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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 5, 1996
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Commission File No. 0-24300
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NORRELL CORPORATION
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(Exact name of registrant as specified in its charter)
GEORGIA 58-0953709
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(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)
3535 Piedmont Road, NE, Atlanta, GA 30305
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404)240-3000
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Not Applicable
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Former name, former address and former fiscal year, if changed since last
report.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 5, 1996, Norrell Corporation and its affiliate N. Acquisition
Corporation (collectively "Norrell"), acquired all of the issued and
outstanding stock of American Technical Resources, Inc. ("ATR") in exchange for
1,000,000 shares of Norrell Corporation common stock in a transaction accounted
for as a pooling of interests.
Founded in 1985, ATR is an information technology staffing company that
specializes in providing computer professionals for short- and long-term
assignments. The company provides contract programming, contract recruiting,
and payrolling services to commercial clients and currently employs more than
700 professionals. In addition to its headquarters in McLean, Virginia, ATR
has branch offices in Colorado Springs and Atlanta.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
It is impractical to provide the required financial statements for
American Technical Resources, Inc., within the time this Current
Report is required to be filed. Such financial statements will be
filed as soon as practicable, but not more than 60 days after this
Current Report is required to be filed.
(b) Pro forma financial information.
It is impractical to provide the pro forma financial statements
required by this Item within the time this Current Report is required
to be filed. Such pro forma financial statements will be filed as
soon as practicable, but not more than 60 days after this Current
Report is required to be filed.
(c) Exhibits
1. Agreement and plan of organization dated August 5, 1996, by and among
American Technical Resources, Inc., Charles F. Phillips, Ralph L. Lary
III, Gary L. Kilgore, William C. Holman, George G. Lytle, Norrell
Corporation and N. Acquisition Corporation.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
NORRELL CORPORATION
(REGISTRANT)
Date: August 16, 1996: By: /s/ C. Kent Garner
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C. Kent Garner
Vice President and Chief Financial Officer
(On behalf of the Registrant and as Chief
Accounting Officer)
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AGREEMENT AND PLAN OF REORGANIZATION
AMONG
AMERICAN TECHNICAL RESOURCES, INC.
CHARLES F. PHILLIPS,
RALPH L. LARY, III,
GARY L. KILGORE,
WILLIAM C. HOLMAN,
GEORGE G. LYTLE,
NORRELL CORPORATION
AND
N. ACQUISITION CORP.
AUGUST 5, 1996
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TABLE OF CONTENTS
1. DEFINITIONS
1.1 THE DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. THE MERGER
2.1 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. THE SURVIVING CORPORATION
3.1 CERTIFICATE OF INCORPORATION . . . . . . . . . . . . . . . . . . . . 2
3.2 BYLAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.3 BOARD OF DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . 2
4. EXCHANGE OF SHARES
4.2 EXCHANGE OF SHARES IN THE MERGER . . . . . . . . . . . . . . . . . . 2
4.2 EXCHANGE OF STOCK CERTIFICATES . . . . . . . . . . . . . . . . . . . 3
4.3 THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.4 DELIVERIES AT THE CLOSING . . . . . . . . . . . . . . . . . . . . . 3
4.5 OTHER AGREEMENTS ENTERED AT CLOSING . . . . . . . . . . . . . . . . 4
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
5.1 ORGANIZATION, ETC. OF ATR . . . . . . . . . . . . . . . . . . . . . 4
5.2 CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.3 AUTHORIZATION OF TRANSACTION . . . . . . . . . . . . . . . . . . . 5
5.4 NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.5 NO SUBSIDIARIES; MINUTE BOOKS, ETC . . . . . . . . . . . . . . . . 5
5.6 BROKERS' FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.7 TITLE TO ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.8 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . 6
5.9 EVENTS SUBSEQUENT TO THE MOST RECENT FISCAL YEAR END . . . . . . . 6
5.10 UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . 9
5.11 LEGAL COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.12 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.13 REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.14 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . 12
5.15 TANGIBLE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.16 CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.17 NOTES AND ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . . . 16
5.18 POWERS OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . . . 16
5.19 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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5.20 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.21 PRODUCT AND SERVICE WARRANTY . . . . . . . . . . . . . . . . . . . 17
5.22 PRODUCT LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.23 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.24 EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.25 GUARANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.26 ENVIRONMENT, HEALTH, AND SAFETY . . . . . . . . . . . . . . . . . . 20
5.27 CERTAIN BUSINESS RELATIONSHIPS WITH ATR . . . . . . . . . . . . . . 21
5.28 ADEQUACY OF ATR'S ASSETS . . . . . . . . . . . . . . . . . . . . . 21
5.29 DISTRIBUTIONS TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . 21
5.30 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6. REPRESENTATIONS AND WARRANTIES OF NORRELL AND NAC
6.1 ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2 AUTHORIZATION OF TRANSACTION . . . . . . . . . . . . . . . . . . . . 22
6.3 NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.4 BROKERS' FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.5 NORRELL COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . 22
6.6 PUBLIC INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.7 NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . . . 23
6.8 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7. CONDITIONS TO OBLIGATION TO CLOSE
7.1 CONDITIONS TO OBLIGATION OF NORRELL AND NAC . . . . . . . . . . . . 23
7.2 CONDITIONS TO OBLIGATION OF ATR AND THE SHAREHOLDERS . . . . . . . . 25
8. POSTCLOSING COVENANTS
8.1 ADDITIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . 26
8.2 LITIGATION SUPPORT . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.3 TRANSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.4 CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.5 COVENANT NOT TO COMPETE . . . . . . . . . . . . . . . . . . . . . . 27
8.6 NO DISPOSITION OF SHARES . . . . . . . . . . . . . . . . . . . . . . 27
8.7 BENEFIT PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9. REMEDIES FOR BREACHES OF THIS AGREEMENT [TO REVISE]
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . 28
9.2 INDEMNIFICATION PROVISIONS FOR BENEFIT OF NORRELL . . . . . . . . . 28
9.3 INDEMNIFICATION PROVISIONS FOR BENEFIT OF SHAREHOLDERS . . . . . . . 29
9.4 THIRD PARTY CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.5 NATURE OF INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 30
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10. MISCELLANEOUS
10.1 NO THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . . 31
10.2 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.3 SUCCESSION AND ASSIGNMENT . . . . . . . . . . . . . . . . . . . . 31
10.4 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.5 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.6 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.7 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.8 AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . 33
10.9 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.10 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.11 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.12 INCORPORATION OF EXHIBITS AND SCHEDULES . . . . . . . . . . . . . 34
10.13 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . 34
10.14 REMEDIES NOT EXCLUSIVE . . . . . . . . . . . . . . . . . . . . . . 34
LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A--AGREEMENT AND PLAN OF MERGER
EXHIBIT B--FORM OF EMPLOYMENT AGREEMENT
EXHIBIT C--FORM OF PLEDGE AND ESCROW AGREEMENT
EXHIBIT D--FINANCIAL STATEMENTS REQUIRED BY SECTION 5.8
EXHIBIT E--ATR'S COUNSEL OPINION
EXHIBIT F--REGISTRATION RIGHTS AGREEMENT
EXHIBIT G--NORRELL'S COUNSEL OPINION
SCHEDULE 4.1-- NUMBER OF SHARES OF NORRELL COMMON STOCK IN EXCHANGE
ATR DISCLOSURE SCHEDULE
NORRELL DISCLOSURE SCHEDULE
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is made and
entered into this 5th day of August, 1996, by and among NORRELL CORPORATION, a
Georgia corporation ("Norrell"), N. ACQUISITION CORP., a Georgia corporation
and wholly owned subsidiary of Norrell ("NAC"), AMERICAN TECHNICAL RESOURCES,
INC., a Virginia corporation ("ATR"), and CHARLES F. PHILLIPS, RALPH L. LARY,
III, GARY L. KILGORE, WILLIAM C. HOLMAN, and GEORGE G. LYTLE (collectively, the
"Shareholders" and individually a "Shareholder"). Norrell, NAC, the
Shareholders and ATR are referred to herein individually as a "Party" and
collectively as the "Parties."
RECITALS
A. The Boards of Directors of Norrell, NAC and ATR have approved as being in
their respective best interests the merger of NAC with and into ATR (the
"Merger"), pursuant to the Agreement and Plan of Merger set forth in Exhibit A
(the "Merger Agreement") and the transactions contemplated hereby, in
accordance with the applicable provisions of the statutes of the Commonwealth
of Virginia and the State of Georgia.
B. For federal income tax purposes, it is intended that the Merger shall
qualify as a reorganization within the meaning of Section 368(a) and Section
368(a)(2)(e) of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual promises
made in this Agreement, and in consideration of the representations,
warranties, and covenants contained in this Agreement, the Parties agree as
follows:
1. DEFINITIONS
1.1 THE DEFINITIONS. For purposes of this Agreement and the
Reorganization Documents, all capitalized terms used in this Agreement shall
have the respective meanings set forth in the Appendix of Terms.
2. THE MERGER
2.1 THE MERGER.
(a) At the Effective Time (as defined in Section 2.2) and subject
to the terms and conditions of this Agreement and the Merger Agreement, NAC
shall be merged with and into ATR and the separate existence of NAC shall
thereupon cease, all in accordance with the applicable provisions of the GBCC,
the VSCA and the Merger Agreement.
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(b) ATR will be the surviving corporation in the Merger and will
continue to be governed by the laws of the Commonwealth of Virginia, and the
separate corporate existence of ATR and all of its rights, privileges,
immunities and franchises, public or private, and all of its duties and
liabilities as a corporation organized under the VSCA, will continue unaffected
by the Merger.
(c) The Merger will have the effects specified by the VSCA and the
GBCC.
2.2 EFFECTIVE TIME. As soon as practicable following fulfillment or
waiver of the conditions specified in Article 7, the Constituent Corporation
will cause Articles of Merger (the "Articles of Merger") to be filed with the
office of the State Corporation Commission of the Commonwealth of Virginia as
provided in Section 13.1720 of the VSCA and with the office of the Secretary of
State of the State of Georgia pursuant to Section 1421105 of the GBCC, and will
also cause to be filed pursuant to the VSCA and the GBCC such certificates of
the officers of the Constituent Corporations and tax clearance certificates as
are required to be filed with either of such offices. Subject to and in
accordance with the laws of the State of Georgia and the Commonwealth of
Virginia, the Merger will become effective at the date and time the Articles of
Merger are filed with the office of the Secretary of the State of Georgia and
with the office of the State Corporation Commission of the Commonwealth of
Virginia or such later time or date as may be specified in the Articles of
Merger (the "Effective Time"). Each of the Parties will use its best efforts
to cause the Merger to be consummated as soon as practicable following the
fulfillment or waiver of the conditions specified in Article 7.
3. THE SURVIVING CORPORATION
3.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
ATR as in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation after the Effective
Time.
3.2 BY-LAWS. The By-Laws of ATR as in effect immediately prior to the
Effective Time shall be the ByLaws of the Surviving Corporation after the
Effective Time.
3.3 BOARD OF DIRECTORS AND OFFICERS. From and after the Effective Time,
the board of directors and officers of ATR shall be comprised of the
individuals specified in the Merger Agreement in each case until their
successors shall have been duly elected and qualified.
4. EXCHANGE OF SHARES
4.1 EXCHANGE OF SHARES IN THE MERGER. Pursuant to the Merger
Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of any holder of any capital stock of NAC or ATR:
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(a) each share of Common Stock, par value one cent ($.01) per
share, of NAC (the "NAC Common Stock") owned by Norrell shall be converted
into and become one share of Common Stock par value $1.00 per share of ATR from
and after the Effective Time; and
(b) each issued and outstanding share of ATR Common Stock shall be
exchangeable for two hundred fifty (250) shares of validly issued, fully paid
and nonassessable Norrell Common Stock, no par value, held by NAC immediately
prior to the Effective Time. The consideration referred to in this
Section 4.1, is referred to as the "Merger Consideration." Schedule 4.1 sets
forth the number of shares of Norrell Common Stock each Shareholder shall be
entitled to receive in exchange for his shares of ATR Common Stock pursuant to
the Merger.
4.2 EXCHANGE OF STOCK CERTIFICATES.
(a) On the Closing Date, Norrell, through NAC, shall make available
to the Shareholders certificates representing shares of Norrell Common Stock
required to effect the exchange referred to in Section 4.1(b), and the
Shareholders shall exchange the shares of ATR Common Stock held by them for
such Norrell Common Stock. Such shares of ATR Common Stock exchanged by the
Shareholders will be cancelled.
(b) If any certificate for shares of Norrell Common Stock is to be
issued in a name other than that in which the certificate, which immediately
prior to the Effective Time represented shares of ATR Common Stock, surrendered
in exchange therefor is registered, it shall be a condition of such exchange
that the person requesting such exchange shall pay any transfer or other taxes
required by reason of the issuance of certificates for such shares of Norrell
Common Stock in a name other than that of the registered holder of any such
certificate surrendered.
4.3 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of ATR's counsel in
McLean, Virginia, at the offices of Norrell's counsel in Atlanta, Georgia, or
such other place as the Parties shall agree, commencing at 10:00 a.m. local
time on the second business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated by this Agreement (other than conditions with respect to actions
the respective Parties will take at the Closing itself) or such other date as
the Parties may mutually determine (the "Closing Date"); provided, however,
that the Closing Date shall be no later than August 12, 1996.
4.4 DELIVERIES AT THE CLOSING. At the Closing, (a) the Shareholders
will deliver to Norrell and NAC the various certificates, instruments, and
documents referred to in Section 7.1; and (b) NAC and Norrell will deliver to
the Shareholders the various certificates, instruments, and documents reffered
to in Section 7.2.
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4.5 OTHER AGREEMENTS ENTERED AT CLOSING. At the Closing, (a)
Norrell, ATR and Charles F. Phillips, Gary L. Kilgore and Ralph L. Lary III
shall execute employment agreements (the "Employment Agreements"), each of
which shall be substantially in the form of Exhibit B, with such additional
terms and conditions as may be mutually agreed to by the respective parties
thereto; and (b) each of Norrell and the Shareholders shall enter a Pledge and
Escrow Agreement (the "Escrow Agreement") substantially in the form of Exhibit
C, and shall cause the Escrow Agent, as such term is defined in the Escrow
Agreement, to execute the Escrow Agreement, in order that, at the Effective
Time, ten percent (10%) of the shares of Norrell Common Stock which the
Shareholders are entitled to receive pursuant to Section 4.1 hereof shall be
delivered on behalf of the Shareholders to the Escrow Agent.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, jointly and severally, represent and warrant to Norrell
and NAC that, except as set forth in the disclosure schedule attached and
initialed by the Parties (the "ATR Disclosure Schedule"):
5.1 ORGANIZATION, ETC. OF ATR. ATR is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and is qualified and authorized to do
business as a foreign corporation and is in good standing in each jurisdiction
where such qualification is required, except where failure to be so qualified
will not have a material adverse effect on ATR, and has all requisite corporate
power and authority to own, lease and operate its properties, to carry on its
business as now being conducted, and to enter into this Agreement and the other
agreements contemplated hereby and to perform its obligations hereunder. The
copies of the Certificate of Incorporation of ATR and of the ByLaws of ATR
(each as amended to date) which have been delivered to Norrell are complete and
correct.
5.2 CAPITAL STOCK. The ATR Disclosure Schedule sets forth as of
the close of business on Closing Date, the authorized, issued and outstanding
shares of all classes of capital stock of ATR, and all such shares are duly
authorized, validly issued, fully paid and nonassessable, free and clear of any
restrictions, Taxes, Security Interests, options, warrants, purchase rights,
contracts, commitments, equities, claims and demands and are owned beneficially
and of record by the Shareholders in the respective amounts set forth in the
ATR Disclosure Schedule. Since such date there has been no change in the
authorized, issued and outstanding shares of any class of capital stock of ATR
or in the number of securities convertible into or exercisable for any shares
of capital stock of ATR. ATR has no other outstanding securities convertible
into or exercisable for shares of capital stock of ATR of any kind, and no
agreement, option, warrant, right or obligation exists for the issuance by ATR
of any shares of ATR capital stock. There are no outstanding stock
appreciation rights, phantom shares, profit participation, or other similar
rights issued by ATR. There are no voting trusts, proxies or other agreements
with respect to the voting of any capital stock of ATR.
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5.3 AUTHORIZATION OF TRANSACTION. ATR has full power and authority
(including full corporate power and authority) to execute and deliver the
Reorganization Documents and to perform its obligations in all respects as
required by the Reorganization Documents. The board of directors of ATR and the
Shareholders have duly authorized the execution, delivery, and performance of
the Reorganization Documents by ATR. The Reorganization Documents constitute
valid and legally binding obligations of ATR, enforceable in accordance with
their terms and conditions. Each Shareholder has full power and authority to
execute and deliver the Reorganization Documents and to perform his obligations
thereunder. The Reorganization Documents constitute the valid and legally
binding obligation of each of the Shareholders, enforceable in accordance with
their respective terms and conditions.
5.4 NON-CONTRAVENTION. Neither the execution and the delivery of the
Reorganization Documents, nor the consummation or performance of the
transactions contemplated in the Reorganization Documents, will (a) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which ATR or a Shareholder is subject or any provision of the charter
or bylaws of ATR, or (b) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
ATR or a Shareholder is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Security Interest upon
any of its assets). Neither ATR nor any Shareholder needs to give any notice
to, make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the Parties to consummate
the transactions contemplated by the Reorganization Documents.
5.5 NO SUBSIDIARIES; MINUTE BOOKS, ETC.
(a) Other than as set forth on the ATR Disclosure Schedule,
ATR has no Subsidiaries. ATR does not directly or indirectly or have any
direct or indirect equity participation in any other corporation, partnership,
trust, or other business association.
(b) The minute books (containing the records of meetings
of the stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of ATR are
correct and complete. ATR is not in default under or in violation of any
provision of its charter or bylaws.
(c) ATR has not been a Subsidiary or division of another
corporation within two years prior to July 15, 1996. ATR does not have any
investment in the common stock of Norrell. ATR has not changed the equity
interest of its voting common stock, including by way of distributions to
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shareholders, or additional issuance, exchange or retirement of securities, in
contemplation of effecting the Merger either within two years before July 15,
1996 or between such date and the date of this Agreement.
5.6 BROKERS' FEES. The Shareholders and ATR have no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by the Reorganization Documents.
5.7 TITLE TO ASSETS. ATR has good and marketable title to, or a valid
leasehold interest in, the properties and assets used by it, located on its
premises, or shown on the Most Recent Balance Sheet or acquired after the date
thereof, free and clear of all Security Interests, except for properties and
assets disposed of in the Ordinary Course of Business since the date of the
Most Recent Balance Sheet. ATR has good and marketable title to all of the ATR
Assets, free and clear of any Security Interest or restriction on transfer.
5.8 FINANCIAL STATEMENTS. Attached as Exhibit D are the following
financial statements (collectively the "Financial Statements"): (i) audited
consolidated balance sheets and statements of income, changes in stockholders'
equity, and cash flow as of and for the fiscal years ended March 31, 1994,
March 31, 1995 and March 31, 1996 (the "Most Recent Fiscal Year End") for ATR;
and (ii) unaudited consolidated balance sheets and statements of income,
changes in stockholders' equity, and cash flow (the "Most Recent Financial
Statements") as of and for the three (3) months ended June 30, 1996 (the "Most
Recent Fiscal Month End") for ATR. The Financial Statements (including the
notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, present fairly the
financial condition of ATR as of such dates and the results of operations of
ATR for such periods, are correct and complete, and are consistent with the
books and records of ATR (which books and records are correct and complete);
provided, however, that the Most Recent Financial Statements are subject to
normal yearend adjustments (which will not be material individually or in the
aggregate) and lack footnotes and other presentation items. As of the dates of
the Financial Statements, ATR did not have any material liabilities or
obligations (secured or unsecured, whether accrued, absolute, direct, indirect,
contingent or otherwise, and whether due or to become due) which are not fully
accrued or reserved against in the Financial Statements in accordance with
GAAP. The Financial Statements do not contain any items of special or
nonrecurring income, or other income not earned in the Ordinary Course of
Business, individually in excess of $1,000 and in the aggregate in excess of
$10,000. ATR has not engaged in any transaction, maintained any bank account,
or used any of the funds of ATR, except fortransactions, bank accounts, and
funds which have been and are reflected in the normally maintained books and
records of ATR. The books, records, and accounts of ATR accurately and fairly
reflect, in reasonable detail, the transactions and the assets and liabilities
of ATR.
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5.9 EVENTS SUBSEQUENT TO THE MOST RECENT FISCAL YEAR END. Since
the Most Recent Fiscal Year End, there has not been any material adverse
change, singly or in the aggregate, in the business, financial condition,
operations, results of operations, liabilities, assets, earnings, or future
prospects of ATR nor has there been any event which has had or may reasonably
be expected to have a material adverse effect on any of the foregoing. Without
limiting the generality of the foregoing, since the Most Recent Fiscal Year
End:
(a) ATR has not sold, leased, transferred, or assigned any of
its assets, tangible or intangible, other than for a fair consideration in the
Ordinary Course of Business;
(b) ATR has not entered into any agreement, contract, lease,
or license (or series of related agreements, contracts, leases, and licenses)
either involving more than $250,000 in the last 12 months or expected to exceed
$250,000 in the current fiscal year, or outside the Ordinary Course of Business
or where a Shareholder, officer, director, employee or any Affiliate is a party
or has an interest;
(c) ATR has not accelerated, terminated, modified, or
canceled any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than $25,000 to
which ATR is a party or by which it is bound;
(d) ATR has not imposed any Security Interest upon any of its
assets, tangible or intangible;
(e) ATR has not made any capital expenditure (or series of
related capital expenditures) either involving more than $25,000 or outside the
Ordinary Course of Business;
(f) ATR has not made any capital investment in, any loan to,
or any acquisition of the securities or assets of, any other Person (or series
of related capital investments, loans, and acquisitions);
(g) ATR has not issued any note, bond, or other debt security
or created, incurred, assumed, or guaranteed any indebtedness or capitalized
lease obligations either involving more than $5,000 singly or $25,000 in
the aggregate or incurred any obligation or Liability of any nature except in
the Ordinary Course of Business;
(h) ATR has not delayed or postponed the payment of accounts
payable and other Liabilities other than in the Ordinary Course of Business;
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(i) ATR has not canceled, compromised, waived, or released any
right or claim (or series of related rights and claims) either involving more
than $3,000 or outside the Ordinary Course of Business;
(j) ATR has not granted disposed of, or allowed to lapse any
license or sublicense of any rights under or with respect to any of its
Intellectual Property;
(k) There has been no change made or authorized in the charter or
bylaws of any of ATR;
(l) ATR has not issued, sold, or otherwise disposed of any of its
capital stock, or granted any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of its capital
stock;
(m) ATR has not declared, set aside, or paid any dividend or made
any distribution with respect to its capital stock (whether in cash or in kind)
or redeemed, purchased, or otherwise acquired any of its capital stock;
(n) ATR has not experienced any damage, destruction, or loss
(whether or not covered by insurance) to its property or assets;
(o) ATR has not made any loan or payment to, or entered into any
other transaction with, any of its directors, officers, and employees outside
the Ordinary Course of Business or with any Shareholder or Affiliate of a
Shareholder in any event;
(p) ATR has not entered into any employment contract, written or
oral, or modified the terms of any existing such contract or agreement, or made
any change in employment terms for any of its directors, officers, and
employees, except in the Ordinary Course of Business;
(q) ATR has not entered into any collective bargaining agreement
or experienced any organized slowdown, work interruption, strike or work
stoppage;
(r) ATR has not granted any increase in the base compensation of
anyof its directors, officers, and employees outside the Ordinary Course of
Business;
(s) ATR has not adopted, amended, modified or terminated any
bonus, profitsharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and employees (or
taken any such action with respect to any other Employee Benefit Plan);
(t) ATR has not made or pledged to make any charitable or other
contribution outside the Ordinary Course of Business or in excess of $3,000;
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(u) ATR has not paid any amount to any third party with respect
to any Liability or obligation (including any costs and expenses ATR has
incurred or may incur in connection with this Agreement and the transactions
contemplated hereby) other than those paid and incurred in the Ordinary Course
of Business;
(v) There has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of Business
involving ATR;
(w) ATR has not made any material change in any method of
accounting, or accounting principle, practice or policy; and
(x) ATR has not committed to any of the foregoing.
5.10 UNDISCLOSED LIABILITIES. ATR has no Liability (and there is
no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability), except for (i) Liabilities set forth on the face of
the Most Recent Balance Sheet (rather than in any notes thereto),(ii)
Liabilities which have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law), and(iii) Liabilities listed
in Section 5.10 of the ATR Disclosure Schedule.
5.11 LEGAL COMPLIANCE. ATR, its predecessors and Affiliates has
compiled with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced or threatened against it alleging
any failure so to comply, and there is no Basis for any such action.
5.12 TAX MATTERS.
(a) ATR has filed all Tax Returns that it was required to file.
All such Tax Returns were correct and complete in all respects. All Taxes owed
by ATR (whether or not shown on any Tax Return) have been paid. ATR currently
is not the beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a jurisdiction where ATR
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of ATR's Assets that arose
in connection with any failure (or alleged failure) to pay any Tax.
(b) ATR has properly withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party,
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including without limitation, withholding of Taxes pursuant to Section 1441 or
1442 of the Code.
(c) No Shareholder or director or officer (or employee responsible
for Tax matters) of ATR expects any authority to assess any additional Taxes
for any period for which Tax Returns have been filed. There is no dispute or
claim concerning any Tax Liability of ATR either (a) claimed or raised by any
authority in writing or (b) as to which any of the Shareholders and the
directors and officers (and employees responsible for Tax matters) of ATR has
Knowledge. Section of the ATR Disclosure Schedule lists all federal, state,
local, and foreign income Tax Returns filed with respect to ATR for taxable
periods ended on or after December 31, 1989, indicates those Tax Returns that
have been audited, and indicates those Tax Returns that currently are the
subject of audit. ATR has delivered to Norrell correct and complete copies of
all federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by ATR since December 31, 1989.
(d) ATR has not waived any statute of limitations in respect of
Taxes or granted any comparable consent or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(e) The unpaid Taxes of ATR (a) did not, as of the Most Recent
Fiscal Month End, exceed the reserve for Tax Liability (rather than any reserve
for deferred Taxes established to reflect timing differences between book and
Tax income) set forth on the face of the Most Recent Balance Sheet (rather than
in any notes thereto) and (b) do not exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of ATR in filing their Tax Returns.
(f) ATR has not filed (and will not file prior to the Effective
Time) a consent under Code Section 341(f) concerning collapsible corporations,
nor has it agreed to have Section 341(f)(2) of the Code apply to any
disposition of any subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by ATR. ATR has not made any payments, is not
obligated to make any payments, and is not a party to any agreement that under
certain circumstances could obligate it to make any payments that will not be
deductible under Code Section 280G. ATR has not been a United States real
property holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section 897(c)(1)(A)(ii). ATR
has disclosed on its federal income Tax Returns all positions taken that could
give rise to an understatement of federal income Tax within the meaning of Code
Section 6662. ATR is not a party to any Tax allocation or sharing agreement.
ATR (a) has not been a member of an Affiliated Group filing a consolidated
federal income Tax Return (other than a group the common parent of which was
ATR) or (b) has any Liability for the Taxes of any Person other than ATR) under
Treas. Reg. Section 1.15026 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.
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5.13 REAL PROPERTY.
(a) ATR does not own any real property.
(b) Section of the ATR Disclosure Schedule lists and describes
briefly all real property leased or subleased by or to ATR. ATR has delivered
to Norrell correct and complete copies of the leases and subleases (as amended
to date) listed in Section of the ATR Disclosure Schedule. With respect to
each lease and sublease listed in Section of the ATR Disclosure Schedule as to
ATR and to the Knowledge of ATR, the Shareholders, its officers or directors,
as to any other party:
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(ii) the lease or sublease will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated by the
Reorganization Documents;
(iii) no party to the lease or sublease is in breach or
default, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification, or
acceleration thereunder;
(iv) no party to the lease or sublease has repudiated any
provision thereof;
(v) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(vi) with respect to each sublease, the representations
and warranties set forth in subsections (i) through (v) above are true and
correct with respect to the underlying lease;
(vii) ATR has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the leasehold or
subleasehold;
(viii) all facilities leased or subleased thereunder have
been and are being operated and maintained in accordance with applicable laws,
rules, and regulations; and
(ix) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation of said
facilities.
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5.14 INTELLECTUAL PROPERTY.
(a) ATR owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary or
desirable for the operation of the business of ATR as presently conducted and
as presently proposed to be conducted. Each item of Intellectual Property owned
or used by ATR immediately prior to the Closing hereunder will be owned or
available for use by ATR. ATR has taken all necessary and desirable action to
maintain and protect each item of Intellectual Property that it owns or uses.
(b) ATR has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of third parties, and none of the Shareholders and the directors and
officers (and employees with responsibility for Intellectual Property matters)
of ATR has ever received, or has Knowledge of, any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that ATR must license or
refrain from using any Intellectual Property rights of any third party). To the
Knowledge of any of the Shareholders and the directors and officers (and
employees with responsibility for Intellectual Property matters) of ATR, no
third party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of ATR and.
(c) Section 5.14(c) of the ATR Disclosure Schedule identifies
each patent or registration which has been issued to ATR with respect to any of
its Intellectual Property, identifies each pending patent application or
application for registration which ATR has made with respect to any of its
Intellectual Property, and identifies each license, agreement, or other
permission which ATR has granted to any third party with respect to any of its
Intellectual Property (together with any exceptions). ATR has delivered to
Norrell correct and complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as amended to date) and
has made available to Norrell correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of each such
item. Section of the ATR Disclosure Schedule also identifies each trade name
or unregistered trademark used by ATR in connection with any of its businesses
and any address at which each name or mark was used. With respect to each item
of Intellectual Property required to be identified in Section of the ATR
Disclosure Schedule:
(i) ATR possess all right, title, and interest in and to
the item, free and clear of any Security Interest, license, or other
restriction;
(ii) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(iii) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to the Knowledge of any of
the
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Shareholders and the directors and officers (and employees with responsibility
for Intellectual Property matters) of ATR, is threatened which challenges the
legality, validity, enforceability, use, or ownership of the item; and
(iv) ATR has never agreed to indemnify any Person for or
against any interference, infringement, misappropriation, or other conflict
with respect to the item.
(d) Section of the ATR Disclosure Schedule identifies each item
of Intellectual Property that any third party owns and that ATR uses and no
Intellectual Property of a third party is used except pursuant to license,
sublicense, agreement, or permission. ATR has delivered to Norrell correct and
complete copies of any licenses, sublicenses, agreements, and permissions(as
amended to date). With respect to each item of Intellectual Property required
to be identified in Section of the ATR Disclosure Schedule:
(i) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in full force and
effect;
(ii) the license, sublicense, agreement, or permission
will continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated by the Reorganization Documents;
(iii) no party to the license, sublicense, agreement, or
permission is in breach or default, and no event has occurred which with notice
or lapse of time would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(iv) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(v) with respect to each sublicense, the representations
and warranties set forth in subsections(i) through(iv) above are true and
correct with respect to the underlying license;
(vi) the underlying item of Intellectual Property is not
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge;
(vii) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to the Knowledge of any of
the Shareholders and the directors and officers (and employees with
responsibility for Intellectual Property matters) of ATR, is threatened which
challenges the legality, validity, or enforceability of the underlying item of
Intellectual Property; and
(viii) ATR has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or permission.
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(e) To the Knowledge of any of the Shareholders and the
directors and officers (and employees with responsibility for Intellectual
Property matters) of ATR, ATR will not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any Intellectual Property
rights of third parties as a result of the continued operation of ATR's
business as presently conducted and as presently proposed to be conducted.
(f) None of the Shareholders and the directors and officers
(and employees with responsibility for Intellectual Property matters) of ATR
has any Knowledge of any new products, inventions, procedures, services, or
methods of manufacturing or processing that any competitors or other third
parties have developed which reasonably could be expected to supersede or make
obsolete any product, service, or process of ATR.
5.15 TANGIBLE ASSETS. ATR owns or leases all buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its business
as presently conducted and as presently proposed to be conducted. Each such
tangible asset is free from defects (patent and latent), has been maintained in
accordance with normal industry practice, is in good operating condition and
repair (subject to normal wear and tear), and is suitable for the purposes for
which it presently is used and presently is proposed to be used. Section of
the ATR Disclosure Schedule lists all Vehicles, Equipment and Furniture and
Fixtures owned, leased or used in ATR's business.
5.16 CONTRACTS. Section of the ATR Disclosure Schedule lists the
following contracts and other agreements to which ATR is a party:
(a) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease payments
in excess of $5,000 per annum;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the
performance of which will extend over a period of more than one year, or cannot
be terminated on 30 day notice, or which is expected to result in a loss to
ATR, or involves consideration in excess of $25,000;
(c) any agreement concerning a partnership or joint
venture; any distribution, dealer, representative, agent, franchise, commission
or other sales agreement;
(d) any agreement (or group of related agreements) under
which ATR has created, incurred, assumed, or guaranteed any indebtedness, or
any capitalized lease obligation, in excess of $5,000 or under which it has
imposed a Security Interest on any of its assets, tangible or intangible;
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(e) any agreement concerning confidentiality, non solicitation
or noncompetition;
(f) any agreement involving any of the Shareholders and their
Affiliates;
(g) any profit sharing, phantom stock, stock option, stock
purchase, stock appreciation, deferred compensation, severance, or other plan
or arrangement for the benefit of its current or former directors, officers,
and employees;
(h) any collective bargaining agreement;
(i) any agreement for the employment of any individual on a
fulltime, parttime, consulting, or other basis providing annual compensation in
excess of $100,000 in the prior 12 months or expected to exceed $100,000 in the
current fiscal year, or providing severance benefits other than in the Ordinary
Course of Business;
(j) any agreement under which ATR has advanced or loaned any
amount to any of its directors, officers, and employees or any of their
Affiliates;
(k) any agreement under which the consequences of a default
or termination could have a material adverse effect on the business, financial
condition, operations, results of operations, or future prospects of ATR(it
being agreed that in the case of a monetary effect, the same will be deemed
material if in excess of $250,000);
(l) any agreement or commitment for any charitable or
political contribution;
(m) any agreement not in the Ordinary Course of Business; and
(n) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $250,000.
ATR has delivered to Norrell a correct and complete copy of each written
agreement listed in Section of the ATR Disclosure Schedule (as amended to
date) and a written summary setting forth the terms and conditions of each oral
agreement referred to in Section of the ATR Disclosure Schedule. With respect
to each such agreement as to ATR, and to the Knowledge of ATR, any officer,
director or Shareholder, as to any other Person: (a) the agreement is legal,
valid, binding, enforceable, and in full force and effect; (b) the agreement
will continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated in the Reorganization Documents; (c) no Person is in breach or
default, and no event has occurred which with notice or lapse of time would
constitute a breach or default,
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or permit termination, modification, or acceleration, under the agreement; and
(d) no Person has repudiated any provision of the agreement.
5.17 NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable
of ATR are reflected properly on the books and records, are valid receivables
for sales actually made or services actually rendered in the Ordinary Course of
Business, subject to no defenses, setoffs, or counterclaims, are current and
collectible, and will be collected in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts in the Most Recent
Balance Sheet (rather than in any notes thereto) as adjusted for the passage of
time through the Effective Date in accordance with the past custom and practice
of ATR.
5.18 POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of ATR.
5.19 INSURANCE. Section of the ATR Disclosure Schedule sets forth the
following information with respect to each insurance policy (including policies
providing property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements) to which ATR has been a party, a named insured,
or otherwise the beneficiary of coverage at any time within the past 5 years:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the policy holder,
and the name of each covered insured;
(c) the policy number and the period of coverage;
(d) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles and ceilings are calculated and
operate) of coverage; and
(e) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
With respect to each such insurance policy: (i) the policy is legal, valid,
binding, enforceable, and in full force and effect; (ii) the policy will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions in the
Reorganization Documents; (iii) neither ATR nor any other party to the policy is
in breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice or the lapse
of time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (iv) no party to the policy
has repudiated any provision thereof. Section of the ATR Disclosure Schedule
describes any self-insurance arrangements affecting ATR.
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5.20 LITIGATION. Section of the ATR Disclosure Schedule sets forth
each instance in which ATR (a) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (b) is a party or, to the
Knowledge of any of the Shareholders and the directors and officers (and
employees with responsibility for litigation matters) of ATR, is threatened to
be made a party, to any action, suit, proceeding, hearing, or investigation of,
in, or before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator. None
of the actions, suits, proceedings, hearings, and investigations set forth in
Section of the ATR Disclosure Schedule could result in any material adverse
change in the business, financial condition, operations, results of operations,
or future prospects of ATR. None of the Shareholders and the directors and
officers (and employees with responsibility for litigation matters) of ATR has
any reason to believe that any such action, suit, proceeding, hearing, or
investigation may be brought or threatened against ATR.
5.21 PRODUCT AND SERVICE WARRANTY. Each product manufactured, sold,
leased, or delivered or service provided by ATR has been in conformity with all
applicable contractual commitments and all express and implied warranties, and
ATR has no Liability (and there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand
against any of them giving rise to any Liability) for replacement or repair
thereof or other damages in connection therewith, subject only to the reserve
for product or service warranty claims in the Most Recent Balance Sheet (rather
than in any notes thereto) as adjusted for the passage of time through the
Effective Date in accordance with the past custom and practice of ATR. No
product manufactured, sold, leased, or delivered or service provided by ATR is
subject to any guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions. Section of the ATR Disclosure Schedule includes
a copy of the standard terms and conditions for ATR containing applicable
guaranty, warranty, and indemnity provisions.
5.22 PRODUCT LIABILITY. ATR has no Liability (and there is no Basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them giving rise to any
Liability) arising out of any injury to individuals or property as a result of
the ownership, possession, or use of any product manufactured, sold, leased, or
delivered by ATR.
5.23 EMPLOYEES.
(a) To the Knowledge of any of the Shareholders and the
directors and officers (and employees with responsibility for employment
matters) of ATR, no executive, key employee, or group of employees has any
plans to terminate employment with ATR. ATR is not a party to or bound by any
collective bargaining agreement, nor has it experienced any strikes,
grievances, claims of unfair labor practices, or other collective bargaining
disputes. ATR has not committed or been charged or threatened with a charge in
the last three (3) years of any unfair labor practice. None of the Shareholders
and the directors and officers (and employees
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with responsibility for employment matters) of ATR has any Knowledge of any
organizational effort presently being made or threatened in the last three (3)
years by or on behalf of any labor union with respect to employees of ATR.
Section of the ATR Disclosure Schedule is a complete list of all employees and
consultants receiving wages from ATR for the one month ended on Most Recent
Month End.
(b) ATR is in compliance with all applicable federal,
state, local and foreign laws and regulations concerning the employeremployee
relationship and with all agreements relating to the employment of their
employees, including applicable wage and hour laws, fair employment laws,
safety laws, worker compensation statutes, unemployment laws, and social
security laws. There areno pending or threatened claims, investigations,
charges, citations, hearings, consent decrees, or litigation concerning:
wages, compensation, bonuses, commissions, awards, or payroll deductions, equal
employment or human rights violations regarding race, color, religion, sex,
national origin, age, handicap, veteran's status, marital status, disability,
or any other recognized class, status, or attribute under any federal, state,
local or foreign equal employment law prohibiting discrimination;
representation petitions or unfair labor practices; grievances or arbitrations
pursuant to current or expired collective bargaining agreements; occupational
safety and health; workers compensation; wrongful termination, negligent
hiring, invasion of privacy or defamation; immigration or any other claim based
on the employment relationship or termination of the employment relationship
(collectively "Labor Claims"). ATR is not liable for any unpaid wages,
bonuses, or commissions (other than those not yet due) or any tax, penalty,
assessment, or forfeiture for failure to comply with any of the foregoing.
There is no outstanding agreement or arrangement with respect to severance
payments with respect to any employee of ATR.
5.24 EMPLOYEE BENEFITS.
(a) Section of the ATR Disclosure Schedule lists each
Employee Benefit Plan that ATR maintains or to which ATR contributes.
(b) Each such Employee Benefit Plan (and each related
trust, insurance contract, or fund) complies in form and in operation in all
respects with the applicable requirements of ERISA, the Code, and other
applicable laws.
(c) All required reports and descriptions (including Form
5500 Annual Reports, Summary Annual Reports, PBGC1's, and Summary Plan
Descriptions) have been filed or distributed with respect to each such Employee
Benefit Plan. The requirements of Part 6 of Subtitle B of Title I of ERISA and
of Code Section 4980B have been met with respect to each such Employee Benefit
Plan which is an Employee Welfare Benefit Plan.
(d) All contributions (including all employer
contributions and employee salary reduction contributions) which are due have
been paid to each
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such Employee Benefit Plan (including an Employee Pension Benefit Plan) and all
contributions for any period ending on or before the Effective Date which are
not yet due have been paid to each such Plan (including Employee Pension
Benefit Plan) or accrued in accordance with the past custom and practice of
ATR. All premiums or other payments for all periods ending on or before the
Effective Date have been paid with respect to each such Employee Benefit Plan
(including an Employee Welfare Benefit Plan).
(e) Each such Employee Benefit Plan which is classified
as a qualified plan (including an Employee Pension Benefit Plan) meets the
requirements of a "qualified plan" under Code Section 401(a) and has received,
within the last two years, a favorable determination letter from the Internal
Revenue Service.
(f) The market value of assets under each such Employee
Benefit Plan (including an Employee Pension Benefit Plan) equals or exceeds the
present value of all vested and nonvested Liabilities thereunder determined in
accordance with PBGC methods, factors, and assumptions applicable to an
Employee Benefit Plan (including an Employee Pension Benefit Plan terminating
on the date for determination.
(g) ATR has delivered to Norrell correct and complete
copies of the plan documents and summary plan descriptions, the most recent
determination letter received from the Internal Revenue Service, the most
recent Form 5500 Annual Report, and all related trust agreements, insurance
contracts, and other funding agreements which implement each such Employee
Benefit Plan.
(h) With respect to each Employee Benefit Plan that ATR
and the Controlled Group of Corporations which includes ATR maintains or ever
has maintained or to which any of them contributes, ever has contributed, or
ever has been required to contribute:
(i) No such Employee Benefit Plan which is an
Employee Pension Benefit Plan (other than any Multiemployer Plan) has been
completely or partially terminated or been the subject of a Reportable Event as
to which notices would be required to be filed with the PBGC. No proceeding by
the PBGC to terminate any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or, to the Knowledge of any of the
Shareholders and the directors and officers (and employees with responsibility
for employee benefits matters) of ATR, threatened.
(ii) There have been no Prohibited Transactions
with respect to any such Employee Benefit Plan. No Fiduciary has any Liability
for breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of any such
Employee Benefit Plan. No action, suit, proceeding, hearing, or investigation
with respect to the administration or the investment of the assets of any such
Employee Benefit Plan (other than routine claims for benefits) is pending or,
to the Knowledge of any of the
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Shareholders and the directors and officers (and employees with
responsibility for employee benefits matters) of ATR, threatened. None of the
Shareholders and the directors and officers (and employees with responsibility
for employee benefits matters) of ATR has any Knowledge of any Basis for any
such action, suit, proceeding, hearing, or investigation.
(iii) ATR has not incurred, and none of the
Shareholders and the directors and officers (and employees with responsibility
for employee benefits matters) of ATR has any reason to expect that any of ATR
will incur, any Liability to the PBGC (other than PBGC premium payments) or
otherwise under Title IV of ERISA (including any withdrawal Liability) or under
the Code with respect to any such Employee Benefit Plan.
(i) ATR and any other members of the Controlled Group of
Corporations that includes ATR do not contribute to, have never contributed to,
and never have been required to contribute to any Multiemployer Plan, and none
has any Liability (including withdrawal Liability) under any Multiemployer
Plan.
(j) ATR does not maintain or contribute nor has it ever
maintained or contributed or been required to contribute to, any Employee
Welfare Benefit Plan providing medical, health, or life insurance or other
welfaretype benefits for current or future retired or terminated employees,
their spouses, or their dependents other than in accordance with the
continuation of coverage requirements of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and Sections 601 through 608 of ERISA,
all of which have been complied with in all material respects.
5.25 GUARANTIES. ATR is not a guarantor or otherwise liable for any
Liability or obligation (including indebtedness) of any other Person.
5.26 ENVIRONMENT, HEALTH, AND SAFETY.
(a) ATR, its predecessors and Affiliates have complied
with all Environmental, Health, and Safety Laws, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against any of them alleging any failure so to
comply. Without limiting the generality of the preceding sentence, ATR, and
its predecessors and Affiliates have obtained and been in compliance with all
of the terms and conditions of all permits, licenses, and other authorizations
which are required under, and have complied with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables which are contained in, all Environmental, Health,
and Safety Laws.
(b) ATR has no Liability (and none of ATR, and its
predecessors and Affiliates has handled or disposed of any substance, arranged
for the disposal of any substance, exposed any employee or other individual to
any substance or condition, or owned or operated any property or facility in
any manner that could
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form the Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against ATR giving
rise to any Liability) for damage to any site, location, or body of water
(surface or subsurface), for any illness of or personal injury to any employee
or other individual, or for any reason under any Environmental, Health,
and Safety Law.
(c) All properties and equipment used in the business of
ATR and its predecessors and Affiliates have been free of asbestos, PCB's,
methylene chloride, trichloroethylene, 1, 2 trans-dichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous Substances.
5.27 CERTAIN BUSINESS RELATIONSHIPS WITH ATR. None of the
Shareholders and their Affiliates has been involved in any business
arrangement, contract, agreement or relationship with ATR within the past
twelve (12) months or received any payments or benefits from ATR, and none of
the Shareholders and their Affiliates owns any asset, tangible or intangible,
which is used in the business of ATR.
5.28 ADEQUACY OF ATR'S ASSETS. ATR's Assets include all rights,
properties, and assets necessary to permit ATR to carry on its business as
presently conducted and presently proposed to be conducted.
5.29 DISTRIBUTIONS TO SHAREHOLDERS. During the two (2) years prior
to the date of this Agreement, ATR has not disposed of, split off, or spun off
or otherwise distributed to the Shareholders or any other shareholder of ATR
any material assets, divisions or businesses of ATR.
5.30 DISCLOSURE. No representation or warranty of the Shareholders
in this Agreement or in any statement, certificate or Schedule furnished by the
Shareholders, or in connection with the transactions contemplated hereby,
contains any untrue statement of fact or omits to state any fact necessary in
order to make the statements contained therein not misleading, and all such
statements, representations, warranties, certificates and Schedules are true
and complete. Nothing in the ATR Disclosure Schedule shall be deemed adequate
to disclose an exception to a representation or warranty unless the ATR
Disclosure Schedule identifies the exception with reasonable particularly and
describes the relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception to
a representation or warranty unless the representation or warranty has to do
with the existence of the document or other item itself. The ATR Disclosure
Schedule will be arranged in paragraphs corresponding to the numbered
paragraphs contained in this Article 5.
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6. REPRESENTATIONS AND WARRANTIES OF NORRELL AND NAC
Norrell and NAC, jointly and severally, represent and warrant to the
Shareholders that except as set forth in Norrell Disclosure Schedule attached
and initialed by the Parties (the "Norrell Disclosure Schedule"):
6.1 ORGANIZATION. Each of Norrell and NAC is a corporation duly
organized,validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
6.2 AUTHORIZATION OF TRANSACTION. Each of Norrell and NAC has full
power and authority (including full corporate power and authority) to execute
and deliver the Reorganization Documents and to perform its respective
obligations thereunder. The Reorganization Documents constitute the valid and
legally binding obligations of Norrell and NAC, respectively, enforceable in
accordance with their terms and conditions.
6.3 NON-CONTRAVENTION. Neither the execution and the delivery of the
Reorganization Documents, nor the consummation of the transactions contemplated
in the Reorganization Documents, will (a) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Norrell
or NAC is subject or any provision of either of their respective charters or
bylaws, or (b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Norrell or NAC is a party or by which either is bound or to which any of its
respective assets is subject. Neither Norrell nor NAC needs to give any notice
to, make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the Parties to consummate
the transactions contemplated by the Reorganization Documents.
6.4 BROKERS' FEES. Neither Norrell nor NAC has any Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the
Shareholders could become liable or obligated.
6.5 NORRELL COMMON STOCK. NAC is the holder of record and owns
beneficially one million (1,000,000) shares of the issued and outstanding
shares of the no par value common stock of Norrell. All such shares were duly
authorized and are validly issued, fully paid and nonassessable.
6.6 PUBLIC INFORMATION. Norrell has delivered to ATR a true and
correct copy of its most recent Annual Report on Form 10-K as filed with the
Securities and Exchange Commission (the "SEC") for the fiscal year ended
October 29, 1995, together with comparable information relating to the fiscal
year ended October 30,
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1994, together with accompanying notes, all as certified by Arthur Andersen
& Co., the independent certified public accountants for Norrell. In addition,
Norrell has delivered to ATR true and correct copies of its annual report to
shareholders with respect to the fiscal year ended October 31, 1995, a proxy
statement relating to the 1995 annual meeting of shareholders, and copies of
its quarterly reports (which include unaudited quarterly financial statements)
as filed with the SEC on Form 10Q for the periods ended January 31, 1996,
and April 30, 1996.
6.7 NO MATERIAL ADVERSE CHANGE. There has been no material adverse
change in the business or financial condition of Norrell since April 30, 1996.
6.8 DISCLOSURE. No representation or warranty of Norrell or NAC in
this Agreement or in any statement, certificate or Schedule furnished by them,
or in connection with the transactions contemplated hereby, contains any untrue
statement of fact or omits to state any fact necessary in order to make the
statements contained therein not misleading, and all such statements,
representations, warranties, certificates and Schedules are true and complete.
Nothing in the Norrell Disclosure Schedule shall be deemed adequate to disclose
an exception to a representation or warranty unless the Norrell Disclosure
Schedule identifies the exception with reasonable particularly and describes
the relevant facts in reasonable detail. Without limiting the generality of
the foregoing, the mere listing (or inclusion of a copy) of a document or other
item shall not be deemed adequate to disclose an exception to a representation
or warranty unless the representation or warranty has to do with the existence
of the document or other item itself. The Norrell Disclosure Schedule will be
arranged in paragraphs corresponding to the numbered paragraphs contained in
this Article 6.
7. CONDITIONS TO OBLIGATION TO CLOSE
7.1 CONDITIONS TO OBLIGATION OF NORRELL AND NAC. The obligation of
Norrell to consummate the transactions to be performed by it in connection
with the Merger is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in
Article 5 shall be true and correct in all material respects at and as of the
Closing;
(b) the Shareholders and ATR shall have performed and
complied with all of their covenants and agreements in all material respects
through the Closing;
(c) no action, suit, or proceeding shall be pending
before any court or quasijudicial or administrative agency of any federal,
state, local, or foreign jurisdiction in which an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent consummation of
any of the transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (iii) affect adversely the right of Norrell to
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own ATR, to operate the business of ATR (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(d) the Shareholders of ATR shall have approved the
Merger in accordance with the VSCA and all of the Shareholders shall have
consented to the Merger or shall have agreed in writing to waive any
dissenters' rights with respect to the Merger;
(e) the Shareholders shall have delivered to Norrell a
certificate to the effect that each of the conditions specified in Section 7.1
(a) - (d) is satisfied in all respects;
(f) ATR, NAC and Norrell shall have received all
authorizations, consents, and approvals of governments and governmental
agencies that may be required;
(g) ATR shall have entered into the Merger Agreement in
substantially the form of Exhibit A and related Articles of Merger required by
the VSCA and GBCC, and the same shall be in full force and effect;
(h) Norrell shall have received from counsel to the
Shareholders an opinion addressed to Norrell and dated as of the Closing Date,
in substantially the form of Exhibit E;
(i) Norrell shall have received the resignations,
effective as of the Effective Time, of each director and officer of ATR, except
for the officers and directors listed in the Merger Agreement;
(j) (i) each of Charles F. Phillips, Gary L. Kilgore and
Ralph L. Lary, III shall have executed and delivered to Norrell an Employment
Agreement; (ii) the Shareholders and Escrow Agent shall have executed and
delivered the Pledge and Escrow Agreement; and (iii) the Shareholders shall
have executed and delivered the Registration Rights Agreement.
(k) all intercompany, Shareholder and their Affiliates
loans or advances from ATR shall have been repaid on or before the Effective
Date and any agreements, arrangements or underlying (other than those
contemplated by the Reorganization Documents) shall have been cancelled,
terminated or otherwise discontinued without cost or expense to ATR;
(l) all actions to be taken by the Shareholders in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be satisfactory in form and substance to
NAC and Norrell;
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(m) the Shareholders shall have delivered to Norrell
their respective certificates for ATR Common Stock together with duly executed
powers ofattorney or stock powers.
Norrell may waive any condition specified in this Section if it executes a
writing so stating at or prior to the Closing.
7.2 CONDITIONS TO OBLIGATION OF ATR AND THE SHAREHOLDERS. The
obligation of ATR and the Shareholders to consummate the transactions to be
performed by them in connection with the Merger is subject to satisfaction of
the following conditions:
(a) the representations and warranties set forth in
Article 6 above shall be true and correct in all material respects at and as of
the Closing;
(b) Norrell and NAC shall have performed and complied
with all of their covenants and agreements in all material respects through the
Closing;
(c) no action, suit, or proceeding shall be pending
before any court or quasijudicial or administrative agency of any federal,
state, local, or foreign jurisdiction wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (a) prevent consummation of
any of the transactions contemplated by this Agreement or (b) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);
(d) Norrell shall have delivered to ATR a certificate to
the effect that each of the conditions specified in Section (a)-(c) is
satisfied in all respects;
(e) ATR, NAC and Norrell shall have received all
authorizations, consents, and approvals of governments and governmental
agencies that may be required;
(f) NAC shall have entered into the Merger Agreement in
substantially the form of Exhibit A and related Articles of Merger required by
the VSCA and GBCC, and the same shall be in full force and effect;
(g) the Shareholders shall have received from counsel to
Norrell an opinion substantially in the form of Exhibit G and dated as of the
Closing Date;
(h) (i) Norrell shall have executed and delivered with
each of Charles F. Phillips, Gary L. Kilgore and Ralph L. Lary, III an
Employment Agreement; (ii) Norrell and the Escrow Agent shall have executed and
delivered the Pledge and Escrow Agreement; and (iii) Norrell shall have
executed and delivered the Registration Rights Agreement.
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(i) all actions to be taken by Norrell and NAC in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments,and other documents required to effect the
transactions contemplated hereby will be satisfactory in form and substance to
ATR; and
(j) NAC shall deliver the Norrell Common Stock into which
the Shareholders' shares of ATR Common Stock are exchangeable pursuant to
Section 4.1 and the Merger.
The Shareholders and ATR may waive any condition specified in this Section 7.2
if they execute a writing so stating at or prior to the Closing.
8. POST-CLOSING COVENANTS
The Parties agree with respect to the period following the Closing:
8.1 ADDITIONAL DOCUMENTS. The Parties will at any time before, at or
after the Effective Time, sign, execute and deliver, or to the extent within
their control, cause others to do so, all such powers of attorney, deeds,
assignments, documents and instruments and do or cause to be done all such
other acts or things as may be necessary or proper to carry out the
transactions contemplated by this Agreement.
8.2 LITIGATION SUPPORT. In the event and for so long as ATR or
Norrell actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under the Reorganization
Documents or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction occurring on or prior to the Closing involving ATR, each of the
Shareholders will cooperate with Norrell and ATR and their counsel in the
contest or defense, and provide such testimony and access to their books and
records as shall be necessary in connection with, the contest or defense.
8.3 TRANSITION. None of the Shareholders will take any action that
is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, employee, temporary employee, consultant employee
or other business associate of ATR from maintaining the same business
relationships with ATR after the Effective Time as it maintained with ATR prior
to the Effective Time. Each of the Shareholders will refer all customer
inquiries relating to the business of ATR to ATR from and after the Effective
Time. Each Party shall deliver to the other (within one (1) business day of
receipt) any money or document they receive that belongs to the other.
8.4 CONFIDENTIALITY. Each of the Shareholders will treat and hold as
confidential all of the Confidential Information, refrain from using or
disclosing any of the Confidential Information except in connection with this
Agreement, and
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deliver promptly to ATR or destroy, at the request and option of ATR all
tangible embodiments (and all copies) of the Confidential Information which are
in their possession. In the event that any of the Shareholders is requested or
required by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process to disclose any Confidential Information, that Shareholder will notify
ATR promptly of the request or requirement so that ATR may seek an appropriate
protective order or waive compliance with the provisions of this Section. If,
in the absence of a protective order or the receipt of a waiver hereunder, any
of the Shareholders is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt,
that Shareholder may disclose the Confidential Information to the tribunal;
provided, however, that the disclosing Shareholder shall use his reasonable
efforts to obtain, at the reasonable request of ATR, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as ATR shall designate. The
foregoing provisions shall not apply to any Confidential Information which is
generally available to the public immediately prior to the time of disclosure.
8.5 COVENANT NOT TO COMPETE. For a period of four (4) years from and
after the Closing Date, each Shareholder agrees, severally, that he will not
within the Geographic Territory (i) engage, directly or indirectly, in any
business that ATR conducts as of the Closing; provided, however, that no owner
of less than 1% of the outstanding stock of any publicly traded corporation
shall be deemed to engage solely by reason thereof in any of its businesses;
(ii) within the Geographic Territory solicit or attempt to solicit, directly or
indirectly, any customer of ATR for the purpose of providing any service
competitive with ATR; or (iii) solicit or employ or attempt to solicit or hire
away or employ any employee of ATR. If the final judgment of a court of
competent jurisdiction declares that any term or provision of this Section is
invalid or unenforceable, the Shareholders and Norrell agree that the court
making the determination of invalidity or unenforceability shall have the power
to reduce the scope, duration, or area, to delete specific words or phrases, or
to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified.
8.6 NO DISPOSITION OF SHARES; POOLING OF INTERESTS. Each
Shareholder represents and warrants to Norrell that he has no present intention
or plan or design to dispose of the shares of Norrell Common Stock that he will
receive pursuant to the Merger. Further, each of the Shareholders hereby
covenants and agrees with Norrell that he will not sell, convey or otherwise
transfer any shares of Norrell Common Stock distributed to such Shareholder
pursuant to the Merger until the expiration of not less than one (1) month
following the release by Norrell of consolidated financial statements of Norrell
(including ATR) to the public that reflect at least one (1) month of joint
operations of Norrell and ATR. Norrell may impose stop transfer restrictions
with respect to the Norrell Common Stock subject
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to the foregoing restriction until the end of the period set forth herein.
Each Party hereto agrees to take such further action or actions and to execute
such other documents, agreements, certificates or instruments as may be
necessary or desirable to maintain pooling of interests accounting treatment of
the transactions contemplated by this Agreement and the Merger Agreement
following the Effective Time in accordance with all applicable financial
accounting standards. Nothing in this Section shall prohibit a Shareholder
from transferring his shares of Norrell Common Stock under the Registration
Rights Agreement or Rule 144 under the Securities Act.
8.7 BENEFIT PLANS. Norrell agrees that following the Closing, all
employees of ATR will receive up to one year's service credit for all benefit
plans of Norrell (including the stock purchase plan and the profit sharing plan
with a 401(k) feature), and after one year the Shareholders who become
employees and other ATR employees will be considered for options grants
consistent with similarly situated Norrell employees.
9. REMEDIES FOR BREACHES OF THIS AGREEMENT
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Norrell and the Shareholders contained in
this Agreement shall survive the Closing (even if the damaged Party knew or had
reason to know of any misrepresentation or breach of warranty at the time of
Closing) and continue in full force and effect (i) with respect to the
representations and warranties in Sections 5.1 through and including Section
5.5, for the period of the applicable statute of limitations and (ii) with
respect to all other representations and warranties until the date of issuance
of the first audited consolidated financial statements for Norrell and its
subsidiaries which contain combined operations of ATR and Norrell.
9.2 INDEMNIFICATION PROVISIONS FOR BENEFIT OF NORRELL.
(a) In the event any of the Shareholders is in breach of any of
their representations or warranties contained in this Agreement or in any of
the other Reorganization Documents, and, provided that Norrell makes a written
claim for indemnification against any of the Shareholders within the applicable
survival period of such representation or warranty under Section 9.1, then the
Shareholders severally agree to indemnify Norrell from and against the entirety
of any Adverse Consequences Norrell or ATR may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the alleged
breach) of such representation or warranty.
Notwithstanding the foregoing, the Shareholders shall have no liability
under this Section 9.2(a) until the aggregate of claims for which
the Shareholders may be liable under this Section 9.2(a) exceeds $25,000 per
occurrence and $250,000 in the aggregate, nor shall the Shareholders have
liability under this Section 9.2(a) in excess of $2,500,000.
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(b) The Shareholders severally agree to indemnify Norrell
and ATR from and against the entirety of any Adverse Consequences Norrell or
ATR may suffer resulting from, arising out of, relating to, in the nature of,
or caused by any breach of any covenant or agreement of a Shareholder in this
Agreement or in any of the other Reorganization Documents.
(c) In determining the several liability of the
Shareholders, each Shareholder shall be liable for his pro rata share of the
Adverse Consequences based on the number of shares of ATR Common Stock owned by
such Shareholder set forth on Schedule 4.1 relative to the total number of
shares of ATR Common Stock owned by all the Shareholders as set forth on
Schedule 4.1.
9.3 INDEMNIFICATION PROVISIONS FOR BENEFIT OF SHAREHOLDERS. In the
event Norrell is in breach (or in the event any third party alleges facts that,
if true, would mean Norrell is in breach) of any of its representations,
warranties, covenants and agreements contained in this Agreement and in the
Registration Rights Agreement, and, provided that the Shareholders make a
written claim for indemnification against Norrell within the applicable
survival period under Section 9.1 with respect to any claim based on breach or
alleged breach of a representation or warranty, then Norrell agrees to
indemnify the Shareholders from and against the entirety of any Adverse
Consequences the Shareholders may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the breach (or the alleged breach).
9.4 THIRD PARTY CLAIMS.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other Party (the
"Indemnifying Party"), then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however, that no delay on the
part of the Indemnified Party in notifying any Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and then solely to
the extent) the Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend
the Indemnified Party against the Third Party Claim with counsel of its choice
satisfactory to the Indemnified Party so long as (A) the Indemnifying Party
notifies the Indemnified Party in writing within 15 days after the Indemnified
Party hasgiven notice of the Third Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim, (B) the
indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations, (C) the Third Party Claim involves only money
damages and does not seek an injunction or other equitable relief, (D)
settlement of, or an adverse judgment with respect to, the Third Party
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Claim is not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice adverse to the continuing business
interests of the Indemnified Party, and (E) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim, (A) the Indemnified Party may retain separate
cocounsel at its sole cost and expense and participate in the defense of the
Third Party Claim, (B) the Indemnified Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party (not to be withheld
unreasonably), and (C) the Indemnifying Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be withheld
unreasonably).
(iv) In the event any of the conditions in Subparagraph
(ii) is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (B) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (C) the Indemnifying
Parties will remain responsible for any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim to the fullest extent.
9.5 NATURE OF INDEMNIFICATION. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have for breach of
representation, warranty, or covenant. Each of the Shareholders agrees that he
will not make any claim for indemnification against Norrell by reason of the
fact that he was a director, officer, employee, or agent of ATR or was serving
at the request of any such entity as a partner, trustee, director, officer,
employee, or agent of another Person (whether such claim is for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such claim is pursuant to any statute, charter
document, bylaw, agreement, orotherwise) with respect to any action, suit,
proceeding, complaint, claim, or demand brought by Norrell against such
Shareholder (whether such action, suit, proceeding, complaint, claim, or demand
is pursuant to this Agreement, applicable law, or otherwise).
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10. MISCELLANEOUS
10.1 NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
10.2 ENTIRE AGREEMENT. This Agreement and the other Reorganization
Documents (including the documents referred to herein) constitute the entire
agreement between the Parties and supersedes any prior understandings,
agreements, or representations by or between the Parties, written or oral, to
the extent they related in any way to the subject matter hereof.
10.3 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties; provided, however, that Norrell may (i) assign any or all
of its rights and interests hereunder to one or more of its Affiliates, and
(ii) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases Norrell nonetheless shall remain
responsible for the performance of all of its obligations hereunder).
10.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
10.5 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.6 NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Shareholders:
Charles F. Phillips
11828 Quince Mill Drive
North Potomac, MD 20878
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Ralph L. Lary, III
13513 River Road
Potomac, MD 20854
Gary L. Kilgore
103 Cameron Mews
Alexandria, VA 22314
William C. Holman
c/o ATRI
1651 Old Meadow Road
6th Floor
McLean, VA 22102-4308
George G. Lytle
421 Carona Place
Silver Spring, MD 20905
Copy to:
Hugh A. M. Shafer, Jr.
8351 Greensboro Drive
McLean, Virginia 22102
If to Norrell:
Norrell Corporation
3535 Piedmont Road, N.E.
Atlanta, GA 30305
Attn: President
Phone: (404) 240-3135
Fax: (404) 240-3029
Copy to:
Norrell Corporation
3535 Piedmont Road, N.E.
Atlanta, GA 30305
Attn: General Counsel
Phone: (404) 240-3158 Fax: (404) 240-3312
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it
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actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.
10.7 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia without giving effect to
any choice or conflict of law provision or rule (whether of the State of
Georgia or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Georgia.
10.8 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
Norrell and the Shareholders. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
10.9 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
10.10 EXPENSES. Each of Norrell, ATR, and the Shareholders will bear
his or its own costs and expenses (including legal and accounting fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby. ATR agrees that it has not and will not bear any of the
costs and expenses of the Shareholders (including any of their legal fees and
expenses) in connection with this Agreement or any of the transactions
contemplated hereby, except that ATR will pay any due diligence costs of ATR
and the Shareholders of up to $100,000 in amount. ATR also agrees that it has
not paid any amount to any third party, and will not pay any amount to any
third party until after the Closing, with respect to any of the costs and
expenses of ATR and the Shareholders (including any of their legal and
accounting fees and expenses) in connection with this Agreement or any of the
transactions contemplated hereby.
10.11 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any
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representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty, or covenant relating to
the same subject matter (regardless of the relative levels of specificity) which
the Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
References to the singular shall include the plurals and vice versa.
10.12 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits, Appendix
of Terms, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
10.13 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter, in addition to any other remedy
to which it may be entitled, at law or in equity.
10.14 REMEDIES NOT EXCLUSIVE. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by any statute or otherwise.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
NORRELL CORPORATION
By: /s/ Mark H. Hain
----------------------------------
Title: V.P.
--------------------------------
N. ACQUISITION CORP.
By: /s/ Mark H. Hain
----------------------------------
Title: V.P.
-------------------------------
ES, INC. AMERICAN TECHNICAL RESOURCES, INC.
By:/s/ Charles F. Phillips
----------------------------------
Title: President
------------------------------
SHAREHOLDERS
By: /s/ Charles F. Phillips
----------------------------------
Charles F. Phillips
By: /s/ Ralph L. Lary, III
----------------------------------
Ralph L. Lary, III
By: /s/ Gary L. Kilgore
----------------------------------
Gary L. Kilgore
By: /s/ William C. Holman
----------------------------------
William C. Holman
By: /s/ George G. Lytle
----------------------------------
George G. Lytle
35
