Exhibit 99.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), dated as of June 10,
2002, is by and between IM Acquisition Inc., a Delaware corporation ("Parent"),
and Technisource, Inc., a Florida corporation (the "Company").
WITNESSETH
WHEREAS, Parent, IM Merger Corp., a Florida corporation and a
wholly-owned subsidiary of Parent ("Merger Subsidiary"), and the Company,
concurrently with the execution and delivery of this Agreement, will enter into
an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), providing for, among other things, the acquisition of the Company
by Parent by means of a cash tender offer for all of the outstanding shares of
Company Common Stock (as defined in Section 1.1) and for the subsequent merger
of Merger Subsidiary with and into the Company (the "Merger") upon the terms and
subject to the conditions set forth in the Merger Agreement; and
WHEREAS, as a condition to the willingness of Parent and Merger
Subsidiary to enter into the Merger Agreement, Parent and Merger Subsidiary have
required that the Company agree, and in order to induce Parent and Merger
Subsidiary to enter into the Merger Agreement the Company has agreed, to grant
Parent the Option (as hereinafter defined) upon the terms and subject to the
conditions of this Agreement.
NOW THEREFORE, in consideration of the execution and delivery by Parent
and Merger Subsidiary of the Merger Agreement and the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, Parent and the Company hereby agree as
follows:
ARTICLE I
THE OPTION
Section 1.1 GRANT OF OPTION. The Company hereby grants to Parent an
irrevocable option (the "Option") to purchase up to such number of newly-issued
shares (the "Shares") of Common Stock, par value $.01 per share, of the Company
(the "Company Common Stock") as is equal to 19.9% of the shares of Company
Common Stock outstanding on the date of exercise of the Option at a purchase
price per share of $4.00 (the "Exercise Price"), in the manner set forth in
Sections 1.2 and 1.3 of this Agreement. The number of Shares that may be
received upon the exercise of the Option and the Exercise Price are subject to
adjustment as herein set forth. This Agreement shall terminate, and the Option
hereby granted shall expire, on the earlier of (i) the Effective Time (as
defined in the Merger Agreement) and (ii) the termination of the Merger
Agreement.
Section 1.2 EXERCISE OF OPTION. At any time or from time to time prior
to the termination of the Option in accordance with the terms of this Agreement,
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Parent (or its designee) may exercise the Option, in whole or in part, if and
only if on or before the date of such exercise, Merger Subsidiary has accepted
for payment pursuant to the Offer (as defined in the Merger Agreement) shares of
Company Common Stock constituting more than 60% but less than 80% of the shares
of Company Common Stock then outstanding on a fully diluted basis and the
exercise of the Option would result in Merger Subsidiary and its affiliates
holding shares of Company Common Stock representing 80% or more of the shares of
Company Common Stock then outstanding on a fully diluted basis.
In the event that Parent wishes to exercise all or any part of the
Option, Parent shall give written notice (the "Option Notice," with the date of
the Option Notice being hereinafter called the "Notice Date") to the Company,
specifying the number of Shares it will purchase and a place and date (not
earlier than three nor later than 20 business days from the Notice Date) for
closing such purchase (a "Closing"). Parent's obligation to purchase Shares, and
the Company's obligation to issue Shares, upon any exercise of the option is
subject (at its election) to the conditions that (i) no preliminary or permanent
injunction or other order against the purchase, issuance or delivery of the
Shares issued by any Federal, state or foreign court of competent jurisdiction
shall be in effect (and no action or proceeding shall have been commenced or
threatened for purposes of obtaining such an injunction or order) and (ii) any
applicable waiting period under the HSR Act (as defined in the Merger Agreement)
and any foreign antitrust or competition laws and regulations shall have expired
and (iii) there shall have been no material breach of the representations,
warranties, covenants or agreements of the other party contained in this
Agreement or the Merger Agreement; provided, however, that any failure by Parent
to purchase Shares, or any failure by the Company to issue Shares, upon exercise
of the Option at any Closing as a result of the nonsatisfaction of any of such
conditions shall not affect or prejudice Parent's right to purchase such Shares
upon the subsequent satisfaction of such conditions.
Section 1.3 PURCHASE OF SHARES. At any Closing, (i) the Company will
deliver to Parent the certificate or certificates representing the number of
Shares being purchased in proper form for transfer upon exercise of the Option
in the denominations designated by Parent in the Option Notice, and, if the
Option has been exercised in part, a new Option evidencing the rights of Parent
to purchase the balance of the Shares subject thereto, and (ii) Parent shall pay
the aggregate purchase price for the Shares to be purchased by wire transfer to
a bank account designated in writing by the Company in an amount equal to the
Exercise Price times the number of Shares to be purchased.
Section 1.4 ADJUSTMENTS UPON SHARE ISSUANCES, CHANGES IN
CAPITALIZATION, ETC. (a) In the event of any change in Company Common Stock or
in the number of outstanding shares of Company Common Stock by reason of a stock
dividend, split-up, recapitalization, combination, exchange of shares or similar
transaction or any other change in the corporate or capital structure of the
Company (including, without limitation, the declaration or payment of a dividend
of cash, securities or other property), the type and number of the Shares to be
issued by the Company upon exercise of the Option shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction, so that Parent shall receive upon exercise of the Option the
number and class of shares or other securities or property that Parent would
have received with respect to the Company Common Stock if the Option had been
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exercised immediately prior to such event or the record date therefor, as
applicable, and such Company Common Stock had elected to the fullest extent it
would have been permitted to elect, to receive such securities, cash or other
property.
(b) In the event that the Company shall enter into an agreement (i) to
consolidate with or merge into any person, other than Parent or one of its
subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other than Parent or one of
its subsidiaries, to merge into the Company and the Company shall be the
continuing or surviving corporation, but, in connection with such merger, the
then outstanding shares of Company Common Stock shall be changed into or
exchanged for stock or other securities of the Company or any other person or
cash or any other property, or the then outstanding shares of Company Common
Stock shall after such merger represent less than 50% of the outstanding shares
and share equivalents of the surviving corporation or (iii) to sell or otherwise
transfer all or substantially all of its assets to any person, other than Parent
or one of its subsidiaries, then, and in each such case, proper provision shall
be made in the agreements governing such transaction so that Parent shall
receive upon exercise of the Option the number and class of shares or other
securities or property that Parent would have received with respect to Company
Common Stock if the Option had been exercised immediately prior to such
transaction or the record date therefor, as applicable, and such Company Common
Stock had elected to the fullest extent it would have been permitted to elect,
to receive such securities, cash or other property.
(c) The rights of Parent under this Section 1.4 shall be in addition
to, and shall in no way limit, its rights against the Company for any breach of
the Merger Agreement.
(d) The provisions of this Agreement shall apply with appropriate
adjustments to any securities for which the Option becomes exercisable pursuant
to this Section 1.4.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent as follows:
Section 2.1 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida. The Company has all requisite power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company, and no other corporate proceeding on the part
of the Company is necessary to authorize this Agreement or for the Company to
consummate such transactions. This Agreement has been duly and validly executed
and delivered by the Company and, assuming this Agreement constitutes the legal,
valid and binding obligation of Parent, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws, now or hereafter in effect, relating to or affecting creditors'
rights and remedies and to general principles of equity.
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Section 2.2 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The execution
and delivery of this Agreement by the Company do not, and the consummation of
the transactions contemplated by and compliance with the provisions of this
Agreement will not, (i) conflict with or violate the Certificate of
Incorporation or By-laws of the Company, in each case as amended to the date of
this Agreement, (ii) conflict with or violate any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or by
which the Company is bound or affected, (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance of any kind on any of the Shares pursuant to, any agreement,
contract, indenture, notice or instrument to which the Company is a party or by
which the Company is bound or affected, or (iv) except for applicable
requirements, if any, of the HSR Act, the Exchange Act and the Securities Act of
1933, as amended (the "Securities Act"), require any filing by the Company with,
or any permit, authorization, consent or approval of, any governmental or
regulatory authority, domestic or foreign.
Section 2.3 OPTION SHARES. The Company has taken all necessary
corporate action to authorize and reserve for issuance such number of Shares as
may be issuable upon exercise of the Option, and the Shares, when issued and
delivered by the Company to Parent upon exercise of the Option, will be duly
authorized, validly issued, fully paid and nonassessable shares of Company
Common Stock, and will be free and clear of any preemptive rights, security
interests, liens, claims, pledges, charges or encumbrances of any kind.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Company as follows:
Section 3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Parent has all requisite power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and the consummation by Parent of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Parent, and no other corporate proceeding on the part of Parent is necessary to
authorize this Agreement or for Parent to consummate such transactions. This
Agreement has been duly executed and delivered by Parent and, assuming this
Agreement constitutes the legal, valid and binding obligation of the Company,
constitutes a legal, valid and binding obligation of Parent, enforceable against
Parent in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in effect,
relating to or affecting creditors' rights and remedies and to general
principles of equity.
Section 3.2 NO CONFLICT, REQUIRED FILING AND CONSENTS. The execution
and delivery of this Agreement by Parent do not, and the consummation of the
transactions contemplated by and compliance with the provisions of this
Agreement will not, (i) conflict with or violate the Certificate of
Incorporation or By-laws of Parent, in each case as amended to the date of this
Agreement, (ii) conflict with or violate any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Parent or by which Parent is
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bound or affected, (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, contract, indenture, note or instrument to which
Parent is a party or by which it is bound or affected or (iv) except for
applicable requirements, if any, of the HSR Act, the Exchange Act, and the
Securities Act, require any filing by Parent with, or any permit, authorization,
consent or approval of, any governmental or regulatory authority, domestic or
foreign, except in the case of each of the foregoing clauses (i) through (iv)
for any such conflicts, violations, breaches, defaults, failures to file or
obtain the consent or approval of, or other occurrences that would not cause or
create a material risk of non-performance or delayed performance by Parent of
its obligations under this Agreement.
Section 3.3 INVESTMENT INTENT. The purchase of Shares pursuant to this
Agreement is for the account of Parent for the purpose of investment and not
with a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act and the rules and regulations promulgated
thereunder.
ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.1 TRANSFER OF SHARES; RESTRICTIVE LEGEND. Parent agrees to
the placement on the certificate(s) representing the Shares of the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR
IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
It is understood and agreed that the reference to restrictions arising
under the Securities Act in the above legend will be removed by delivery of
substitute certificate(s) without such reference if such Shares have been sold
in compliance with the registration and prospectus delivery requirements of the
Securities Act or Parent has delivered to the Company a copy of a letter from
the staff of the Securities and Exchange Commission, or an opinion of counsel in
form and substance reasonably satisfactory to the Company and its counsel, to
the effect that such legend is not required for purposes of the Securities Act.
Section 4.2 REASONABLE BEST EFFORTS. Subject to the terms and
conditions of this Agreement, Parent and the Company shall each use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement. Each party shall promptly consult with the other
and provide any necessary information and material with respect to all filings
made by such party with any governmental or regulatory authority in connection
with this Agreement or the transactions contemplated hereby.
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Section 4.3 FURTHER ASSURANCES. The Company shall perform such further
acts and execute such further documents and instruments as may reasonably be
required to vest in Parent the power to carry out the provisions of this
Agreement. If Parent shall exercise the Option, or any portion thereof, in
accordance with the terms of this Agreement, the Company shall, without
additional consideration, execute and deliver all such further documents and
instruments and take all such further action as Parent may reasonably request
for the purpose of effectively carrying out the transactions contemplated by
this Agreement.
Section 4.4 SURVIVAL. All of the representations, warranties and
covenants contained herein shall survive a Closing and shall be deemed to have
been made as of the date hereof and as of the date of each Closing.
ARTICLE V
MISCELLANEOUS
Section 5.1 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto and specifically referencing
this Agreement.
Section 5.2 NOTICES. All notices, requests and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) or by
telecopy (with copies by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent, to
IM Acquisition, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax: 000-000-0000
with a copy to (which shall not constitute notice):
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx
Fax: 000-000-0000
(b) if to the Company, to
Technisource, Inc.
Gulf Atlantic Building
Suite 200
1901 W. Cypress Creek Road
Ft. Xxxxxxxxxx, Xxxxxxx 00000
Attention: C. Xxxxxxx Xxxxx
Fax: 000-000-0000
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with a copy to (which shall not constitute notice):
Holland & Knight LLP
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Fax: 000-000-0000
Section 5.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 5.4 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement and the Merger Agreement (including the documents and the instruments
referred to herein and therein): (a) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, and (b) are not intended
to confer upon any person other than the parties hereto any rights or remedies
hereunder.
Section 5.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflicts of law thereof.
Section 5.6 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties; any instrument purporting to make such
assignment shall be void. Notwithstanding the foregoing, the rights and
obligations of Parent hereunder may, upon written notice to the Company prior to
or promptly following such action, be assigned by Parent to any of its corporate
affiliates so long as such party remains an affiliate of Parent, but no such
transfer shall relieve Parent of its obligations hereunder if such transferee
does not perform such obligations. Subject to the first sentence of this Section
5.6, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
Section 5.7 ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York or in New York state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
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addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of New York or
any New York state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than a Federal or state court sitting in the
State of New York.
Section 5.8 SEVERABILITY. Any term or provision of this Agreement that
is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction or other authority declares that any term or provision
hereof is invalid, void or unenforceable, the parties agree that the court
making such determination shall have the power to reduce the scope, duration,
area or applicability of the term or provision, to delete specific words or
phrases, or to replace any invalid, void or unenforceable term or provision with
a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.
[Signature pages follow]
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IN WITNESS WHEREOF, each of Parent and the Company have caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
By:___________________________
Name:
Title
By:___________________________
Name:
Title
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