AGREEMENT AND PLAN OF MERGER
dated as of
October 29, 1999
by and among
CROSS COUNTRY STAFFING, INC. ("CCS"),
CCTC ACQUISITION, INC.
AND CERTAIN OF THE STOCKHOLDERS OF CCS
and
TRAVCORPS CORPORATION and
the STOCKHOLDERS OF TRAVCORPS CORPORATION
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS................................................................................................2
ARTICLE II
THE MERGER; CLOSING.......................................................................................11
2.1 The Merger.....................................................................................11
2.2 Effective Time; Closing........................................................................11
2.3 Effect of the Merger...........................................................................11
2.4 Certificate of Incorporation; By-Laws..........................................................12
2.5 Directors and Officers.........................................................................12
2.6 Effect on Capital Stock........................................................................12
2.7 No Further Ownership Rights in TravCorps Common Stock..........................................13
2.8 Taking of Necessary Action; Further Action.....................................................14
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE TC STOCKHOLDERS....................................................................................14
3.1 Organization and Qualification.................................................................14
3.2 Authority; No Breach...........................................................................15
3.3 Securities and Ownership; Subsidiaries.........................................................17
3.4 TravCorps Financial Statements.................................................................20
3.5 Interests of Related Persons...................................................................20
3.6 Absence of Undisclosed Liabilities.............................................................21
3.7 Absence of Certain Changes or Events...........................................................21
3.8 Taxes..........................................................................................23
3.9 Assets.........................................................................................24
3.10 Intellectual Property..........................................................................25
3.11 Accounts Receivable............................................................................28
3.12 Contracts and Commitments......................................................................28
3.13 Customers and Suppliers........................................................................29
3.14 Inventory......................................................................................30
3.15 Insurance......................................................................................30
3.16 Litigation, etc................................................................................30
3.17 Compliance with Law; Necessary Authorizations; Securities Matters..............................31
3.18 Environmental Matters..........................................................................32
3.19 Labor Matters..................................................................................33
3.20 Employee Benefit Plans.........................................................................33
3.21 Questionable Payments..........................................................................36
3.22 Finders........................................................................................36
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF THE CCS STOCKHOLDERS........................................................................36
4.1 Organization and Qualification.................................................................37
4.2 Authority; No Breach...........................................................................37
4.3 Securities and Ownership; Subsidiaries.........................................................40
4.4 CCS Financial Statements.......................................................................42
4.5 Interests of Related Persons...................................................................42
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4.6 Absence of Undisclosed Liabilities.............................................................43
4.7 Absence of Certain Changes or Events...........................................................43
4.8 Taxes..........................................................................................45
4.9 Assets.........................................................................................46
4.10 Intellectual Property..........................................................................47
4.11 Accounts Receivable............................................................................50
4.12 Contracts and Commitments......................................................................50
4.13 Customers and Suppliers........................................................................51
4.14 Inventory......................................................................................52
4.15 Insurance......................................................................................52
4.16 Litigation, etc................................................................................52
4.17 Compliance with Law; Necessary Authorizations; Securities Matters..............................53
4.18 Environmental Matters..........................................................................54
4.19 Labor Matters..................................................................................54
4.20 Employee Benefit Plans.........................................................................55
4.21 Questionable Payments..........................................................................57
4.22 Finders........................................................................................58
ARTICLE V
COVENANTS.................................................................................................58
5.1 Conduct of Business............................................................................58
5.2 Records........................................................................................59
5.3 Filings and Authorizations.....................................................................59
5.4 Discussions with Others........................................................................59
5.5 Further Assurances.............................................................................60
5.6 Tax Matters....................................................................................60
5.7 Indemnification; Directors' and Officers' Insurance............................................60
5.8 Notification of Certain Matters................................................................62
5.9 Employee Matters...............................................................................62
5.10 Obligations of Merger Subsidiary...............................................................63
5.11 Confidentiality................................................................................63
5.12 Termination of Certain Agreements..............................................................64
5.13 PreClosing Payments............................................................................64
ARTICLE VI
CONDITIONS TO CLOSING.....................................................................................64
6.1 Conditions Precedent to Obligations of CCS and the CCS Stockholders............................64
(a) Representations and Warranties Accurate........................................................65
(b) Performance by TC Stockholders and TravCorps...................................................65
(c) Consents.......................................................................................65
(d) No Legal Prohibition...........................................................................65
(e) Certificate....................................................................................65
(f) Opinion of Counsel for TravCorps...............................................................66
(g) No Material Adverse Change.....................................................................66
(h) HSR Act........................................................................................66
(i) Stockholders Agreement.........................................................................66
(j) Registration Rights Agreement..................................................................66
(k) Cancellation of Stock Options..................................................................66
6.2 Conditions Precedent to Obligations of TC Stockholders and TravCorps and
the TC Stockholders............................................................................66
(a) Representations and Warranties Accurate........................................................67
(b) Performance by CCS.............................................................................67
(c) Consents.......................................................................................67
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(d) No Legal Prohibition...........................................................................67
(e) Certificate....................................................................................67
(f) Opinion of Counsel for CCS.....................................................................68
(g) No Material Adverse Change.....................................................................68
(h) HSR Act........................................................................................68
(i) Stockholders Agreement.........................................................................68
(j) Registration Rights Agreement..................................................................68
(k) Amendment of Certificate of Incorporation and By Laws..........................................68
(l) Stock Option Plan..............................................................................68
(m) Tax Opinion....................................................................................68
(n) Closing Working Capital........................................................................69
(o) Ashley One Issues..............................................................................69
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION...............................................69
7.1 Survival of Representations and Warranties.....................................................69
7.2 Indemnification by CCS.........................................................................69
ARTICLE VIII
MISCELLANEOUS.............................................................................................70
8.1 Termination....................................................................................70
8.2 Effect of Termination..........................................................................71
8.3 Expenses.......................................................................................71
8.4 Amendment......................................................................................71
8.5 Entire Agreement...............................................................................72
8.6 Waivers........................................................................................72
8.7 Notices........................................................................................72
8.8 Counterparts...................................................................................74
8.9 Governing Law..................................................................................74
8.10 Binding Effect; Third Party Beneficiaries; Assignment..........................................74
8.11 Severability...................................................................................75
8.12 Headings.......................................................................................75
8.13 No Agency......................................................................................75
8.14 Representative.................................................................................75
8.15 Public Announcements...........................................................................76
8.16 Knowledge Qualifications; Accounting Terms.....................................................76
8.17 Interpretation.................................................................................76
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 29, 1999 by and
among Cross Country Staffing, Inc., a Delaware corporation ("CCS"), CCTC
Acquisition, Inc., a Delaware corporation and a direct wholly-owned subsidiary
of CCS ("Merger Sub"), certain of the stockholders of CCS (which Persons are
listed on Exhibit 1 hereto and are individually referred to as a "CCS
Stockholder" and collectively as the "CCS Stockholders") and TravCorps
Corporation, a Delaware corporation ("TravCorps"), and each of the stockholders
of TravCorps (which Persons are listed on Exhibit 2 hereto and are individually
referred to as a "TC Stockholder" and collectively as the "TC Stockholders").
WHEREAS, the TC Stockholders own all of the issued and outstanding
shares of capital stock of TravCorps;
WHEREAS, the CCS Stockholders own all of the issued and outstanding
shares of capital stock of CCS;
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State of
Delaware ("Delaware Law"), CCS, Merger Sub, the CCS Stockholders, TravCorps and
the TC Stockholders intend to enter into a business combination transaction;
WHEREAS, the parties hereto intend that the Merger (as defined
herein) qualify as a "reorganization" within the meaning of Section 368(a) of
the Code (as defined herein);
NOW, THEREFORE, in consideration of the foregoing, of the
representations, warranties, covenants and mutual agreements hereinafter
contained, and of other good and valuable consideration, receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
The terms defined in this Article I, whenever used herein (including
without limitation the Exhibits and Schedules hereto), shall have the following
meanings for all purposes of this Agreement:
"Affiliate" of a Person means any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with such Person.
"Agreement" means this agreement among the parties set forth on the
first page hereof, including, without limitation, all Exhibits and Schedules
hereto, as the same may be amended from time to time.
"Balance Sheet Date" means July 31, 1999 in the case of CCS, and
July 24, 1999 in the case of TravCorps.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City are required or authorized by law
to be closed.
"CCS" has the meaning given to it in the caption hereto.
"CCS APA" has the meaning set forth in Section 6.2(n).
"CCS Common Stock" has the meaning set forth in Section 2.6(a).
"CCS Environmental Liabilities" means any claims, judgments, damages
(including punitive damages), losses, penalties, fines, liabilities,
encumbrances, liens, violations, costs and expenses (including attorneys' and
consultants' fees) of investigation, assessment, remediation or defense of any
matter relating to human health, safety or the Environment of whatever kind or
nature by any Person or Governmental Entity, (A) which are incurred as a result
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of (i) the existence of Hazardous Substances in, on, under, at or emanating from
any Real Property, (ii) the off-site transportation, treatment, storage or
disposal of Hazardous Substances generated by CCS or its Subsidiaries, or (iii)
the violation of any Environmental Laws, or (B) which arise under the
Environmental Laws.
"CCS ERISA Affiliate" means any entity that would be deemed a
"single employer" with CCS under Section 414(b),(c),(m) or (o) of the Code or
Section 4001 of ERISA.
"CCS Financial Statements" means the unaudited balance sheet of CCS
as of July 31, 1999 and the related pro forma consolidated statements of
operations, and cash flows of CCS and Cross Country Staffing, a general
partnership, for the 12-month period ended on July 31, 1999, including the
related notes thereto.
"CCS Material Adverse Effect" means any material adverse effect on
the business, operations, financial condition or results of operations of CCS
and its Subsidiaries taken as whole.
"CCS Plan" means any Employee Benefit Plan established, maintained,
sponsored, or contributed to by CCS or any Subsidiary or an ERISA Affiliate on
behalf of any employee, director or stockholder (whether current, former or
retired) or their beneficiaries, or with respect to which CCS or any Subsidiary
or any ERISA Affiliate has or has had any obligation on behalf of such person.
"CCS Stockholders" has the meaning given to it in the caption
hereto.
"Closing" has the meaning set forth in Section 2.2(b).
"Closing Date" has the meaning set forth in Section 2.2(b).
"Code" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
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"Consent" means any consent, approval, authorization, license or
order of, registration, declaration or filing with, or notice to, or waiver
from, any federal, state, local, foreign or other Governmental Entity or any
Person, including, without limitation, any security holder or creditor which is
necessary to be obtained, made or given in connection with the execution and
delivery of this Agreement and/or any Operative Document, the performance by a
Person of its obligations hereunder and/or thereunder and the consummation of
the transactions contemplated hereby and/or thereby.
"Delaware Law" has the meaning given to it in the recitals hereto.
"Designated Amount" has the meaning set forth in Section 5.13.
"Directly or Indirectly" means as an individual, partner,
shareholder, member, creditor, director, officer, principal, agent, employee,
trustee, consultant, advisor or in any other relationship or capacity.
"Effective Time" has the meaning set forth in Section 2.2(a).
"Employee Benefit Plan" means any "employee benefit plan" (as
defined under Section 3(3) of ERISA) or any other bonus, deferred compensation,
pension, profit-sharing, retirement, stock purchase, stock option, stock
appreciation, other forms of incentive compensation, excess benefit,
supplemental pension insurance, disability, medical, supplemental unemployment,
vacation benefits, payroll practice, fringe benefit, scholarship, sickness,
accident, severance, or post-retirement compensation or benefit, welfare or any
other employee benefit plan, policy, arrangement or practice, whether written or
oral.
"Encumbrance" means any security interests, liens, pledges, levies,
escrows, encumbrances, options, rights of first refusal, transfer restrictions,
conditional sale contracts, title retention contracts, mortgages,
hypothecations, indentures or security agreements whether written or oral.
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"Environment" means any surface or subsurface physical medium or
natural resource, including, air, land, soil, surface waters, ground waters,
stream and river sediments.
"Environmental Action" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, proceeding,
judgment, letter or other communication from any Federal, state, local or
municipal agency, department, bureau, office or other authority or any third
party involving a Hazardous Discharge or any violation of any Permit or
Environmental Laws.
"Environmental Laws" means any federal, state, local or common law,
rule, regulation, ordinance, code, order or judgment (including the common law
and any judicial or administrative interpretations, guidances, directives,
policy statements or opinions) relating to the injury to, or the pollution or
protection of, human health and safety or the Environment.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
"GAAP" means United States generally accepted accounting principles,
applied on a consistent basis.
"Governmental Entity" means any federal, state, local or foreign
government, political subdivision, legislature, court, agency, department,
bureau, commission or other governmental regulatory authority, body or
instrumentality.
"Grace Entity" means Cross Country Staffing, a Delaware general
partnership, CCHP, Inc., a Delaware corporation ("CCHP"), MRA Staffing Systems,
Inc., a Delaware corporation ("MRA"), and each entity which was as of July 29,
1999 a direct or indirect shareholder of CCHP or MRA.
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"Hazardous Discharge" means any releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping of Hazardous Substances, whether on or off the
premises of CCS or TravCorps and their respective Subsidiaries, as the case may
be.
"Hazardous Substance" means petroleum, petroleum products,
petroleum-derived substances, radioactive materials, hazardous wastes,
polychlorinated biphenyls, lead based paint, radon, urea formaldehyde, asbestos
or any materials containing asbestos, and any materials or substances regulated
or defined as or included in the definition of "hazardous substances,"
"hazardous materials," "hazardous constituents," "toxic substances,"
"pollutants," "contaminants" or any similar denomination intended to classify or
regulate substances by reason of toxicity, carcinogenicity, ignitability,
corrosivity or reactivity under any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" means, with respect to any Person, all obligations of
such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures
or similar instruments, (iii) under conditional sale or other title retention
agreements relating to property or assets purchased by such Person, (iv) issued
or assumed as the deferred purchase price of property or services (other than
trade accounts payable), (v) under capital leases, (vi) in respect of interest
rate protection agreements, foreign currency exchange agreements or other
interest or exchange rate hedging arrangements, (vii) as an account party in
respect of letters of credit and bankers' acceptances, (viii) with respect to
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise to be secured by) any
Encumbrances on property owned or acquired by such Person, (ix) in the nature of
guarantees of Indebtedness of others, and (x) for all accrued interest, premiums
and penalties upon prepayment of any of the foregoing. Indebtedness with respect
to any Person shall not include obligations of
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such Person for operating leases (including real property leases) so long as the
payments under such leases in accordance with GAAP are reflected as expenses on
such Person's statement of operations.
"Indemnified Parties" has the meaning set forth in Section 5.7.
"Indemnified Party" has the meaning set forth in Section 5.7.
"IRS" means the Internal Revenue Service.
"Licensed Service Provider" has the meaning set forth in Section
3.17(c).
"Merger" has the meaning set forth in Section 2.1.
"Merger Sub" has the meaning given to it in the caption hereto.
"Operative Document" means any agreement, instrument or other
document set forth on Exhibit 3 hereto.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA maintained or contributed to by or on behalf of
CCS or TravCorps or any of their respective Subsidiaries, as the case may be.
"Person" means an individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint stock company, trust,
unincorporated organization or other entity, or any Governmental Entity or
quasi-governmental body or regulatory authority.
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"Permits" means all licenses, certificates of authority, permits,
registrations, local siting approvals, authorizations, qualifications and
similar filings under any federal, state or local laws or with any Governmental
Entities.
"Property" (or "Properties" when the context requires) means any
Real Property and any personal or mixed property, whether tangible or
intangible.
"Real Property" means any real property presently owned, used,
leased, occupied, managed or operated by CCS or TravCorps or their respective
Subsidiaries, as the case may be.
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the Environment or into or out of any property, including the movement of
Hazardous Substances through or in the air, soil, surface water, groundwater or
real property or other property, whether owned or leased.
"Representative" has the meaning given to it in Section 8.14.
"Subsidiary," or "Subsidiaries" with respect to any Person (the
"Owner"), means any corporation, partnership, limited liability company or other
entity in which the Owner, directly or indirectly, owns or controls 50% or more
of the voting stock or other ownership interests.
"Surviving Corporation" has the meaning set forth in Section 2.1.
"Tax Return" means each and every report, return, declaration,
information return, statement or other information required to be supplied to a
taxing or governmental authority with respect to any Tax or Taxes, including
without limitation any combined or consolidated return for any group of entities
including CCS or TravCorps or any of their respective Subsidiaries, as the case
may be.
8
"Taxes" (or "Tax" where the context requires) shall mean all
federal, state, county, provincial, local, foreign and other taxes (including,
without limitation, income, profits, premium, estimated, excise, sales, use,
occupancy, gross receipts, franchise, ad valorem, severance, capital levy,
production, transfer, withholding, employment and payroll related and property
taxes and other governmental charges and assessments), whether attributable to
statutory or nonstatutory rules and whether or not measured in whole or in part
by net income, and including without limitation interest, additions to tax or
interest, charges and penalties with respect thereto, and expenses associated
with contesting any proposed adjustment related to any of the foregoing.
"TC Stockholders" has the meaning given to it in the caption hereto.
"Trade Secrets" means any information which (i) is used in a
business, (ii) is not generally known to the public or to Persons who can obtain
economic value from its disclosure, and (iii) is subject to reasonable efforts
to maintain its secrecy or confidentiality; the term may include but is not
limited to inventions, processes, know-how, formulas, computer software, and
mask works which are not patented and are not protected by registration (e.g.,
under copyright or mask work laws); lists of customers, suppliers, and
employees, and data related thereto; business plans and analyses; and financial
data.
"TravCorps" has the meaning given to it in the caption hereto.
"TravCorps Common Stock" has the meaning set forth in Section
2.6(a).
"TravCorps Environmental Liabilities" means any claims, judgments,
damages (including punitive damages), losses, penalties, fines, liabilities,
encumbrances, liens, violations, costs and expenses (including attorneys' and
consultants' fees) of investigation, assessment, remediation or defense of any
matter relating to human health, safety or the Environment of whatever kind or
nature by any Person or Governmental Entity, (A) which are
9
incurred as a result of (i) the existence of Hazardous Substances in, on, under,
at or emanating from any Real Property, (ii) the off-site transportation,
treatment, storage or disposal of Hazardous Substances generated by TravCorps or
its Subsidiaries, or (iii) the violation of any Environmental Laws, or (B) which
arise under the Environmental Laws.
"TravCorps ERISA Affiliate" means any entity that would be deemed a
"single employer" with TravCorps under Section 414(b),(c),(m) or (o) of the Code
or Section 4001 of ERISA.
"TravCorps Financial Statements" means the unaudited consolidated
balance sheet of TravCorps and its Subsidiaries as of July 24, 1999 and the
related consolidated statement of operations, stockholders equity and cash flow
of TravCorps and its Subsidiaries for the 12-month period ended July 24, 1999,
including the notes thereto.
"TravCorps Material Adverse Effect" means any material adverse
effect on the business operations, financial condition or results of operations
of TravCorps and its Subsidiaries taken as whole.
"TravCorps Permitted Encumbrances" has the meaning set forth in
Section 3.9.
"TravCorps Plan" means any Employee Benefit Plan established,
maintained, sponsored, or contributed to by TravCorps or any Subsidiary or an
ERISA Affiliate on behalf of any employee, director or stockholder (whether
current, former or retired) or their beneficiaries, or with respect to which
TravCorps or any Subsidiary or any ERISA Affiliate has or has had any obligation
on behalf of such Person.
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ARTICLE II
THE MERGER; CLOSING
2.1 The Merger. At the Effective Time and subject to and upon the
terms and conditions of this Agreement and the applicable provisions of Delaware
Law, Merger Sub shall be merged with and into TravCorps (the "Merger"), the
separate corporate existence of Merger Sub shall cease, and TravCorps shall
continue as the surviving corporation. TravCorps as the surviving corporation
after the Merger is hereinafter sometimes referred to as the "Surviving
Corporation."
2.2 Effective Time; Closing.
(a) On the Closing Date, the parties hereto shall cause the
Merger to be consummated by filing a certificate of merger with the Secretary of
State of the State of Delaware, in such form as required by, and executed in
accordance with the relevant provisions of, Delaware Law. When used in this
Agreement, the term "Effective Time" shall mean the date and time at which the
Merger shall become effective under Delaware Law.
(b) The closing of the transactions contemplated by this
Agreement (the "Closing") shall be held at the offices of Proskauer Rose LLP,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at a time and date to be specified by
the parties, which shall be no later than the second Business Day after the
satisfaction or waiver, as the case may be, of the conditions set forth in
Article VI, or at such other time, date and location as the parties hereto agree
in writing (the "Closing Date").
2.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the rights, privileges, powers, franchises
and property of Merger Sub and TravCorps shall vest in the Surviving
Corporation, and all restrictions, disabilities, duties, debts and liabilities
of Merger Sub
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and TravCorps shall become the restrictions, disabilities, duties, debts and
liabilities of the Surviving Corporation.
2.4 Certificate of Incorporation; By-Laws.
(a) At the Effective Time, the Certificate of Incorporation of
Merger Sub, in the form attached hereto as Exhibit 4, shall be the Certificate
of Incorporation of the Surviving Corporation, and shall continue in full force
and effect until thereafter amended; provided, however, that at the Effective
Time Article I of the Certificate of Incorporation of the Surviving Corporation
shall be amended to read: "The name of the corporation is TravCorps
Corporation."
(b) At the Effective Time, the Bylaws of Merger Sub, in the
form attached hereto as Exhibit 5, shall be the Bylaws of the Surviving
Corporation and shall continue in full force and effect until thereafter
amended.
2.5 Directors and Officers. The directors and officers set forth on
Schedule 2.5 hereto shall be the initial directors and officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
2.6 Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of any party:
(a) Conversion of TravCorps Common Stock. The shares of common
stock, par value $0.01 per share, of TravCorps ("TravCorps Common Stock") issued
and outstanding immediately prior to the Effective Time, other than any shares
of TravCorps Common Stock to be canceled pursuant to Section 2.6(b), will be
canceled and extinguished and automatically converted into the right to receive,
in the aggregate, 1,520,000 shares of validly issued, fully paid and
non-assessable Class A common stock, par value $0.01 per share, of CCS
12
("CCS Common Stock") upon surrender of the certificates representing such shares
of TravCorps Common Stock at the Closing.
(b) Cancellation of Parent-Owned Stock. Each share of
TravCorps Common Stock held by TravCorps or owned by Merger Sub, CCS or any
direct or indirect wholly-owned subsidiary of TravCorps or of CCS immediately
prior to the Effective Time shall be canceled and extinguished without any
conversion thereof.
(c) Capital Stock of Merger Sub. Each share of common stock,
par value $0.01 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be exchanged for and converted into one
validly issued, fully paid and non-assessable share of common stock, par value
$0.01 per share, of the Surviving Corporation. Each stock certificate of Merger
Sub evidencing ownership of any such shares shall evidence ownership of such
shares of capital stock of the Surviving Corporation.
(d) All Other Capital Stock of TravCorps. All other capital
stock of TravCorps shall be canceled and retired and shall cease to exist, and
no consideration shall be issued or delivered in exchange therefor.
2.7 No Further Ownership Rights in TravCorps Common Stock. All
shares of CCS Common Stock issued in accordance with the terms hereof shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
shares of TravCorps Common Stock and, after the Effective Time, there shall be
no further registration of transfers on the records of the Surviving Corporation
of shares of TravCorps Common Stock that were outstanding immediately prior to
the Effective Time. If, after the Effective Time, certificates which immediately
prior to the Effective Time represented outstanding shares of TravCorps Common
Stock are presented to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this Article II.
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2.8 Taking of Necessary Action; Further Action. If, at any time
after the Effective Time, any such further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Surviving Corporation
with full right, title and possession to all assets, property, rights,
privileges, powers and franchises of TravCorps or Merger Sub, the officers and
directors of TravCorps and Merger Sub are fully authorized in the name of their
respective corporations or otherwise to take, and will take, all such lawful and
necessary action. CCS shall cause Merger Sub to perform all of its obligations
relating to this Agreement and the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE TC STOCKHOLDERS
Each of the TC Stockholders, on a basis that is several and not
joint, hereby represents and warrants to CCS and the CCS Stockholders as follows
(all such representations and warranties are qualified by the TravCorps
Disclosure Schedule attached to this Agreement as Exhibit III):
3.1 Organization and Qualification. TravCorps is a corporation duly
organized, validly existing and in good standing in the State of Delaware, with
corporate power and authority to own, lease and operate its assets and
Properties and carry on its business as presently owned or conducted. TravCorps
is licensed or qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction in which the ownership, use or leasing
of its assets or Properties, or the conduct or nature of its business makes such
licensing or qualification necessary and in which the failure to be so licensed
or qualified and in good standing would reasonably be expected to have a
TravCorps Material Adverse Effect. Each such jurisdiction is set forth in
Schedule 3.1 of the TravCorps Disclosure Schedule. The name of each director and
officer of TravCorps on the date hereof, and the position held by each such
individual with TravCorps, is set forth on Schedule 3.1 of the TravCorps
Disclosure Schedule.
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The copies of the certificate of incorporation, including all amendments
thereto, and by-laws of TravCorps delivered to CCS prior to the date hereof are
complete and accurate copies of such instruments as currently in effect.
3.2 Authority; No Breach. (a) Each of the TC Stockholders has all
requisite power and authority to execute and deliver this Agreement and the
Operative Documents to which it is or shall, pursuant to this Agreement, be a
party, and to perform, carry out and consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance of this Agreement
and the Operative Documents to which he or it is or shall, pursuant to this
Agreement, be a party have been duly and validly authorized by all necessary
limited partnership or other action on the part of such TC Stockholder. This
Agreement and the Operative Documents to which he or it is, or will be a party,
have been, or will be, duly executed and delivered by such TC Stockholder and
(assuming the due authorization, execution and delivery by the other parties
hereto and thereto) constitute the legal, valid and binding obligations of such
TC Stockholder.
(b) TravCorps has all requisite corporate power and authority
to execute and deliver this Agreement and the Operative Documents to which it is
or shall, pursuant to this Agreement, be a party, and to perform, carry out and
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the Operative Documents to which
TravCorps is or shall, pursuant to this Agreement, be a party have been duly and
validly authorized by all necessary corporate action on the part of TravCorps.
This Agreement and the Operative Documents to which TravCorps is, or will be a
party, has been, or will be, duly executed and delivered by TravCorps and
(assuming the due authorization, execution and delivery by the other parties
hereto and thereto) constitute the legal, valid and binding obligations of
TravCorps.
15
(c) Except as set forth in Schedule 3.2(c) of the TravCorps
Disclosure Schedule, neither the execution and delivery of this Agreement or any
Operative Document by any of the TC Stockholders nor the consummation of any of
the transactions contemplated herein or therein, nor the full performance by
each of the TC Stockholders of their obligations hereunder or thereunder do or
will: (i) if applicable, violate any provision of the limited partnership
agreement of such TC Stockholder; (ii) conflict with, result in a breach or
violation of, or constitute a default under (or an event which, with or without
notice, lapse of time or both, would constitute a default) or result in the
invalidity of, or accelerate the performance required by or cause or give rise
to any right of acceleration or termination of any right or obligation pursuant
to any agreement or commitment to which any of the TC Stockholders is a party or
by which any of the TC Stockholders (or any of their respective assets or
Properties) is subject or bound; (iii) result in the creation of, or give any
third party the right to create, any Encumbrance upon any assets or Properties
of any TC Stockholder; (iv) conflict with, violate, result in a breach of or
constitute a default under any writ, injunction, statute, law, ordinance, rule,
regulation, judgment, award, Permit, decree, order, or process of any
Governmental Entity to which any TC Stockholder or any assets or Properties of
any TC Stockholder are subject; (v) terminate or modify, or give any third party
the right to terminate or modify, the provisions or terms of any contract or
agreement to which any TC Stockholder is a party or by which any of the TC
Stockholders (or any of their respective assets or Properties) is subject or
bound which in the case of clauses (ii) through (v) would reasonably be expected
to have a material adverse effect on the validity or enforceability of this
Agreement or on the ability of such TC Stockholder to perform its obligations
hereunder.
(d) Except as set forth in Schedule 3.2(d) of the TravCorps
Disclosure Schedule, neither the execution and delivery of this Agreement or any
Operative Document by TravCorps nor the consummation of any of the transactions
contemplated herein or therein, nor the full performance by TravCorps of its
obligations hereunder or thereunder do or will:
16
(i) violate any provision of the certificate of incorporation or bylaws of
TravCorps or any of its Subsidiaries; (ii) conflict with, result in a breach or
violation of, or constitute a default under (or an event which, with or without
notice, lapse of time or both, would constitute a default) or result in the
invalidity of, or accelerate the performance required by or cause or give rise
to any right of acceleration or termination of any right or obligation pursuant
to any agreement or commitment to which TravCorps or any of its Subsidiaries is
a party or by which any of them (or any of their respective assets or
Properties) is subject or bound; (iii) result in the creation of, or give any
third party the right to create, any Encumbrance upon any assets or Properties
of TravCorps or any of its Subsidiaries; (iv) conflict with, violate, result in
a breach of or constitute a default under any writ, injunction, statute, law,
ordinance, rule, regulation, judgment, award, Permit, decree, order, or process
of any Governmental Entity to which TravCorps, any of its Subsidiaries or any
assets or Properties of any of the foregoing are subject, (v) terminate or
modify, or give any third party the right to terminate or modify, the provisions
or terms of any contract or agreement to which TravCorps or any of its
Subsidiaries is a party or by which any of the foregoing (or any of their
respective assets or Properties) is subject or bound; or (vi) result in or give
to any Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under any contract or agreement to which
TravCorps or any of its Subsidiaries is a party or by which any of their
respective assets or Properties is subject or bound; which, in the case of
clauses (ii) through (vi), would reasonably be expected to have a TravCorps
Material Adverse Effect.
3.3 Securities and Ownership; Subsidiaries. (a) The total number of
shares of capital stock, and the classes and par values thereof, which TravCorps
is authorized to issue, the designation, par value and number of such shares
which are issued and outstanding and the identity of and number of such
outstanding shares owned (of record) by each holder thereof are as set forth in
Schedule 3.3(a) of the TravCorps Disclosure Schedule.
17
(b) TravCorps has not issued any securities in violation of
any preemptive or similar rights. Except as set forth in Schedule 3.3(b) of the
TravCorps Disclosure Schedule, there are no outstanding (i) securities
convertible into or exchangeable for any shares of capital stock or other
securities of TravCorps; (ii) subscriptions, options, "phantom" stock rights,
warrants, calls, commitments, preemptive rights or other rights of any kind
(absolute, contingent or otherwise) entitling any party to acquire or otherwise
receive from TravCorps any shares of capital stock or other securities or
receive or exercise any benefits or rights similar to any rights enjoyed by or
enuring to the holder of capital stock of TravCorps; (iii) contracts,
commitments, agreements, understandings or arrangements of any kind relating to
the issuance of any capital stock, convertible or exchangeable securities, or
any subscriptions, options, warrants or similar rights of TravCorps or granting
to any Person any right to participate in the equity or income of TravCorps or
to participate in or direct the election of any director or officer of TravCorps
or the manner in which any shares of TravCorps' capital stock are voted. There
are no shares of stock or other securities of TravCorps reserved for issuance
for any purpose, other than pursuant to option plans described on Schedule
3.3(b) .
(c) All of the outstanding shares of capital stock of
TravCorps are duly authorized, validly issued, fully paid and nonassessable.
(d) Schedule 3.3(d) of the TravCorps Disclosure Schedule sets
forth the names of each Subsidiary of TravCorps and shows for each Subsidiary of
TravCorps: (i) its jurisdiction of organization; (ii) the authorized and
outstanding capital stock or other ownership interests of each Subsidiary of
TravCorps; and (iii) the identity of and number of shares of such capital stock
owned (of record and beneficially) by each holder thereof.
(e) Each Subsidiary of TravCorps is duly organized, validly
existing and in good standing in the state of its organization, with full
corporate power and authority to own, lease and operate its assets and
Properties and carry on its business as presently owned or con-
18
ducted. Each Subsidiary of TravCorps is licensed or qualified to transact
business and is in good standing as a foreign corporation in each of the
jurisdictions indicated in Schedule 3.3(e) of the TravCorps Disclosure Schedule,
which are the only jurisdictions in which the ownership, use or leasing of its
assets or Properties, or the conduct or nature of its business makes such
licensing or qualification necessary, except where the failure to be so
qualified or in good standing would not, individually or in the aggregate, have
a TravCorps Material Adverse Effect.
(f) All shares of capital stock of each Subsidiary of
TravCorps issued and outstanding are duly authorized, validly issued, fully paid
and nonassessable.
(g) Except as set forth in Schedule 3.3(g) of the TravCorps
Disclosure Schedule, there are no outstanding (i) securities convertible into or
exchangeable for any shares of capital stock or other securities of any
Subsidiary of TravCorps; (ii) subscriptions, options, warrants, calls,
commitments, preemptive rights or other rights of any kind (absolute, contingent
or otherwise) entitling any party to acquire or otherwise receive from any
Subsidiary of TravCorps any shares of capital stock or other securities; (iii)
contracts, preemptive rights, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any capital stock,
convertible or exchangeable securities, or any subscriptions, options, warrants
or similar rights of any Subsidiary of TravCorps; or (iv) rights of any Person
to be paid as if he, she or it were a holder of equity interests in any
Subsidiary of TravCorps or securities convertible into or exchangeable for
equity interests in any Subsidiary of TravCorps, including, without limitation,
phantom stock and stock appreciation rights. Except as set forth in Schedule
3.3(g) of the TravCorps Disclosure Schedule, there are no shares of stock or
other securities of any Subsidiary of TravCorps reserved for issuance for any
purpose and no Subsidiary of TravCorps is a party to any voting agreements,
voting trusts, proxies or other agreements, instruments or understandings with
respect to the voting of any shares of the capital stock of such Subsidiary, or
any agreement with respect to the transferability, purchase or redemption of any
shares of capital stock of such Subsidiary.
19
(h) Except for the Subsidiaries of TravCorps set forth on
Schedule 3.3(d) of the TravCorps Disclosure Schedule, and as set forth in
Schedule 3.3(h) of the TravCorps Disclosure Schedule, TravCorps does not own,
Directly or Indirectly, any economic, voting or other ownership interest in any
Person.
3.4 TravCorps Financial Statements. TravCorps has heretofore
delivered to CCS true and correct copies of the TravCorps Financial Statements.
The TravCorps Financial Statements have been prepared from the books and records
of TravCorps and its Subsidiaries, and present fairly (i) the consolidated
unaudited financial position of TravCorps and its Subsidiaries at the date
thereof and (ii) the consolidated unaudited results of operations of TravCorps
and its Subsidiaries for the period then ended, in each case in accordance with
GAAP (subject to normal year-end adjustments and except for the absence of
footnotes).
3.5 Interests of Related Persons. Except as set forth in Schedule
3.5 of the TravCorps Disclosure Schedule, no officer or director of TravCorps or
any of its Subsidiaries and none of the TC Stockholders nor any relative of any
of the TC Stockholders that is an individual:
(i) owns any interest in any Person which is a competitor, supplier
or customer of TravCorps or any of its Subsidiaries or serves as an officer,
director, employee or consultant for any such Person;
(ii) owns, in whole or in part, any Property, asset or right, used
in connection with the business of TravCorps or any of its Subsidiaries;
(iii) has an interest in any contract or agreement with TravCorps or
any of its Subsidiaries; or
(iv) has any contractual arrangements with TravCorps or any of its
Subsidiaries.
20
3.6 Absence of Undisclosed Liabilities. Except as set forth in
Schedule 3.6 of the TravCorps Disclosure Schedule, neither TravCorps nor any of
its Subsidiaries has any material liabilities, losses or obligations of any
nature (whether absolute, known or unknown, accrued, fixed, contingent,
liquidated, unliquidated, due or to become due, or otherwise), except for (i)
liabilities included or reflected in the TravCorps Financial Statements and
adequately reflected or reserved against therein, or (ii) liabilities or
performance obligations arising in the ordinary course of business (and not as a
result of a breach or default by TravCorps or any of its Subsidiaries). Neither
TravCorps nor any of its Subsidiaries nor any TC Stockholder knows of any basis
for the assertion against TravCorps of any such material liability.
3.7 Absence of Certain Changes or Events. Except as set forth in
Schedule 3.7 of the TravCorps Disclosure Schedule, since the Balance Sheet Date
the business of TravCorps and its Subsidiaries has been conducted only in the
ordinary and usual course. Without limiting the generality of the foregoing,
except as set forth in Schedule 3.7 of the TravCorps Disclosure Schedule, since
the Balance Sheet Date neither TravCorps nor any of its Subsidiaries has:
(a) suffered any TravCorps Material Adverse Effect;
(b) suffered any material damage, destruction or casualty loss
(whether or not covered by insurance) or condemnation taking or other proceeding
which would reasonably be expected to have a TravCorps Material Adverse Effect;
(c) except for increases in salary in the ordinary course of
business, entered into or amended any employment or consulting contract or
commitment (whether oral or written) or compensation arrangement or employee
benefit plan, or changed or committed to change (including any change pursuant
to any bonus, pension, profit-sharing or other plan, commitment, policy or
arrangement) the compensation payable or to become payable to any of its
officers, directors, key employees, agents or consultants, or made any pension,
retirement, profit-sharing,
21
bonus or other employee welfare or benefit payment or contribution other than
payments or contributions required by the governing documents of the foregoing,
copies of which have been delivered or made available to CCS;
(d) made or proposed any change in its accounting or tax methods,
principles or practices, except for such changes which are required by GAAP or
by law;
(e) authorized, declared, set aside or paid any dividend or other
distribution in respect of its capital stock;
(f) Directly or Indirectly redeemed, purchased or otherwise acquired
any of its shares of capital stock or authorized any stock split,
reclassification or recapitalization or otherwise changed the terms or
provisions of any of its capital stock;
(g) incurred any material Indebtedness or made any loan, advance or
capital contribution to any person except in the ordinary course of business;
(h) paid, discharged or satisfied any material claim, liability or
obligation other than the payment, discharge or satisfaction of liabilities and
obligations incurred in the ordinary course of business;
(i) (i) prepaid any material obligation having a fixed maturity of
more than 90 days from the date such obligation was issued or incurred, or (ii)
not paid, within a reasonable date of when due, any account payable, or sought
the extension of the payment date of any such account payable;
(j) permitted or allowed any material portion of its Property or
assets to be subjected to any Encumbrance, except for liens for current Taxes
not yet due;
(k) sold, transferred, or otherwise disposed of any material portion
of its Properties or assets, except in the ordinary course of business;
22
(l) made any capital expenditures or commitments in excess of
$200,000 in the aggregate for repairs or additions to property, plant, equipment
or tangible capital assets; or
(m) agreed, whether in writing or otherwise, to take any action
described in this Section 3.7.
3.8 Taxes.
(a) Each of TravCorps and its Subsidiaries has duly, timely and
properly filed when due, all federal, state, local, foreign and other Tax
Returns required to be filed by it with respect to its sales, income, business
or operations (including without limitation any consolidated or combined Tax
Returns in which it is included) and such Tax Returns are true, complete and
accurate in all material respects. Except as may otherwise have been
communicated to CCS prior to the date hereof in a writing referring to this
Section, each of TravCorps and its Subsidiaries has duly paid all Taxes due from
TravCorps or any of its Subsidiaries as shown on such Tax Returns.
(b) Except as set forth on Schedule 3.8(b), all amounts required to
be withheld by TravCorps or any of its Subsidiaries from customers or from or on
behalf of employees for income, payroll, social security and unemployment
insurance taxes have been collected or withheld and either paid to the
appropriate Governmental Entity or set aside and, to the extent required by law,
held in accounts for such purpose.
(c) Except as set forth in Schedule 3.8(c) of the TravCorps
Disclosure Schedule, (i) there currently are no pending or, to the knowledge of
TravCorps or any of its Subsidiaries, threatened actions or proceedings
(including, without limitation, audit proceedings) by any applicable taxing
authority for the assessment, collection, adjustment or deficiency of Taxes
against TravCorps or any of its Subsidiaries, and (ii) neither TravCorps nor any
of its Subsidiaries has received any notice of deficiency or assessment from any
federal, state, local or
23
foreign taxing authority with respect to liabilities for any material Taxes of
TravCorps or any of its Subsidiaries. Except as set forth in Schedule 3.8(c) of
the TravCorps Disclosure Schedule, there are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any
assessment or audit of any Tax or Tax Return of TravCorps or any of its
Subsidiaries for any period.
(d) To the knowledge of TravCorps, there is no existing fact or
circumstance that will cause the Merger to fail to qualify as a "reorganization"
within the meaning of Section 368 of the Code.
3.9 Assets.
(a) Each of TravCorps and its Subsidiaries has good title to all the
material items of personal property assets (tangible and intangible) which
TravCorps or any of its Subsidiaries purports to own on the date hereof,
including without limitation, those reflected in the TravCorps Financial
Statements at the Balance Sheet Date, free and clear of all Encumbrances, except
for (i) liens for current Taxes not yet due and payable; (ii) Encumbrances set
forth in Schedule 3.9(a) of the TravCorps Disclosure Schedule or reflected on
the TravCorps Financial Statements; and (iii) Encumbrances which do not
materially detract from the value or materially interfere with any present use
of such assets (clauses (i) through (iii) collectively, the "TravCorps Permitted
Encumbrances").
(b) Schedule 3.9(b) of the TravCorps Disclosure Schedule contains a
complete and correct list of all Real Property owned by TravCorps and each of
its Subsidiaries as well as a list of any contracts or options to acquire any
Real Property. Each of TravCorps and its Subsidiaries has good and marketable
title to all such owned Real Property, free and clear of all Encumbrances except
for TravCorps Permitted Encumbrances.
24
(c) Schedule 3.9(c) of the TravCorps Disclosure Schedule contains a
complete and correct list of all material items of personal property and all
Real Property leased by TravCorps and each of its Subsidiaries except for Real
Property leased in the ordinary course of business for temporary housing of
employees. TravCorps has previously delivered or made available to CCS true,
complete and correct copies of all lease documents relating to such property.
All lease documents are valid, binding and enforceable in accordance with their
terms and are in full force and effect. No event has occurred which constitutes
or, with the passing of time or giving of notice, or both, would constitute, a
material default by TravCorps under any such lease document.
3.10 Intellectual Property.
(a) Except as disclosed in Schedule 3.10(a) of the TravCorps
Disclosure Schedule, each of TravCorps and its Subsidiaries is the exclusive
owner of all right, title and interest in and to each of the following that are
being used in the business of TravCorps or any of its Subsidiaries as currently
conducted, and/or have been or are being developed or acquired for potential use
in the business of TravCorps or any of its Subsidiaries:
(i) all material computer programs and databases and their
associated system and user documentation (collectively, the "Software Products")
set forth in Schedule 3.10(a)(i) of the TravCorps Disclosure Schedule;
(ii) all material copyrights and copyright registrations set
forth in Schedule 3.10(a)(ii) of the TravCorps Disclosure Schedule;
(iii) all material patents and applications set forth in
Schedule 3.10(a)(iii) of the TravCorps Disclosure Schedule;
(iv) all material trademarks, service marks and tradenames
(collectively the "Marks"), and the registrations of, and/or applications to
register, any one or more of Marks
25
in federal, state or foreign jurisdictions set forth in Schedule 3.10(a)(iv) of
the TravCorps Disclosure Schedule; and
(v) all material Trade Secrets and other proprietary rights.
The items referred to in subparagraphs (i) through (v) of this
Section 3.10(a), subject to the exclusions to ownership expressly set forth
therein, are herein referred to collectively as the "TravCorps Intellectual
Property Rights." The TravCorps Intellectual Property Rights constitute all such
rights necessary to operate the business of TravCorps and its Subsidiaries in
all material respects as it is currently conducted.
(b) Schedule 3.10(b) of the TravCorps Disclosure Schedule sets forth
a list of all material license and similar agreements between TravCorps any of
its Subsidiaries and third parties, under which TravCorps or any of its
Subsidiaries is granted rights to the use, reproduction, distribution,
manufacture, sale or licensing of items embodying the patent, copyright, Trade
Secret, trademark or other proprietary rights of such third parties
(collectively, the "TravCorps License Rights"). Except as set forth in Schedule
3.10(b) of the TravCorps Disclosure Schedule, no Person is entitled to any
material royalty, fee and/or other payment or other consideration of whatever
nature with respect to the TravCorps License Rights or TravCorps Intellectual
Property Rights. The TravCorps License Rights and the TravCorps Intellectual
Property Rights are sometimes collectively referred to as the "TravCorps
Rights".
(c) Schedule 3.10(c) of the TravCorps Disclosure Schedule sets forth
a list of all agreements under which TravCorps, any of its Subsidiaries, any TC
Stockholder or any of their respective Affiliates has granted any material
rights to third parties of, to or under the TravCorps Rights. All such rights
granted have been and are non-exclusive. True, correct and complete copies of
all such agreements have been delivered or made available to CCS.
26
(d) No material claims with respect to the TravCorps Rights have
been asserted or, to the knowledge of TravCorps or any of its Subsidiaries, are
threatened by any Person. To the knowledge of TravCorps or any of its
Subsidiaries, as of the date hereof, there has not been and there is not any
material infringement, misappropriation or any other unauthorized use of any of
the TravCorps Rights by any third party, employee, consultant or former employee
or consultant of TravCorps or any of its Subsidiaries.
(e) Whenever used in this Agreement: (i) "TravCorps Computer
Systems" means all the computer systems of TravCorps and its Subsidiaries
including, without limitation, all mainframes, PC's and other work stations,
peripherals and other components, and the Software Products; (ii) "TravCorps
Licensed Software Products" means any software products licensed by third
parties to TravCorps or its Subsidiaries, including, without limitation, the
software products disclosed on Schedule 3.10(a)(i) or Schedule 3.10(b); (iii)
"TravCorps Licensed Computer Systems" means all mainframes, PC's and other work
stations, peripherals and other components, and the TravCorps Licensed Software
Products; and (iv) "TravCorps Comprehensive Computer Systems" collectively
refers to the TravCorps Computer Systems and TravCorps Licensed Computer
Systems.
(f) Except as disclosed in Schedule 3.10(f) of the TravCorps
Disclosure Schedule or as will not, individually or in the aggregate, have a
TravCorps Material Adverse Effect, the TravCorps Comprehensive Computer Systems:
(i) are capable of recognizing, processing, managing, representing,
interpreting, and manipulating correctly date-related data for dates earlier and
later than January 1, 2000, including, without limitation, calculating,
comparing, sorting (including without limitation, sorting by accurate ascending
or descending sequence), storing, tagging, and sequencing, without resulting in
or causing local or mathematical errors or inconsistencies in any user-interface
functionalities, data storage, data fields, calculations, reports, processing,
or any other input or output; (ii) have the ability to provide date recognition
for any data element represented without a date, or whose year is
27
represented by only two digits and the ability to automatically function into
and beyond the year 2000 without human intervention; (iii) correctly interpret
data, dates and time into and beyond the year 2000, including, without
limitation, any and all leap years; (iv) have the ability not to produce
noncompliance in existing information, nor otherwise corrupt such data; and (v)
have the ability to successfully interface with internal and external
applications or systems that have not yet achieved year 2000 compliance during
the time in which the systems and such applications and systems co-exist.
3.11 Accounts Receivable. Except as set forth in Schedule 3.11 of
the TravCorps Disclosure Schedule, all of the accounts, notes and other
receivables of TravCorps and its Subsidiaries (i) reflected on the TravCorps
Financial Statements as of the Balance Sheet Date and (ii) as of the date
hereof, represent sales actually made in the ordinary course of business
consistent with past practice for goods or services delivered or rendered in
bona fide arm's-length transactions.
3.12 Contracts and Commitments. Except as set forth in Schedule 3.12
of the TravCorps Disclosure Schedule:
(a) Neither TravCorps nor any of its Subsidiaries has any
agreements, contracts, or commitments, written or oral, which involve (i) the
performance of services by TravCorps or its Subsidiaries in excess of $150,000
anticipated for fiscal year 1999 or (ii) the performance of services or delivery
of goods to TravCorps or its Subsidiaries in excess of $150,000 anticipated for
fiscal year 1999;
(b) Neither TravCorps nor any of its Subsidiaries has any collective
bargaining or union contracts or agreements;
28
(c) Neither TravCorps nor any of its Subsidiaries is restricted by
any agreement or other commitment from carrying on its business as currently
conducted anywhere in the world;
(d) Neither TravCorps nor any of its Subsidiaries has any material
obligations for Indebtedness;
(e) Neither TravCorps nor any of its Subsidiaries is a party to any
partnership or joint venture agreement whether or not a separate legal entity is
created thereby or any contract or agreement relating to the acquisition or
disposition of any portion of its business;
(f) Neither TravCorps nor any of its Subsidiaries is in material
breach or default, under any contract referred to in Schedule 3.12, and there
exists no event or condition (other than the entering into of this Agreement and
the consummation of the transactions contemplated hereby) which (whether with or
without notice, lapse of time, or both) would constitute a material default by
TravCorps or any Subsidiary thereunder, give rise to a right to accelerate,
modify or terminate any material provision thereof or give rise to any material
Encumbrance on their respective material Properties or assets or a right to any
material, additional or guaranteed payments; and to the knowledge of TravCorps
or any of its Subsidiaries, no other party to any such contract or agreement is
in material breach or default thereof;
(g) each contract and agreement referred to in Schedule 3.12 and
each contract and agreement relating to a TravCorps License Right is valid and
in full force and effect and constitutes a legal, valid and binding obligation
of TravCorps or any of its Subsidiaries, and, to the knowledge of TravCorps or
any of its Subsidiaries, the other parties thereto, enforceable in accordance
with its terms, accurate and complete copies thereof, together with all
amendments thereto, have been heretofore delivered or made available to CCS.
29
3.13 Customers and Suppliers.
(a) Schedule 3.13(a) of the TravCorps Disclosure Schedule contains a
true and complete list of the ten largest customers of TravCorps and its
Subsidiaries in order of dollar volume of sales during the period from July 26,
1998 through the Balance Sheet Date showing the total sales in dollars to each
such customer during such period.
(b) Except as set forth on Schedule 3.13(b) of the TravCorps
Disclosure Schedule, neither TravCorps nor any of its Subsidiaries is engaged in
any material disputes with any material customers or suppliers. In addition,
neither TravCorps nor any of its Subsidiaries has any knowledge that any
material customer or group of customers of TravCorps or any of its Subsidiaries
is materially dissatisfied with its services.
3.14 Inventory. Except as set forth in Schedule 3.14 of the
TravCorps Disclosure Schedule neither TravCorps or any of its Subsidiaries
maintains any material inventory.
3.15 Insurance. True and complete copies of all insurance policies
or summaries of such policies (including, but not limited to, liability,
property and casualty, workers compensation, directors and officers liability,
surety bonds, key man or corporate owned life insurance, vehicular and other
insurance policies and contracts) covering TravCorps or any of its Subsidiaries
or otherwise held by or on behalf of it, or any aspect of its assets or business
have been delivered or made available to CCS. Except as set forth on Schedule
3.15, there are no pending material claims under any of the foregoing. To the
knowledge of TravCorps or any of its Subsidiaries, no party to any such
insurance policy is in material default with respect thereto, nor does any
condition exist (other than the transactions contemplated by this Agreement)
that with notice or lapse of time or both would constitute such a material
default by any party thereunder. All such insurance policies are sufficient in
all material respects for
30
compliance with all requirements under all material agreements or contracts to
which TravCorps or any of its Subsidiaries is a party or otherwise bound.
3.16 Litigation, etc. Except as set forth in Schedule 3.16 of the
TravCorps Disclosure Schedule, there is no material claim, action, suit or
proceeding that is pending or, to TravCorps' knowledge, threatened on the date
hereof and to the knowledge of TravCorps there is no inquiry or investigation
pending on the date hereof, of any kind or nature whatsoever, by or before any
court or Governmental Entity against TravCorps or any of its Subsidiaries, or
which questions or challenges the validity of this Agreement or any action taken
or to be taken by any TC Stockholder pursuant to this Agreement or in connection
with the transactions contemplated hereby; and, to the knowledge of TravCorps or
any of its Subsidiaries, there is no valid basis for any such material claim,
action, suit, inquiry, proceeding or investigation. Neither TravCorps nor any of
its Subsidiaries is subject to any material judgment, order or decree.
3.17 Compliance with Law; Necessary Authorizations; Securities
Matters.
(a) Each of TravCorps and its Subsidiaries is duly complying and has
duly complied, in all material respects, in respect of its business, operations
and Properties, with all applicable laws, rules, regulations, orders, building
and other codes, zoning and other ordinances, Permits, authorizations, judgments
and decrees of all Governmental Entities.
(b) Except as set forth in Schedule 3.17(b), each of TravCorps and
its Sub sidiaries has duly obtained all material Permits and Consents necessary
for the conduct of its business; each of the foregoing is set forth in Schedule
3.17(b) of the TravCorps Disclosure Schedule and is in full force and effect;
each of TravCorps and its Subsidiaries is in compliance with all material terms
of all the foregoing; there are no material proceedings pending or, to the
knowledge of TravCorps or any of its Subsidiaries, threatened which are
reasonably likely to result in the revocation, cancellation, suspension or
modification thereof, and neither TravCorps nor any of its Subsidiaries has any
knowledge of any basis therefor; and the consummation of the
31
transactions contemplated hereby will not result in any such revocation,
cancellation, suspension or modification nor require TravCorps or any of its
Subsidiaries or CCS to make any filing or take any action in order to maintain
the validity of any item listed on Schedule 3.17(b).
(c) Each person or entity employed or engaged by TravCorps or any of
its Subsidiaries to provide services on behalf of TravCorps or any of its
Subsidiaries ("Licensed Service Provider") has obtained (and maintains) all
necessary licensure or certification to provide such services in compliance in
all material respects with any applicable law.
3.18 Environmental Matters. To the knowledge of TravCorps and each
of its Subsidiaries:
(a) All of the operations of TravCorps and each of its Subsidiaries
comply and have at all times complied, in all material respects, with all
applicable Environmental Laws, and neither TravCorps nor any of its Subsidiaries
is subject to any material TravCorps Environmental Liabilities. Neither
TravCorps nor any of its Subsidiaries nor any other Person, has engaged in,
authorized, allowed or suffered any operations or activities upon any of the
Real Property of TravCorps or its Subsidiaries for the purpose of or in any way
involving the handling, manufacture, treatment, processing, storage, use,
generation, release, discharge, emission, dumping or disposal of any Hazardous
Substances at, on or under the Real Property of TravCorps or its Subsidiaries,
except in compliance in all material respects with all applicable Environmental
Laws.
(b) None of the Real Property or any assets of TravCorps or any of
its Subsidiaries contain any Hazardous Substances in, on, over, under or at it
in concentrations or amounts which would materially violate Environmental Laws
or impose material liability or obligations on the present or former owner,
manager, or operator of the Real Property under the Environmental Laws for any
assessment, investigation, corrective action, remediation or monitoring of
Hazardous Substances. None of such Real Property is listed or proposed for
32
listing on the National Priorities List pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et
seq., ("CERCLA") or any similar inventory of sites requiring investigation or
remediation maintained by any state. Neither TravCorps nor any of its
Subsidiaries has received any notice, whether oral or written, from any
Governmental Entity or third party of any actual or threatened material
TravCorps Environmental Liabilities with respect to the Real Property of
TravCorps or any of its Subsidiaries, any assets of TravCorps or any of its
Subsidiaries or the conduct of the business of TravCorps or any of its
Subsidiaries.
3.19 Labor Matters. (a) Except to the extent set forth in Schedule
3.19 of the TravCorps Disclosure Schedule:
(i) there is no labor strike, or material dispute, grievance,
arbitration proceeding, slowdown or stoppage, or charge of unfair labor practice
actually pending, threatened against or affecting the operation of the business
of TravCorps or any of its Subsidiaries, other than routine individual
grievances;
(ii) no unions or other collective bargaining units have been
certified or recognized by TravCorps or any of its Subsidiaries as representing
any of its employees and, to the knowledge of TravCorps, there are no existing
union organizing efforts or representation questions with respect to any of the
employees of TravCorps or any of its Subsidiaries.
3.20 Employee Benefit Plans. (a) Except as set forth in Schedule
3.20 of the TravCorps Disclosure Schedule, there are no Plans. With respect to
each Plan, as applicable, accurate and complete (i) copies of each written Plan
(including all amendments thereto), (ii) written descriptions of each oral Plan,
(iii) copies of related trust or funding agreements, (iv) summary plan
descriptions, (v) summaries of material modifications, (vi) copies of the most
recent annual reports and actuarial valuations and (vii) copies of the most
recent determination
33
letter from the IRS for each Plan intended to qualify under Code Section 401(a)
have been heretofore delivered or made available to CCS.
(b) None of TravCorps, any of its Subsidiaries, its TravCorps ERISA
Affiliates, or any of their respective predecessors has ever contributed to,
contributes to, has ever been required to contribute to, or otherwise
participated in or participates in or in any way, directly or indirectly, has
any liability with respect to any Employee Benefit Plan which is subject to
Title IV of ERISA.
(c) With respect to each of the Plans on Schedule 3.20, except as
set forth on Schedule 3.20:
(i) each Plan intended to qualify under Section 401(a) of the
Code has received a determination letter from the IRS to the effect that the
Plan is qualified under Section 401 of the Code and any trust maintained
pursuant thereto is exempt from federal income taxation under Section 501 of the
Code and nothing has occurred (since the date of the determination letter) or is
expected to occur through the date of the Closing (including, without
limitation, the transactions contemplated by this Agreement) that caused or
could cause the loss of such qualification or exemption or the imposition of any
material penalty or tax liability;
(ii) all material payments required by any Plan, any
agreement, or by law (including, without limitation, all contributions,
insurance premiums, or intercompany charges) have been made;
(iii) no material claim, lawsuit, arbitration or other action
has been threatened, asserted, instituted, or anticipated against the Plans, any
trustee or fiduciaries thereof, TravCorps, any of its Subsidiaries, any
TravCorps ERISA Affiliate, any director, officer, or employee thereof, or any of
the assets of any trust of the Plans;
34
(iv) the Plan complies and has been maintained and operated in
all material respects in accordance with its terms and applicable law,
including, without limitation, ERISA and the Code;
(v) no "prohibited transaction," within the meaning of Section
4975 of the Code and Section 406 of ERISA, has occurred or is expected to occur
with respect to the Plan (and the consummation of the transactions contemplated
by this Agreement will not constitute or directly or indirectly result in such a
"prohibited transaction");
(vi) with respect to each Plan that is funded mostly or
partially through an insurance policy, neither TravCorps nor any of its
Subsidiaries nor any TravCorps ERISA Affiliate has any material liability in the
nature of retroactive rate adjustment, loss sharing arrangement or other actual
or contingent liability arising wholly or partially out of events occurring on
or before the Closing.
(d) Except to the extent set forth in Schedule 3.20(d), the
consummation of the transactions contemplated by this Agreement will not give
rise to any material liability, including, without limitation, material
liability for severance pay, unemployment compensation, termination pay, or
withdrawal liability, or materially accelerate the time of payment or vesting or
materially increase the amount of compensation or benefits due to any employee,
director or stockholder of TravCorps or any of its Subsidiaries (whether
current, former, or retired) or their beneficiaries solely by reason of such
transactions. No material amounts payable under any Plan will fail to be
deductible for federal income tax purposes by virtue of Sections 280G or 162(m)
of the Code.
(e) Neither TravCorps, any of its Subsidiaries nor any TravCorps
ERISA Affiliate maintains, contributes to, or in any way provides for any
benefits of any kind whatsoever (other than under Section 4980B of the Code, the
Federal Social Security Act, or a plan qualified under Section 401(a) of the
Code) to any current or future retiree or terminee.
35
(f) Neither TravCorps, any of its Subsidiaries nor any TravCorps
ERISA Affiliate, or any officer or employee thereof, has made any promises or
commitments, whether legally binding or not, to create any material additional
plan, agreement, or arrangement, or to materially modify or change any existing
Plan.
3.21 Questionable Payments. Neither the TC Stockholders nor any
director, officer, agent, employee, or any other Person acting on behalf of the
TC Stockholders, or TravCorps or any of its Subsidiaries, has, directly or
indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses; made any unlawful payment to
government officials or employees or to political parties or campaigns;
established or maintained any unlawful fund of corporate monies or other assets;
made or received any bribe, or any unlawful rebate, payoff, influence payment,
kickback or other payment; given any favor or gift which is not deductible for
federal income tax purposes; or made any bribe, kickback, or other payment of a
similar or comparable nature, to any governmental or non-governmental Person,
regardless of form, whether in money, property, or services, to obtain favorable
treatment in securing business or to obtain special concessions, or to pay for
favorable treatment for business or for special concessions secured.
3.22 Finders. No TC Stockholder and none of TravCorps' or its
Subsidiaries' directors or officers, have taken any action that, directly or
indirectly, would obligate CCS, TravCorps or any of its Subsidiaries, to anyone
acting as broker, finder, financial advisor or in any similar capacity in
connection with this Agreement or any of the transactions contemplated hereby.
36
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF THE CCS STOCKHOLDERS
37
Each of the CCS Stockholders, on a basis that is several and not
joint, hereby represents and warrants to TravCorps and the TC Stockholders as
follows (all such representations and warranties are qualified by the CCS
Disclosure Schedule attached to this Agreement as Exhibit IV):
4.1 Organization and Qualification. CCS is a corporation duly
organized, validly existing and in good standing in the State of Delaware, with
corporate power and authority to own, lease and operate its assets and
Properties and carry on its business as presently owned or conducted. CCS is
licensed or qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction in which the ownership, use or leasing of its
assets or Properties, or the conduct or nature of its business makes such
licensing or qualification necessary and in which the failure to be so licensed
or qualified and in good standing would reasonably be expected to have a CCS
Material Adverse Effect. Each such jurisdiction is set forth in Schedule 4.1 of
the CCS Disclosure Schedule. The name of each director and officer of CCS on the
date hereof, and the position held by each such individual with CCS, is set
forth on Schedule 4.1 of the CCS Disclosure Schedule. The copies of the
certificate of incorporation, including all amendments thereto, and by-laws of
CCS delivered to TravCorps prior to the date hereof are complete and accurate
copies of such instruments as currently in effect. Since the date of its
incorporation, Merger Subsidiary has not engaged in any activities other than in
connection with or as contemplated by this Agreement.
4.2 Authority; No Breach. (a) Each of the CCS Stockholders has all
requisite power and authority to execute and deliver this Agreement and the
Operative Documents to which it is or shall, pursuant to this Agreement, be a
party, and to perform, carry out and consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance of this Agreement
and the Operative Documents to which he or it is or shall, pursuant to this
Agreement, be a party have been duly and validly authorized by all necessary
limited partnership or other action on the part of such CCS Stockholder. This
Agreement and the
38
Operative Documents to which he or it is, or will be a party, have been, or will
be, duly executed and delivered by such CCS Stockholder and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
constitute the legal, valid and binding obligations of such CCS Stockholder.
(b) CCS has all requisite corporate power and authority to execute
and deliver this Agreement and the Operative Documents to which it is or shall,
pursuant to this Agreement, be a party, and to perform, carry out and consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Operative Documents to which CCS is or
shall, pursuant to this Agreement, be a party have been duly and validly
authorized by all necessary corporate action on the part of CCS. This Agreement
and the Operative Documents to which CCS is, or will be a party, has been, or
will be, duly executed and delivered by CCS and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) constitutes the
legal, valid and binding obligation of CCS.
(c) Except as set forth in Schedule 4.2(c) of the CCS Disclosure
Schedule, neither the execution and delivery of this Agreement or any Operative
Document by any of the CCS Stockholders nor the consummation of any of the
transactions contemplated herein or therein, nor the full performance by each of
the CCS Stockholders of their obligations hereunder or thereunder do or will:
(i) if applicable, violate any provision of the limited partnership agreement of
such CCS Stockholder; (ii) conflict with, result in a breach or violation of, or
constitute a default under (or an event which, with or without notice, lapse of
time or both, would constitute a default) or result in the invalidity of, or
accelerate the performance required by or cause or give rise to any right of
acceleration or termination of any right or obligation pursuant to any agreement
or commitment to which any of the CCS Stockholders is a party or by which any of
the CCS Stockholders (or any of their respective assets or Properties) is
subject or bound; (iii) result in the creation of, or give any third party the
right to create, any Encumbrance upon any assets or Properties of any CCS
Stockholder; (iv) conflict with, violate, result in a breach of
39
or constitute a default under any writ, injunction, statute, law, ordinance,
rule, regulation, judgment, award, Permit, decree, order, or process of any
Governmental Entity to which any CCS Stockholder or any assets or Properties of
any CCS Stockholder are subject; (v) terminate or modify, or give any third
party the right to terminate or modify, the provisions or terms of any contract
or agreement to which any CCS Stockholder is a party or by which any of the CCS
Stockholders (or any of their respective assets or Properties) is subject or
bound; which in the case of clauses (ii) through (v) would reasonably be
expected to have a material adverse effect on the validity or enforceability of
this Agreement or on the ability of such CCS Stockholder to perform its
obligations hereunder.
(d) Except as set forth in Schedule 4.2(d) of the CCS Disclosure
Schedule, neither the execution and delivery of this Agreement or any Operative
Document by CCS nor the consummation of any of the transactions contemplated
herein or therein, nor the full performance by CCS of its obligations hereunder
or thereunder do or will: (i) violate any provision of the certificate of
incorporation or bylaws of CCS or any of its Subsidiaries; (ii) conflict with,
result in a breach or violation of, or constitute a default under (or an event
which, with or without notice, lapse of time or both, would constitute a
default) or result in the invalidity of, or accelerate the performance required
by or cause or give rise to any right of acceleration or termination of any
right or obligation pursuant to any agreement or commitment to which CCS or any
of its Subsidiaries is a party or by which any of them (or any of their
respective assets or Properties) is subject or bound; (iii) result in the
creation of, or give any third party the right to create, any Encumbrance upon
any assets or Properties of CCS or any of its Subsidiaries; (iv) conflict with,
violate, result in a breach of or constitute a default under any writ,
injunction, statute, law, ordinance, rule, regulation, judgment, award, Permit,
decree, order, or process of any Governmental Entity to which CCS, any of its
Subsidiaries or any assets or Properties of any of the foregoing are subject,
(v) terminate or modify, or give any third party the right to terminate or
modify, the provisions or terms of any contract or agreement to which CCS or any
of its
40
Subsidiaries is a party or by which any of the foregoing (or any of their
respective assets or Properties) is subject or bound; or (vi) result in or give
to any Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under any contract or agreement to which CCS
or any of its Subsidiaries is a party or by which any of their respective assets
or Properties is subject or bound; which, in the case of clauses (ii) through
(vi), would reasonably be expected to have a CCS Material Adverse Effect.
4.3 Securities and Ownership; Subsidiaries. (a) The total number of
shares of capital stock, and the classes and par values thereof, which CCS is
authorized to issue, the designation, par value and number of such shares which
are issued and outstanding and the identity of and number of such outstanding
shares owned (of record) by each holder thereof are as set forth in Schedule
4.3(a) of the CCS Disclosure Schedule.
(b) CCS has not issued any securities in violation of any preemptive
or similar rights. Except as set forth in Schedule 4.3(b) of the CCS Disclosure
Schedule, there are no outstanding (i) securities convertible into or
exchangeable for any shares of capital stock or other securities of CCS; (ii)
subscriptions, options, "phantom" stock rights, warrants, calls, commitments,
preemptive rights or other rights of any kind (absolute, contingent or
otherwise) entitling any party to acquire or otherwise receive from CCS any
shares of capital stock or other securities or receive or exercise any benefits
or rights similar to any rights enjoyed by or enuring to the holder of capital
stock of CCS; (iii) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any capital stock,
convertible or exchangeable securities, or any subscriptions, options, warrants
or similar rights of CCS or granting to any Person any right to participate in
the equity or income of CCS or to participate in or direct the election of any
director or officer of CCS or the manner in which any shares of CCS's capital
stock are voted. There are no shares of stock or other securities of CCS
reserved for issuance for any purpose other than pursuant to option plans
described in Schedule 4.3(b).
41
(c) All of the outstanding shares of CCS Common Stock are duly
authorized, validly issued, fully paid and nonassessable.
(d) Schedule 4.3(d) of the CCS Disclosure Schedule sets forth the
names of each Subsidiary of CCS and shows for each Subsidiary of CCS: (i) its
jurisdiction of organization; (ii) the authorized and outstanding capital stock
or other ownership interests of each Subsidiary of CCS; and (iii) the identity
of and number of shares of such capital stock owned (of record and beneficially)
by each holder thereof.
(e) Each Subsidiary of CCS is duly organized, validly existing and
in good standing in the state of its organization, with full corporate power and
authority to own, lease and operate its assets and Properties and carry on its
business as presently owned or conducted. Each Subsidiary of CCS is licensed or
qualified to transact business and is in good standing as a foreign corporation
in each of the jurisdictions indicated in Schedule 4.3(e) of the CCS Disclosure
Schedule, which are the only jurisdictions in which the ownership, use or
leasing of its assets or Properties, or the conduct or nature of its business
makes such licensing or qualification necessary, except where the failure to be
so qualified or in good standing would not, individually or in the aggregate,
have a CCS Material Adverse Effect.
(f) All shares of capital stock of each Subsidiary of CCS issued and
outstanding are duly authorized, validly issued, fully paid and nonassessable.
(g) Except as set forth in Schedule 4.3(g) of the CCS Disclosure
Schedule, there are no outstanding (i) securities convertible into or
exchangeable for any shares of capital stock or other securities of any
Subsidiary of CCS; (ii) subscriptions, options, warrants, calls, commitments,
preemptive rights or other rights of any kind (absolute, contingent or
otherwise) entitling any party to acquire or otherwise receive from any
Subsidiary of CCS any shares of capital stock or other securities; (iii)
contracts, preemptive rights, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any capital stock,
42
convertible or exchangeable securities, or any subscriptions, options, warrants
or similar rights of any Subsidiary of CCS; or (iv) rights of any Person to be
paid as if he, she or it were a holder of equity interests in any Subsidiary of
CCS or securities convertible into or exchangeable for equity interests in any
Subsidiary of CCS, including, without limitation, phantom stock and stock
appreciation rights. Except as set forth in Schedule 4.3(g) of the CCS
Disclosure Schedule, there are no shares of stock or other securities of any
Subsidiary of CCS reserved for issuance for any purpose and no Subsidiary of CCS
is a party to any voting agreements, voting trusts, proxies or other agreements,
instruments or understandings with respect to the voting of any shares of the
capital stock of such Subsidiary, or any agreement with respect to the
transferability, purchase or redemption of any shares of capital stock of such
Subsidiary.
(h) Except for the Subsidiaries of CCS set forth in Schedule 4.3(d)
of the CCS Disclosure Schedule, and as set forth in Schedule 4.3(h) of the CCS
Disclosure Schedule, CCS does not own, Directly or Indirectly, any economic,
voting or other ownership interest in any Person.
4.4 CCS Financial Statements. CCS has heretofore delivered to
TravCorps true and correct copies of the CCS Financial Statements. The CCS
Financial Statements have been prepared from the books and records of CCS and
Cross Country Staffing, its predecessor entity, and present fairly (i) the
consolidated unaudited financial position of CCS and its Subsidiary at the date
thereof and (ii) the pro-forma consolidated unaudited results of operations of
CCS and its predecessor for the period then ended, in each case in accordance
with GAAP (subject to normal year-end adjustments and except for the absence of
footnotes).
4.5 Interests of Related Persons. Except as set forth in Schedule
4.5 of the CCS Disclosure Schedule, no officer or director of TravCorps or any
of its Subsidiaries and none of the CCS Stockholders nor any relative of any of
the CCS Stockholders that is an individual:
43
(i) owns any interest in any Person which is a competitor, supplier
or customer of CCS or any of its Subsidiaries or serves as an officer, director,
employee or consultant for any such Person;
(ii) owns, in whole or in part, any Property, asset or right, used
in connection with the business of CCS or any of its Subsidiaries;
(iii) has an interest in any contract or agreement with CCS or any
of its Subsidiaries; or
(iv) has any contractual arrangements with CCS or any of its
Subsidiaries.
4.6 Absence of Undisclosed Liabilities. Except as set forth in
Schedule 4.6 of the CCS Disclosure Schedule, neither CCS nor any of its
Subsidiaries has any material liabilities, losses or obligations of any nature
(whether absolute, known or unknown, accrued, fixed, contingent, liquidated,
unliquidated, due or to become due, or otherwise), except for (i) liabilities
included or reflected in the CCS Financial Statements and adequately reflected
or reserved against therein, or (ii) liabilities or performance obligations
arising in the ordinary course of business (and not as a result of a breach or
default by CCS or any of its Subsidiaries). Neither CCS nor any of its
Subsidiaries nor any CCS Stockholder knows of any basis for the assertion
against CCS of any such material liability.
4.7 Absence of Certain Changes or Events. Except as set forth in
Schedule 4.7 of the CCS Disclosure Schedule, since the Balance Sheet Date the
business of CCS and its Subsidiaries has been conducted only in the ordinary and
usual course. Without limiting the generality of the foregoing, except as set
forth in Schedule 4.7 of the CCS Disclosure Schedule, since the Balance Sheet
Date neither CCS nor any of its Subsidiaries has:
(a) suffered any CCS Material Adverse Effect;
44
(b) suffered any material damage, destruction or casualty loss
(whether or not covered by insurance) or condemnation taking or other proceeding
which would reasonably be expected to have a CCS Material Adverse Effect;
(c) except for increases in salary in the ordinary course of
business, entered into or amended any employment or consulting contract or
commitment (whether oral or written) or compensation arrangement or employee
benefit plan, or changed or committed to change (including any change pursuant
to any bonus, pension, profit-sharing or other plan, commitment, policy or
arrangement) the compensation payable or to become payable to any of its
officers, directors, key employees, agents or consultants, or made any pension,
retirement, profit-sharing, bonus or other employee welfare or benefit payment
or contribution other than payments or contributions required by the governing
documents of the foregoing, copies of which have been delivered or made
available to TravCorps;
(d) made or proposed any change in its accounting or tax methods,
principles or practices, except for such changes which are required by GAAP or
by law;
(e) authorized, declared, set aside or paid any dividend or other
distribution with respect of its capital stock;
(f) Directly or Indirectly redeemed, purchased or otherwise acquired
any of its shares of capital stock or authorized any stock split,
reclassification or recapitalization or otherwise changed the terms or
provisions of any of its capital stock;
(g) incurred any material Indebtedness or made any loan, advance or
capital contribution to any person except in the ordinary course of business;
(h) paid, discharged or satisfied any material claim, liability or
obligation other than the payment, discharge or satisfaction of liabilities and
obligations incurred in the ordinary course of business;
45
(i) (i) prepaid any material obligation having a fixed maturity of
more than 90 days from the date such obligation was issued or incurred, or (ii)
not paid, within a reasonable date of when due, any account payable, or sought
the extension of the payment date of any such account payable;
(j) permitted or allowed any material portion of its Property or
assets to be subjected to any Encumbrance, except for liens for current Taxes
not yet due;
(k) sold, transferred, or otherwise disposed of any material portion
of its Properties or assets, except in the ordinary course of business;
(l) made any capital expenditures or commitments in excess of
$200,000 in the aggregate for repairs or additions to property, plant, equipment
or tangible capital assets; or
(m) agreed, whether in writing or otherwise, to take any action
described in this Section 4.7.
4.8 Taxes.
(a) Each of CCS and its Subsidiaries has duly, timely and properly
filed when due, all federal, state, local, foreign and other Tax Returns
required to be filed by it with respect to its sales, income, business or
operations (including without limitation any consolidated or combined Tax
Returns in which it is included) and such Tax Returns are true, complete and
accurate in all material respects. Except as may otherwise have been
communicated to TravCorps prior to the date hereof in a writing referring to
this Section, each of CCS and its Subsidiaries has duly paid all Taxes due from
CCS or any of its Subsidiaries as shown on such Tax Returns.
(b) Except as set forth in Schedule 4.8(b), all amounts required to
be withheld by CCS or any of its Subsidiaries from customers or from or on
behalf of employees for income,
46
payroll, social security and unemployment insurance taxes have been collected or
withheld and either paid to the appropriate Governmental Entity or set aside
and, to the extent required by law, held in accounts for such purpose.
(c) Except as set forth in Schedule 4.8(c) of the CCS Disclosure
Schedule, (i) there currently are no pending or, to the knowledge of CCS or any
of its Subsidiaries, threatened actions or proceedings (including, without
limitation, audit proceedings) by any applicable taxing authority for the
assessment, collection, adjustment or deficiency of Taxes against CCS or any of
its Subsidiaries, and (ii) neither CCS nor any of its Subsidiaries has received
any notice of deficiency or assessment from any federal, state, local or foreign
taxing authority with respect to liabilities for any material Taxes of CCS or
any of its Subsidiaries. Except as set forth in Schedule 4.8(c) of the CCS
Disclosure Schedule, there are no outstanding agreements or waivers extending
the statutory period of limitation applicable to any assessment or audit of any
Tax or Tax Return of CCS or any of its Subsidiaries for any period.
(d) To the knowledge of CCS and each of its Subsidiaries, there is
no existing fact or circumstance that will cause the Merger to fail to qualify
as a "reorganization" within the meaning of Section 368 of the Code.
(e) CCS is not liable as successor or transferee for any liability
or obligation of any Grace Entity pertaining to Taxes (including, without
limitation, withholding Taxes caused by or arising from any Grace Entity's
practices with regard to meal and incidental expense payments, lodging
allowances or in-kind lodging).
4.9 Assets.
(a) Each of CCS and its Subsidiaries has good title to all the
material items of personal property assets (tangible and intangible) which CCS
or any of its Subsidiaries purports to own on the date hereof, including without
limitation, those reflected in the CCS Financial
47
Statements at the Balance Sheet Date, free and clear of all Encumbrances, except
for (i) liens for current Taxes not yet due and payable; (ii) Encumbrances set
forth in Schedule 4.9(a) of the CCS Disclosure Schedule or reflected on the CCS
Financial Statements; and (iii) Encumbrances which do not materially detract
from the value or materially interfere with any present use of such assets.
Neither CCS nor any of its Subsidiaries owns any Real Property.
(b) Schedule 4.9(b) of the CCS Disclosure Schedule contains a
complete and correct list of all material items of personal property and all
Real Property leased by CCS and each of its Subsidiaries except for Real
Property leased in the ordinary course of business for temporary housing of
employees. CCS has previously delivered or made available to TravCorps true,
complete and correct copies of all lease documents relating to such property.
All lease documents are valid, binding and enforceable in accordance with their
terms and are in full force and effect. No event has occurred which constitutes
or, with the passing of time or giving of notice, or both, would constitute, a
material default by CCS under any such lease document.
4.10 Intellectual Property.
(a) Except as disclosed in Schedule 4.10(a) of the CCS Disclosure
Schedule, each of CCS and its Subsidiaries is the exclusive owner of all right,
title and interest in and to each of the following that are being used in the
business of CCS or any of its Subsidiaries as currently conducted, and/or have
been or are being developed or acquired for potential use in the business of CCS
or any of its Subsidiaries:
(i) all material computer programs and databases and their
associated system and user documentation (collectively, the "Software Products")
set forth in Schedule 4.10(a)(i) of the CCS Disclosure Schedule;
(ii) all material copyrights and copyright registrations set
forth in Schedule 4.10(a)(ii) of the CCS Disclosure Schedule;
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(iii) All material trademarks, service marks and trade names
(collectively the "Marks"), and the registrations of, and/or applications to
register, any one or more of Marks in federal, state or foreign jurisdictions
set forth in Schedule 4.10(a)(iv) of the CCS Disclosure Schedule; and
(iv) all material Trade Secrets and other proprietary rights.
The items referred to in subparagraphs (i) through (iv) of this
Section 4.10(a), subject to the exclusions to ownership expressly set forth
therein, are herein referred to collectively as the "CCS Intellectual Property
Rights." The CCS Intellectual Property Rights constitute all such rights
necessary to operate the business of CCS and its Subsidiaries in all material
respects as it is currently conducted.
(b) Schedule 4.10(b) of the CCS Disclosure Schedule sets forth a
list of all material license and similar agreements between CCS any of its
Subsidiaries and third parties, under which CCS or any of its Subsidiaries is
granted rights to the use, reproduction, distribution, manufacture, sale or
licensing of items embodying the copyright, Trade Secret, trademark or other
proprietary rights of such third parties (collectively, the "CCS License
Rights"). Except as set forth in Schedule 4.10(b) of the CCS Disclosure
Schedule, no Person is entitled to any material royalty, fee and/or other
payment or other consideration of whatever nature with respect to the CCS
License Rights or CCS Intellectual Property Rights. The CCS License Rights and
the CCS Intellectual Property Rights are sometimes collectively referred to as
the "CCS Rights".
(c) Schedule 4.10(c) of the CCS Disclosure Schedule sets forth a
list of all agreements under which CCS or any of its Subsidiaries or any CCS
Stockholder of any of their respective Affiliates, has granted any material
rights to third parties of, to or under the CCS Rights. All such rights granted
have been and are non-exclusive. True, correct and complete copies of all such
agreements have been delivered or made available to TravCorps.
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(d) No material claims with respect to the CCS Rights have been
asserted or, to the knowledge of CCS or any of its Subsidiaries, are threatened
by any Person. To the knowledge of CCS or any of its Subsidiaries, as of the
date hereof, there has not been and there is not any material infringement,
misappropriation or any other unauthorized use of any of the CCS Rights by any
third party, employee, consultant or former employee or consultant of CCS or any
of its Subsidiaries.
(e) Whenever used in this Agreement: (i) "CCS Computer Systems"
means all the computer systems of CCS and its Subsidiaries including, without
limitation, all mainframes, PC's and other work stations, peripherals and other
components, and the Software Products; (ii) "CCS Licensed Software Products"
means any software products licensed by third parties to CCS or its
Subsidiaries, including, without limitation, the software products disclosed on
Schedule 4.10(a)(i) or Schedule 4.10(b); (iii) "CCS Licensed Computer Systems"
means all mainframes, PC's and other work stations, peripherals and other
components, and the CCS Licensed Software Products; and (iv) "CCS Comprehensive
Computer Systems" collectively refers to the CCS Computer Systems and CCS
Licensed Computer Systems.
(f) Except as disclosed in Schedule 4.10(f) of the CCS Disclosure
Schedule, or as will not, individually or in the aggregate, have a CCS Material
Adverse Effect, the CCS Comprehensive Computer Systems: (i) are capable of
recognizing, processing, managing, representing, interpreting, and manipulating
correctly date-related data for dates earlier and later than January 1, 2000,
including, without limitation, calculating, comparing, sorting (including
without limitation, sorting by accurate ascending or descending sequence),
storing, tagging, and sequencing, without resulting in or causing local or
mathematical errors or inconsistencies in any user-interface functionalities,
data storage, data fields, calculations, reports, processing, or any other input
or output; (ii) have the ability to provide date recognition for any data
element represented without a date, or whose year is represented by only two
digits and the ability to automatically function into and beyond the year 2000
without human intervention; (iii) correctly
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interpret data, dates and time into and beyond the year 2000, including, without
limitation, any and all leap years; (iv) have the ability not to produce
noncompliance in existing information, nor otherwise corrupt such data; and (v)
have the ability to successfully interface with internal and external
applications or systems that have not yet achieved year 2000 compliance during
the time in which the systems and such applications and systems co-exist.
4.11 Accounts Receivable. Except as set forth in Schedule 4.11 of
the CCS Disclosure Schedule, all of the accounts, notes and other receivables of
CCS and its Subsidiaries (i) reflected on the CCS Financial Statements as of the
Balance Sheet Date and (ii) as of the date hereof, represent sales actually made
in the ordinary course of business consistent with past practice for goods or
services delivered or rendered in bona fide arm's-length transactions.
4.12 Contracts and Commitments. Except as set forth in Schedule 4.12
of the CCS Disclosure Schedule:
(a) Neither CCS nor any of its Subsidiaries has any agreements,
contracts, or commitments, written or oral, which involve (i) the performance of
services by CCS or its Subsidiaries in excess of $150,000 anticipated for fiscal
year 1999 or (ii) the performance of services or delivery of goods to CCS or its
Subsidiaries in excess of $150,000 anticipated for fiscal year 1999.
(b) Neither CCS nor any of its Subsidiaries has any collective
bargaining or union contracts or agreements;
(c) Neither CCS nor any of its Subsidiaries is restricted by any
agreement or other commitment from carrying on its business as currently
conducted anywhere in the world;
(d) Neither CCS nor any of its Subsidiaries has any material
obligations for Indebtedness;
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(e) Neither CCS nor any of its Subsidiaries is a party to any
partnership or joint venture agreement whether or not a separate legal entity is
created thereby or any contract or agreement relating to the acquisition or
disposition of any portion of its business;
(f) Neither CCS nor any of its Subsidiaries is in material breach or
default, under any contract referred to in Schedule 4.12, and there exists no
event or condition (other than the entering into of this Agreement and the
consummation of the transactions contemplated thereby) which (whether with or
without notice, lapse of time, or both) would constitute a material default by
CCS or any Subsidiary thereunder, give rise to a right to accelerate, modify or
terminate any material provision thereof or give rise to any material
Encumbrance on their respective material Properties or assets or a right to any
material, additional or guaranteed payments; and to the knowledge of CCS or any
of its Subsidiaries, no other party to any such contract or agreement is in
material breach or default thereof;
(g) each contract and agreement referred to in Schedule 4.12 and
each contract and agreement relating to a CCS License Right is valid and in full
force and effect and constitutes a legal, valid and binding obligation of CCS or
any of its Subsidiaries, and, to the knowledge of CCS or any of its
Subsidiaries, the other parties thereto, enforceable in accordance with its
terms, accurate and complete copies thereof, together with all amendments
thereto, have been heretofore delivered or made available to TravCorps.
4.13 Customers and Suppliers.
(a) Schedule 4.13(a) of the CCS Disclosure Schedule contains a true
and complete list of the ten largest customers of CCS and its Subsidiaries in
order of dollar volume of sales during the period from July 31, 1998 through the
Balance Sheet Date showing the total sales in dollars to each such customer
during such period.
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(b) Except as set forth on Schedule 4.13(b) of the CCS Disclosure
Schedule neither CCS nor any of its Subsidiaries is engaged in any material
disputes with any material customers or suppliers. In addition, neither CCS nor
any of its Subsidiaries has any knowledge that any material customer or group of
customers of CCS or any of its Subsidiaries is materially dissatisfied with its
services.
4.14 Inventory. Except as set forth in Schedule 4.14 of the CCS
Disclosure Schedule, neither CCS nor any of its Subsidiaries maintains any
material inventory.
4.15 Insurance. True and complete copies of all insurance policies
or summaries of such policies (including, but not limited to, liability,
property and casualty, workers compensation, directors and officers liability,
surety bonds, key man or corporate owned life insurance, vehicular and other
insurance policies and contracts) covering CCS or any of its Subsidiaries or
otherwise held by or on behalf of it, or any aspect of its assets or business
have been delivered or made available to TravCorps. Except as set forth on
Schedule 4.15, there are no pending material claims under any of the foregoing.
To the knowledge of CCS or any of its Subsidiaries, no party to any such
insurance policy is in material default with respect thereto, nor does any
condition exist that with notice or lapse of time or both would constitute such
a material default by any party thereunder. All such insurance policies are
sufficient in all material respects for compliance with all requirements under
all material agreements or contracts to which CCS or any of its Subsidiaries is
a party or otherwise bound.
4.16 Litigation, etc. Except as set forth in Schedule 4.16 of the
CCS Disclosure Schedule, there is no material claim, action, suit, or proceeding
that is pending or to CCS's knowledge, threatened on the date hereof, and to the
knowledge of CCS there is no inquiry or investigation pending on the date
hereof, of any kind or nature whatsoever, by or before any court or Governmental
Entity against CCS or any of its Subsidiaries, or which questions or challenges
the validity of this Agreement or any action taken or to be taken by CCS
53
or any CCS Stockholders pursuant to this Agreement or in connection with the
transactions contemplated hereby; and, to the knowledge of CCS or any of its
Subsidiaries, there is no valid basis for any such material claim, action, suit,
inquiry, proceeding or investigation. Neither CCS nor any of its Subsidiaries is
subject to any material judgment, order or decree.
4.17 Compliance with Law; Necessary Authorizations; Securities
Matters.
(a) Each of CCS and its Subsidiaries is duly complying and has duly
complied, in all material respects, in respect of its business, operations and
Properties, with all applicable laws, rules, regulations, orders, building and
other codes, zoning and other ordinances, Permits, authorizations, judgments and
decrees of all Governmental Entities.
(b) Each of CCS and its Subsidiaries has duly obtained all material
Permits and Consents necessary for the conduct of its business; each of the
foregoing is set forth in Schedule 4.17(b) of the CCS Disclosure Schedule and is
in full force and effect; each of CCS and its Subsidiaries is in compliance with
all material terms of all the foregoing; there are no material proceedings
pending or, to the knowledge of CCS or any of its Subsidiaries, threatened which
are reasonably likely to result in the revocation, cancellation, suspension or
modification thereof, and neither CCS nor any of its Subsidiaries has any
knowledge of any basis therefor; and the consummation of the transactions
contemplated hereby will not result in any such revocation, cancellation,
suspension or modification nor require CCS or any of its Subsidiaries or
TravCorps to make any filing or take any action in order to maintain the
validity of any item listed on Schedule 4.17(b).
(c) Each Licensed Service Provider employed or engaged by CCS or any
of its Subsidiaries to provide services on behalf of CCS or any of its
Subsidiaries has obtained (and maintains) all necessary licensure or
certification to provide such services in compliance in all material respects
with any applicable law.
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4.18 Environmental Matters. To the knowledge of CCS and each of its
Subsidiaries:
(a) All of the operations of CCS and each of its Subsidiaries comply
and have at all times complied, in all material respects, with all applicable
Environmental Laws, and neither CCS nor any of its Subsidiaries is subject to
any material CCS Environmental Liabilities. Neither CCS nor any of its
Subsidiaries nor, any other Person, has engaged in, authorized, allowed or
suffered any operations or activities upon any of the Real Property of CCS or
its Subsidiaries for the purpose of or in any way involving the handling,
manufacture, treatment, processing, storage, use, generation, release,
discharge, emission, dumping or disposal of any Hazardous Substances at, on or
under the Real Property of CCS or its Subsidiaries, except in compliance in all
material respects with all applicable Environmental Laws.
(b) None of the Real Property or any assets of CCS or any of its
Subsidiaries contain any Hazardous Substances in, on, over, under or at it in
concentrations or amounts which would materially violate Environmental Laws or
impose material liability or obligations on the present or former owner,
manager, or operator of the Real Property under the Environmental Laws for any
assessment, investigation, corrective action, remediation or monitoring of
Hazardous Substances. None of such Real Property of CCS or its Subsidiaries is
listed or proposed for listing on the National Priorities List pursuant to
CERCLA, or any similar inventory of sites requiring investigation or remediation
maintained by any state. Neither CCS nor any of its Subsidiaries has received
any notice, whether oral or written, from any Governmental Entity or third party
of any actual or threatened material CCS Environmental Liabilities with respect
to the Real Property of CCS or its Subsidiaries, any assets of CCS or any of its
Subsidiaries or the conduct of the business of CCS or any of its Subsidiaries.
4.19 Labor Matters. (a) Except to the extent set forth in Schedule
4.19 of the CCS Disclosure Schedule:
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(i) there is no labor strike, or material dispute, grievance,
arbitration proceeding, slowdown or stoppage, or charge of unfair labor practice
actually pending, threatened against or affecting the operation of the business
of CCS or any of its Subsidiaries, other than routine individual grievances;
(ii) no unions or other collective bargaining units have been
certified or recognized by CCS or any of its Subsidiaries as representing any of
its employees and, to the knowledge of CCS, there are no existing union
organizing efforts or representation questions with respect to any of the
employees of CCS or any of its Subsidiaries.
4.20 Employee Benefit Plans. (a) Except as set forth in Schedule
4.20 of the CCS Disclosure Schedule, there are no Plans. With respect to each
Plan, as applicable, accurate and complete (i) copies of each written Plan
(including all amendments thereto), (ii) written descriptions of each oral Plan,
(iii) copies of related trust or funding agreements, (iv) summary plan
descriptions, (v) summaries of material modifications, (vi) copies of the most
recent annual reports and actuarial valuations and (vii) copies of the most
recent determination letter from the IRS for each Plan intended to qualify under
Code Section 401(a) have been heretofore delivered or made available to
TravCorps.
(b) None of CCS, any of its Subsidiaries, its CCS ERISA Affiliates,
or any of their respective predecessors has ever contributed to, contributes to,
has ever been required to contribute to, or otherwise participated in or
participates in or in any way, directly or indirectly, has any liability with
respect to any Employee Benefit Plan which is subject to Title IV of ERISA.
(c) With respect to each of the Plans on Schedule 4.20, except as
set forth on Schedule 4.20:
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(i) each Plan intended to qualify under Section 401(a) of the
Code has received a determination letter from the IRS to the effect that the
Plan is qualified under Section 401 of the Code and any trust maintained
pursuant thereto is exempt from federal income taxation under Section 501 of the
Code and nothing has occurred (since the date of the determination letter) or is
expected to occur through the date of the Closing (including, without
limitation, the transactions contemplated by this Agreement) that caused or
could cause the loss of such qualification or exemption or the imposition of any
penalty or tax liability;
(ii) all material payments required by any Plan, any
agreement, or by law (including, without limitation, all contributions,
insurance premiums, or intercompany charges) have been made;
(iii) no material claim, lawsuit, arbitration or other action
has been threatened, asserted, instituted, or anticipated against the Plans, any
trustee or fiduciaries thereof, CCS, any of its Subsidiaries, any CCS ERISA
Affiliate, any director, officer, or employee thereof, or any of the assets of
any trust of the Plans;
(iv) the Plan complies and has been maintained and operated in
all material respects in accordance with its terms and applicable law,
including, without limitation, ERISA and the Code;
(v) no "prohibited transaction," within the meaning of Section
4975 of the Code and Section 406 of ERISA, has occurred or is expected to occur
with respect to the Plan (and the consummation of the transactions contemplated
by this Agreement will not constitute or directly or indirectly result in such a
"prohibited transaction");
(vi) with respect to each Plan that is funded mostly or
partially through an insurance policy, neither CCS nor any of its Subsidiaries
nor any CCS ERISA Affiliate has any material liability in the nature of
retroactive rate adjustment, loss sharing arrangement or
57
other actual or contingent liability arising wholly or partially out of events
occurring on or before the Closing.
(d) Except to the extent set forth in Schedule 4.20(d) the
consummation of the transactions contemplated by this Agreement will not give
rise to any material liability, including, without limitation, material
liability for severance pay, unemployment compensation, termination pay, or
withdrawal liability, or materially accelerate the time of payment or vesting or
materially increase the amount of compensation or benefits due to any employee,
director or stockholder of CCS or any of its Subsidiaries (whether current,
former, or retired) or their beneficiaries solely by reason of such
transactions. No material amounts payable under any Plan will fail to be
deductible for federal income tax purposes by virtue of Sections 280G or 162(m)
of the Code.
(e) Neither CCS, any of its Subsidiaries nor any CCS ERISA Affiliate
maintains, contributes to, or in any way provides for any benefits of any kind
whatsoever (other than under Section 4980B of the Code, the Federal Social
Security Act, or a plan qualified under Section 401(a) of the Code) to any
current or future retiree or terminee.
(f) Neither CCS, any of its Subsidiaries nor any CCS ERISA
Affiliate, or any officer or employee thereof, has made any promises or
commitments, whether legally binding or not, to create any material additional
plan, agreement, or arrangement, or to materially modify or change any existing
Plan.
4.21 Questionable Payments. Neither the CCS Stockholders nor any
director, officer, agent, employee, or any other Person acting on behalf of the
CCS Stockholders, or CCS or any of its Subsidiaries, has, directly or
indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses; made any unlawful payment to
government officials or employees or to political parties or campaigns;
established or maintained any unlawful fund of corporate monies or other assets;
made or received any bribe, or any
58
unlawful rebate, payoff, influence payment, kickback or other payment; given any
favor or gift which is not deductible for federal income tax purposes; or made
any bribe, kickback, or other payment of a similar or comparable nature, to any
governmental or non-governmental Person, regardless of form, whether in money,
property, or services, to obtain favorable treatment in securing business or to
obtain special concessions, or to pay for favorable treatment for business or
for special concessions secured.
4.22 Finders. No CCS Stockholder and none of CCS's or its
Subsidiaries' directors or officers, have taken any action that, directly or
indirectly, would obligate CCS, TravCorps or any of its Subsidiaries, to anyone
acting as broker, finder, financial advisor or in any similar capacity in
connection with this Agreement or any of the transactions contemplated hereby.
ARTICLE V
COVENANTS
5.1 Conduct of Business. From the date hereof and until the Closing
Date, except as contemplated by this Agreement or expressly consented to by an
instrument in writing signed by the other parties, TravCorps, on the one hand,
and CCS, on the other hand, will each use its commercially reasonable best
efforts to: (i) conduct its business and operations only in the ordinary course,
consistent with past practice, (ii) maintain and preserve its Properties in good
repair, order and condition, (iii) preserve its business operations and
organizations intact, (iv) keep available the services of its current officers
and satisfactorily performing employees, (v) preserve its current advantageous
business relationships, including without limitation the goodwill of its
customers and suppliers and others having business relationships with it; and
(vi) not, Directly or Indirectly, redeem, purchase or otherwise acquire any of
its shares of capital stock or, except as set forth on Schedule 5.1, authorize
any stock split or recapitalization or issue any shares of capital stock (other
than in connection with exercise of options outstanding on the date hereof) or
grant options.
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5.2 Records. Prior to the Closing Date, each of TravCorps and CCS
shall and shall cause each of its Subsidiaries to afford the other party, its
attorneys, accountants and representatives, free and full access to its
business, books, records and employees, and shall provide such additional
financial and operating data and other information as the other party, shall
from time to time reasonably request.
5.3 Filings and Authorizations. Each of the parties, as promptly as
practicable, (i) shall make, or cause to be made, all such filings and
submissions under laws, rules and regulations applicable to him, her or it or
his, her or its Affiliates, as may be required to consummate the Merger in
accordance with the terms of this Agreement, (ii) shall use all commercially
reasonable efforts to obtain, or cause to be obtained, all Consents necessary to
be obtained by him, her or it or his, her or its Affiliates, in order to
consummate the Merger, and (iii) shall use all commercially reasonable efforts
to take, or cause to be taken, all other actions necessary, proper or advisable
in order for him, her or it to fulfill his, her or its obligations hereunder.
The parties shall coordinate and cooperate with one another in exchanging such
information and supplying such reasonable assistance as may be reasonably
requested by each in connection with the foregoing.
5.4 Discussions with Others. From the date hereof until the Closing
Date the TC Stockholders, on the one hand, and the CCS Stockholders on the other
hand, shall cause each of TravCorps and CCS and their respective officers,
directors, employees or representatives not to, solicit or enter into
negotiations with any party or encourage, facilitate or initiate any discussions
with any party, with regard to a purchase and sale of any portion of the capital
stock of either TravCorps or CCS, any material portion of the assets of either
TravCorps or CCS or any merger or consolidation of either TravCorps or CCS with
any third party.
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5.5 Further Assurances. The parties hereto shall from time to time
after the Closing Date execute and deliver such additional instruments and
documents, as any party hereto may reasonably request to consummate the
transfers and other transactions contemplated hereby.
5.6 Tax Matters. Each of TravCorps and CCS will not take any action
that is reasonably likely to cause the Merger to fail to qualify as a
"reorganization" within the meaning of Section 368 of the Code, and shall use
its reasonable best efforts (including the provision of customary
representations) to permit counsel to render the opinion described in Section
6.2(n). Neither TravCorps nor CCS shall take or cause to be taken any action
which would cause to be untrue (or fail to take or cause not to be taken any
action which would cause to be untrue) any of the representations set forth in
certificates delivered to such counsel.
5.7 Indemnification; Directors' and Officers' Insurance. (a) From
and after the Effective Time, to the fullest extent permitted by applicable law,
the Surviving Corporation shall, and CCS shall cause the Surviving Corporation
to, indemnify, defend and hold harmless each Person who is now, or has been at
any time prior to the date hereof, or who becomes prior to the Effective Time, a
director, officer or employee of the TravCorps or any of its Subsidiaries (each
an "Indemnified Party" and, collectively, the "Indemnified Parties") against all
losses, expenses (including reasonable attorneys' fees and expenses), claims,
damages, liabilities or amounts paid in settlement arising out of actions or
omissions occurring at or prior to the Effective Time and whether asserted or
claimed prior to, at or after the Effective Time that are in whole or in part
(i) based on or arising out of the fact that such Person is or was a director,
officer or employee of TravCorps or one of its Subsidiaries or (ii) based on,
arising out of or pertaining to the transactions contemplated by this Agreement.
In the event of any such loss, expense, claim, damage or liability (whether or
not arising before the Effective Time), (i) the Surviving Corporation shall pay
the reasonable fees and expenses of counsel selected by the Indemnified Parties
promptly after statements therefor are received and otherwise advance to such
Indemnified Party upon request reimbursement of documented expenses reasonably
incurred, in
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either case to the extent not prohibited by Delaware Law upon receipt of any
affirmation and undertaking required by Delaware Law, (ii) the Surviving
Corporation will cooperate in the defense of any such matter and (iii) any
determination required to be made with respect to whether an Indemnified Party's
conduct complies with the standards set forth under Delaware Law and the
Surviving Corporation's certificate of incorporation or bylaws shall be made by
independent counsel mutually acceptable to the Surviving Corporation and the
Indemnified Party; provided, however, that the Surviving Corporation shall not
be liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld). In addition to the indemnification provided
above, to the fullest extent permitted by law, from and after the Effective
Time, all rights to indemnification now existing in favor of the employees,
agents, directors or officers of TravCorps and its Subsidiaries with respect to
their activities as such prior to the Effective Time, as provided in TravCorp's
certificate of incorporation or bylaws, in effect on the date hereof, shall
survive the Merger and shall continue in full force and effect for a period of
not less than six years from the Effective Time.
(b) For a period of 6 years after the Effective Time, CCS shall
cause to be maintained in effect the policies of directors' and officers'
liability insurance maintained by TravCorps for the benefit of those Persons who
are covered by such policies at the Effective Time (or CCS may substitute
therefor policies of at least the same coverage with respect to matters
occurring prior to the Effective Time).
(c) In the event CCS or the Surviving Corporation or any of their
successors or assigns consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or transfers all or substantially all of their
properties and assets to any Person, then and in either such case, proper
provision shall be made so that the successors and assigns of CCS or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section.
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(d) The provisions of this Section 5.7 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.
Section 5.8 Notification of Certain Matters. Each party hereto shall
give prompt notice to each other party hereto of (i) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in this Agreement,
which is qualified as to materiality, to be untrue or inaccurate, or any
representation or warranty not so qualified, to be untrue or inaccurate in any
material respect at or prior to the Effective Time, (ii) any material failure of
any party hereto to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder, (iii) any notice of, or other
communication relating to, a default or event which, with notice or lapse of
time or both, would become a default, received by such party or any of its
Subsidiaries subsequent to the date of this Agreement and prior to the Effective
Time under any contract or agreement to which it or any of its Subsidiaries is a
party or is subject material to the financial condition, business or results of
operations of it and its Subsidiaries, taken as a whole or (iv) any notice or
other communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions contemplated by
this Agreement; provided, however, that the delivery of any notice pursuant to
this Section 5.8 shall not cure such breach or non-compliance or limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
Section 5.9 Employee Matters. CCS shall cause the Surviving
Corporation to honor the obligations of TravCorps or any of its Subsidiaries
under the provisions of all employment, consulting, termination, severance,
change in control and indemnification agreements between and among TravCorps or
any of its Subsidiaries and any current or former officer, director, consultant
or employee of TravCorps or any of its Subsidiaries. For a period of one year
following the Effective Time, CCS agrees that it will maintain, or will cause
the Surviving Corporation and its Subsidiaries to maintain, for the benefit of
the employees of
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TravCorps and any of its Subsidiaries following the Effective Time, compensation
and benefit plans, programs, arrangements and policies as will provide
compensation and benefits which in the aggregate are not materially less
favorable than those provided to such employees as of the date hereof under the
TravCorps employee benefit plans set forth on Schedule 5.9 attached hereto in
accordance with their written terms and without regard to formal or informal
discretionary provisions.
Section 5.10 Obligations of Merger Subsidiary. CCS will take all
action necessary to cause Merger Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth in
this Agreement.
Section 5.11 Confidentiality. Prior to the Effective Time and after
any termination of this Agreement, each party to this Agreement will hold, and
each of TravCorps and CCS will use its best efforts to cause its officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning the other parties furnished to it or its Affiliates in
connection with the transactions contemplated by this Agreement, except to the
extent that such information can be shown to have been (i) previously known by
such party, (ii) in the public domain through no fault of such party or (iii)
later lawfully acquired by such party from sources other than the other parties;
provided that each party may disclose such information to its officers,
directors, employees, accountants, counsel, consultants, advisors and agents in
connection with the transactions contemplated by this Agreement so long as such
party informs such Persons of the confidential nature of such information and
directs them to treat it confidentially. Each party shall satisfy its obligation
to hold any such information in confidence if it exercises the same care with
respect to such information as it would take to preserve the confidentiality of
its own similar information. If this Agreement is terminated, each party will,
and will use its best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to,
64
destroy or deliver to the other parties, upon request, all documents and other
materials, and all copies thereof, that it or its Affiliates obtained, or that
were obtained on their behalf, from the other parties in connection with this
Agreement and that are subject to such confidence.
5.12 Termination of Certain Agreements. Effective as of the Closing,
each of the agreements set forth on Schedule 5.12 shall terminate in full, be of
no further force or effect, and no party shall have any further liability with
respect thereto.
5.13 PreClosing Payments. TravCorps shall have the right, prior to
the Effective Time, to pay up to an aggregate of $1,127,733 to its option
holders in connection with the cancellation of all TravCorps stock options. CCS
shall have the right, prior to the Effective Time, to distribute or pay to such
parties as, and in such proportions as the Board of Directors of CCS may
determine, an amount (the "Designated Amount") (if a positive number) determined
on an after tax basis equal to the product of (x) 1.632 and (y) the amount
actually paid by TravCorps pursuant to the first sentence of this Section 5.13
determined on an after tax basis and adjusted for any limitations on the use of
TravCorps' net operating losses following the Merger. Without giving effect to
the tax adjustments provided in the immediately preceding sentence, the
aggregate amount to be distributed or paid by CCS pursuant to this Section 5.13
(which amount shall include all special bonus payments made to employees of CCS
and all payment made to stockholders or their affiliates following the date
hereof and prior to the Effective Time) shall not exceed the Designated Amount.
5.14 Permits. Each of CCS and TravCorps shall use its commercially
reasonable efforts to secure all permits material to their respective
businesses.
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ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions Precedent to Obligations of CCS and the CCS
Stockholders. The obligation of CCS and the CCS Stockholders under this
Agreement to consummate the Merger on the Closing Date shall be subject to the
satisfaction, at or prior to the Closing Date, of all of the following
conditions, any one or more of which may be waived by CCS and the CCS
Stockholders:
(a) Representations and Warranties Accurate. The representations and
warranties of the TC Stockholders contained in this Agreement which are
qualified as to materiality shall be true and correct in all respects, and those
not so qualified shall be true and correct in all material respects, as of the
date of this Agreement and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date.
(b) Performance by TC Stockholders and TravCorps. Each of the TC
Stockholders and TravCorps shall have performed and complied in all material
respects with all covenants and agreements required to be performed or complied
with by such Person hereunder on or prior to the Closing Date.
(c) Consents. The Consents set forth on Exhibit 6.1(c) hereto shall
have been duly obtained, made or given and shall be in full force and effect,
without the imposition upon CCS or TravCorps of any material condition,
restriction or required undertaking.
(d) No Legal Prohibition. No suit, action, investigation, inquiry or
other proceeding by any Governmental Entity shall have been instituted or
threatened which arises out of or relates to this Agreement or the transactions
contemplated hereby and no injunction, order, decree or judgment shall have been
issued and be in effect or threatened to be issued by any Governmental Entity of
competent jurisdiction, and no statute, rule or regulation shall have been
66
enacted or promulgated by any Governmental Entity and be in effect, which in
each case restrains or prohibits the consummation of the Merger.
(e) Certificate. CCS shall have received a certificate, dated the
Closing Date, signed by the Representative of the TC Stockholders and TravCorps,
to the effect that the conditions set forth in Sections 6.1(a) and 6.1(b) have
been satisfied.
(f) Opinion of Counsel for TravCorps. CCS and the CCS Stockholders
shall have received an opinion, dated the Closing Date, from Xxxxx Xxxx &
Xxxxxxxx, counsel to TravCorps, in form and substance reasonably acceptable to
CCS.
(g) No Material Adverse Change. No event, loss, damage, condition or
state of facts of any kind shall exist which has had a TravCorps Material
Adverse Effect or which may reasonably be expected to have a TravCorps Material
Adverse Effect.
(h) HSR Act. The required waiting period under the HSR Act shall
have expired or been earlier terminated.
(i) Stockholders Agreement. The Stockholders Agreement in the form
annexed hereto as Exhibit 6.1(i) shall have been executed and delivered by the
parties thereto and the individual set forth on Schedule 6.1(i)(1) shall have
executed that certain side letter set forth on Exhibit 6.1(i)(2).
(j) Registration Rights Agreement. The Registration Rights Agreement
in the form annexed hereto as Exhibit 6.1(j) shall have been executed and
delivered by the parties thereto.
(k) Cancellation of Stock Options. All options to purchase shares of
capital stock of TravCorps shall have been terminated.
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6.2 Conditions Precedent to Obligations of TC Stockholders and
TravCorps and the TC Stockholders. The obligations of the TC Stockholders under
this Agreement to consummate the Merger on the Closing Date shall be subject to
the satisfaction, at or prior to the Closing Date, of all of the following
conditions, any one or more of which may be waived by TravCorps and the TC
Stockholders:
(a) Representations and Warranties Accurate. The representations and
warranties of the CCS Stockholders contained in this Agreement which are
qualified as to materiality shall be true and correct in all respects, and those
not so qualified shall be true and correct in all material respects, as of the
date of this Agreement and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date.
(b) Performance by CCS and the CCS Stockholders. Each of CCS and the
CCS Stockholders shall have performed and complied in all material respects with
all covenants and agreements required to be performed or complied with by such
Person hereunder on or prior to the Closing Date.
(c) Consents. The Consents set forth on Exhibit 6.1(c) hereto shall
have been duly obtained, made or given and shall be in full force and effect,
without the imposition upon CCS or TravCorps of any material condition,
restriction or required undertaking.
(d) No Legal Prohibition. No suit, action, investigation, inquiry or
other proceeding by any Governmental Entity shall have been instituted or
threatened which arises out of or relates to this Agreement or the transactions
contemplated hereby and no injunction, order, decree or judgment shall have been
issued and be in effect or threatened to be issued by any Governmental Entity of
competent jurisdiction, and no statute, rule or regulation shall have been
enacted or promulgated by any Governmental Entity and be in effect, which in
each case restrains or prohibits the consummation of the Merger.
68
(e) Certificate. The Representative of the TC Stockholders shall
have received a certificate, dated the Closing Date, signed by the
Representative of the CCS Stockholders and CCS to the effect that the conditions
set forth in Sections 6.2(a) and 6.2(b) have been satisfied.
(f) Opinion of Counsel for CCS. The TC Stockholders shall have
received an opinion, dated the Closing Date, from Proskauer Rose LLP, counsel to
CCS, in form and substance reasonably acceptable to the TC Stockholders.
(g) No Material Adverse Change. No event, loss, damage, condition or
state of facts of any kind shall exist which has had a CCS Material Adverse
Effect or which may reasonably be expected to have a CCS Material Adverse
Effect.
(h) HSR Act. The required waiting period under the HSR Act shall
have expired or been earlier terminated.
(i) Stockholders Agreement. The Stockholders Agreement in the form
annexed hereto as Exhibit 6.1(i) shall have been executed and delivered by the
parties thereto.
(j) Registration Rights Agreement. The Registration Rights Agreement
in the form annexed hereto as Exhibit 6.1(j) shall have been executed and
delivered by the parties thereto.
(k) Amendment of Certificate of Incorporation and By Laws. The
Certificate of Incorporation of CCS and the By-laws of CCS shall have been
amended as set forth in Exhibit 6.2(k)(1), and Exhibit 6.2(k)(2), respectively.
(l) Stock Option Plans. CCS shall have adopted the stock option
plans having terms substantially the same as those set forth on the summary
attached hereto as Exhibit 6.2(l), which plans shall be in forms reasonably
acceptable to TravCorps.
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(m) Tax Opinion. TravCorps shall have received an opinion of Xxxxx
Xxxx & Xxxxxxxx in form and substance reasonably satisfactory to TravCorps, on
the basis of certain facts, representations and assumptions set forth in such
opinion, dated the Effective Time, to the effect that the Merger will be treated
for federal income tax purposes as a reorganization qualifying under the
provisions of Section 368(a) of the Code, and that each of CCS, Merger Sub and
TravCorps will be a party to the reorganization within the meaning of Section
368(b) of the Code. In rendering such opinion, such counsel shall be entitled to
rely upon certain representations of officers of CCS and TravCorps.
(n) Closing Working Capital. The Closing Working Capital Amount (as
defined in the Asset Purchase Agreement dated June 24, 1999 among X.X. Xxxxx &
Co.-Conn., CCS and the other parties thereto (the "CCS APA")) shall have been
finally determined and the Cash Purchase Price (as defined in the CCS APA) shall
not have been increased pursuant to Section 4.5 of the CCS APA by more than
$1,600,000.
(o) Ashley One Issues. The investments by certain of the parties to
the Agreement in Ashley One, Inc. shall have been consummated on substantially
the terms set forth on Exhibit 6.2(o), with definitive documentation reasonably
satisfactory to the TC Stockholders.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
7.1 Survival of Representations and Warranties. None of the
representations and warranties contained in Articles III and IV shall survive
the Closing
7.2 Indemnification by CCS. From and after the Closing, CCS shall
indemnify and hold (i) the CCS Stockholders, their Affiliates and their
respective directors, officers, employees, stockholders, members, partners,
agents, successors and assigns and (ii) the TC Stockholders, their Affiliates
and their respective directors, officers, employees, stockholders, members,
partners, agents, successors and assigns harmless from and defend each
70
of them from and against any and all demands, claims, actions, liabilities,
losses, costs, damages or expenses whatsoever (including, without limitation,
reasonable attorneys' fees and expenses) asserted against, imposed upon or
incurred by them resulting from or arising out of any breach following the
Closing of any covenant or obligation of CCS contained herein and to be
performed after the Closing.
ARTICLE VIII
MISCELLANEOUS
8.1 Termination. This Agreement may be terminated, and the
transactions contemplated herein may be abandoned:
(a) any time before the Closing, by mutual written agreement of CCS
and TravCorps;
(b) any time before the Closing, by CCS and the CCS Stockholders, on
the one hand, or TravCorps and the TC Stockholders on the other hand, (i) in the
event of a material breach of any covenant contained herein by any
non-terminating party if such non-terminating party fails to cure such breach
within five Business Days following notification thereof by the terminating
party or (ii) upon notification to the non-terminating party by the terminating
party that the satisfaction of any condition to the terminating party's
obligations under this Agreement becomes impossible or impracticable with the
use of commercially reasonable efforts if the failure of such condition to be
satisfied is not caused by a breach hereof by the terminating party; or
(c) any time after January 30, 2000 by CCS and the CCS Stockholders,
on the one hand, or TravCorps and the TC Stockholders, on the other hand, upon
notification to the non-terminating party by the terminating party if the
Closing shall not have occurred on or before such date and such failure to
consummate is not caused by a breach of this Agreement by the terminating party.
71
8.2 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 8.1, this Agreement will forthwith become null and void, and
there will be no liability or obligation on the part of any party (or any of
their respective officers, directors, employees, partners, agents or other
representatives or Affiliates), except as provided in the next succeeding
sentence and except that the provisions with respect to confidentiality in
Section 5.11, expenses in Section 8.3 and public announcements in Section 8.15
will continue to apply following any such termination. Notwithstanding any other
provision in this Agreement to the contrary, upon termination of this Agreement
pursuant to Section 8.1(b) or (c), the TC Stockholders will remain liable to CCS
and the CCS Stockholders for any willful and deliberate breach of this Agreement
by the TC Stockholders existing at the time of such termination, TravCorps will
remain liable to CCS and the CCS Stockholders for any willful and deliberate
breach of this Agreement by TravCorps and its Subsidiaries existing at the time
of such termination, CCS will remain liable to TravCorps and the TC Stockholders
for any willful and deliberate breach of this Agreement by CCS existing at the
time of such termination, and the CCS Stockholders will remain liable to
TravCorps and the TC Stockholders for any willful and deliberate breach of this
Agreement by the CCS Stockholders existing at the time of such termination and
may seek such remedies, including damages against the other with respect to any
such breach as are provided in this Agreement or as are otherwise available at
law or in equity.
8.3 Expenses. Each party hereto shall pay its own expenses incurred
in connection with this Agreement and the transactions contemplated hereby;
provided, however, that if the Merger is consummated, CCS will pay the
reasonable costs and expenses incurred by each of the parties.
8.4 Amendment. This Agreement may not be modified, amended, altered
or supplemented except by a written agreement executed by each party.
72
8.5 Entire Agreement. This Agreement, together with the Exhibits and
Schedules hereto, the Operative Documents and the instruments and other
documents delivered pursuant to this Agreement, contain the entire agreement of
the parties relating to the subject matter hereof and thereof, and supersede all
prior agreements, understandings, representations, warranties and covenants of
any kind between the parties with respect to the matters hereof and thereof.
8.6 Waivers. Waiver by any party of any breach of or failure to
comply with any provision of this Agreement by the other parties shall not be
construed as, or constitute, a continuing waiver of such provision, or a waiver
of any other breach of, or failure to comply with, any other provision of this
Agreement. No waiver of any such breach or failure or of any term or condition
of this Agreement shall be effective unless in a written notice signed by the
waiving party and delivered, in the manner required for notices generally, to
each affected party.
8.7 Notices. All notices and other communications hereunder shall be
validly given or made if in writing, (i) when delivered personally (by courier
service or otherwise), (ii) when sent by telecopy, or (iii) when actually
received if mailed by first-class certified or registered United States mail or
recognized overnight courier service, postage-prepaid and return receipt
requested, and all legal process with regard hereto shall be validly served when
served in accordance with applicable law, in each case to the address of the
party to receive such notice or other communication set forth below, or at such
other address as any party hereto may from time to time advise the other parties
pursuant to this Subsection:
73
If to the TC Stockholders:
Xxxxxx Xxxxxxx Xxxx Xxxxxx Capital
Partners IV
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx,
Managing Director
If to TravCorps:
TravCorps Corporation
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxxxx,
President
in either case with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
If to the CCS Stockholders:
Charterhouse Equity Partners III, L.P.,
as Representative
c/o Charterhouse Group International, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx,
Managing Director
74
If to CCS:
Cross Country Staffing, Inc.
0000 Xxxx xx Xxxxxxxx Xxxx., X.X.
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx,
President
in either case with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
8.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
8.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York (without regard to
its conflicts of law rules).
8.10 Binding Effect; Third Party Beneficiaries; Assignment. This
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective legal representatives, successors and
permitted assigns. Except as set forth in Section 5.7, nothing expressed or
referred to in this Agreement is intended or shall by construed to give any
Person other than the parties to this Agreement, or their respective legal
representatives, successors and permitted assigns, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein. Neither party may assign this
75
Agreement nor any of its rights hereunder, other than any right to payment of a
liquidated sum, nor delegate any of its obligations hereunder, without the prior
written consent of the other.
8.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction, and any such provision, to the extent invalid or
unenforceable, shall be replaced by a valid and enforceable provision which
comes closest to the intention of the parties underlying such invalid or
unenforceable provision.
8.12 Headings. The headings contained in this Agreement are for
reference purposes only and shall not modify define, limit, expand or otherwise
affect in any way the meaning or interpretation of this Agreement.
8.13 No Agency. Except as provided in Section 8.14 hereof, no party
hereto shall be deemed hereunder to be an agent of, or partner or joint venturer
with, any other party hereto.
8.14 Representative. Each TC Stockholder (other than any such
Stockholder that is an Affiliate of Xxxxxx Xxxxxxx Xxxx Xxxxxx Capital Partners
IV, L.P.) does hereby irrevocably appoint Xxxxx Xxxxxxx and each CCS Stockholder
does hereby irrevocably appoint Charterhouse Equity Partners III, L.P. (each
herein called a "Representative") as his true and lawful attorney-in-fact and
agent, with full power of substitution or resubstitution, to act solely and
exclusively on behalf of such TC Stockholder or CCS Stockholder, as the case may
be, with respect to any matters relating to this Agreement and any document,
certificate or other agreement to be executed and delivered by or on behalf of
such TC Stockholder or CCS Stockholder pursuant hereto, with the full power,
without the consent of such party, to exercise all of the powers which any such
TC Stockholder or CCS Stockholder could exercise under the provisions of this
Agreement or any document, certificate or other agreement to be executed and
76
delivered by or on behalf of any such TC Stockholder or CCS Stockholder pursuant
hereto, including, without limitation, to (i) accept and give notices hereunder,
(ii) consent to any modification or amendment hereof or (iii) give any waiver or
consent hereunder. Each Representative does hereby accept such appointment. CCS
and the CCS Stockholders, on the one hand, and TravCorps and such TC
Stockholders, on the other hand, shall be entitled to rely exclusively upon such
notices, waivers, consents, amendments, modifications and other acts of the
Representative as being the binding acts of such TC Stockholders or the CCS
Stockholders.
8.15 Public Announcements. None of the parties hereto will issue or
cause the publication of any press release or otherwise make any public
statement with respect to the transactions contemplated hereby without the prior
written consent of the parties hereto, provided, that any party hereto may (i)
make a public announcement to the extent required by law, judicial process or
the rules, regulations or interpretations of the Securities and Exchange
Commission or any national securities exchange or (ii) communicate with its
investors in the ordinary course of business with respect to the performance of
its investment in CCS.
8.16 Knowledge Qualifications; Accounting Terms. (a) Whenever any
party makes any representation, warranty or other statement to such party's
knowledge, such party will be deemed to have made reasonable inquiry into the
subject matter of such representation, warranty or other statement, including
reasonable inquiry of each executive officer and director of such party.
(b) Any accounting terms used in this Agreement shall, unless
otherwise defined in this Agreement, have the meaning ascribed thereto by GAAP.
8.17 Interpretation. In this Agreement, unless a contrary intention
appears, (i) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision, and to any
77
certificates delivered pursuant hereto; and (ii) reference to any Article or
Section means such Article or Section hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
TravCorps Corporation
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
Cross Country Staffing, Inc.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name:
Title:
CCTC Acquisition, Inc.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name:
Title:
TC Stockholders:
XXXXXX XXXXXXX XXXX XXXXXX
CAPITAL PARTNERS IV, L.P.
By: MSDW Capital Partners IV, LLC,
as general partner
78
By: MSDW Capital Partners IV, Inc.,
as member
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
Address: 1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
MSDW IV 892 INVESTORS, L.P.
By: MSDW Capital Partners IV, LLC,
as general partner
By: MSDW Capital Partners IV, Inc.,
as member
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
Address: 1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
XXXXXX XXXXXXX XXXX XXXXXX
CAPITAL INVESTORS IV, L.P.
By: MSDW Capital Partners IV, LLC,
as general partner
79
By: MSDW Capital Partners IV, Inc.,
as member
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name:
Title:
Address: 1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
XXXXXX XXXXXXX VENTURE PARTNERS III, L.P.
By: Xxxxxx Xxxxxxx Venture Partners III, L.L.C.,
its General Partner
By: Xxxxxx Xxxxxxx Venture Capital III, Inc.,
its Institutional Managing Member
By: Xxxxx Xxxxxx
---------------------------------------
Name:
Title:
Address: 1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
XXXXXX XXXXXXX VENTURE INVESTORS III, L.P.
By: Xxxxxx Xxxxxxx Venture Investors III, L.L.C.,
its General Partner
80
By: Xxxxxx Xxxxxxx Venture Capital III, Inc.,
its Institutional Managing Member
By: Xxxxx Xxxxxx
---------------------------------------
Name:
Title:
Address: 1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
THE XXXXXX XXXXXXX VENTURE PARTNERS
ENTREPRENEUR FUND, L.P.
By: Xxxxxx Xxxxxxx Venture Partners III, L.L.C.,
its General Partner
By: Xxxxxx Xxxxxxx Venture Capital III, Inc.,
its Institutional Managing Member
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Name:
Title:
Address: 1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
/s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------
Xxxxx X. Xxxxx
81
/s/ Xxxxx X. Xxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Mount
---------------------------------------
Xxxxx X. Mount
/s/ Xxxxxxx X. Xxxx
---------------------------------------
Xxxxxxx X. Xxxx
/s/ Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxx
---------------------------------------
Xxxxxxx Xxxxxx
CCS Stockholders:
CHARTERHOUSE EQUITY PARTNERS III, L.P.
By: CHUSA Equity Investors III, L.P.,
general partner
By: Charterhouse Equity III, Inc.,
general partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx
Managing Director
82
CHEF NOMINEES LIMITED
By: Charterhouse Group International, Inc.,
Attorney-in-Fact
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx
Managing Director
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxx Xxxxxx
---------------------------------------
Xxxx Xxxxxx
83
