===============================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
NCO GROUP, INC.
AND
CMS A/R SERVICES, INC.
===============================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 AGREEMENT TO PURCHASE AND SELL....................................................... 1
Section 1.1 Purchase and Sale of Seller's Assets........................................ 1
Section 1.2 Purchased Assets............................................................ 1
Section 1.3 Assumed Liabilities......................................................... 2
ARTICLE 2 PURCHASE PRICE....................................................................... 2
Section 2.1 ................................................................................. 2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER............................................. 2
Section 3.1 Organization; Corporate Power; Etc.......................................... 2
Section 3.2 Licenses and Permits........................................................ 2
Section 3.3 Authorization of Agreement No Conflicts..................................... 2
Section 3.4 Compliance with Applicable Laws............................................. 3
Section 3.5 Litigation.................................................................. 3
Section 3.6 Title to Assets other than Real Property.................................... 3
Section 3.7 Reserved.................................................................... 3
Section 3.8 Brokers and Finders......................................................... 3
Section 3.9 Material Contracts.......................................................... 3
Section 3.10 Material Event.............................................................. 3
Section 3.11 Effective Date of Representations, Warranties,
Covenants and Agreements.................................................... 3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................................... 4
Section 4.1 Organization; Corporate Power; Etc.......................................... 4
Section 4.2 Licenses and Permits........................................................ 4
Section 4.3 Authorization of Agreement; No Conflicts.................................... 4
Section 4.4 Brokers and Finders......................................................... 4
Section 4.5 Effective Date of Representations, Warranties,
Covenants and Agreements.................................................... 4
ARTICLE 5 ADDITIONAL AGREEMENTS................................................................ 4
Section 5.1 Due Diligence, Access to Information, Etc................................... 4
Section 5.2 Access To Client Files/Conversion........................................... 5
Section 5.3 Expenses.................................................................... 5
Section 5.4 Taking of Necessary Action/Requisite Regulatory Approvals................... 5
Section 5.5 Notification of Certain Events.............................................. 5
Section 5.6 Personal, Property and Sales Taxes.......................................... 5
Section 5.7 Survival of Representations and Warranties.................................. 6
Section 5.8 Use of Name................................................................. 6
Section 5.9 Employees................................................................... 6
Section 5.10 Future Business............................................................. 6
Section 5.11 Specific Uncollected Accounts............................................... 7
Section 5.12 Commonwealth Edison Company Receivable...................................... 7
Section 5.13 Audit....................................................................... 7
(i)
ARTICLE 6 CONDUCT OF BUSINESS.................................................................. 7
ARTICLE 7 CONDITIONS PRECEDENT TO CLOSING...................................................... 7
Section 7.1 Condition to the Parties' Obligations....................................... 7
Section 7.2 Conditions to Purchaser's Obligations....................................... 7
Section 7.3 Conditions to Seller's Obligations.......................................... 8
ARTICLE 8 CLOSING.............................................................................. 9
Section 8.1 Closing..................................................................... 9
Section 8.2 Purchase Price.............................................................. 9
Section 8.3 Conveyance and Transfer; Assumption......................................... 9
Section 8.4 Certificate................................................................. 9
Section 8.5 Opinion of Seller's Counsel................................................. 9
Section 8.6 Opinion of Purchaser's Counsel............................................. 10
ARTICLE 9 TERMINATION, AMENDMENTS AND WAIVERS................................................. 10
Section 9.1 Termination................................................................ 10
Section 9.2 Effect of Termination; Survival............................................ 10
Section 9.3 Amendment.................................................................. 10
Section 9.4 Waiver..................................................................... 10
ARTICLE 10 INDEMNIFICATION..................................................................... 11
Section 10.1 Indemnification by Seller.................................................. 11
Section 10.2 Indemnification by Purchaser............................................... 11
Section 10.3 Notice..................................................................... 11
Section 10.4 Limitation of Indemnity.................................................... 11
ARTICLE 11 GENERAL PROVISIONS.................................................................. 12
Section 11.1 Notices.................................................................... 12
Section 11.2 Counterparts............................................................... 12
Section 11.3 Entire Agreement/No Third Party Rights/Assignment.......................... 12
Section 11.4 Governing Law.............................................................. 13
Section 11.5 Non-disclosure of Agreement................................................ 13
Section 11.6 Headings/Table of Contents................................................. 13
Section 11.7 Enforcement of Agreement................................................... 13
Section 11.8 Severability............................................................... 13
Section 11.9 Confidentiality............................................................ 13
Section 11.10 Certain Definition......................................................... 13
(ii)
INDEX OF EXHIBITS AND SCHEDULES
Schedule A
Schedule B
Schedule 1.2.5
Schedule 3.5
Schedule 3.9
Schedule 5.11
Exhibit 7.2.5
Exhibit 7.2.9
Exhibit 8.5
Exhibit 8.6
FFS&E
Office and Equipment Leases
Trust and Credit Card Bank Accounts Litigation
Material Contracts
Specific Uncollected Accounts
Form of Agreement Not to Compete Form of Collection Agreement
Form of Opinion of Counsel to Seller
Form of Opinion of Counsel to Purchaser
(iii)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of
January 21, 1997 by and between CMS A/R SERVICES, INC. a Michigan Corporation
("Seller") and NCO GROUP, INC., a Pennsylvania Corporation ("Purchaser").
WITNESSETH
WHEREAS the Board of Directors of Seller has determined that it is in
the best interests of Seller for Seller to sell substantially all of its assets;
WHEREAS the Board of Directors of Purchaser has determined that it is
in the best interests of Purchaser for Purchaser to purchase substantially all
of Seller's assets; and
WHEREAS each of the Boards of Directors of Seller and Purchaser has
approved this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of these premises and the
representations, warranties and agreements herein contained, and intending to be
legally bound, Seller and Purchaser hereby agree as follows:
ARTICLE 1
AGREEMENT TO PURCHASE AND SELL
Section 1.1 Purchase and Sale of Seller's Assets. At the closing of the
transactions contemplated by this Agreement (the "Closing"), Seller will sell to
Purchaser, and Purchaser will purchase from Seller, all assets exclusively
associated with Seller's receivables management, teleservices and accounts
collection business (the "Business"), including certain accounts, certain
accounts, certain liabilities and certain assets of Seller.
Section 1.2 Purchased Assets. The assets to be conveyed to Purchaser
by Seller at the Closing (the "Purchased Assets") are the following:
1.2.1 Certain furniture, fixtures, supplies and
equipment, all as more particularly described on Schedule A hereto
(collectively, the "FFS&E");
1.2.2 All of Seller's rights under all contracts,
leases and agreements relating to the Business, including, but not limited to,
office and equipment leases as listed on Schedule B hereto;
1.2.3 All notes and accounts receivable held by
Seller and all notes, bonds and other evidences of indebtedness of and rights to
receive payments from any person held by Seller;
1.2.4 All goodwill and all books and records of
Seller associated with the Business, including without limitation, all customer
lists and customer files;
1.2.5 The trust and credit card bank accounts listed
on Schedule 1.2.5 hereto Purchased Assets shall not include cash, tax related
assets, Seller's name, except pursuant to Section
5.8 herein, trademarks, service marks or any other asset or right of Seller
without Seller's prior written consent to such use.
Section 1.3 Assumed Liabilities. The liabilities of Seller to be
assumed by Purchaser at the Closing (the "Assumed Liabilities") include Seller's
liabilities and obligations under customer and client contracts relating to the
Business as well as all office and equipment leases relating to the Business as
listed on Schedule B hereto. Purchaser does not assume any other liabilities of
Seller other than those described above.
ARTICLE 2
PURCHASE PRICE
Section 2.1 The price to be paid by Purchaser to Seller and BLC (the
"Purchase Price") in consideration of Seller's conveyance of the Purchased
Assets to Purchaser and the assumption by Purchaser of the Assumed Liabilities
shall be equal to the sum of the following:
2.1.1 A non refundable deposit of $50,000 payable on
the date of the execution of this Agreement to be held in escrow by counsel for
Purchaser until Closing (the "Deposit"); and
2.1.2 An amount equal to $4,311,222 payable at
Closing.
2.1.3 An amount equal to $738,778 payable at Closing
to BLC Corporation ("BLC") (the "Dialer Payoff").
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to and covenants and agrees with
Purchaser as follows:
Section 3.1 Organization; Corporate Power; Etc. Seller is a Michigan
corporation duly organized, validly existing and in good standing under the laws
of the State of Michigan with full corporate power and authority to own, lease
and operate its properties and assets and to carry on the Business.
Section 3.2 Licenses and Permits. Seller has all licenses,
certificates, franchises, rights and permits that are necessary for the conduct
of the Business, and such licenses are in full force and effect, except for any
lack or failure to be in full force and effect that would not, individually or
in the aggregate, have a material adverse effect on Seller or the Business. The
Business has been conducted, and will be conducted until the Closing Date, in
all material respects, in compliance with all applicable licenses, certificates,
franchises, rights and permits.
Section 3.3 Authorization of Agreement No Conflicts.
3.3.1 The execution and delivery of this Agreement by
Seller and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller and constitutes a valid
and binding obligation of Seller, enforceable in accordance with its
-2-
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium and by general equitable principles.
3.3.2 The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
conflict with, or result in any violation of or default or loss of a material
benefit under, any provision of the articles or bylaws of Seller or any
mortgage, indenture, lease, agreement (either written or oral) or other
instrument or any permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Seller
or its properties, other than any such conflict, violation, default or loss
which will not have a material adverse effect on the Business.
Section 3.4 Compliance with Applicable Laws. Seller's activities are
not being, conducted in violation of any law, ordinance or regulation, except
for violations which individually or in the aggregate would not have a material
adverse effect on the Business.
Section 3.5 Litigation. Except as set forth on Schedule 3.5, there is
no suit, action or proceeding pending or, to the knowledge of Seller, threatened
against or affecting the Business, which, if adversely determined, would have a
material adverse effect on the Business; nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
regarding the Business having any such effect.
Section 3.6 Title to Assets other than Real Property. Seller owns (or
leases as disclosed on Schedules A and B) and has good and marketable title to
the FFS&E free and clear of all mortgages, liens, encumbrances, pledges or
charges of any kind or nature.
Section 3.7 Reserved.
Section 3.8 Brokers and Finders. Seller is not a party to or obligated
under any agreement with any broker or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement nor the
consummation of the transactions provided for herein will result in any
liability to any broker or finder.
Section 3.9 Material Contracts. Schedule 3.9 lists all of the material
agreements, obligations and understandings to which Seller is a party as of the
date of this Agreement.
Section 3.10 Material Event. Seller is not aware of any actual or
threatened material event or change which would effect the Business or the
client base of the Business in such a way as to have a material adverse effect
on the Purchased Assets or the value of the Business taken as a whole.
Section 3.11 Effective Date of Representations, Warranties, Covenants
and Agreements. Each representation, warranty, covenant and agreement of Seller
set forth in this Agreement shall be deemed to be made on and as of the date
hereof.
-3-
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that:
Section 4.1 Organization; Corporate Power; Etc. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Pennsylvania. Purchaser has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently conducted.
Section 4.2 Licenses and Permits. Purchaser has all material licenses
and permits that are necessary for the conduct of its businesses, and such
licenses are in full force and effect, except for any failure to be in full
force and effect that would not, individually or in the aggregate, have a
material adverse effect on Purchaser.
Section 4.3 Authorization of Agreement; No Conflicts.
4.3.1 The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been duly executed and delivered by Purchaser and Constitutes a
legal, valid and binding obligation of Purchaser, enforceable against Purchaser
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium or by general equitable
principles.
4.3.2 The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not conflict
with, or result in any violation of or default or loss of a material benefit
under, any provision of the articles or bylaws of Purchaser or, any material
mortgage, indenture, lease, agreement or other material instrument, or any
permit, concession, grant, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Purchaser, other than any such
conflict, violation, default or loss which (i) will not have a material adverse
effect on Purchaser; or (ii) will be cured or waived prior to the Closing.
Section 4.4 Brokers and Finders. Purchaser is not a party to or
obligated under any agreement with any broker or finder relating to the
transactions contemplated hereby.
Section 4.5 Effective Date of Representations, Warranties, Covenants
and Agreements. Each representation, warranty, covenant and agreement of
Purchaser set forth in this Agreement shall be deemed to be made on and as of
the date hereof.
ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.1 Due Diligence, Access to Information, Etc.
5.1.1 Following the execution of this Agreement and
before the Closing, upon reasonable notice Seller shall allow Purchaser and its
accountants, counsel and other
-4-
representatives reasonable access to its officers, employees, properties, books,
contracts, commitments, records and files of the Business.
5.1.2 Following the Closing, during normal business
hours, Seller will afford Purchaser, its counsel, accountants and other agents,
full access to books, records or documents retained by Seller relating to the
Assumed Liabilities. If Seller intends to destroy any of its books, records or
documents relating to the Assumed Liabilities within three years of the Closing
Date, Seller will notify Purchaser of such fact and retain them or deliver them
to Purchaser as it shall determine.
5.1.3 Following the Closing, during normal business
hours, Purchaser will afford Seller, its counsel, accountants and other agents,
full access to any books, records or documents acquired by Purchaser pursuant to
this Agreement as Seller may reasonably request. If Purchaser intends to destroy
any of such books, records or documents within three years of the Closing Date,
Purchaser will notify Seller of such fact and retain them or deliver them to
Seller as it shall determine.
Section 5.2 Access To Client Files/Conversion. Following the execution
of this Agreement and before the Closing Seller shall, if required by Purchaser
permit Purchaser and its representatives access to Seller's client files and
computer programs in order to permit Purchaser to begin the client data and
other information of the Business to Purchaser's computer system.
Section 5.3 Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring the same.
Section 5.4 Taking of Necessary Action/Requisite Regulatory Approvals.
Each of the parties hereto agrees to use all reasonable efforts promptly to take
or cause to be taken all action and promptly to do or cause to be done all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including but not limited to, the Michigan Bulk Transfer Act. Without limiting
the foregoing, Purchaser and Seller shall use their best efforts to obtain all
consents of third parties and Governmental Entity necessary or, in the
reasonable opinion of Purchaser or Seller, advisable for the consummation of the
transactions contemplated by this Agreement, including but not limited to,
complying with the reasonable requirements (rules and regulations) of the
Securities and Exchange Commission as such may be relative to the consummation
of the transaction contemplated herein. In case at any time after the Closing
any further action is necessary or desirable to carry out the purposes of this
Agreement or to vest Purchaser with full title to the Purchased Assets, the
proper officers or directors of Purchaser or Seller, as the case may be, shall
take all such necessary action.
Section 5.5 Notification of Certain Events. The parties shall promptly
advise each other in writing of any change or event which could reasonably be
expected to have a adverse effect on the transactions contemplated by this
Agreement.
Section 5.6 Personal, Property and Sales Taxes. Purchaser shall be
responsible to pay all personal property or sales taxes, if any, arising out of
the sale of the Purchased Assets.
-5-
Section 5.7 Survival of Representations and Warranties. All
representations, warranties of Seller and Purchaser contained or made pursuant
to this Agreement shall survive the Closing for a period of six months.
Section 5.8 Use of Name. The parties agree that nothing in this
Agreement shall convey any right, title or interest, by license or assignment to
the tradenames "CMS", "CMS ENERGY", "CONSUMERS POWER COMPANY", "CONSUMERS
ENERGY", "CMS UTILITY SERVICES, INC.", or any colorable variation thereof. The
parties acknowledge that any use of these names shall constitute an infringement
on the rights of Seller or any of its affiliates. However, notwithstanding the
foregoing, Purchaser may use the Seller's service ▇▇▇▇ "CMS," pursuant to a
royalty free license, for a period of eighteen (18) months following the Closing
Date, under the following limited circumstances:
5.8.1 "CMS" may only be used with the trade name "CMS
A/R Services, Inc." and in no other way whatsoever.
5.8.2 Purchaser's permitted use of "CMS A/R Services,
Inc." may only be used when it accompanies Purchaser's use of its trade name or
service ▇▇▇▇ (which will not be a colorable variation of "CMS A/R Services,
Inc.") and such use will only be made when preceded by the phrase "formerly
known as" immediately preceding such use in a type size not less than the type
size used for the letters "CMS."
5.8.3 Purchaser's permitted use of "CMS" shall be for
a period of eighteen (18) months following the Closing Date and any use of "CMS"
(or any colorable variation) after such eighteen (18) month period is
acknowledged by the Purchaser to be an infringement of the trademark rights of
Seller and would subject the Purchaser to an injunction to avoid Seller's
irreparable harm and to damages for such use. If such infringement occurs,
Seller shall give written notice to Purchaser before seeking an injunction.
5.8.4 Purchaser will provide Seller a copy of each
proposed use of "CMS" before it is used in public to assure Purchaser's
compliance with this provision.
5.8.5 Purchaser's use of "CMS" shall be limited to
use in connection with the Business only.
Section 5.9 Employees. Purchaser shall hire all employees of Seller and
Seller shall use its best efforts to assist Purchaser in its efforts to hire
employees of Seller.
Section 5.10 Future Business. During the term of the Consumers
Agreement (as defined in Section 7.2.9), if Seller, Consumers Power Company or
any of their affiliates acquire any domestic utility company that does not have
an internal accounts receivable processing department or that does not have a
long term contract with a collection service provider or that has a long term
contract with a collection service provider that may be terminated, Seller will
cause, provided that Purchaser is not under material default under any agreement
with Seller, Consumers Power Company or any of their affiliates to make such
utility give Purchaser a right of first refusal to provide collection services
at rates equal to written quotes obtained by such utility from Purchaser's
competitors. In addition, if Consumers Power Company or any of their affiliates
acquire any domestic utility company that has a long term contract with a
collection service provider that may not be terminated until expiration
-6-
of the term of agreement, upon such expiration, Seller shall give Purchaser the
right of first refusal to provide collection services at rates equal to written
quotes obtained by such utility from Purchaser's competitors.
Section 5.11 Specific Uncollected Accounts. Seller and Purchaser agree
that in the event that the outstanding accounts receivables listed on Schedule
5.11 attached hereto, are uncollectible in the ordinary course of business by
the Purchaser after Closing, Seller, upon receiving written notice from
Purchaser of non-collection, shall pay to Purchaser the amount of such
uncollected receivable.
Section 5.12 Commonwealth Edison Company Receivable. Seller currently
has an account receivable owing from Commonwealth Edison Company ("Com Ed") that
has been valued by the parties at $463,524.00 (the "Com Ed Receivable"). The
final value and ultimate collection of the Com Ed Receivable will occur after
Closing. Seller and Purchaser agree that in the event that the amount ultimately
collected from the Com Ed Receivable is less that $463,524.00, Seller will pay
the difference to Purchaser. Seller and Purchaser also agree that in the event
that the amount ultimately collected from the Com Ed Receivable is greater than
$463,524.00, Seller and Purchaser shall split such excess in equal portions and
Purchaser shall pay to Seller its equal share of such surplus.
Section 5.13 Audit. The parties agree that Purchaser shall bear the
cost of the audit to be conducted by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant to Section 7.2.7
for the year ended December 31, 1996. In no event shall Purchaser pay more than
$32,000 for such audit.
ARTICLE 6
CONDUCT OF BUSINESS
During the period from the date of execution of this Agreement through
the Closing Date or the earlier termination of this Agreement pursuant to
Article 9, Seller agrees (except to the extent Purchaser shall otherwise consent
in writing or as may be required by law or regulation), to carry on the Business
in the ordinary course in substantially the manner in which heretofore conducted
and use all reasonable efforts to preserve intact its business organization,
keep available the services of its officers and employees, and preserve its
relationship with customers, suppliers and others having business dealings with
it and will not enter into any material contracts or make any changes to its
furniture, fixtures and equipment without the prior written consent of
Purchaser.
ARTICLE 7
CONDITIONS PRECEDENT TO CLOSING
Section 7.1 Condition to the Parties' Obligations. The obligations of
all the parties to this Agreement to consummate the transactions contemplated by
this Agreement shall be Subject to the fulfillment of the conditions that there
shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the transactions contemplated
by this Agreement, by any Governmental Entity which: (i) makes the consummation
of the purchase and sale illegal; or (ii) imposes any condition upon Purchaser
which would be materially burdensome to Purchaser.
Section 7.2 Conditions to Purchaser's Obligations. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment of the following conditions:
-7-
7.2.1 The representations and warranties of Seller
contained in Article 3 shall be true in all material respects as of the Closing
Date as though made at and as of the Closing Date, except to the extent they
expressly refer to an earlier time and except where the failure to be true,
individually or in the aggregate, would not have or would not be reasonably
likely to have, a material adverse effect on the Business or upon the
consummation of the transactions contemplated hereby; Seller shall have duly
performed and complied in all material respects with all agreements, covenants
and conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date, except where the failure to so perform and
comply, individually or in the aggregate, would not have or would not be
reasonably likely to have, a material adverse effect on the Business or upon the
consummation of the transactions contemplated hereby.
7.2.2 Any consent required for the consummation of
the transactions contemplated by this Agreement under any agreement, contract or
license to which Seller is a party or by or under which it is bound or licensed,
the withholding of which may reasonably be expected to have a material adverse
effect on Purchaser or the Business shall have been obtained.
7.2.3 Purchaser shall have received from legal
counsel to Seller an opinion dated the Closing Date in substantially the form
attached hereto as Exhibit 8.5.
7.2.4 Counsel for Purchaser shall have approved, in
the exercise of counsel's reasonable discretion, the validity of all
transactions herein contemplated, as well as the form and substance of all
opinions, certificates, instruments of transfer and other documents to be
delivered to Purchaser hereunder.
7.2.5 Purchaser and Seller shall have executed an
agreement not to compete for a period of 5 years in substantially the form of
Exhibit 7.2.5 to this Agreement.
7.2.6 Reserved
7.2.7 Seller shall provide to Purchaser on or before
Closing audited financial statements for the Business for the years ended
December 31, 1995 and 1996.
7.2.8 Purchaser shall have entered into an employment
agreement with ▇▇▇▇ ▇▇▇▇▇▇, a key employee of Seller.
7.2.9 Seller shall cause Consumers Power Company to
enter into a collection services agreement with Purchaser for a term of not less
than 3 years in substantially the form of Exhibit 7.2.9 to this Agreement (the
"Consumers Agreement").
Section 7.3 Conditions to Seller's Obligations. The obligation of
Seller to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment of the following conditions:
7.3.1 The representations and warranties of Purchaser
contained in Article 4 shall be true in all material respects as of the Closing
Date as though made at and as of the Closing Date, except to the extent they
expressly refer to an earlier time and except where the failure to be true,
individually or in the aggregate, would not have or would not be reasonably
likely to have, a material adverse effect on Purchaser or upon the consummation
of the transactions contemplated
-8-
hereby; Purchaser shall have duly performed and complied in all material
respects with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date, except where the failure to so perform and comply, individually or in the
aggregate, would not have or would not be reasonably likely to have, a material
adverse effect on Purchaser or upon the consummation of the transactions
contemplated hereby.
7.3.2 Seller shall have received from legal counsel
to Purchaser an opinion dated the Closing Date in substantially the form
attached hereto as Exhibit 8.6.
7.3.3 Counsel for Seller shall have approved, in the
exercise of counsel's reasonable discretion, the validity of all transactions
herein contemplated, as well as the form and substance of all opinions,
certificates, instruments of transfer and other documents to be delivered to
Seller hereunder.
ARTICLE 8
CLOSING
Section 8.1 Closing. The Closing shall take place on or before January
31, 1997 (the "Closing Date") or such time after January 31, 1997 as the parties
may mutually agree, and shall be held at offices of the Business located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such place as the
parties may mutually agree. The following actions shall occur at the Closing:
Section 8.2 Purchase Price. Purchaser shall deliver to Seller, in
immediately available funds, $4,311,222 which represents the balance of the
Purchase Price less the Deposit and the Dialer Payoff. Purchaser shall deliver
to BLC, in immediately available funds, $738,778 which represents the Dialer
Payoff. Counsel for Purchaser shall release the Deposit to Seller. Seller shall
notify Purchaser in writing no less than three (3) business days prior to the
Closing Date of the appropriate wire transfer instructions.
Section 8.3 Conveyance and Transfer; Assumption. Seller shall deliver
to Purchaser such instruments of conveyance and transfer, in form and substance
satisfactory to Purchaser's counsel, as shall be effective to vest in Purchaser
marketable title to all the Purchased Assets. Seller shall reasonably cooperate
with Purchaser to put Purchaser in actual possession and operating control of
the Purchased Assets. Purchaser shall deliver to Seller such instruments of
assumption, as shall effectively cause Purchaser to assume the obligations of
the Assumed Liabilities.
Section 8.4 Certificate. Purchaser shall deliver to Seller, and Seller
shall deliver to Purchaser, a certificate, signed by a duly authorized officer
of the delivering corporation, representing and warranting that the
representations and warranties made by it hereunder were true and correct when
made and have continued true and correct through the Closing, for this purpose
substituting the Closing Date for the date of this Agreement, except where such
representations or warranties expressly refer to an earlier time, and that the
delivering corporation has performed all obligations required to be performed by
it hereunder.
Section 8.5 Opinion of Seller's Counsel. Seller shall deliver to
Purchaser an opinion of its counsel in substantially the form of Exhibit 8.5 to
this Agreement.
-9-
Section 8.6 Opinion of Purchaser's Counsel. Purchaser shall deliver to
Seller an opinion of its counsel in substantially the form of Exhibit 8.6 to
this Agreement.
ARTICLE 9
TERMINATION, AMENDMENTS AND WAIVERS
Section 9.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
9.1.1 by mutual consent of Seller and Purchaser;
9.1.2 by either Purchaser or Seller upon the failure
to satisfy the condition specified in Section 7.1;
9.1.3 by either Seller or Purchaser if the Closing
Date shall not have occurred by the close of business on June 30, 1997;
9.1.4 by either Seller or Purchaser if there shall
have been a material breach of any of the representations or warranties set
forth in this Agreement on the part of the other party, which breach by its
nature cannot be cured prior to the Closing and which breach would, in the
reasonable opinion of the non-breaching party, individually or in the aggregate,
have, or be reasonably likely to have, a material adverse effect on the
non-breaching party or upon the consummation of the transactions contemplated
hereby;
9.1.5 by either Seller or Purchaser if there shall
have been a material breach of any of the covenants or agreements set forth in
this Agreement on the part of the other party, which breach shall not have been
cured within twenty business days following receipt by the breaching party of
written notice of such breach from the other party hereto;
9.1.6 by Purchaser upon the failure to satisfy any
conditions specified in Section 7.2.
9.1.7 by Seller upon the failure to satisfy any
conditions specified in Section 7.3.
Section 9.2 Effect of Termination; Survival. No termination of this
Agreement as provided in Section 9.1 for any reason or in any manner shall
release, or be construed as so releasing, any party hereto from its obligations
pursuant to Sections 5.3 or 10.5 hereto or from any liability or damage to any
other party hereto arising out of, in connection with or otherwise relating to,
directly or indirectly, said party's material breach or failure in performance
of any of its covenants, agreements, duties or obligations arising hereunder, or
any material breaches of any representation or warranty contained herein arising
prior to the date of termination of this Agreement.
Section 9.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken by their respective boards of directors or their duly
authorized officers.
Section 9.4 Waiver. Any term or provision of this Agreement may be
waived in writing at any time by the party which is entitled to the benefits
thereof.
-10-
ARTICLE 10
INDEMNIFICATION
Section 10.1 Indemnification by Seller. Except as hereinafter set
forth, Seller shall indemnify and hold harmless Purchaser, and its respective
successors and assigns, against, and in respect of, any and all damages, claims,
losses, liabilities (collectively a "Loss") which may arise out of: (i) any
breach or violation of this Agreement by Seller; (ii) any breach of any of the
representations, warranties or covenants made in Section 3 of this Agreement by
Seller or (iii) any events or occurrences arising prior to the Closing. The
warranties and representations of Seller shall survive the Closing for a period
of six months and the sole remedy of Purchaser for a breach of such warranties
or representations shall be pursuant to the terms of this Article 10.
Section 10.2 Indemnification by Purchaser. Except as hereinafter set
forth, Purchaser shall indemnify and hold harmless Seller, Seller's parent
company and its respective successors and assigns, against, and in respect of,
any and all damages, claims, losses, liabilities which may arise out of: (i) any
breach or violation of this Agreement by Purchaser; or (ii) the Assumed
Liabilities; or (ill) any breach of any of the representations, warranties or
covenants made in Section 4 of this Agreement by Seller. The warranties and
representations of Purchaser shall survive the Closing for a period of six
months and tile sole remedy of Seller for a breach of such warranty or
representations shall be pursuant to the terms of this Article 10.
Section 10.3 Notice. Promptly after acquiring knowledge of any Loss or
any action, suit, investigation, proceeding, demand, assessment, audit, judgment
or claim which may give rise to a Loss against which Seller or Purchaser (an
"Indemnifying Party"), has indemnified a party to this Agreement (an
"Indemnified Party"), such Indemnified Party shall give the Indemnifying Party
written notice thereof The Indemnifying Party shall, at its own expense,
promptly defend, contest or otherwise protect against any such Loss or any such
action, suit, investigation, proceeding, demand, assessment, audit, judgment or
claim and shall receive from the Indemnified Party all necessary and reasonable
cooperation in said defense including, but not limited to, the services of
employees of such Indemnified Party who are familiar with the transactions out
of which any such Loss, action, suit, investigation, proceeding, demand,
assessment, audit, judgment or claim may have arisen. In the event that the
Indemnifying Party shall undertake to compromise or defend any such asserted
liability, it shall promptly notify the Indemnified Party of its intention to do
so. In the event that the Indemnifying Party, after written notice from an
Indemnified Party, fails to take timely action to defend the subject matter of
such notice, the Indemnified Party shall have the right to defend the same by
counsel of its own choosing, but at the cost and expense of the Indemnifying
Party.
Section 10.4 Limitation of Indemnity. Notwithstanding any provisions in
this Agreement to the contrary:
10.4.1 Before an Indemnified Party may assert a claim
for indemnity under this Section 10, the Indemnified Party must give or cause to
be given the written notice required by subsection 10.3 of this Section 10.
10.4.2 The indemnity obligation of any Indemnifying
Party under this Section 10 shall not apply until the aggregate amount of claims
asserted or demands made would, with notice, give rise to an obligation to
indemnify, that exceeds 5% of the Purchase Price (the "Indemnity Basket"), and
then only with respect to any amounts in excess thereof The indemnity obligation
of
-11-
any Indemnifying Party shall not be limited by the Indemnity Basket in the event
that the claims asserted against the Indemnifying Party are the result of
intentional misrepresentation or fraud.
10.4.3 The indemnity obligation of any Indemnifying
Party under this Section 10 shall be net of any proceeds actually received with
respect thereto by the Indemnified Party under any policy of insurance
maintained by the Indemnified Party (other than under a program of self
insurance).
ARTICLE 11
GENERAL PROVISIONS
Section 11.1 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, mailed by
registered or certified mail (return receipt requested), or sent by confirmed
overnight courier on the date such notice is so delivered, mailed or sent, as
the case may be, to the parties at the following addresses or (or any such other
address for a party as shall be specified by like notice):
If to Purchaser at:
NCO Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No:
If to Seller at:
CMS Energy Corporation
Fairlane Plaza South
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopier No: ▇▇▇-▇▇▇-▇▇▇▇
Section 11.2 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
Section 11.3 Entire Agreement/No Third Party Rights/Assignment. This
Agreement (including the documents and instruments referred to herein) and the
Confidentiality Agreement previously executed by Purchaser (a) constitute the
entire agreement and supersedes all prior agreements, representations,
warranties and understandings, both written and oral among the parties with
respect to the subject matter hereof, (b) are not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder; (c) shall
not be assigned by a party, by operation of law or otherwise, without the
consent of the other parties and (d) subject to the foregoing, shall be binding
upon and shall inure to the benefit of the parties hereto and their permitted
successors and assigns.
-12-
Section 11.4 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Michigan, without regard
to any applicable conflicts of law.
Section 11.5 Non-disclosure of Agreement. Purchaser and Seller agree,
except as required by law upon the written advice of counsel, to not issue any
public notice, disclosure or press release with respect to the transactions
contemplated by this Agreement without seeking the consent of the other party,
which consent shall not be unreasonably withheld.
Section 11.6 Headings/Table of Contents. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning, or interpretation of this Agreement.
Section 11.7 Enforcement of Agreement. The parties hereto agree that
irreparable damage will occur in the event that any of the provisions of this
Agreement is not performed in accordance with its specific terms or is otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provision hereof in any court of the United States or
any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 11.8 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
Section 11.9 Confidentiality. The parties hereto agree that they will
keep the terms and conditions of this Agreement in confidence and will not
disclose such information to any third party, except to their respective
professional advisors and as required to comply with law, requests or
requirements of government agencies, including, but not limited to, rules and
regulations of the Securities and Exchange Commission, and as may be required in
judicial proceedings, without the written consent of the other parties.
Purchaser agrees that, prior to the Closing, it will not contact Seller's
employees or customers for any purpose without the prior consent of Seller.
Section 11.10 Certain Definition. As used in this Agreement, the
following term shall have the meanings set forth below:
"Governmental Entity" shall mean any court, federal, state,
local or foreign Government or any administrative agency or commission or other
governmental authority or instrumentality whatsoever.
-13-
IN WITNESS WHEREOF, Seller and Purchaser have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first above written.
SELLER:
CMS A/R SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chairman of the Board and President
PURCHASER:
NCO GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Its: Senior Vice President
-14-