
schedule of Morrison Health Care, Inc. and Subsidiaries listed in Item
14(a). This schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our
opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference
in the Registration Statements of Morrison Health Care, Inc. and
Subsidiaries listed below of our report dated June 23, 1998, with respect to
the consolidated financial statements incorporated herein by reference, and
our report included in the preceding paragraph with respect to the
financial statement schedule included in this Annual Report (Form 10-K)
of Morrison Health Care, Inc. and Subsidiaries for the year ended May 31, 1998.
-Registration Statement No. 333-2098 on Form S-8
dated March 8, 1996
and related Prospectus
-Registration Statement No. 333-2100 on Form S-8
dated March 8, 1996
and related Prospectus
-Registration Statement No. 333-2102 on Form S-8
dated March 8, 1996
and related Prospectus
-Registration Statement No. 333-2104 on Form S-8
dated March 8, 1996
and related Prospectus
-Registration Statement No. 333-2106 on Form S-8
dated March 8, 1996
and related Prospectus
-Registration Statement No. 333-2108 on Form S-8
dated March 8, 1996
and related Prospectus
-Registration Statement No. 333-4504 on Form S-8
dated May 3, 1996
and related Prospectus
-Registration Statement No. 333-4508 on Form S-8
dated May 3, 1996
and related Prospectus
-Registration Statement No. 333-20197 on Form S-8
dated January 22, 1997
and related Prospectus
-Registration Statement No. 333-40177 on Form S-8
dated November 13, 1997
and related Prospectus
/s/ Ernst & Young LLP
Atlanta, Georgia
August 28, 1998
MORRISON HEALTH CARE INC.
EXHIBIT 27
FINANCIAL DATA SCHEDULE
(in thousands except per share
amounts)
This schedule contains summary financial information
extracted from the
consolidated balance sheets and consolidated
statements of income on pages
18 through 19 of the Company's 1998 Annual Report to
Stockholders and is
qualified in its entirety by reference to such
financial statements.
Item Number Item Description
Year End 1998
- ------------------------------------------------------------
- -------------
5-02(1) Cash and cash items
$5,720
5-02(2) Marketable securities
0
5-02(3)(a)(1) Notes and accounts receivable - trade
22,268
5-02(4) Allowances for doubtful accounts
887
5-02(6) Inventory
2,936
5-02(9) Total current assets
39,620
5-02(13) Property, plant and equipment
24,191
5-02(14) Accumulated depreciation
10,232
5-02(18) Total assets
84,374
5-02(21) Total current liabilities
32,276
5-02(22) Bonds, mortgages and similar debt
31,690
5-02(28) Preferred stock - mandatory redemption
0
5-02(29) Preferred stock - no mandatory redemption
0
5-02(30) Common stock
124
5-02(31) Other stockholders' equity
8,248
5-02(32) Total liabilities and stockholders'
84,374
equity
Item Number Item Description 52
Weeks 1998
- ------------------------------------------------------------
- -------------
5-03(b)1(a) Net sales of tangible products
$250,371
5-03(b)1 Total revenues
250,371
5-03(b)2(a) Cost of tangible goods sold
207,265
5-03(b )2 Total costs and expenses applicable to
207,265
sales and revenues
5-03(b)3 Other costs and expenses
0
5-03(b)5 Provision for doubtful accounts and notes
0
5-03(b)(8) Interest and amortization of debt
1,528
discount
5-03(b)(10) Income before taxes and other items
19,065
5-03(b)(11) Income tax expense
7,513
5-03(b)(14) Income/loss continuing operations
11,552
5-03(b)(15) Discontinued operations
0
5-03(b)(17) Extraordinary items
0
5-03(b)(18) Cumulative effect - changes in
0
accounting principles
5-03(b)(19) Net income or loss
11,552
5-03(b)(20) Earnings per share - primary
0.97
5-03(b)(20) Earnings per share - fully diluted
0.95
