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AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 19, 2004
AMONG
VENTURI PARTNERS, INC.
VTP, INC.
VENTURI TECHNOLOGY PARTNERS, LLC
COMSYS INFORMATION TECHNOLOGY SERVICES, INC.
COMSYS HOLDING, INC.
AND
THE STOCKHOLDERS OF
COMSYS HOLDING, INC. SIGNATORY HERETO
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TABLE OF CONTENTS
PAGE
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INTRODUCTION .................................................................................................... 1
ARTICLE 1 THE MERGER............................................................................................. 1
SECTION 1.1. The Merger................................................................................ 1
SECTION 1.2. Effects of the Merger..................................................................... 2
SECTION 1.3. Closing................................................................................... 2
SECTION 1.4. Consummation of the Merger................................................................ 2
SECTION 1.5. Organizational Documents; Directors and Officers.......................................... 2
ARTICLE 2 EFFECT OF THE MERGER ON THE EQUITY OF THE CONSTITUENT ENTITIES; EXCHANGE OF CERTIFICATES............... 2
SECTION 2.1. Conversion of Merger Sub Capital Stock.................................................... 2
SECTION 2.2. Conversion of Holding Capital Stock....................................................... 3
SECTION 2.3. Exchange of Certificates.................................................................. 4
SECTION 2.4. Adjustments to the Exchange Ratios........................................................ 5
SECTION 2.5. Taking of Necessary Action; Further Action................................................ 7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY, MERGER SUB AND PARTNERS................................. 7
SECTION 3.1. Organization.............................................................................. 7
SECTION 3.2. Capitalization............................................................................ 8
SECTION 3.3. Authorization; No Conflict................................................................ 9
SECTION 3.4. Subsidiaries.............................................................................. 11
SECTION 3.5. SEC Reports and Financial Statements...................................................... 11
SECTION 3.6. Absence of Material Adverse Changes, etc.................................................. 13
SECTION 3.7. Litigation................................................................................ 13
SECTION 3.8. Information Supplied...................................................................... 14
SECTION 3.9. Broker's or Finder's Fees................................................................. 14
SECTION 3.10. Employee Plans............................................................................ 14
SECTION 3.11. Board Recommendation; Company Action; Requisite Vote of the Company's Stockholders........ 17
SECTION 3.12. Taxes .................................................................................... 19
SECTION 3.13. Environmental Matters..................................................................... 22
SECTION 3.14. Compliance with Laws...................................................................... 22
SECTION 3.15. Employment Matters........................................................................ 23
SECTION 3.16. Foreign National Employees................................................................ 24
SECTION 3.17. Investment Company........................................................................ 24
SECTION 3.18. Property.................................................................................. 24
SECTION 3.19. Intellectual Property..................................................................... 25
SECTION 3.20. Insurance................................................................................. 25
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SECTION 3.21. Certain Contracts and Arrangements........................................................ 26
SECTION 3.22. Company Financing Arrangements............................................................ 27
SECTION 3.23. Company Rights Plan; Takeover Statutes.................................................... 27
SECTION 3.24. Activities of Merger Sub.................................................................. 28
SECTION 3.25. Agreement Regarding Staffing Disposition.................................................. 28
SECTION 3.26. Books and Financial Records............................................................... 28
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF HOLDING AND COMSYS................................................... 29
SECTION 4.1. Organization.............................................................................. 29
SECTION 4.2. Capitalization............................................................................ 29
SECTION 4.3. Authorization; No Conflict................................................................ 30
SECTION 4.4. Subsidiaries.............................................................................. 32
SECTION 4.5. Financial Statements...................................................................... 33
SECTION 4.6. Absence of Material Adverse Changes, etc.................................................. 34
SECTION 4.7. Litigation................................................................................ 34
SECTION 4.8. Information Supplied...................................................................... 34
SECTION 4.9. Broker's or Finder's Fees................................................................. 34
SECTION 4.10. Employee Plans............................................................................ 34
SECTION 4.11. Taxes..................................................................................... 37
SECTION 4.12. Environmental Matters..................................................................... 40
SECTION 4.13. Compliance with Laws...................................................................... 40
SECTION 4.14. Employment Matters........................................................................ 40
SECTION 4.15. Foreign National Employees................................................................ 42
SECTION 4.16. Investment Company........................................................................ 42
SECTION 4.17. Properties................................................................................ 42
SECTION 4.18. Intellectual Property..................................................................... 43
SECTION 4.19. Insurance................................................................................. 43
SECTION 4.20. Certain Contracts and Arrangements........................................................ 43
SECTION 4.21. Comsys Financing Arrangements............................................................. 44
SECTION 4.22. Books and Financial Records............................................................... 44
ARTICLE 4A REPRESENTATIONS AND WARRANTIES OF THE HOLDING STOCKHOLDERS............................................ 45
SECTION 4A1. Status; Power and Authority............................................................... 45
SECTION 4A2. Enforceability............................................................................ 45
SECTION 4A3. Access to Information..................................................................... 45
SECTION 4A4. Knowledgeable and Sophisticated Investor.................................................. 45
SECTION 4A5. Accredited Investor....................................................................... 45
SECTION 4A6. No Other Representations.................................................................. 46
SECTION 4A7. Investment Intent......................................................................... 46
SECTION 4A8. Transfer Restrictions..................................................................... 46
SECTION 4A9. No General Solicitation................................................................... 46
SECTION 4A10. No Brokers................................................................................ 46
SECTION 4A11. Legend.................................................................................... 46
SECTION 4A12. No Recommendation......................................................................... 47
SECTION 4A13. Other Activities.......................................................................... 47
SECTION 4A14. Reliance.................................................................................. 47
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ARTICLE 5 CONDUCT OF BUSINESS PENDING THE MERGER................................................................. 47
SECTION 5.1. Conduct of Business by the Company Pending the Merger..................................... 47
SECTION 5.2. Conduct of Business by Holding and Comsys Pending the Merger.............................. 51
ARTICLE 6 ADDITIONAL AGREEMENTS.................................................................................. 54
SECTION 6.1. Preparation of Proxy Statement............................................................ 54
SECTION 6.2. Blue Sky Laws............................................................................. 56
SECTION 6.3. Consents and Approvals.................................................................... 56
SECTION 6.4. Public Statements......................................................................... 57
SECTION 6.5. Registration Rights....................................................................... 58
SECTION 6.6. Further Assurances........................................................................ 58
SECTION 6.7. Tax Treatment............................................................................. 58
SECTION 6.8. Notification of Certain Matters........................................................... 59
SECTION 6.9. Access to Information; Confidentiality.................................................... 59
SECTION 6.10. No Solicitation........................................................................... 60
SECTION 6.11. Company Charter; Bylaws................................................................... 62
SECTION 6.12. Allocation of Financing Fees.............................................................. 62
SECTION 6.13. Staffing Disposition...................................................................... 63
SECTION 6.14. Indemnification and Insurance............................................................. 64
SECTION 6.15. Company Board of Directors; Officers...................................................... 66
SECTION 6.16. Wachovia Option Grant..................................................................... 67
SECTION 6.17. Section 16 Matters........................................................................ 67
SECTION 6.18. NASDAQ Listing............................................................................ 67
SECTION 6.19. Redemption of Holding Preferred Stock..................................................... 68
SECTION 6.20. Cancellation of Warrants.................................................................. 68
SECTION 6.21. Employee Benefit Matters.................................................................. 68
SECTION 6.22. Subscription Agreements................................................................... 68
ARTICLE 7 CONDITIONS............................................................................................. 69
SECTION 7.1. Conditions to Each Party's Obligation To Effect the Merger................................ 69
SECTION 7.2. Conditions to Obligations of Holding and Comsys........................................... 70
SECTION 7.3. Conditions to Obligation of the Company and Merger Sub.................................... 71
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER...................................................................... 72
SECTION 8.1. Termination............................................................................... 72
SECTION 8.2. Effect of Termination..................................................................... 74
SECTION 8.3. Fees and Expenses......................................................................... 75
SECTION 8.4. Amendment................................................................................. 76
SECTION 8.5. Waiver.................................................................................... 76
ARTICLE 9 GENERAL PROVISIONS..................................................................................... 76
SECTION 9.1. Notices................................................................................... 76
SECTION 9.2. Non-Survival of Representations and Warranties............................................ 77
SECTION 9.3. Knowledge Qualifiers...................................................................... 78
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SECTION 9.4. Construction.............................................................................. 78
SECTION 9.5. Governing Law; Jurisdiction............................................................... 78
SECTION 9.6. Counterparts; Facsimile Transmission of Signatures........................................ 79
SECTION 9.7. Assignment; Binding Effect; Third Party Beneficiaries..................................... 79
SECTION 9.8. Severability.............................................................................. 80
SECTION 9.9. Entire Agreement.......................................................................... 80
SECTION 9.10. Specific Performance; Remedies............................................................ 80
SECTION 9.11. Incorporation of Exhibits and Disclosure Letters.......................................... 80
EXHIBITS SECTION
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Exhibit A Form of Amended and Restated Certificate of Incorporation of Holding .............................. 1.5
Exhibit B Form of Amended and Restated Bylaws of Holding..................................................... 1.5
Exhibit C Holding Stockholders' Escrowed Shares ............................................................. 2.4
Exhibit D Form of Escrow Agreement .......................................................................... 2.4
Exhibit E Form of Accredited Investor Questionnaire ......................................................... 4A.5
Exhibit F Form of Registration Rights Agreement.............................................................. 6.5(a)
Exhibit G Form of Amended and Restated Registration Rights Agreement......................................... 6.5(a)
Exhibit H Holding Tax Certificate............................................................................ 6.7
Exhibit I Company Tax Certificate............................................................................ 6.7
Exhibit J Joint Press Release................................................................................ 6.10(a)
Exhibit K Form of Amended and Restated Certificate of Incorporation of the Company........................... 6.11
Exhibit L Form of Amended and Restated Bylaws of the Company................................................. 6.11
Exhibit M Resigning Officers of the Company.................................................................. 6.15
Exhibit N New Officers of the Company........................................................................ 6.15
Exhibit O Voting Agreement................................................................................... 7.1(i)
Exhibit P Certain Employees.................................................................................. 7.2(d)
Exhibit Q Form of Separation and Release Agreement........................................................... 7.2(d)
Exhibit R Form of Severance and Retention Agreement.......................................................... 7.2(e)
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DEFINED TERMS
TERM LOCATION
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2003 10-K.................................................................. Section 3.1
401(K) Matter.............................................................. Section 3.25
Agreement.................................................................. Preamble
Amended and Restated Registration Rights Agreement......................... Section 6.5(a)
Amended Charter............................................................ Section 6.11
Buyer...................................................................... Section 3.25
Buyer Agreement............................................................ Section 3.25
Certificate of Merger...................................................... Section 1.4
Certificates............................................................... Section 2.3(a)
Class A-3 Exchange Ratio................................................... Section 2.2(b)
Class A-3 Merger Consideration............................................. Section 2.2(b)
Class B Exchange Ratio..................................................... Section 2.2(c)
Class B Merger Consideration............................................... Section 2.2(c)
Class C Exchange Ratio..................................................... Section 2.2(d)
Class C Merger Consideration............................................... Section 2.2(d)
Class D Exchange Ratio..................................................... Section 2.2(e)
Class D Merger Consideration............................................... Section 2.2(e)
Closing.................................................................... Section 1.3
Closing Date............................................................... Section 1.3
COBRA...................................................................... Section 3.10(e)
Code....................................................................... Introduction
Commitment Letter.......................................................... Section 4.21
Common Stock Exchange Ratio................................................ Section 2.2(a)
Common Stock Merger Consideration.......................................... Section 2.2(a)
Company.................................................................... Preamble
Company Board Approval..................................................... Section 3.11(a)
Company Bylaws............................................................. Section 3.1
Company Charter............................................................ Section 3.1
Company Common Stock....................................................... Section 2.2(a)
Company Contracts.......................................................... Section 3.21(a)
Company Disclosure Letter.................................................. Article 3 (Introductory Paragraph)
Company Employee........................................................... Section 3.15(a)
Company Employee Benefit Plan.............................................. Section 3.10(a)
Company Employee Pension Benefit Plan...................................... Section 3.10(a)
Company Employee Welfare Benefit Plan...................................... Section 3.10(a)
Company ERISA Affiliates................................................... Section 3.10(a)
Company Financial Advisor.................................................. Section 3.9
Company Financial Statements............................................... Section 3.5(b)
Company Foreign National Employees......................................... Section 3.16
Company Independent Contractors............................................ Section 3.15(a)
Company Insurance Policies................................................. Section 3.20
Company Intellectual Property.............................................. Section 3.19
Company Knowledgeable Officers............................................. Section 9.3
Company Material Adverse Effect............................................ Section 3.3(b)
Company Preferred Stock.................................................... Section 3.2(a)
Company Rights............................................................. Section 3.2(a)
Company Rights Plan........................................................ Section 3.2(a)
Company SEC Reports........................................................ Section 3.5(a)
Company Stockholder Vote................................................... Section 3.11(d)
Company Stockholders Meeting............................................... Section 6.1(d)
Company Subsidiaries....................................................... Section 3.1
Comsys..................................................................... Preamble
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TERM LOCATION
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Comsys Common Stock........................................................ Section 4.2(a)
Comsys Contracts........................................................... Section 4.20(a)
Comsys Disclosure Letter................................................... Article 4 (Introductory Paragraph)
Comsys Employee............................................................ Section 4.14(a)
Comsys Employee Benefit Plan............................................... Section 4.10(a)
Comsys Employee Pension Benefit Plan....................................... Section 4.10(a)
Comsys Employee Welfare Benefit Plan....................................... Section 4.10(a)
Comsys ERISA Affiliates.................................................... Section 4.10(a)
Comsys Foreign National Employees.......................................... Section 4.15
Comsys Independent Contractors............................................. Section 4.14(a)
Comsys Insurance Policies.................................................. Section 4.19
Comsys Intellectual Property............................................... Section 4.18
Comsys Knowledgeable Officers.............................................. Section 9.3
Confidentiality Agreement.................................................. Section 6.9(c)
Constituent Entities....................................................... Section 1.1
Credit Facility............................................................ Section 5.2(b)
DGCL....................................................................... Introduction
D&O Insurance.............................................................. Section 6.14(c)
Effective Date............................................................. Section 1.4
Effective Time............................................................. Section 1.4
Environmental Laws......................................................... Section 3.13
ERISA...................................................................... Section 3.10(o)
Escrow Agreement........................................................... Section 2.4(f)
Escrowed Shares............................................................ Section 2.4(f)
Exchange Act............................................................... Section 3.3(c)
Exchange Ratios............................................................ Section 2.2(e)
Expense Cap................................................................ Section 8.3
Expenses................................................................... Section 8.3
Financing.................................................................. Section 4.21
Form S-8................................................................... Section 6.5(b)
GAAP....................................................................... Section 3.5(b)
Group A Designees.......................................................... Section 6.15(a)
Group B Designees.......................................................... Section 6.15(a)
Holding.................................................................... Preamble
Holding Class A-1 Preferred Stock.......................................... Section 4.2(b)
Holding Class A-2 Preferred Stock.......................................... Section 4.2(b)
Holding Class A-3 Preferred Stock.......................................... Introduction
Holding Class B Preferred Stock............................................ Introduction
Holding Class C Preferred Stock............................................ Introduction
Holding Class D Preferred Stock............................................ Introduction
Holding Class E Preferred Stock............................................ Section 4.2(b)
Holding Common Stock....................................................... Introduction
Holding Financial Statements............................................... Section 4.5(a)
Holding Material Adverse Effect............................................ Section 4.3(d)
Holding Shares............................................................. Section 2.3(a)
Holding Stockholder Consent................................................ Section 4.3(c)
Holding Stockholders....................................................... Preamble
Holding Subsidiaries....................................................... Section 4.1
HSR Act.................................................................... Section 3.3(c)
Indemnified Party.......................................................... Section 6.14(a)
Indemnifying Parties....................................................... Section 6.14(b)
Inland..................................................................... Section 3.22
Investors.................................................................. Section 3.22
Letter Agreement........................................................... Section 3.22
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TERM LOCATION
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Letter Agreement Transactions.............................................. Section 3.11(a)
Lien....................................................................... Section 3.4(b)
Links...................................................................... Section 3.22
Maximum Amount............................................................. Section 6.14(c)
Merger..................................................................... Introduction
Merger Consideration....................................................... Section 2.2(e)
Merger Sub................................................................. Preamble
Merger Sub Common Stock.................................................... Section 2.1
Merger Sub Stockholder Consent............................................. Section 3.3(a)
MGOP....................................................................... Section 3.22
MGOPB...................................................................... Section 3.22
NASDAQ..................................................................... Section 2.3(c)
Net Cash Proceeds.......................................................... Section 3.25
NYSE....................................................................... Section 3.5(d)
Nonqualified Plan.......................................................... Section 6.21(b)
OTC Bulletin Board......................................................... Section 3.3(c)
Partners................................................................... Preamble
Person..................................................................... Section 3.9
PFI........................................................................ Section 3.3(a)
PFI Consent................................................................ Section 3.11(c)
Pre-Closing Period......................................................... Section 2.4(f)
Proxy Statement............................................................ Section 3.3(c)
Qualified Company Employee Benefit Plan.................................... Section 3.10(c)
Qualified Comsys Employee Benefit Plan..................................... Section 4.10(c)
Replacement Agreement...................................................... Section 3.25
Replacement Facility....................................................... Section 5.2(b)
Xxxxxxxx-Xxxxx Act......................................................... Section 3.5(d)
Securities Act............................................................. Section 3.5(a)
Series A Junior Participating Preferred Stock.............................. Section 3.2(a)
Series B Convertible Participating Preferred Stock......................... Section 3.2(a)
Staffing................................................................... Section 3.25
Staffing Disposition....................................................... Section 6.13(a)
Subscription Agreement..................................................... Section 3.22
Subsidiary................................................................. Section 3.4(a)
Superior Proposal.......................................................... Section 6.10(c)
Surviving Entity........................................................... Section 1.1
Surviving Entity Common Stock.............................................. Section 2.1
Takeover Proposal.......................................................... Section 6.10(c)
Tax or Taxes............................................................... Section 3.12(p)
Tax Liabilities............................................................ Section 2.4(f)
Tax Return................................................................. Section 3.12(p)
Termination Date........................................................... Section 8.1(b)
Termination Fee............................................................ Section 8.3
Unclaimed Property Taxes................................................... Section 2.4(f)
Unemployment Taxes......................................................... Section 2.4(f)
Voting Agreement........................................................... Section 7.1(i)
VPI 401(k) Plan............................................................ Section 6.21(b)
Wachovia................................................................... Section 6.16
Wachovia Director.......................................................... Section 6.15(a)
WARN Act................................................................... Section 3.15(e)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of July 19,
2004, is made by and among COMSYS Holding, Inc., a Delaware corporation
("HOLDING"), COMSYS Information Technology Services, Inc., a Delaware
corporation and wholly-owned subsidiary of Holding ("COMSYS"), Venturi Partners,
Inc., a Delaware corporation (the "COMPANY"), Venturi Technology Partners, LLC,
a North Carolina limited liability company and indirect, wholly-owned subsidiary
of the Company ("PARTNERS"), VTP, Inc., a Delaware corporation and wholly-owned
subsidiary of the Company ("MERGER SUB") and each of the stockholders of Holding
party hereto (the "HOLDING STOCKHOLDERS").
INTRODUCTION
The respective Boards of Directors of each of Holding, Comsys, the Company
and Merger Sub have unanimously (i) declared advisable and approved the merger
of Merger Sub with and into Holding (the "MERGER"), upon the terms and subject
to the conditions set forth in this Agreement and (ii) declared advisable,
approved and adopted this Agreement.
As a result of the Merger, and in accordance with the Delaware General
Corporation Law (the "DGCL"), each issued and outstanding share of (i) the
common stock of Holding, par value $.01 per share (the "HOLDING COMMON STOCK"),
(ii) Class A-3 preferred stock of Holding, par value $.01 per share (the
"HOLDING CLASS A-3 PREFERRED STOCK"), (iii) Class B preferred stock of Holding,
par value $.01 per share (the "HOLDING CLASS B PREFERRED STOCK"), (iv) Class C
preferred stock of Holding, par value $.01 per share (the "HOLDING CLASS C
PREFERRED STOCK") and (v) Class D preferred stock of Holding, par value $.01 per
share (the "HOLDING CLASS D PREFERRED STOCK"), will be converted into the right
to receive the applicable portion of the Merger Consideration (as defined in
Section 2.2(e)).
The parties to this Agreement intend that the Merger qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "CODE"), for Federal income tax purposes, and that this
Agreement constitutes a plan of reorganization.
In consideration of the foregoing and of the mutual covenants contained in
this Agreement, and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Holding, Comsys, the Company,
Partners, Merger Sub and the Holding Stockholders hereby agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1. The Merger. At the Effective Time, in accordance with
this Agreement and the DGCL, Merger Sub will be merged with and into Holding,
the separate existence of Merger Sub will cease, and Holding will continue as
the surviving entity. For purposes of this Agreement, (i) the entity surviving
the Merger after the Effective Time may be referred to as the "SURVIVING ENTITY"
and (ii) Holding and Merger Sub may together be referred to as the "CONSTITUENT
ENTITIES."
SECTION 1.2. Effects of the Merger. The Merger will have the effects
set forth in the DGCL.
SECTION 1.3. Closing. The closing of the Merger (the "CLOSING") will
take place at 10:00 a.m. (Houston time) on a date to be specified by the
parties, which will be no later than the second business day after satisfaction
or (to the extent permitted by applicable law) waiver of the conditions set
forth in Article 7 (other than any such conditions which by their nature cannot
be satisfied until the Closing Date, which shall be required to be so satisfied
or (to the extent permitted by applicable law) waived on the Closing Date), at
the offices of Akin Gump Xxxxxxx Xxxxx & Xxxx LLP, 0000 Xxxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxx 00000 unless another time, date or place is agreed to in
writing by the parties hereto (such date upon which the Closing occurs, the
"CLOSING DATE").
SECTION 1.4. Consummation of the Merger. On the Closing Date, the
parties hereto will cause the Merger to be consummated by filing with the
Secretary of State of the State of Delaware a certificate of merger or other
appropriate documents (in any such case, the "CERTIFICATE OF MERGER") in such
form as required by, and executed in accordance with, the relevant provisions of
the DGCL and will make all other filings or recordings required under the DGCL.
The Merger will become effective at such time as the Certificate of Merger is
duly filed with such Secretary of State, or at such later time as Holding and
the Company will agree and specify in the Certificate of Merger (the time and
date the Merger becomes effective being the "EFFECTIVE TIME" and "EFFECTIVE
DATE," respectively).
SECTION 1.5. Organizational Documents; Directors and Officers. The
certificate of incorporation of Holding, as in effect immediately prior to the
Effective Time, shall be amended in its entirety at the Effective Time to read
as set forth in Exhibit A hereto and, as so amended, shall be the certificate of
incorporation of the Surviving Entity until thereafter amended as provided
therein and under the DGCL. The bylaws of Holding, as in effect immediately
prior to the Effective Time, shall be amended in their entirety at the Effective
Time to read as set forth in Exhibit B hereto and, as so amended, shall be the
bylaws of the Surviving Entity until thereafter amended as provided therein and
under the DGCL. The directors of Holding immediately prior to the Effective Time
will be the initial directors of the Surviving Entity and will serve until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving Entity's
certificate of incorporation and bylaws and the DGCL. The officers of Holding
immediately prior to the Effective Time will be the initial officers of the
Surviving Entity and will serve until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Surviving Entity's certificate of incorporation and bylaws
and the DGCL.
ARTICLE 2
EFFECT OF THE MERGER ON THE EQUITY OF THE CONSTITUENT ENTITIES; EXCHANGE OF
CERTIFICATES
SECTION 2.1. Conversion of Merger Sub Capital Stock. At the
Effective Time, by virtue of the Merger and without any action on the part of
Holding, Comsys, Partners, the Company, Merger Sub or any Holding Stockholder,
each share of common stock, par value
2
$.01 per share, of Merger Sub ("MERGER SUB COMMON STOCK") outstanding
immediately prior to the Effective Time will be converted into one share of
common stock, par value $.01 per share, of the Surviving Entity ("SURVIVING
ENTITY COMMON STOCK"). Each certificate which immediately prior to the Effective
Time represents a number of outstanding shares of Merger Sub Common Stock will,
from and after the Effective Time, for all purposes represent the same number of
shares of Surviving Entity Common Stock.
SECTION 2.2. Conversion of Holding Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of Holding,
Comsys, Partners, the Company, Merger Sub or any Holding Stockholder:
(a) Each share of Holding Common Stock issued and outstanding
immediately prior to the Effective Time will be canceled and will be converted
automatically into the right to receive .0001 (the "COMMON STOCK EXCHANGE
RATIO") of a fully paid and nonassessable share of common stock, par value $.01
per share, of the Company (the "COMPANY COMMON STOCK") (the "COMMON STOCK MERGER
CONSIDERATION"), subject to adjustments contemplated by Section 2.2(f) and
Section 2.4. As of the Effective Time, all such shares of Holding Common Stock
will no longer be outstanding and will automatically be canceled and will cease
to exist, and each holder of a certificate representing any such shares of
Holding Common Stock will cease to have any rights with respect thereto, except
the right to receive the Common Stock Merger Consideration and any cash in lieu
of fractional shares of Company Common Stock to be issued or paid in
consideration therefore upon surrender of such certificate in accordance with
Section 2.3, without interest.
(b) Each share of Holding Class A-3 Preferred Stock issued and
outstanding immediately prior to the Effective Time will be canceled and will be
converted automatically into the right to receive 10.4397 (the "CLASS A-3
EXCHANGE RATIO") fully paid and nonassessable shares of Company Common Stock
(the "CLASS A-3 MERGER CONSIDERATION"), subject to the adjustments contemplated
by Section 2.2(f) and Section 2.4. As of the Effective Time, all such shares of
Holding Class A-3 Preferred Stock will no longer be outstanding and will
automatically be canceled and will cease to exist, and each holder of a
certificate representing any such shares of Holding Class A-3 Preferred Stock
will cease to have any rights with respect thereto, except the right to receive
the Class A-3 Merger Consideration and any cash in lieu of fractional shares of
Company Common Stock to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.3, without interest.
(c) The conversion of Holding Class B Preferred Stock will be
based on its liquidation value. The aggregate liquidation value of Holding Class
B Preferred Stock immediately prior to the Effective Time is agreed to be
$53,726,164 notwithstanding anything to the contrary in Holding's certificate of
incorporation and each such dollar of liquidation value of Holding Class B
Preferred Stock will be canceled and will be converted automatically into the
right to receive .01165118 (the "CLASS B EXCHANGE RATIO") fully paid and
nonassessable shares of Company Common Stock (the "CLASS B MERGER
CONSIDERATION"), subject to the adjustments contemplated by Section 2.2(f) and
Section 2.4. As of the Effective Time, all shares of Holding Class B Preferred
Stock will no longer be outstanding and will automatically be canceled and will
cease to exist, and each holder of a certificate representing any such shares of
Holding Class B Preferred Stock will cease to have any rights with respect
thereto, except the right to receive
3
the Class B Merger Consideration and any cash in lieu of fractional shares of
Company Common Stock to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.3, without interest.
(d) Each share of Holding Class C Preferred Stock issued and
outstanding immediately prior to the Effective Time will be canceled and will be
converted automatically into the right to receive 117.41923 (the "CLASS C
EXCHANGE RATIO") fully paid and nonassessable shares of Company Common Stock
(the "CLASS C MERGER CONSIDERATION"), subject to the adjustments contemplated by
Section 2.2(f) and Section 2.4. As of the Effective Time, all such shares of
Holding Class C Preferred Stock will no longer be outstanding and will
automatically be canceled and will cease to exist, and each holder of a
certificate representing any such shares of Holding Class C Preferred Stock will
cease to have any rights with respect thereto, except the right to receive the
Class C Merger Consideration and any cash in lieu of fractional shares of
Company Common Stock to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.3, without interest.
(e) Each share of Holding Class D Preferred Stock issued and
outstanding immediately prior to the Effective Time will be canceled and will be
converted automatically into the right to receive 1,411.423 (the "CLASS D
EXCHANGE RATIO", and together with the Common Stock Exchange Ratio, the Class
A-3 Exchange Ratio, the Class B Exchange Ratio and the Class C Exchange Ratio,
the "EXCHANGE RATIOS") fully paid and nonassessable shares of Company Common
Stock (the "CLASS D MERGER CONSIDERATION," and together with the Common Stock
Merger Consideration, Class A-3 Merger Consideration, Class B Merger
Consideration and the Class C Merger Consideration, the "MERGER CONSIDERATION"),
subject to the adjustments contemplated by Section 2.2(f) and Section 2.4. As of
the Effective Time, all such shares of Holding Class D Preferred Stock will no
longer be outstanding and will automatically be canceled and will cease to
exist, and each holder of a certificate representing any such shares of Holding
Class D Preferred Stock will cease to have any rights with respect thereto,
except the right to receive the Class D Merger Consideration and any cash in
lieu of fractional shares of Company Common Stock to be issued or paid in
consideration therefor upon surrender of such certificate in accordance with
Section 2.3, without interest.
(f) Notwithstanding anything in this Agreement to the contrary,
if, between the date of this Agreement and the Effective Time, the outstanding
shares of Company Common Stock, Holding Common Stock, Holding Class A-3
Preferred Stock, Holding Class B Preferred Stock, Holding Class C Preferred
Stock or Holding Class D Preferred Stock are changed into a different number of
shares or a different class by reason of any reclassification, recapitalization,
split-up, combination, exchange of shares or readjustment, or a stock dividend
thereon is declared with a record date within such period, the Exchange Ratios
will be appropriately adjusted to provide the Holding Stockholders the same
economic effect as contemplated by this Agreement prior to such event.
SECTION 2.3. Exchange of Certificates.
(a) Exchange Procedures. Immediately following the Effective Time,
(i) each of the Holding Stockholders will deliver to the Company for
cancellation and in exchange for the applicable portion of the Merger
Consideration, certificates (collectively, the "CERTIFICATES") that,
4
immediately prior to the Effective Time, represented all issued and outstanding
shares of Holding Common Stock, Holding Series A-3 Preferred Stock, Holding
Series B Preferred Stock, Holding Series C Preferred Stock or Holding Series D
Preferred Stock (collectively, the "HOLDING SHARES") owned by such Holding
Stockholder and (ii) the Company will deliver to each of the Holding
Stockholders one or more certificates representing the applicable portion of the
Merger Consideration and, if applicable, cash in lieu of any fractional share as
contemplated by Section 2.3(c). The Certificates shall be deemed at any time
after the Effective Time to represent only the right to receive upon surrender
in accordance with this Section 2.3 the applicable portion of the Merger
Consideration into which the Holding Shares have been converted pursuant to
Section 2.2 and, if applicable, cash in lieu of any fractional share as
contemplated by Section 2.3(c).
(b) No Further Ownership Rights in Holding Shares. The Merger
Consideration issued or paid upon the surrender for exchange of the Certificates
in accordance with the terms of this Article 2 will be deemed to have been
issued in full satisfaction of all rights pertaining to the Holding Shares
theretofore represented by the Certificates, and from and after the Effective
Time there will be no further registration of transfers on the stock transfer
books of Holding of the Holding Shares that were outstanding immediately prior
to the Effective Time.
(c) No Fractional Shares. No certificates or scrip representing
fractional shares of Company Common Stock will be issued upon the surrender for
exchange of Certificates, no dividend or distribution of the Company will relate
to such fractional share interest and such fractional share interest will not
entitle the owner thereof to vote or to any rights of a stockholder of the
Company. In lieu of such fractional share interest, the Company will pay to the
former holder of a Certificate after aggregating all Certificates held by such
holder an amount in cash equal to the product obtained by multiplying (x) the
fractional share interest to which such former holder (after taking into account
all Holding Shares held at the Effective Time by such holder) would otherwise be
entitled by (y) the average of the last reported sale prices for a share of
Company Common Stock on the NASDAQ National Market ("NASDAQ"), or such other
national exchange on which the Company Common Stock is listed and traded (in
each case as reported in The Wall Street Journal, or, if not so reported, any
other authoritative source) for the five most recent trading days on which
trades in the Company Common Stock were made prior to the Closing Date.
SECTION 2.4. Adjustments to the Exchange Ratios.
(a) Adjustments Based on Net Cash Proceeds. In the event the Net
Cash Proceeds (as defined in Section 3.25) received by the Company as
consideration for the Staffing Disposition (as defined in Section 6.13) exceed
$25 million, the aggregate Merger Consideration will be adjusted in accordance
with the following table so that, immediately after the Effective Time and
subject to Section 2.4(d), the Holding Stockholders will collectively own the
percentage of the outstanding Company Common Stock (on a fully diluted basis,
including the exercise or conversion of all warrants, options, preferred stock
or similar interests, as applicable) specified in the table (or proportionately
adjusted to the nearest whole share of Company Common Stock for incremental
amounts between those amounts shown in the table); provided, however, that in no
event will the aggregate Merger Consideration be adjusted pursuant to this
5
Section 2.4(a) so as to result in the Holding Stockholders collectively owning
less than 50.2% of the outstanding Company Common Stock (on a fully diluted
basis as described above) immediately after the Effective Time.
Net Cash Proceeds In Excess of $25 Million Holding Stockholders Collective Ownership
($ millions) (%)
------------------------------------------ -----------------------------------------
0 55.5
5 54.5
10 53.5
15 52.6
20 51.8
25 51.0
30 or more 50.2
(b) Adjustments Based on Fully Diluted Company Common Stock
Outstanding. In the event that the number of shares of Company Common Stock
outstanding immediately prior to the Effective Time (on a fully diluted basis,
including shares issuable upon the exercise or conversion of all warrants,
options, preferred stock or similar interests, as applicable) plus the number of
shares issuable upon the exercise or conversion of all warrants issued in
connection with the preferred stock subscription agreement attached as an
exhibit to the Letter Agreement is more or less than 7,544,541, then the
aggregate Merger Consideration will be adjusted so that such Merger
Consideration at the Effective Time represents the same percentage interest in
the Company as it did on the date of this Agreement.
(c) Reserved.
(d) If the aggregate Merger Consideration is adjusted as set forth
in Sections 2.4(a) and (b) above, then (i) the respective number of shares of
Company Common Stock constituting each of the aggregate Common Stock Merger
Consideration, aggregate Class A-3 Merger Consideration, aggregate Class B
Merger Consideration, aggregate Class C Merger Consideration and aggregate Class
D Merger Consideration shall be adjusted to equal the number of shares of
Company Common Stock obtained by multiplying (x) the aggregate number of shares
constituting the aggregate Merger Consideration as adjusted above, by (y) a
fraction, the numerator of which is the number of shares of Company Common Stock
constituting the aggregate Merger Consideration to be received by the applicable
class of Holding capital stock prior to the adjustment, and the denominator of
which is the number of shares of Company Common Stock constituting the aggregate
Merger Consideration prior to such adjustment, and (ii) appropriate adjustments
shall be made to the Merger Consideration to be received in respect to each
share of the applicable class of Holding capital stock and the Exchange Ratio
for such class of Holding capital stock to reflect the adjustment to the number
of shares constituting the aggregate Merger Consideration to be received by the
applicable class of Holding capital stock.
(e) Excess Net Cash Proceeds. In the event Net Cash Proceeds
exceed $55 million, the Company will, notwithstanding anything to the contrary
contained herein, distribute such excess to its stockholders prior to Closing
without modifying any other calculation set forth in this Section 2.4.
6
(f) Adjustments Based on Tax Liabilities. At the Closing, the
Company will place in escrow 186,705 of the shares of Company Common Stock
constituting Merger Consideration (the "ESCROWED SHARES") in connection with
potential obligations with respect to: (a) the Taxes of Staffing or any of its
Subsidiaries due, or at any time determined to be due, and payable to the State
of California, or any subdivision or agency thereof, for unemployment taxes (the
"UNEMPLOYMENT TAXES") for any period beginning on or before and ending after the
Closing Date which is allocable to the portion of the period occurring on or
before the Closing Date (the "PRE-CLOSING PERIOD"); and (b) the Taxes of
Staffing or any of its Subsidiaries due, or at any time determined to be due,
and payable to the State of Delaware, or any subdivision or agency thereof, in
respect of escheated property for any Pre-Closing Period (the "UNCLAIMED
PROPERTY TAXES" and, together with the Unemployment Taxes, the "TAX
LIABILITIES"). The number of Escrowed Shares attributable to each Holding
Stockholder is set forth on Exhibit C attached hereto. The Company shall act as
escrow agent and hold the Escrowed Shares on terms and conditions customary for
such an escrow arrangement. The Escrowed Shares shall be held and released in
accordance with an escrow agreement in the form attached as Exhibit D (the
"ESCROW AGREEMENT"), which Escrow Agreement shall be entered into among the
Company, Holding and the Holding Stockholders, and shall provide for the release
of the Escrowed Shares to the Holding Stockholders as and when obligations for
the Tax Liabilities are paid by the Company or any of its Subsidiaries and
confirmed by the Company's audit committee.
SECTION 2.5. Taking of Necessary Action; Further Action. Each of
Holding, Partners, Comsys, the Company, Merger Sub and each Holding Stockholder
will use its commercially reasonable efforts to take all such actions as may be
necessary or appropriate in order to effectuate the Merger under the DGCL as
promptly as commercially practicable. If at any time after the Effective Time,
any further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Entity with full right, title and possession
to all assets, property, rights, privileges, powers and franchises of either of
the Constituent Entities, the officers and directors of the Surviving Entity are
fully authorized in the name of each Constituent Entity or otherwise to take,
and will take, all such lawful and necessary action.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY, MERGER SUB AND PARTNERS
Except as set forth on the disclosure letter (each section of which
qualifies the correspondingly numbered representation and warranty or covenant
to the extent specified therein) previously delivered by the Company to Holding
and Comsys (the "COMPANY DISCLOSURE LETTER"), the Company, Merger Sub and
Partners hereby jointly and severally represent and warrant to Holding, Comsys
and the Holding Stockholders as follows, provided, however, that no
representation or warranty or covenant in this Article 3 other than Section 3.10
and Section 3.25 shall be deemed to include Staffing:
SECTION 3.1. Organization. The Company and each of the Subsidiaries
of the Company (the "COMPANY SUBSIDIARIES") is a corporation, limited liability
company or partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has all requisite
power and authority to own, operate and lease its properties and to carry on its
business as now conducted. The Company and each of the Company Subsidiaries is
duly qualified and/or licensed, as may be required, and in good
7
standing in each of the jurisdictions in which the nature of the business
conducted by it or the character of the property owned, leased or used by it
makes such qualification and/or licensing necessary, except in such
jurisdictions where the failure to be so qualified and/or licensed, individually
or in the aggregate, would not be material to the Company and the Company
Subsidiaries or Partners, in each case considered as a single enterprise. The
copies of the Company's restated certificate of incorporation delivered to
Holding prior to the date hereof (the "COMPANY CHARTER") and amended and
restated bylaws (the "COMPANY BYLAWS") which are incorporated by reference as an
exhibit to the Company's Annual Report on Form 10-K for the year ended December
28, 2003 (the "2003 10-K") are complete and correct copies of such documents and
contain all amendments thereto as in effect on the date of this Agreement. The
copies of the certificate of incorporation and bylaws or similar organizational
documents of the Company Subsidiaries that were delivered to Holding and Comsys
prior to the date of this Agreement are complete and correct copies of such
documents and contain all amendments thereto as in effect on the date of this
Agreement.
SECTION 3.2. Capitalization.
(a) As of the date of this Agreement, the authorized capital stock
of the Company consists of (i) 95,000,000 shares of Company Common Stock,
6,089,938 of which are issued and outstanding, and (ii) 5,000,000 shares of
preferred stock, $.01 par value (the "COMPANY PREFERRED STOCK"), of which (A)
500,000 shares have been designated as "SERIES A JUNIOR PARTICIPATING PREFERRED
STOCK," no shares of which are issued and outstanding and (B) 1,047,290 shares
have been designated as "SERIES B CONVERTIBLE PARTICIPATING PREFERRED STOCK," no
shares of which are issued and outstanding. As of the date of this Agreement, no
shares of Company Common Stock were held in the treasury of the Company and
500,000 shares of Series A Junior Participating Preferred Stock were reserved
for issuance upon exercise of the rights (the "COMPANY RIGHTS") distributed to
the holders of Company Common Stock pursuant to the Amended and Restated Rights
Agreement dated as of April 14, 2003, by and between the Company and Wachovia
Bank, N.A., as amended on August 18, 2003 and the date hereof (the "COMPANY
RIGHTS PLAN"). The issued and outstanding shares of Company Common Stock have
been, and all shares which may be issued in connection with the Merger will be,
duly authorized and validly issued, fully paid and nonassessable, and free of
preemptive rights. The Company has not, subsequent to December 28, 2003,
declared or paid any dividend, or declared or made any distribution on, or
authorized the creation or issuance of, or issued, or authorized or effected any
split-up or any other recapitalization of, any of its capital stock, or directly
or indirectly redeemed, purchased or otherwise acquired any of its outstanding
capital stock, nor has the Company heretofore agreed to take any such action.
There are no outstanding contractual obligations of the Company of any kind to
redeem, purchase or otherwise acquire any outstanding shares of capital stock of
the Company. Other than the Company Common Stock, there are no outstanding
bonds, debentures, notes or other indebtedness or securities of the Company
having the right to vote on any matters on which stockholders of the Company may
vote. All of the outstanding capital stock of Merger Sub is owned by the
Company.
(b) Section 3.2(b) of the Company Disclosure Letter lists all
outstanding options, warrants or other rights to subscribe for, purchase or
acquire from the Company or any Company Subsidiary any capital stock of the
Company or securities convertible into or exchangeable for capital stock of the
Company (and the exercise, conversion, purchase,
8
exchange or other similar price thereof) and all outstanding restricted stock
awards. There are no stock appreciation rights attached to the options, warrants
or rights listed in Section 3.2(b) of the Company Disclosure Letter. Except as
set forth above in this Section 3.2 and Section 3.2(b) of the Company Disclosure
Letter, no shares of capital stock or other voting securities of the Company are
issued, reserved for issuance or outstanding, and there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any of the
Company Subsidiaries is a party or by which any of them is bound obligating the
Company or any of the Company Subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock or other
voting securities of the Company or of any of the Company Subsidiaries or
obligating the Company or any of the Company Subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. The Company's execution,
delivery and performance of this Agreement and the consummation by the Company
of the transactions contemplated hereby will not cause any adjustments to the
terms of any of the Company's outstanding warrants.
SECTION 3.3. Authorization; No Conflict.
(a) Each of the Company and Merger Sub has the requisite corporate
power and authority to enter into and deliver this Agreement and all other
agreements and documents contemplated hereby to which it is a party and to carry
out its obligations hereunder and thereunder. The execution and delivery of this
Agreement by the Company and Merger Sub, the performance by the Company and
Merger Sub of their respective obligations hereunder and the consummation by the
Company and Merger Sub of the transactions contemplated hereby (including the
Staffing Disposition) have been duly authorized by the respective Boards of
Directors of the Company and Merger Sub. Partners has the requisite limited
liability company power and authority to enter into and deliver this Agreement
and all other agreements and documents contemplated hereby to which it is a
party and to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement by Partners, the performance by Partners of its
obligations hereunder and the consummation by Partners of the transactions
contemplated hereby have been duly authorized by PFI Corp., a Delaware
corporation and wholly-owned subsidiary of the Company ("PFI"), as the sole
member of Partners. No other corporate proceedings on the part of the Company or
any of the Company Subsidiaries (including Merger Sub and Partners) are
necessary to authorize the execution and delivery of this Agreement, the
performance by the Company, Partners and Merger Sub of their respective
obligations hereunder and the consummation by the Company, Partners and Merger
Sub of the transactions contemplated hereby (including the Staffing
Disposition), except for the approval of this Agreement by the Company
Stockholder Vote (as defined in Section 3.11(d)) and by the holder or holders of
a majority of the common stock of Merger Sub (the "MERGER SUB STOCKHOLDER
CONSENT"). This Agreement has been duly executed and delivered by the Company,
Partners and Merger Sub and constitutes a valid and binding obligation of each
of the Company, Partners and Merger Sub, enforceable in accordance with its
terms, except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general equitable
principles.
9
(b) Neither the execution and delivery of this Agreement by the
Company, Partners or Merger Sub, nor the consummation by the Company, Partners
or Merger Sub of the transactions contemplated hereby (including the Staffing
Disposition) nor compliance by the Company, Partners or Merger Sub with any of
the provisions herein will (i) result in a violation or breach of or conflict
with the certificate of incorporation or bylaws of the Company or similar
organizational documents of any of the Company Subsidiaries, (ii) result in a
violation or breach of or conflict with any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination, cancellation of, or
give rise to a right of purchase under, or accelerate the performance required
by, or result in a right of termination or acceleration under, or result in the
creation of any Lien (as defined in Section 3.4(b)) upon any of the properties
or assets owned or operated by the Company or any Company Subsidiaries under, or
result in being declared void, voidable or without further binding effect, or
otherwise result in a detriment to the Company or any Company Subsidiary under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, contract, lease, agreement or other
instrument or obligation of any kind to which the Company or any of the Company
Subsidiaries is a party or by which the Company or any of the Company
Subsidiaries or any of their respective properties or assets may be bound or
(iii) subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in paragraph
(c) below, violate any judgment, ruling, order, writ, injunction, decree,
statute, law (including the common law), rule or regulation applicable to the
Company or any of the Company Subsidiaries or any of their respective properties
or assets, other than any such event described in items (ii) or (iii) which,
individually or in the aggregate, has not had and would not reasonably be
expected to have or result in a Company Material Adverse Effect. A "COMPANY
MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the business,
operations, assets, liabilities, condition (financial or otherwise) or results
of operations of either (x) Partners and its Subsidiaries, considered as a
single enterprise or (y) the Company and the Company Subsidiaries, considered as
a single enterprise or (ii) the ability of any of the Company, Merger Sub and
Partners to perform their respective obligations under this Agreement or to
consummate the transactions contemplated by this Agreement; provided, however,
that any event, condition, change, occurrence, development or state of
circumstances which (A) adversely affects the securities markets in general or
the information technology staffing industry generally, including legal,
accounting or regulatory changes, (B) arises out of general economic or industry
conditions (and in each case does not disproportionately affect the Company and
the Company Subsidiaries or Partners, in each case considered as a single
enterprise) or (C) (other than with respect to a breach of either this Section
3.3 or Section 3.21 that is not timely cured if susceptible to cure) arise out
of, result from or relate to the transactions contemplated by this Agreement or
the announcement thereof, shall not be considered in determining whether a
Company Material Adverse Effect has occurred. For purposes hereof, changes in
the trading price of Company Common Stock as reported by the NASDAQ or a
delisting from NASDAQ will not alone constitute a Company Material Adverse
Effect.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental or regulatory
authority is necessary to be obtained or made by the Company or any Company
Subsidiary in connection with the Company's execution, delivery and performance
of this Agreement or the consummation by the Company or Merger Sub of the
transactions contemplated hereby, except for (i) compliance with the DGCL, with
respect to the filing of the Certificate of Merger, (ii) compliance with the
Xxxx-Xxxxx-Xxxxxx Antitrust
10
Improvement Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR ACT") and applicable foreign competition and/or antitrust
laws, if any, (iii) the filing with the SEC of (A) a proxy statement with
respect to the Merger and other matters to be submitted to the Company
stockholders for their consideration as provided in clauses (i) through (iii) of
the first sentence of Section 6.1(d) (such proxy statement, as amended or
supplemented from time to time, the "PROXY STATEMENT") and (B) such reports
under Section 13(a), 13(d), 15(d) or 16(a) and Rule 14f-1 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "EXCHANGE ACT"), as may be required in connection with this
Agreement and the transactions contemplated hereby, (iv) compliance with the
rules of the Over the Counter Bulletin Board (the "OTC BULLETIN BOARD"), NASDAQ
or other exchange on which Shares of the Company Common Stock are traded, as
applicable and (v) compliance with the "BLUE SKY" laws of various states.
SECTION 3.4. Subsidiaries.
(a) The Company Subsidiaries and their respective jurisdictions of
organization are identified in Section 3.4(a) of the Company Disclosure Letter.
As used in this Agreement, "SUBSIDIARY" means, with respect to any party, any
corporation or other organization whether incorporated or unincorporated, of
which (x) at least a majority of the securities or other interests having by
their terms voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly beneficially owned or controlled by such
party or by any one or more of its Subsidiaries, or by such party and one or
more of its Subsidiaries, or (y) such party or any Subsidiary of such party is a
general partner of a partnership or a manager of a limited liability company.
(b) All of the outstanding shares of capital stock or other equity
securities of, or other ownership interests in, each Company Subsidiary are duly
authorized, validly issued, fully paid and nonassessable, and such shares,
securities or interests are owned by the Company or by a Company Subsidiary free
and clear of any Liens or limitations on voting rights. There are no
subscriptions, options, warrants, calls, rights, convertible securities or other
agreements or commitments of any character relating to the issuance, transfer,
sales, delivery, voting or redemption (including any rights of conversion or
exchange under any outstanding security or other instrument) for any of the
capital stock or other equity interests of, or other ownership interests in, any
Company Subsidiaries. There are no agreements requiring the Company or any
Company Subsidiary to make contributions to the capital of, or lend or advance
funds to, any Company Subsidiary. As used in this Agreement, "LIEN" means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
SECTION 3.5. SEC Reports and Financial Statements.
(a) Since January 1, 2001, the Company has filed with the SEC all
forms, reports, schedules, registration statements, definitive proxy statements
and other documents (collectively, including all exhibits thereto, the "COMPANY
SEC REPORTS") required to be filed by the Company with the SEC. As of their
respective dates, and giving effect to any amendments or supplements thereto
filed prior to the date of this Agreement, the Company SEC Reports
11
complied in all material respects with the requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT"), the Exchange Act and the respective
rules and regulations of the SEC promulgated thereunder applicable to such
Company SEC Reports, and none of the Company SEC Reports contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. None of the
Company Subsidiaries is required to file any forms, reports or other documents
with the SEC pursuant to Section 13 or 15 of the Exchange Act.
(b) The consolidated balance sheets and the related consolidated
statements of operations, consolidated statements of stockholders' equity and
comprehensive income (loss) and consolidated statements of cash flows
(including, in each case, any related notes and schedules thereto)
(collectively, the "COMPANY FINANCIAL STATEMENTS") of the Company contained in
the Company SEC Reports have been prepared from the books and records of the
Company and the Company Subsidiaries, comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in conformity with United
States generally accepted accounting principles ("GAAP") (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as otherwise noted therein)
and present fairly the consolidated financial position and the consolidated
results of operations and cash flows of the Company and the Company Subsidiaries
as of the dates or for the periods presented therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments in the
ordinary course of business). Except as reflected in the Company Financial
Statements, neither the Company nor any of the Company Subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise), other than liabilities or obligations that (i) were not required
by GAAP to be disclosed or provided for in the Company Financial Statements or
(ii) were incurred since December 31, 2003, and which, in each case, (A) were
incurred in the ordinary course of business consistent with past practice and
(B) individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.
(c) Since January 1, 2001, the Company has not received written
notice from the SEC or any other governmental entity that any of its accounting
policies or practices are or may be the subject of any review, inquiry,
investigation or challenge by the SEC or other governmental entity. Since
January 1, 2001, the Company's independent public accounting firm has not
informed the Company that it has any material questions, challenges or
disagreements regarding or pertaining to the Company's accounting policies or
practices. Since January 1, 2001, to the knowledge of the Company, no officer or
director of the Company has received, or is entitled to receive, any material
compensation from any entity that has engaged in or is engaging in any material
transaction with the Company or any Company Subsidiary. Set forth in Section
3.5(c) of the Company Disclosure Letter is a list of all off-balance sheet
special purpose entities and financing arrangements of the Company and the
Company Subsidiaries.
(d) With respect to each annual report on Form 10-K, each quarterly
report on Form 10-Q and each amendment of any such report included in the
Company SEC Reports filed since August 29, 2002, the chief executive officer and
chief financial officer of the Company have made all certifications required by
the Xxxxxxxx-Xxxxx Act of 2002 (the "XXXXXXXX-XXXXX
12
ACT") and any related rules and regulations promulgated by the SEC and the New
York Stock Exchange (the "NYSE"), the OTC Bulletin Board, NASDAQ or other
exchange on which the Company Common Stock has been or is traded from time to
time, as applicable, and the statements contained in any such certifications are
complete and correct in all material respects.
(e) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15(e) or 15d-15(e) under the
Exchange Act); such disclosure controls and procedures are designed to ensure
that material information relating to the Company required to be disclosed in
the Company's Exchange Act Reports, including its consolidated Company
Subsidiaries, is made known to the Company's principal executive officer and its
principal financial officer by others within those entities, particularly during
the periods in which the periodic reports required under the Exchange Act are
being prepared; and, to the knowledge of the Company, such disclosure controls
and procedures are effective in timely alerting the Company's principal
executive officer and its principal financial officer to material information
required to be included in the Company's periodic reports required under the
Exchange Act.
(f) The Company is, or will timely be, in compliance in all material
respects with all current and proposed listing and corporate governance
requirements of the NYSE, the OTC Bulletin Board, NASDAQ or other exchange on
which the Company Common Stock has been or is traded from time to time, as
applicable, and is in compliance in all material respects, and will continue to
remain in compliance from the date hereof until immediately after the Effective
Time, with all rules, regulations and requirements of the Xxxxxxxx-Xxxxx Act and
the SEC.
SECTION 3.6. Absence of Material Adverse Changes, etc. Since March
28, 2004, the Company and the Company Subsidiaries have conducted their business
in the ordinary course of business consistent with past practice and there has
not been or occurred:
(a) any event, condition, change, occurrence, development or state
of circumstances which, individually or in the aggregate, has had or would
reasonably be expected to have a Company Material Adverse Effect;
(b) any material damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets owned or operated
by the Company and the Company Subsidiaries; or
(c) any event, condition, action or occurrence that, if taken during
the period from the date of this Agreement through the Effective Time, would
constitute a breach of Section 5.1(b).
SECTION 3.7. Litigation. There are no suits, actions or legal,
administrative, arbitration or other proceedings or governmental investigations
pending or, to the knowledge of the Company, threatened, to which the Company or
any of the Company Subsidiaries is a party. There are no judgments, decrees,
injunctions, rules, awards or orders of any governmental or regulatory entity or
arbitrator outstanding against the Company or any of the Company Subsidiaries.
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SECTION 3.8. Information Supplied. The information provided by the
Company for inclusion in the Proxy Statement (including any information required
to be filed with the SEC and delivered to the Company stockholders pursuant to
Rule 14f-1 under the Exchange Act) and each amendment or supplement thereto, at
the time of filing thereof with the SEC and at the time of its dissemination to
the Company's stockholders will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act (and include any
information required to be included therein pursuant to Rule 14f-1 under the
Exchange Act). Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information about Holding or
Comsys or any of their respective affiliates supplied by or through Holding or
Comsys in writing specifically for inclusion in the Proxy Statement or any
amendment or supplement thereto.
SECTION 3.9. Broker's or Finder's Fees. Except for SunTrust Capital
Markets, Inc. (the "COMPANY FINANCIAL ADVISOR"), no agent, broker, Person or
firm acting on behalf of the Company or any Company Subsidiary or under the
Company's or any Company Subsidiary's authority is or will be entitled to any
advisory, commission or broker's or finder's fee or commission from any of the
parties hereto in connection with any of the transactions contemplated hereby.
The Company has furnished to Holding and Comsys a true and complete copy of the
Company's agreement with the Company Financial Advisor, pursuant to which the
Company Financial Advisor is entitled to a fee in connection with the
transactions contemplated hereby. The term "PERSON" means an individual,
corporation, partnership, joint venture, association, trust, unincorporated
organization, limited liability company or other entity.
SECTION 3.10. Employee Plans.
(a) There are no current Company Employee Benefit Plans established,
maintained, adopted, participated in, sponsored, contributed or required to be
contributed to, provided, promised to be provided, terminated by, or resulting
in any material liability to the Company or any entity with which the Company is
considered a single employer under Section 414(b), (c) or (m) of the Code
("COMPANY ERISA AFFILIATES"). As used in this Agreement, "COMPANY EMPLOYEE
BENEFIT PLAN" means any Company or Company Subsidiary plan, program, policy,
practice, agreement or other arrangement providing compensation or benefits in
any form to any current or former employee, independent contractor, officer or
director of the Company or any of the Company Subsidiaries or any beneficiary or
dependent thereof, whether written or unwritten, formal or informal, including
without limitation any "employee welfare benefit plan" within the meaning of
Section 3(1) of ERISA ("COMPANY EMPLOYEE WELFARE BENEFIT PLAN"), any "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA (whether or
not such plan is subject to ERISA) ("COMPANY EMPLOYEE PENSION BENEFIT PLAN") and
any other pension, profit-sharing, bonus, incentive compensation, deferred
compensation, vacation, sick pay, stock purchase, stock option, phantom equity,
severance, employment, consulting, unemployment, hospitalization or other
medical, life, or other insurance, long- or short-term disability, change of
control, fringe benefit, or any other plan, program or policy.
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(b) With respect to each Company Employee Benefit Plan, the Company
has made available to Holding and Comsys a true, correct and complete copy of:
(i) each writing constituting a part of such Company Employee Benefit Plan
(including, but not limited to, the plan document(s), adoption agreement,
prototype or volume submitter documents, trust agreement, annuity contract,
third party administrative contracts and insurance contracts) and all amendments
thereto; (ii) the two most recent Annual Reports (Form 5500 Series) including
all applicable schedules, if required; (iii) the current summary plan
description and any material modifications thereto, if required to be furnished
under ERISA, or any written summary provided to participants with respect to any
plan for which no summary plan description exists; (iv) the most recent
determination letter (or if applicable, advisory or opinion letter) from the
Internal Revenue Service, if any, or if an application for a determination
letter is pending, the application with all attachments; and (v) all notices
given within the last three years relating to such Company Employee Benefit
Plan, any fiduciary thereof, the Company, or any ERISA Affiliate by the Internal
Revenue Service, Department of Labor, Pension Benefit Guarantee Corporation, or
other governmental agency relating to such Company Employee Benefit Plan.
(c) Each Company Employee Benefit Plan that is intended to be
"QUALIFIED" within the meaning of Section 401(a), 401(f) or 403(a) of the Code
and, to the extent applicable, Section 401(k) of the Code ("QUALIFIED COMPANY
EMPLOYEE BENEFIT PLAN"), has received a favorable determination letter from the
Internal Revenue Service that has not been revoked (or is within the remedial
amendment period for obtaining such letter), and no event has occurred and no
condition exists that could reasonably be expected to adversely affect the
qualified status of any such Company Employee Benefit Plan. For the avoidance of
doubt, the term "favorable determination letter" as used in this Section 3.10(c)
does not include an opinion letter or advisory letter issued with respect to a
master and prototype or volume submitter plan. Any favorable determination
letters referenced in this Section 3.10(c) cover "GUST" as defined in footnote 2
of IRS Notice 2003-49. Each Qualified Company Employee Benefit Plan has timely
made "GOOD FAITH" amendments to comply with the Economic Growth and Tax
Reconciliation Relief Act of 2001 as required by IRS Notice 2001-42.
(d) The Company has (i) filed or caused to be filed all material
returns and reports on the Company Employee Benefit Plans that it and/or any
fiduciary of any such plan is required to file and (ii) paid or made adequate
provision for all fees, interest, penalties, assessments or deficiencies that
have become due pursuant to those returns or reports or pursuant to any
assessment or adjustment that has been made relating to those returns or
reports.
(e) The funding, if any, under each Company Employee Welfare Benefit
Plan does not exceed and has not exceeded the limitations under Sections 419A(b)
and 419A(c) of the Code. The Company is not subject to taxation on the income of
any Company Employee Welfare Benefit Plan's welfare benefit fund (as such term
is defined in Section 419(e) of the Code) under Section 419A(g) of the Code. All
Company Employee Welfare Benefit Plans required to comply with the health care
continuation coverage ("COBRA") provisions of ERISA and the Code (and similar
state law) have complied with such requirements in all material respects.
(f) Each Company Employee Benefit Plan has been operated and
administered in all material respects in accordance with its provisions.
15
(g) The Company and the Company Subsidiaries have complied, and are
now in compliance, in all material respects, with all provisions of ERISA, the
Code and all laws and regulations applicable to the Company Employee Benefit
Plans.
(h) Neither the Company nor any ERISA Affiliate has ever
established, maintained, contributed to, or had an obligation to contribute to,
any Company Employee Benefit Plan that is a "MULTIEMPLOYER PLAN," as that term
is defined in Section 3(37) of ERISA, or is subject to Title IV of ERISA.
Neither the Company nor any Company ERISA Affiliate has any liability under
Title IV of ERISA (including a liability to pay premiums to the Pension Benefit
Guaranty Corporation), and no such liability has been or is expected to be
incurred by the Company or any of the Company Subsidiaries.
(i) Neither the Company nor any Company Subsidiary is obligated to
provide life, health or medical benefits or insurance coverage to any
individual, or to the family members of any individual, for any period extending
beyond the termination of the individual's employment, except to the extent
required by the COBRA provisions in ERISA and the Code or any similar provisions
of state law.
(j) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (including the Staffing
Disposition) will not, either alone or in connection with termination of
employment, (i) entitle any current or former employee, independent contractor,
director, or officer of the Company or the Company Subsidiaries to severance
pay, any change in control payment, or any other material payment (including
unemployment compensation, bonus or otherwise), except as expressly provided in
this Agreement, (ii) accelerate the time of payment or vesting, change the form
or method of payment, or increase the amount of compensation due, any such
employee, independent contractor, director, or officer, (iii) materially
increase any benefits otherwise payable under any Company Employee Benefit Plan,
agreement or otherwise, or (iv) entitle any such employee, independent
contractor, director or officer to any gross-up or similar material payment in
respect of the excise tax described in Section 4999 of the Code. Neither the
Company nor any Company Subsidiary has taken any action that would result in its
incurring any obligation for any payments or benefits described in clauses (i),
(ii), (iii) or (iv) of this Section 3.10(j) (without regard to whether the
transactions contemplated by this Agreement are consummated) except to the
extent required in a written contract or agreement in existence as of the date
of this Agreement.
(k) There are no suits, actions, proceedings, investigations, claims
or orders pending or, to the knowledge of the Company, threatened against the
Company, any Company Subsidiary or any Company Employee Benefit Plan related to
any Company Employee Benefit Plan (other than claims for benefits or appeals of
denied claims in the ordinary course of business). No Employee Benefit Plan is
subject to any ongoing audit, investigation, or other administrative proceeding
of any governmental entity, and no Plan is the subject of any pending
application for administrative relief under any voluntary compliance program or
closing agreement program of the Internal Revenue Service or the Department of
Labor.
(l) The Company has the right to amend or terminate each Company
Employee Benefit Plan at any time without incurring any liability other than
with respect to benefits that have already accrued under a Company Employee
Pension Benefit Plan.
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(m) Without limiting the generality of any other representation
contained herein, there exists no Lien against the Company, any Company
Subsidiary, any ERISA Affiliate, or any of their assets arising under sections
302(f) or 4068(A) of ERISA or section 412(n) of the Code.
(n) Neither the Company nor any Company ERISA Affiliate has a formal
plan, commitment, or proposal, whether legally binding or not, nor has any of
them made a commitment to employees, officers, directors, consultants or
independent contractors to create any additional Company Employee Benefit Plan
or modify, change or terminate any existing Company Employee Benefit Plan, and
no such plan, commitment or proposal is under serious consideration. No events
have occurred or are expected to occur with respect to any Company Employee
Benefit Plan that would cause a material change in the cost of providing the
benefits under such plan or would cause a material change in the cost of
providing for other liabilities of such plan other than an economic downturn, an
increase in the cost of healthcare, or similar event beyond the control of the
Company and Company Subsidiaries.
(o) As used in this Agreement, "ERISA" means the Employee Retirement
Income Securities Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
SECTION 3.11. Board Recommendation; Company Action; Requisite Vote
of the Company's Stockholders.
(a) The Board of Directors of the Company has, by resolutions duly
adopted by the requisite vote of the directors present at a meeting of such
board duly called and held on July 17, 2004 and not subsequently rescinded or
modified in any way, unanimously (i) determined that this Agreement, the Merger,
in accordance with the terms of this Agreement, and the other transactions
contemplated hereby (including the proposed amendment and restatement of the
Company Charter and the Company Bylaws, approval of the transactions
contemplated by the Letter Agreement (as defined in Section 3.22) (the "LETTER
AGREEMENT TRANSACTIONS") and the Staffing Disposition (as defined in Section
6.13(a))) are advisable and in the best interests of the Company and its
stockholders, (ii) approved and adopted this Agreement and approved the Merger
and the other transactions contemplated hereby, including the Letter Agreement
Transactions, the Staffing Disposition and the amendment and restatement of the
Company Charter and Company Bylaws, (iii) directed that this Agreement, the
amended and restated Company Charter and the Staffing Disposition be submitted
for consideration by the stockholders of the Company and (iv) recommended that
the stockholders of the Company approve this Agreement, the amendment and
restatement of the Company Charter and the Staffing Disposition (collectively,
the "COMPANY BOARD APPROVAL"). Notwithstanding the foregoing, any change in or
modification or revocation of the recommendation to the Company's stockholders
of this Agreement, the amendment and restatement of the Company Charter or the
Staffing Disposition by the Board of Directors of the Company in accordance with
either Section 6.1(d) or Section 6.10(a) shall not constitute a breach of the
representation in clause (iv). The Board of Directors of the Company has
received from the Company Financial Advisor a written opinion, a true and
correct copy of which has been provided to Holding and Comsys by the Company, to
the effect that, as of the date of the opinion, from a financial point of view,
the consideration to be received by the shareholders of the Company pursuant to
the Merger
17
transaction is fair to the Company's stockholders. The Company has been
authorized by the Company Financial Advisor to include such opinion in its
entirety in the Proxy Statement so long as such inclusion is in form and
substance reasonably satisfactory to the Company Financial Advisor and its
counsel.
(b) The Board of Directors of Merger Sub has, by written consent of
all of the directors, which consent has not been subsequently rescinded or
modified in any way, unanimously (i) determined that this Agreement, the Merger,
in accordance with the terms of this Agreement, and the other transactions
contemplated hereby are advisable and in the best interests of Merger Sub, (ii)
approved and adopted this Agreement and approved the Merger and the other
transactions contemplated hereby, (iii) directed that this Agreement be
submitted for consideration by the sole stockholder of Merger Sub and (iv)
recommended that the sole stockholder of Merger Sub approve this Agreement
(including the Merger Consideration and the transactions contemplated by the
Subscription Agreement and the Letter Agreement) and execute the Merger Sub
Stockholder Consent. The Company is the sole stockholder of Merger Sub, and the
Merger Sub Stockholder Consent is the only approval of the holder or holders of
any class or series of Merger Sub's capital stock necessary to approve this
Agreement and the transactions contemplated hereby and to consummate the Merger.
(c) The sole member of Partners has, by resolutions duly adopted by
such sole member, as of July 19, 2004 and not subsequently rescinded or modified
in any way, unanimously (i) determined that this Agreement, the Merger, in
accordance with the terms of this Agreement, and the other transactions
contemplated hereby are advisable and in the best interests of Partners, (ii)
approved and adopted this Agreement and approved the Merger and the other
transactions contemplated hereby, (iii) directed that this Agreement be
submitted for consideration by the sole holder of all outstanding equity
interests in Partners and (iv) recommended that the sole holder of all
outstanding equity interests in Partners approve this Agreement. PFI is the sole
holder of all outstanding equity interests in Partners, and the written consent
of PFI approving this Agreement and the transactions contemplated hereby (the
"PFI CONSENT") is the only approval of the holder or holders of any class or
series of Partners' equity interests necessary to approve this Agreement and the
transactions contemplated hereby. PFI, as the sole holder of all outstanding
equity interests in Partners, has executed and delivered the PFI Consent.
(d) The only vote of the holders of any class or series of the
Company's capital stock that is or will be necessary to:
(i) approve this Agreement and adopt the plan of merger
contained herein is the affirmative vote of the holders of a majority of the
issued and outstanding shares of Company Common Stock;
(ii) amend and restate the Company Charter is either (A) the
affirmative vote of the holders of a majority of the issued and outstanding
shares of Company Common Stock, or (B) if the Company Board Approval is
rescinded and in any subsequent resolution relating to such amendment and
restatement, no Significant Holder Designee is included among those members of
the Board of Directors of the Company voting in favor of
18
such resolution, the affirmative vote of the holders of 75% of the issued and
outstanding shares of Company Common Stock; and
(iii) approve the Staffing Disposition is the adoption of a
resolution authorizing the Staffing Disposition by the holders of a majority of
the issued and outstanding shares of Company Common Stock entitled to vote
thereon, provided, however, that so long as the Staffing Disposition constitutes
a Related Party Transaction as defined in and pursuant to the Company Charter,
(A) each Five Percent Holder (as such term is defined in the Company Charter)
has approved such action and (B) such action also has been approved by the
affirmative vote of 80% of the entire Board of Directors of the Company, which
approval has been satisfied as of the date hereof by the Company Board Approval
and remains in full force and effect (such adoptions and approvals,
collectively, the "COMPANY STOCKHOLDER VOTE").
No vote of the holders of any class or series of the Company's capital stock is
or will be necessary to amend and restate the Company Bylaws, provided that the
Board of Directors of the Company, including at least one Significant Holder
Designee, has approved such action, which approval has been satisfied by the
Company Board Approval and the amendment and restatement of the Company Bylaws
contemplated by this Agreement will become effective without any further
corporate action by the Company at the Effective Time.
SECTION 3.12. Taxes.
(a) Each of the Company and each Company Subsidiary has timely filed
all material federal, state, local, and other Tax Returns required to be filed
by it in the manner prescribed by applicable law and all such Tax Returns are
true, complete and correct in all material respects. All Taxes shown as due on
such Tax Returns have been paid in full and the Company and each Company
Subsidiary has made adequate provision (or adequate provision has been made on
its behalf) for all accrued Taxes not yet due. The accruals and reserves for
Taxes reflected in the 2003 10-K are adequate to cover all Taxes accruing
through such date. The Company and the Company Subsidiaries have withheld and
paid over all material Taxes required to have been withheld and paid over, and
complied in all material respects with all information reporting and backup
withholding requirements, including the maintenance of required records with
respect thereto, in connection with amounts paid or owing to any employee,
creditor, independent contractor or other third party. There are no material
Liens on any of the assets, rights or properties of the Company or any Company
Subsidiary with respect to Taxes, other than Liens for Taxes not yet due and
payable or for Taxes that the Company or a Company Subsidiary is contesting in
good faith through appropriate proceedings.
(b) As of the date of this Agreement, no federal, state, local or
foreign audits or other administrative proceedings or court proceedings are
presently pending with regard to any Taxes or Tax Returns of the Company or any
Company Subsidiary, and neither the Company nor any Company Subsidiary has
received a written notice of any material pending or proposed claims, audits or
proceedings with respect to Taxes. No material deficiencies have been asserted
in writing against the Company or any Company Subsidiary as a result of
examinations by any state, local, federal or foreign taxing authority and no
material issue has been raised by any examination conducted by any state, local,
federal or foreign taxing authority that, by application of the same principles,
might result in a proposed deficiency for any other
19
period not so examined which deficiency (or deficiencies), in either case, is
not (or are not) adequately reserved for in the most recent Company Financial
Statements. Each material deficiency resulting from any audit or examination
relating to Taxes of the Company or any Company Subsidiary by any taxing
authority has been paid or is being contested in good faith and in accordance
with law and is adequately reserved for on the balance sheets contained in the
Company Financial Statements in accordance with GAAP. No claim is pending and no
claim has ever been made that has not been resolved by an authority in a
jurisdiction where the Company or any of the Company Subsidiaries does not file
Tax Returns that the Company or any Company Subsidiary, as the case may be, is
or may be subject to Tax in that jurisdiction. Neither the Company nor any
Company Subsidiary is subject to any private letter ruling of the Internal
Revenue Service or comparable rulings of other tax authorities that will be
binding on the Company or any Company Subsidiary with respect to any period
following the Closing Date. Neither the Company nor any Company Subsidiary has
granted any power of attorney which is currently in force with respect to any
income, franchise or similar Taxes or any income, franchise or similar Tax
Returns.
(c) Neither the Company nor any Company Subsidiary has requested any
extension of time within which to file any material Tax Return which Tax Return
has not yet been filed. There are no agreements, waivers of statutes of
limitations, or other arrangements providing for extensions of time in respect
of the assessment or collection of any unpaid Taxes against the Company or any
Company Subsidiary. The Company and each Company Subsidiary have disclosed on
their federal income Tax Returns all positions taken therein that could, if not
so disclosed, give rise to a substantial understatement penalty within the
meaning of Section 6662 of the Code. Neither the Company nor any Company
Subsidiary has been a party to a "listed transaction" within the meaning of
Treas. Reg. Sec. 1.6011-4(b).
(d) Neither the Company nor any Company Subsidiary is a party to any
Tax sharing agreement, Tax indemnity obligation or similar agreement,
arrangement or practice with respect to Taxes (including any advance pricing
agreement, closing agreement or other agreement relating to Taxes with any
taxing authority).
(e) To the knowledge of the Company, neither the Company nor any
Company Subsidiary is a party to any agreement, contract, or arrangement that,
individually or collectively, would give rise to the payment of any amount
(whether in cash or property, including shares of capital stock) that would not
be deductible pursuant to the terms of Section 280G of the Code or would be
subject to the excise tax under Section 4999 of the Code, or, to the knowledge
of the Company, that would not be deductible pursuant to the terms of Sections
162(a)(1), 162(m) or 162(n) of the Code.
(f) Neither the Company nor any affiliate of the Company has made
with respect to the Company, any Company Subsidiary, or any assets held by the
Company or any Company Subsidiary any consent under Section 341 of the Code.
(g) Neither the Company nor any Company Subsidiary has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355 (a)(1)(A) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code (A) in the two
years prior to the date of this Agreement, or (B) in a distribution
20
that could otherwise constitute part of a "plan" or "series of related
transactions" (within the meaning of Section 355(e) of the Code) in conjunction
with the Merger.
(h) The statutes of limitations for the federal income Tax Returns
of the Company and the Company Subsidiaries have expired or otherwise have been
closed for all taxable periods ending on or before January 3, 1999.
(i) Neither the Company nor any Company Subsidiary is a party to any
safe harbor lease within the meaning of Section 168(f)(8) of the Code, as in
effect prior to amendment by The Tax Equity and Fiscal Responsibility Act of
1982. None of the property owned by the Company or a Company Subsidiary is
"TAX-EXEMPT USE PROPERTY" within the meaning of Section 168(h) of the Code.
Neither the Company nor any Company Subsidiary is required to make any
adjustment under Code Section 481(a) by reason of a change in accounting method
or otherwise.
(j) There have not been, within two years of the date of this
Agreement, any (i) redemptions by the Company or any Company Subsidiary, (ii)
transfers or disposition of property by the Company or any Company Subsidiary
for which the Company or the Company Subsidiary did not receive adequate
consideration, or (iii) distributions to the holders of Company Common Stock
with respect to their stock other than distributions of cash in the ordinary
course of business, excluding any redemptions, transfers or dispositions between
or among the Company and any Company Subsidiary.
(k) Section 3.12(k) of the Company Disclosure Letter accurately
reflects the tax basis of the assets listed therein.
(l) The Company's net operating loss and capital loss carryforwards
are no less than the amounts reflected in Section 3.12(l) of the Company
Disclosure Letter.
(m) Neither the Company nor any Company Subsidiary has been a member
of an affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which was the Company). To the knowledge of
the Company, neither the Company nor any Company Subsidiary has been notified in
writing that it will be required to incur any liability for Taxes of any Person
(other than the Company or a Company Subsidiary) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law) with
respect to any Tax claim that has been made by a Tax authority with respect to
such other Person.
(n) Neither the Company nor any Company Subsidiary will be required
to include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any intercompany transactions or any excess loss account
described in Treasury Regulations under Code section 1502 (or any corresponding
or similar provision of state, local or foreign law).
(o) Neither the Company nor any of the Company Subsidiaries has
taken any action or knows of any fact, agreement, plan or other circumstance
that could reasonably be expected to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
21
(p) As used in this Agreement, "TAX" or "TAXES" means, except as any
such item relates to a Company Employee Benefit Plan, (i) all taxes, levies or
other like assessments, charges or fees (including estimated taxes, charges and
fees), including, without limitation, income, franchise, profits, corporations,
advance corporation, gross receipts, transfer, excise, property, sales, use
value-added, ad valorem, license, capital, wage, employment, payroll,
withholding, social security, severance, occupation, import, custom, stamp,
alternative, add-on minimum, environmental or other governmental taxes or
charges, imposed by the United States or any state, county, local or foreign
government or subdivision or agency thereof, including any interest, penalties
or additions to tax applicable or related thereto; (ii) all liability for the
payment of any amounts of the type described in clause (i) as the result of
being a member of an affiliated, consolidated, combined or unitary group; and
(iii) all liability for the payment of any amounts as a result of an express or
implied obligation to indemnify any other Person with respect to the payment of
any amounts of the type described in clause (i) or clause (ii). As used in this
Agreement, "TAX RETURN" means any report, return, statement, declaration or
other written information required to be supplied to a taxing or other
governmental authority in connection with Taxes, except as any such item relates
to a Company Employee Benefit Plan.
SECTION 3.13. Environmental Matters. Except as, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect: (i) the Company and Company Subsidiaries are in compliance with
all applicable federal, state and local laws, regulations, and requirements
relating to pollution, protection of the environment, and human health and
safety ("ENVIRONMENTAL LAWS"); (ii) the Company and Company Subsidiaries are not
subject to any existing, pending or, to the Company's knowledge, threatened
proceedings regarding alleged violation of or liability under any Environmental
Law; (iii) there have been no unauthorized releases of pollutants, contaminants,
or other substance regulated under any Environmental Law (including petroleum
products) at any property owned, operated or occupied by the Company and Company
Subsidiaries; and (iv) the Company and Company Subsidiaries have obtained all
permits and other authorizations required under Environmental Laws, such permits
and other authorizations are currently in full force and effect, and the Company
and Company Subsidiaries are in compliance with such permits and other
authorizations. To the knowledge of the Company, there has been no material
environmental investigation, study, audit, test, review or other analysis
conducted by or on behalf of the Company (or any of its predecessors) in
relation to the current or prior business of the Company (or any of its
predecessors) or any Company Subsidiary or any property or facility now or
previously owned or leased by the Company or any Company Subsidiary.
SECTION 3.14. Compliance with Laws. The Company and the Company
Subsidiaries are in compliance in all material respects with all applicable
laws, rules or regulations of any United States federal, state or local or
foreign government or agency thereof that materially affect the business,
properties or assets owned or leased by the Company and the Company
Subsidiaries, and no notice, charge, claim, action or assertion has been
received by the Company or any Company Subsidiary or, to the Company's
knowledge, has been filed, commenced or threatened against the Company or any
Company Subsidiary alleging any such non-compliance. All licenses, permits and
approvals required under such laws, rules and regulations are in full force and
effect, except as would not be material to the Company and the Company
Subsidiaries or Partners, in each case considered as a single enterprise.
22
SECTION 3.15. Employment Matters.
(a) The Company and the Company Subsidiaries are in compliance in
all material respects with all applicable laws respecting labor, employment,
immigration, fair employment practices, terms and conditions of employment,
workers' compensation, occupational safety, plant closings, wages and hours, and
any other law applicable to any current or former employee or director of the
Company or any Company Subsidiary (each a "COMPANY EMPLOYEE"), or the
independent contractors and consultants of the Company and the Company
Subsidiaries (collectively, the "COMPANY INDEPENDENT CONTRACTORS"), or other
Persons providing services to the Company or any Company Subsidiary, including,
without limitation, all laws concerning the classification of employees and
independent contractors. Each of the Company and the Company Subsidiaries has
withheld all material amounts required by applicable law or by agreement to be
withheld from the wages, salaries and other payments to employees, and none of
the Company and the Company Subsidiaries is liable for any material arrears of
wages or any material penalty for failure to timely pay wages.
(b) To the Company's knowledge, no Company Employee, Company
Independent Contractor or any other Person providing services to the Company or
any Company Subsidiary is in violation of any term of any employment contract,
non-disclosure agreement, non-competition agreement, or any restrictive covenant
applicable to a former employer relating (i) to the right of any such Person to
be employed or retained by the Company or any Company Subsidiary, or (ii) to the
use by or for the benefit of any of the Company or a Company Subsidiary of the
trade secrets, intellectual property, or confidential or proprietary information
of others in each case, in any material respect. To the knowledge of the
Company, no Company Employee, Company Independent Contractor or any other Person
providing services to the Company or any Company Subsidiary is in violation of
any term of any employment contract, non-disclosure agreement, non-competition
agreement, or restrictive covenant relating to the business of the Company or
any Company Subsidiary, which violation or violations would, individually or in
the aggregate, have a Company Material Adverse Effect.
(c) The Company and the Company Subsidiaries have provided Holding
and Comsys with true, complete and correct copies of all current written
employment, management, change of control or severance agreements or
arrangements which have been entered into between the Company and any Company
Subsidiary, on the one hand, and any Company Employee, Company Independent
Contractor or any other Person providing services to the Company or any Company
Subsidiary, on the other hand, including any amendments thereto, in each case,
providing for annual compensation, change of control or severance benefits that
are in excess of $100,000 in the aggregate, and a list of any current officer of
the Company or a Company Subsidiary or any other employee of the Company or a
Company Subsidiary with a level of annual compensation (including base pay and
any bonus or other incentive payments) that is in excess of $100,000 per year
for the year ended December 31, 2003. Other than as expressly set forth in such
agreements or amendments or in this Agreement, there have been no material
changes, and there are no material proposed amendments or changes, to the
remuneration or benefits of any kind payable or due to any of such Company
Employees.
(d) Neither the Company nor any Company Subsidiary: (i) is a party
to or otherwise bound by any collective bargaining agreement, contract or other
agreement or
23
understanding with a labor union or labor organization, nor is any such contract
or agreement presently being negotiated, nor, to the knowledge of the Company,
is there, nor has there been in the last five years, a representation campaign
respecting any of the employees of the Company or any of the Company
Subsidiaries, and, to the knowledge of the Company, there are no campaigns being
conducted to solicit cards from employees of Company or any of the Company
Subsidiaries to authorize representation by any labor organization; (ii) is a
party to, or bound by, any consent decree with, or citation by, any governmental
agency relating to employees or employment practices; or (iii) is the subject of
any proceeding asserting that it has committed an unfair labor practice or is
seeking to compel it to bargain with any labor union or labor organization nor,
as of the date of this Agreement, is there pending or, to the knowledge of the
Company, threatened, any labor strike, dispute, walkout, work stoppage,
slow-down or lockout involving the Company or any of the Company Subsidiaries.
(e) In the 90-day period preceding the date of this Agreement,
neither the Company nor any of the Company Subsidiaries has effectuated (i) a
"PLANT CLOSING" (as defined in the Workers Adjustment and Retraining
Notification Act of 1989, as amended (the "WARN ACT")), affecting any site of
employment or one or more facilities or operating units within any site of
employment or facility of the Company or any of the Company Subsidiaries, or
(ii) a "MASS LAYOFF" (as defined in the WARN Act) affecting any site of
employment or facility of the Company or any of the Company Subsidiaries; nor
has the Company or any of the Company Subsidiaries been affected by any
transaction or engaged in layoffs or employment terminations sufficient in
number to trigger application of any state, local or foreign law or regulation
similar to the WARN Act. Section 3.15(e) of the Company Disclosure Letter lists
the number of the Company's or the Company Subsidiaries' employees (other than
billable consultants) who have suffered an "EMPLOYMENT LOSS" (as defined in the
WARN Act) in the 90 days prior to the date of this Agreement or had a reduction
in hours of at least 50% in the 180 days prior to the date of this Agreement. To
the knowledge of the Company, the Company and the Company Subsidiaries have at
all times properly classified each of their respective employees as employees,
each of their respective "LEASED EMPLOYEES" (within the meaning of Section
414(n) of the Code) as leased employees, and each of their independent
contractors as independent contractors, as applicable.
SECTION 3.16. Foreign National Employees. Section 3.16 of the
Company Disclosure Letter sets forth a complete list of all employees of the
Company who, to the Company's knowledge, are working pursuant to visas sponsored
by the Company (collectively, the "COMPANY FOREIGN NATIONAL EMPLOYEES"). To the
knowledge of the Company, each Company Foreign National Employee holds a valid
visa and is permitted to work in his or her current capacity as a Company
Employee pursuant to such visa.
SECTION 3.17. Investment Company. Neither the Company nor any of the
Company Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations promulgated thereunder.
SECTION 3.18. Property. Neither the Company nor any of the Company
Subsidiaries owns or has owned any real property. Except as set forth in the
Company Disclosure Schedule, the Company and each of the Company Subsidiaries
has good and
24
marketable title to all of their respective properties and assets, free and
clear of all Liens except Liens for Taxes not yet due and payable, pledges to
secure deposits and such minor imperfections of title, if any, as do not
materially detract from the value of or interfere with the present use of the
property affected thereby or which, individually or in the aggregate, would not
be reasonably likely to have a Company Material Adverse Effect; and all leases
pursuant to which the Company or any of the Company Subsidiaries lease from
others material amounts of real or personal property are in good standing, valid
and effective in accordance with their respective terms, and there is not, under
any of such leases, any existing material default or event of default (or event
which with notice or lapse of time, or both, would constitute a material default
and in respect of which the Company or such Company Subsidiary has not taken
adequate steps to prevent such a default from occurring). All major items of
operating equipment owned or leased by the Company or any of the Company
Subsidiaries (i) are, in the aggregate, in a state of repair so as to be
adequate in all material respects for reasonably prudent operations in the areas
in which they are operated and (ii) are adequate, together with all other
properties of the Company and the Company Subsidiaries, to comply in all
material respects with the requirements of all applicable contracts of the
Company.
SECTION 3.19. Intellectual Property. Except as provided for in the
Buyer Agreement, the Company and the Company Subsidiaries own or possess all
necessary licenses or other valid rights to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights and
proprietary information used or held for use in connection with their respective
businesses (the "COMPANY INTELLECTUAL PROPERTY"), free and clear of all Liens,
and there are no assertions or claims challenging the validity of any of the
foregoing. Except as provided for in the Buyer Agreement, neither the Company
nor any Company Subsidiary has granted to any other Person any license to use
any of the foregoing. To the Company's knowledge, the conduct of the Company's
and the Company Subsidiaries' respective businesses does not conflict with any
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, copy rights and proprietary information of others in any way. The
Company has taken reasonable security measures to protect the secrecy,
confidentiality and value of the Company Intellectual Property, to the extent
such measures are appropriate. Neither the Company nor any Company Subsidiary is
required to pay any royalty or other amount to anyone with respect to any of the
Company Intellectual Property. Following consummation of the Staffing
Disposition in compliance with the terms of Section 6.13, the Company will
continue to own, free from any royalty, maintenance, renewal or other fees or
charges, all Company Intellectual Property that had been used by Staffing prior
to the consummation of the Staffing Disposition except as provided for in the
Buyer Agreement. The execution, delivery and performance of this Agreement by
the Company of the transactions contemplated by this Agreement will not alter,
impair, diminish or result in the loss of any rights or interests of the Company
or any Company Subsidiary (other than Staffing) of any Company Intellectual
Property.
SECTION 3.20. Insurance. The Company and each Company Subsidiary is
covered by valid, outstanding enforceable policies of insurance issued by
reputable insurers covering its properties, assets and business against risks of
the nature normally insured against by similar entities in the same or similar
lines of business in coverage amounts typically and reasonably carried by such
entities (the "COMPANY INSURANCE POLICIES"). Section 3.20 of the Company
Disclosure Letter sets forth a complete and accurate list of the Company
Insurance
25
Policies. The Company Insurance Policies are in full force and effect, and all
premiums due thereon have been paid through the date of this Agreement and will
be paid through the Closing Date. The Company and each of the Company
Subsidiaries has complied in all material respects with the provisions of the
Company Insurance Policies applicable to it, and provided to Holding and Comsys
copies of all of the Company Insurance Policies and all amendments and riders
thereto. There are no pending claims under any of the Company Insurance
Policies, including any claim for loss or damage to the properties, assets or
business of the Company or any of the Company Subsidiaries. Neither the Company
nor any of the Company Subsidiaries has failed to give, in a timely manner, any
notice required under any of the Company Insurance Policies to preserve its
rights thereunder.
SECTION 3.21. Certain Contracts and Arrangements.
(a) Except with respect to any Company Employee Benefit Plan,
Section 3.21(a) of the Company Disclosure Letter sets forth a true and complete
list of (i) all material agreements to which the Company or any Company
Subsidiary is a party (which for customers shall be limited to the top fifty
Partners customers in terms of first quarter 2004 revenue); (ii) all loan or
credit agreements, notes, bonds, mortgages, indentures and other agreements and
instruments pursuant to which indebtedness of the Company or any Company
Subsidiary is outstanding or may be incurred; (iii) all agreements requiring
expenditures in excess of $50,000 individually or $200,000 in the aggregate; and
(iv) all contracts that cannot be terminated on 30 days' notice or less without
material cost or penalties (the agreements, contracts and obligations specified
above, collectively the "COMPANY CONTRACTS"). Each Company Contract is in full
force and effect, and is a legal, valid and binding obligation of the Company or
one of the Company Subsidiaries and, to the knowledge of the Company, each of
the other parties thereto, enforceable in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization or other laws affecting the enforcement of
creditors' rights generally or by general equitable principles. No condition
exists or event has occurred which (whether with or without notice or lapse of
time or both) would constitute a violation, default or breach by the Company or
any Company Subsidiary or, to the knowledge of the Company, any other party
thereto under any Company Contract or result in a right of termination of any
Company Contract. Other than as contemplated by Section 3.3(c), no consents,
assignments, waivers, authorizations or other certificates are necessary in
connection with the transactions contemplated hereby (including the Staffing
Disposition) to provide for the continuation in full force and effect of all of
the Company Contracts after the Closing.
(b) Neither the Company nor any of the Company Subsidiaries is a
party to or bound by (i) any non-competition or other agreement or other
arrangement that purports to limit or otherwise materially restrict the Company
or any Company Subsidiary or any successor thereto, or that would, after the
Effective Time, to the knowledge of the Company, materially limit or restrict
the Company, the Surviving Entity or any of their subsidiaries or any successor
thereto, from engaging or competing in the information technology staffing
business or (ii) any agreement or other arrangement that contains a "MOST
FAVORED NATION" provision purporting to require the Company or any of the
Company Subsidiaries to provide services to a customer on terms at least as
favorable as those on which the Company or any Company Subsidiary provides
services to a third party unaffiliated with such customer.
26
SECTION 3.22. Company Financing Arrangements. The Company has on or
prior to the date hereof entered into a subscription agreement with Wachovia
(the "SUBSCRIPTION AGREEMENT"), a true and complete copy of which has been
furnished by the Company to Holding and Comsys, pursuant to which Wachovia has
agreed, subject to the terms and conditions contained in the Subscription
Agreement, to convert, at the Effective Time, specified amounts of outstanding
debt of Comsys (subject to adjustment as provided in the Subscription
Agreement), into shares of Company Preferred Stock to be issued by the Company
at the Effective Time. The Company has on or prior to the date hereof entered
into a letter agreement (the "LETTER AGREEMENT") with MatlinPatterson Global
Opportunities Partners, L.P. ("MGOP"), MatlinPatterson Global Opportunities
Partners (Bermuda), L.P., ("MGOPB"), Links Partners, L.P. ("LINKS") and Inland
Partners, L.P. ("INLAND") pursuant to which MGOP, MGOPB, Inland and Links have
agreed, severally and not jointly, to purchase at the Effective Time, under
certain circumstances, up to $7,000,000 of the Company Preferred Stock in
accordance with the terms of the subscription agreement attached to the Letter
Agreement as an exhibit. A true and complete copy of the Letter Agreement has
been furnished by the Company to Holding and Comsys. The Subscription Agreement
and the Letter Agreement are in full force and effect and, since the date
thereof, have not been withdrawn, amended or terminated in any manner. The
Company has taken all corporate and other actions required to cause the
Subscription Agreement and the Letter Agreement to be effective.
SECTION 3.23. Company Rights Plan; Takeover Statutes.
(a) The Company has delivered to Holding and Comsys a true and
complete copy of the Company Rights Plan. No "Distribution Date" or "Stockholder
Acquisition Date" (as each such term is defined in the Company Rights Plan) has
occurred prior to the date of this Agreement. The Company has taken all action
so that none of (i) this Agreement, (ii) the execution and delivery of this
Agreement by any party hereto, (iii) the performance by any party of its
obligations under this Agreement or (iv) the consummation of any of the
transactions contemplated by this Agreement (including the Merger and the
Staffing Disposition) will:
(i) cause any Person to become an Acquiring Person, cause a
Distribution Date or Stock Acquisition Date (as each such term is defined in the
Company Rights Plan) to occur or otherwise cause the rights to be issued
pursuant to the Company Rights Plan to become exercisable; or
(ii) trigger any "Significant Holder" or "Related Party"
provisions set forth in the Company Charter (as each such term is defined
therein).
(b) The Company has taken all actions so that the Company Rights
Plan will terminate immediately prior to the Effective Time.
(c) The approval by the Board of Directors of the Company of this
Agreement, the Merger, the amendment of the Company Charter, the amendment of
the Company Bylaws and the transactions contemplated hereby and thereby
(including the Staffing Disposition) is sufficient to render inapplicable to the
Merger, this Agreement and the transactions contemplated hereby the restrictions
contained in Section 203 of the DGCL, and no "fair price," "moratorium,"
"control share acquisition" or other anti-takeover law of any state is
27
applicable to or triggered by the Merger, this Agreement or the transactions
contemplated hereby.
SECTION 3.24. Activities of Merger Sub. Merger Sub conducts no
operations and, other than entering into this Agreement and performing its
obligations hereunder, has not entered into any agreement or conducted any
business.
SECTION 3.25. Agreement Regarding Staffing Disposition. The Company
is simultaneously entering into a definitive agreement with Compass CS Inc.
("BUYER"), a true and correct copy of which has been provided to Holding,
pursuant to which Buyer is required to purchase all of the issued and
outstanding capital stock of Venturi Staffing Partners, Inc. ("STAFFING"), for a
purchase price providing the Company with Net Cash Proceeds upon the closing of
such transaction of not less than $25 million, in a transaction that the parties
thereto agree to consummate at or prior to the Closing Date on terms consistent
with those set forth in Section 6.13 (the "BUYER AGREEMENT"). The Buyer
Agreement permits the Company to terminate the Buyer Agreement under certain
circumstances and enter into a definitive agreement with a third party (a
"REPLACEMENT AGREEMENT"). The terms of any Replacement Agreement must be on
terms that are acceptable to Holding and otherwise consistent with the terms set
forth in Section 6.13. Any Replacement Agreement shall require that the sale of
Staffing contemplated therein be consummated on or before the Closing Date. The
term "NET CASH PROCEEDS" refers to the amount in cash received by the Company as
consideration for the sale of Staffing (including funds placed in escrow in
connection with the Tax Liabilities), upon the closing of such transaction net
of (i) income taxes, (ii) broker, legal and accounting fees and other
transaction fees and expenses and any termination fees arising out of or in
connection with the sale of Staffing contemplated by this Agreement and (iii)
any other liabilities associated with Staffing, including any accrued
liabilities of Staffing which are not assumed by the Buyer at the time the sale
of Staffing is consummated (including but not limited to liabilities relating to
the Nonqualified Plan, the 401(K) Matter (as defined below), the Unemployment
Taxes and the Unclaimed Property Taxes) that are not assumed by the purchaser of
Staffing. The Company will not amend or waive any rights under the Buyer
Agreement without the prior written approval of Holding, or terminate the Buyer
Agreement except in accordance with its terms. The Company will comply with all
of its obligations in the Buyer Agreement and all representations and warranties
of the Company and Staffing in the Buyer Agreement are true and correct. If the
Company enters into a Replacement Agreement as permitted hereby, (i) the Company
will not amend or waive any rights under such Replacement Agreement without the
prior written approval of Holding, or terminate such Replacement Agreement
except in accordance with its terms, (ii) the Company will comply with all of
its obligations in such Replacement Agreement and (iii) all representations and
warranties of the Company and Staffing in the Replacement Agreement will be true
and correct. "401(K) MATTER" means liabilities and costs incurred or estimated
as of the Effective Time by the Company in good faith to be incurred in
connection with the correction of any form, operational or demographic error
associated with the VPI 401(K) Plan, provided, however, that liabilities for the
401(K) Matter for purposes of the Net Cash Proceeds shall not exceed $500,000.
SECTION 3.26. Books and Financial Records. The books of account and
other financial records of the Company are complete and correct and represent
actual, bona fide transactions and have been maintained in accordance with sound
business practices and the
28
requirements of Section 13(b)(2) of the Exchange Act (regardless of whether or
not the Company is subject to that Section), including the maintenance of a
system of internal controls that meets the requirements of such section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF HOLDING AND COMSYS
Except as set forth on the disclosure letter (each section of which
qualifies the correspondingly numbered representation and warranty or covenant
to the extent specified therein) previously delivered by Holding and Comsys to
the Company (the "COMSYS DISCLOSURE LETTER"), Holding and Comsys hereby jointly
and severally represent and warrant to the Company as follows:
SECTION 4.1. Organization. Holding and each of the Subsidiaries of
Holding (the "HOLDING SUBSIDIARIES") is a corporation, limited liability company
or partnership duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all requisite power and
authority to own, operate and lease its properties and to carry on its business
as now conducted. Holding and each of the Holding Subsidiaries is duly qualified
and/or licensed, as may be required, and in good standing in each of the
jurisdictions in which the nature of the business conducted by it or the
character of the property owned, leased or used by it makes such qualification
and/or licensing necessary, except in such jurisdictions where the failure to be
so qualified and/or licensed, individually or in the aggregate, would not be
material to Holding or the Holding Subsidiaries. The copies of the certificate
of incorporation and bylaws of Holding and Comsys that were delivered to the
Company prior to the date of this Agreement are complete and correct copies of
such documents and contain all amendments thereto as in effect on the date of
this Agreement.
SECTION 4.2. Capitalization.
(a) As of the date of this Agreement, the authorized capital stock
of Comsys consists of 5,000,000 shares of common stock, par value $.01 per
share, of Comsys (the "COMSYS COMMON STOCK"), 2,115,500 shares of which are
issued and outstanding. As of the date of this Agreement, no shares of Comsys
Common Stock were held by Comsys in its treasury. The issued and outstanding
shares of Comsys Common Stock have been duly authorized and validly issued,
fully paid and are nonassessable and free of preemptive rights. Comsys has not,
subsequent to December 31, 2003, declared or paid any dividend, or declared or
made any distribution on, or authorized the creation or issuance of, or issued,
authorized or effected any split up or any other recapitalization of, any of its
capital stock, or directly or indirectly redeemed, purchased or otherwise
acquired any of its outstanding capital stock, nor has Comsys heretofore agreed
to take any such action. There are no outstanding contractual obligations of
Comsys of any kind to redeem, purchase or otherwise acquire any outstanding
shares of capital stock of Comsys. Other than the Comsys Common Stock, there are
no outstanding bonds, debentures, notes or other indebtedness or securities of
Comsys having the right to vote on any matters on which stockholders of Comsys
may vote. Except as set forth above, no shares of capital stock or other voting
securities of Comsys are issued, reserved for issuance or outstanding, and there
are no outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Comsys or any
29
other Holding Subsidiary is a party or by which any of them is bound obligating
Comsys or any other Holding Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting
securities of Comsys or of any other Holding Subsidiary or obligating Comsys or
any other Holding Subsidiary to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking.
(b) As of the date of this Agreement, the authorized capital stock
of Holding consists of: (i) 35,000,000 shares of Holding Common Stock,
20,844,060 shares of which are issued and outstanding; (ii) 150,000 shares of
Class A-1 preferred stock of Holding, par value $.01 per share (the "HOLDING
CLASS A-1 PREFERRED STOCK"), 92,553.653 shares of which are issued and
outstanding; (iii) 46,352 shares of Class A-2 preferred stock of Holding, par
value $.01 per share (the "HOLDING CLASS A-2 PREFERRED STOCK"), 46,351.073
shares of which are issued and outstanding; (iv) 3,000 shares of Holding Class
A-3 Preferred Stock, 3,000 shares of which are issued and outstanding; (v)
33,000 shares of Holding Class B Preferred Stock, 33,000 shares of which are
issued and outstanding; (vi) 62,500 shares of Holding Class C Preferred Stock,
62,500 shares of which are issued and outstanding; (vii) 1,000 shares of Holding
Class D Preferred Stock, 1,000 shares of which are issued and outstanding; and
(viii) 7,177.579 shares of Class E preferred stock of Holding, par value $.01
per share (the "HOLDING CLASS E PREFERRED STOCK"), 7,177.579 shares of which are
issued and outstanding. As of the date of this Agreement, no shares of any class
of Holding capital stock were held by Holding in its treasury. The issued and
outstanding shares of each class of Holding capital stock have been duly
authorized and validly issued, fully paid and are nonassessable and free of
preemptive rights. Holding has not, subsequent to December 31, 2003, declared or
paid any dividend, or declared or made any distribution on, or authorized the
creation or issuance of, or issued, authorized or effected any split up or any
recapitalization of, any of its capital stock, or directly or indirectly
redeemed, purchased or otherwise acquired any of its outstanding capital stock,
nor has Holding heretofore agreed to take any such action. There are no
outstanding contractual obligations of Holding of any kind to redeem, purchase
or otherwise acquire any outstanding shares of capital stock of Holding. Other
than the respective classes of Holding capital stock there are no outstanding
bonds, debentures, notes or other indebtedness or securities of Holding having
the right to vote on any matters on which stockholders of Holding may vote. No
shares of capital stock or other voting securities of Holding are issued,
reserved for issuance or outstanding, and there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which Holding is a party or by which Holding is
bound obligating Holding to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of Holding or obligating Holding to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking.
SECTION 4.3. Authorization; No Conflict.
(a) Each of Holding and Comsys has the requisite corporate power and
authority to enter into and deliver this Agreement and all other agreements and
documents contemplated hereby to which it is a party and to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement by Holding and Comsys, the performance by Holding and Comsys of their
respective obligations hereunder and the
30
consummation by Holding and Comsys of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Holding and Comsys,
respectively, and no other corporate proceedings on the part of Holding or any
of the Holding Subsidiaries are necessary to authorize the execution and
delivery of this Agreement, the performance by Holding and Comsys of their
respective obligations hereunder and the consummation by Holding and Comsys of
the transactions contemplated hereby, other than obtaining the Holding
Stockholder Consent (as defined in Section 4.3(c)). This Agreement has been duly
executed and delivered by each of Holding and Comsys and constitutes a valid and
binding obligation of Holding and Comsys respectively, enforceable in accordance
with its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization or other
laws affecting the enforcement of creditors' rights generally or by general
equitable principles.
(b) The Board of Directors of Comsys has, by resolutions duly
adopted by the requisite vote of the directors present at a meeting of such
board duly called and held on July 15, 2004 and not subsequently rescinded or
modified in any way, unanimously (i) determined that this Agreement, the Merger,
in accordance with the terms of this Agreement and the other transactions
contemplated hereby to which Comsys is a party are advisable and in the best
interests of Comsys and its stockholders, and (ii) approved and adopted this
Agreement and approved the Merger and the other transactions contemplated hereby
to which Comsys is a party. No vote of the holders of any class or series of
Comsys' capital stock is necessary to consummate the Merger.
(c) The Board of Directors of Holding has, by resolutions duly
adopted by the requisite vote of the directors present at a meeting of such
board duly called and held on July 15, 2004 and not subsequently rescinded or
modified in any way, unanimously (i) determined that this Agreement, the Merger,
in accordance with the terms of this Agreement and the other transactions
contemplated hereby to which Holding is a party are advisable and in the best
interests of Holding and its stockholders, and (ii) approved and adopted this
Agreement and approved the Merger and the other transactions contemplated hereby
to which Holding is a party. The only vote of the holders of any class or series
of Holding's capital stock necessary to consummate the Merger is the adoption of
this Agreement by the holders of a majority of the issued and outstanding shares
of Holding Common Stock (the "HOLDING STOCKHOLDER CONSENT").
(d) Neither the execution and delivery of this Agreement by Holding
or Comsys, nor the consummation by Holding or Comsys of the transactions
contemplated hereby nor compliance by Holding or Comsys with any of the
provisions herein will (i) result in a violation or breach of or conflict with
the certificate of incorporation or bylaws of Holding or Comsys or any similar
organizational documents of any Holding Subsidiaries, (ii) result in a violation
or breach of or conflict with any provisions of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination, cancellation of, or give rise to a right of
purchase under, or accelerate the performance required by, or result in a right
of termination or acceleration under, or result in the creation of any Lien upon
any of the properties or assets owned or operated by Holding or any of the
Holding Subsidiaries under, or result in being declared void, voidable or
without further binding effect, or otherwise result in a detriment to Holding or
any Holding Subsidiary under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, contract, lease,
agreement or other instrument or obligation of any kind to which
31
Holding or any of the Holding Subsidiaries is a party or by which Holding or any
of the Holding Subsidiaries or any of their respective properties or assets may
be bound or (iii) subject to obtaining or making the consents, approvals,
orders, authorizations, registrations, declarations and filings referred to in
paragraph (e) below, violate any judgment, ruling, order, writ, injunction,
decree, statute, law (including the common law), rule or regulation applicable
to Holding or any of the Holding Subsidiaries or any of their respective
properties or assets other than any such event described in items (ii) or (iii)
which, individually or in the aggregate, has not had and would not reasonably be
expected to have or result in a Holding Material Adverse Effect. A "HOLDING
MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the business,
operations, assets, liabilities, condition (financial or otherwise) or results
of operations of Holding and the Holding Subsidiaries considered as a single
enterprise or (ii) the ability of Holding or Comsys to perform their respective
obligations under this Agreement or to consummate the transactions contemplated
by this Agreement; provided, however, that any event, condition, change,
occurrence, development or state of circumstances which (A) adversely affects
the securities markets in general or the information technology staffing
industry generally, including legal, accounting or regulatory changes, (B)
arises out of general economic or industry conditions (and in each case does not
disproportionately affect Holding and the Holding Subsidiaries considered as a
single enterprise) or (C) (other than with respect to a breach of either this
Section 4.3 or Section 4.20 that is not timely cured if susceptible to cure)
arise out of, result from or relate to the transactions contemplated by this
Agreement or the announcement thereof, shall not be considered in determining
whether a Holding Material Adverse Effect has occurred.
(e) No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental or regulatory
authority is necessary to be obtained or made by Comsys or any other Holding
Subsidiary in connection with Holding's or Comsys' respective execution,
delivery and performance of this Agreement or the consummation by Holding or
Comsys of the transactions contemplated hereby, except for (i) compliance with
the DGCL, with respect to the filing of the Certificate of Merger, (ii)
compliance with the HSR Act and applicable foreign competition and/or antitrust
laws, if any, and (iii) the filing with the SEC of such reports under Section
13(a), 13(d), 15(d) or 16(a) and Rule 14f-1 of the Exchange Act, as may be
required in connection with this Agreement and the transactions contemplated
hereby.
SECTION 4.4. Subsidiaries.
(a) Holding has no Subsidiaries other than Comsys. All of the
outstanding shares of capital stock or other equity securities of, or other
ownership interests in, Comsys are duly authorized, validly issued, fully paid
and nonassessable, and such shares, securities or interests are owned by Holding
free and clear of any Liens or limitations on voting rights. There are no
subscriptions, options, warrants, calls, rights, convertible securities or other
agreements or commitments of any character relating to the issuance, transfer,
sales, delivery, voting or redemption (including any rights of conversion or
exchange under any outstanding security or other instrument) for any of the
capital stock or other equity interests of, or other ownership interests in,
Comsys. There are no agreements requiring Holding to make contributions to the
capital of, or lend or advance funds to, Comsys.
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(b) The Holding Subsidiaries and their respective jurisdictions of
organization are identified in Section 4.4(a) of the Comsys Disclosure Letter.
All of the outstanding shares of capital stock or other equity securities of, or
other ownership interests in, each Holding Subsidiary are duly authorized,
validly issued, fully paid and nonassessable, and such shares, securities or
interests are owned by Comsys or by another Holding Subsidiary free and clear of
any Liens or limitations on voting rights. There are no subscriptions, options,
warrants, calls, rights, convertible securities or other agreements or
commitments of any character relating to the issuance, transfer, sales,
delivery, voting or redemption (including any rights of conversion or exchange
under any outstanding security or other instrument) for any of the capital stock
or other equity interests of, or other ownership interests in, any Holding
Subsidiaries. There are no agreements requiring Comsys or any other Holding
Subsidiary to make contributions to the capital of, or lend or advance funds to,
any Holding Subsidiary.
SECTION 4.5. Financial Statements.
(a) The consolidated balance sheets and the related consolidated
statements of operations, consolidated statements of stockholders' equity and
comprehensive income (loss) and consolidated statements of cash flows
(including, in each case, any related notes and schedules thereto) of Holding
for the annual periods ending December 31, 2001, 2002 and 2003 and the quarterly
period ending March 31, 2004 (collectively, the "HOLDING FINANCIAL STATEMENTS")
delivered by Holding to the Company have been prepared from the books and
records of Holding and the Holding Subsidiaries, have been prepared in
conformity with GAAP (except, in the case of unaudited statements) applied on a
consistent basis during the periods involved (except as otherwise noted therein)
and present fairly the consolidated financial position and the consolidated
results of operations and cash flows of Holding and the Holding Subsidiaries as
of the dates or for the periods presented therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments in the
ordinary course of business). Except as reflected in the Holding Financial
Statements, neither Holding nor any of the Holding Subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise), other than liabilities or obligations that (i) were not required
by GAAP to be disclosed or provided for in the Holding Financial Statements or
(ii) were incurred since December 31, 2003, and which, in each case, (A) were
incurred in the ordinary course of business consistent with past practice and
(B) individually or in the aggregate, have not had and would not reasonably be
expected to have a Holding Material Adverse Effect.
(b) Neither Holding nor Comsys has received written notice from any
governmental entity that any of its accounting policies or practices are or may
be the subject of any review, inquiry, investigation or challenge by any
governmental entity. Since January 1, 2001, neither Holding's nor Comsys'
respective independent public accounting firm has informed Holding or Comsys,
respectively, that it has any material questions, challenges or disagreements
regarding or pertaining to Holding's or Comsys' respective accounting policies
or practices. Since January 1, 2001, to the knowledge of Holding and Comsys, no
officer or director of Holding or Comsys has received, or is entitled to
receive, any material compensation from any entity that has engaged in or is
engaging in any material transaction with Holding or any Holding Subsidiary. Set
forth in Section 4.5(b) of the Comsys Disclosure Letter is a list of all
off-balance sheet special purpose entities and financing arrangements of Holding
and the Holding Subsidiaries.
33
SECTION 4.6. Absence of Material Adverse Changes, etc. Since March
31, 2004, Holding and the Holding Subsidiaries have conducted their respective
businesses in the ordinary course of business consistent with past practice and
there has not been or occurred:
(a) any event, condition, change, occurrence, development or state
of circumstances which, individually or in the aggregate, has had or would
reasonably be expected to have a Holding Material Adverse Effect;
(b) any material damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets owned or operated
by Holding or the Holding Subsidiaries; or
(c) any event, condition, action or occurrence that, if taken during
the period from the date of this Agreement through the Effective Time, would
constitute a breach of Section 5.2(b).
SECTION 4.7. Litigation. There are no suits, actions or legal,
administrative, arbitration or other proceedings or governmental investigations
pending or, to the knowledge of Holding or Comsys, threatened, to which Holding
or any of the Holding Subsidiaries is a party. There are no judgments, decrees,
injunctions, rules, awards or orders of any governmental or regulatory entity or
arbitrator outstanding against Holding or any of the Holding Subsidiaries.
SECTION 4.8. Information Supplied. The information provided by
Holding and Comsys for inclusion in the Proxy Statement (including any
information required to be filed with the SEC and delivered to the Company
stockholders pursuant to Rule 14f-1 under the Exchange Act) and each amendment
or supplement thereto, at the time of filing thereof with the SEC and at the
time of its dissemination to the Company's stockholders will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
SECTION 4.9. Broker's or Finder's Fees. No agent, broker, Person or
firm acting on behalf of Holding or any Holding Subsidiary or under Holding's or
any Holding Subsidiary's authority is or will be entitled to any advisory,
commission or broker's or finder's fee or commission from any of the parties
hereto in connection with any of the transactions contemplated hereby.
SECTION 4.10. Employee Plans.
(a) There are no current Comsys Employee Benefit Plans established,
maintained, adopted, participated in, sponsored, contributed or required to be
contributed to, provided, promised to be provided, terminated by, or resulting
in any material liability to Holding or Comsys or any entity with which Holding
or Comsys is considered a single employer under Section 414(b), (c) or (m) of
the Code ("COMSYS ERISA AFFILIATES"). As used in this Agreement, "COMSYS
EMPLOYEE BENEFIT PLAN" means any Holding or Holding Subsidiary plan, program,
policy, practice, agreement or other arrangement providing compensation or
benefits in any form to any current or former employee, independent contractor,
officer or director of Holding or any of the Holding Subsidiaries or any
beneficiary or dependent thereof, whether
34
written or unwritten, formal or informal, including without limitation any
"employee welfare benefit plan" within the meaning of Section 3(1) of ERISA
("COMSYS EMPLOYEE WELFARE BENEFIT PLAN"), any "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA (whether or not such plan is subject
to ERISA) ("COMSYS EMPLOYEE PENSION BENEFIT PLAN") and any other pension,
profit-sharing, bonus, incentive compensation, deferred compensation, vacation,
sick pay, stock purchase, stock option, phantom equity, severance, employment,
consulting, unemployment, hospitalization or other medical, life, or other
insurance, long- or short-term disability, change of control, fringe benefit, or
any other plan, program or policy.
(b) With respect to each Comsys Employee Benefit Plan, Holding and
Comsys have made available to the Company a true, correct and complete copy of:
(i) each writing constituting a part of such Comsys Employee Benefit Plan
(including, but not limited to, the plan document(s), adoption agreement,
prototype or volume submitter documents, trust agreement, annuity contract,
third party administrative contracts and insurance contracts) and all amendments
thereto; (ii) the two most recent Annual Reports (Form 5500 Series) including
all applicable schedules, if required; (iii) the current summary plan
description and any material modifications thereto, if required to be furnished
under ERISA, or any written summary provided to participants with respect to any
plan for which no summary plan description exists; (iv) the most recent
determination letter (or if applicable, advisory or opinion letter) from the
Internal Revenue Service, if any, or if an application for a determination
letter is pending, the application with all attachments; and (v) all notices
given within the last three years relating to such Comsys Employee Benefit Plan,
any fiduciary thereof, Holding, Comsys, or any Comsys ERISA Affiliate by the
Internal Revenue Service, Department of Labor, Pension Benefit Guarantee
Corporation, or other governmental agency relating to such Comsys Employee
Benefit Plan.
(c) Each Comsys Employee Benefit Plan that is intended to be
"qualified" within the meaning of Section 401(a), 401(f) or 403(a) of the Code
and, to the extent applicable, Section 401(k) of the Code ("QUALIFIED COMSYS
EMPLOYEE BENEFIT PLAN"), has received a favorable determination letter from the
Internal Revenue Service that has not been revoked (or is within the remedial
amendment period for obtaining such letter), and no event has occurred and no
condition exists that could reasonably be expected to adversely affect the
qualified status of any such Comsys Employee Benefit Plan. For the avoidance of
doubt, the term "favorable determination letter" as used in this Section 4.10(c)
does not include an opinion letter or advisory letter issued with respect to a
master and prototype or volume submitter plan. Any favorable determination
letters referenced in this Section 4.10(c) cover "GUST" as defined in footnote 2
of IRS Notice 2003-49. Each Qualified Comsys Employee Benefit Plan has timely
made "GOOD FAITH" amendments to comply with the Economic Growth and Tax
Reconciliation Relief Act of 2001 as required by IRS Notice 2001-42.
(d) Holding or Comsys, as applicable, has (i) filed or caused to be
filed all material returns and reports on the Comsys Employee Benefit Plans that
it and/or any fiduciary of any such plan is required to file and (ii) paid or
made adequate provision for all fees, interest, penalties, assessments or
deficiencies that have become due pursuant to those returns or reports or
pursuant to any assessment or adjustment that has been made relating to those
returns or reports.
35
(e) The funding, if any, under each Comsys Employee Welfare Benefit
Plan does not exceed and has not exceeded the limitations under Sections 419A(b)
and 419A(c) of the Code. Neither Holding nor Comsys is subject to taxation on
the income of any Comsys Employee Welfare Benefit Plan's welfare benefit fund
(as such term is defined in Section 419(e) of the Code) under Section 419A(g) of
the Code. All Comsys Employee Welfare Benefit Plans required to comply with the
COBRA provisions of ERISA and the Code (and similar state law) have complied
with such requirements in all material respects.
(f) Each Comsys Employee Benefit Plan has been operated and
administered in all material respects in accordance with its provisions.
(g) Holding and the Holding Subsidiaries have complied, and are now
in compliance, in all material respects, with all provisions of ERISA, the Code
and all laws and regulations applicable to the Comsys Employee Benefit Plans.
(h) None of Holding, Comsys or any Comsys ERISA Affiliate has ever
established, maintained, contributed to, or had an obligation to contribute to,
any Comsys Employee Benefit Plan that is a "MULTIEMPLOYER PLAN," as that term is
defined in Section 3(37) of ERISA, or is subject to Title IV of ERISA. None of
Holding, Comsys or any Comsys ERISA Affiliate has any liability under Title IV
of ERISA (including a liability to pay premiums to the Pension Benefit Guaranty
Corporation), and no such liability has been or is expected to be incurred by
Holding or any of the Holding Subsidiaries.
(i) Neither Holding nor the Holding Subsidiaries is obligated to
provide life, health or medical benefits or insurance coverage to any
individual, or to the family members of any individual, for any period extending
beyond the termination of the individual's employment, except to the extent
required by the COBRA provisions in ERISA and the Code or any similar provisions
of state law.
(j) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not, either alone or
in connection with termination of employment, (i) entitle any current or former
employee, independent contractor, director, or officer of Holding or the Holding
Subsidiaries to severance pay, any change in control payment, or any other
material payment (including unemployment compensation, bonus or otherwise),
except as expressly provided in this Agreement, (ii) accelerate the time of
payment or vesting, change the form or method of payment, or increase the amount
of compensation due, any such employee, independent contractor, director, or
officer, (iii) materially increase any benefits otherwise payable under any
Comsys Employee Benefit Plan, agreement or otherwise, or (iv) entitle any such
employee, independent contractor, director or officer to any gross-up or similar
material payment in respect of the excise tax described in Section 4999 of the
Code. Neither Holding nor any Holding Subsidiary has taken any action that would
result in its incurring any obligation for any payments or benefits described in
clauses (i), (ii), (iii) or (iv) of this Section 4.10(j) (without regard to
whether the transactions contemplated by this Agreement are consummated) except
to the extent required in a written contract or agreement in existence as of the
date of this Agreement.
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(k) There are no suits, actions, proceedings, investigations, claims
or orders pending or, to the knowledge of Holding and Comsys, threatened against
Holding any Holding Subsidiary or any Comsys Employee Benefit Plan related to
any Comsys Employee Benefit Plan (other than claims for benefits or appeals of
denied claims in the ordinary course of business). No Comsys Employee Benefit
Plan is subject to any ongoing audit, investigation, or other administrative
proceeding of any governmental entity, and no Plan is the subject of any pending
application for administrative relief under any voluntary compliance program or
closing agreement program of the Internal Revenue Service or the Department of
Labor.
(l) Holding or Comsys, as applicable, has the right to amend or
terminate each Comsys Employee Benefit Plan at any time without incurring any
liability other than with respect to benefits that have already accrued under a
Comsys Employee Pension Benefit Plan.
(m) Without limiting the generality of any other representation
contained herein, there exists no Lien against Holding, any Holding Subsidiary,
any Comsys ERISA Affiliate, or any of their assets arising under sections 302(f)
or 4068(A) of ERISA or section 412(n) of the Code.
(n) None of Holding, Comsys or any Comsys ERISA Affiliate has a
formal plan, commitment, or proposal, whether legally binding or not, nor has
any of them made a commitment to employees, officers, directors, consultants or
independent contractors to create any additional Comsys Employee Benefit Plan or
modify, change or terminate any existing Comsys Employee Benefit Plan, and no
such plan, commitment or proposal is under serious consideration. No events have
occurred or are expected to occur with respect to any Comsys Employee Benefit
Plan that would cause a material change in the cost of providing the benefits
under such plan or would cause a material change in the cost of providing for
other liabilities of such plan other than an economic downturn, an increase in
the cost of healthcare, or similar event beyond the control of Holding and
Holding Subsidiaries.
SECTION 4.11. Taxes.
(a) Each of Holding and each Holding Subsidiary has timely filed all
material federal, state, local, and other Tax Returns required to be filed by it
in the manner prescribed by applicable law and all such Tax Returns are true,
complete and correct in all material respects. All Taxes shown as due on such
Tax Returns have been paid in full and Holding and each Holding Subsidiary has
made adequate provision (or adequate provision has been made on its behalf) for
all accrued Taxes not yet due. The accruals and reserves for Taxes reflected in
the Holding Financial Statements are adequate to cover all Taxes accruing
through such date. Holding and the Holding Subsidiaries have withheld and paid
over all material Taxes required to have been withheld and paid over, and
complied in all material respects with all information reporting and backup
withholding requirements, including the maintenance of required records with
respect thereto, in connection with amounts paid or owing to any employee,
creditor, independent contractor or other third party. There are no material
Liens on any of the assets, rights or properties of Holding or any Holding
Subsidiary with respect to Taxes, other than Liens for Taxes not yet due and
payable or for Taxes that Holding or a Holding Subsidiary is contesting in good
faith through appropriate proceedings.
37
(b) As of the date of this Agreement, no federal, state, local or
foreign audits or other administrative proceedings or court proceedings are
presently pending with regard to any Taxes or Tax Returns of Holding or any
Holding Subsidiary, and neither Holding nor any Holding Subsidiary has received
a written notice of any material pending or proposed claims, audits or
proceedings with respect to Taxes. No material deficiencies have been asserted
in writing against Holding or any Holding Subsidiary as a result of examinations
by any state, local, federal or foreign taxing authority and no material issue
has been raised by any examination conducted by any state, local, federal or
foreign taxing authority that, by application of the same principles, might
result in a proposed deficiency for any other period not so examined which
deficiency (or deficiencies), in either case, is not (or are not) adequately
reserved for in the most recent Holding Financial Statements. Each material
deficiency resulting from any audit or examination relating to Taxes of Holding
or any Holding Subsidiary by any taxing authority has been paid or is being
contested in good faith and in accordance with law and is adequately reserved
for on the balance sheets contained in the Holding Financial Statements in
accordance with GAAP. No claim is pending and no claim has ever been made that
has not been resolved by an authority in a jurisdiction where Holding or any of
the Holding Subsidiaries does not file Tax Returns that Holding or any Holding
Subsidiary, as the case may be, is or may be subject to Tax in that
jurisdiction. Neither Holding nor any Holding Subsidiary is subject to any
private letter ruling of the Internal Revenue Service or comparable rulings of
other tax authorities that will be binding on Holding or any Holding Subsidiary
with respect to any period following the Closing Date. Neither Holding nor any
Holding Subsidiary has granted any power of attorney which is currently in force
with respect to any income, franchise or similar Taxes or any income, franchise
or similar Tax Returns.
(c) Neither Holding nor any Holding Subsidiary has requested any
extension of time within which to file any material Tax Return which Tax Return
has not yet been filed. There are no agreements, waivers of statutes of
limitations, or other arrangements providing for extensions of time in respect
of the assessment or collection of any unpaid Taxes against Holding or any
Holding Subsidiary. Holding and each Holding Subsidiary have disclosed on their
federal income Tax Returns all positions taken therein that could, if not so
disclosed, give rise to a substantial understatement penalty within the meaning
of Section 6662 of the Code. Neither Holding nor any Holding Subsidiary has been
a party to a "listed transaction" within the meaning of Treas. Reg. Sec.
1.6011-4(b).
(d) Neither Holding nor any Holding Subsidiary is a party to any Tax
sharing agreement, Tax indemnity obligation or similar agreement, arrangement or
practice with respect to Taxes (including any advance pricing agreement, closing
agreement or other agreement relating to Taxes with any taxing authority).
(e) To the knowledge of Holding and Comsys, neither Holding nor any
Holding Subsidiary is party to any agreement, contract or arrangement that,
individually or collectively, would give rise to the payment of any amount
(whether in cash or property, including shares of capital stock), that would not
be deductible pursuant to the terms of Section 280G of the Code or would be
subject to any excise tax under Section 4999 of the Code, or, to the knowledge
of Holding, that would not be deductible pursuant to the terms of Section
162(a)(1), 162(m) or 162(n) of the Code.
38
(f) None of Holding, Comsys or any affiliate of Holding or Comsys
has made with respect to Holding any Holding Subsidiary, or any assets held by
Holding or any Holding Subsidiary any consent under Section 341 of the Code.
(g) Neither Holding nor any Holding Subsidiary has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355 (a)(1)(A) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code (A) in the two
years prior to the date of this Agreement, or (B) in a distribution that could
otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in conjunction with the
Merger.
(h) The statutes of limitations for the federal income Tax Returns
of Holding and the Holding Subsidiaries have expired or otherwise have been
closed for all taxable periods ending on or before December 31, 1998.
(i) Neither Holding nor any Holding Subsidiary is a party to any
safe harbor lease within the meaning of Section 168(f)(8) of the Code, as in
effect prior to amendment by The Tax Equity and Fiscal Responsibility Act of
1982. None of the property owned by Holding or a Holding Subsidiary is
"TAX-EXEMPT USE PROPERTY" within the meaning of Section 168(h) of the Code.
Neither Holding nor any Holding Subsidiary is required to make any adjustment
under Code Section 481(a) by reason of a change in accounting method or
otherwise.
(j) There have not been, within two years of the date of this
Agreement, any (i) redemptions by Holding or any Holding Subsidiary, (ii)
transfers or disposition of property by Holding or any Holding Subsidiary for
which Holding or Holding Subsidiary did not receive adequate consideration, or
(iii) distributions to the holders of Holding Common Stock with respect to their
stock other than distributions of cash in the ordinary course of business,
excluding any redemptions, transfers or dispositions between or among Holding
and any Holding Subsidiary.
(k) Section 4.11(k) of the Comsys Disclosure Letter accurately
reflects the tax basis of the assets listed therein.
(l) Holding's net operating loss and capital loss carryforwards are
no less than the amounts reflected in Section 4.11(l) of the Comsys Disclosure
Letter.
(m) Neither Holding nor any Holding Subsidiary has been a member of
an affiliated group filing a consolidated federal income Tax Return (other than
a group the common parent of which was Holding). To the knowledge of Holding and
Comsys, neither Holding nor any Holding Subsidiary has been notified in writing
that it will be required to incur any liability for Taxes of any Person (other
than Holding or a Holding Subsidiary) under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or foreign law) with respect to any
Tax claim that has been made by a Tax authority with respect to such other
Person.
(n) Neither Holding nor any Holding Subsidiary will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any intercompany
39
transactions or any excess loss account described in Treasury Regulations under
Code section 1502 (or any corresponding or similar provision of state, local or
foreign law).
(o) Neither Holding nor any of the Holding Subsidiaries has taken
any action or knows of any fact, agreement, plan or other circumstance that
could reasonably be expected to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
SECTION 4.12. Environmental Matters. Except as, individually or in
the aggregate, would not reasonably be expected to have a Holding Material
Adverse Effect: (i) Holding and Holding Subsidiaries are in compliance with all
applicable Environmental Laws; (ii) Holding and Holding Subsidiaries are not
subject to any existing, pending or, to Holding and Comsys' knowledge,
threatened proceedings regarding alleged violation of or liability under any
Environmental Law; (iii) there have been no unauthorized releases of pollutants,
contaminants or other substances regulated under any Environmental Law
(including petroleum products) at any property owned, operated or occupied by
Holding and Holding Subsidiaries; and (iv) Holding and Holding Subsidiaries have
obtained all permits and other authorizations required under Environmental Laws,
such permits and other authorizations are currently in full force and effect,
and Holding and the Holding Subsidiaries are in compliance with such permits and
other authorizations. To the knowledge of Holding and Comsys, there has been no
material environmental investigation, study, audit, test, review or other
analysis conducted by or on behalf of Holding or Comsys (or any of their
respective predecessors) in relation to the current or prior business of Holding
(or any of its respective predecessors) or any Holding Subsidiary or any
property or facility now or previously owned or leased by Holding or any Holding
Subsidiary.
SECTION 4.13. Compliance with Laws. Holding and the Holding
Subsidiaries are in compliance in all material respects with all applicable
laws, rules or regulations of any United States federal, state or local or
foreign government or agency thereof that materially affect the business,
properties or assets owned or leased by Holding and the Holding Subsidiaries,
and no notice, charge, claim, action or assertion has been received by Holding
or any Holding Subsidiary or, to Holding's and Comsys' knowledge, has been
filed, commenced or threatened against Holding or any Holding Subsidiary
alleging any such non-compliance. All licenses, permits and approvals required
under such laws, rules and regulations are in full force and effect, except as
would not be material to Holding and the Holding Subsidiaries considered
together as a single enterprise.
SECTION 4.14. Employment Matters.
(a) Holding and the Holding Subsidiaries are in compliance in all
material respects with all applicable laws respecting labor, employment,
immigration, fair employment practices, terms and conditions of employment,
workers' compensation, occupational safety, plant closings, wages and hours, and
any other law applicable to any current or former employee or director of
Holding or any Holding Subsidiary (each a "COMSYS EMPLOYEE"), or the independent
contractors and consultants of Holding and the Holding Subsidiaries
(collectively, the "COMSYS INDEPENDENT CONTRACTORS"), or other Persons providing
services to Holding or any Holding Subsidiary, including, without limitation,
all laws concerning the classification of
40
employees and independent contractors. Each of Holding and the Holding
Subsidiaries has withheld all material amounts required by applicable law or by
agreement to be withheld from the wages, salaries and other payments to
employees, and neither Holding nor any Holding Subsidiary is liable for any
material arrears of wages or any material penalty for failure to timely pay
wages.
(b) To Holding's and Comsys' knowledge, no Comsys Employee, Comsys
Independent Contractor or any other Person providing services to Holding or any
Holding Subsidiary is in violation of any term of any employment contract,
non-disclosure agreement, non-competition agreement, or any restrictive covenant
applicable to a former employer relating (i) to the right of any such Person to
be employed or retained by Holding or any Holding Subsidiary, or (ii) to the use
by or for the benefit of Holding or any Holding Subsidiary of the trade secrets,
intellectual property, or confidential or proprietary information of others, in
each case, in any material respect. To the knowledge of Holding and Comsys, no
Comsys Employee, Comsys Independent Contractor or any other Person providing
services to Holding or any Holding Subsidiary is in violation of any term of any
employment contract, non-disclosure agreement, non-competition agreement, or
restrictive covenant relating to the business of Holding or any Holding
Subsidiary, which violation or violations would, individually or in the
aggregate, have a Holding Material Adverse Effect.
(c) Holding and the Holding Subsidiaries have provided the Company
with true, complete and correct copies of all current written employment,
management, change of control or severance agreements or arrangements which have
been entered into between Holding and any Holding Subsidiary, on the one hand,
and any Comsys Employee, Comsys Independent Contractor or any Person providing
services to Holding or any Holding Subsidiary, on the other hand, including any
amendments thereto, in each case, providing for annual compensation, change of
control or severance benefits that are in excess of $100,000 in the aggregate,
and a list of any current officer of Holding or a Holding Subsidiary or any
other employee of Holding or a Holding Subsidiary with a level of annual
compensation (including base pay and any bonus or other incentive payments) that
is in excess of $100,000 per year for the year ended December 31, 2003. Other
than as expressly set forth in such agreements or amendments or in this
Agreement, there have been no material changes, and there are no material
proposed amendments or changes, to the remuneration or benefits of any kind
payable or due to any of such Comsys Employees.
(d) Neither Holding nor any Holding Subsidiary: (i) is a party to or
otherwise bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is any
such contract or agreement presently being negotiated, nor, to the knowledge of
Holding and Comsys, is there, nor has there been in the last five years, a
representation campaign respecting any of the employees of Holding or any of the
Holding Subsidiaries, and, to the knowledge of Holding and Comsys, there are no
campaigns being conducted to solicit cards from employees of Holding or any of
the Holding Subsidiaries to authorize representation by any labor organization;
(ii) is a party to, or bound by, any consent decree with, or citation by, any
governmental agency relating to employees or employment practices; or (iii) is
the subject of any proceeding asserting that it has committed an unfair labor
practice or is seeking to compel it to bargain with any labor union or labor
organization nor, as of the date of this Agreement, is there pending or, to the
knowledge of Holding and Comsys,
41
threatened, any labor strike, dispute, walkout, work stoppage, slow-down or
lockout involving Holding or any of the Holding Subsidiaries.
(e) In the 90-day period preceding the date of this Agreement,
neither Holding nor any of the Holding Subsidiaries has effectuated (i) a "PLANT
CLOSING" (as defined in the WARN Act), affecting any site of employment or one
or more facilities or operating units within any site of employment or facility
of Holding or any of the Holding Subsidiaries, or (ii) a "MASS LAYOFF" (as
defined in the WARN Act) affecting any site of employment or facility of Holding
or any of the Holding Subsidiaries; nor has Holding or any of the Holding
Subsidiaries been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
state, local or foreign law or regulation similar to the WARN Act. Section
4.14(e) of the Comsys Disclosure Letter lists the number of Holding's or the
Holding Subsidiaries' employees (other than billable consultants) who have
suffered an "EMPLOYMENT LOSS" (as defined in the WARN Act) in the 90 days prior
to the date of this Agreement or had a reduction in hours of at least 50% in the
180 days prior to the date of this Agreement. To the knowledge of Holding and
Comsys, Holding and the Holding Subsidiaries have at all times properly
classified each of their respective employees as employees, each of their
respective "leased employees" (within the meaning of Section 414(n) of the Code)
as leased employees, and each of its independent contractors as independent
contractors, as applicable.
SECTION 4.15. Foreign National Employees. Section 4.15 of the Comsys
Disclosure Letter sets forth a complete list of all employees of Holding or
Comsys who, to Holding's and Comsys' knowledge, are working pursuant to visas
sponsored by Holding or Comsys (collectively, the "COMSYS FOREIGN NATIONAL
EMPLOYEES"). To the knowledge of Holding and Comsys, each Comsys Foreign
National Employee holds a valid visa and is permitted to work in his or her
current capacity as a Comsys Employee pursuant to such visa.
SECTION 4.16. Investment Company. Neither Holding nor any of the
Holding Subsidiaries is an "investment company" or a company "controlled" by an
"INVESTMENT COMPANY" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations promulgated thereunder.
SECTION 4.17. Properties. Neither Holding nor any of the Holding
Subsidiaries owns or has owned any real property. Except as set forth in the
Comsys Disclosure Schedule, Holding and each of the Holding Subsidiaries has
good and marketable title to all of their respective properties and assets, free
and clear of all Liens except Liens for Taxes not yet due and payable, pledges
to secure deposits and such minor imperfections of title, if any, as do not
materially detract from the value of or interfere with the present use of the
property affected thereby or which, individually or in the aggregate, would not
be reasonably likely to have a Holding Material Adverse Effect; and all leases
pursuant to which Holding or any of the Holding Subsidiaries lease from others
material amounts of real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not, under any
of such leases, any existing material default or event of default (or event
which with notice or lapse of time, or both, would constitute a material default
and in respect of which Holding or such Holding Subsidiary has not taken
adequate steps to prevent such a default from occurring). All major items of
operating equipment owned or leased by Holding or any of the Holding
Subsidiaries (i) are, in the aggregate, in a state of repair so as to be
adequate in all material
42
respects for reasonably prudent operations in the areas in which they are
operated and (ii) are adequate, together with all other properties of Holding
and the Holding Subsidiaries, to comply in all material respects with the
requirements of all applicable contracts of Holding and Comsys.
SECTION 4.18. Intellectual Property. Holding and the Holding
Subsidiaries own or possess all necessary licenses or other valid rights to use
all patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, copyrights and proprietary information used or held for use in
connection with their respective businesses (the "COMSYS INTELLECTUAL
PROPERTY"), free and clear of all Liens, and there are no assertions or claims
challenging the validity of any of the foregoing. Neither Holding nor any
Holding Subsidiary has granted to any other Person any license to use any of the
foregoing. To Holding's and Comsys' knowledge, the conduct of Holding's and the
Holding Subsidiaries' respective businesses does not conflict with any patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
copy rights and proprietary information of others in any way. Holding and Comsys
have taken reasonable security measures to protect the secrecy, confidentiality
and value of the Comsys Intellectual Property, to the extent such measures are
appropriate. Neither Holding nor any Holding Subsidiary is required to pay any
royalty or other amount to anyone with respect to any of the Comsys Intellectual
Property. The execution, delivery and performance of this Agreement by Holding
or Comsys of the transactions contemplated by this Agreement will not alter,
impair, diminish or result in the loss of any rights or interests of Holding or
any Holding Subsidiary of any Comsys Intellectual Property.
SECTION 4.19. Insurance. Holding and each Holding Subsidiary is
covered by valid, outstanding enforceable policies of insurance issued by
reputable insurers covering its properties, assets and business against risks of
the nature normally insured against by similar entities in the same or similar
lines of business in coverage amounts typically and reasonably carried by such
entities (the "COMSYS INSURANCE POLICIES"). Section 4.19 of the Comsys
Disclosure Letter sets forth a complete and accurate list of the Comsys
Insurance Policies. The Comsys Insurance Policies are in full force and effect,
and all premiums due thereon have been paid through the date of this Agreement
and will be paid through the Closing Date. Holding and each of the Holding
Subsidiaries has complied in all material respects with the provisions of the
Comsys Insurance Policies applicable to it, and provided to the Company copies
of all of the Comsys Insurance Policies and all amendments and riders thereto.
There are no pending claims under any of the Comsys Insurance Policies,
including any claim for loss or damage to the properties, assets or business of
Holding or any of the Holding Subsidiaries. Neither Holding nor any of the
Holding Subsidiaries has failed to give, in a timely manner, any notice required
under any of the Comsys Insurance Policies to preserve its rights thereunder.
SECTION 4.20. Certain Contracts and Arrangements.
(a) Except with respect to any Comsys Employee Benefit Plan, Section
4.20(a) of the Comsys Disclosure Letter sets forth a true and complete list of
(i) all material agreements to which Holding or any Holding Subsidiary is a
party (which for customers shall be limited to the top fifty Comsys customers in
terms of first quarter 2004 revenue); (ii) all loan or credit agreements, notes,
bonds, mortgages, indentures and other agreements and instruments pursuant to
which indebtedness of Holding or any Holding Subsidiary is outstanding or may be
incurred; (iii) all agreements requiring capital expenditures in excess of
$50,000 individually or
43
$200,000 in the aggregate; and (iv) all contracts that cannot be terminated on
30 days' notice or less without material cost or penalties (the agreements,
contracts and obligations specified above, collectively the "COMSYS CONTRACTS").
Each Comsys Contract is in full force and effect, and is a legal, valid and
binding obligation of Holding or one of the Holding Subsidiaries and, to the
knowledge of Holding and Comsys, each of the other parties thereto, enforceable
in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization or other
laws affecting the enforcement of creditors' rights generally or by general
equitable principles. No condition exists or event has occurred which (whether
with or without notice or lapse of time or both) would constitute a violation,
default or breach by Holding or any Holding Subsidiary or, to the knowledge of
Holding and Comsys, any other party thereto under any Comsys Contract or result
in a right of termination of any Comsys Contract. Other than as contemplated by
Section 4.3(e), no consents, assignments, waivers, authorizations or other
certificates are necessary in connection with the transactions contemplated
hereby to provide for the continuation in full force and effect of all of the
Comsys Contracts after the Closing.
(b) Neither Holding nor any of the Holding Subsidiaries is a party
to or bound by (i) any non-competition or other agreement or other arrangement
that purports to limit or otherwise materially restrict Holding or any Holding
Subsidiary or any successor thereto, or that would, after the Effective Time, to
the knowledge of Holding and Comsys, materially limit or restrict the Company,
the Surviving Entity or any of their subsidiaries or any successor thereto, from
engaging or competing in the information technology staffing business or (ii)
any agreement or other arrangement that contains a "most favored nation"
provision purporting to require Holding or any of the Holding Subsidiaries to
provide services to a customer on terms at least as favorable as those on which
Holding or any Holding Subsidiary provides services to a third party
unaffiliated with such customer.
SECTION 4.21. Comsys Financing Arrangements. Comsys has obtained a
commitment letter from a third party lender (the "COMMITMENT LETTER"), a true
and complete copy of which has been furnished by Comsys to the Company, pursuant
to which the lender has agreed, subject to the terms and on the conditions set
forth in the Commitment Letter, to make available to the Company at the
Effective Time aggregate financing in the amount of $183 million (the
"FINANCING"). The Commitment Letter is in full force and effect and, since the
date thereof, has not been withdrawn, amended or terminated in any manner.
SECTION 4.22. Books and Financial Records. The respective books of
account and other financial records of Holding and Comsys are complete and
correct and represent actual, bona fide transactions and have been maintained in
accordance with sound business practices and the requirements of Section
13(b)(2) of the Exchange Act (regardless of whether or not Holding or Comsys are
subject to that Section), including the maintenance of a system of internal
controls that would meet the requirements of such section if applicable. As of
the Effective Time, neither Holding nor any other Holding Subsidiary will have
any loans or extensions of credit outstanding with any of its respective
officers or directors that would cause the Company not to be in compliance with
Section 402 of the Xxxxxxxx-Xxxxx Act if applicable.
44
ARTICLE 4A
REPRESENTATIONS AND WARRANTIES OF THE HOLDING STOCKHOLDERS
Each Holding Stockholder, severally and not jointly, hereby represents and
warrants as to itself only and not as to any other Holding Stockholder to the
Company as follows:
SECTION 4A1. Status; Power and Authority. If the Holding Stockholder
is not a natural person, the Holding Stockholder is a corporation, limited
liability company or partnership, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite corporate, limited liability company or partnership power and
authority to execute and deliver this Agreement and the Holding Stockholder
Consent, to perform its obligations hereunder and to consummate the transactions
contemplated hereby and has taken all necessary corporate, limited liability
company or partnership action, as applicable, to authorize the execution and
delivery of this Agreement. If the Holding Stockholder is a natural person, the
Holding Stockholder has the requisite competence, power and authority to execute
and deliver this Agreement and the Holding Stockholder Consent, to perform his
or her obligations hereunder and to consummate the transactions contemplated
hereby.
SECTION 4A2. Enforceability. This Agreement has been duly executed
and delivered by the Holding Stockholder and is enforceable in accordance with
its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization or other
laws affecting the enforcement of creditors' rights generally or by general
equitable principles.
SECTION 4A3. Access to Information. The Holding Stockholder has had
an opportunity to review all documents and information provided by the Company
that such Holding Stockholder has requested and considers material to its
decision to enter into this Agreement and to ask questions of the Company or
persons acting on the Company's behalf, concerning the Company and the terms and
conditions of the Merger, and all such questions, if any, have been answered to
the full satisfaction of the Holding Stockholder.
SECTION 4A4. Knowledgeable and Sophisticated Investor. The Holding
Stockholder is a sophisticated investor with such knowledge and experience in
financial and business matters and investments in restricted securities that the
Holding Stockholder is capable of evaluating the merits and risks of acquiring
the shares of Company Common Stock to be issued to the Holding Stockholder in
connection with the Merger. The Holding Stockholder is aware that acquiring
shares of the Company Common Stock is a speculative investment and that there is
no guarantee that the Holding Stockholder will realize any gain from its
investment. The Holding Stockholder is (i) able to bear the economic risk of
this investment and (ii) able to hold the shares of Company Common Stock
indefinitely. The Holding Stockholder has consulted with its own attorney,
accountant or investment adviser with respect to the suitability of such
investment.
SECTION 4A5. Accredited Investor. The Holding Stockholder (x) is an
"accredited investor" as defined in Regulation D under the Securities Act, and
has executed and delivered to the Company, or will execute and deliver to the
Company within two days of the
45
date of this Agreement, an accredited investor questionnaire in the form
attached hereto as Exhibit E or (y) has retained or consulted with a "purchaser
representative" (as such term is defined in Rule 501 of Regulation D promulgated
under the Securities Act) in connection with the transactions contemplated by
this Agreement. The Holding Stockholder understands that the Company has relied
on the information contained therein in determining to issue shares of Company
Common Stock to the Holding Stockholder.
SECTION 4A6. No Other Representations. The Holding Stockholder
acknowledges that, except as expressly stated in Article 3 of this Agreement,
neither the Company (including any Company Subsidiary) nor any officer,
director, employee, agent or representative of the Company or any Company
Subsidiary has made any representations or warranties of any kind to the Holding
Stockholder with respect to its investment in the Company Common Stock.
SECTION 4A7. Investment Intent. The Holding Stockholder understands
that the shares of Company Common Stock to be issued to the Holding Stockholder
in connection with the Merger, when issued and delivered to the Holding
Stockholder, will not have not been registered under the Securities Act, or any
other applicable state or federal securities statutes. The Holding Stockholder
has no present intention of reselling, directly or indirectly participating in
any distribution of, or otherwise disposing of such shares of Company Common
Stock in violation of applicable securities laws. The Holding Stockholder
understands that it may bear the economic risk of holding such shares for an
indefinite period of time.
SECTION 4A8. Transfer Restrictions. The Holding Stockholder
understands that the shares of Company Common Stock to be issued to the Holding
Stockholder in connection with the Merger may not be offered for sale, sold or
transferred except pursuant to (i) an effective registration under the
Securities Act or in a transaction which is otherwise in compliance with the
Securities Act, (ii) an effective registration under any applicable state
securities statute or in a transaction otherwise in compliance with any
applicable state securities statute and (iii) compliance with the applicable
securities laws of other jurisdictions.
SECTION 4A9. No General Solicitation. The Holding Stockholder
acknowledges that the shares of Company Common Stock to be issued to the Holding
Stockholder in connection with the Merger were not offered to the Holding
Stockholder by means of any general solicitation, publicly disseminated
advertisement or sales literature.
SECTION 4A10. No Brokers. The Holding Stockholder has not authorized
any broker, dealer, agent or finder to act on its behalf, nor does the Holding
Stockholder have any knowledge of any broker, dealer, agent or finder purporting
to act on its behalf with respect to the Merger.
SECTION 4A11. Legend. The Holding Stockholder acknowledges that a
legend substantially as follows will be placed on the certificates representing
the shares of Company Common Stock issued to the Holding Stockholder in
connection with the Merger, along with any additional legend required by federal
or state law or required pursuant to any shareholder or similar agreement:
46
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT.
SECTION 4A12. No Recommendation. The Holding Stockholder
acknowledges that no federal or state agency has made any finding or
determination relating to the fairness for investment of the Company Common
Stock and no federal or state agency has recommended or endorsed the Company
Common Stock.
SECTION 4A13. Other Activities. The Holding Stockholder was not
organized for the specific purpose of acquiring the shares of Company Common
Stock to be issued to the Holding Stockholder in connection with the Merger and
has other investments or business activities or will make other investments or
engage in other business activities, unless the Holding Stockholder has
indicated to the contrary to the Company and specified the number of beneficial
owners thereof and the Company has consented in writing thereto.
SECTION 4A14. Reliance. The Holding Stockholder understands that the
shares of Company Common Stock to be issued to the Holding Stockholder in
connection with the Merger are being transferred to it in reliance upon specific
provisions of federal and state securities laws and that the Company is relying
upon the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Holding Stockholder set forth herein
in order to determine the applicability of such provisions. The Holding
Stockholder shall indemnify and hold the Company harmless from damage, claim or
loss (including attorneys' fees) resulting from breach by such Holding
Stockholder of any representation set forth in this Article 4A with respect to
such Holding Stockholder.
ARTICLE 5
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Conduct of Business by the Company Pending the Merger.
The Company covenants and agrees that, prior to the Effective Time, unless
Holding shall otherwise consent in writing (which consent shall not be
unreasonably withheld, conditioned or delayed), or except as expressly permitted
or required pursuant to this Agreement or any agreement the form of which is
attached hereto as an exhibit (including the Staffing Disposition in conformity
with the terms of this Agreement):
(a) The businesses of the Company and the Company Subsidiaries shall
be conducted only in the ordinary and usual course of business and consistent
with past practices, and the Company and the Company Subsidiaries shall use
their commercially reasonable efforts to maintain and preserve intact their
respective business organizations and to maintain significant beneficial
business relationships with suppliers, contractors, distributors, customers,
licensors,
47
licensees and others having business relationships with them to keep available
the services of their current key officers and employees; and
(b) Without limiting the generality of the foregoing Section 5.1(a),
except as set forth in Section 5.1 of the Company Disclosure Letter or except as
expressly permitted or required pursuant to this Agreement or any agreement the
form of which is attached hereto as an exhibit, the Company shall not directly
or indirectly, and shall not permit any of the Company Subsidiaries to, do any
of the following:
(i) acquire, sell, lease, transfer or dispose of any assets,
rights or securities that are material to the Company and the Company
Subsidiaries or Partners, in each case considered as a single enterprise, or
terminate, cancel, materially modify or enter into any material commitment,
transaction, line of business or other agreement, in each case outside of the
ordinary course of business consistent with past practice;
(ii) acquire by merging or consolidating with or by purchasing
any equity interest in or a substantial portion of the assets of, or by any
other manner, any business, corporation, partnership, association or other
business organization or division thereof;
(iii) amend or propose to amend its certificate of
incorporation or bylaws or, in the case of the Company Subsidiaries, their
respective constituent documents;
(iv) declare, set aside or pay any dividend or other
distribution payable in cash, capital stock, property or otherwise with respect
to any shares of its capital stock other than intra-company transfers from any
Company Subsidiary to its parent entity;
(v) purchase, redeem or otherwise acquire, or offer to
purchase, redeem or otherwise acquire, any shares of its capital stock, other
equity securities, other ownership interests or any options, warrants or rights
to acquire any such stock, securities or interests;
(vi) split, combine or reclassify any outstanding shares of
its capital stock;
(vii) except for Company Common Stock issuable upon exercise
of options, warrants or convertible debt outstanding on the date hereof, issue,
sell, dispose of or authorize, propose or agree to the issuance, sale or
disposition by the Company or any of the Company Subsidiaries of, any shares of,
or any options, warrants or rights of any kind to acquire any shares of, or any
securities convertible into or exchangeable for any shares of, its capital stock
of any class, or any other securities in respect of, in lieu of, or in
substitution for any class of its capital stock outstanding on the date hereof;
(viii) modify the terms of any existing indebtedness for
borrowed money or security issued by the Company or any Company Subsidiary;
(ix) incur any indebtedness for borrowed money, except for
borrowings made in the ordinary course of business under the Second Amended and
Restated
48
Credit Facility dated as of April 14, 2003, as amended, among the Company, its
subsidiary guarantors and CIT Group as a successor to Bank of America, N.A., as
Agent;
(x) assume, guarantee, endorse or otherwise as an
accommodation become responsible for, the obligations of any other Person, or
make any loans or advances, except to or for the benefit of Partners;
(xi) create or assume any material Lien on any material asset;
(xii) authorize, recommend or propose any change in its
capitalization;
(xiii) (A) take any action with respect to the grant of or
increase in any severance or termination pay to any current or former director,
executive officer or employee of the Company or any Company Subsidiary, except
as may be required by any existing severance plan or other agreement, (B)
execute any employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any such director, executive
officer or employee of the Company or any Company Subsidiary, (C) increase the
benefits payable under any existing severance or termination pay policies or
employment agreements, (D) increase the compensation, bonus or other benefits of
current or former directors, executive officers or employees of the Company or
any Company Subsidiary other than billable consultants and, in the case of
non-executive officer employees, increases provided for in the Company's 2004
budget as previously delivered to Holding and Comsys (provided, however, that
the Company is operating within the limits of such budget at the time of any
such increase), (E) adopt or establish any new employee benefit plan or amend in
any material respect any existing employee benefit plan, (F) provide any
material benefit to a current or former director, executive officer or employee
of the Company or any Company Subsidiary not required by any existing agreement
or employee benefit plan, other than for clauses (A), (B) and (D) above, in the
case of employees who are not directors and executive officers, in the ordinary
course of business, (G) hire any person (other than billable consultants) at a
level of annual compensation (including base pay and any guaranteed or signing
bonus or other incentive payments not in accordance with the Company's standard
plans) greater than or equal to $150,000, or (H) take any action that would
result in its incurring any obligation for any payments or benefits described in
clauses (i), (ii), (iii) or (iv) of Section 3.10(j) (without regard to whether
the transactions contemplated by this Agreement are consummated) except to the
extent required in a written contract or agreement in existence as of the date
of this Agreement or by applicable law;
(xiv) other than in the ordinary course of business consistent
with past practice, execute or amend (other than as required by existing
employee benefit plans or employment agreements or by applicable law) in any
material respect any employment, consulting, severance or indemnification
agreement between the Company or any of the Company Subsidiaries and any of
their respective directors, officers, agents, consultants or employees, or any
collective bargaining agreement or other obligation to any labor organization or
employee incurred or entered into by the Company or any of the Company
Subsidiaries (other than as required by existing employee benefit plans or
employment agreements or by applicable law);
49
(xv) make any changes in its method of reporting for taxes or
accounting methods other than as required by GAAP or applicable law; make or
rescind any Tax election; make any change to its method of reporting income,
deductions, or other Tax items for Tax purposes; settle or compromise any Tax
liability or enter into any transaction with an affiliate outside the ordinary
course of business if such transaction would give rise to a material tax
liability;
(xvi) settle, compromise or otherwise resolve any litigation
or other legal proceedings involving a payment of more than $100,000 in any one
case by the Company or any of the Company Subsidiaries;
(xvii) other than in the ordinary course of business, pay or
discharge any claims, Liens or liabilities involving more than $100,000
individually or $200,000 in the aggregate, which are not reserved for or
reflected on the balance sheets included in the Company Financial Statements;
(xviii) write off any accounts or notes receivable in excess
of $250,000 in the aggregate;
(xix) make or commit to make capital expenditures in excess of
the aggregate budgeted amount set forth in the Company's fiscal 2004 capital
expenditure plan previously provided to Comsys;
(xx) enter into any agreement, arrangement or commitment that
limits or otherwise restricts the Company or any Company Subsidiary, or that
would reasonably be expected to, after the Effective Time, limit or restrict
Comsys or any of its Subsidiaries or any of their respective affiliates or any
successor thereto, from engaging or competing in any line of business in which
it is currently engaged or in any geographic area material to the business or
operations of the Company and the Company Subsidiaries or Partners, in each case
considered as a single enterprise;
(xxi) other than in the ordinary course of business consistent
with past practice, terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it is a party;
(xxii) except as permitted by Section 6.10, knowingly take, or
agree to commit to take, any action that would or would reasonably be expected
to result in the failure of a condition set forth in Section 7.2(a) or (b) at,
or as of any time prior to, the Effective Time, or that would materially impair
the ability of the Company, Holding, Comsys, Merger Sub, the Holding
Stockholders or the holders of Company Common Stock to consummate the Merger in
accordance with the terms hereof or materially delay such consummation;
(xxiii) knowingly take any action that would or could
reasonably be expected to disqualify the Merger as a reorganization within the
meaning of Section 368(a) of the Code;
(xxiv) make any payments to any Person that beneficially holds
ten percent (10%) or more of any class of issued and outstanding capital stock
of the Company or is
50
a senior officer of the Company, or any affiliate of any such Person, whether in
respect of such capital stock, as a management or consulting fee or otherwise,
provided, however, that the Company may pay to any such Person (A) interest that
is then due and owing on existing indebtedness that is otherwise permissible
hereunder or (B) compensation and benefits payable to any such Person that is
otherwise permissible hereunder; or
(xxv) take or agree in writing or otherwise to take any of the
actions precluded by Sections 5.1(a) or (b).
SECTION 5.2. Conduct of Business by Holding and Comsys Pending the
Merger. Holding and Comsys covenant and agree that, prior to the Effective Time,
unless the Company shall otherwise consent in writing (which consent shall not
be unreasonably withheld, conditioned or delayed) or except as expressly
permitted or required pursuant to this Agreement or any agreement the form of
which is attached hereto as an exhibit:
(a) The businesses of Holding and the Holding Subsidiaries shall be
conducted only in the ordinary and usual course of business and consistent with
past practices, and Holding and the Holding Subsidiaries shall use their
commercially reasonable efforts to maintain and preserve intact their respective
business organizations and to maintain significant beneficial business
relationships with suppliers, contractors, distributors, customers, licensors,
licensees and others having business relationships with them to keep available
the services of their current key officers and employees; and
(b) Without limiting the generality of the foregoing Section 5.2(a),
except as set forth in Section 5.2 of the Comsys Disclosure Letter or except as
expressly permitted or required pursuant to this Agreement or any agreement the
form of which is attached hereto as an exhibit, Holding and Comsys shall not
directly or indirectly, and shall not permit any of the Holding Subsidiaries to,
do any of the following:
(i) acquire, sell, lease, transfer or dispose of any assets,
rights or securities that are material to Holding and the Holding Subsidiaries
or terminate, cancel, materially modify or enter into any material commitment,
transaction, line of business or other agreement, in each case outside of the
ordinary course of business consistent with past practice;
(ii) acquire by merging or consolidating with or by purchasing
any equity interest in or a substantial portion of the assets of, or by any
other manner, any business, corporation, partnership, association or other
business organization or division thereof;
(iii) amend or propose to amend Holding's certificates of
incorporation or bylaws or, in the case of the Holding Subsidiaries, their
respective constituent documents;
(iv) declare, set aside or pay any dividend or other
distribution payable in cash, capital stock, property or otherwise with respect
to any shares of its capital stock other than intra-company transfers from any
Holding Subsidiary to its parent entity;
(v) except for the redemption of the Holding Class A-1
Preferred Stock, Holding Class A-2 Preferred Stock and Holding Class E Preferred
Stock, purchase,
51
redeem or otherwise acquire, or offer to purchase, redeem or otherwise acquire,
any shares of its capital stock, other equity securities, other ownership
interests or any options, warrants or rights to acquire any such stock,
securities or interests;
(vi) split, combine or reclassify any outstanding shares of
its capital stock;
(vii) except for Comsys Common Stock issuable upon exercise of
options, warrants or convertible debt outstanding on the date hereof, issue,
sell, dispose of or authorize, propose or agree to the issuance, sale or
disposition by Holding or any of the Holding Subsidiaries of, any shares of, or
any options, warrants or rights of any kind to acquire any shares of, or any
securities convertible into or exchangeable for any shares of, their respective
capital stock of any class, or any other securities in respect of, in lieu of,
or in substitution for any class of their respective capital stock outstanding
on the date hereof;
(viii) modify the terms of any existing indebtedness for
borrowed money or security issued by Holding or any Holding Subsidiary (except
as provided in Section 5.2(b)(i));
(ix) incur any indebtedness for borrowed money, except for
borrowings made in the ordinary course of business under the Second Amended and
Restated Credit Agreement dated as of June 30, 2000, as amended (the "CREDIT
FACILITY"), among Comsys, Holding, various guarantors named therein and Wachovia
Bank, N.A. (successor to First Union National Bank), as Administrative Agent;
(x) assume, guarantee, endorse or otherwise as an
accommodation become responsible for, the obligations of any other Person, or
make any loans or advances, except to or for the benefit of the Holding
Subsidiaries;
(xi) create or assume any material Lien on any material asset
except for Liens created in connection with the Replacement Facility (as defined
below);
(xii) authorize, recommend or propose any change in its
capitalization;
(xiii) (A) take any action with respect to the grant of or
increase in any severance or termination pay to any current or former director,
executive officer or employee of Holding or any Holding Subsidiary, except as
may be required by any existing severance plan or other agreement, (B) execute
any employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any such director, executive
officer or employee of Holding or any Holding Subsidiary, (C) increase the
benefits payable under any existing severance or termination pay policies or
employment agreements, (D) increase the compensation, bonus or other benefits of
current or former directors, executive officers or employees of Holding or any
Holding Subsidiary other than billable consultants and, in the case of
non-executive officer employees of Comsys, increases provided for in Comsys'
2004 budget as previously delivered to the Company (provided, however, that
Comsys is operating within the limits of such budget at the time of any such
increase), (E) adopt or establish any new employee benefit plan or amend in any
material respect any existing employee benefit plan, (F) provide any material
benefit to a current or former director,
52
executive officer or employee of the Company or any Company Subsidiary not
required by any existing agreement or employee benefit plan, other than for
clauses (A), (B) and (D) above, in the case of employees who are not directors
and executive officers, in the ordinary course of business, (G) hire any person
(other than billable consultants) at a level of annual compensation (including
base pay and any guaranteed or signing bonus or other incentive payments not in
accordance with the Company's standard plans) greater than or equal to $150,000,
or (H) take any action that would result in its incurring any obligation for any
payments or benefits described in clauses (i), (ii), (iii) or (iv) of Section
3.10(j) (without regard to whether the transactions contemplated by this
Agreement are consummated) except to the extent required in a written contract
or agreement in existence as of the date of this Agreement or by applicable law;
(xiv) other than in the ordinary course of business consistent
with past practice, execute or amend (other than as required by existing
employee benefit plans or employment agreements or by applicable law) in any
material respect any employment, consulting, severance or indemnification
agreement between the Company or any of the Company Subsidiaries and any of
their respective directors, officers, agents, consultants or employees, or any
collective bargaining agreement or other obligation to any labor organization or
employee incurred or entered into by the Company or any of the Company
Subsidiaries (other than as required by existing employee benefit plans or
employment agreements or by applicable law);
(xv) make any changes in its method of reporting for taxes or
accounting methods other than as required by GAAP or applicable law; make or
rescind any Tax election; make any change to its method of reporting income,
deductions, or other Tax items for Tax purposes; settle or compromise any Tax
liability or enter into any transaction with an affiliate outside the ordinary
course of business if such transaction would give rise to a material tax
liability;
(xvi) settle, compromise or otherwise resolve any litigation
or other legal proceedings involving a payment of more than $100,000 in any one
case by the Company or any of the Company Subsidiaries;
(xvii) other than in the ordinary course of business, pay or
discharge any claims, Liens or liabilities involving more than $100,000
individually or $200,000 in the aggregate, which are not reserved for or
reflected on the balance sheets included in the Company Financial Statements;
(xviii) write off any accounts or notes receivable in excess
of $250,000 in the aggregate;
(xix) make or commit to make capital expenditures in excess of
the aggregate budgeted amount set forth in the Company's fiscal 2004 capital
expenditure plan previously provided to Comsys;
(xx) enter into any agreement, arrangement or commitment that
limits or otherwise restricts the Company or any Company Subsidiary, or that
would reasonably be expected to, after the Effective Time, limit or restrict
Comsys or any of
53
their respective affiliates or any successor thereto, from engaging or competing
in any line of business in which it is currently engaged or in any geographic
area material to the business or operations of the Company and the Company
Subsidiaries or Partners, in each case considered as a single enterprise;
(xxi) other than in the ordinary course of business consistent
with past practice, terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it is a party;
(xxii) knowingly take, or agree to commit to take, any action
that would or would reasonably be expected to result in the failure of a
condition set forth in Section 7.3(a) or (b) at, or as of any time prior to, the
Effective Time, or that would materially impair the ability of the Company,
Holding, Comsys, Merger Sub, the Holding Stockholders or the holders of Company
Common Stock to consummate the Merger in accordance with the terms hereof or
materially delay such consummation;
(xxiii) knowingly take any action that would or could
reasonably be expected to disqualify the Merger as a reorganization within the
meaning of Section 368(a) of the Code;
(xxiv) make any payments to any Holding Stockholder or any
affiliate of such Person, whether in respect of Holding Shares, as a management
or consulting fee or otherwise, provided, however, that Holding or Comsys may
pay to any such Person interest that is then due and owing on existing
indebtedness that is otherwise permissible hereunder or (B) compensation and
benefits payable to any such Person that is otherwise permissible hereunder; or
(xxv) take or agree in writing or otherwise to take any of the
actions precluded by Sections 5.2(a) or (b).
Notwithstanding any other provision of this Section 5.2, Holding and Comsys are
expressly permitted to enter into a new credit facility with Xxxxxxx Xxxxx
Capital and other lenders party thereto to replace the Credit Facility (the
"REPLACEMENT FACILITY").
ARTICLE 6
ADDITIONAL AGREEMENTS
SECTION 6.1. Preparation of Proxy Statement.
(a) The Company shall prepare and file the Proxy Statement with the
SEC pursuant to the Exchange Act no later than August 2, 2004; provided that
Holding and its counsel shall be given reasonable opportunity prior to such
filing to review and comment on the Proxy Statement prior to the filing thereof
with the SEC. The Company will cause the Proxy Statement to comply as to form in
all material respects with the applicable provisions of the Exchange Act and the
rules and regulations promulgated thereunder, including Regulation 14C and Rule
14f-1 of the Exchange Act, and will provide notice to Holding, promptly after
receiving notice thereof, of any request by the SEC for amendment of the Proxy
Statement or comments thereon and responses thereto or requests by the SEC for
additional information. The Company
54
agrees to use its commercially reasonable efforts, after consultation with
Holding, to respond promptly to any comments or requests made by the SEC with
respect to the Proxy Statement. No filing of, or amendment or supplement
(including by incorporation by reference) to, or correspondence to the SEC or
its staff with respect to, the Proxy Statement will be made by the Company
without the approval of Holding, which approval shall not be unreasonably
withheld or delayed; provided that with respect to documents filed by the
Company which are incorporated by reference in the Proxy Statement, this right
of approval shall apply only with respect to information relating to Holding,
Comsys or their respective businesses, financial condition or results of
operations, or this Agreement or the transactions contemplated hereby.
(b) Holding and Comsys agree to use their commercially reasonable
efforts to cooperate and to provide the Company with such information as it may
reasonably request in connection with the preparation of the Proxy Statement.
Each party agrees promptly to supplement, update and correct any information
provided by it for use in the Proxy Statement if and to the extent that it is or
shall have become incomplete, false or misleading.
(c) The Company will use commercially reasonable efforts to cause
the Proxy Statement to be mailed to its stockholders as promptly as practicable
after the date that the SEC completes its review of the Proxy Statement or, if
the SEC chooses not to review the Proxy Statement, within five days after the
date that the SEC notifies the Company that it will not review the Proxy
Statement.
(d) The Company shall, as soon as practicable after the date hereof,
and in accordance with the Company Charter, Company Bylaws and applicable law,
establish a record date (which will be as soon as practicable after the date
hereof) for, duly call, give notice of, convene and hold a meeting of its
stockholders (the "COMPANY STOCKHOLDERS MEETING") solely for the purpose of
considering and taking action upon (i) this Agreement, (ii) the amendment and
restatement of the Company Charter and (iii) the Staffing Disposition, provided,
however, that the Company may elect to include for consideration at the Company
Stockholders Meeting (and include in the Proxy Statement) (x) its annual
election of directors and (y) the ratification of its auditors for fiscal 2004.
Notwithstanding anything herein to the contrary, and subject to applicable law
and applicable NASD rules, the Company may, provided it has fully complied with
Sections 6.1(a), (b) and (c), hold its Company Stockholders Meeting at a time of
its choosing, provided, however, that such Company Stockholders Meeting shall be
held not later than 30 days following the mailing by the Company of its Proxy
Statement to the Company Stockholders or such shorter period as necessary to
ensure that the Company Stockholders Meeting is held no later than five business
days before the expiration date of the Commitment Letter as set forth in the
Commitment Letter. Once the Company Stockholders Meeting has been called and
noticed, the Company shall not postpone or adjourn the Company Stockholders
Meeting without the consent of Holding, which shall not be unreasonably
withheld, conditioned or delayed; provided, however, that the Company may so
postpone or adjourn the Company Stockholders Meeting without the consent of
Holding under the following circumstances: (A) for the absence of a quorum, or
(B) to allow reasonable additional time for the filing and mailing of any
supplemental or amended disclosure which the Company believes in good faith is
necessary under applicable law and for such supplemental or amended disclosure
to be disseminated and reviewed by the Company's stockholders prior to the
Company Stockholders Meeting, or (C) in the event the Board of Directors of the
Company withdraws, modifies or changes in accordance
55
with the terms of this Agreement its recommendation that this Agreement and the
Merger are in the best interests of the Company and its stockholders; provided,
further, that in the event that the Company Stockholders Meeting is delayed to a
date after the Termination Date (as defined in Section 8.1(b)) as a result of
either (A) or (B) above, then the Termination Date shall be extended to the
fifth business day after such date). Each of the proposals set forth in clauses
(i) through (iii) shall be conditioned upon approval of all of the other
proposals set forth in clauses (i) through (iii), and no such proposal shall be
implemented unless all four proposals are implemented, and the Company shall
include statements to that effect in the Proxy Statement. The Board of Directors
of the Company shall declare that this Agreement and the Merger and each of the
matters set forth in clauses (ii) and (iii) above are advisable and in the best
interests of the Company and its stockholders and recommend that this Agreement
and each of the matters set forth in clauses (ii) and (iii) above be approved by
the stockholders of the Company and include in the Proxy Statement a copy of
such recommendations; provided, however, that the Board of Directors of the
Company may withdraw, modify or change its recommendation with respect to this
Agreement, the Merger and/or any of the other matters set forth in clauses (ii)
or (iii) above if, but only if it has determined in good faith, after
consultation with outside counsel, that withdrawal, modification or change of
any such recommendation is, in the good faith judgment of the Board of Directors
of the Company, required by the Board of Directors to comply with its fiduciary
duties imposed by applicable law. Unless the Board of Directors of the Company
has withdrawn or modified its recommendation of this Agreement and any of the
matters contained in clauses (ii) or (iii) above in compliance with this Section
6.1(d), the Company shall use its commercially reasonable best efforts to
solicit from stockholders of the Company proxies in favor of (i) the adoption of
this Agreement, (ii) the amendment and restatement of the Company Charter and
(iii) the approval of the Staffing Disposition, and shall take all other
commercially reasonable action necessary or advisable to secure the vote or
consent of stockholders required by applicable law to effect the Merger and
other transactions contemplated by this Agreement.
(e) As soon as practicable (and in any event not later than one
business day) following the execution of this Agreement:
(i) Holding will obtain from the Holding Stockholders the
Holding Stockholder Consent and promptly deliver to the Company a true and
correct copy thereof; and
(ii) The Company will execute the Merger Sub Stockholder
Consent and promptly deliver to Comsys a true and correct copy thereof.
SECTION 6.2. Blue Sky Laws. The Company shall take all actions as
may be necessary to comply with the securities and blue sky laws of all
jurisdictions which are applicable to the issuance of the Company Common Stock
in connection with the Merger, and Holding and Comsys shall use their
commercially reasonable best efforts to assist the Company as may be necessary
to comply with such laws.
SECTION 6.3. Consents and Approvals.
(a) The Company, Holding, Comsys, Merger Sub and the Holding
Stockholders shall each, as promptly as practicable, and in any event not later
than August 2,
56
2004, file or cause to be filed with the Federal Trade Commission and the United
States Department of Justice any notifications required to be filed under the
HSR Act with respect to the transactions contemplated hereby. The parties shall
use reasonable best efforts to respond promptly to any requests for additional
information made by either of such agencies, and to cause the waiting periods
under the HSR Act to terminate or expire at the earliest possible date after the
date of filing.
(b) The Company, Holding, Comsys, Merger Sub and the Holding
Stockholders shall consult and cooperate with each other and (i) promptly
prepare and file all necessary documentation, (ii) effect all necessary
applications, notices, petitions and filings and execute all agreements and
documents, (iii) use all commercially reasonable efforts to obtain all necessary
permits, consents, approvals and authorizations of all governmental bodies, (iv)
provide all necessary information to effect the Financing and (v) use all
commercially reasonable efforts to obtain all necessary permits, consents,
approvals and authorizations of all other parties, in the case of each of the
foregoing clauses (i), (ii), (iii), (iv) and (v), necessary to consummate the
transactions contemplated by this Agreement or required by the terms of any
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument to which the Company, Holding,
Merger Sub, Comsys or any of their respective Subsidiaries is a party or by
which any of them is bound; provided, however, that no note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession, contract,
lease or other instrument shall be amended or modified to increase in any
material respect the amount payable thereunder or to be otherwise more
burdensome, or less favorable, in each case in any material respect, to the
Company and the Company Subsidiaries or Partners, on the one hand, or Holding
and the Holding Subsidiaries, on the other hand, in each case considered as a
single enterprise, in order to obtain any permit, consent, approval or
authorization without first obtaining the written consent of Holding, on the one
hand, or the Company, on the other hand, which consent shall not be unreasonably
withheld, conditioned or delayed; and provided, further, that other than with
respect to the Staffing Disposition neither the Company and the Company
Subsidiaries or Partners, on the one hand, or Holding and the Holding
Subsidiaries, on the other hand, in each case considered as a single enterprise,
shall be required hereby to divest itself of any material part of its assets or
business in order to obtain any such permit, consent, approval or authorization.
The Company shall have the right to review and approve in advance all
characterizations of the information relating to the Company or Merger Sub;
Holding shall have the right to review and approve in advance all
characterizations of the information relating to Holding or Comsys; and each of
the Company and Holding shall have the right to review and approve in advance
all characterizations of the information relating to the transactions
contemplated by this Agreement, in each case which appear in any material filing
(including the Proxy Statement) made in connection with the transactions
contemplated hereby. The Company, Holding, Comsys and Merger Sub agree that they
will consult with each other with respect to the obtaining of all such necessary
permits, consents, approvals and authorizations of all third parties and
governmental bodies. Notwithstanding the foregoing, nothing in this Section
6.3(b) shall restrict or prohibit Holding or Comsys from entering into the
Replacement Facility or granting any Lien in favor of the lenders in connection
therewith.
SECTION 6.4. Public Statements. The Company, Holding, Comsys and
Merger Sub shall consult with each other prior to issuing, and provide each
other with the opportunity to review and comment upon, any public announcement,
statement or other
57
disclosure with respect to this Agreement or the transactions contemplated
hereby (including the Staffing Disposition) and shall not issue any such public
announcement or statement prior to such consultation, except as may be required
by law or any listing agreement with any securities exchange or trading market
applicable to any such party.
SECTION 6.5. Registration Rights.
(a) At or prior to the Closing, the Company and the Holding
Stockholders will enter into a Registration Rights Agreement with respect to the
shares of Company Common Stock issued to the Holding Stockholders in connection
with the Merger and substantially in the form attached as Exhibit F hereto. At
or prior to the Closing, the Company shall, and shall use commercially
reasonable efforts to cause, the Company stockholders who are a party thereto,
to enter into an Amended and Restated Registration Rights Agreement amending
certain provisions of the Registration Rights Agreement dated as of April 14,
2003, by and among the Company and the investors signatory thereto which amended
and restated agreement (the "AMENDED AND RESTATED REGISTRATION RIGHTS
AGREEMENT") shall be substantially in the form attached hereto as Exhibit G.
(b) The Company agrees to use all commercially reasonable efforts to
file a Registration Statement on Form S-8 ("FORM S-8") with the SEC within 60
days after the Closing for the registration of shares issuable pursuant to the
Company's existing 2003 Equity Incentive Plan.
SECTION 6.6. Further Assurances. Subject to the terms and conditions
provided herein (including Section 6.10), each of the Company, Holding, Comsys
and Merger Sub agrees to use all commercially reasonable efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
reasonably necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement, including obtaining all consents, approvals and authorizations
required for or in connection with the consummation by the parties hereto of the
transactions contemplated by this Agreement, and, only if Holding and the
Company mutually agree, contesting and resisting of any action, including any
legislative, administrative or judicial action, and seeking to have vacated,
lifted, reversed or overturned, any decree, judgment, injunction or other order
(whether temporary, preliminary or permanent) that restricts, prevents or
prohibits the consummation of the transactions contemplated by this Agreement.
In the event any litigation is commenced by any Person involving the Company or
its directors and relating to the transactions contemplated by this Agreement,
including any other Takeover Proposal (as defined in Section 6.10(c)), Holding
shall have the right, at its own expense, to participate therein; provided,
however, that the Company shall be entitled to control its own defense in any
such litigation.
SECTION 6.7. Tax Treatment. Each of Holding and the Company shall
use all commercially reasonable efforts to cause the Merger to qualify as a
reorganization under the provisions of Section 368 of the Code and to obtain the
opinions of counsel referred to in Sections 7.2(c) and 7.3(c). Each of Holding
and the Company shall execute the officers' certificates substantially in the
form attached as Exhibits H and I hereto, as of the date the Proxy Statement is
mailed to the Company's stockholders and as of the Closing Date; provided,
however, that the failure of Holding or the Company to certify as to any matter
in such officer
58
certificate because of an event, or change in facts or law, in any such case
outside of such party's control, shall not constitute a breach of this covenant.
SECTION 6.8. Notification of Certain Matters. Each of the Company
and Merger Sub agrees to give prompt notice to Holding and Comsys, and to use
all reasonable efforts to prevent or promptly remedy, (i) the occurrence or
failure to occur, or (ii) the impending or threatened occurrence or failure to
occur, of any event which occurrence or failure to occur would be reasonably
likely to cause the failure of any of the conditions set forth in Section 7.2(a)
or (b); provided, however, that the delivery of any notice pursuant to this
Section 6.8 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice. The Company and Merger Sub will provide to
Holding and Comsys, not more than five nor less than three business days prior
to the Closing Date, a revised and updated copy of the Company Disclosure Letter
accurate and complete as of that date; provided, however, that such revised and
updated Company Disclosure Letter will be provided for informational purposes
only and will not amend or supplement the Company Disclosure Letter or otherwise
limit or affect the remedies available to Holding or Comsys under this
Agreement. Holding and Comsys agree to give prompt notice to the Company, and to
use all reasonable efforts to prevent or promptly remedy, (i) the occurrence or
failure to occur, or (ii) the impending or threatened occurrence or failure to
occur, of any event which occurrence or failure to occur would be reasonably
likely to cause the failure of any of the conditions set forth in Section 7.3(a)
or (b); provided, however, that the delivery of any notice pursuant to this
Section 6.8 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice. Holding and Comsys will provide to the
Company and Merger Sub, not more than five nor less than three business days
prior to the Closing Date, a revised and updated copy of the Comsys Disclosure
Letter accurate and complete as of that date; provided, however, that such
revised and updated Comsys Disclosure Letter will be provided for informational
purposes only and will not amend or supplement the Comsys Disclosure Letter or
otherwise limit or affect the remedies available to the Company and Merger Sub
under this Agreement.
SECTION 6.9. Access to Information; Confidentiality.
(a) The Company shall, and shall cause the Company Subsidiaries and
the officers, directors, employees and agents of the Company and the Company
Subsidiaries to, afford the officers, employees and agents of Holding and
Comsys, at their sole cost and risk, reasonable access at all reasonable times
from the date hereof through the Effective Date to their respective officers,
employees, agents, properties, facilities, books, records, contracts and other
assets and shall furnish Holding and Comsys all financial, operating and other
data and information as Holding or Comsys through their respective officers,
employees or agents may reasonably request. Holding and Comsys, at their sole
cost and risk, shall have the right to make such due diligence investigations as
they shall deem necessary or reasonable, upon reasonable notice to the Company
and without disruption or damage to the Company's operations or properties. No
additional investigations or disclosures shall affect the Company's and Merger
Sub's representations and warranties contained herein, or limit or otherwise
affect the remedies available to Holding or Comsys pursuant to this Agreement.
(b) Holding shall, and shall cause the Holding Subsidiaries and the
officers, directors, employees and agents of Holding and the Holding
Subsidiaries to, afford the officers,
59
employees and agents of the Company, at its sole cost and risk, reasonable
access at all reasonable times from the date hereof through the Effective Date
to their respective officers, employees, agents, properties, facilities, books,
records, contracts and other assets and shall furnish the Company all financial,
operating and other data and information as the Company through its officers,
employees or agents may reasonably request. The Company, at its sole cost and
risk, shall have the right to make such due diligence investigations as it shall
deem necessary or reasonable, upon reasonable notice to Holding and Comsys and
without disruption or damage to Holding's or Comsys' respective operations or
properties. No additional investigations or disclosures shall affect Holding's
or Comsys' representations and warranties contained herein, or limit or
otherwise affect the remedies available to the Company pursuant to this
Agreement.
(c) The provisions of the Confidentiality Agreement, dated July 16,
2003, as amended, between Comsys and the Company (as so amended, the
"CONFIDENTIALITY AGREEMENT") shall remain in full force and effect in accordance
with its terms.
SECTION 6.10. No Solicitation.
(a) From the date of this Agreement until the Effective Time or, if
earlier, the termination of this Agreement in accordance with its terms, the
Company shall not, nor shall it permit any of the Company Subsidiaries to, nor
shall it authorize or permit any officer, director or employee of, or any
investment banker, attorney or other advisor or representative of, the Company
or any of the Company Subsidiaries to:
(i) solicit, initiate or encourage the submission of any
Takeover Proposal (as hereinafter defined);
(ii) approve or recommend any Takeover Proposal, enter into
any agreement, agreement-in-principle or letter of intent with respect to or
accept any Takeover Proposal (or resolve to or publicly propose to do any of the
foregoing); or
(iii) participate or engage in any discussions or negotiations
regarding, or furnish to any Person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or could reasonably be expected to lead to, any Takeover Proposal;
provided, however, that:
(w) the Company and Holding shall issue a joint press release
announcing the entering into of the Agreement, among other matters, which press
release has been attached hereto as Exhibit J, and the Company shall promptly
file a current report on Form 8-K that will include as an attachment, among
other things, a copy of this Agreement;
(x) nothing contained in clauses (i) or (ii) above or the
Confidentiality Agreement shall prohibit the Company or its Board of Directors
from disclosing to the Company's stockholders a position with respect to a
tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act, provided that the Board of Directors of the
Company shall not recommend that the stockholders of the Company tender their
Company Common Stock in connection with any such tender or exchange offer unless
the
60
Board of Directors of the Company determines in good faith (after receiving the
advice of a financial adviser of nationally recognized reputation, which shall
include the Company Financial Advisor) that such Takeover Proposal is a Superior
Proposal (as hereinafter defined);
(y) if (under circumstances in which the Company has complied
with all of its obligations under this Section 6.10(a)), prior to receipt of the
Company Stockholder Vote, the Company receives an unsolicited written Takeover
Proposal from a third party that the Board of Directors of the Company
determines in good faith (after receiving the advice of a financial adviser of
nationally recognized reputation, which shall include the Company Financial
Advisor) is or is reasonably likely to lead to a Superior Proposal, the Company
and its representatives may conduct such additional discussions and negotiations
or provide such information as the Board of Directors of the Company shall
determine, but only if, prior to such provision of information or conduct of
such additional discussions or negotiations (A) such third party shall have
entered into a confidentiality agreement in customary form that is no less
favorable to the Company than is the Confidentiality Agreement (and containing
additional provisions that expressly permit the Company to comply with the
provisions of this Section 6.10) and (B) the Board of Directors of the Company
determines in its good faith judgment, after consultation with outside legal
counsel, that it is required to do so in order to comply with its fiduciary
duties under applicable law; and
(z) it shall not be a breach by the Company of the provisions
of this Section 6.10 if its efforts to effect the Staffing Disposition in
accordance with the terms of this Agreement and in compliance with the Buyer
Agreement (or Replacement Agreement, as applicable) result in an unsolicited
Superior Proposal.
(b) The Company shall immediately cease and cause to be terminated,
and shall cause its affiliates and the Company Subsidiaries and its or their
respective officers, directors, employees, representatives or agents to
terminate, all existing discussions or negotiations, if any, with any Persons
conducted heretofore with respect to, or that could reasonably be expected to
lead to, a Takeover Proposal (other than with respect to Staffing as
contemplated by Section 6.13 hereof and in compliance with the Buyer Agreement
(or the Replacement Agreement, as applicable)) and will cause any such parties
(and their agents or advisors) in possession of confidential information
regarding the Company or any of the Company Subsidiaries to return or destroy
such information. The Company shall ensure that its officers, directors and key
employees and its investment bankers, attorneys and other representatives are
aware of the provisions of this Section.
(c) For purposes of this Agreement, (i) "TAKEOVER PROPOSAL" shall
mean any inquiry, proposal or offer from any Person (other than Holding, Comsys
or any of their respective affiliates) relating to any merger, consolidation,
reorganization, share exchange, recapitalization, liquidation, direct or
indirect business combination, or other similar transaction involving the
Company or any Company Subsidiary or the issuance or acquisition of shares of
capital stock or other equity securities of the Company or any Company
Subsidiary representing 15% or more (by
61
voting power) of the outstanding capital stock of the Company or such Company
Subsidiary or any tender or exchange offer that if consummated would result in
any Person, together with all affiliates thereof, beneficially owning shares of
capital stock or other equity securities of the Company or any Company
Subsidiary representing 15% or more (by voting power) of the outstanding capital
stock of the Company or such Company Subsidiary, or the acquisition, license,
purchase or other disposition of a substantial portion of the technology,
business or assets of the Company or any Company Subsidiary outside the ordinary
course of business or inconsistent with past practice; and (ii) the term
"SUPERIOR PROPOSAL" means any bona fide written Takeover Proposal to effect a
merger, consolidation, reorganization, share exchange, recapitalization,
liquidation, direct or indirect business combination, or other similar
transaction as a result of which the Company's stockholders cease to own at
least 50% of the voting securities of the ultimate parent entity resulting from
such transaction or a sale of all or substantially all of the assets of the
businesses conducted by both (x) Staffing and its Subsidiaries and (y) Partners
and its Subsidiaries, which in any such case is on terms that the Board of
Directors of the Company determines in its good faith judgment (after receipt of
the advice of a financial advisor of nationally recognized reputation (it being
acknowledged that the Company Financial Advisor meets such qualification) and
outside counsel), taking into account all relevant factors, including any
conditions to such Takeover Proposal, the timing of the closing thereof, the
risk of nonconsummation, the ability of the Person making the Takeover Proposal
to finance the transaction contemplated thereby, any required governmental or
other consents, filings and approvals, (A) would, if consummated, result in a
transaction that is more favorable to the Company's stockholders from a
financial point of view than the transactions contemplated by this Agreement
(including the terms of any proposal by Comsys to modify the terms of the
transactions contemplated by this Agreement) and (B) is reasonably likely to be
completed (including as to any financing) without undue delay.
(d) In addition to the other obligations of the Company set forth in
this Section 6.10, the Company shall promptly, and in any event within 48 hours,
advise Comsys orally and in writing of any request for information with respect
to any Takeover Proposal, or any inquiry with respect to or which the Company
reasonably believes could result in a Takeover Proposal, the material terms and
conditions of such request, Takeover Proposal or inquiry, and the identity of
the Person making the same. The Company shall inform Comsys on a prompt and
current basis (and in any event within 48 hours) of the status and content of
any discussions regarding any Takeover Proposal with a third party and as
promptly as practicable of any change in the price, structure or form of the
consideration or material terms of and conditions regarding the Takeover
Proposal or of any other developments or circumstances which could reasonably be
expected to culminate in the taking of any of the actions referred to in Section
6.10(a) or Section 8.1(f)(i).
SECTION 6.11. Company Charter; Bylaws. Immediately prior to the
Effective Time, the Company shall (i) cause to be filed with the office of the
Secretary of State of the State of Delaware an amendment and restatement of the
Company Charter in the form attached as Exhibit K hereto (the "AMENDED
CHARTER"); and (ii) amend and restate the Company Bylaws in the form attached as
Exhibit L hereto.
SECTION 6.12. Allocation of Financing Fees. Not later than two
business days following the date of this Agreement with respect to amounts paid
to date and thereafter not later than two business days following presentation
by Comsys of invoices therefor, the Company will deliver to Comsys a payment
equal to one-half of the amount (if any) of any origination, commitment and/or
other fees and expenses specified in the Commitment Letter and paid by Comsys to
its third party lender pursuant thereto. The Company will deliver such payment
by
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wire transfer of immediately available funds to an account specified by Comsys.
Notwithstanding anything to the contrary in Section 8.1: (i) such payment shall
be refundable to the Company in the event of a termination of this Agreement
pursuant to Section 8.1(f)(ii) without regard to whether Comsys receives a
refund of such fees and (ii) in the event this Agreement is terminated pursuant
to Section 8.1(e), the Company will deliver to Comsys an additional payment
equal to the other one-half of the amount (if any) of any origination,
commitment and/or other fees specified in the Commitment Letter and paid by
Comsys to its third party lender pursuant thereto. If (x) this Agreement is
terminated pursuant to any provision of Section 8.1 (other than Section
8.1(f)(ii)), (y) Holding is not entitled to receive reimbursement of any
Expenses pursuant to Section 8.3, and (z) Comsys receives a refund of any
portion of such financing fees, then Comsys shall refund to the Company its pro
rata share of such refund.
SECTION 6.13. Staffing Disposition.
(a) The Company will use its commercially reasonable efforts to
cause to be sold, at or prior to the Effective Time, all of the business and
liabilities of Staffing in a stock-for-cash transaction in which the parties to
such transaction each elect, under Section 338(h)(10) of the Code, to treat the
transaction as a sale of the assets of Staffing for federal income tax purposes
(the "STAFFING DISPOSITION").
(b) A sale of the stock of Staffing shall qualify as a Staffing
Disposition only if the following is true:
(i) the Net Cash Proceeds received by the Company as
consideration for the disposition are at least $25 million, which shall be paid
to the Company in full in immediately available funds at the closing of such
transaction;
(ii) the cash proceeds received by the Company as
consideration for the disposition are at least $30.3 million (including funds
placed in escrow in connection with the Tax Liabilities), which shall be paid to
the Company in full in immediately available funds at the closing of such
transaction;
(iii) the Company will not be required to provide any letters
of credit associated with workers compensation insurance claims of the Staffing
business unless the Company receives from the prospective buyer of Staffing
letters of credit that may be drawn on to satisfy the Staffing workers
compensation insurance claims;
(iv) with the exception of any working capital adjustment
required to be made with respect to the Staffing Disposition, the Company will
cause the Staffing Disposition to be effected on terms providing (i) that the
purchaser of Staffing will bear any and all costs associated with the
post-closing transition of ownership of Staffing (including any administrative,
accounting, technical, back-office or similar support services provided by the
Company or any Company Subsidiary) and (ii) upon consummation of the disposition
(A) all of the representations and warranties of the Company or any Company
Subsidiary made in the definitive agreement pursuant to which the Staffing
Disposition is effected terminate, (B) neither the Company nor any Company
Subsidiary will have any liabilities or obligations, whether known or unknown,
absolute or contingent, accrued or unaccrued, relating to or arising
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out of the ownership or operation of Staffing, and (C) except as provided for in
the Buyer Agreement, the Company will continue to own (free from any royalty,
maintenance, renewal or other fees or charges) all Company Intellectual Property
that had been used by Staffing prior to consummation of the Staffing
Disposition;
(v) the definitive agreement pursuant to which the Staffing
Disposition is effected requires that Staffing and the purchaser of Staffing
will provide the Company with the right to use the name "Venturi Partners, Inc."
for a transition period of not less than 180 days after Closing; and
(vi) the Company reserves all of the Net Cash Proceeds from
the Staffing Disposition for, and at the Effective Time applies such amount
toward, the repayment of the Company's senior debt, as more particularly
described in Section 6.13 of the Company Disclosure Letter.
(c) The Buyer Agreement, in the form presented to Holding on the
date hereof, qualifies as a Staffing Disposition so long as the conditions
specified in Section 6.13(b) (other than those set forth in Section 6.13(b)(iii)
and Sections 6.13(b)(iv)(ii)(A) and (B)) are satisfied as of the Closing Date.
SECTION 6.14. Indemnification and Insurance.
(a) The Company and Merger Sub agree that, to the full extent
permitted by applicable law, all rights to indemnification by Holding or Comsys
now existing with respect to any matter existing or occurring, or any acts or
omissions occurring at or prior to the Effective Time in favor of each Person
who is now, or has been at any time prior to the date hereof or who becomes
prior to the Effective Time an officer or director of Holding or any Holding
Subsidiary or an employee of Holding or any Holding Subsidiary or any individual
who has been specifically designated by the board of directors of Holdings as a
"Covered Person" within the meaning of Article Nine of its Fifth Amended and
Restated Certificate of Incorporation or who acts as a fiduciary under any of
the Comsys Employee Benefit Plans (each an "INDEMNIFIED PARTY") as provided in
Holding's or Comsys' respective certificate of incorporation or bylaws, in each
case as in effect on the date of this Agreement, or pursuant to any other
agreements in effect on the date hereof, copies of which have been provided to
the Company, including provisions relating to the advancement of expenses
incurred in the defense of any action or suit, shall survive the Merger and
shall remain in full force and effect. From and after the Effective Time, the
Company and the Surviving Entity shall be jointly and severally liable to pay
and perform in a timely manner such indemnification obligations.
(b) For six years after the Effective Time, to the full extent
permitted under applicable law, the Company and the Surviving Entity (the
"INDEMNIFYING PARTIES") shall, jointly and severally indemnify, defend and hold
harmless each Indemnified Party against all losses, claims, damages,
liabilities, fees, expenses, judgments and fines arising in whole or in part out
of actions or omissions in their capacity as such occurring at or prior to the
Effective Time, and will reimburse each Indemnified Party for any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such losses, claims, damages, liabilities, fees,
expenses, judgments and fines as such expenses are incurred; provided,
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however, that nothing herein shall impair any rights to indemnification of any
Indemnified Party referred to in clause (a) above. Promptly after receipt by an
Indemnified Party under this Section 6.14(b) of notice of the commencement of
any action, such Indemnified Party will, if a claim in respect thereof is to be
made against an Indemnifying Party under this Section 6.14(b), notify the
Indemnifying Party of the commencement thereof; but the omission so to notify an
Indemnifying Party will not relieve it from any liability which it may have to
any Indemnified Party except to the extent that the Indemnifying Party is
actually and materially prejudiced by such omission. In case any such action is
brought against any Indemnified Party and it notifies an Indemnifying Party of
the commencement thereof, the Indemnifying Party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other Indemnifying
Party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Party (who shall not, except with the consent
of the Indemnified Party (which consent will not be unreasonably withheld,
conditioned or delayed), be counsel to the Indemnifying Party), and after notice
from the Indemnifying Party to such Indemnified Party of its election so to
assume the defense thereof (and so long as the Indemnifying Party satisfies such
obligations), the Indemnifying Party will not be liable to such Indemnified
Party under this Section 6.14(b) for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party (which consent will not be
unreasonably withheld, conditioned or delayed), effect any settlement of any
pending or threatened action in respect of which any Indemnified Party is or
would reasonably be expected to be have been a party and indemnity could
properly have been sought hereunder by such Indemnified Party unless such
settlement (i) includes an unconditional release of such Indemnified Party from
all liability on any claims that are the subject matter of such action and (ii)
does not include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an Indemnified Party. Notwithstanding anything
to the contrary set forth herein, no Indemnifying Party shall be obligated
pursuant to this Section 6.14(b) to pay the fees and disbursements of more than
one counsel for all Indemnified Parties in any single action in any one
jurisdiction except to the extent that, in the opinion of counsel for the
Indemnified Parties, two or more of such Indemnified Parties have conflicting
interests in the outcome of such action.
(c) (i) The Company shall cause the Surviving Entity to maintain
Holding's and Comsys' respective officers' and directors' liability insurance
policies, in effect on the date of this Agreement (the "D&O INSURANCE"), for a
period of not less than six years after the Effective Time, but only to the
extent related to actions or omissions prior to the Effective Time; provided,
however, that (A) the Surviving Entity may substitute therefor policies of at
least the same coverage and amounts containing terms no less advantageous to
such former directors or officers and (B) such substitution shall not result in
gaps or lapses of coverage with respect to matters occurring prior to the
Effective Time; provided, further, that in no event shall the Company or the
Surviving Entity be required to expend more than an amount per year equal to
300% of current annual premiums paid by Holding and Comsys in the aggregate for
such insurance (the "MAXIMUM AMOUNT") to maintain or procure insurance coverage
pursuant hereto; provided, further, that if the amount of the annual premiums
necessary to maintain or procure such insurance coverage exceeds the Maximum
Amount, the Company and the Surviving Entity shall procure and maintain for such
six-year period as much coverage as reasonably practicable for the Maximum
Amount. The Company shall have the right to cause coverage to be extended under
the D&O Insurance by obtaining a six-year "tail" policy on terms and conditions
no less
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advantageous than the existing D&O Insurance, and such "tail" policy shall
satisfy the provisions of this Section 6.14(c)(i).
(ii) The Company shall maintain for a period of not less than
six years after the Effective Time such directors' and officers' liability
insurance policies as it has in effect on the date of this Agreement with
respect to actions or omissions occurring with respect to the Company and the
Company Subsidiaries prior to the Effective Time, including with respect to both
current and former officers and directors; provided, however, that (A) the
Company may substitute therefor policies of at least the same coverage and
amounts containing terms no less advantageous to those insured thereunder, and
(B) such substitution shall not result in gaps or lapses of coverage with
respect to matters occurring prior to the Effective Time; provided, further,
that in no event shall the Company be required to expend more than 300% of the
premiums currently being paid for such insurance to maintain or procure
insurance coverage pursuant hereto; provided, further, that if the amount of the
annual premiums necessary to maintain or procure such insurance coverage exceeds
such premium amount, the Company shall procure and maintain for such six-year
period as much coverage as reasonably practicable for such amount. The Company
shall have the right to cause coverage to be extended under such insurance by
maintaining or obtaining a six-year "tail" policy on terms and conditions no
less advantageous that the existing such insurance, and such "tail" policy shall
satisfy the conditions of this Section 6.14(c)(ii).
(d) The obligations of the Company and the Surviving Entity under
this Section 6.14 shall survive the consummation of the Merger and shall not be
terminated or modified in such a manner as to adversely affect any Indemnified
Party to whom this Section 6.14 applies without the consent of such affected
Indemnified Party.
(e) If the Company or the Surviving Entity or any of their
respective successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or Surviving Entity or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company or the
Surviving Entity, as the case may, be shall assume the obligations set forth in
this Section 6.14.
(f) Any Indemnified Party shall, as a condition of the
indemnification provided herein, reasonably cooperate with the Indemnifying
Parties in the defense or investigation of any matter giving rise to an
indemnity obligation hereunder.
SECTION 6.15. Company Board of Directors; Officers.
(a) The Company shall take all commercially reasonable actions as
are necessary and within its powers (including seeking the resignation of one or
more existing members of or expanding the size of the Company's Board of
Directors and recommending to its stockholders the Amended Charter) to cause:
(i) five individuals identified by Holding (each a "GROUP B DESIGNEE") to be
elected or appointed to the Board of Directors of the Company effective
immediately after the Effective Time, to serve until the earlier of such
individual's resignation or removal or until his successor is duly elected and
qualified in accordance with the certificate of incorporation and bylaws of the
Company, (ii) the Board of Directors of the
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Company effective immediately after Effective Time to be expanded to a total of
nine directors, five of whom shall be Group B Designees (who shall be elected or
appointed as provided in subclause (i) above) and four of whom shall be
designated by the Company from its existing directors (the "GROUP A DESIGNEES"),
all as set forth in the Amended Charter, (iii) Group B Designees to constitute a
majority of each committee of the Company's Board of Directors (other than the
audit committee) effective immediately after the Effective Time and (iv)
designees of Holding to hold all director and officer positions at each of the
Company Subsidiaries effective immediately after the Effective Time. If at any
time prior to the Effective Time, any Group B Designee shall be unable or
unwilling to serve as a director of the Company effective immediately after the
Effective Time, the Board of Directors of Holding shall, by written notice to
the Company, designate another individual to serve in his or her place as
provided above, and the Company shall take all commercially reasonable actions
as are necessary and within its powers to cause such replacement designee to be
elected or appointed to the Board of Directors of the Company in accordance with
the foregoing. Holding will specify which Group B Designees will be the
"WACHOVIA DIRECTORS" for purposes of the Voting Agreement.
(b) The Company shall take all such actions as are necessary to
cause the officers of the Company listed on Exhibit M to tender, effective as of
the Effective Time, written resignation letters pursuant to which each such
individual will resign from their respective position(s) listed on Exhibit M,
effective as of the Effective Time. Any such individual who fails to tender a
resignation letter shall be removed from his or her respective positions set
forth on Exhibit M by the Board of Directors of the Company, effective as of the
Effective Time. The Board of Directors of the Company shall appoint the
individuals listed on Exhibit N to serve in the positions set forth opposite
their respective names on Exhibit N, in each case effective as of the Effective
Time.
SECTION 6.16. Wachovia Option Grant. Prior to the Effective Time,
the Company shall take all actions that are required to permit under the
Company's Xxxxxxx Xxxxxxx Policy Statement the grants of call options by
Wachovia Investors, Inc. or any affiliate successor thereto (collectively,
"WACHOVIA"), pursuant to the Option Agreements dated as of the date hereof
between Wachovia and certain Holding Stockholders.
SECTION 6.17. Section 16 Matters. Prior to the Effective Time, the
Company shall take all such steps as may be required to cause the transactions
contemplated by Article 2 and any other acquisitions of equity securities of the
Company (including derivative securities) in connection with this Agreement by
each Person (including any Person who is deemed to be a "director by
deputization" under applicable securities laws) who is or will become subject to
the reporting requirements of Section 16(a) of the Exchange Act with respect to
the Company to be exempt under Rule 16b-3 under the Exchange Act.
SECTION 6.18. NASDAQ Listing. From the date of this Agreement
through the Effective Time, the Company, Holding and Comsys will cooperate and
use commercially reasonable efforts to provide information, complete requisite
documentation and will otherwise take such actions as are reasonably necessary
to complete the NASDAQ listing application process for the continued listing of
the Company Common Stock on NASDAQ following the Effective Time.
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SECTION 6.19. Redemption of Holding Preferred Stock. Prior to the
Effective Time, each issued and outstanding share of the Holding Class A-1
Preferred Stock and Holding Class A-2 Preferred Stock will be repurchased by
Holding and each issued and outstanding share of Holding Class E Preferred
Stock, will be redeemed by Holding in accordance with the terms thereof.
SECTION 6.20. Cancellation of Warrants. Prior to the Effective Time,
each issued and outstanding warrant to purchase Holding Common Stock will be
cancelled by Holding and each holder of any issued and outstanding warrants
SECTION 6.21. Employee Benefit Matters.
(a) Company Employee Benefit Plans. Effective as of the Effective
Date, Company shall, or shall cause a Subsidiary to, (i) terminate or merge with
the corresponding Comsys Employee Benefit Plan, as specified by Comsys, each of
the Company Employee Benefit Plans designated by Comsys, (ii) cause Surviving
Entity and its Subsidiaries to become participating employers in each Company
Employee Benefit Plan designated by Comsys that is not so terminated or merged,
(iii) cause each Company Employee Benefit Plan that is not so terminated or
merged and in which Surviving Entity and/or its Subsidiaries have become
participating employers to exclude coverage of each Employee who is covered
under a corresponding Comsys Employee Benefit Plan, with such exclusion to be
effective for the duration of such coverage under such Comsys Employee Benefit
Plan, and (iv) correct any operational error or form defect associated with any
Company Employee Benefit Plan that has been identified by Comsys.
(b) Company Employee Benefit Plans Covering Staffing Employees.
Effective as of or prior to the Effective Date, Company shall (i) cause the
Personnel Group of America, Inc. Non-qualified Profit Sharing Plan (the
"NONQUALIFIED PLAN") to be terminated and all benefit obligations under such
plan to participants to be satisfied, (ii) cause the participation (including
all associated liabilities and obligations) attributable to the employees and
former employees (and their dependents) of Staffing and each Staffing Subsidiary
in each Company Employee Benefit Plan (other than the Venturi Partners, Inc.
401(k) Plan (formerly known as the Personnel Group of America, Inc. 401(k) Plan)
("VPI 401(k) PLAN") and the Nonqualified Plan) to be spun off from such Company
Employee Benefit Plan and transferred to Staffing (and cause Staffing to accept
such spun-off plans), and (iii) cause Staffing and each Staffing Subsidiary to
cease to be a participating employer in each Company Employee Benefit Plan
(other than the VPI 401(k) Plan and the Nonqualified Plan).
(c) Transfer of Employment of Certain Staffing Employees.
Effective as of the Effective Date, Company shall cause the employees of
Staffing and Staffing Subsidiaries who have been identified by Comsys and are
listed on Section 6.21(c) of the Company Disclosure Letter to be transferred to
employment with Partners.
SECTION 6.22. Subscription Agreements. The Company shall cause (a)
the transactions contemplated by the Subscription Agreement to be completed and
(b) MGOP, MGOPB, Links and Inland or other investors to purchase up to
$7,000,000 of the Company
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Preferred Stock in accordance with the subscription agreement attached as an
exhibit to the Letter Agreement, in each case at or prior to the Effective Time.
ARTICLE 7
CONDITIONS
SECTION 7.1. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligations of each party to effect the Merger are
subject to the satisfaction or, to the extent permitted by applicable law,
waiver on or prior to the Closing Date of each of the following conditions:
(a) Company Stockholder Vote. The Company shall have received the
Company Stockholder Vote.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger and the other transactions contemplated by this
Agreement under the HSR Act shall have been terminated or shall have expired.
(c) Proxy Statement. The Proxy Statement (including any
information required pursuant to Rule 14f-1 under the Exchange Act) shall have
been mailed to the Company's stockholders and all required waiting periods
related thereto under applicable law shall have expired.
(d) No Injunctions or Restraints. No preliminary injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental regulatory or administrative agency or commission, nor any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, shall be in effect that would make the Merger illegal or
otherwise prevent the consummation thereof.
(e) Financing. The Company and Comsys shall have received or have
available the proceeds of the Financing, provided, however, that this condition
precedent shall be considered satisfied if, on the Effective Date, the only
remaining condition precedent to such financing is the delivery to the issuer
thereof of a certified and/or date-stamped copy of the Certificate of Merger.
(f) Subscription Agreement. Each of the Subscription Agreement and
Letter Agreement shall be in full force and effect and shall not have been
withdrawn, amended or terminated in any manner, and none of the investors party
thereto shall have breached or otherwise failed to perform their respective
obligations set forth in the applicable agreement and the transactions
contemplated thereby shall have been performed in full.
(g) Holding Stockholder Consent. The Holding Stockholder Consent
shall have been obtained.
(h) Merger Sub Stockholder Consent. The Merger Sub Stockholder
Consent shall have been obtained.
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(i) Voting Agreement. Each of the Company and each "Significant
Holder" (as such term is defined in the Company Charter) of the Company as of
the Effective Date shall have executed and delivered a counterpart copy of an
agreement substantially in the form of Exhibit O attached hereto with respect to
voting for nominees for the Board of Directors of the Company for a specified
period of time following the Effective Time, all as more fully set forth in such
agreement (the "VOTING AGREEMENT").
(j) Holding shall have repurchased the Holding Class A-1 Preferred
Stock and the Holding Class A-2 Preferred Stock and redeemed the Holding Class E
Preferred Stock.
SECTION 7.2. Conditions to Obligations of Holding and Comsys. The
obligations of Holding and Comsys to effect the Merger are further subject to
the satisfaction or, to the extent permitted by applicable law, the waiver of
each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company and Merger Sub set forth in this Agreement and in any
document delivered in connection herewith (i) to the extent qualified by Company
Material Adverse Effect or any other materiality qualifications shall be true
and correct and (ii) to the extent not so qualified shall be true and correct in
all material respects (other than the representations and warranties set forth
in Section 3.2, which shall be true and correct in all respects), in each case
as of the date hereof and as of the Closing Date (except to the extent expressly
made as of a specified date, in which case as of such date), and Holding and
Comsys shall each have received a certificate signed on behalf of each of the
Company and Merger Sub by an executive officer of such entity to such effect.
(b) Performance of Obligations of the Company and Merger Sub. Each
of the Company and Merger Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date (other than the obligations set forth in Section 6.15, 6.16 and
6.17, which shall have been performed in all respects), and Holding and Comsys
shall each have received a certificate signed on behalf of each of the Company
and Merger Sub by an executive officer of such entity to such effect; provided
that this condition shall not be waived by Comsys or Holding with respect to
performance by the Company of its obligations under Section 6.16 or 6.17 without
the prior written consent of Wachovia.
(c) Tax Opinion. Holding and Comsys shall have received from Akin
Gump Xxxxxxx Xxxxx & Xxxx LLP, counsel to Holding and Comsys, on the date on
which the Proxy Statement is mailed to the Company's stockholders and on the
Closing Date, an opinion, in each case dated as of such respective date and
stating that the Merger will qualify for U.S. federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code (the issuance of
such opinion shall be conditioned upon the receipt by such tax counsel of
officer's letters from each of Holding and the Company, in each case,
substantially in the form attached as Exhibits H and I hereto).
(d) Separation and Release Agreement. Each employee of the Company
listed on Exhibit P shall have executed and delivered a Separation and Release
Agreement in favor of the Company substantially in the form of Exhibit Q
attached hereto.
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(e) Severance and Retention Agreement. Employees of the Company
identified by Comsys or Holding prior to the Closing shall have executed and
delivered a Severance and Retention Agreement with the Company substantially in
the form of Exhibit R attached hereto.
(f) Staffing Disposition. The Staffing Disposition shall have
occurred on terms and subject to conditions as contemplated by Section 6.13 and
otherwise reasonably acceptable to Holding.
(g) Notification of Staffing Disposition. The Company shall have
delivered to each of Holding and Comsys a certificate notifying Holding and
Comsys of (i) the completion of the Staffing Disposition and (ii) the amount of
the Net Cash Proceeds (which must equal or exceed $25 million).
(h) Registration Rights Agreement and Amended and Restated
Registration Rights Agreement. The Company shall have executed and delivered the
Registration Rights Agreement and the Company and the Company stockholders party
thereto shall each have executed and delivered the Amended and Restated
Registration Rights Agreement.
(i) Guarantees of Staffing Leases. Buyer shall have agreed to
indemnify the Company and its Subsidiaries on terms reasonably acceptable to
Holding from and against any and all costs, damages, liabilities and expenses,
including attorneys' fees, arising after the Effective Time under or in
connection with any guarantees by the Company or its Subsidiaries of leases for
properties leased by Staffing or any of its Subsidiaries.
SECTION 7.3. Conditions to Obligation of the Company and Merger Sub.
The obligations of the Company and Merger Sub to effect the Merger are further
subject to the satisfaction or, to the extent permitted by applicable law, the
waiver of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Holding and Comsys set forth in this Agreement and in any document
delivered in connection herewith (i) to the extent qualified by Holding Material
Adverse Effect or any other materiality qualifications shall be true and correct
and (ii) to the extent not so qualified shall be true and correct in all
material respects (other than the representations and warranties set forth in
Section 4.2, which shall be true and correct in all respects), in each case as
of the date hereof and as of the Closing Date (except to the extent expressly
made as of a specified date, in which case as of such date), and the Company and
Merger Sub shall have received a certificate signed on behalf of Holding and
Comsys by their respective chief executive officers and the chief financial
officers to such effect.
(b) Performance of Obligations of Holding and Comsys. Holding and
Comsys shall each have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing
Date, and the Company and Merger Sub shall have received a certificate signed on
behalf of Holding and Comsys by their respective chief executive officers and
the chief financial officers to such effect.
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(c) Tax Opinion. The Company and Merger Sub shall have received
from PricewaterhouseCoopers LLP, tax counsel to the Company, on the date on
which the Proxy Statement is mailed to the Company's stockholders and on the
Closing Date, an opinion, in each case dated as of such respective date and
stating that the Merger will qualify for U.S. federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code (the issuance of
such opinion shall be conditioned upon the receipt by such tax counsel of
officer's letters from each of Holding and the Company, in each case,
substantially in the form attached as Exhibits H and I hereto).
(d) Registration Rights Agreement. The Holding Stockholders shall
each have executed and delivered the Registration Rights Agreement.
(e) Staffing Disposition. The Staffing Disposition shall have
occurred.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after this Agreement has been adopted by the Company Stockholder Vote:
(a) by mutual written consent of Holding, Comsys, Merger Sub and
the Company, each consent to have been approved by such Person's respective
board of directors;
(b) by the Company, Holding or Comsys, if the Merger has not been
consummated by December 31, 2004, or such other date as the Company, Holding and
Comsys shall mutually agree upon or as is provided in Section 6.1(d) (the
"TERMINATION DATE"); provided, however, that the right to terminate this
Agreement under this Section 8.1(b) shall not be available to any party whose
breach of any representation, warranty, covenant or agreement in this Agreement
has been the cause of, or resulted in, the failure of the Effective Time to
occur on or before such date;
(c) by the Company, Holding or Comsys, if any judgment, order,
decree, statute, law, ordinance, rule, regulation or other legal restraint or
prohibition having the effects set forth in Section 7.1(d) shall be in effect
and shall have become final and nonappealable; provided, however, that such
terminating party did not initiate such action;
(d) by the Company, Holding or Comsys, if a Company Stockholder
Vote in favor of each of the matters described in clauses (i) through (iii) of
Section 3.11(d) shall not have been obtained at the Company Stockholders
Meeting;
(e) by Holding or Comsys, if:
(i) the Board of Directors of the Company (or any committee
thereof) shall have withdrawn or modified or amended in any respect adverse to
Comsys its adoption of or recommendation in favor of this Agreement or any of
the other matters described in clauses (i) through (iii) of Section 3.11(d) or
shall have failed to make such favorable recommendation;
72
(ii) the Board of Directors of the Company (or any committee
thereof) shall have recommended to the stockholders of the Company any Takeover
Proposal or shall have resolved or publicly announced an intention to do so;
(iii) the Company shall have breached Section 6.10 in any
material respect, and Holding or Comsys shall have been adversely affected
thereby;
(iv) the Company shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (A)
would give rise to the failure of a condition set forth in Section 7.2(a) or
(b), and (B) is incapable of being cured or has not been cured by the Company
within five business days after written notice has been given by Holding or
Comsys to the Company of such breach or failure to perform;
(v) the Company and/or its stockholders or directors shall
not have taken all actions necessary to cause (A) each Group B Designee (or
replacement designee thereof as contemplated by Section 6.15(a)) to be elected
or appointed to the Board of Directors of the Company effective immediately
after the Effective Time, to serve until the earlier of such individual's
resignation or removal or until his successor is duly elected and qualified in
accordance with the certificate of incorporation and bylaws of the Company; (B)
the Board of Directors effective immediately after the Effective Time to consist
of a total of nine directors, five of whom shall be Group B Designees; (C) Group
B Designees to constitute a majority of each committee (other than the Company's
audit committee) of the Company's Board of Directors effective immediately after
the Effective Time; and (D) designees of Holding to be elected or appointed to
hold all director and officer positions of each of the Company Subsidiaries
effective immediately after the Effective Time; or
(vi) the Staffing Disposition is not consummated in
accordance with Section 7.2(f);
(f) by the Company, if:
(i) prior to the Company Stockholders Meeting, (A) the
Company shall not have breached Section 6.10 in any material respect, (B) the
Board of Directors of the Company authorizes the Company, subject to complying
with the terms of Section 6.10 and this Section 8.1(f)(i), to enter into a
binding written agreement concerning a transaction that constitutes a Superior
Proposal and the Company notifies Holding and Comsys in writing that it intends
to enter into such an agreement, attaching the most current version of such
agreement to such notice, (C) Comsys does not make, within five business days of
receipt of the Company's written notification of its intention to enter into
such agreement, an offer that the Board of Directors of the Company determines,
in its good faith judgment (after receipt of the advice of its financial
advisor), is at least as favorable to the Company's stockholders from a
financial point of view as the Superior Proposal and (D) the Company
simultaneously with such termination pays to Comsys in immediately available
funds any fees and expenses required to be paid or reimbursed pursuant to
Section 8.3; or
73
(ii) Holding, Comsys or any Holding Stockholder shall have
breached or failed to perform in any material respect any of their respective
representations, warranties, covenants or other agreements contained in this
Agreement, which breach or failure to perform (A) would give rise to the failure
of a condition set forth in Section 7.3(a), (b), (c) or (d) and (B) is incapable
of being cured or has not been cured by Holding, Comsys or such Holding
Stockholders, as applicable, within five business days after written notice has
been given by the Company to Holding, Comsys or such Holding Stockholder, as
applicable, of such breach or failure to perform.
(iii) the Staffing Disposition is not consummated; provided,
however, that the right to terminate this Agreement under this Section
8.1(f)(iii) shall not be available to the Company if the Staffing Disposition is
not consummated because of the Company's breach of any representation, warranty,
covenant or agreement in the Buyer Agreement, or, if applicable, the Replacement
Agreement, or any breach of any representation, warranty, covenant or agreement
in this Agreement pertaining to Staffing.
The party desiring to terminate this Agreement shall give written notice of such
termination to the other parties.
SECTION 8.2. Effect of Termination. Upon the termination of this
Agreement pursuant to Section 8.1, this Agreement shall forthwith become null
and void except as set forth in Section 8.3 and for the provisions of Article 9,
which shall survive such termination; provided, however, that nothing herein
shall relieve any party from liability for any intentional breach of this
Agreement prior to such termination. In addition, the Confidentiality Agreement
shall not be affected by the termination of this Agreement.
74
SECTION 8.3. Fees and Expenses. If (x) this Agreement is terminated
pursuant to Sections 8.1(e)(i), 8.1(e)(ii), 8.1(e)(iii), 8.1(e)(v) (except for a
failure of the Company stockholders to cause the conditions in Section 8.1(e)(v)
to occur) or 8.1(f)(i) or (y) (A) a Takeover Proposal in respect of the Company
(other than a Takeover Proposal relating solely to Staffing) is publicly
announced or is proposed or offered or made to the Company or the Company's
stockholders prior to this Agreement having been approved by the Company
Stockholder Vote, (B) this Agreement is terminated by any party, as applicable,
pursuant to Section 8.1(b) or by Holding or Comsys, pursuant to Section
8.1(e)(iv) due to the Company's having intentionally breached (and not cured
after notice thereof) any of its representations, warranties, covenants or
agreements set forth in this Agreement and (C) within 12 months following such
termination the Company shall consummate or enter into, directly or indirectly,
any agreement with respect to a Takeover Proposal, or (z) this Agreement is
terminated by any party pursuant to Section 8.1(b) or by Holding or Comsys
pursuant to Section 8.1(e)(vi) and the Company prior to such termination shall
have breached (and not cured after notice thereof) any of its representations,
warranties, covenants or agreements set forth in the Buyer Agreement or, if
applicable, the Replacement Agreement or any of its representations, warranties,
covenants or agreements set forth in this Agreement pertaining to the Staffing
Disposition, which breach shall have materially contributed to the failure of
the Effective Time to occur prior to the termination of this Agreement, the
Company shall promptly, but in no event later than one business day after
termination of this Agreement (or on the date of such consummation or, if
earlier, entry into such agreement in the case of (y) above), pay Holding a fee
in immediately available funds of $4 million (the "TERMINATION FEE"). If this
Agreement is terminated pursuant to Section 8.1(d), the Company shall promptly,
but in no event later than one business day after termination of this Agreement,
pay Holding a fee in immediately available funds of $1.5 million. For purposes
of this Section 8.3, the references in the definition of Takeover Proposal to
15% shall be changed to 40%.
Except as set forth in this Section 8.3 and Section 6.12, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated; provided, however, that Holding and the Company will
share equally any filing fees in connection with their respective filings
required under the HSR Act and provided, further, that (x) if this Agreement is
terminated and the Termination Fee is payable as a result thereof, in addition
to the payment of the Termination Fee, the Company shall assume and pay, or
reimburse Holding for, all Expenses, but not more than $2.5 million in the
aggregate (the "EXPENSE CAP") for all such Expenses; (y) if this Agreement is
terminated pursuant to Section 8.1(d), the Company shall assume and pay, or
reimburse Holding for, all of its Expenses up to the Expense Cap; and (z) (I) if
this Agreement is terminated by any party pursuant to Section 8.1(b) or by the
Company pursuant to Section 8.1(f)(iii) or by Holding or Comsys pursuant to
Section 8.1(e)(vi) and (II) the Company prior to such termination shall not have
breached (or if breached, failed to cure) any of its representations,
warranties, covenants or agreements set forth in the Buyer Agreement or, if
applicable, the Replacement Agreement or any of its representations, warranties,
covenants or agreements set forth in this Agreement pertaining to the Staffing
Disposition, then (A) the Company shall assume and pay, or reimburse Holding
for, all of its Expenses up to the Expense Cap, and (B) in the event the Company
recovers from any third party damages for breach of the Buyer Agreement and/or
Replacement Agreement, the Company shall pay Holding one half of the amount of
such recovery (net of litigation and collection costs) up to a maximum of $1.5
75
million. Any such assumption, payment or reimbursement shall be made promptly,
and in any event not more than five business days following request by Holding.
As used herein, "EXPENSES" means all expenses incurred or committed to by or on
behalf of Holding in connection with the investigation and evaluation of the
Company, Partners, Staffing and their respective Subsidiaries and operations,
and with the preparation, execution and performance of this Agreement, each
other agreement or document contemplated by this Agreement, including, without
limitation, all fees and expenses of agents, representatives, counsel and
accountants and all commitment and other fees and costs to secure and preserve
the availability of financing necessary to consummate such transactions.
SECTION 8.4. Amendment. This Agreement may not be amended or
modified except by a writing signed by all of the parties. Such amendment or
amendments may be made at any time before or after the effectiveness of the
Company Stockholder Vote; provided, however, that after the effectiveness of
such Company Stockholder Vote, no amendment shall be made without the further
approval of such stockholders if such amendment would (a) in any way materially
adversely affect the rights of the Company stockholders (other than a
termination of this Agreement in accordance with the provisions hereof) or (b)
require a shareholder vote under applicable law, the Company's listing agreement
with NASDAQ or rules promulgated by the National Association of Securities
Dealers applicable to Persons listed on NASDAQ.
SECTION 8.5. Waiver. Any party may, for itself only, (a) extend the
time for the performance of any of the obligations of any other party under this
Agreement, (b) waive any inaccuracies in the representations and warranties of
any other party contained herein or in any document delivered pursuant hereto
and (c) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any such extension or waiver will be
valid only if set forth in a writing signed by the party to be bound thereby. No
waiver by any party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, may be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising because of any prior or
subsequent such occurrence. Neither the failure nor any delay on the part of any
party to exercise any right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
preclude any other or further exercise of the same or of any other right or
remedy.
ARTICLE 9
GENERAL PROVISIONS
SECTION 9.1. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission and
electronic mail transmission, so long as a receipt of such electronic mail
transmission is requested and received) and shall be given,
(a) if to Holding or Comsys:
COMSYS Holding, Inc.
0000 Xxxx Xxx Xxxxxxx
00
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx
Fax: 000-000-0000
with a copy to (which shall not constitute notice):
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, P.C.
Fax: 000-000-0000
(b) if to the Company, Partners or Merger Sub
Venturi Partners, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Fax: 000-000-0000
with a copy to (which shall not constitute notice):
Xxxxxxxx & Xxxxxxxx LLP
000 00xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Fax: 000-000-0000
(c) if to the Holding Stockholders:
c/o COMSYS Holding, Inc.
0000 Xxxx Xxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx
Fax: 000-000-0000
or to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests or other communications will be deemed received on the date of receipt
by the recipient thereof if received prior to 5:00 p.m. on a business day in the
place of receipt. Otherwise, any such notice, request or communication shall be
deemed to have been received on the next succeeding business day in the place of
receipt.
SECTION 9.2. Non-Survival of Representations and Warranties. All
representations and warranties set forth in this Agreement and/or in any
instrument delivered
77
pursuant to this Agreement shall not survive the Effective Time, but shall
terminate at the Effective Time.
SECTION 9.3. Knowledge Qualifiers. "To the knowledge of the Company"
and similar phrases mean (a) the actual knowledge of the individuals described
in Section 9.3 of the Company Disclosure Letter (the "COMPANY KNOWLEDGEABLE
OFFICERS") and (b) the constructive knowledge of the Company Knowledgeable
Officers to the extent such knowledge would have been obtained by their due
inquiry of the employees charged with responsibility for the particular matter
that is the subject of such representation or warranty. "To the knowledge of
Holding and Comsys" and similar phrases mean (a) the actual knowledge of the
individuals described in Section 9.3 of the Comsys Disclosure Letter (the
"COMSYS KNOWLEDGEABLE OFFICERS") and (b) the constructive knowledge of the
Comsys Knowledgeable Officers to the extent such knowledge would have been
obtained by their due inquiry of the employees charged with responsibility for
the particular matter that is the subject of such representation or warranty
SECTION 9.4. Construction. This Agreement has been freely and fairly
negotiated among the parties. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties and no presumption or burden of proof will arise favoring or
disfavoring any party because of the authorship of any provision of this
Agreement. Any reference to any law will be deemed to refer to such law as in
effect on the date hereof and all rules and regulations promulgated thereunder,
unless the context requires otherwise. The words "include," "includes," and
"including" will be deemed to be followed by "without limitation." Pronouns in
masculine, feminine, and neuter genders will be construed to include any other
gender, and words in the singular form will be construed to include the plural
and vice versa, unless the context otherwise requires. The words "this
Agreement," "herein," "hereof," "hereby," "hereunder," and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The parties intend that each representation,
warranty, and covenant contained herein will have independent significance. If
any party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the party has not breached will not
detract from or mitigate the fact that the party is in breach of the first
representation, warranty, or covenant. Time is of the essence in the performance
of this Agreement. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
SECTION 9.5. Governing Law; Jurisdiction.
(a) This Agreement will be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to any choice of
law principles or conflicts of law rules (whether of the State of Delaware or
any other jurisdiction) that would result in the application of the substantive
or procedural laws of any other jurisdiction and, as applicable the federal laws
of the United States.
(b) Any action, suit or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby shall only be brought in the
Court of Chancery in and for New Castle
78
County, Delaware, and each party consents to the exclusive jurisdiction and
venue of such courts (and of the appropriate appellate courts therefrom) in any
such action, suit or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such, action, suit or proceeding in any such court or that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum. Process in any such action, suit or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, service of
process on such party as provided in Section 9.1 shall be deemed effective
service of process on such party. Partners hereby appoints the Company as its
agent and each Holding Stockholder hereby appoints Holding as its agent to
receive on its behalf service of copies of the summons and complaint and any
other process that might be served in an action, suit or proceeding as
contemplated by this Section 9.5.
SECTION 9.6. Counterparts; Facsimile Transmission of Signatures.
This Agreement may be executed in two or more counterparts, each of which will
be deemed an original but all of which together will constitute one and the same
instrument, and delivered by means of a facsimile transmission. This Agreement
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties. For purposes of determining
whether a party has signed this Agreement or any document contemplated hereby or
any amendment or waiver hereof, only a handwritten original signature on a paper
document or a facsimile copy of such a handwritten original signature shall
constitute a signature, notwithstanding any law relating to or enabling the
creation, execution or delivery of any contract or signature by electronic
means.
SECTION 9.7. Assignment; Binding Effect; Third Party Beneficiaries.
(a) No party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other parties; provided, however, that a Holding Stockholder may assign this
Agreement and its rights, interests and obligations hereunder in connection with
its sale of Holding Shares so long as the transferee, if it is not already a
party hereto, executes and delivers a signature page to become a party to this
Agreement and executes and delivers an accredited investor questionnaire in the
form attached hereto as Exhibit E indicating that such transferee is an
accredited investor. Any purported assignment in breach of this provision shall
be null and void. All of the terms, agreements, covenants, representations,
warranties and conditions of this Agreement are binding upon, and inure to the
benefit of and are enforceable by, the parties and their respective successors
and permitted assigns.
(b) Nothing in this Agreement shall be construed as giving any
Person, other than the parties hereto and their heirs, successors, legal
representatives and permitted assigns, any right, remedy or claim under or in
respect of this Agreement or any provision hereof; except that (i) each Holding
Stockholder is and is intended to be a third party beneficiary of Section 2.3(a)
and Section 6.1(e) and may specifically enforce the terms of such provision,
(ii) each Indemnified Party is and is intended to be a third party beneficiary
of Section 6.14 and may specifically enforce the terms of such provision and
(iii) each Holding Stockholder and each Group B Designee is and is intended to
be a third party beneficiary under Section 6.15, and may specifically enforce
the terms of such provision.
79
SECTION 9.8. Severability. The provisions of this Agreement will be
deemed severable and the invalidity or unenforceability of any provision will
not affect the validity or enforceability of the other provisions hereof;
provided that if any provision of this Agreement, as applied to any party or to
any circumstance, is judicially determined not to be enforceable in accordance
with its terms, the parties agree that the court judicially making such
determination may modify the provision in a manner consistent with its
objectives such that it is enforceable, and/or to delete specific words or
phrases, and in its modified form, such provision will then be enforceable and
will be enforced.
SECTION 9.9. Entire Agreement. This Agreement, together with the
Confidentiality Agreement and the Exhibits and Disclosure Letters hereto and the
certificates, documents, instruments and writings that are delivered pursuant
hereto, constitutes the entire agreement and understanding of the parties in
respect of the subject matter hereof and supersedes all prior understandings,
agreements or representations by or among the parties, written or oral, to the
extent they relate in any way to the subject matter hereof.
SECTION 9.10. Specific Performance; Remedies. Each party
acknowledges and agrees that the other parties would be damaged irreparably if
any provision of this Agreement were not performed in accordance with its
specific terms or were otherwise breached. Accordingly, the parties will be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Agreement and to enforce specifically this Agreement and its provisions
in any action or proceeding instituted in any state or federal court sitting in
the State of Delaware having jurisdiction over the parties and the matter, in
addition to any other remedy to which they may be entitled, at law or in equity.
Except as expressly provided herein, the rights, obligations and remedies
created by this Agreement are cumulative and in addition to any other rights,
obligations or remedies otherwise available at law or in equity. Except as
expressly provided herein, nothing herein will be considered an election of
remedies.
SECTION 9.11. Incorporation of Exhibits and Disclosure Letters. The
Exhibits and Disclosure Letters identified in this Agreement are incorporated
herein by reference and made a part hereof.
[SIGNATURE PAGE FOLLOWS]
80
IN WITNESS WHEREOF, Holding, Comsys, Merger Sub, Partners, the Company and
the Holding Stockholders have caused this Agreement to be executed as of the
date first written above.
VENTURI PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman and Chief Executive Officer
VENTURI TECHNOLOGY PARTNERS, LLC
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President
VTP, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer and President
[Signature Page to Agreement and Plan of Merger]
COMSYS HOLDING, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
COMSYS INFORMATION TECHNOLOGY SERVICES, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
[Signature Page to Agreement and Plan of Merger]
HOLDING STOCKHOLDERS:
OLD TRAFFORD INVESTMENT PTE LTD.
By: /s/ Xxx-Xxxx Tay
--------------------------------------------
Name: Xxx-Xxxx Tay
Title: Director
[Signature Page to Agreement and Plan of Merger]
HOLDING STOCKHOLDERS:
GTCR FUND VI, L.P.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman
GTCR VI EXECUTIVE FUND, L.P.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman
GTCR ASSOCIATES VI
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman
[Signature Page to Agreement and Plan of Merger]
HOLDING STOCKHOLDERS:
X. X. XXXXXX DIRECT CORPORATE FINANCE INSTITUTIONAL
INVESTORS LLC
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
X. X. XXXXXX DIRECT CORPORATE FINANCE PRIVATE
INVESTORS LLC
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
000 XXXXX XXXXXX FUND, L.P.
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
[Signature Page to Agreement and Plan of Merger]
HOLDING STOCKHOLDERS:
WACHOVIA INVESTORS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
[Signature Page to Agreement and Plan of Merger]
HOLDING STOCKHOLDERS:
/s/ Xxxxxxx X. Xxxxxx
---------------------------------------------------
Xxxxxxx X. Xxxxxx, individually
/s/ Xxxxx X. Xxxx
---------------------------------------------------
Xxxxx X. Xxxx, individually
/s/ Xxxxxxxx X. Xxxx
---------------------------------------------------
Xxxxxxxx X. Xxxx, individually
/s/ Xxxxxx X. Xxxx, Xx.
---------------------------------------------------
Xxxxxx X. Xxxx, Xx. , individually
/s/ Xxxxxx X. Xxxxxx XX
---------------------------------------------------
Xxxxxx X. Xxxxxx XX, individually
/s/ Xxxx X. Xxxxxxx
---------------------------------------------------
Xxxx X. Xxxxxxx, individually
/s/ Xxxxxxx X. Xxxxxx
---------------------------------------------------
Xxxxxxx X. Xxxxxx, individually
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------------
Xxxxxxx X. Xxxxxxxxx, individually
[Signature Page to Agreement and Plan of Merger]
EXHIBIT A
Form of Amended and Restated Certificate of Incorporation of
COMSYS Holding, Inc.
[ATTACHED]
SIXTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
COMSYS HOLDING, INC.
COMSYS Holding, Inc. (the "CORPORATION"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (the "GCL"),
does hereby certify as follows:
1. The name of the Corporation is COMSYS Holding, Inc. and the
Corporation was originally incorporated under the name MITS Holding, Inc. The
original certificate of incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on August 31, 1999.
2. This Sixth Amended and Restated Certificate of Incorporation was
duly approved by the Board of Directors of the Corporation (the "BOARD OF
DIRECTORS") and adopted by the stockholders of the Corporation in accordance
with Sections 228, 242 and 245 of the GCL.
3. This Sixth Amended and Restated Certificate of Incorporation, as it
may be amended or restated from time to time (this "CERTIFICATE"), restates,
integrates and further amends the existing Fifth Amended and Restated
Certificate of Incorporation of the Corporation and all amendments thereto that
are in effect on the date hereof (the "CERTIFICATE OF INCORPORATION").
4. The text of the Certificate of Incorporation is hereby amended and
restated to read in its entirety as follows:
First. The name of the corporation is COMSYS Holding, Inc. (the
"CORPORATION").
Second. The address of the Corporation's registered office in the State of
Delaware is The Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
Third. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the GCL.
Fourth.
(a) Authorized Capital Stock. The total number of shares of all
classes of stock which the Corporation shall have authority to issue is one
thousand (1,000), of which nine hundred (900) shares, par value $0.01 per share,
shall be designated as "Common Stock" and one hundred (100) shares, par value
$0.01 per share, shall be designated as "Preferred Stock". Subject to the terms
of any serial designations for any series of Preferred Stock, the number of
authorized shares of Common Stock or any series of Preferred Stock may be
increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the outstanding shares entitled
to vote, voting together as a single class, irrespective of the provisions of
Section 242(b)(2) of the GCL or any corresponding provision hereafter enacted.
(b) Common Stock.
(i) The holders of shares of Common Stock shall be entitled
to one vote for each such share on each matter properly submitted to the
stockholders on which the holders of shares of Common Stock are entitled to
vote. Except as otherwise required by law or this Certificate (including any
Preferred Stock Designation, as defined below) at any annual or special meeting
of the stockholders the Common Stock shall have the exclusive right to vote for
the election of directors and on all other matters properly submitted to a vote
of the stockholders. Notwithstanding the foregoing, except as otherwise required
by law or this Certificate (including a Preferred Stock Designation), holders of
Common Stock shall not be entitled to vote on any amendment to this Certificate
(including any amendment to any Preferred Stock Designation) that relates solely
to the terms of one or more outstanding series of Preferred Stock if the holders
of such affected series are entitled, either separately or together with the
holders of one or more other such series, to vote thereon pursuant to this
Certificate (including any Preferred Stock Designation.).
(ii) No Cumulative Voting. The holders of shares of Common
Stock shall not have cumulative voting rights.
(iii) Dividends. Subject to the rights of the holders of
Preferred Stock, and subject to any other provisions of this Certificate, as it
may be amended from time to time, holders of shares of Common Stock shall be
entitled to receive such dividends and other distributions in cash, stock or
property of the Corporation when, as and if declared thereon by the Board of
Directors of the Corporation (the "BOARD OF DIRECTORS") from time to time out of
assets or funds of the Corporation legally available therefor.
(iv) Liquidation, Dissolution, Etc. In the event of any
liquidation, dissolution or winding up (either voluntary or involuntary) of the
Corporation, after payment or provision for payment of the debts and other
liabilities of the Corporation and subject to the rights of the holders of
Preferred Stock in respect thereof, the holders of shares of Common Stock shall
be entitled to receive the remaining assets of the Corporation available for
distribution to its stockholders, ratably in proportion to the number of shares
held by them.
(v) No Preemptive Or Subscription Rights. No holder of
shares of Common Stock shall be entitled to preemptive or subscription rights.
(c) Power To Sell And Purchase Shares. Subject to the requirements
of applicable law, the Corporation shall have the power to issue and sell all or
any part of any shares of any class of stock herein or hereafter authorized to
such persons, and for such consideration, as the Board of Directors shall from
time to time, in its discretion, determine, whether or not greater consideration
could be received upon the issue or sale of the same number of shares of another
class, and as otherwise permitted by law. Subject to the requirements of
2
applicable law, the Corporation shall have the power to purchase any shares of
any class of stock herein or hereafter authorized from such persons, and for
such consideration, as the Board of Directors shall from time to time, in its
discretion, determine, whether or not less consideration could be paid upon the
purchase of the same number of shares of another class, and as otherwise
permitted by law.
(d) Preferred Stock. Shares of Preferred Stock may be issued in
one or more series from time to time by the Board of Directors, and the Board of
Directors is expressly authorized to fix for each series such voting powers,
full or limited, or no voting powers and such designations, preferences and
relative, participating, optional or other special rights and such
qualifications, limitations and restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of such series and included in a certificate of
designations ("PREFERRED STOCK DESIGNATION") filed pursuant to the GCL, in each
case subject to the terms of this Certificate including without limitation the
following:
(i) the distinctive serial designation of such series which
shall distinguish it from other series;
(ii) the number of shares included in such series;
(iii) the dividend rate (or method of determining such rate)
payable to the holders of the shares of such series, any conditions upon which
such dividends shall be paid and the date or dates upon which such dividends
shall be payable;
(iv) whether dividends on the shares of such series shall be
cumulative and, in the case of shares of any series having cumulative dividend
rights, the date or dates or method of determining the date or dates from which
dividends on the shares of such series shall be cumulative;
(v) the amount or amounts which shall be payable out of the
assets of the Corporation to the holders of the shares of such series upon
voluntary or involuntary liquidation, dissolution or winding up the Corporation,
and the relative rights of priority, if any, of payment of the shares of such
series;
(vi) the price or prices at which, the period or periods
within which and the terms and conditions upon which the shares of such series
may be redeemed, in whole or in part, at the option of the Corporation or at the
option of the holder or holders thereof or upon the happening of a specified
event or events;
(vii) the obligation, if any, of the Corporation to purchase
or redeem shares of such series pursuant to a sinking fund or otherwise and the
price or prices at which, the period or periods within which and the terms and
conditions upon which the shares of such series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(viii) whether or not the shares of such series shall be
convertible or exchangeable, at any time or times at the option of the holder or
holders thereof or at the option of the Corporation or upon the happening of a
specified event or events, into shares of any other
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class or classes or any other series of the same or any other class or classes
of stock of the Corporation, and the price or prices or rate or rates of
exchange or conversion and any adjustments applicable thereto; and
(ix) whether or not the holders of the shares of such series
shall have voting rights, in addition to the voting rights provided by law, and
if so the terms of such additional voting rights.
Fifth. The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(a) The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors.
(b) The number of directors of the Corporation shall be fixed from
time to time exclusively by the Board of Directors pursuant to a resolution
adopted by a majority of the Whole Board. For purposes of this Certificate,
"Whole Board" shall mean the total number of directors the Corporation would
have if there were no vacancies. Election of directors need not be by written
ballot unless the By-Laws of the Corporation (the "BY-LAWS") so provide.
(c) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the provisions of the GCL,
this Certificate, and any By-Laws adopted by the stockholders; provided,
however, that no By-Laws hereafter adopted by the stockholders shall invalidate
any prior act of the directors which would have been valid if such By-Laws had
not been adopted.
Sixth. No director shall be personally liable to the Corporation or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the GCL as the same exists or may hereafter be
amended. If the GCL is amended hereafter to authorize corporate action further
eliminating or limiting the liability of directors, then the liability of a
director of the Corporation to the Corporation or its stockholders shall be
eliminated or limited to the fullest extent authorized by the GCL, as so
amended. Any repeal or amendment of this Article Sixth by the stockholders of
the Corporation or by changes in law, or the adoption of any other provision of
this Certificate inconsistent with this Article Sixth, will, unless otherwise
required by law, be prospective only (except to the extent such amendment or
change in law permits the Corporation to further limit or eliminate the
liability of directors on a retroactive basis than permitted prior thereto) and
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal, amendment or adoption of such
inconsistent provision with respect to acts or omissions occurring prior to such
repeal, amendment or adoption of such inconsistent provision.
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Seventh.
(a) Each person who is or was made a party or is threatened to be
made a party to or is otherwise involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "PROCEEDING") by reason of the fact that he or she
is or was a director or officer of the Corporation or, while a director or
officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (hereinafter a "COVERED PERSON"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent, or in any other capacity while serving as
a director, officer, employee or agent, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized or permitted by applicable
law, as the same exists or may hereafter be amended, against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes and penalties and amounts paid in settlement)
reasonably incurred or suffered by such Covered Person in connection with such
proceeding, and such right to indemnification shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that, except for proceedings to enforce rights to indemnification, the
Corporation shall indemnify a Covered Person in connection with a proceeding (or
part thereof) initiated by such Covered Person only if such proceeding (or part
thereof) was authorized by the Board. The right to indemnification conferred by
this Article Seventh shall be a contract right and shall include the right to be
paid by the Corporation the expenses incurred in defending or otherwise
participating in any such proceeding in advance of its final disposition;
provided, however, that, if the GCL requires, an advancement of expenses
incurred by a Covered Person in his or her capacity as a director or officer of
the Corporation (and not in any other capacity in which service was or is
rendered by such Covered Person, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Covered Person, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such Covered Person is not
entitled to be indemnified for such expenses under this Article Seventh or
otherwise.
(b) The rights conferred on any Covered Person by this Article
Seventh shall not be exclusive of any other rights which any Covered Person may
have or hereafter acquire under law, this Certificate, the By-Laws, an
agreement, vote of stockholders or disinterested directors, or otherwise.
(c) Any repeal or amendment of this Article Seventh by the
stockholders of the Corporation or by changes in law, or the adoption of any
other provision of this Certificate inconsistent with this Article Seventh,
will, unless otherwise required by law, be prospective only (except to the
extent such amendment or change in law permits the Corporation to provide
broader indemnification rights on a retroactive basis than permitted prior
thereto), and will not in any way diminish or adversely affect any right or
protection existing at the time of such repeal or amendment or adoption of such
inconsistent provision in respect of any act or omission occurring prior to such
repeal or amendment or adoption of such inconsistent provision.
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(d) This Article Seventh shall not limit the right of the Corporation,
to the extent and in the manner authorized or permitted by law, to indemnify and
to advance expenses to persons other than Covered Persons.
Eighth. Meetings of stockholders may be held within or without the State
of Delaware, as the By-Laws may provide. The books of the Corporation may be
kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws.
Ninth. In furtherance and not in limitation of the powers conferred upon
it by the laws of the State of Delaware, the Board of Directors shall have
concurrent power with the stockholders to adopt, amend, alter, add to or repeal
the By-Laws. The affirmative vote of a majority of the Whole Board shall be
required for the Board to adopt, amend, alter, add to or repeal the By-Laws.
Tenth. The Corporation hereby elects not to be governed by Section 203 of
the GCL pursuant to Section 203(b)(3) therein.
Eleventh. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate and any other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner now or hereafter prescribed in this
Certificate, the By-Laws or the GCL, and, except as set forth in Article
Seventh, all rights, preferences and privileges herein conferred upon
stockholders, directors, or any other persons by and pursuant to this
Certificate are granted subject to such reservation.
6
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly
executed in its name and on its behalf by ___________________, its
__________________, this ____ day of _______________, 2004.
COMSYS HOLDING, INC.
By: ________________________________
Name:
Title:
EXHIBIT B
Form of Amended and Restated Bylaws of COMSYS Holding, Inc.
[ATTACHED]
AMENDED AND RESTATED
BY-LAWS
OF
COMSYS HOLDING, INC.,
a Delaware corporation
(the "CORPORATION")
(Adopted as of__________, 20__ )
AMENDED AND RESTATED
BY-LAWS
OF
COMSYS HOLDING, INC.
ARTICLE I.
OFFICES
Section 1.1. REGISTERED OFFICE. The registered office of the
Corporation within the State of Delaware shall be located at either (a) the
principal place of business of the Corporation in the State of Delaware or (b)
the office of the corporation or individual acting as the Corporation's
registered agent in Delaware.
Section 1.2. ADDITIONAL OFFICES. The Corporation may, in addition to
its registered office in the State of Delaware, have such other offices and
places of business, both within and outside the State of Delaware, as the Board
of Directors of the Corporation (the "BOARD") may from time to time determine or
as the business and affairs of the Corporation may require.
ARTICLE II.
STOCKHOLDERS MEETINGS
Section 2.1. ANNUAL MEETINGS. Unless directors are elected by
written consent in lieu of an annual meeting as permitted by applicable law or
an annual meeting is otherwise not required by applicable law, an annual meeting
of stockholders shall be held at such place and time and on such date as shall
be determined by the Board and stated in the notice of the meeting, provided
that the Board may in its sole discretion determine that the meeting shall not
be held at any place, but may instead be held solely by means of remote
communication pursuant to Section 9.5(a). At each annual meeting, the
stockholders shall elect directors of the Corporation and may transact any other
business as may properly be brought before the meeting. Stockholders may, unless
the Corporation's Certificate of Incorporation, as the same may be amended or
restated from time to time (the "CERTIFICATE OF INCORPORATION"), provides
otherwise, act by written consent to elect directors; provided, however, that if
such consent is less than unanimous, such action by written consent may be in
lieu of holding an annual meeting only if all of the directorships to which
directors could be elected at an annual meeting held at the effective time of
such action are vacant and are filled by such action.
Section 2.2. SPECIAL MEETINGS. Except as otherwise required by
applicable law or provided in the Certificate of Incorporation, special meetings
of stockholders, for any purpose or purposes, may be called only by (a) the
Chairman of the Board, (b) the Chief Executive Officer, (c) the President, (d)
the Board, or (e) the Secretary at the request in writing of
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stockholders holding shares representing a majority of the voting power of the
outstanding shares entitled to vote on the matter for which such meeting is to
be called. The Secretary shall call such a meeting upon receiving such a
request. Special meetings of stockholders shall be held at such place and time
and on such date as shall be determined by the Board and stated in the
Corporation's notice of the meeting, provided that the Board may in its sole
discretion determine that the meeting shall not be held at any place, but may
instead be held solely by means of remote communication pursuant to Section
9.5(a).
Section 2.3. NOTICES. Notice of each stockholders meeting stating
the place, if any, date, and time of the meeting, and the means of remote
communication, if any, by which stockholders and proxyholders may be deemed to
be present in person and vote at such meeting, shall be given in the manner
permitted by Section 9.3 to each stockholder entitled to vote thereat by the
Corporation not less than 10 nor more than 60 days before the date of the
meeting. If said notice is for a stockholders meeting other than an annual
meeting, it shall in addition state the purpose or purposes for which the
meeting is called, and the business transacted at such meeting shall be limited
to the matters so stated in the Corporation's notice of meeting (or any
supplement thereto).
Section 2.4. QUORUM. Except as otherwise provided by applicable law,
the Certificate of Incorporation or these By-Laws, the presence, in person or by
proxy, at a stockholders meeting of the holders of shares of outstanding capital
stock of the Corporation representing a majority of the voting power of all
outstanding shares of capital stock of the Corporation entitled to vote at such
meeting shall constitute a quorum for the transaction of business at such
meeting, except that when specified business is to be voted on by a class or
series of stock voting as a class, the holders of shares representing a majority
of the voting power of the outstanding shares of such class or series shall
constitute a quorum of such class or series for the transaction of such
business. If a quorum shall not be present at any meeting of the stockholders,
the chairman of the meeting or the stockholders entitled to vote thereat so
present, by a majority in voting power thereof, may adjourn the meeting from
time to time in the manner provided in Section 2.6 until a quorum shall attend.
The stockholders present at a duly convened meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Shares of its own stock belonging to
the Corporation or to another corporation, if a majority of the voting power of
the shares entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the Corporation, shall neither
be entitled to vote nor be counted for quorum purposes; provided, however, that
the foregoing shall not limit the right of the Corporation or any such other
corporation to vote shares held by it in a fiduciary capacity.
Section 2.5. VOTING OF SHARES.
(a) Voting Lists. The Secretary shall prepare, or shall cause the
officer or agent who has charge of the stock ledger of the Corporation to
prepare, at least 10 days before each meeting of stockholders, a complete list
of the stockholders of record entitled to vote thereat arranged in alphabetical
order and showing the address and the number of shares registered in the name of
each stockholder. Nothing contained in this Section 2.5(a) shall require the
Corporation to include electronic mail addresses or other electronic contact
information on such list. Such list shall be open to the examination of any
stockholder, for any purpose germane to
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the meeting, during ordinary business hours for a period of at least 10 days
prior to the meeting: (i) on a reasonably accessible electronic network,
provided that the information required to gain access to such list is provided
with the notice of the meeting, or (ii) during ordinary business hours, at the
principal place of business of the Corporation. In the event that the
Corporation determines to make the list available on an electronic network, the
Corporation may take reasonable steps to ensure that such information is
available only to stockholders of the Corporation. If the meeting is to be held
at a place, then the list shall be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present. If a meeting of stockholders is to be held solely by
means of remote communication as permitted by Section 9.5(a), the list shall be
open to the examination of any stockholder during the whole time of the meeting
on a reasonably accessible electronic network, and the information required to
access such list shall be provided with the notice of meeting. The stock ledger
shall be the only evidence as to who are the stockholders entitled to examine
the list required by this Section 2.5(a) or to vote in person or by proxy at any
meeting of stockholders.
(b) Manner of Voting. At any stockholders meeting, every
stockholder entitled to vote may vote in person or by proxy. If authorized by
the Board, the voting by stockholders or proxyholders at any meeting conducted
by remote communication may be effected by a ballot submitted by electronic
transmission (as defined in Section 9.3(c)), provided that any such electronic
transmission must either set forth or be submitted with information from which
the Corporation can determine that the electronic transmission was authorized by
the stockholder or proxyholder. The Board, in its discretion, or the chairman of
the meeting of stockholders, in such person's discretion, may require that any
votes cast at such meeting shall be cast by written ballot.
(c) Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for such
stockholder by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. Proxies need
not be filed with the Secretary until the meeting is called to order, but shall
be filed with the Secretary before being voted. Without limiting the manner in
which a stockholder may authorize another person or persons to act for such
stockholder as proxy, either of the following shall constitute a valid means by
which a stockholder may grant such authority:
(i) A stockholder may execute a writing authorizing another
person or persons to act for such stockholder as proxy. Execution may be
accomplished by the stockholder or such stockholder's authorized officer,
director, employee or agent signing such writing or causing such person's
signature to be affixed to such writing by any reasonable means, including,
but not limited to, by facsimile signature.
(ii) A stockholder may authorize another person or persons to
act for such stockholder as proxy by transmitting or authorizing the
transmission of an electronic transmission to the person who will be the
holder of the proxy, provided that any such electronic transmission must
either set forth or be submitted with information from which it can be
determined that the electronic transmission was authorized by the
stockholder.
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Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission authorizing another person or persons to act as proxy
for a stockholder may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used; provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission.
(d) Required Vote. Subject to the rights of the holders of one or
more series of preferred stock of the Corporation ("PREFERRED STOCK"), voting
separately by class or series, to elect directors pursuant to the terms of one
or more series of Preferred Stock, the election of directors shall be determined
by a plurality of the votes cast by the stockholders present in person or
represented by proxy at the meeting and entitled to vote thereon. All other
matters shall be determined by the vote of a majority of the votes cast by the
stockholders present in person or represented by proxy at the meeting and
entitled to vote thereon, unless the matter is one upon which, by applicable
law, the Certificate of Incorporation or these By-Laws, a different vote is
required, in which case such provision shall govern and control the decision of
such matter.
(e) Inspectors of Election. The Board may appoint one or more
persons as inspectors of election, who may be employees of the Corporation or
otherwise serve the Corporation in other capacities, to act at any meeting of
stockholders or any adjournment thereof and to make a written report thereof.
The Board may appoint one or more persons as alternate inspectors to replace any
inspector who fails to act. If no inspectors of election or alternates are
appointed by the Board, the chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before discharging his or her
duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspectors shall ascertain and report the number of outstanding
shares and the voting power of each; determine the number of shares present in
person or represented by proxy at the meeting and the validity of proxies and
ballots; count all votes and ballots and report the results; determine and
retain for a reasonable period a record of the disposition of any challenges
made to any determination by the inspectors; and certify their determination of
the number of shares represented at the meeting and their count of all votes and
ballots. No person who is a candidate for an office at an election may serve as
an inspector at such election. Each report of an inspector shall be in writing
and signed by the inspector or by a majority of them if there is more than one
inspector acting at such meeting. If there is more than one inspector, the
report of a majority shall be the report of the inspectors.
Section 2.6. ADJOURNMENTS. Any meeting of stockholders, annual or
special, may be adjourned by the chairman of the meeting or by the stockholders
present and entitled to vote thereat, by a majority in voting power thereof,
from time to time, whether or not there is a quorum, to reconvene at the same or
some other place. Notice need not be given of any such adjourned meeting if the
date, time, place, if any, thereof, and the means of remote communication, if
any, by which stockholders and proxyholders may be deemed to be present in
person and vote at such adjourned meeting are announced at the meeting at which
the adjournment is taken. At the adjourned meeting the stockholders, or the
holders of any class or series of stock entitled to vote separately as a class,
as the case may be, may transact any business which might have been transacted
at the original meeting. If the adjournment is for more than 30 days, or if
after the adjournment a new record date is fixed for the adjourned
4
meeting, notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
Section 2.7. CONDUCT OF MEETINGS. The chairman of each annual and
special meeting of stockholders shall be the Chairman of the Board or, in the
absence (or inability or refusal to act) of the Chairman of the Board, the Chief
Executive Officer (if he or she shall be a director) or, in the absence (or
inability or refusal to act) of the Chief Executive Officer, or if the Chief
Executive Officer is not a director, the President (if he or she shall be a
director) or, in the absence (or inability or refusal to act) of the President
or if the President is not a director, such other person as shall be appointed
by the Board, or in the absence of such appointment, a chairman chosen at the
meeting. The date and time of the opening and the closing of the polls for each
matter upon which the stockholders will vote at a meeting shall be announced at
the meeting by the chairman of the meeting. The Board may adopt such rules and
regulations for the conduct of the meeting of stockholders as it shall deem
appropriate. Except to the extent inconsistent with these By-Laws or such rules
and regulations as adopted by the Board, the chairman of any meeting of
stockholders shall have the right and authority to convene and to adjourn the
meeting, to prescribe such rules, regulations and procedures and to do all such
acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Unless and to the extent determined by the Board or the
chairman of the meeting, meetings of stockholders shall not be required to be
held in accordance with the rules of parliamentary procedure. The secretary of
each annual and special meeting of stockholders shall be the Secretary or, in
the absence (or inability or refusal to act) of the Secretary, an Assistant
Secretary so appointed to act by the chairman of the meeting. In the absence (or
inability or refusal to act) of the Secretary and all Assistant Secretaries, the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 2.8. CONSENTS IN LIEU OF MEETING. Unless otherwise provided
by the Certificate of Incorporation, any action required or permitted to be
taken at any annual or special meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding capital stock of the Corporation having not less than the minimum
voting power that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the Corporation to its registered office in the State of
Delaware, the Corporation's principal place of business, or the Secretary. Every
written consent shall bear the date of signature of each stockholder who signs
the consent and no written consent shall be effective to take the corporate
action referred to therein unless, within 60 days of the date the earliest dated
consent is delivered to the Corporation, a written consent or consents signed by
a sufficient number of holders to take such action are delivered to the
Corporation by delivery to the Corporation's registered office in the State of
Delaware, the Corporation's principal place of business, or the Secretary.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. An electronic
transmission consenting to the action to be taken and transmitted by a
stockholder, proxyholder or a person or persons authorized to act for a
stockholder or proxyholder shall be deemed to be written, signed and dated for
purposes hereof if such electronic transmission sets forth or is delivered with
information from which the Corporation can determine that such transmission was
transmitted by a stockholder or proxyholder (or by a person authorized to act
for a stockholder or proxyholder) and the date on
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which such stockholder, proxyholder or authorized person transmitted such
transmission. The date on which such electronic transmission is transmitted
shall be deemed to be the date on which such consent was signed. No consent
given by electronic transmission shall be deemed to have been delivered until
such consent is reproduced in paper form and delivered to the Corporation by
delivery either to the Corporation's registered office in the State of Delaware,
the Corporation's principal place of business, or the Secretary. Delivery made
to the Corporation's registered office shall be made by hand or by certified or
registered mail, return receipt requested. Notwithstanding the limitations on
delivery in the previous sentence, consents given by electronic transmission may
be otherwise delivered to the Corporation's principal place of business or to
the Secretary if, to the extent, and in the manner provided by resolution of the
Board. Any copy, facsimile or other reliable reproduction of a consent in
writing may be substituted or used in lieu of the original writing for any and
all purposes for which the original writing could be used; provided that such
copy, facsimile or other reproduction shall be a complete reproduction of the
entire original writing. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing and who, if the action had been
taken at a meeting, would have been entitled to notice of the meeting if the
record date for such meeting had been the date that written consents signed by a
sufficient number of holders were delivered to the Corporation as provided in
this Section 2.8.
ARTICLE III.
DIRECTORS
Section 3.1. POWERS. The business and affairs of the Corporation
shall be managed by or under the direction of the Board, which may exercise all
such powers of the Corporation and do all such lawful acts and things as are not
by statute or by the Certificate of Incorporation or by these By-Laws required
to be exercised or done by the stockholders. Directors need not be stockholders
or residents of the State of Delaware.
Section 3.2. NUMBER; TERM. The number of directors of the
Corporation shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the Whole Board, but
no decrease in such number shall have the effect of shortening the term of any
incumbent director. "Whole Board" shall mean the total number of directors the
Corporation would have if there were no vacancies. Except as otherwise provided
in the Certificate of Incorporation or these By-Laws, the directors shall be
elected at the annual meeting of stockholders to hold office until the next
succeeding annual meeting of stockholders. Each director shall hold office for
the term for which such director is elected and until his or her successor shall
have been elected and qualified, subject to such director's earlier death,
resignation, retirement, disqualification or removal.
Section 3.3. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as
otherwise provided in the Certificate of Incorporation, vacancies resulting from
death, resignation, retirement, disqualification, removal or other cause and
newly created directorships resulting from an increase in the number of
directors elected by all of the stockholders having the right to vote as a
single class may be filled by a majority vote of the directors then in office,
even
6
if less than a quorum, by a sole remaining director, or by the stockholders.
Except as otherwise provided in the Certificate of Incorporation, if the holders
of any class or classes of stock or series thereof are entitled to elect one or
more directors by the Certificate of Incorporation, vacancies and newly created
directorships of such class or classes or series may be filled only by a
majority of the directors elected by such class or classes or series thereof
then in office, by a sole remaining director so elected, or by the stockholders
of such class or classes or series thereof. Except as otherwise provided in the
Certificate of Incorporation, any director elected or chosen in accordance with
this Section 3.3 shall hold office until the next annual election of directors
and until his or her successor shall have been elected and qualified, subject to
such director's earlier death, resignation, retirement, disqualification or
removal.
Section 3.4. COMPENSATION. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, the Board shall have the
authority to fix the compensation of directors. The directors may be reimbursed
their expenses, if any, of attendance at each meeting of the Board and may be
paid either a fixed sum for attendance at each meeting of the Board or other
compensation as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of committees of the Board may be allowed like compensation
and reimbursement of expenses for attending committee meetings.
ARTICLE IV.
BOARD MEETINGS
Section 4.1. ANNUAL MEETINGS. The Board shall meet as soon as
practicable after the adjournment of each annual stockholders meeting at the
place of the annual stockholders meeting unless the Board shall fix another time
and place and give notice thereof in the manner required herein for special
meetings of the Board. No notice to the directors shall be necessary to legally
convene this meeting, except as provided in this Section 4.1.
Section 4.2. REGULAR MEETINGS. Regularly scheduled, periodic
meetings of the Board may be held without notice at such times, dates and places
as shall from time to time be determined by the Board.
Section 4.3. SPECIAL MEETINGS. Special meetings of the Board (a) may
be called by the Chairman of the Board or President and (b) shall be called by
the Chairman of the Board, President or Secretary on the written request of a
majority of directors then in office, or the sole director, as the case may be,
and shall be held at such time, date and place as may be determined by the
person calling the meeting or, if called upon the request of directors or the
sole director, as specified in such written request. Notice of each special
meeting of the Board shall be given, as provided in Section 9.3, to each
director (i) at least 24 hours before the meeting if such notice is oral notice
given personally or by telephone or written notice given by hand delivery or by
means of a form of electronic transmission and delivery; (ii) at least two days
before the meeting if such notice is sent by a nationally recognized overnight
delivery service; and (iii) at least five days before the meeting if such notice
is sent through the United States mail. If the Secretary shall fail or refuse to
give such notice, then the notice may be given by the
7
officer who called the meeting or the directors who requested the meeting. Any
and all business that may be transacted at a regular meeting of the Board may be
transacted at a special meeting. Except as may be otherwise expressly provided
by applicable law, the Certificate of Incorporation, or these By-Laws, neither
the business to be transacted at, nor the purpose of, any special meeting need
be specified in the notice or waiver of notice of such meeting. A special
meeting may be held at any time without notice if all the directors are present
or if those not present waive notice of the meeting in accordance with Section
9.4.
Section 4.4. QUORUM; REQUIRED VOTE. A majority of the Board, but in
any event not less than one-third of the Whole Board, shall constitute a quorum
for the transaction of business at any meeting of the Board, and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board, except as may be otherwise specifically provided
by applicable law, the Certificate of Incorporation or these By-Laws. If a
quorum shall not be present at any meeting, a majority of the directors present
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present.
Section 4.5. CONSENT IN LIEU OF MEETING. Unless otherwise restricted
by the Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board or any committee thereof may
be taken without a meeting if all members of the Board or committee, as the case
may be, consent thereto in writing or by electronic transmission, and the
writing or writings or electronic transmission or transmissions (or paper
reproductions thereof) are filed with the minutes of proceedings of the Board or
committee. Such filing shall be in paper form if the minutes are maintained in
paper form and shall be in electronic form if the minutes are maintained in
electronic form.
Section 4.6. ORGANIZATION. The chairman of each meeting of the Board
shall be the Chairman of the Board or, in the absence (or inability or refusal
to act) of the Chairman of the Board, the Chief Executive Officer (if he or she
shall be a director) or, in the absence (or inability or refusal to act) of the
Chief Executive Officer or if the Chief Executive Officer is not a director, the
President (if he or she shall be a director) or in the absence (or inability or
refusal to act) of the President or if the President is not a director, a
chairman elected from the directors present. The Secretary shall act as
secretary of all meetings of the Board. In the absence (or inability or refusal
to act) of the Secretary, an Assistant Secretary shall perform the duties of the
Secretary at such meeting. In the absence (or inability or refusal to act) of
the Secretary and all Assistant Secretaries, the chairman of the meeting may
appoint any person to act as secretary of the meeting.
ARTICLE V.
COMMITTEES OF DIRECTORS
Section 5.1. ESTABLISHMENT. The Board may designate one or more
committees, each committee to consist of one or more of the directors. Each
committee shall keep regular minutes of its meetings and report the same to the
Board when required. The Board
8
shall have the power at any time to fill vacancies in, to change the membership
of, or to dissolve any such committee.
Section 5.2. AVAILABLE POWERS. Any committee established pursuant to
Section 5.1 hereof, to the extent permitted by applicable law and by resolution
of the Board, shall have and may exercise all of the powers and authority of the
Board in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers that may
require it.
Section 5.3. ALTERNATE MEMBERS. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of such committee.
Section 5.4. PROCEDURES. Unless the Board otherwise provides, the
time, date, place, if any, and notice of meetings of a committee and the means
of remote communication, if any, shall be determined by such committee. At
meetings of a committee, a majority of the number of members of the committee
(but not including any alternate member, unless such alternate member has
replaced any absent or disqualified member at the time of, or in connection
with, such meeting) shall constitute a quorum for the transaction of business.
The act of a majority of the members present at any meeting at which a quorum is
present shall be the act of the committee, except as otherwise specifically
provided by applicable law, the Certificate of Incorporation, these By-Laws or
the Board. If a quorum is not present at a meeting of a committee, the members
present may adjourn the meeting from time to time, without notice other than an
announcement at the meeting, until a quorum is present. Unless the Board
otherwise provides and except as provided in these By-Laws, each committee
designated by the Board may make, alter, amend and repeal rules for the conduct
of its business. In the absence of such rules each committee shall conduct its
business in the same manner as the Board is authorized to conduct its business
pursuant to Article III and Article IV of these By-Laws.
ARTICLE VI.
OFFICERS
Section 6.1. OFFICERS. The officers of the Corporation elected by
the Board shall be a Chairman of the Board, a Chief Executive Officer, a
President, a Treasurer, a Secretary and such other officers (including without
limitation a Chief Financial Officer, Vice Presidents, Assistant Secretaries and
Assistant Treasurers) as the Board from time to time may determine. Officers
elected by the Board shall each have such powers and duties as generally pertain
to their respective offices, subject to the specific provisions of this Article
VI. Such officers shall also have such powers and duties as from time to time
may be conferred by the Board. The Chairman of the Board, Chief Executive
Officer or President may also appoint such other officers (including without
limitation one or more Vice Presidents and Controllers) as may be necessary or
desirable for the conduct of the business of the Corporation. Such other
officers shall have such powers and duties and shall hold their offices for such
terms as may be provided in these By-Laws or as may be prescribed by the Board
or, if such officer has been appointed by the
9
Chairman of the Board, Chief Executive Officer or President, as may be
prescribed by the appointing officer.
(a) Chairman of the Board. The Chairman of the Board shall preside
when present at all meetings of the stockholders and the Board. The Chairman of
the Board shall advise and counsel the Chief Executive Officer and other
officers and shall exercise such powers and perform such duties as shall be
assigned to or required of the Chairman of the Board from time to time by the
Board or these By-Laws.
(b) Chief Executive Officer. The Chief Executive Officer shall be
the chief executive officer of the Corporation, shall have general supervision
of the affairs of the Corporation and general control of all of its business
subject to the ultimate authority of the Board, and shall be responsible for the
execution of the policies of the Board. In the absence (or inability or refusal
to act) of the Chairman of the Board, the Chief Executive Officer (if he or she
shall be a director) shall preside when present at all meetings of the
stockholders and the Board.
(c) President. The President shall be the chief operating officer
of the Corporation and shall, subject to the authority of the Chief Executive
Officer and the Board, have general management and control of the day-to-day
business operations of the Corporation and shall consult with and report to the
Chief Executive Officer. The President shall put into operation the business
policies of the Corporation as determined by the Chief Executive Officer and the
Board and as communicated to the President by the Chief Executive Officer and
the Board. The President shall make recommendations to the Chief Executive
Officer on all operational matters that would normally be reserved for the final
executive responsibility of the Chief Executive Officer. In the absence (or
inability or refusal to act) of the Chairman of the Board and Chief Executive
Officer, the President (if he or she shall be a director) shall preside when
present at all meetings of the stockholders and the Board.
(d) Vice Presidents. In the absence (or inability or refusal to
act) of the President, the Vice President (or in the event there be more than
one Vice President, the Vice Presidents in the order designated by the Board)
shall perform the duties and have the powers of the President. Any one or more
of the Vice Presidents may be given an additional designation of rank or
function.
(e) Secretary.
(i) The Secretary shall attend all meetings of the
stockholders, the Board and (as required) committees of the Board and shall
record the proceedings of such meetings in books to be kept for that
purpose. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board and shall
perform such other duties as may be prescribed by the Board, the Chairman
of the Board, the Chief Executive Officer or the President. The Secretary
shall have custody of the corporate seal of the Corporation and the
Secretary, or any Assistant Secretary, shall have authority to affix the
same to any instrument requiring it, and when so affixed, it may be
attested by his or her signature or by the signature of such Assistant
Secretary. The Board may give general authority to any other officer to
affix the seal of the Corporation and to attest the affixing thereof by his
or her signature.
10
(ii) The Secretary shall keep, or cause to be kept, at the
principal executive office of the Corporation or at the office of the
Corporation's transfer agent or registrar, if one has been appointed, a
stock ledger, or duplicate stock ledger, showing the names of the
stockholders and their addresses, the number and classes of shares held by
each and, with respect to certificated shares, the number and date of
certificates issued for the same and the number and date of certificates
cancelled.
(f) Assistant Secretaries. The Assistant Secretary or, if there be
more than one, the Assistant Secretaries in the order determined by the Board
shall, in the absence (or inability or refusal to act) of the Secretary, perform
the duties and have the powers of the Secretary.
(g) Treasurer. The Treasurer shall perform all duties commonly
incident to that office (including, without limitation, the care and custody of
the funds and securities of the Corporation which from time to time may come
into the Treasurer's hands and the deposit of the funds of the Corporation in
such banks or trust companies as the Board, or the President may authorize).
(h) Assistant Treasurers. The Assistant Treasurer or, if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board shall, in the absence (or inability or refusal to act) of the Treasurer,
perform the duties and exercise the powers of the Treasurer.
Section 6.2. TERM OF OFFICE. The elected officers of the Corporation
shall be elected annually by the Board at its first meeting held after each
annual meeting of stockholders. All officers elected by the Board shall hold
office until the next annual meeting of the Board and until their successors are
duly elected and qualified or until their earlier death, resignation,
retirement, disqualification, or removal from office. Any officer may be
removed, with or without cause, at any time by the Board. Any officer appointed
by the Chairman of the Board, Chief Executive Officer or President may also be
removed, with or without cause, by the Chairman of the Board, Chief Executive
Officer or President, as the case may be, unless the Board otherwise provides.
Any vacancy occurring in any elected office of the Corporation may be filled by
the Board. Any vacancy occurring in any office appointed by the Chairman of the
Board, Chief Executive Officer or President may be filled by the Chairman of the
Board, Chief Executive Officer or President, as the case may be, unless the
Board then determines that such office shall thereupon be elected by the Board,
in which case the Board shall elect such officer.
Section 6.3. OTHER OFFICERS. The Board may delegate the power to
appoint such other officers and agents, and may also remove such officers and
agents or delegate the power to remove same, as it shall from time to time deem
necessary or desirable.
Section 6.4. MULTIPLE OFFICEHOLDERS; STOCKHOLDER AND DIRECTOR
OFFICERS. Any number of offices may be held by the same person, unless the
Certificate of Incorporation or these By-Laws otherwise provide. Officers need
not be stockholders or residents of the State of Delaware.
11
ARTICLE VII.
SHARE CERTIFICATES
Section 7.1. ENTITLEMENT TO CERTIFICATES. The shares of the
Corporation shall be represented by certificates, provided that the Board may
provide by resolution or resolutions that some or all of any or all classes or
series of its stock shall be uncertificated shares. Any such resolution shall
not apply to shares represented by a certificate until such certificate is
surrendered to the Corporation. Notwithstanding the adoption of such a
resolution by the Board, every holder of stock represented by certificates and
upon request every holder of uncertificated shares shall be entitled to have a
certificate signed in accordance with Section 7.3 representing the number of
shares registered in certificate form.
Section 7.2. MULTIPLE CLASSES OF STOCK. If the Corporation shall be
authorized to issue more than one class of stock or more than one series of any
class, the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualification, limitations or restrictions of such preferences and/or rights
shall, unless and to the extent (and subject to applicable law) the Board shall
by resolution provide that such class or series of stock shall be
uncertificated, be set forth in full or summarized on the face or back of any
certificate that the Corporation shall issue to represent such class or series
of stock; provided that, in lieu of the foregoing requirements, there may be set
forth on the face or back of such certificate a statement that the Corporation
will furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional, or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section 7.3. SIGNATURES. Each certificate representing capital stock
of the Corporation shall be signed by or in the name of the Corporation by (a)
the Chairman of the Board, the Chief Executive Officer, the President or a Vice
President; and (b) the Treasurer, an Assistant Treasurer, the Secretary, or an
Assistant Secretary of the Corporation. Any or all the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar on the date of
issue.
Section 7.4. ISSUANCE AND PAYMENT. Subject to applicable law, the
Certificate of Incorporation or these By-Laws, shares may be issued for such
consideration and to such persons as the Board may determine from time to time.
Shares may not be issued until the full amount of the consideration has been
paid, unless upon the face or back of each certificate issued to represent any
partly paid shares of capital stock there shall have been set forth the total
amount of the consideration to be paid therefor and the amount paid thereon up
to and including the time said certificate is issued.
Section 7.5. LOST CERTIFICATES. The Corporation may issue a new
certificate of stock or uncertificated shares in place of any certificate
theretofore issued by it alleged to have been lost, stolen or destroyed upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen or destroyed. When authorizing such issue, the
12
Corporation may require the owner of such lost, stolen or destroyed certificate,
or such owner's legal representative, to give the Corporation a bond sufficient
to indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate or uncertificated shares.
Section 7.6. TRANSFER OF STOCK. Stock of the Corporation shall be
transferable in the manner prescribed by applicable law and in these By-Laws.
Transfers of stock shall be made on the stock ledger of the Corporation only by
the person named as the holder thereof on the stock ledger of the Corporation or
by such person's duly constituted attorney or legal representative, and in the
case of shares represented by a certificate, upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued. No transfer of stock shall be valid as against the Corporation for any
purpose until it shall have been entered in the stock ledger of the Corporation
by an entry showing from and to whom transferred.
Section 7.7. REGISTERED STOCKHOLDERS. Except as otherwise required
by applicable law (a) the Corporation shall be entitled to recognize the
exclusive right of a person registered on its stock ledger as the owner of
shares for all purposes, including, without limitation, as the owner of such
shares to receive dividends, vote such shares, examine the stock ledger and the
books of the Corporation and be held liable for calls and assessments and (b)
the Corporation shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any person other than such
registered owner, whether or not it shall have express or other notice thereof.
ARTICLE VIII.
INDEMNIFICATION
Section 8.1. RIGHT TO INDEMNIFICATION. Each person who was or is
made a party or is threatened to be made a party to or is otherwise involved in
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "PROCEEDING"), by
reason of the fact that he or she is or was a director or officer of the
Corporation or, while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter a "COVERED PERSON"), whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or
agent, or in any other capacity while serving as a director, officer, employee
or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized or permitted by applicable law, as the same exists or
may hereafter be amended, against all expense, liability and loss (including,
without limitation, attorneys' fees, judgments, fines, ERISA excise taxes and
penalties and amounts paid in settlement) reasonably incurred or suffered by
such Covered Person in connection with such proceeding; provided, however, that,
except as provided in Section 8.3 with respect to proceedings to enforce rights
to indemnification, the Corporation shall indemnify a Covered Person in
connection with a proceeding (or part thereof) initiated by such Covered Person
only if such proceeding (or part thereof) was authorized by the Board.
13
Section 8.2. RIGHT TO ADVANCEMENT OF EXPENSES. In addition to the
right to indemnification conferred in Section 8.1, a Covered Person shall also
have the right to be paid by the Corporation the expenses (including, without
limitation, attorneys' fees) incurred in defending, testifying, or otherwise
participating in any such proceeding in advance of its final disposition
(hereinafter an "ADVANCEMENT OF EXPENSES"); provided, however, that, if the
Delaware General Corporation Law ("DGCL") requires, an advancement of expenses
incurred by a Covered Person in his or her capacity as a director or officer of
the Corporation (and not in any other capacity in which service was or is
rendered by such Covered Person, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "UNDERTAKING"), by or on behalf of such Covered
Person, to repay all amounts so advanced if it shall ultimately be determined by
final judicial decision from which there is no further right to appeal
(hereinafter a "FINAL ADJUDICATION") that such Covered Person is not entitled to
be indemnified for such expenses under this Article VIII or otherwise.
Section 8.3. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under
Section 8.1 or Section 8.2 is not paid in full by the Corporation within 60 days
after a written claim therefor has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be 20 days, the Covered Person may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the Covered Person shall also be entitled to be paid the expense of
prosecuting or defending such suit. In (a) any suit brought by the Covered
Person to enforce a right to indemnification hereunder (but not in a suit
brought by a Covered Person to enforce a right to an advancement of expenses) it
shall be a defense that, and (b) in any suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking, the
Corporation shall be entitled to recover such expenses upon a final adjudication
that, the Covered Person has not met any applicable standard for indemnification
set forth in the DGCL. Neither the failure of the Corporation (including its
directors who are not parties to such action, a committee of such directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the Covered
Person is proper in the circumstances because the Covered Person has met the
applicable standard of conduct set forth in the DGCL, nor an actual
determination by the Corporation (including a determination by its directors who
are not parties to such action, a committee of such directors, independent legal
counsel, or its stockholders) that the Covered Person has not met such
applicable standard of conduct, shall create a presumption that the Covered
Person has not met the applicable standard of conduct or, in the case of such a
suit brought by the Covered Person, shall be a defense to such suit. In any suit
brought by the Covered Person to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the Covered Person is not entitled to be indemnified, or to such
advancement of expenses, under this Article VIII or otherwise shall be on the
Corporation.
Section 8.4. NON-EXCLUSIVITY OF RIGHTS. The rights provided to
Covered Persons pursuant to this Article VIII shall not be exclusive of any
other right which any Covered
14
Person may have or hereafter acquire under applicable law, the Certificate of
Incorporation, these By-Laws, an agreement, a vote of stockholders or
disinterested directors, or otherwise.
Section 8.5. INSURANCE. The Corporation may maintain insurance, at
its expense, to protect itself and/or any director, officer, employee or agent
of the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the DGCL.
Section 8.6. INDEMNIFICATION OF OTHER PERSONS. This Article VIII
shall not limit the right of the Corporation to the extent and in the manner
authorized or permitted by law to indemnify and to advance expenses to persons
other than Covered Persons. Without limiting the foregoing, the Corporation may,
to the extent authorized from time to time by the Board, grant rights to
indemnification and to the advancement of expenses to any employee or agent of
the Corporation and to any other person who is or was serving at the request of
the Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan, to the fullest extent of the
provisions of this Article VIII with respect to the indemnification and
advancement of expenses of Covered Persons under this Article VIII.
Section 8.7. AMENDMENTS. Any repeal or amendment of this Article
VIII by the Board or the stockholders of the Corporation or by changes in
applicable law, or the adoption of any other provision of these By-Laws
inconsistent with this Article VIII, will, to the extent permitted by applicable
law, be prospective only (except to the extent such amendment or change in
applicable law permits the Corporation to provide broader indemnification rights
to Covered Persons on a retroactive basis than permitted prior thereto), and
will not in any way diminish or adversely affect any right or protection
existing hereunder in respect of any act or omission occurring prior to such
repeal or amendment or adoption of such inconsistent provision.
Section 8.8. CERTAIN DEFINITIONS. For purposes of this Article VIII,
(a) references to "other enterprise" shall include any employee benefit plan;
(b) references to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; (c) references to "serving at the
request of the Corporation" shall include any service that imposes duties on, or
involves services by, a person with respect to any employee benefit plan, its
participants, or beneficiaries; and (d) a person who acted in good faith and in
a manner such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interest of the Corporation" for
purposes of Section 145 of the DGCL.
Section 8.9. CONTRACT RIGHTS. The rights provided to Covered Persons
pursuant to this Article VIII shall be contract rights and such rights shall
continue as to a Covered Person who has ceased to be a director, officer, agent
or employee and shall inure to the benefit of the Covered Person's heirs,
executors and administrators.
Section 8.10. SEVERABILITY. If any provision or provisions of this
Article VIII shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Article VIII shall not in any way
15
be affected or impaired thereby; and (b) to the fullest extent possible, the
provisions of this Article VIII (including, without limitation, each such
portion of this Article VIII containing any such provision held to be invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
ARTICLE IX.
MISCELLANEOUS
Section 9.1. PLACE OF MEETINGS. If the place of any meeting of
stockholders, the Board or committee of the Board for which notice is required
under these By-Laws is not designated in the notice of such meeting, such
meeting shall be held at the principal business office of the Corporation;
provided, however, if the Board has, in its sole discretion, determined that a
meeting shall not be held at any place, but instead shall be held by means of
remote communication pursuant to Section 9.5 hereof, then such meeting shall not
be held at any place.
Section 9.2. FIXING RECORD DATES.
(a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board may fix a record date, which shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board, and which record date shall not be more than 60 nor less than 10 days
before the date of such meeting. If no record date is fixed by the Board, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the business day
next preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board may fix a new record date for the
adjourned meeting.
(b) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than 60 days prior to such action. If no
record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
(c) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board, and which date
shall not be more than 10 days after the date upon which the resolution fixing
the record date is adopted by the Board. If no record date has been fixed by the
Board, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the Board
is otherwise required, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken
16
is delivered to the Corporation by delivery to its registered office in the
State of Delaware, its principal place of business, or the Secretary. Delivery
made to the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board and prior action by the Board is otherwise required, the record date
for determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
Board adopts the resolution taking such prior action.
Section 9.3. MEANS OF GIVING NOTICE.
(a) Notice to Directors. Whenever under applicable law, the
Certificate of Incorporation or these By-Laws notice is required to be given to
any director, such notice shall be given either (i) in writing and sent by hand
delivery, through the United States mail, or by a nationally recognized
overnight delivery service for next day delivery, (ii) by means of facsimile
telecommunication or other form of electronic transmission, or (iii) by oral
notice given personally or by telephone. A notice to a director will be deemed
given as follows: (i) if given by hand delivery, orally, or by telephone, when
actually received by the director, (ii) if sent through the United States mail,
when deposited in the United States mail, with postage and fees thereon prepaid,
addressed to the director at the director's address appearing on the records of
the Corporation, (iii) if sent for next day delivery by a nationally recognized
overnight delivery service, when deposited with such service, with fees thereon
prepaid, addressed to the director at the director's address appearing on the
records of the Corporation, (iv) if sent by facsimile telecommunication, when
sent to the facsimile transmission number for such director appearing on the
records of the Corporation, (v) if sent by electronic mail, when sent to the
electronic mail address for such director appearing on the records of the
Corporation, or (vi) if sent by any other form of electronic transmission, when
sent to the address, location or number (as applicable) for such director
appearing on the records of the Corporation.
(b) Notice to Stockholders. Whenever under applicable law, the
Certificate of Incorporation or these By-Laws notice is required to be given to
any stockholder, such notice may be given (i) in writing and sent either by hand
delivery, through the United States mail, or by a nationally recognized
overnight delivery service for next day delivery, or (ii) by means of a form of
electronic transmission consented to by the stockholder, to the extent permitted
by, and subject to the conditions set forth in, Section 232 of the DGCL. A
notice to a stockholder shall be deemed given as follows: (i) if given by hand
delivery, when actually received by the stockholder, (ii) if sent through the
United States mail, when deposited in the United States mail, with postage and
fees thereon prepaid, addressed to the stockholder at the stockholder's address
appearing on the stock ledger of the Corporation, (iii) if sent for next day
delivery by a nationally recognized overnight delivery service, when deposited
with such service, with fees thereon prepaid, addressed to the stockholder at
the stockholder's address appearing on the stock ledger of the Corporation, and
(iv) if given by a form of electronic transmission consented to by the
stockholder to whom the notice is given and otherwise meeting the requirements
set forth above, (A) if by facsimile transmission, when directed to a number at
which the stockholder has consented to receive notice, (B) if by electronic
mail, when directed to an electronic mail address at which the stockholder has
consented to receive notice, (C) if by a posting on an electronic network
together with separate notice to the stockholder of such specified posting, upon
the later of (1) such posting and (2) the giving of such separate notice, and
(D) if by any other form of
17
electronic transmission, when directed to the stockholder. A stockholder may
revoke such stockholder's consent to receiving notice by means of electronic
communication by giving written notice of such revocation to the Corporation.
Any such consent shall be deemed revoked if (1) the Corporation is unable to
deliver by electronic transmission two consecutive notices given by the
Corporation in accordance with such consent and (2) such inability becomes known
to the Secretary or an Assistant Secretary or to the Corporation's transfer
agent, or other person responsible for the giving of notice; provided, however,
the inadvertent failure to treat such inability as a revocation shall not
invalidate any meeting or other action.
(c) Electronic Transmission. "ELECTRONIC TRANSMISSION" means any
form of communication, not directly involving the physical transmission of
paper, that creates a record that may be retained, retrieved and reviewed by a
recipient thereof, and that may be directly reproduced in paper form by such a
recipient through an automated process, including but not limited to
transmission by telex, facsimile telecommunication, electronic mail, telegram
and cablegram.
Section 9.4. WAIVER OF NOTICE. Whenever any notice is required to be
given under applicable law, the Certificate of Incorporation, or these By-Laws,
a written waiver of such notice, signed before or after the date of such meeting
by the person or persons entitled to said notice, or a waiver by electronic
transmission by the person entitled to said notice, shall be deemed equivalent
to such required notice. All such waivers shall be kept with the books of the
Corporation. Attendance at a meeting shall constitute a waiver of notice of such
meeting, except where a person attends for the express purpose of objecting to
the transaction of any business on the ground that the meeting was not lawfully
called or convened.
SECTION 9.5. MEETING ATTENDANCE VIA REMOTE COMMUNICATION EQUIPMENT.
(a) Stockholder Meetings. If authorized by the Board in its sole
discretion, and subject to such guidelines and procedures as the Board may
adopt, stockholders and proxyholders not physically present at a meeting of
stockholders may, by means of remote communication:
(i) participate in a meeting of stockholders; and
(ii) be deemed present in person and vote at a meeting of
stockholders, whether such meeting is to be held at a designated place or
solely by means of remote communication, provided that (A) the Corporation
shall implement reasonable measures to verify that each person deemed
present and permitted to vote at the meeting by means of remote
communication is a stockholder or proxyholder, (B) the Corporation shall
implement reasonable measures to provide such stockholders and proxyholders
a reasonable opportunity to participate in the meeting and to vote on
matters submitted to the stockholders, including an opportunity to read or
hear the proceedings of the meeting substantially concurrently with such
proceedings, and (C) if any stockholder or proxyholder votes or takes other
action at the meeting by means of remote communication, a record of such
votes or other action shall be maintained by the Corporation.
18
(b) Board Meetings. Unless otherwise restricted by applicable law,
the Certificate of Incorporation, or these By-Laws, members of the Board or any
committee thereof may participate in a meeting of the Board or any committee
thereof by means of conference telephone or other communications equipment by
means of which all persons participating in the meeting can hear each other.
Such participation in a meeting shall constitute presence in person at the
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting was not lawfully called or convened.
Section 9.6. DIVIDENDS. The Board may from time to time declare, and
the Corporation may pay, dividends (payable in cash, property or shares of the
Corporation's capital stock) on the Corporation's outstanding shares of capital
stock, subject to applicable law and the Certificate of Incorporation.
Section 9.7. RESERVES. The Board may set apart out of the funds of
the Corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve.
Section 9.8. CONTRACTS AND NEGOTIABLE INSTRUMENTS. Except as
otherwise provided by applicable law, the Certificate of Incorporation or these
By-Laws, any contract, bond, deed, lease, mortgage or other instrument may be
executed and delivered in the name and on behalf of the Corporation by such
officer or officers or other employee or employees of the Corporation as the
Board may from time to time authorize. Such authority may be general or confined
to specific instances as the Board may determine. The Chairman of the Board, the
Chief Executive Officer, the President or any Vice President may execute and
deliver any contract, bond, deed, lease, mortgage or other instrument in the
name and on behalf of the Corporation. Subject to any restrictions imposed by
the Board, the Chairman of the Board, Chief Executive Officer, President or any
Vice President may delegate powers to execute and deliver any contract, bond,
deed, lease, mortgage or other instrument in the name and on behalf of the
Corporation to other officers or employees of the Corporation under such
person's supervision and authority, it being understood, however, that any such
delegation of power shall not relieve such officer of responsibility with
respect to the exercise of such delegated power.
Section 9.9. FISCAL YEAR. The fiscal year of the Corporation shall
be fixed by the Board.
Section 9.10. SEAL. The seal of the Corporation shall be in such
form as shall from time to time be adopted by the Board. The seal may be used by
causing it or a facsimile thereof to be impressed, affixed or otherwise
reproduced.
Section 9.11. BOOKS AND RECORDS. The books and records of the
Corporation may be kept within or outside the State of Delaware at such place or
places as may from time to time be designated by the Board.
Section 9.12. RESIGNATION. Any director, committee member or officer
may resign by giving notice thereof in writing or by electronic transmission to
the Chairman of the Board, the Chief Executive Officer, the President or the
Secretary. The resignation shall take
19
effect at the time specified therein, or at the time of receipt of such notice
if no time is specified or the specified time is earlier than the time of such
receipt. Unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 9.13. SURETY BONDS. Such officers, employees and agents of
the Corporation (if any) as the Chairman of the Board, Chief Executive Officer,
President or the Board may direct, from time to time, shall be bonded for the
faithful performance of their duties and for the restoration to the Corporation,
in case of their death, resignation, retirement, disqualification or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in their possession or under their control belonging to the
Corporation, in such amounts and by such surety companies as the Chairman of the
Board, Chief Executive Officer, President or the Board may determine. The
premiums on such bonds shall be paid by the Corporation and the bonds so
furnished shall be in the custody of the Secretary.
Section 9.14. SECURITIES OF OTHER CORPORATIONS. Powers of attorney,
proxies, waivers of notice of meeting, consents in writing and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the Chairman of the Board, Chief Executive
Officer, President or any Vice President. Any such officer may, in the name of
and on behalf of the Corporation, take all such action as any such officer may
deem advisable to vote in person or by proxy at any meeting of security holders
of any corporation in which the Corporation may own securities, or to consent in
writing, in the name of the Corporation as such holder, to any action by such
corporation, and at any such meeting or with respect to any such consent shall
possess and may exercise any and all rights and power incident to the ownership
of such securities and which, as the owner thereof, the Corporation might have
exercised and possessed. The Board may from time to time confer like powers upon
any other person or persons.
Section 9.15. AMENDMENTS. The Board shall have the power to adopt,
amend, alter or repeal the By-Laws. The By-Laws also may be adopted, amended,
altered or repealed by the stockholders.
20
EXHIBIT C
Holding Stockholders' Escrowed Shares
ALLOCABLE ALLOCABLE
PORTION OF TOTAL PERCENTAGE OF
ESCROWED TOTAL ESCROWED
STOCKHOLDER SHARES SHARES
---------------------------------------------------------------- ---------------- --------------
Wachovia Investors, Inc. 145,630 78.0%
X.X. Xxxxxx Direct Corporate Finance Institutional Investors LLC 4,694 2.5%
X.X. Xxxxxx Direct Corporate Finance Private Investors LLC 1,226 0.7%
Old Trafford Investment Pte Ltd. 6,574 3.5%
GTCR Fund VI, L.P. 575 0.3%
Management 28,006 15.0%
------- -----
TOTAL 186,705 100.0%
------- -----
EXHIBIT D
Form of Escrow Agreement
[ATTACHED]
ESCROW AGREEMENT
This Voting Agreement (this "AGREEMENT") is made and entered into as of
[*], 2004 by and among Comsys Holding, Inc., a Delaware corporation ("HOLDING"),
Venturi Partners, Inc., a Delaware corporation (the "COMPANY"), and the parties
identified as "Stockholders" on the signature pages hereto (each a "STOCKHOLDER"
and collectively, the "STOCKHOLDERS").
PRELIMINARY STATEMENTS
The Company, VTP, Inc., Venturi Technology Partners, LLC, Comsys
Information Technology Services, Inc., Holding and certain stockholders of
Holding have entered into an Agreement and Plan of Merger dated as of July [*],
2004 (as the same may be amended from time to time, the "MERGER AGREEMENT"),
pursuant to which, upon the terms and subject to the conditions thereof, VTP,
Inc. will be merged with and into Holding and Holding will be the surviving
entity (the "MERGER").
As a condition to the consummation of the transactions contemplated by the
Merger Agreement, Holding and the Stockholders have required that the Company,
and the Company is willing to, enter into an escrow agreement with respect to
certain shares of the Company Common Stock to be issued in connection with the
Merger.
Capitalized terms used but not defined herein have the meanings given in
the Merger Agreement.
Now, therefore, for good, valuable and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
STATEMENT OF AGREEMENT
ARTICLE I
ESCROW ARRANGEMENTS
Section 1.1. Share Issuance. Pursuant to Section 2.4(f) of the Merger
Agreement, at the Effective Time, the Company shall issue, in the names and
allocable amounts set forth on Exhibit A hereto, an aggregate of 186,705 shares
of Company Common Stock or such other number of shares as 186,705 equals due to
any recapitalization, stock split, stock dividend or similar action occurring
after the date hereof (the "ESCROWED SHARES"). When issued, the Escrowed Shares
will be duly authorized and validly issued, fully paid and nonassessable, and
free of preemptive rights. The Escrowed Shares shall be held in escrow and
subsequently released to the Stockholders and/or retained by the Company in
accordance with the terms of this Agreement.
Section 1.2. Escrow Terms.
(a) Establishment of Escrow. The Company hereby agrees to act as
escrow agent hereunder (in such capacity, the "ESCROW AGENT"), to hold and
safeguard the Escrowed Shares upon issuance and to distribute the Escrowed
Shares in accordance with the terms of this Agreement.
(b) Distribution of Escrowed Shares. Distributions of Escrowed
Shares shall be made to the Stockholders as set forth in this Section 1.2(b). As
used in this Agreement, "BUSINESS DAY" shall mean any day, except Saturday,
Sunday or a day on which banks in New York are required to be closed. On the
first Business Day after the six month anniversary of the Effective Time (the
"INITIAL DETERMINATION DATE"), the Company shall prepare and submit to the Audit
Committee of the Board of Directors (the "AUDIT COMMITTEE") the following
information: (x) a statement as to whether the Company and the applicable
authorities of the State of California have reached a settlement with respect to
the Unemployment Taxes for the Pre-Closing Period (any such settlement, an "SUI
SETTLEMENT"); (y) the amounts, if any, the Company has paid or caused to be paid
to the applicable authorities of the State of California and comprising all
amounts due pursuant to an applicable SUI Settlement (the "SUI SETTLEMENT
AMOUNT"); and (z) a statement whether the Company has filed or caused to be
filed a return required to be filed, accompanied by payment in full for all
Unclaimed Property Taxes reflected in such return (each, a "UPT SETTLEMENT
AMOUNT"), with the applicable authorities of the State of Delaware (such filed
return, a "UPT SETTLEMENT"). After the Initial Determination Date, within three
Business Days after each date, if any, on which Company makes or causes to be
made any payments to the State of California with respect to an SUI Settlement
or to the State of Delaware with respect to a UPT Settlement, the Company shall
prepare and submit a statement to the Audit Committee setting forth in
reasonable detail the terms of any such SUI or UPT Settlement and the amount of
any such SUI or UPT Settlement Amount. The Audit Committee shall promptly review
all such statements and information prepared by the Company. The Company shall
make the following distributions, as applicable, from the Escrowed Shares within
three Business Days after written confirmation by the Audit Committee of (a) any
SUI Settlement and payment of the applicable SUI Settlement Amount or (b) any
UPT Settlement and payment of the applicable UPT Settlement Amount:
(i) SUI Distribution. The Escrow Agent shall distribute a
number of shares of Company Common Stock (the "SUI DISTRIBUTION SHARES") in an
amount equal to the lesser of (i) the total number of shares then held in escrow
and (ii) the number of shares determined by multiplying 186,705 (subject to the
adjustment described in Section 1.1) by the SUI Settlement Ratio. The "SUI
SETTLEMENT RATIO" shall be calculated by dividing the SUI Settlement Amount (in
dollars) by $2,500,000. The SUI Distribution Shares shall be distributed to the
Stockholders on a pro rata basis based on their respective allocable percentage
of the Escrowed Shares as set forth on Exhibit A; provided, however, that if the
amount of shares so calculated is not a whole number, the number of shares to be
distributed to such Stockholder shall be rounded up to the nearest whole number
of shares if such fractional amount is equal to or greater than 0.5, and rounded
down to the nearest whole share if such fractional amount is less than 0.5.
(ii) UPT Distribution. The Escrow Agent shall distribute a
number of shares of Company Common Stock (the "UPT DISTRIBUTION SHARES") equal
to the lesser of (i) the total number of shares then held in escrow and (ii) the
number of shares determined by multiplying 186,705 (subject to the adjustment
described in Section 1.1) by the UPT Settlement Ratio. The "UPT SETTLEMENT
RATIO" shall be calculated by dividing the applicable UPT Settlement Amount (in
dollars) by $2,500,000. The UPT Distribution Shares shall be distributed to the
Stockholders on a pro rata basis based on their respective allocable percentage
of the Escrowed Shares as set forth on Exhibit A; provided, however, that if the
amount of shares so
2
calculated is not a whole number, the number of shares to be distributed to such
Stockholder shall be rounded up to the nearest whole number of shares if such
fractional amount is equal to or greater than 0.5, and rounded down to the
nearest whole share if such fractional amount is less than 0.5.
(c) Termination of Escrow.
(i) This Agreement shall terminate upon the earlier to occur
of the following (provided, however, that under no circumstances shall such
termination occur until at least the first Business Day following the six month
anniversary of the Effective Time):
1) the date that is three Business Days following the
date, if any, on which Escrow Agent has received written confirmation from the
Audit Committee that the Company has (x) received notification from the
applicable authorities of the State of California that they have reached the SUI
Settlement and all amounts due thereunder have been paid and (y) has filed (or
caused to be filed) all required returns for Unclaimed Property Taxes and paid
(or caused to be paid) the UPT Settlement Amount;
2) the date on which the Escrow Agent shall have
distributed all of the shares comprising the Escrowed Shares; or
3) the date that is two years from the date hereof
(the earlier of such dates, the "ESCROW TERMINATION DATE").
(ii) On the Escrow Termination Date, any Escrowed Shares
remaining in the escrow following the distribution to the Stockholders of the
SUI Distribution Shares and the UPT Distribution Shares shall be deemed released
from escrow and (x) if the Agreement is terminated pursuant to Section
1.2(c)(i)(1) or Section 1.2(c)(i)(2), returned to the Company or (y) if the
Agreement is terminated pursuant to Section 1.2(c)(i)(3), distributed to the
Stockholders on a pro rata basis based on their respective allocable percentage
of the Escrowed Shares as set forth on Exhibit A (and subject to the adjustment
for fractional shares described in Section 1.2(b)), in each case free from this
Escrow Agreement.
(d) Ownership of Escrowed Shares. Each Stockholder shall at all
times during the term of this Agreement have title to and beneficial ownership
of the Escrowed Shares issued to such Stockholder, together with all powers of a
stockholder attendant thereto, including the right to vote such shares;
provided, however, that a Stockholder will not have the power to sell, transfer
or otherwise alienate any shares held by the Escrow Agent pursuant to the terms
of this Agreement. The Escrow Agent shall not have any interest in any of the
Escrowed Shares deposited hereunder but is serving as escrow holder only and
having only possession thereof. Each Stockholder shall relinquish title to and
have no further interest in or rights with respect to any Escrowed Shares at
such time as they are released from escrow and held by the Company in accordance
with Section 1.2(c)(ii).
3
ARTICLE II
DUTIES OF ESCROW AGENT
Section 2.1. Care of Escrowed Shares. Escrow Agent shall not be under any
duty to give the Escrowed Shares held by it hereunder any greater degree of care
than it gives its own similar property.
Section 2.2. Liability of Escrow Agent. Escrow Agent shall not be liable,
except for its own gross negligence or willful misconduct, for actions taken in
its capacity as Escrow Agent under with this Agreement.
Section 2.3. Reliance. Escrow Agent shall be entitled to rely upon any
order, judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder without being required to determine the authenticity
or the correctness of any fact stated therein or the propriety or validity of
the service thereof. Escrow Agent may act in reliance upon any instrument or
signature reasonably believed by it to be genuine and may assume that the person
purporting to give receipt or advice or make any statement or execute any
document in connection with the provisions hereof has been duly authorized to do
so.
Section 2.4. Advice of Counsel. Escrow Agent may act pursuant to the
written opinion of counsel with respect to any matter relating to this Agreement
and shall not be liable for any action taken or omitted by it in good faith in
accordance with such advice.
Section 2.5. No Advice. Escrow Agent shall not be called upon to advise
any Stockholder as to the wisdom in selling or retaining or taking or refraining
from any action with respect to any securities deposited hereunder.
Section 2.6. Limited Liability. This Agreement expressly sets forth all
the duties of Escrow Agent with respect to any and all matters pertinent hereto.
No implied duties or obligations shall be read into this agreement against
Escrow Agent.
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.1. Entire Agreement. This Agreement, together with the Exhibit
hereto, constitutes the entire agreement and understanding of the parties in
respect of the subject matter hereof and supersedes all prior understandings,
agreements or representations by or among the parties, written or oral, to the
extent they relate in any way to the subject matter hereof.
Section 3.2. Assignment; Binding Effect. No party may assign either this
Agreement or any of its rights, interests or obligations hereunder without the
prior written approval of the other parties. All of the terms, agreements,
covenants, representations, warranties and conditions of this Agreement are
binding upon, and inure to the benefit of and are enforceable by, the parties
and their respective successors and permitted assigns.
Section 3.3. Notices. All notices, requests and other communications
provided for or permitted to be given under this Agreement must be in writing
and shall be given by personal delivery, by certified or registered United
States mail (postage prepaid, return receipt requested),
4
by a nationally recognized overnight delivery service for next day delivery, or
by facsimile transmission, as follows (or to such other address as any party may
give in a notice given in accordance with the provisions hereof):
If to a Stockholder: To the address given under such Stockholder's
name on the Signature Pages.
If to the Company:
Venturi Partners, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
with a copy (which will not constitute notice) to:
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxx. 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, P.C.
Facsimile: 214-969-4343
All notices, requests or other communications will be effective and deemed given
only as follows: (i) if given by personal delivery, upon such personal delivery,
(ii) if sent by certified or registered mail, on the fifth Business Day after
being deposited in the United States mail, (iii) if sent for next day delivery
by overnight delivery service, on the date of delivery as confirmed by written
confirmation of delivery, (iv) if sent by facsimile, upon the transmitter's
confirmation of receipt of such facsimile transmission, except that if such
confirmation is received after 5:00 p.m. (in the recipient's time zone) on a
Business Day, or is received on a day that is not a Business Day, then such
notice, request or communication will not be deemed effective or given until the
next succeeding Business Day. Notices, requests and other communications sent in
any other manner, including by electronic mail, will not be effective.
Section 3.4. Specific Performance; Remedies. Each party acknowledges and
agrees that the other parties would be damaged irreparably if any provision of
this Agreement were not performed in accordance with its specific terms or were
otherwise breached. Accordingly, the parties will be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and its provisions in any action or
proceeding instituted in any state or federal court sitting in the State of
Delaware having jurisdiction over the parties and the matter, in addition to any
other remedy to which they may be entitled, at law or in equity. Except as
expressly provided herein, the rights, obligations and remedies created by this
Agreement are cumulative and in addition to any other rights, obligations or
remedies otherwise available at law or in equity. Except as expressly provided
herein, nothing herein will be considered an election of remedies.
5
Section 3.5. Submission to Jurisdiction; No Jury Trial.
(a) Submission to Jurisdiction. Any action, suit or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall
only be brought in any federal court located in the State of Delaware or any
Delaware state court, and each party consents to the exclusive jurisdiction and
venue of such courts (and of the appropriate appellate courts therefrom) in any
such action, suit or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such, action, suit or proceeding in any such court or that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum. Process in any such action, suit or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, service of
process on such party as provided in Section 3.3 shall be deemed effective
service of process on such party.
(b) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES THAT ANY DISPUTE
THAT MAY ARISE OUT OF OR RELATING TO THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE SUCH PARTY HEREBY EXPRESSLY
WAIVES ITS RIGHT TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. THE SCOPE OF THIS WAIVER IS
INTENDED TO ENCOMPASS ANY AND ALL ACTIONS, SUITS AND PROCEEDINGS THAT RELATE TO
THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY REPRESENTS THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO
ENFORCE THE FOREGOING WAIVER, (ii) SUCH PARTY UNDERSTANDS AND WITH THE ADVICE OF
COUNSEL HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND REPRESENTATIONS IN THIS
SECTION 3.5(b).
Section 3.6. Headings. The article and section headings contained in this
Agreement are inserted for convenience only and will not affect in any way the
meaning or interpretation of this Agreement.
Section 3.7. Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to any choice of law principles or conflicts of law rules (whether of the
State of Delaware or any other jurisdiction) that would result in the
application of the substantive or procedural laws of any other jurisdiction and,
as applicable the federal laws of the United States.
6
Section 3.8. Amendment. This Agreement may not be amended or modified
except by a writing signed by all of the parties.
Section 3.9. Extensions; Waivers. Any party may, for itself only, (a)
extend the time for the performance of any of the obligations of any other party
under this Agreement, (b) waive any inaccuracies in the representations and
warranties of any other party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any such extension or
waiver will be valid only if set forth in a writing signed by the party to be
bound thereby. No waiver by any party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, may be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of warranty or covenant hereunder or affect in any way any rights arising
because of any prior or subsequent such occurrence. Neither the failure nor any
delay on the part of any party to exercise any right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy preclude any other or further exercise of the
same or of any other right or remedy.
Section 3.10. Severability. The provisions of this Agreement will be
deemed severable and the invalidity or unenforceability of any provision will
not affect the validity or enforceability of the other provisions hereof;
provided that if any provision of this Agreement, as applied to any party or to
any circumstance, is judicially determined not to be enforceable in accordance
with its terms, the parties agree that the court judicially making such
determination may modify the provision in a manner consistent with its
objectives such that it is enforceable, and/or to delete specific words or
phrases, and in its modified form, such provision will then be enforceable and
will be enforced.
Section 3.11. Expenses. Except as otherwise expressly provided in this
Agreement, each party will bear its own costs and expenses incurred in
connection with the preparation, execution and performance of this Agreement and
the transactions contemplated hereby, including all fees and expenses of agents,
representatives, financial advisors, legal counsel and accountants.
Section 3.12. Counterparts; Effectiveness. This Agreement may be executed
in two or more counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument. This Agreement will
become effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties. For purposes of determining whether
a party has signed this Agreement or any document contemplated hereby or any
amendment or waiver hereof, only a handwritten original signature on a paper
document or a facsimile copy of such a handwritten original signature shall
constitute a signature, notwithstanding any law relating to or enabling the
creation, execution or delivery of any contract or signature by electronic
means.
Section 3.13. Construction. This Agreement has been freely and fairly
negotiated among the parties. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties and no presumption or burden of proof will arise favoring or
disfavoring any party because of the authorship of any provision of this
Agreement. Any reference to any law will be deemed also to refer to such law as
amended and
7
all rules and regulations promulgated thereunder, unless the context requires
otherwise. The words "include," "includes," and "including" will be deemed to be
followed by "without limitation." Pronouns in masculine, feminine, and neuter
genders will be construed to include any other gender, and words in the singular
form will be construed to include the plural and vice versa, unless the context
otherwise requires. The words "this Agreement," "herein," "hereof," "hereby,"
"hereunder," and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The parties
intend that each representation, warranty, and covenant contained herein will
have independent significance. If any party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty or covenant relating to the same subject
matter (regardless of the relative levels of specificity) which the party has
not breached will not detract from or mitigate the fact that the party is in
breach of the first representation, warranty, or covenant.
[SIGNATURE PAGES FOLLOW]
8
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
THE COMPANY:
VENTURI PARTNERS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
THE STOCKHOLDERS:
WACHOVIA INVESTORS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Address: Wachovia Capital Partners
One Wachovia Center, 12th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Principal
Fax: (000) 000-0000
X.X. XXXXXX DIRECT CORPORATE
FINANCE INSTITUTIONAL INVESTORS
LLC
By:_________________________________
Name:_______________________________
Title:______________________________
Address:____________________________
____________________________
____________________________
[SIGNATURE PAGE TO ESCROW AGREEMENT]
X.X. XXXXXX DIRECT CORPORATE
FINANCE PRIVATE INVESTORS LLC
By:_________________________________
Name:_______________________________
Title:______________________________
Address:____________________________
____________________________
____________________________
000 XXXXX XXXXXX FUND LP
By:_________________________________
Name:_______________________________
Title:______________________________
Address:____________________________
____________________________
____________________________
OLD TRAFFORD INVESTMENT PTE LTD.
By:_________________________________
Name:_______________________________
Title:______________________________
Address:____________________________
____________________________
____________________________
GTCR VI FUND, L.P.
By:_________________________________
Name:_______________________________
Title:______________________________
Address:____________________________
____________________________
____________________________
[SIGNATURE PAGE TO ESCROW AGREEMENT]
MANAGEMENT:
_________________________________________
Xxxxxxx X. Xxxxxx
_________________________________________
Xxxxx X. Xxxx
_________________________________________
Xxxxxxxx X. Xxxx
_________________________________________
Xxxxxx X. Xxxx, Xx.
_________________________________________
Xxxxxx X. Xxxxxx
_________________________________________
Xxxx X. Xxxxxxx
_________________________________________
Xxxxxxx X. Xxxxxx
_________________________________________
Xxxxxxx X. Xxxxxxxxx
[SIGNATURE PAGE TO ESCROW AGREEMENT]
EXHIBIT A
ALLOCATION OF ESCROWED SHARES
ALLOCABLE ALLOCABLE
PORTION OF TOTAL PERCENTAGE OF
ESCROWED TOTAL ESCROWED
STOCKHOLDER SHARES SHARES
---------------------------------------------------------------- ---------------- --------------
Wachovia Investors, Inc. 145,630 78.0%
X.X. Xxxxxx Direct Corporate Finance Institutional Investors LLC 4,694 2.5%
X.X. Xxxxxx Direct Corporate Finance Private Investors LLC 1,226 0.7%
Old Trafford Investment Pte Ltd. 6,574 3.5%
GTCR Fund VI, L.P. 575 0.3%
Management 28,006 15.0%
------- -----
TOTAL 186,705 100.0%
------- -----
EXHIBIT E
Form of Accredited Investor Questionnaire
[ATTACHED]
ACCREDITED INVESTOR QUESTIONNAIRE
Name of investor: ______________________________________________________________
Address: _______________________________________________________________________
Re: Agreement and Plan of Merger dated as of July __, 2004 among Venturi
Partners, Inc., Venturi Technology Partners, LLC, VTP, Inc., COMSYS
Information Technology Services, Inc., COMSYS Holding, Inc. and certain
stockholders of COMSYS Holding, Inc. signatory thereto (the "MERGER
AGREEMENT").
The undersigned hereby certifies, represents and warrants to Venturi
Partners, Inc. (the "ISSUER") that he, she or it qualifies as an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D, promulgated
under the Securities Act of 1933 (the "ACT"), as amended, because (please check
all boxes that apply):
NATURAL PERSON INVESTORS
[ ] He/she is a director, executive officer or general partner of the Issuer
of the securities being offered or sold, or a director, executive officer,
or general partner of a general partner of that Issuer; or
[ ] He/she is a natural person whose individual net worth, or joint net worth
with that person's spouse at the time of his/her purchase of Issuer
securities in connection with the Merger Agreement exceeds $1,000,000; or
[ ] He/she is a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year.
ENTITY INVESTORS
[ ] It is an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, with total assets in excess of
$5,000,000 that was not formed for the purpose of investing in the Issuer;
or
[ ] It is a corporation, Massachusetts or similar business trust, or
partnership with total assets in excess of $5,000,000 that was not formed
for the purpose of investing in the Issuer; or
[ ] It is a "bank" as defined in Section 3(a)(2) of the Act; or
[ ] It is a "savings and loan association" or other institution as defined in
Section 3(a)(5)(A) of the Act, whether acting in its individual or
fiduciary capacity; or
[ ] It is a broker dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended; or
[ ] It is an insurance company as defined in Section 2(13) of the Act; or
[ ] It is an investment company registered under the Investment Company Act of
1940; or
[ ] It is a "business development company" as defined in Section 2(a)(48) of
the Investment Company Act of 1940; or
[ ] It is a "Small Business Investment Company" licensed by the United States
Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; or
[ ] It is a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
[ ] It is a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such a plan has total
assets in excess of $5,000,000; or
[ ] It is a trust, with total assets greater than $5,000,000, not formed for
the specified purpose of acquiring the securities offered by an Issuer and
whose purchase is directed by a "sophisticated person" as defined in Rule
506(b)(2)(ii) of Regulation D promulgated under the Act; or
[ ] It is an employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 with total assets greater than
$5,000,000; or
[ ] It is an employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 that is a self-directed plan with
investment decisions made by persons who are accredited investors (check
appropriate boxes in this form for such persons); or
[ ] It is an employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 if the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of that Act, which is one
of the following:
[ ] A bank;
[ ] A savings and loan association;
[ ] An insurance company; or
[ ] A registered investment adviser
[ ] It is an entity, all of whose equity owners are "accredited investors"
(check appropriate boxes in this form for such persons).
[SIGNATURE PAGE FOLLOWS]
2
Date: _______________, 2004
ENTITY INVESTOR: NATURAL PERSON INVESTOR
_____________________
_____________________ _____________________________________
_____________________ Name:________________________________
By:_____________________
Name:___________________
Title:__________________
[Signature Page to Accredited Investor Questionnaire]
EXHIBIT F
Form of Registration Rights Agreement
[ATTACHED]
REGISTRATION RIGHTS AGREEMENT
DATED AS OF [*], 2004
AMONG
VENTURI PARTNERS, INC.
AND
CERTAIN STOCKHOLDERS NAMED HEREIN
TABLE OF CONTENTS
PAGE
----
Section 1. Definitions...................................................... 1
Section 2. Demand Registrations............................................. 3
Section 3. Piggyback Registrations.......................................... 6
Section 4. Shelf Registration............................................... 7
Section 5. Obligations of the Company....................................... 7
Section 6. Registration Expenses............................................ 11
Section 7. Indemnification.................................................. 12
Section 8. Rules 144 and 144A............................................... 15
Section 9. Underwritten Registrations....................................... 15
Section 10. Covenants of Holders............................................. 15
Section 11. Miscellaneous.................................................... 16
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
into as of [*], 2004, by and among Venturi Partners, Inc., a Delaware
corporation (the "COMPANY"), the persons and entities listed on Exhibit A hereto
(collectively, the "WACHOVIA GROUP"), the persons and entities listed on Exhibit
B hereto (collectively, the "JUNIOR SECURITIES GROUP"), and the persons listed
on Exhibit C hereto (collectively, the "COMSYS MANAGEMENT GROUP"). The members
of each of the Wachovia Group, the Junior Securities Group and the Comsys
Management Group are each referred to herein as a "STOCKHOLDER" and collectively
referred to as the "STOCKHOLDERS." Capitalized terms used but not defined herein
have the meanings given such terms in the Merger Agreement (as defined below).
Pursuant to the terms of the Agreement and Plan of Merger dated as of July
__, 2004 among the Company, Venturi Technology Partners, LLC, VTP, Inc., COMSYS
Information Technology Services, Inc., COMSYS Holding, Inc. and certain
stockholders of COMSYS Holding, Inc. signatory thereto (the "HOLDING
STOCKHOLDERS") (as amended or supplemented, the "MERGER AGREEMENT"), the Company
will issue to the Holding Stockholders shares of Company Common Stock in
connection with the Merger.
In connection with the Merger, the parties hereto desire to enter into
this Agreement to govern certain of their rights, duties and obligations
relating to registration of their Registrable Securities (as defined herein).
Now, therefore, for good, valuable and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, now agree as follows:
STATEMENT OF AGREEMENT
Section 1. Definitions.
As used in this Agreement, the following terms shall have the meanings set
forth below:
"CHARTER" means the Amended and Restated Certificate of Incorporation of
the Company, as amended from time to time.
"COMMISSION" means the United States Securities and Exchange Commission or
any other United States federal agency at the time administering the Securities
Act.
"COMMON STOCK" means the Company's common stock, par value $0.01 per
share, or any other shares of capital stock or other securities of the Company
into which such shares of Common Stock shall be reclassified or changed,
including by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed, or if
the Company pays a dividend or makes a distribution on the Common Stock in
shares of capital stock, or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of Common Stock, a
share of Common Stock shall be deemed to be
such number of shares of stock and amount of other securities to which a holder
of a share of Common Stock outstanding immediately prior to such change,
reclassification, exchange, dividend, distribution, subdivision or combination
would be entitled.
"COMSYS MANAGEMENT GROUP" has the meaning set forth in the introductory
paragraph of this Agreement.
"DELAY PERIOD" has the meaning set forth in Section 5(a) of this
Agreement.
"DEMAND NOTICE" has the meaning set forth in Section 2(a) of this
Agreement.
"DEMAND REGISTRATION" has the meaning set forth in Section 2(a) of this
Agreement.
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"EXISTING REGISTRATION RIGHTS AGREEMENT" means that certain Registration
Rights Agreement dated as of April 14, 2003 among the Company (f/k/a/ Personnel
Group of America, Inc.) and the other parties named therein, and any amendment
or restatement of such agreement.
"HOLDER" means a person who owns Registrable Securities and is either (i)
a Stockholder or a Permitted Transferee of a Stockholder that has agreed to be
bound by the terms of this Agreement as if such Person were a Stockholder, (ii)
upon the death of any Holder, the executor of the estate of such Holder or such
Holder's heirs, devisees, legatees or assigns or (iii) upon the disability of
any Holder, any guardian or conservator of such Holder.
"INTERRUPTION PERIOD" has the meaning set forth in the last paragraph in
Section 5(c).
"JUNIOR SECURITIES GROUP" has the meaning set forth in the introductory
paragraph of this Agreement.
"JUNIOR SECURITIES PARTIES" means the Junior Securities Group and their
Permitted Transferees.
"LOSSES" has the meaning set forth in Section 7(a) of this Agreement.
"MISSTATEMENT/OMISSION" has the meaning set forth in Section 7(a) of this
Agreement.
"PERMITTED TRANSFEREE" means any Person to whom the rights under this
Agreement have been assigned in accordance with the provisions of Section 11(d)
hereof.
"PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"PIGGYBACK REGISTRATION" has the meaning set forth in Section 3(a) of this
Agreement.
2
"PROSPECTUS" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"REGISTRABLE SECURITIES" means the shares of Common Stock issued to the
Stockholders pursuant to the Merger Agreement. If as a result of any
reclassification, stock dividends or stock splits or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or other transaction or event, any capital stock, evidence of
indebtedness, warrants, options, rights or other securities (collectively "OTHER
SECURITIES") are issued or transferred to a Holder in respect of Registrable
Securities held by the Holder, references herein to Registrable Securities shall
be deemed to include such Other Securities. As to any particular Registrable
Securities, such securities will cease to be Registrable Securities when (i)
they have been distributed to the public pursuant to an offering registered
under the Securities Act, (ii) they have been distributed to the public pursuant
to Rule 144 (or any successor provision) under the Securities Act, or (iii) they
have been sold to any Person to whom the rights under this Agreement are not
assigned in accordance with this Agreement.
"REGISTRATION STATEMENT" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Securities,
including the related Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits, and all materials incorporated by reference or deemed
to be incorporated by reference in such registration statement or Prospectus.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"SHELF REGISTRATION" has the meaning set forth in Section 4(a) of this
Agreement.
"STOCKHOLDER" or "STOCKHOLDERS" has the meanings set forth in the
introductory paragraph of this Agreement.
"WACHOVIA GROUP" has the meaning set forth in the introductory paragraph
of this Agreement.
"WACHOVIA PARTIES" means the Wachovia Group and their Permitted
Transferees.
Section 2. Demand Registrations.
(a) Right to Demand. Upon the terms and subject to the conditions
of this Agreement, (i) Holders of at least a majority of the aggregate amount of
outstanding Registrable Securities held by the Wachovia Parties and (ii) Holders
of at least a majority of the aggregate amount of outstanding Registrable
Securities held by the Junior Securities Parties shall, in each case, have the
right, by written notice (the "DEMAND NOTICE") given to the Company, to request
the Company to register under and in accordance with the provisions of the
Securities Act all or
3
part of the Registrable Securities designated by such Holders (a "DEMAND
REGISTRATION"). Upon receipt of any such Demand Notice, the Company will
promptly notify all other Holders of the receipt of such Demand Notice and allow
them the opportunity to include Registrable Securities in the proposed
registration by giving notice to the Company within five days after the Holder
receives such notice; provided, that Holders joining in a proposed registration
pursuant to this sentence shall not be deemed to have exercised a Demand
Registration for purposes of Section 2(b) hereof and such Holders shall be
included in such registration on the basis set forth in Section 2(h) hereof. The
Company shall not be required to register any Registrable Securities under this
Section 2 unless the anticipated aggregate offering price to the public for any
such offering of the Registrable Securities included in such Demand Notice is
expected to be at least $5 million.
(b) Number of Demand Registrations. The Wachovia Parties shall be
entitled to have three Demand Registrations effected and the Junior Securities
Parties shall be entitled to have one Demand Registration effected. A Demand
Registration shall not be deemed to be effected and shall not count as a Demand
Registration of any Person (i) if a Registration Statement with respect thereto
shall not have become effective under the Securities Act and remained effective
for at least 180 days (excluding any Interruption Period) or until the
completion of the distribution of the Registrable Securities thereunder,
whichever is earlier (including, without limitation, because of withdrawal of
such Registration Statement by the Holders pursuant to Section 2(f) hereunder),
(ii) if, after it has become effective, such registration is interfered with for
any reason by any stop order, injunction or other order or requirement of the
Commission or any governmental authority, or as a result of the initiation of
any proceeding for such stop order by the Commission through no fault of the
Holders and the result of such interference is to prevent the Holders from
disposing of such Registrable Securities proposed to be sold in accordance with
the intended methods of disposition, (iii) the Company exercises its rights with
respect to a Delay Period under Section 5(a) and the result is a delay in the
proposed distribution of any Registrable Securities and the Holders determine
not to sell such Registrable Securities pursuant to such registration as a
result of such delay, or (iv) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with any
underwritten offering shall not be satisfied or waived with the consent of the
Holders of a majority in number of the Registrable Securities to be included in
such Demand Registration, other than as a result of any breach by the Holders or
any underwriter of its obligations thereunder or hereunder.
(c) Registration Statement. Subject to paragraph (a) above, as
soon as practicable, but in any event within 45 days of the date on which the
Company first receives one or more Demand Notices pursuant to Section 2(a)
hereof, the Company shall file with the Commission a Registration Statement on
the appropriate form for the registration and sale of the total number of
Registrable Securities specified in such Demand Notice, together with the number
of Registrable Securities requested to be included in the Demand Registration by
other Holders, in accordance with the intended method or methods of distribution
specified by the Holders in such Demand Notice. The Company shall use its
reasonable best efforts to cause such Registration Statement to be declared
effective by the Commission as soon as reasonably practicable. Notwithstanding
the foregoing, the Company shall not be obligated to file a Registration
Statement pursuant to this Section 2(c) if the offering requested to be
registered is a delayed or continuous offering under Rule 415 under the
Securities Act and such offering is
4
available for the Holders, in which case the registration shall be made by the
Company pursuant to Section 4 hereof.
(d) Amendments; Supplements. Subject to Section 5(a), upon the
occurrence of any event that would cause the Registration Statement (A) to
contain a material misstatement or omission or (B) to be not effective and
usable for resale of Registrable Securities during the period that such
Registration Statement is required to be effective and usable, the Company shall
file an amendment to the Registration Statement as soon as reasonably
practicable, in the case of clause (A), correcting any such misstatement or
omission and, in the case of either clause (A) or (B), use its reasonable best
efforts to cause such amendment to be declared effective and such Registration
Statement to become usable as soon as reasonably practicable thereafter.
(e) Effectiveness. The Company agrees to use its reasonable best
efforts to keep any Registration Statement filed pursuant to this Section 2
continuously effective and usable for the sale of Registrable Securities until
the earlier of (i) 180 days from the date on which the Commission declares such
Registration Statement effective (excluding any Interruption Period), or (ii)
the date on which all the Registrable Securities covered by such Registration
Statement have been sold pursuant to such Registration Statement.
(f) Holders Withdrawal. Holders of a majority in number of the
Registrable Securities to be included in a Demand Registration pursuant to this
Section 2 may, at any time prior to the effective date of the Registration
Statement in respect thereof, revoke such request by providing a written notice
to the Company to such effect.
(g) Preemption of Demand Registration. Notwithstanding anything to
the contrary contained herein, after receiving a written request for a Demand
Registration, the Company may elect to effect an underwritten primary
registration in lieu of the Demand Registration if the Company's Board of
Directors believes that such primary registration would be in the best interests
of the Company. If the Company so elects to effect a primary registration, the
Company shall give prompt written notice (which shall be given not later than 20
days after the date of the Demand Notice) to all holders of the Registrable
Securities of its intention to effect such a registration and shall afford the
holders of the Registrable Securities the rights contained in Section 3 with
respect to Piggyback Registrations. In the event that the Company so elects to
effect a primary registration after receiving a request for a Demand
Registration, the Company shall use its reasonable best efforts to have the
Registration Statement declared effective by the Commission as soon as
reasonably practicable. In addition, the request for a Demand Registration shall
be deemed to have been withdrawn and such primary registration shall not be
deemed to be a Demand Registration.
(h) Priority on Demand Registrations. If a Demand Registration is
an underwritten offering and includes securities for sale by the Company, and
the managing underwriter (such underwriter to be chosen by the Holders of a
majority of the Registrable Securities included in such registration, subject to
the Company's reasonable approval) advises the Company, in writing, that, in its
good faith judgment, the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
materially and adversely affecting the marketability of the offering, then the
Company will include in any such registration the maximum number of shares which
the managing underwriter
5
advises the Company can be sold in such offering allocated as follows: (i)
first, the Registrable Securities requested to be included in such registration
by the initiating Holders and securities of other Holders of Registrable
Securities and other holders of registration rights under the Existing
Registration Rights Agreement, with such securities to be included on a pro rata
basis (or in such other proportion mutually agreed among such holders) based on
the amount of securities requested to be included therein and (ii) second, to
the extent that any other securities may be included without exceeding the
limitations recommended by the underwriter as aforesaid, the securities that the
Company proposes to sell. If the initiating Holders are not allowed to register
all of the Registrable Securities requested to be included by such Holders
because of allocations required by this section, such initiating Holders shall
not be deemed to have exercised a Demand Registration for purposes of Section
2(b).
Section 3. Piggyback Registrations.
(a) Right to Piggyback Registrations. Whenever the Company or
another party having registration rights proposes that the Company register any
of the Company's equity securities under the Securities Act (other than a
registration on Form S-4 relating solely to a transaction described in Rule 145
of the Securities Act or a registration on Form S-8 or any successor forms
thereto), whether or not for sale for the Company's own account, the Company
will give prompt written notice of such proposed filing to all Holders at least
30 days before the anticipated filing date. Such notice shall offer such Holders
the opportunity to register such amount of Registrable Securities as they shall
request (a "PIGGYBACK REGISTRATION"). Subject to Section 3(b) hereof, the
Company shall include in each such Piggyback Registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 20 days after such notice has been given by the Holders
to the Company. If the Registration Statement relating to the Piggyback
Registration is to cover an underwritten offering, such Registrable Securities
shall be included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriters. Each Holder shall be
permitted to withdraw all or part of the Registrable Securities from a Piggyback
Registration at any time prior to the effective time of such Piggyback
Registration.
(b) Priority on Piggyback Registrations. If a Piggyback
Registration is an underwritten offering by or through one or more underwriters
of recognized standing and the managing underwriters advise the party or parties
initiating such offering in writing (a copy of which writing shall be provided
to the Holders) that in their good faith judgment the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without materially and adversely affecting the
marketability of the offering, then any such registration shall include the
maximum number of shares which such managing underwriters advise can be sold in
such offering allocated as follows: (i) first, the securities the party or
parties initiating such offering propose to sell, and (ii) second, to the extent
that any other securities may be included without exceeding the limitations
recommended by the underwriters as aforesaid, (x) if the Company has initiated
such offering, the Registrable Securities to be included in such registration by
the Holders and securities of other holders of registration rights under the
Existing Registration Rights Agreement, with such additional securities to be
included on a pro rata basis (or in such other proportion mutually agreed among
the Holders and such other holders), based on the amount of Registrable
Securities and other securities requested to be included therein, and (y) if a
party other than the Company initiated
6
such offering (subject to Section 3(b)(i) above), securities proposed to be sold
by the Company, the Registrable Securities to be included in such registration
by the Holders and securities of other holders of registration rights under the
Existing Registration Rights Agreement, with such additional securities to be
included on a pro rata basis (or in such other proportion mutually agreed among
the Company, the Holders and such other holders), based on the amount of
Registrable Securities and other securities requested to be included therein.
Section 4. Shelf Registration.
(a) Right to Shelf Registration. The Company shall use its
commercially reasonable efforts to (i) file with the Commission as promptly as
practicable following the date of this Agreement (but in no event later than 60
days after such date) a registration ("SHELF REGISTRATION") for delayed or
continuous offerings of Registrable Securities in market transactions on any
appropriate form pursuant to Rule 415 under the Securities Act (or similar rule
that may be adopted by the Commission), which form shall be available for the
sale of all of the Registrable Securities outstanding on the effective date of
the Shelf Registration in accordance with the intended methods of distribution
thereof, and (ii) cause the Shelf Registration to be declared effective by the
Commission as soon thereafter as practicable. The Company agrees to use its
commercially reasonable efforts to keep such Shelf Registration continuously
effective and usable for resale of Registrable Securities until the second
anniversary of the date of this Agreement or such shorter period which will
terminate at such time as the Holders have sold all the Registrable Securities
covered by such Registration Statement. At any time thereafter, any Holder or
Holders holding in the aggregate at least 5% of the outstanding shares of Common
Stock may request that the Company file and cause to be declared effective a
Shelf Registration.
(b) Number of Shelf Registrations. The Holders shall be entitled
to an unlimited number of Shelf Registrations and no Shelf Registration shall be
counted as a Demand Registration for purposes of Section 2(a) hereof.
Section 5. Obligations of the Company.
(a) Delay Period. Notwithstanding the foregoing, the Company shall
have the right to delay the filing of any Registration Statement otherwise
required to be prepared and filed by the Company pursuant to Sections 2, 3 or 4,
or to suspend the use of any Registration Statement, for a period not in excess
of 60 consecutive calendar days (a "DELAY PERIOD") if (i) the Board of Directors
of the Company determines that filing or maintaining the effectiveness of such
Registration Statement would have a material adverse effect on the Company or
the holders of its capital stock in relation to any material acquisition or
disposition, financing or other corporate transaction and the Board of Directors
of the Company has determined in good faith that disclosure thereof would not be
in the best interests of the Company and its holders of capital stock at the
time or (ii) the Board of Directors of the Company has determined in good faith
that the filing of a Registration Statement or maintaining the effectiveness of
a current Registration Statement would require disclosure of material
information that the Company has a valid business purpose for retaining as
confidential at such time. The Company shall be entitled to exercise a Delay
Period more than one time in any calendar year so long as such exercise does not
prevent the Holders from being entitled to at least 240 days of effective
registration rights per
7
calendar year and that no Delay Period may commence if it is less than 30 days
from the end of the previous Delay Period. Notwithstanding the foregoing, the
number of days of effective registration rights that the Holders shall be
entitled to for calendar year 2004 will be pro rated based on the number of days
remaining in 2004 after the date of this Agreement.
(b) Shelf Registrations After Other Registrations. Other than the
initial Shelf Registration discussed in Section 4(a) above, the Company shall
not be obligated to effect any Shelf Registration within 120 days after the
effective date of a previous Registration Statement filed by the Company (except
for registrations on Form S-4 or Form S-8, or other forms prescribed under the
Securities Act for the same purpose or for an exchange offer).
(c) Registration Procedures. Whenever the Company is required to
register Registrable Securities pursuant to Sections 2, 3 or 4 hereof, the
Company will use its reasonable best efforts to effect the registration to
permit the sale of such Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company will
as expeditiously as possible:
(1) prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities as prescribed by Sections
2, 3 or 4 on a form available for the sale of the Registrable Securities by the
holders thereof in accordance with the intended method or methods of
distribution thereof and use reasonable best efforts to cause each such
Registration Statement to become and remain effective within the time periods
and otherwise as provided herein;
(2) prepare and file with the Commission such amendments
(including post-effective amendments) to the Registration Statement and such
supplements to the Prospectus as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such Registration Statement;
(3) furnish to each selling Holder of Registrable Securities
covered by a Registration Statement and to each underwriter, if any, such number
of copies of such Registration Statement, each amendment and post-effective
amendment thereto, the Prospectus included in such Registration Statement
(including each preliminary prospectus and any supplement to such Prospectus and
any other prospectus filed under Rule 424 of the Securities Act), in each case
including all exhibits, and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Holder or to be disposed of by such underwriter (the Company
hereby consenting to the use in accordance with all applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such Prospectus (or preliminary prospectus or supplement thereto) by each
such Holder and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such Registration Statement or
Prospectus);
8
(4) use its reasonable best efforts to register or qualify
and, if applicable, to cooperate with the selling Holders, the underwriters, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of, the
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as any selling Holder or managing underwriters (if any)
shall reasonably request, to keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
securities covered by the applicable Registration Statement; provided, that, the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph or (ii) consent to general service of process or taxation in any such
jurisdiction where it is not so subject;
(5) cause all such Registrable Securities to be listed or
quoted (as the case may be) on each national securities exchange or other
securities market on which securities of the same class as the Registrable
Securities are then listed or quoted;
(6) provide a transfer agent and registrar for all such
Registrable Securities and a CUSIP number for all such Registrable Securities
not later than the effective date of such Registration Statement;
(7) comply with all applicable rules and regulations of the
Commission, and make available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (or in each case within
such extended period of time as may be permitted by the Commission for filing
the applicable report with the Commission) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in an
underwritten offering or (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company after the
effective date of a Registration Statement;
(8) use reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or suspending
the qualification (or exemption from qualification) of any of the Registrable
Securities included therein for sale in any jurisdiction, and, in the event of
the issuance of any stop order suspending the effectiveness of a Registration
Statement, or of any order suspending the qualification of any Registrable
Securities included in such Registration Statement for sale in any jurisdiction,
the Company will use its reasonable best efforts promptly to obtain the
withdrawal of such order at the earliest possible moment;
(9) obtain "cold comfort" letters and updates thereof (which
letters and updates (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the Holders) from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to
9
each of the underwriters, if any, and each selling Holder of Registrable
Securities, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as the underwriters, if any, or
the Holders of a majority of the Registrable Securities being included in the
registration may reasonably request;
(10) obtain opinions of independent counsel to the Company
and updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any, and the
Holders of a majority of the Registrable Securities being included in the
registration), addressed to each selling Holder and each of the underwriters, if
any, covering the matters customarily covered in opinions of issuer's counsel
requested in underwritten offerings, such as the effectiveness of the
Registration Statement and such other matters as may be requested by such
counsel and underwriters, if any;
(11) promptly notify the selling Holders and the managing
underwriters, if any, and confirm such notice in writing, when a Prospectus or
any supplement or post-effective amendment to such Prospectus has been filed,
and, with respect to a Registration Statement or any post-effective amendment
thereto, when the same has become effective, of any request by the Commission or
any other federal or state governmental authority for amendments or supplements
to a Registration Statement or related Prospectus or for additional information,
of the issuance by the Commission of any stop order suspending the effectiveness
of a Registration Statement or of any order preventing or suspending the use of
any Prospectus or the initiation of any proceedings by any Person for that
purpose, of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Securities for offer or sale
under the securities or blue sky laws of any jurisdiction, or the contemplation,
initiation or threatening, of any proceeding for such purpose, and of the
happening of any event or the existence of any facts that make any statement
made in such Registration Statement or Prospectus untrue in any material respect
or that require the making of any changes in such Registration Statement or
Prospectus so that it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made (in the case of any Prospectus), not misleading (which notice shall be
accompanied by an instruction to the selling Holders and the managing
underwriters, if any, to suspend the use of the Prospectus until the requisite
changes have been made);
(12) if requested by the managing underwriters, if any, or a
Holder of Registrable Securities being sold, promptly incorporate in a
prospectus, supplement or post-effective amendment such information as the
managing underwriters, if any, and the Holders of a majority of the Registrable
Securities being sold reasonably request to be included therein relating to the
sale of the Registrable Securities, including, without limitation, information
with respect to the number of shares of Registrable Securities being sold to
underwriters, the purchase price being paid therefor by such underwriters and
with respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering, and make all required filings of such
prospectus, supplement or post-effective amendment promptly following
notification of the matters to be incorporated in such supplement or
post-effective amendment;
10
(13) if requested, furnish to each selling Holder of
Registrable Securities and the managing underwriter, without charge, at least
one signed copy of the Registration Statement;
(14) as promptly as practicable upon the occurrence of any
event contemplated by Section 5(c)(11) above, prepare a supplement or
post-effective amendment to the Registration Statement or the Prospectus, or any
document incorporated therein by reference, or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Securities
being sold hereunder, the Prospectus will not contain an untrue statement of a
material fact or an omission to state a material fact required to be stated in a
Registration Statement or Prospectus or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and
(15) if such offering is an underwritten offering, enter into
such agreements (including an underwriting agreement in form, scope and
substance as is customary in underwritten offerings) and take all such other
appropriate and reasonable actions requested by the Holders owning a majority of
the Registrable Securities being sold in connection therewith or by the managing
underwriters (including cooperating in reasonable marketing efforts, including
in connection with any Demand Registration, participation by senior executives
of the Company in any "roadshow" or similar meeting with potential investors) in
order to expedite or facilitate the disposition of such Registrable Securities,
and in such connection, provide indemnification provisions and procedures
substantially to the effect set forth in Section 7 hereof with respect to all
parties to be indemnified pursuant to said Section. The above shall be done at
each closing under such underwriting or similar agreement, or as and to the
extent required thereunder.
Each Holder agrees by acquisition of such Registrable Securities that,
upon receipt of written notice from the Company of the happening of any event of
the kind described in Section 5(c)(11), such Holder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Registration Statement contemplated by Section 5(c)(14), or until it is
advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
prospectus (such period during which disposition is discontinued being an
"INTERRUPTION PERIOD"), and, if so directed by the Company, such Holder will
deliver to the Company all copies of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice.
Section 6. Registration Expenses.
(a) Expenses Payable by the Company. The Company shall bear all
expenses incurred with respect to the registration or attempted registration of
the Registrable Securities pursuant to Sections 2, 3 and 4 of this Agreement as
provided herein. Such expenses shall include, without limitation, (i) all
registration, qualification and filing fees (including, without limitation, (A)
fees with respect to compliance with the Commission, (B) fees with respect to
filings required to be made with the national securities exchange or national
market system on which the Common Stock is then traded or quoted and (C) fees
and expenses of compliance with state securities or blue sky laws (including,
without limitation, fees and disbursements of counsel
11
for the Company or the underwriters, or both, in connection with blue sky
qualifications of Registrable Securities)), (ii) messenger and delivery
expenses, word processing, duplicating and printing expenses (including without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with The Depository Trust Company, printing
preliminary prospectuses, prospectuses, prospectus supplements, including those
delivered to or for the account of the Holders and provided in this Agreement,
and blue sky memoranda), (iii) fees and disbursements of counsel for the
Company, (iv) fees and disbursements of all independent certificated public
accountants for the Company (including, without limitation, the expense of any
"comfort letters" required by or incident to such performance), (v) all
out-of-pocket expenses of the Company (including without limitation, expenses
incurred by the Company, its officers, directors, and employees performing legal
or accounting duties or preparing or participating in "roadshow" presentations
or of any public relations, investor relations or other consultants or advisors
retained by the Company in connection with any roadshow, including travel and
lodging expenses of such roadshows), (vi) fees and expenses incurred in
connection with the quotation or listing of shares of Common Stock on any
national securities exchange or other securities market, and (vii) reasonable
fees and expenses of one firm of counsel for all selling Holders (which shall be
chosen by the Holders of a majority of Registrable Securities to be included in
such offering).
(b) Expenses Payable by the Holders. Each Holder shall pay all
underwriting discounts and commissions or placement fees of underwriters or
broker's commissions incurred in connection with the sale or other disposition
of Registrable Securities for or on behalf of such Holder's account.
Section 7. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify, to the fullest extent permitted by law, each Holder, each affiliate
of a Holder and each director, officer, employee, manager, stockholder, partner,
member, counsel, agent or representative of such Holder and its affiliates and
each Person who controls any such Person (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act) (collectively,
"HOLDER INDEMNIFIED PARTIES") against, and hold it and them harmless from, all
losses, claims, damages, liabilities, actions, proceedings, costs (including,
without limitation, costs of preparation and attorneys' fees and disbursements)
and expenses, including expenses of investigation and amounts paid in settlement
(collectively, "LOSSES") arising out of, caused by or based upon any untrue or
alleged untrue statement of material fact contained in any Registration
Statement, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading (a
"MISSTATEMENT/OMISSION"), or any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any state securities law, or any rule
or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law, except that the Company shall not be liable insofar as
such Misstatement/Omission or violation is made in reliance upon and in
conformity with information furnished in writing to the Company by such Holder
expressly for use therein; provided, further, that the Company shall not be
liable for a Holder's failure to deliver or cause to be delivered (to the extent
such delivery is required under the Securities Act) the Prospectus contained in
the Registration Statement, furnished to it by the Company on a timely basis at
or prior to the time such action is required by the Securities Act to the person
claiming a Misstatement/Omission if
12
such Misstatement/Omission was corrected in such Prospectus. In connection with
an underwritten offering, the Company will indemnify such underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such underwriters (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as provided
above with respect to the indemnification of the Holders. This indemnity shall
be in addition to any other indemnification arrangements to which the Company
may otherwise be party. Notwithstanding the foregoing, the indemnity contained
in this section shall not apply to amounts paid in settlement of any such Losses
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld).
(b) Indemnification by the Holders. In connection with any
Registration Statement in which a Holder is participating, each such Holder
agrees to indemnify, to the fullest extent permitted by law, the Company and
each director and officer of the Company and each Person who controls the
Company (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) against, and hold it harmless from, any Losses
arising out of or based upon (i) any Misstatement/Omission contained in the
Registration Statement, if and to the extent that such Misstatement/Omission was
made in reliance upon and in conformity with information furnished in writing by
such Holder for use therein, or (ii) the failure by such Holder to deliver or
cause to be delivered (to the extent such delivery is required under the
Securities Act) the Prospectus contained in the Registration Statement,
furnished to it by the Company on a timely basis at or prior to the time such
action is required by the Securities Act to the person claiming a
Misstatement/Omission if such Misstatement/Omission was corrected in such
Prospectus. Notwithstanding the foregoing, the obligation to indemnify will be
individual (several and not joint) to each Holder and will be limited to the net
amount of proceeds (net of payment of all expenses) received by such Holder from
the sale of Registrable Securities pursuant to such Registration Statement
giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any action,
claim or proceeding shall be brought against any Person entitled to
indemnification hereunder, such indemnified party shall promptly notify each
indemnifying party in writing, and such indemnifying party shall assume the
defense thereof, including the employment of one counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses incurred in
connection with the defense thereof. The failure to so notify such indemnifying
party shall relieve such indemnifying party of its indemnification obligations
to such indemnified party to the extent that such failure to notify materially
prejudiced such indemnifying party but not from any liability that it or they
may have to the indemnified party for contribution or otherwise. Each
indemnified party shall have the right to employ separate counsel in such
action, claim or proceeding and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of each indemnified party
unless: (i) such indemnifying party has agreed to pay such expenses; (ii) such
indemnifying party has failed promptly to assume the defense and employ counsel
reasonably satisfactory to such indemnified party; or (iii) the named parties to
any such action, claim or proceeding (including any impleaded parties) include
both such indemnified party and such indemnifying party or an affiliate or
controlling person of such indemnifying party, and such indemnified party shall
have been advised in writing by counsel that either (x) there may be one or more
legal defenses available to it which are different from or in addition to those
available to such indemnifying party or such affiliate or controlling person or
13
(y) a conflict of interest may exist if such counsel represents such indemnified
party and such indemnifying party or its affiliate or controlling person;
provided, however, that such indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be responsible hereunder for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel), which counsel shall be designated by such indemnified party or, in the
event that such indemnified party is a Holder Indemnified Party, by the Holders
of a majority of the Registrable Securities included in the subject Registration
Statement.
No indemnifying party shall be liable for any settlement effected without
its written consent (which consent may not be unreasonably delayed or withheld).
Each indemnifying party agrees that it will not, without the indemnified party's
prior written consent, consent to entry of any judgment or settle or compromise
any pending or threatened claim, action or proceeding in respect of which
indemnification or contribution may be sought hereunder unless the foregoing
contains an unconditional release, in form and substance reasonably satisfactory
to the indemnified parties, of the indemnified parties from all liability and
obligation arising therefrom. The indemnifying party's liability to any such
indemnified party hereunder shall not be extinguished solely because any other
indemnified party is not entitled to indemnity hereunder.
(d) Survival. The indemnification provided for under this
Agreement will (i) remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party, (ii) survive the
transfer of securities and (iii) survive the termination of this Agreement.
(e) Right to Contribution. If the indemnification provided for in
this Section 7 is unavailable to, or insufficient to hold harmless, an
indemnified party under Section 7(a) or Section 7(b) above in respect of any
Losses referred to in such Sections, then each applicable indemnifying party
shall have an obligation to contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Company, on the one hand, and
of the Holder, on the other, in connection with the Misstatement/Omission or
violation which resulted in such Losses, taking into account any other relevant
equitable considerations. The amount paid or payable by a party as a result of
the Losses referred to above shall be deemed to include, subject to the
limitations set forth in Section 8(c) above, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation, lawsuit
or legal or administrative action or proceeding.
The relative fault of the Company, on the one hand, and of the Holder, on
the other, shall be determined by reference to, among other things, whether the
relevant Misstatement/Omission or violation relates to information supplied by
the Company or by the Holder and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such Misstatement/Omission
or violation.
The Company and each Holder agree that it would not be just and equitable
if contribution pursuant to this Section 7(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7(e), a Holder shall not be required to
14
contribute any amount in excess of the amount by which (i) the amount (net of
payment of all expenses) at which the securities that were sold by such Holder
and distributed to the public were offered to the public exceeds (ii) the amount
of any damages which such Holder has otherwise been required to pay by reason of
such Misstatement/Omission or violation.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
Section 8. Rules 144 and 144A.
The Company shall timely file the reports required to be filed by it under
the Securities Act and the Exchange Act (including but not limited to the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act)
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
holder of Registrable Securities, make publicly available other information) and
will take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 and Rule
144A under the Securities Act, as such Rules may be amended from time to time,
or (b) any similar rule or regulation hereafter adopted by the Commission.
Section 9. Underwritten Registrations.
(a) No Person may participate in any registration hereunder which
is underwritten unless such Person (i) agrees to sell such Person's securities
on the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, customary indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements; provided, that, no Holder included in any
underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters other than representations and
warranties regarding such Holder and such Holder's intended method of
distribution.
(b) If any of the Registrable Securities covered by any
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will manage
the offering will be selected by, and the underwriting arrangements with respect
thereto will be approved by, the Company; provided, however, that such
investment bankers and managers and underwriting arrangements must be reasonably
satisfactory to the Holders of the majority of Registrable Securities to be
included in such offering.
Section 10. Covenants of Holders.
Each of the Holders hereby agrees (a) to cooperate with the Company and to
furnish to the Company all such information regarding such Holder, its ownership
of Registrable Securities
15
and the disposition of such securities in connection with the preparation of the
Registration Statement and any filings with any state securities commissions as
the Company may reasonably request, (b) to the extent required by the Securities
Act, to deliver or cause delivery of the Prospectus contained in the
Registration Statement, any amendment or supplement thereto, to any purchaser of
the Registrable Securities covered by the Registration Statement from the Holder
and (c) if requested by the Company, to notify the Company of any sale of
Registrable Securities by such Holder.
Section 11. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with, adversely effects or violates the rights granted to the Holders in this
Agreement; it being understood that the granting of additional demand or
piggyback registration rights with respect to capital stock of the Company shall
not be deemed inconsistent with or adverse to the rights granted to Holders
hereunder, and the rights of the Holders shall be subject to any such additional
grants.
(b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and hereby agree to waive the defense in any
action for specific performance or injunctive relief that a remedy at law would
be adequate. Accordingly, any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any bond or
other security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of this Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement, including the provisions of this sentence, may
be amended, modified, supplemented or waived only upon the prior written consent
of the Company and Holders of a majority of the outstanding Registrable
Securities.
(d) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. The Holders may assign all rights under this agreement; provided,
however, that no Holder may transfer or assign its rights hereunder unless such
transferring Holder shall, prior to any such transfer, obtain from the
transferee a joinder agreement in a form reasonably satisfactory to the Company
and deliver a copy of such joinder agreement to the Company and to the Holders.
Only persons (other than the initial Stockholders hereto) that execute a joinder
agreement shall be deemed to be Holders. The Company shall be given written
notice by the transferring Holder at the time of the transfer stating the name
and address of the transferee and identifying the Registrable Securities
transferred, provided, that, failure to give such notice shall not affect the
validity of such transfer or assignment.
(e) Termination of Registration Rights. The rights of any Holder
to cause the Company to register Registrable Securities under this Agreement
shall terminate with respect to
16
such Holder as soon as such Holder is legally able to dispose of all of its
Registrable Securities in one transaction pursuant to Rule 144 under the
Securities Act.
(f) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected, it being intended that the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, any one of which need not contain the signatures of more than one
party, but each of which when so executed shall be deemed to be an original and
all such counterparts taken together shall constitute one and the same
Agreement.
(h) Descriptive Headings: Interpretation. The descriptive headings
of this Agreement are inserted for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. The use of the word "including" in
this Agreement shall be by way of example rather than by limitation.
(i) Notices. All notices, requests and other communications
provided for or permitted to be given under this Agreement must be in writing
and shall be given by personal delivery, by certified or registered United
States mail (postage prepaid, return receipt requested), by a nationally
recognized overnight delivery service for next day delivery, or by facsimile
transmission, as follows (or to such other address as any party may give in a
notice given in accordance with the provisions hereof):
If to the Company:
Venturi Partners, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, P.C.
Facsimile: 214-969-4343
If to a Stockholder, to the fax number or the address set forth for such
Stockholder on the Exhibits hereto, with copies as set forth therein.
17
All notices, requests or other communications will be effective and deemed given
only as follows: (i) if given by personal delivery, upon such personal delivery,
(ii) if sent by certified or registered mail, on the fifth business day after
being deposited in the United States mail, (iii) if sent for next day delivery
by overnight delivery service, on the date of delivery as confirmed by written
confirmation of delivery, (iv) if sent by facsimile, upon the transmitter's
confirmation of receipt of such facsimile transmission, except that if such
confirmation is received after 5:00 p.m. (in the recipient's time zone) on a
business day, or is received on a day that is not a business day, then such
notice, request or communication will not be deemed effective or given until the
next succeeding business day. Notices, requests and other communications sent in
any other manner, including by electronic mail, will not be effective.
(j) GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF
DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The parties
hereby irrevocably submit to the jurisdiction of any federal court located in
the State of Delaware or any Delaware state court solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Delaware state or federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in the Section on notices above or in such
other manner as may be permitted by law shall be valid and sufficient service
thereof.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
18
(k) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
19
IN WITNESS WHEREOF the parties hereto have or have caused this
Registration Rights Agreement to be duly executed as of the date first above
written
THE COMPANY:
Venturi Partners, Inc.
By:_________________________
Name:_______________________
Title:______________________
THE STOCKHOLDERS:
Wachovia Investors, Inc.
By:_________________________
Name:_______________________
Title:______________________
GTCR Fund VI, L.P.
By:_________________________
Name:_______________________
Title:______________________
GTCR VI Executive Fund, L.P.
By:_________________________
Name:_______________________
Title:______________________
GTCR Associates VI
By:_________________________
Name:_______________________
Title:______________________
[Signature Page to Registration Rights Agreement]
X.X. Xxxxxx Direct Corporate Finance Institutional
Investors LLC
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
X.X. Xxxxxx Direct Corporate Finance Private
Investors LLC
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
Old Trafford Investment Pte. Ltd.
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
000 Xxxxx Xxxxxx Fund, L.P.
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
___________________________________________________
Xxxxxxx X. Xxxxxx, individually
___________________________________________________
Xxxxx X. Xxxx, individually
___________________________________________________
Xxxxxxxx X. Xxxx, individually
[Signature Page to Registration Rights Agreement]
___________________________________________________
Xxxxxx X. Xxxx, individually
___________________________________________________
Xxxxxx X. Xxxxxx XX, individually
___________________________________________________
Xxxx X. Xxxxxxx, individually
___________________________________________________
Xxxxxxx X. Xxxxxx, individually
___________________________________________________
Xxxxxxx X. Xxxxxxxxx
[Signature Page to Registration Rights Agreement]
EXHIBIT A
Wachovia Group
Address/Facsimile
Wachovia Investors, Inc.
A-1
EXHIBIT B
Junior Securities Group
Address/Facsimile
GTCR Fund IV, L.P.
GTCR VI Executive Fund, L.P.
GTCR Associates VI
X.X. Xxxxxx Direct Corporate Finance
Institutional Investors LLC
X.X. Xxxxxx Direct Corporate Finance Private
Investors LLC
Old Trafford Investment Pte. Ltd.
000 Xxxxx Xxxxxx Fund, L.P.
B-1
EXHIBIT C
Comsys Management Group
NAME ADDRESS
-------------------- -----------------------------------------------------
Xxxxxxx X. Xxxxxx 0000 Xxxx Xxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000
Xxxxx X. Xxxx 0000 Xxxx Xxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000
Xxxxxxxx X. Xxxx 0000 Xxxx Xxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000
Xxxxxx X. Xxxx, Xx. 0000 Xxxx Xxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxx XX 0000 Xxxx Xxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx 0000 Xxxx Xxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000
Xxxx X. Xxxxxxx 0 Xxxxxxxx Xxxxx, #000, Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxxx 0000 Xxxx Xxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000
C-1
EXHIBIT G
Form of Amended and Restated Registration Rights Agreement
[ATTACHED]
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
DATED AS OF [*], 2004
AMONG
VENTURI PARTNERS, INC.
AND
THE PARTIES NAMED HEREIN
TABLE OF CONTENTS
PAGE
----
Section 1. Definitions........................................................ 1
Section 2. Demand Registrations............................................... 4
Section 3. Piggyback Registrations............................................ 6
Section 4. Shelf Registration................................................. 7
Section 5. Obligations of the Company......................................... 7
Section 6. Registration Expenses.............................................. 12
Section 7. Indemnification.................................................... 12
Section 8. Rules 144 and 144A................................................. 15
Section 9. Underwritten Registrations......................................... 15
Section 10. Covenants of Holders.............................................. 16
Section 11. Miscellaneous..................................................... 16
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT")
is made and entered into as of [*], 2004, by and among Venturi Partners, Inc., a
Delaware corporation (the "COMPANY"), and the parties identified as "Investors"
on the signature pages hereto (each an "INVESTOR" and together the "INVESTORS").
PRELIMINARY STATEMENTS
A. The Company entered into a Registration Rights Agreement dated as of
April 14, 2003 (the "REGISTRATION RIGHTS AGREEMENT") with several investors
pursuant to which the Company agreed to provide the Investors with certain
registration rights set forth therein.
B. The Company, Venturi Technology Partners, LLC, VTP, Inc., COMSYS
Information Technology Services, Inc., COMSYS Holding, Inc. ("HOLDING") and
certain stockholders of Holding (the "HOLDING STOCKHOLDERS") entered into an
Agreement and Plan of Merger dated July __, 2004 (the "MERGER AGREEMENT"),
pursuant to which, upon the terms and subject to the conditions thereof, VTP,
Inc. will be merged with and into Holding and Holding will be the surviving
entity (the "MERGER").
C. As a condition to the consummation of the transactions contemplated
by the Merger Agreement, the Company is entering into a Registration Rights
Agreement with the Holding Stockholders to provide the Holding Stockholders with
certain registration rights (the "HOLDING STOCKHOLDERS REGISTRATION RIGHTS
AGREEMENT").
D. Section 11(c) of the Registration Rights Agreement provides that the
provisions of the Registration Rights Agreement may be amended, modified,
supplemented or waived upon the prior written consent of the Company and the
Holders of a majority of the outstanding Registrable Securities.
E. In connection with the foregoing, the Company and the Investors
desire to amend and restate the Registration Rights Agreement in its entirety as
set forth herein.
Now, therefore, for good, valuable and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, now agree as follows:
STATEMENT OF AGREEMENT
Section 1. Definitions.
As used in this Agreement, the following terms shall have the meanings set
forth below:
"CHARTER" means the Amended and Restated Certificate of Incorporation of
the Company, as amended from time to time.
"COMMISSION" means the United States Securities and Exchange Commission or
any other United States federal agency at the time administering the Securities
Act.
"COMMON STOCK" means the Company's common stock, par value $0.01 per
share, or any other shares of capital stock or other securities of the Company
into which such shares of Common Stock shall be reclassified or changed,
including, by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed, or if
the Company pays a dividend or makes a distribution on the Common Stock in
shares of capital stock, or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of Common Stock, a
share of Common Stock shall be deemed to be such number of shares of stock and
amount of other securities to which a holder of a share of Common Stock
outstanding immediately prior to such change, reclassification, exchange,
dividend, distribution, subdivision or combination would be entitled.
"CREDIT RESTRUCTURE AGREEMENT" means the Credit Restructure Agreement
dated April 11, 2003, among the Company and certain Investors pursuant to which
the Company issued to such Investors Warrants to purchase Common Stock.
"DELAY PERIOD" has the meaning set forth in Section 5(a) of this
Agreement.
"DEMAND NOTICE" has the meaning set forth in Section 2(a) of this
Agreement.
"DEMAND REGISTRATION" has the meaning set forth in Section 2(a) of this
Agreement.
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"HOLDER" means a person who owns Registrable Securities and is either (i)
an Investor or a Permitted Transferee of an Investor that has agreed to be bound
by the terms of this Agreement as if such Person were an Investor, (ii) upon the
death of any Holder, the executor of the estate of such Holder or such Holder's
heirs, devisees, legatees or assigns or (iii) upon the disability of any Holder,
any guardian or conservator of such Holder.
"INTERRUPTION PERIOD" has the meaning set forth in the last paragraph in
Section 5(c).
"LOSSES" has the meaning set forth in Section 7(a) of this Agreement.
"MISSTATEMENT/OMISSION" has the meaning set forth in Section 7(a) of this
Agreement.
"PERMITTED TRANSFEREE" means any Person to whom the rights under this
Agreement have been assigned in accordance with the provisions of Section 11(d)
hereof.
"PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
2
"PIGGYBACK REGISTRATION" has the meaning set forth in Section 3(a) of this
Agreement.
"PROSPECTUS" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"REGISTRABLE SECURITIES" means (i) the shares of Common Stock issued to
the Investors pursuant to the Restructuring Agreement, (ii) any shares of Common
Stock issued or issuable upon the conversion of the Series B Preferred Stock and
(iii) any shares of Common Stock issued or issuable upon the exercise of any of
the Warrants. If as a result of any reclassification, stock dividends or stock
splits or in connection with a combination of shares, recapitalization, merger,
consolidation, or other reorganization or other transaction or event, any
capital stock, evidence of indebtedness, warrants, options, rights or other
securities (collectively "OTHER SECURITIES") are issued or transferred to a
Holder in respect of Registrable Securities held by the Holder, references
herein to Registrable Securities shall be deemed to include such Other
Securities. As to any particular Registrable Securities, such securities will
cease to be Registrable Securities when (i) they have been distributed to the
public pursuant to an offering registered under the Securities Act, (ii) they
have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, or (iii) they have been sold to any Person
to whom the rights under this Agreement are not assigned in accordance with this
Agreement.
"REGISTRATION STATEMENT" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Securities,
including the related Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits, and all materials incorporated by reference or deemed
to be incorporated by reference in such registration statement or Prospectus.
"REQUIRED HOLDERS" means Holders of at least a majority of the aggregate
amount of all Registrable Securities outstanding.
"RESTRUCTURING AGREEMENT" means the Restructuring Agreement dated March
14, 2003, among the Company and certain Investors, and a Participation
Agreement, dated March 14, 2003, between the Company and an Investor, pursuant
to which the Company issued shares of its Common Stock and preferred stock
convertible into Common Stock to certain of the Investors.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"SHELF REGISTRATION" has the meaning set forth in Section 4(a) of this
Agreement.
"WARRANTS" means the common stock purchase warrants issued by the Company
pursuant to the Credit Restructure Agreement.
3
Section 2. Demand Registrations.
(a) Right to Demand. Upon the terms and subject to the conditions
of this Agreement, the Required Holders shall have the right, by written notice
(the "DEMAND NOTICE") given to the Company, to request the Company to register
under and in accordance with the provisions of the Securities Act all or part of
the Registrable Securities designated by such Holders (a "DEMAND REGISTRATION").
Upon receipt of any such Demand Notice, the Company will promptly notify all
other Holders of the receipt of such Demand Notice and allow them the
opportunity to include Registrable Securities in the proposed registration by
giving notice to the Company within five days after the Holder receives such
notice; provided, that Holders joining in a proposed registration pursuant to
this sentence shall not be deemed to have exercised a Demand Registration for
purposes of Section 2(b) hereof and such Holders shall be included in such
registration on the basis set forth in Section 2(h) hereof. Notwithstanding
anything herein to the contrary, the Company shall not be required to honor a
request for a Demand Registration if the Company has not received Demand Notices
from the Required Holders. The Company shall not be required to register any
Registrable Securities under this Section 2 unless the anticipated aggregate
offering price to the public for any such offering of the Registrable Securities
included in such Demand Notice is expected to be at least $5 million.
(b) Number of Demand Registrations. The Required Holders shall be
entitled to have two Demand Registrations effected. A Demand Registration shall
not be deemed to be effected and shall not count as a Demand Registration of any
Person (i) if a Registration Statement with respect thereto shall not have
become effective under the Securities Act and remained effective for at least
180 days (excluding any Interruption Period) or until the completion of the
distribution of the Registrable Securities thereunder, whichever is earlier
(including, without limitation, because of withdrawal of such Registration
Statement by the Holders pursuant to Section 2(f) hereunder), (ii) if, after it
has become effective, such registration is interfered with for any reason by any
stop order, injunction or other order or requirement of the Commission or any
governmental authority, or as a result of the initiation of any proceeding for
such stop order by the Commission through no fault of the Holders and the result
of such interference is to prevent the Holders from disposing of such
Registrable Securities proposed to be sold in accordance with the intended
methods of disposition, (iii) the Company exercises its rights with respect to a
Delay Period under Section 5(a) and the result is a delay in the proposed
distribution of any Registrable Securities and the Holders determine not to sell
such Registrable Securities pursuant to such registration as a result of such
delay, or (iv) if the conditions to closing specified in the purchase agreement
or underwriting agreement entered into in connection with any underwritten
offering shall not be satisfied or waived with the consent of the Required
Holders, other than as a result of any breach by the Holders or any underwriter
of its obligations thereunder or hereunder.
(c) Registration Statement. Subject to paragraph (a) above, as
soon as practicable, but in any event within 45 days of the date on which the
Company first receives one or more Demand Notices from the Required Holders
pursuant to Section 2(a) hereof, the Company shall file with the Commission a
Registration Statement on the appropriate form for the registration and sale of
the total number of Registrable Securities specified in such Demand Notice,
together with the number of Registrable Securities requested to be included in
the Demand Registration by other Holders, in accordance with the intended method
or methods of
4
distribution specified by the Holders in such Demand Notice. The Company shall
use its reasonable best efforts to cause such Registration Statement to be
declared effective by the Commission as soon as reasonably practicable.
Notwithstanding the foregoing, the Company shall not be obligated to file a
Registration Statement pursuant to this Section 2(c) if the offering requested
to be registered is a delayed or continuous offering under Rule 415 under the
Securities Act and such offering is available for the Holders, in which case the
registration shall be made by the Company pursuant to Section 4 hereof.
(d) Amendments; Supplements. Subject to Section 5(a), upon the
occurrence of any event that would cause the Registration Statement (A) to
contain a material misstatement or omission or (B) to be not effective and
usable for resale of Registrable Securities during the period that such
Registration Statement is required to be effective and usable, the Company shall
file an amendment to the Registration Statement as soon as reasonably
practicable, in the case of clause (A), correcting any such misstatement or
omission and, in the case of either clause (A) or (B), use its reasonable best
efforts to cause such amendment to be declared effective and such Registration
Statement to become usable as soon as reasonably practicable thereafter.
(e) Effectiveness. The Company agrees to use its reasonable best
efforts to keep any Registration Statement filed pursuant to this Section 2
continuously effective and usable for the sale of Registrable Securities until
the earlier of (i) 180 days from the date on which the Commission declares such
Registration Statement effective (excluding any Interruption Period), or (ii)
the date on which all the Registrable Securities covered by such Registration
Statement have been sold pursuant to such Registration Statement.
(f) Holders Withdrawal. Holders of a majority in number of the
Registrable Securities to be included in a Demand Registration pursuant to this
Section 2 may, at any time prior to the effective date of the Registration
Statement in respect thereof, revoke such request by providing a written notice
to the Company to such effect.
(g) Preemption of Demand Registration. Notwithstanding anything to
the contrary contained herein, after receiving a written request for a Demand
Registration, the Company may elect to effect an underwritten primary
registration in lieu of the Demand Registration if the Company's Board of
Directors believes that such primary registration would be in the best interests
of the Company. If the Company so elects to effect a primary registration, the
Company shall give prompt written notice (which shall be given not later than 20
days after the date of the Demand Notice) to all holders of the Registrable
Securities of its intention to effect such a registration and shall afford the
holders of the Registrable Securities the rights contained in Section 3 with
respect to Piggyback Registrations. In the event that the Company so elects to
effect a primary registration after receiving a request for a Demand
Registration, the Company shall use its reasonable best efforts to have the
Registration Statement declared effective by the Commission as soon as
reasonably practicable. In addition, the request for a Demand Registration shall
be deemed to have been withdrawn and such primary registration shall not be
deemed to be a Demand Registration.
(h) Priority on Demand Registrations. If a Demand Registration is
an underwritten offering and includes securities for sale by the Company, and
the managing underwriter (such underwriter to be chosen by the Holders of a
majority of the Registrable
5
Securities included in such registration, subject to the Company's reasonable
approval) advises the Company, in writing, that, in its good faith judgment, the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without materially and adversely
affecting the marketability of the offering, then the Company will include in
any such registration the maximum number of shares which the managing
underwriter advises the Company can be sold in such offering allocated as
follows: (i) first, the Registrable Securities requested to be included in such
registration by the initiating Holders and securities of other Holders of
Registrable Securities and other holders of registration rights under the
Holding Stockholder Registration Rights Agreement, with such securities to be
included on a pro rata basis (or in such other proportion mutually agreed among
such holders) based on the amount of securities requested to be included therein
and (ii) second, to the extent that any other securities may be included without
exceeding the limitations recommended by the underwriter as aforesaid, the
securities that the Company proposes to sell. If the initiating Holders are not
allowed to register all of the Registrable Securities requested to be included
by such Holders because of allocations required by this section, such initiating
Holders shall not be deemed to have exercised a Demand Registration for purposes
of Section 2(b).
Section 3. Piggyback Registrations.
(a) Right to Piggyback Registrations. Whenever the Company or
another party having registration rights proposes that the Company register any
of the Company's equity securities under the Securities Act (other than a
registration on Form S-4 relating solely to a transaction described in Rule 145
of the Securities Act or a registration on Form S-8 or any successor forms
thereto), whether or not for sale for the Company's own account, the Company
will give prompt written notice of such proposed filing to all Holders at least
30 days before the anticipated filing date. Such notice shall offer such Holders
the opportunity to register such amount of Registrable Securities as they shall
request (a "PIGGYBACK REGISTRATION"). Subject to Section 3(b) hereof, the
Company shall include in each such Piggyback Registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 20 days after such notice has been given by the Holders
to the Company. If the Registration Statement relating to the Piggyback
Registration is to cover an underwritten offering, such Registrable Securities
shall be included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriters. Each Holder shall be
permitted to withdraw all or part of the Registrable Securities from a Piggyback
Registration at any time prior to the effective time of such Piggyback
Registration.
(b) Priority on Piggyback Registrations. If a Piggyback
Registration is an underwritten offering, by or through one or more underwriters
of recognized standing and the managing underwriters advise the party or parties
initiating such offering in writing (a copy of which writing shall be provided
to the Holders) that in their good faith judgment the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without materially and adversely affecting the
marketability of the offering, then any such registration shall include the
maximum number of shares which such managing underwriters advise can be sold in
such offering allocated as follows: (i) first, the securities the party or
parties initiating such offering propose to sell, and (ii) second, to the extent
that any other securities may be included without exceeding the limitations
recommended by the underwriters as aforesaid, (x) if the Company has initiated
such offering, the Registrable
6
Securities to be included in such registration by the Holders and securities of
other holders of registration rights under the Holding Stockholders Registration
Rights Agreement, with such additional securities to be included on a pro rata
basis (or in such other proportion mutually agreed among the Holders and such
other holders), based on the amount of Registrable Securities and other
securities requested to be included therein, and (y) if a party other than the
Company initiated such offering (subject to Section 3(b)(i) above), securities
proposed to be sold by the Company, the Registrable Securities to be included in
such registration by the Holders and securities of other holders of registration
rights under the Holding Stockholders Registration Rights Agreement, with such
additional securities to be included on a pro rata basis (or in such other
proportion mutually agreed among the Company, the Holders and such other
holders), based on the amount of Registrable Securities and other securities
requested to be included therein.
Section 4. Shelf Registration.
(a) Right to Shelf Registration. The Company shall use its
commercially reasonable efforts to (i) file with the Commission as promptly as
practicable following the date of this Agreement (but in no event later than 60
days after such date) a registration ("SHELF REGISTRATION") for delayed or
continuous offerings of Registrable Securities in market transactions on any
appropriate form pursuant to Rule 415 under the Securities Act (or similar rule
that may be adopted by the Commission), which form shall be available for the
sale of all of the Registrable Securities outstanding on the effective date of
the Shelf Registration in accordance with the intended methods of distribution
thereof and (ii) cause the Shelf Registration to be declared effective by the
Commission as soon thereafter as practicable. The Company agrees to use its
commercially reasonable efforts to keep such Shelf Registration continuously
effective and usable for resale of Registrable Securities until the second
anniversary of the date of this Agreement or such shorter period which will
terminate at such time as the Holders have sold all the Registrable Securities
covered by such Registration Statement. At any time thereafter, any Holder or
Holders holding in the aggregate at least 5% of the outstanding shares of Common
Stock may request that the Company file and cause to be declared effective a
Shelf Registration.
(b) Number of Shelf Registrations. The Holders shall be entitled
to an unlimited number of Shelf Registrations and no Shelf Registration shall be
counted as a Demand Registration for purposes of Section 2(a) hereof.
(c) Agreement regarding Shelf Registration. Each Holder hereby
waives any claim it may have had against the Company for not filing a Shelf
Registration for the Registrable Securities prior to the time specified in
Section 4(a) above.
Section 5. Obligations of the Company.
(a) Delay Period. Notwithstanding the foregoing, the Company shall
have the right to delay the filing of any Registration Statement otherwise
required to be prepared and filed by the Company pursuant to Sections 2, 3 or 4,
or to suspend the use of any Registration Statement, for a period not in excess
of 60 consecutive calendar days (a "DELAY PERIOD") if (i) the Board of Directors
of the Company determines that filing or maintaining the effectiveness of such
Registration Statement would have a material adverse effect on the Company or
the holders
7
of its capital stock in relation to any material acquisition or disposition,
financing or other corporate transaction and the Board of Directors of the
Company has determined in good faith that disclosure thereof would not be in the
best interests of the Company and its holders of capital stock at the time or
(ii) the Board of Directors of the Company has determined in good faith that the
filing of a Registration Statement or maintaining the effectiveness of a current
Registration Statement would require disclosure of material information that the
Company has a valid business purpose for retaining as confidential at such time.
The Company shall be entitled to exercise a Delay Period more than one time in
any calendar year so long as such exercise does not prevent the Holders from
being entitled to at least 240 days of effective registration rights per
calendar year and that no Delay Period may commence if it is less than 30 days
from the end of the previous Delay Period. Notwithstanding the foregoing, the
number of days of effective registration rights that the Holders shall be
entitled to for calendar year 2004 will be pro rated based on the number of days
remaining in 2004 after the date of this Agreement.
(b) Shelf Registrations After Other Registrations. Other than the
initial Shelf Registration discussed in Section 4(a) above, the Company shall
not be obligated to effect any Shelf Registration within 120 days after the
effective date of a previous Registration Statement filed by the Company (except
for registrations on Form S-4 or Form S-8, or other forms prescribed under the
Securities Act for the same purpose or for an exchange offer).
(c) Registration Procedures. Whenever the Company is required to
register Registrable Securities pursuant to Sections 2, 3 or 4 hereof, the
Company will use its reasonable best efforts to effect the registration to
permit the sale of such Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company will
as expeditiously as possible:
(1) prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities as prescribed by Sections
2, 3 or 4 on a form available for the sale of the Registrable Securities by the
holders thereof in accordance with the intended method or methods of
distribution thereof and use reasonable best efforts to cause each such
Registration Statement to become and remain effective within the time periods
and otherwise as provided herein;
(2) prepare and file with the Commission such amendments,
(including post-effective amendments) to the Registration Statement and such
supplements to the Prospectus as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such Registration Statement;
(3) furnish to each selling Holder of Registrable Securities
covered by a Registration Statement and to each underwriter, if any, such number
of copies of such Registration Statement, each amendment and post-effective
amendment thereto, the Prospectus included in such Registration Statement
(including each preliminary prospectus and any supplement to such Prospectus and
any other prospectus filed under Rule 424 of the Securities Act), in each case
including all exhibits, and such other documents as such Holder may
8
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Holder or to be disposed of by such underwriter (the
Company hereby consenting to the use in accordance with all applicable law of
each such Registration Statement (or amendment or post-effective amendment
thereto) and each such Prospectus (or preliminary prospectus or supplement
thereto) by each such Holder and the underwriters, if any, in connection with
the offering and sale of the Registrable Securities covered by such Registration
Statement or Prospectus);
(4) use its reasonable best efforts to register or qualify
and, if applicable, to cooperate with the selling Holders, the underwriters, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of, the
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as any selling Holder or managing underwriters (if any)
shall reasonably request, to keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
securities covered by the applicable Registration Statement; provided, that, the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph or (ii) consent to general service of process or taxation in any such
jurisdiction where it is not so subject;
(5) cause all such Registrable Securities to be listed or
quoted (as the case may be) on each national securities exchange or other
securities market on which securities of the same class as the Registrable
Securities are then listed or quoted;
(6) provide a transfer agent and registrar for all such
Registrable Securities and a CUSIP number for all such Registrable Securities
not later than the effective date of such Registration Statement;
(7) comply with all applicable rules and regulations of the
Commission, and make available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (or in each case within
such extended period of time as may be permitted by the Commission for filing
the applicable report with the Commission) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in an
underwritten offering or (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company after the
effective date of a Registration Statement;
(8) use reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or suspending
the qualification (or exemption from qualification) of any of the Registrable
Securities included therein for sale in any jurisdiction, and, in the event of
the issuance of any stop order suspending the effectiveness of a Registration
Statement, or of any order suspending the qualification of any Registrable
Securities included in such Registration Statement for sale in any jurisdiction,
the Company will
9
use its reasonable best efforts promptly to obtain the withdrawal of such order
at the earliest possible moment;
(9) obtain "cold comfort" letters and updates thereof (which
letters and updates (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the Holders) from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each of the underwriters, if any, and each selling
Holder of Registrable Securities, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as the
underwriters, if any, or the Holders of a majority of the Registrable Securities
being included in the registration may reasonably request;
(10) obtain opinions of independent counsel to the Company
and updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any, and the
Holders of a majority of the Registrable Securities being included in the
registration), addressed to each selling Holder and each of the underwriters, if
any, covering the matters customarily covered in opinions of issuer's counsel
requested in underwritten offerings, such as the effectiveness of the
Registration Statement and such other matters as may be requested by such
counsel and underwriters, if any;
(11) promptly notify the selling Holders and the managing
underwriters, if any, and confirm such notice in writing, when a Prospectus or
any supplement or post-effective amendment to such Prospectus has been filed,
and, with respect to a Registration Statement or any post-effective amendment
thereto, when the same has become effective, of any request by the Commission or
any other federal or state governmental authority for amendments or supplements
to a Registration Statement or related Prospectus or for additional information,
of the issuance by the Commission of any stop order suspending the effectiveness
of a Registration Statement or of any order preventing or suspending the use of
any Prospectus or the initiation of any proceedings by any Person for that
purpose, of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Securities for offer or sale
under the securities or blue sky laws of any jurisdiction, or the contemplation,
initiation or threatening, of any proceeding for such purpose, and of the
happening of any event or the existence of any facts that make any statement
made in such Registration Statement or Prospectus untrue in any material respect
or that require the making of any changes in such Registration Statement or
Prospectus so that it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made (in the case of any Prospectus), not misleading (which notice shall be
accompanied by an instruction to the selling Holders and the managing
underwriters, if any, to suspend the use of the Prospectus until the requisite
changes have been made);
(12) if requested by the managing underwriters, if any, or a
Holder of Registrable Securities being sold, promptly incorporate in a
prospectus, supplement or post-
10
effective amendment such information as the managing underwriters, if any, and
the Holders of a majority of the Registrable Securities being sold reasonably
request to be included therein relating to the sale of the Registrable
Securities, including, without limitation, information with respect to the
number of shares of Registrable Securities being sold to underwriters, the
purchase price being paid therefor by such underwriters and with respect to any
other terms of the underwritten offering of the Registrable Securities to be
sold in such offering, and make all required filings of such prospectus,
supplement or post-effective amendment promptly following notification of the
matters to be incorporated in such supplement or post-effective amendment;
(13) if requested, furnish to each selling Holder of
Registrable Securities and the managing underwriter, without charge, at least
one signed copy of the Registration Statement;
(14) as promptly as practicable upon the occurrence of any
event contemplated by Section 5(c)(11) above, prepare a supplement or
post-effective amendment to the Registration Statement or the Prospectus, or any
document incorporated therein by reference, or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Securities
being sold hereunder, the Prospectus will not contain an untrue statement of a
material fact or an omission to state a material fact required to be stated in a
Registration Statement or Prospectus or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and
(15) if such offering is an underwritten offering, enter into
such agreements (including an underwriting agreement in form, scope and
substance as is customary in underwritten offerings) and take all such other
appropriate and reasonable actions requested by the Holders owning a majority of
the Registrable Securities being sold in connection therewith or by the managing
underwriters (including cooperating in reasonable marketing efforts, including
in connection with any Demand Registration, participation by senior executives
of the Company in any "roadshow" or similar meeting with potential investors) in
order to expedite or facilitate the disposition of such Registrable Securities,
and in such connection, provide indemnification provisions and procedures
substantially to the effect set forth in Section 7 hereof with respect to all
parties to be indemnified pursuant to said Section. The above shall be done at
each closing under such underwriting or similar agreement, or as and to the
extent required thereunder.
Each Holder agrees by acquisition of such Registrable Securities that,
upon receipt of written notice from the Company of the happening of any event of
the kind described in Section 5(c)(11), such Holder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Registration Statement contemplated by Section 5(c)(14), or until it is
advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
prospectus (such period during which disposition is discontinued being an
"INTERRUPTION PERIOD"), and, if so directed by the Company, such Holder will
deliver to the Company all copies of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice.
11
Section 6. Registration Expenses.
(a) Expenses Payable by the Company. The Company shall bear all
expenses incurred with respect to the registration or attempted registration of
the Registrable Securities pursuant to Sections 2, 3 and 4 of this Agreement as
provided herein. Such expenses shall include, without limitation, (i) all
registration, qualification and filing fees (including, without limitation, (A)
fees with respect to compliance with the Commission, (B) fees with respect to
filings required to be made with the national securities exchange or national
market system on which the Common Stock is then traded or quoted and (C) fees
and expenses of compliance with state securities or blue sky laws (including,
without limitation, fees and disbursements of counsel for the Company or the
underwriters, or both, in connection with blue sky qualifications of Registrable
Securities)), (ii) messenger and delivery expenses, word processing, duplicating
and printing expenses (including without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company, printing preliminary prospectuses, prospectuses,
prospectus supplements, including those delivered to or for the account of the
Holders and provided in this Agreement, and blue sky memoranda), (iii) fees and
disbursements of counsel for the Company, (iv) fees and disbursements of all
independent certificated public accountants for the Company (including, without
limitation, the expense of any "comfort letters" required by or incident to such
performance), (v) all out-of-pocket expenses of the Company (including without
limitation, expenses incurred by the Company, its officers, directors, and
employees performing legal or accounting duties or preparing or participating in
"roadshow" presentations or of any public relations, investor relations or other
consultants or advisors retained by the Company in connection with any roadshow,
including travel and lodging expenses of such roadshows), (vi) fees and expenses
incurred in connection with the quotation or listing of shares of Common Stock
on any national securities exchange or other securities market, and (vii)
reasonable fees and expenses of one firm of counsel for all selling Holders
(which shall be chosen by the Holders of a majority of Registrable Securities to
be included in such offering).
(b) Expenses Payable by the Holders. Each Holder shall pay all
underwriting discounts and commissions or placement fees of underwriters or
broker's commissions incurred in connection with the sale or other disposition
of Registrable Securities for or on behalf of such Holder's account.
Section 7. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify, to the fullest extent permitted by law, each Holder, each affiliate
of a Holder and each director, officer, employee, manager, stockholder, partner,
member, counsel, agent or representative of such Holder and its affiliates and
each Person who controls any such Person (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act) (collectively,
"HOLDER INDEMNIFIED PARTIES") against, and hold it and them harmless from, all
losses, claims, damages, liabilities, actions, proceedings, costs (including,
without limitation, costs of preparation and attorneys' fees and disbursements)
and expenses, including expenses of investigation and amounts paid in settlement
(collectively, "LOSSES") arising out of, caused by or based upon any untrue or
alleged untrue statement of material fact contained in any Registration
Statement, or any omission or alleged omission of a material fact required to be
stated therein or
12
necessary to make the statements therein not misleading (a
"MISSTATEMENT/OMISSION"), or any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any state securities law, or any rule
or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law, except that the Company shall not be liable insofar as
such Misstatement/Omission or violation is made in reliance upon and in
conformity with information furnished in writing to the Company by such Holder
expressly for use therein; provided, further, that the Company shall not be
liable for a Holder's failure to deliver or cause to be delivered (to the extent
such delivery is required under the Securities Act) the Prospectus contained in
the Registration Statement, furnished to it by the Company on a timely basis at
or prior to the time such action is required by the Securities Act to the person
claiming a Misstatement/Omission if such Misstatement/Omission was corrected in
such Prospectus. In connection with an underwritten offering, the Company will
indemnify such underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers and directors and each Person who controls such underwriters (within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders. This indemnity shall be in addition to any other
indemnification arrangements to which the Company may otherwise be party.
Notwithstanding the foregoing, the indemnity contained in this section shall not
apply to amounts paid in settlement of any such Losses if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld).
(b) Indemnification by the Holders. In connection with any
Registration Statement in which a Holder is participating, each such Holder
agrees to indemnify, to the fullest extent permitted by law, the Company and
each director and officer of the Company and each Person who controls the
Company (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) against, and hold it harmless from, any Losses
arising out of or based upon (i) any Misstatement/Omission contained in the
Registration Statement, if and to the extent that such Misstatement/Omission was
made in reliance upon and in conformity with information furnished in writing by
such Holder for use therein, or (ii) the failure by such Holder to deliver or
cause to be delivered (to the extent such delivery is required under the
Securities Act) the Prospectus contained in the Registration Statement,
furnished to it by the Company on a timely basis at or prior to the time such
action is required by the Securities Act to the person claiming a
Misstatement/Omission if such Misstatement/Omission was corrected in such
Prospectus. Notwithstanding the foregoing, the obligation to indemnify will be
individual (several and not joint) to each Holder and will be limited to the net
amount of proceeds (net of payment of all expenses) received by such Holder from
the sale of Registrable Securities pursuant to such Registration Statement
giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any action,
claim or proceeding shall be brought against any Person entitled to
indemnification hereunder, such indemnified party shall promptly notify each
indemnifying party in writing, and such indemnifying party shall assume the
defense thereof, including the employment of one counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses incurred in
connection with the defense thereof. The failure to so notify such indemnifying
party shall relieve such indemnifying party of its indemnification obligations
to such indemnified party to the extent that such failure to notify materially
prejudiced such indemnifying party but not from any liability that it or they
may have to the indemnified party for contribution or otherwise. Each
13
indemnified party shall have the right to employ separate counsel in such
action, claim or proceeding and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of each indemnified party
unless: (i) such indemnifying party has agreed to pay such expenses; (ii) such
indemnifying party has failed promptly to assume the defense and employ counsel
reasonably satisfactory to such indemnified party; or (iii) the named parties to
any such action, claim or proceeding (including any impleaded parties) include
both such indemnified party and such indemnifying party or an affiliate or
controlling person of such indemnifying party, and such indemnified party shall
have been advised in writing by counsel that either (x) there may be one or more
legal defenses available to it which are different from or in addition to those
available to such indemnifying party or such affiliate or controlling person or
(y) a conflict of interest may exist if such counsel represents such indemnified
party and such indemnifying party or its affiliate or controlling person;
provided, however, that such indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be responsible hereunder for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel), which counsel shall be designated by such indemnified party or, in the
event that such indemnified party is a Holder Indemnified Party, by the Holders
of a majority of the Registrable Securities included in the subject Registration
Statement.
No indemnifying party shall be liable for any settlement effected without
its written consent (which consent may not be unreasonably delayed or withheld).
Each indemnifying party agrees that it will not, without the indemnified party's
prior written consent, consent to entry of any judgment or settle or compromise
any pending or threatened claim, action or proceeding in respect of which
indemnification or contribution may be sought hereunder unless the foregoing
contains an unconditional release, in form and substance reasonably satisfactory
to the indemnified parties, of the indemnified parties from all liability and
obligation arising therefrom. The indemnifying party's liability to any such
indemnified party hereunder shall not be extinguished solely because any other
indemnified party is not entitled to indemnity hereunder.
(d) Survival. The indemnification provided for under this
Agreement will (i) remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party, (ii) survive the
transfer of securities and (iii) survive the termination of this Agreement.
(e) Right to Contribution. If the indemnification provided for in
this Section 7 is unavailable to, or insufficient to hold harmless, an
indemnified party under Section 7(a) or Section 7(b) above in respect of any
Losses referred to in such Sections, then each applicable indemnifying party
shall have an obligation to contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Company, on the one hand, and
of the Holder, on the other, in connection with the Misstatement/Omission or
violation which resulted in such Losses, taking into account any other relevant
equitable considerations. The amount paid or payable by a party as a result of
the Losses referred to above shall be deemed to include, subject to the
limitations set forth in Section 8(c) above, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation, lawsuit
or legal or administrative action or proceeding.
14
The relative fault of the Company, on the one hand, and of the Holder, on
the other, shall be determined by reference to, among other things, whether the
relevant Misstatement/Omission or violation relates to information supplied by
the Company or by the Holder and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such Misstatement/Omission
or violation.
The Company and each Holder agree that it would not be just and equitable
if contribution pursuant to this Section 7(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7(e), a Holder shall not be required to contribute any amount in
excess of the amount by which (i) the amount (net of payment of all expenses) at
which the securities that were sold by such Holder and distributed to the public
were offered to the public exceeds (ii) the amount of any damages which such
Holder has otherwise been required to pay by reason of such
Misstatement/Omission or violation.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
Section 8. Rules 144 and 144A.
The Company shall timely file the reports required to be filed by it under
the Securities Act and the Exchange Act (including but not limited to the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act)
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will; upon the request of any
holder of Registrable Securities, make publicly available other information) and
will take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 and Rule
144A under the Securities Act, as such Rules may be amended from time to time,
or (b) any similar rule or regulation hereafter adopted by the Commission.
Section 9. Underwritten Registrations.
(a) No Person may participate in any registration hereunder which
is underwritten unless such Person (i) agrees to sell such Person's securities
on the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, customary indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements; provided, that, no Holder included in any
underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters other than representations and
warranties regarding such Holder and such Holder's intended method of
distribution.
(b) If any of the Registrable Securities covered by any
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and
15
manager or managers that will manage the offering will be selected by, and the
underwriting arrangements with respect thereto will be approved by, the Company;
provided, however, that such investment bankers and managers and underwriting
arrangements must be reasonably satisfactory to the Holders of the majority of
Registrable Securities to be included in such offering.
Section 10. Covenants of Holders.
Each of the Holders hereby agrees (a) to cooperate with the Company and to
furnish to the Company all such information regarding such Holder, its ownership
of Registrable Securities and the disposition of such securities in connection
with the preparation of the Registration Statement and any filings with any
state securities commissions as the Company may reasonably request, (b) to the
extent required by the Securities Act, to deliver or cause delivery of the
Prospectus contained in the Registration Statement, any amendment or supplement
thereto, to any purchaser of the Registrable Securities covered by the
Registration Statement from the Holder and (c) if requested by the Company, to
notify the Company of any sale of Registrable Securities by such Holder.
Section 11. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with, adversely effects or violates the rights granted to the Holders in this
Agreement; it being understood that the granting of additional demand or
piggyback registration rights with respect to capital stock of the Company shall
not be deemed inconsistent with or adverse to the rights granted to Holders
hereunder, and the rights of the Holders shall be subject to any such additional
grants.
(b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and hereby agree to waive the defense in any
action for specific performance or injunctive relief that a remedy at law would
be adequate. Accordingly, any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any bond or
other security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of this Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement, including the provisions of this sentence, may
be amended, modified, supplemented or waived only upon the prior written consent
of the Company and Holders of a majority of the outstanding Registrable
Securities.
(d) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. The Holders may assign all rights under this agreement; provided,
however, that no Holder may transfer or assign its rights hereunder unless such
transferring Holder shall, prior to any such transfer, obtain from
16
the transferee a joinder agreement in a form reasonably satisfactory to the
Company and deliver a copy of such joinder agreement to the Company and to the
Holders. Only persons (other than the initial Investors hereto) that execute a
joinder agreement shall be deemed to be Holders. The Company shall be given
written notice by the transferring Holder at the time of the transfer stating
the name and address of the transferee and identifying the Registrable
Securities transferred, provided, that, failure to give such notice shall not
affect the validity of such transfer or assignment.
(e) Termination of Registration Rights. The rights of any Holder
to cause the Company to register Registrable Securities under this Agreement
shall terminate with respect to such Holder as soon as such Holder is legally
able to dispose of all of its Registrable Securities in one transaction pursuant
to Rule 144 under the Securities Act.
(f) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected, it being intended that the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, any one of which need not contain the signatures of more than one
party, but each of which when so executed shall be deemed to be an original and
all such counterparts taken together shall constitute one and the same
Agreement.
(h) Descriptive Headings: Interpretation. The descriptive headings
of this Agreement are inserted for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. The use of the word "including" in
this Agreement shall be by way of example rather than by limitation.
(i) Notices. All notices, requests and other communications
provided for or permitted to be given under this Agreement must be in writing
and shall be given by personal delivery, by certified or registered United
States mail (postage prepaid, return receipt requested), by a nationally
recognized overnight delivery service for next day delivery, or by facsimile
transmission, as follows (or to such other address as any party may give in a
notice given in accordance with the provisions hereof):
If to the Company:
Venturi Partners, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
17
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, P.C.
Facsimile: 214-969-4343
If to an Investor, to the fax number or the address set forth for such
Investor on Exhibit A hereto, with copies as set forth therein.
All notices, requests or other communications will be effective and deemed given
only as follows: (i) if given by personal delivery, upon such personal delivery,
(ii) if sent by certified or registered mail, on the fifth business day after
being deposited in the United States mail, (iii) if sent for next day delivery
by overnight delivery service, on the date of delivery as confirmed by written
confirmation of delivery, (iv) if sent by facsimile, upon the transmitter's
confirmation of receipt of such facsimile transmission, except that if such
confirmation is received after 5:00 p.m. (in the recipient's time zone) on a
business day, or is received on a day that is not a business day, then such
notice, request or communication will not be deemed effective or given until the
next succeeding business day. Notices, requests and other communications sent in
any other manner, including by electronic mail, will not be effective.
(j) GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF
DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The parties
hereby irrevocably submit to the jurisdiction of any federal court located in
the State of Delaware or any Delaware state court solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Delaware state or federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in the Section on notices above or in such
other manner as may be permitted by law shall be valid and sufficient service
thereof.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY
18
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
(k) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
19
IN WITNESS WHEREOF the parties hereto have or have caused this
Registration Rights Agreement to be duly executed as of the date first above
written
THE COMPANY:
VENTURI PARTNERS, INC.
By: _________________________________________________
Name: _________________________________________________
Title: _________________________________________________
THE INVESTORS:
INLAND PARTNERS, L.P.
By: ______________________________, its General
Partner
By: _________________________________________________
Name: _________________________________________________
Title: _________________________________________________
LINKS PARTNERS, L.P.
By: ______________________________, its General
Partner
By: _________________________________________________
Name: _________________________________________________
Title: _________________________________________________
[Signature Page to Amended and Restated Registration Rights Agreement]
MATLINPATTERSON GLOBAL
OPPORTUNITIES PARTNERS, L.P.
By: MatlinPatterson Global Advisors LLC, its
Investment Advisor
By: _________________________________________________
Name: _________________________________________________
Title: _________________________________________________
ZAZOVE ASSOCIATES, LLC, FOR AND ON
BEHALF OF:
CENTURY NATIONAL INSURANCE
COMPANY,
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA,
SAN DIEGO COUNTY EMPLOYEE
RETIREMENT ASSOCIATION (BONY
ACCOUNT),
ZAZOVE CONVERTIBLE SECURITIES FUND,
INC.,
QWEST OCCUPATIONAL HEALTH TRUST,
QWEST PENSION TRUST,
HFR CA SELECT FUND,
ZURICH INSTITUTIONAL BENCHMARKS
MASTER FUND LTD.,
ZAZOVE HIGH YIELD CONVERTIBLE
SECURITIES FUND, L.P.,
ZAZOVE AGGRESSIVE GROWTH FUND,
ZAZOVE GLOBAL CONVERTIBLE FUND, L.P.,
ZAZOVE INCOME FUND, L.P.,
SAN DIEGO COUNTY EMPLOYEES
RETIREMENT ASSOCIATION,
ZAZOVE HEDGED CONVERTIBLE FUND, L.P.
By: _________________________________________________
Name: _________________________________________________
Title: _________________________________________________
[Signature Page to Amended and Restated Registration Rights Agreement]
R2 INVESTMENTS, LDC
By: Amalgamated Gadget, L.P., its Investment
Manager
By: Scepter Holdings, Inc., its General Partner
By: ________________________________________
Name: ________________________________________
Title:________________________________________
XXXXX X. XXXXXXXXXXX
By: ________________________________________
XXXXXXX XXXXX BARNEY
By: ________________________________________
Name: ________________________________________
Title:________________________________________
SC FUNDAMENTAL VALUE FUND, L.P.
By: SC Fundamental LLC, its General Partner
By: ________________________________________
Name: ________________________________________
Title:________________________________________
SC FUNDAMENTAL VALUE BVI, LTD.
By: SC Fundamental Value BVI, Inc., as
Managing General Partner of its Investment
Manager
By: ________________________________________
Name: ________________________________________
Title:________________________________________
[Signature Page to Amended and Restated Registration Rights Agreement]
XXXXXX ASSOCIATES, LLC
By: ________________________________________
Name: ________________________________________
Title:________________________________________
HIGHBRIDGE CAPITAL MANAGEMENT LLC
By: Highbridge Capital Management
By: ________________________________________
Name: ________________________________________
Title:________________________________________
XXXX XXXXXX
By: ________________________________________
XXXXX X. XXXXXX & XXXX XXX XXXXXX JTWROS
By: ________________________________________
By: ________________________________________
LC CAPITAL MASTER FUND, LTD.
By: ________________________________________
Name: ________________________________________
Title:________________________________________
[Signature Page to Amended and Restated Registration Rights Agreement]
BANK OF AMERICA, N.A., formerly known as
NationsBank, N.A. and Bank of America Illinois
By: ________________________________________
Name: ________________________________________
Title:________________________________________
BANK OF AMERICA STRATEGIC SOLUTIONS, INC.
By: ________________________________________
Name: ________________________________________
Title:________________________________________
BNP PARIBAS
By: ________________________________________
Name: ________________________________________
Title:________________________________________
BANK ONE, NA
By: ________________________________________
Name: ________________________________________
Title:________________________________________
HBV CAPITAL MANAGEMENT LLC
By: ________________________________________
Name: ________________________________________
Title:________________________________________
[Signature Page to Amended and Restated Registration Rights Agreement]
EXHIBIT A
Investor Address/Facsimile
A-1
EXHIBIT H
Holding Tax Certificate
[ATTACHED]
[COMSYS HOLDING, INC. LETTERHEAD]
______________________, 2004
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
PricewaterhouseCoopers LLP
[ADDRESS]
Dear Sirs:
In connection with the opinions to be delivered by your firms pursuant to
Sections 7.2 and 7.3 of the Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated as of July __, 2004 by and among COMSYS Holding, Inc., a
Delaware corporation ("HOLDING"), COMSYS Information Technology Services, Inc.,
a Delaware corporation and wholly-owned subsidiary of Holding, Venturi Partners,
Inc., a Delaware corporation (the "COMPANY"), Venturi Technology Partners, LLC,
a North Carolina limited liability company and wholly-owned subsidiary of the
Company ("PARTNERS"), VTP, Inc., a Delaware corporation and wholly-owned
subsidiary of the Company ("MERGER SUB"), and the stockholders of Holding (the
"HOLDING STOCKHOLDERS") (the "MERGER AGREEMENT"), whereby Merger Sub will be
merged with and into Holding, with Holding to be the surviving entity and a
wholly-owned subsidiary of the Company (the "MERGER"), I certify that to the
best of my knowledge and belief, after due inquiry and investigation, as
follows:
1. The representations made by Holding in the Merger Agreement and the
facts relating to the contemplated Merger as described in the Merger Agreement
and the Proxy Statement, each as amended and including all exhibits, insofar as
such facts pertain to Holding, are true, correct and complete in all material
respects and will be true, correct and complete in all material respects at the
Effective Time of the Merger. All capitalized terms used but not defined herein
shall have the same meaning as in the Merger Agreement.
2. The fair market value of the Company Common Stock and cash in lieu of
fractional shares of Company Common Stock, if any, received by each Holding
Stockholder in the Merger will be approximately equal to the fair market value
of the Holding Shares surrendered by such stockholder in the Merger. The Merger
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consideration to be received in the Merger by the Holding Stockholders was
determined by arm's length negotiations between the managements of the Company
and Holding.
3. The payment of cash in lieu of fractional shares of Company Common
Stock in the Merger is solely for the purpose of avoiding the expense and
inconvenience to the Company of issuing fractional shares of Company Common
Stock and does not represent separately bargained for consideration.
4. The value, determined as of the Effective Date, of the Company Common
Stock to be received in the Merger will be at least 50% of the value of all of
the outstanding stock of Holding. For purposes of this representation:
(a) Shares of Holding stock exchanged for cash or other property, or
exchanged for cash in lieu of fractional shares of Company Common Stock,
will be treated as outstanding on the Effective Date; and
(b) Shares of Holding stock redeemed prior to and in connection with
the Merger will be treated as outstanding on the Effective Date.
5. Prior to and in connection with the Merger (i) Holding has not made and
will not make any extraordinary distributions with respect to any of its stock;
and (ii) no person that is related to Holding, within the meaning of Treasury
Regulation section 1.368-1(e)(3)(i)(B), has acquired or will acquire stock of
Holding from any holder thereof.
6. In the Merger, shares of Holding stock representing at least 80% of the
total combined voting power of all classes of stock of Holding outstanding on
the date of the Merger, and at least 80% of the total number of each other class
of stock of Holding outstanding on the date of the Merger will be exchanged
solely for Company Common Stock. For purposes of this representation, shares of
Holding stock exchanged for cash or other property originating with the Company
will be treated as outstanding on the date of the Merger.
7. At the Effective Time of the Merger, Holding will not have outstanding
any warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in Holding that, if exercised
or converted, would affect the Company's acquisition or retention of Control of
Holding. For purposes of this representation letter, "Control" means the direct
ownership of stock possessing at least 80% of the total combined voting power
for the election of directors of all classes of stock of Holding entitled to
vote, and at least 80% of the total number of shares of each nonvoting class of
stock of Holding.
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8. Holding has no plan or intention to issue additional shares of its
stock that would result in the Company losing Control of Holding.
9. The Company and Holding will pay their respective expenses, if any,
incurred in connection with the Merger except as otherwise provided in Section
8.3 of the Merger Agreement. With respect to any stockholders of Holding, any
(i) expenses incurred for investment or estate planning advice to stockholders,
or (ii) expenses incurred by an individual stockholder or group of stockholders
for legal, accounting or investment advice or counsel relating to the Merger
will be paid by Holding prior to Closing. To the knowledge of Holding without
further inquiry, the Company has not agreed to assume, nor will it directly or
indirectly assume, any expense or other liability, whether fixed or contingent,
of any stockholder of Holding in connection with or as part of the Merger or any
related transaction; provided further that all liability for transfer taxes
incurred by a Holding Stockholder will be paid by such Holding Stockholder and
in no event by the Company or a related person, directly or indirectly.
10. Holding is not an investment company as defined in sections
368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code of 1986, as amended (the
"Code").
11. Holding is not under the jurisdiction of a court in a case under Title
11 of the United States Code, or a receivership, foreclosure, or similar
proceeding in a federal or state court.
12. There is no intercorporate indebtedness existing between the Company
and Holding or between Merger Sub and Holding that was issued, acquired, or will
be settled at a discount.
13. In connection with the Merger, no stock of Holding will be acquired
for consideration other than Company Common Stock (except for cash received in
lieu of fractional shares of Company Common Stock) by the Company or by any
person related to the Company within the meaning of Treasury Regulation section
1.368-1(e)(3).
14. On the date of the Merger, Holding will be conducting Holding's
historic business or using a significant portion of Holding's historic business
assets in a business. Further, in contemplation of or as part of the Merger,
Holding has not sold, transferred, or otherwise disposed of any of its assets to
an extent that would prevent the Company, or any person related to the Company,
from continuing the historic business of Holding or from using a significant
portion of Holding's historic business assets in a business.
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15. Following the Merger, Holding will hold at least 90% of the fair
market value of its net assets and at least 70% of the fair market value of its
gross assets held immediately prior to the Merger and at least 90% of the fair
market value of the net assets and at least 70% of the fair market value of the
gross assets of Merger Sub held immediately before the Merger. For purposes of
this representation, amounts paid by Merger Sub or Holding for reorganization
expenses or to stockholders who receive cash or other property, and all
redemptions and distributions (except for regular, normal dividends) made by
Holding immediately preceding or in contemplation of, the Merger will be
included as assets of Holding or Merger Sub, as applicable, prior to the Merger
and assets transferred from the Company to Merger Sub are not included as assets
of Merger Sub immediately before the Merger where such assets are used to enable
Merger Sub to satisfy state minimum capitalization requirements (where the money
is returned to the Company as part of the transaction).
16. None of the Company Common Stock to be received in the Merger by any
Holding Stockholder which is (or was) a service provider to Holding will be
separate consideration for, or allocable to, past or future services. None of
the compensation to be received by any Holding Stockholder who is (or was) a
service provider to Holding is separate consideration for, or allocable to, such
stockholder's shares of Holding Shares to be surrendered in the Merger, and the
compensation to be paid to any such person will be for services actually
rendered and will be commensurate with amounts paid to third parties bargaining
at arm's length for similar services.
17. At the Effective Time of the Merger, the tax basis and fair market
value of the assets of Holding will exceed its liabilities, plus the
liabilities, if any, to which the assets are subject.
18. Neither Holding nor any of its subsidiaries has been a party to a
distribution of stock qualifying for tax-free treatment (i) in the two years
prior to the date of the Merger, or (ii) in a distribution which is part of a
plan (or series of related transactions) in conjunction with the Merger.
19. There will be no dissenters to the Merger.
20. Holding will not take any position on any federal, state, or local
income or franchise tax return, or take any other tax reporting position that is
inconsistent with the treatment of the Merger as a reorganization within the
meaning of section 368(a) of the Code or with any of the foregoing
representations, unless otherwise required by a final judgment, decree, or other
order which addresses the Merger by a court of competent jurisdiction, or by
applicable state or local income or franchise tax law (and then only to the
extent required by such applicable law).
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21. The Merger Agreement represents the entire understanding between or
among the Company, Holding, and Merger Sub with respect to the Merger and there
are no other written or oral agreements regarding the Merger (or any transaction
relating thereto) other than those expressly referred to in the Merger
Agreement. The Merger will be consummated strictly in accordance with the Merger
Agreement and none of the material terms and conditions therein has been or will
be waived or modified.
22. The undersigned is authorized to make all the representations set
forth herein on behalf of Holding.
We understand that Akin Gump Xxxxxxx Xxxxx & Xxxx LLP, as tax counsel for
Holding, and PricewaterhouseCoopers LLP, as tax counsel for the Company, will
rely on this representation letter, without further inquiry, in rendering their
opinions concerning certain of the federal income tax consequences of the Merger
and hereby commit to promptly and timely inform them if, for any reason, we have
reason to believe that any of the facts described or representations made herein
are or have become untrue, incorrect or incomplete in any respect prior to the
Effective Time.
Very truly yours,
COMSYS Holding, Inc.
By:________________________________________
Name:______________________________________
Title:_____________________________________
EXHIBIT I
Company Tax Certificate
[ATTACHED]
[VENTURI PARTNERS, INC. LETTERHEAD]
__________________, 2004
PricewaterhouseCoopers LLP
[ADDRESS]
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Ladies and Gentlemen:
In connection with the opinions to be delivered by your firms pursuant to
Sections 7.2 and 7.3 of the Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated as of July __, 2004 by and among COMSYS Holding, Inc., a
Delaware corporation ("HOLDING"), COMSYS Information Technology Services, Inc.,
a Delaware corporation and wholly-owned subsidiary of Holding, Venturi Partners,
Inc., a Delaware corporation (the "COMPANY"), Venturi Technology Partners, LLC,
a North Carolina limited liability company and wholly-owned subsidiary of the
Company ("PARTNERS"), VTP, Inc., a Delaware corporation and wholly-owned
subsidiary of the Company ("MERGER SUB"), and the stockholders of Holding (the
"HOLDING STOCKHOLDERS") (the "MERGER Agreement"), whereby Merger Sub will be
merged with and into Holding, with Holding to be the surviving entity and a
wholly-owned subsidiary of the Company (the "MERGER"), I certify that to the
best of my knowledge and belief, after due inquiry and investigation, as
follows:
1. The representations made by the Company in the Merger Agreement and the
facts relating to the contemplated Merger as described in the Merger Agreement
and the Proxy Statement, each as amended and including all exhibits, insofar as
such facts pertain to the Company and Merger Sub, are true, correct and complete
in all material respects and will be true, correct and complete in all material
respects at the Effective Time of the Merger. All capitalized terms used but not
defined herein shall have the same meaning as in the Merger Agreement.
2. The fair market value of the Company Common Stock and cash in lieu of
fractional shares of Company Common Stock, if any, received by each Holding
Stockholder in the Merger will be approximately equal to the fair market value
of the Holding Shares surrendered by such stockholder in the Merger. The Merger
consideration to be received in the Merger by the Holding Stockholders was
determined by arm's length negotiations between the managements of the Company
and Holding.
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Page 2
3. The payment of cash in lieu of fractional shares of Company Common
Stock in the Merger is solely for the purpose of avoiding the expense and
inconvenience to the Company of issuing fractional shares of Company Common
Stock and does not represent separately bargained for consideration.
4. In connection with the Merger, none of the Holding Shares will be
acquired for consideration other than Company Common Stock (except for cash
received in lieu of fractional shares of Company Common Stock) by the Company or
by any person related to the Company within the meaning of Treasury Regulation
section 1.368-1(e)(3).
5. Except in the Merger, neither the Company nor Merger Sub (nor any other
subsidiary of the Company) has acquired or prior to the Merger will acquire, or
has owned in the past five years, any shares of Holding stock.
6. In the Merger, outstanding shares of Holding stock representing Control
(as defined below) will be exchanged solely for Company Common Stock. For
purposes of this representation letter, "Control" means the direct ownership of
stock possessing at least 80% of the total combined voting power for the
election of directors of all classes of stock of Holding entitled to vote, and
at least 80% of the total number of shares of each nonvoting class of stock of
Holding. For purposes of this representation, shares of Holding stock exchanged
for cash or other property originating with the Company will be treated as
outstanding on the date of the Merger.
7. The Company has no plan or intention to cause Holding to issue
additional shares of its stock that would result in the Company losing Control
of Holding.
8. Subsequent to and in connection with the Merger, the Company will not
redeem or reacquire, nor will any person related to the Company within the
meaning of Treasury Regulation section 1.368-1(e)(3) acquire, any of the shares
of Company Common Stock issued in exchange for Holding Shares in the Merger.
9. Following the Merger, the Company will cause Holding to hold at least
90% of the fair market value of its net assets and at least 70% of the fair
market value of its gross assets held immediately prior to the Merger and at
least 90% of the fair market value of the net assets and at least 70% of the
fair market value of the gross assets of Merger Sub held immediately before the
Merger. For purposes of this representation, amounts paid by Merger Sub or
Holding for reorganization expenses or to stockholders who receive cash or other
property, and all redemptions and distributions (except for regular, normal
dividends) made by Holding immediately preceding or in contemplation of, the
Merger will be included as assets of Holding or Merger Sub, as
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applicable, prior to the Merger and assets transferred from the Company to
Merger Sub are not included as assets of Merger Sub immediately before the
Merger where such assets are used to enable Merger Sub to satisfy state minimum
capitalization requirements (where the money is returned to the Company as part
of the transaction).
10. Following the Merger, the historic business of Holding will be
continued by, or a significant portion of Holding's historic business assets
will be used in, a business of the Company or a corporation controlled by the
Company.
11. The Company has no plan or intention to (a) liquidate Holding; (b)
merge Holding with or into another corporation; (c) sell, distribute or
otherwise dispose of the Holding Shares acquired in the Merger; or (d) cause or
permit Holding to sell or otherwise dispose of any of its assets or any of the
assets acquired from Merger Sub, except, in the case of (d), for dispositions of
assets made in the ordinary course of business or transfers to a corporation
controlled by Holding, or, in the case of (b), (c), and (d), mergers, transfers,
or successive transfers to a corporation controlled by the Company.
12. The Company, Holding, and the Holding Stockholders will pay their
respective expenses, if any, incurred in connection with the Merger except as
otherwise provided in Section 8.3 of the Merger Agreement. To the extent any
expenses related to the Merger will be funded directly or indirectly by a party
other than the incurring party, such expenses will be solely and directly
related to the Merger, and will not include (i) expenses incurred for investment
or estate planning advice to stockholders, or (ii) expenses incurred by an
individual stockholder or group of stockholders for legal, accounting or
investment advice or counsel relating to the Merger. The Company has not agreed
to assume, nor will it directly or indirectly assume, any expense or other
liability, whether fixed or contingent, of any stockholder of Holding in
connection with or as part of the Merger or any related transaction; provided
further that all liability for transfer taxes incurred by a Holding stockholder
will be paid by such Holding stockholder and in no event by the Company or a
related person, directly or indirectly.
13. The Company is not an investment company as defined in sections
368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code of 1986, as amended (the
"Code").
14. The Company is not under the jurisdiction of a court in a case under
Title 11 of the United States Code, or a receivership, foreclosure, or similar
proceeding in a federal or state court.
15. There is no intercorporate indebtedness existing between the Company
and Holding or between Merger Sub and Holding that was issued, acquired or will
be settled at a discount.
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16. The Company will not assume any liabilities of Holding Stockholders in
the Merger.
17. Merger Sub is a corporation newly formed for the purpose of
participating in the Merger and at no time prior to the Merger has had assets
(other than nominal assets contributed upon the formation of Merger Sub, which
assets will be held by Holding following the Merger) or any business operation.
Merger Sub will have no liabilities assumed by Holding, and will not transfer to
Holding any assets subject to liabilities in the Merger.
18. Prior to the Merger, the Company will own all the capital stock of
Merger Sub.
19. None of the Company Common Stock to be received in the Merger by any
Holding Stockholder which is (or was) a service provider to Holding will be
separate consideration for, or allocable to, past or future services. None of
the compensation to be received by any Holding Stockholder who is (or was) a
service provider to Holding is separate consideration for, or allocable to, such
stockholder's shares of Holding Shares to be surrendered in the Merger, and the
compensation to be paid to any such person will be for services actually
rendered and will be commensurate with amounts paid to third parties bargaining
at arm's length for similar services.
20. Neither the Company nor any of its subsidiaries has been a party to a
distribution of stock qualifying for tax-free treatment (i) in the two years
prior to the date of the Merger, or (ii) in a distribution which is part of a
plan (or series of related transactions) in conjunction with the Merger.
21. There will be no dissenters to the Merger.
22. The Company will not take any position on any federal, state, or local
income or franchise tax return, or take any other tax reporting position that is
inconsistent with the treatment of the Merger as a reorganization within the
meaning of section 368(a) of the Code or with any of the foregoing
representations, unless otherwise required by a final judgment, decree or other
order which addresses the Merger by a court of competent jurisdiction, or by
applicable state or local income or franchise tax law (and then only to the
extent required by such applicable law).
23. The Merger Agreement represents the entire understanding between or
among the Company, Holding, and Merger Sub with respect to the Merger and there
are no other written or oral agreements regarding the Merger (or any transaction
relating thereto) other than those expressly referred to in the Merger
Agreement. The Merger will be consummated strictly in accordance with the Merger
Agreement and
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none of the material terms and conditions therein has been or will be waived or
modified.
24. The undersigned is authorized to make all the representations set
forth herein on behalf of the Company.
I understand that Akin Gump Xxxxxxx Xxxxx & Xxxx LLP, as tax counsel for
Holding, and PricewaterhouseCoopers LLP, as tax counsel for the Company, will
rely on this representation letter, without further inquiry, in rendering their
opinion concerning certain of the federal income tax consequences of the Merger
and hereby commit to promptly and timely inform them if, for any reason, we have
reason to believe that any of the facts described or representations made herein
are or have become untrue, incorrect or incomplete in any respect prior to the
Effective Time.
Very truly yours,
Venturi Partners, Inc.
By:___________________________________
Name:_________________________________
Title:________________________________
EXHIBIT J
Form of Joint Press Release
[ATTACHED]
JOINT NEWS RELEASE
MEDIA INQUIRIES:
COMSYS HOLDING, INC. VENTURI PARTNERS, INC.
Xxxxx Xxxx Xxxxx X. Xxxx
713/386-1420 704/442-5105
xxxxx@xxxxxx.xxx xxxxx@xxxxxxxxxxxxxxx.xxx
Xxx X. Xxxxxxxx, Xx.
704/442-5106
xxxxxxxxx@xxxxxxxxxxxxxxx.xxx
COMSYS AND VENTURI PARTNERS ANNOUNCE EXECUTION OF MERGER AGREEMENT
Industry veteran and COMSYS President and CEO Xxxxxxx X. Xxxxxx to lead
combined company
Venturi also announces sale of commercial staffing business to CBS Personnel
Conference call to review details at 10:00 a.m. EDT today
HOUSTON, TX and CHARLOTTE, NC (July 20, 2004) -- COMSYS Holding, Inc. and
Venturi Partners, Inc. (NASDAQ: VENP) jointly announced today that the two
companies have agreed to merge in a stock-for-stock exchange and create one of
the largest IT staffing companies in the United States.
The merged companies will operate under the COMSYS name and offer IT staffing,
permanent recruiting and placement of IT professionals, vendor management
services, project solutions, offshore development, specialized IT staffing,
network services, translation services and a number of dedicated software
practices, including business intelligence.
After the merger, the new COMSYS will have an expanded coast-to-coast presence
of 37 offices in 23 states and employ approximately 4,900 IT professionals
serving commercial clients in 13 industry segments and a variety of state and
local government agencies. Combined revenues of the merging companies were
approximately $590 million for the twelve-month period ended March 31, 2004 (on
a pro forma basis and excluding revenues from Venturi's commercial staffing
business).
COMSYS will apply for continued listing on NASDAQ, initially under the existing
Venturi trading symbol (VENP). Executives of both companies will serve on the
management team for the new company, under the leadership of President and Chief
Executive Officer Xxxxxxx X. Xxxxxx, currently president and CEO of COMSYS. The
board of directors initially will consist of five COMSYS designees and four
Venturi designees.
Venturi also announced that it has agreed to sell Venturi Staffing Partners,
Inc., its commercial staffing business, to Compass CS, Inc., in a cash
transaction. Compass CS is a leading staffing services provider that does
business throughout the Ohio Valley and South Carolina as CBS Personnel Services
and Columbia Staffing (collectively, "CBS Personnel"). The sale of Venturi's
commercial staffing business is expected to close simultaneously with the COMSYS
merger. The two transactions are linked, and neither will be completed unless
both are completed at the same time.
The consummation of the merger, a refinancing of the combined business and the
sale of Venturi's commercial staffing business are all expected to occur before
October 31, 2004.
Venturi Chief Executive Officer Xxxxx X. Xxxxxxxxx said, "Since completing our
financial restructuring last year, we have focused strategically on making our
IT and commercial staffing businesses bigger and stronger to avoid competitive
disadvantage. Each of the transactions announced today facilitates the creation
of large pure play staffing services companies and we expect each to be
significant participants in the growth of their industries as smaller
participants become marginalized. Our new partner in IT and the purchaser of our
commercial staffing business are seasoned operators, and we are excited about
the opportunities that each will offer our customers and employees, billable and
nonbillable alike."
COMSYS Chief Executive Xxxx Xxxxxx said, "Our merger marks a new beginning for
both Venturi and COMSYS. Through this business combination, we are creating a
stronger organization that we expect to be a primary player in the IT staffing
industry for years to come. The company will enjoy the benefits of a national
presence, while maintaining the superior service and intimate client
relationships of a local provider. We expect this larger national presence to be
advantageous in extending IT staffing and solutions services to current clients,
obtaining preferred supplier status with Fortune 500 companies, and servicing
national clients from multiple locations."
"There is very little client overlap between our two companies," Xxxxxx
continued. "The client profile of the combined company will be an excellent
combination of middle market and Fortune 500 clients, which will give us a broad
and diversified client base. Further, the culture and operating practices of our
companies are very similar, which should lead to a swift and successful
integration. Our employees and consultants should benefit from the opportunities
that come with our being a larger and more focused company."
A BROADER GEOGRAPHIC FOOTPRINT AND RANGE OF SERVICES FOR THE MERGED COMPANY
On a combined basis, ten of the merged company's branch offices will have more
than 200 consultants each on assignment, and another 16 branches will have more
than 100 consultants each.
There is little customer overlap between the two merging companies in services
to each other's largest clients: Only four of the top 30 clients on a pro forma
basis purchase significant services from both companies now. The largest client
of the combined businesses is expected to represent less than 7% of pro forma
2003 revenues.
The merged company expects its vendor management services offerings to continue
to grow. COMSYS' VMS offerings and Venturi's vWorx have each gained momentum and
achieved profitability over the past two years. The combined VMS business, with
27 clients, will be one of the largest in the industry.
The combined businesses will also have a major presence in federal, state and
local government IT staffing services, a fast-growing sector for the IT staffing
industry. Combined company revenues from government technology staffing
practices were approximately $48 million in 2003 on a pro forma basis.
The combined company will also provide a range of project services, including
dedicated practice areas in SAS, Microsoft and PeopleSoft products and network
services.
CREATION OF PARALLEL COMMERCIAL STAFFING PLATFORM
CBS Personnel Chief Executive Officer Xxxxxxxxx X. Xxxxxx said, "Our acquisition
of Venturi's commercial staffing business will create a large geographic
footprint for the combined CBS and Venturi staffing operations, which will have
over 135 offices nationwide and should enable the new firm to compete more
effectively in many segments of the marketplace. The combined operations of the
new commercial staffing company would have had approximately $445 million in pro
forma revenues in 2003.
"Our existing operation historically has been concentrated in the Ohio Valley
and in South Carolina, and the addition of Venturi's staffing operation to our
existing base will transform us into a company of national scope and reach, "
Xxxxxx continued. "We believe the combination will be attractive to our
customers, as it will facilitate our ability to service them in markets we have
not previously served, and especially for our employees, who can expect
significant opportunity as we greatly expand the coverage of our operations."
FINANCIAL TERMS OF THE MERGER AND COMMERCIAL STAFFING SALE
In the merger, COMSYS will merge with a newly created, wholly owned subsidiary
of Venturi and COMSYS' shareholders will be issued new shares of Venturi common
stock. Holders of
Venturi common stock will continue to hold their existing shares after the
merger. Subject to certain adjustments as set forth in the merger agreement,
COMSYS stockholders will receive new shares representing approximately 55.5% of
the total shares of the combined company on a fully diluted basis (taking into
account outstanding Venturi stock options and warrants as of closing). COMSYS
will be considered the surviving company for accounting purposes.
As a condition to the closing of the COMSYS merger, among others, Venturi has
agreed to sell its commercial staffing business for $30.3 million, plus the
assumption of certain specified liabilities and subject to the retention by
Venturi of other specified liabilities. Sale proceeds, after payment of
expenses, will be used to pay down existing Venturi debt. The purchaser in this
transaction, CBS Personnel, is affiliated with The Compass Group International
LLC, a significant stockholder of Venturi.
Both the merger transaction and the sale of the commercial staffing business are
subject to the approval of Venturi's stockholders, and the sale of the
commercial staffing business is also subject to special voting requirements
mandated by Venturi's charter. Both the merger and the sale have been approved
and recommended by Venturi's Board of Directors and by a special committee of
Venturi's Board formed to make recommendations with respect to the transactions.
The special committee has also received fairness opinions from its financial
advisor, SunTrust Xxxxxxxx Xxxxxxxx, with respect to both the merger and the
sale transactions. The transactions are also subject to appropriate regulatory
approvals and other customary closing conditions.
INTEGRATION AND COST SAVINGS OF MERGED COMPANY
Operations for the merged company will be headquartered in Houston, the current
home base of COMSYS. COMSYS and Venturi expect they will achieve significant
operating leverage through the combination. The companies intend to consolidate
overlapping offices in 13 geographic markets. The integration plan should
streamline operations through the elimination of duplicate staff positions,
although the companies do not plan to eliminate sales or recruiting positions.
Integration of the two companies should be completed in the first half of 2005.
The corporate functions of Venturi will be consolidated into the existing
corporate services departments of COMSYS, and the merger partners believe the
consolidation will eliminate substantially all of Venturi's corporate overhead.
In 2003, Venturi's overhead, which is not allocated to operating business units,
was approximately $14.4 million.
COMSYS Chief Financial Officer Xxxx Xxxx said, "The proposed transaction has
potential to offer substantial value to stockholders of both companies and is
expected to be accretive to the merged company's earnings in 2005."
FINANCING THE TRANSACTION
COMSYS has received a fully underwritten $183 million commitment from Xxxxxxx
Xxxxx Capital, a commercial lending division of Xxxxxxx Xxxxx Business Financial
Services, Inc. Proceeds of this financing, together with the net cash proceeds
from the sale of Venturi's
commercial staffing business and the issuance of approximately $38 million in
new preferred stock to existing creditors of COMSYS and Venturi, will pay off
approximately $175 million of funded debt at the closing of the transaction. The
Xxxxxxx Xxxxx facility will also fund certain restructuring and transition costs
to be paid by the merged company after the closing and provide working capital
for ongoing operational and working capital demands of the business. The parties
believe the merger should improve liquidity. The participation by Venturi's
creditors in the new preferred stock issue is also subject to special
stockholder voting requirements as mandated in Venturi's charter.
CONFERENCE CALL DETAILS
COMSYS and Venturi will conduct a conference call today at 10:00 a.m. Eastern
Time to discuss the merger and related transactions. The conference call-in
number is (000) 000-0000. The call will also be Web cast live and replayed for
30 days at xxx.xxxxxxxxxxxxxxx.xxx or xxx.xxxxxxxxxxxxxx.xxx. A taped replay of
the call will be available from 12:00 p.m. Eastern Time today through July 27,
2004, by dialing (000) 000-0000, passcode 359095.
ABOUT COMSYS
COMSYS Information Technology Services Inc. (xxx.xxxxxx.xxx) is a premier IT
staffing and services company with a nationwide presence. Leveraging more than
30 years of experience, COMSYS has built upon its core competency of staff
augmentation by creating offerings that bring cost-effective, client-centric
solutions to specific markets. COMSYS' offerings and products include contingent
staffing, vendor management, project services, network services and project
management. COMSYS serves government agencies and Fortune 500 clients in the
healthcare, financial/insurance, energy and telecommunications industries.
ABOUT VENTURI PARTNERS
Venturi Partners is a nationwide provider of information technology consulting
and custom software development services; high-end clerical, accounting and
other specialty professional staffing services; and technology systems for human
capital management. For more information about Venturi, visit
xxx.xxxxxxxxxxxxxxx.xxx.
ABOUT CBS PERSONNEL
CBS Personnel is a leading provider of commercial staffing and permanent
placement services in the Ohio Valley and South Carolina, with 55 branch offices
prior to the acquisition described in this release. Founded in 1970 and
headquartered in Cincinnati, CBS Personnel believes its regional focus promotes
the delivery of its core services in a more targeted, personal manner to each of
its customers. For more information about CBS Personnel, visit
xxx.xxxxxxxxxxxx.xxx.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements may be identified by words such as "estimate,"
"forecast," "plan," "intend," "believe," "should," "expect," "anticipate," or
variations or negatives thereof, or by similar or comparable words or phrases.
The forward-looking statements contained in this press release include
statements about the proposed merger of COMSYS and Venturi, the anticipated
performance of the combined
company following the merger, the proposed financing transactions contemplated
in connection with that merger, and the proposed sale of Venturi's commercial
staffing business and the performance of CBS Personnel after the sale. These
statements are not guarantees of future performance, involve certain risks,
uncertainties and assumptions that are difficult to predict, and are based upon
assumptions as to future events that may not prove accurate. Accordingly, actual
outcomes and results may differ materially from what is expressed herein. In any
forward-looking statement in which Venturi, COMSYS or CBS Personnel expresses an
expectation or belief as to future results, that expectation or belief is
expressed in good faith and believed to have a reasonable basis, but there can
be no assurance that the statement or expectation or belief will result or be
achieved or accomplished.
Risks and uncertainties pertaining to the following factors, among others, could
cause actual results to differ materially from those described in the
forward-looking statements:
- the ability of Venturi and COMSYS to obtain the stockholder and
regulatory approvals required for the merger;
- the combined company's ability to successfully integrate the
businesses of the two companies;
- unexpected costs involved in the merger or the combined company's
ability to achieve cost-cutting synergies;
- the impact of uncertainty surrounding the merger on the businesses
of the two companies;
- the impact of delays in satisfying the conditions to the
transactions, including the right of COMSYS or Venturi to terminate
the merger agreement if the merger is not completed by December 31,
2004, and of CBS Personnel or Venturi to terminate the stock
purchase agreement if the sale of Venturi's staffing business is not
completed by October 31, 2004;
- the combined company's ability to maintain the existing client
relationships of Venturi and COMSYS and attract new clients in the
context of changing economic or competitive conditions;
- the combined company's success in attracting, training and retaining
qualified management personnel and other staff employees;
- the risk that cost- cutting or restructuring activities could cause
an adverse impact on certain of the combined company's operations;
- economic declines that affect the liquidity of the combined company
or its ability to comply with its loan covenants; and
- adverse changes in credit and capital market conditions that may
affect the combined company's ability to obtain financing or
refinancing, including the refinancing contemplated in connection
with the merger and sale transactions, on favorable terms or at all.
Additional economic, business, competitive and/or regulatory factors affecting
Venturi's businesses generally that may cause actual results of the combined
company to differ materially are discussed in Venturi's filings with the SEC,
including without limitation its Annual Report on Form 10-K for the year ended
December 28, 2003 and Quarterly Report on Form 10-Q for the
quarter ended March 28, 2004, especially in the Management's Discussion and
Analysis sections of such reports.
Because long-term contracts are not a significant part of Venturi's or COMSYS'
business, future results cannot be reliably predicted by considering past trends
or extrapolating past results. Venturi and COMSYS undertake no obligation to
update information contained in this release and are not responsible for any
changes made to this release by wire or Internet services.
Venturi intends to file with the Securities and Exchange Commission a proxy
statement and other relevant documents in connection with the proposed
transactions. STOCKHOLDERS OF VENTURI ARE URGED TO READ THE PROXY STATEMENT AND
OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT VENTURI, COMSYS AND THE PROPOSED TRANSACTIONS.
Stockholders may obtain a free copy of these materials (when they are available)
and other documents filed with the SEC at the SEC's website at xxx.xxx.xxx. A
free copy of the proxy statement, when it becomes available, also may be
obtained from Venturi by writing to the following address: Five XxxxXxxxxx
Xxxxx, 0x Xxxxx, 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxx, XX 00000. Venturi
stockholders also may access free copies of the documents filed with the SEC by
Venturi on Venturi's website at xxx.xxxxxxxxxxxxxxx.xxx or upon written request
to Venturi at its address listed above.
Venturi and its directors, executive officers and certain other members of
management and employees may be soliciting proxies from stockholders in favor of
the proposed transactions. Information regarding the persons who may, under the
rules of the SEC, be considered to be participants in the solicitation of
Venturi stockholders in connection with the proposed merger is set forth in Part
III of Venturi's Amendment No. 1 on Form 10-K/A to its Annual Report on Form
10-K for the year ended December 28, 2003 filed with the SEC on April 26, 2004.
Additional information about these persons is contained in the Current Report on
Form 8-K to be filed by Venturi with the SEC on July 20, 2004. Additional
information regarding these individuals and any interest they have in the
proposed transaction will be set forth in the proxy statement when it is filed
with the SEC.
EXHIBIT K
Form of Amended and Restated Certificate of Incorporation of the Company
[ATTACHED]
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VENTURI PARTNERS, INC.
Venturi Partners, Inc. (the "CORPORATION"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (the "GCL"),
does hereby certify as follows:
1. The name of the Corporation is Venturi Partners, Inc. and the
Corporation was originally incorporated under the name Personnel Group of
America, Inc.
2. The original certificate of incorporation of the Corporation was filed
with the Secretary of State of the State of Delaware on July 7, 1995, a restated
certificate of incorporation of the Corporation was filed with the Secretary of
State of the State of Delaware on July 28, 1995, a second restated certificate
of incorporation of the Corporation was filed with the Secretary of State of the
State of Delaware on August 24, 1995, and a third restated certificate of
incorporation of the Corporation was filed with the Secretary of State of the
State of Delaware on August 1, 2003, which certificate was corrected by a
certificate of correction filed with the Secretary of State of the State of
Delaware on July 9, 2004 (as so corrected, the "THIRD RESTATED CERTIFICATE OF
INCORPORATION").
3. This Amended and Restated Certificate of Incorporation was duly
approved by the Board of Directors of the Corporation (the "BOARD OF DIRECTORS")
and adopted by the stockholders of the Corporation in accordance with Sections
242 and 245 of the GCL.
4. Pursuant to Section 103(d) of the GCL, this Amended and Restated
Certificate of Incorporation (this "CERTIFICATE") shall become effective at ____
a.m. (Eastern Time) on ____________, 2004 (the "EFFECTIVE TIME").
5. This Certificate restates, integrates and further amends the Third
Restated Certificate of Incorporation to read in its entirety as follows:
First. The name of the corporation is [____________] (the "CORPORATION").
Second. The address of the Corporation's registered office in the State of
Delaware is The Corporation Trust Company, The Corporation Trust Center, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
Third. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the GCL.
Fourth.
(a) Authorized Capital Stock. The total number of shares of all
classes of stock which the Corporation shall have authority to issue is [one
hundred million (100,000,000)], of which [ninety-five million (95,000,000)]
shares, par value $0.01 per share, shall be designated as "COMMON STOCK" and
[five million (5,000,000)] shares, par value $0.01 per share, shall be
designated as "PREFERRED STOCK". Subject to the terms of any serial designations
for any series of Preferred Stock, the number of authorized shares of Common
Stock or any series of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the outstanding shares entitled to vote, voting
together as a single class, irrespective of the provisions of Section 242(b)(2)
of the GCL or any corresponding provision hereafter enacted.
(b) Common Stock.
(i) The holders of shares of Common Stock shall be entitled to
one vote for each such share on each matter properly submitted to the
stockholders on which the holders of shares of Common Stock are entitled to
vote. Except as otherwise required by law or this Certificate (including any
Preferred Stock Designation, as defined below) at any annual or special meeting
of the stockholders, holders of shares of Common Stock shall have the exclusive
right to vote for the election of directors and on all other matters properly
submitted to a vote of the stockholders. Notwithstanding the foregoing, except
as otherwise required by law or this Certificate (including a Preferred Stock
Designation), holders of shares of Common Stock shall not be entitled to vote on
any amendment to this Certificate (including any amendment to any Preferred
Stock Designation) that relates solely to the terms of one or more outstanding
series of Preferred Stock if the holders of such affected series are entitled,
either separately or together with the holders of one or more other such series,
to vote thereon pursuant to this Certificate (including any Preferred Stock
Designation).
(ii) No Cumulative Voting. The holders of shares of Common
Stock shall not have cumulative voting rights.
(iii) Dividends. Subject to the rights of the holders of
Preferred Stock, and subject to any other provisions of this Certificate, as it
may be amended from time to time, holders of shares of Common Stock shall be
entitled to receive such dividends and other distributions in cash, stock or
property of the Corporation when, as and if declared thereon by the Board of
Directors of the Corporation (the "BOARD OF DIRECTORS") from time to time out of
assets or funds of the Corporation legally available therefor.
(iv) Liquidation, Dissolution, Etc. In the event of any
liquidation, dissolution or winding up (either voluntary or involuntary) of the
Corporation, after payment or provision for payment of the debts and other
liabilities of the Corporation and subject to the rights of the holders of
Preferred Stock in respect thereof, the holders of shares of Common Stock shall
be entitled to receive the remaining assets of the Corporation available for
distribution to its stockholders, ratably in proportion to the number of shares
held by them.
2
(v) No Preemptive Or Subscription Rights. No holder of shares
of Common Stock shall be entitled to preemptive or subscription rights.
(c) Power To Sell And Purchase Shares. Subject to the requirements
of applicable law, the Corporation shall have the power to issue and sell all or
any part of any shares of any class of stock herein or hereafter authorized to
such persons, and for such consideration, as the Board of Directors shall from
time to time, in its discretion, determine, whether or not greater consideration
could be received upon the issue or sale of the same number of shares of another
class, and as otherwise permitted by law. Subject to the requirements of
applicable law, the Corporation shall have the power to purchase any shares of
any class of stock herein or hereafter authorized from such persons, and for
such consideration, as the Board of Directors shall from time to time, in its
discretion, determine, whether or not less consideration could be paid upon the
purchase of the same number of shares of another class, and as otherwise
permitted by law.
(d) Preferred Stock. Of the authorized Preferred Stock, _____ shares
are designated Series A-1 Preferred Stock (the "SERIES A-1 PREFERRED STOCK").
The rights, preferences and powers, and the qualifications, limitations and
restrictions thereon, granted to and imposed on the Series A-1 Preferred Stock
are set forth in Exhibit A to this Certificate. Except for the Series A-1
Preferred Stock, shares of Preferred Stock may be issued in one or more series
from time to time by the Board of Directors, and the Board of Directors is
expressly authorized to fix for each series such voting powers, full or limited,
or no voting powers and such designations, preferences and relative,
participating, optional or other special rights and such qualifications,
limitations and restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the
issuance of such series and included in a certificate of designations
("PREFERRED STOCK DESIGNATION") filed pursuant to the GCL, in each case subject
to the terms of this Certificate including without limitation the following:
(i) the distinctive serial designation of such series which
shall distinguish from other series;
(ii) the number of shares included in such series;
(iii) the dividend rate (or method of determining such rate)
payable to the holders of the shares of such series, any conditions upon which
such dividends shall be paid and the date or dates upon which such dividends
shall be payable;
(iv) whether dividends on the shares of such series shall be
cumulative and, in the case of shares of any series having cumulative dividend
rights, the date or dates or method of determining the date or dates from which
dividends on the shares of such series shall be cumulative;
(v) the amount or amounts which shall be payable out of the
assets of the Corporation to the holders of the shares of such series upon
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment of the
shares of such series;
3
(vi) the price or prices at which, the period or periods
within which and the terms and conditions upon which the shares of such series
may be redeemed, in whole or in part, at the option of the Corporation or at the
option of the holder or holders thereof or upon the happening of a specified
event or events;
(vii) the obligation, if any, of the Corporation to purchase
or redeem shares of such series pursuant to a sinking fund or otherwise and the
price or prices at which, the period or periods within which and the terms and
conditions upon which the shares of such series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(viii) whether or not the shares of such series shall be
convertible or exchangeable, at any time or times at the option of the holder or
holders thereof or at the option of the Corporation or upon the happening of a
specified event or events, into shares of any other class or classes or any
other series of the same or any other class or classes of stock of the
Corporation, and the price or prices or rate or rates of exchange or conversion
and any adjustments applicable thereto; and
(ix) whether or not the holders of the shares of such series
shall have voting rights, in addition to the voting rights provided by law, and
if so the terms of such voting rights.
Fifth. The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(a) Board of Directors. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors. Election
of directors need not be by written ballot unless the By-Laws of the Corporation
(the "BY-LAWS") so provide.
(b) Number of Directors. The number of directors constituting the
Board of Directors shall not be less than nine (9) nor more than thirteen (13),
the exact number of which shall be fixed from time to time exclusively by the
Board of Directors pursuant to a resolution adopted by a majority of the Whole
Board. Effective immediately after the Effective Time, the Board of Directors
shall consist of nine (9) directors, which directors shall be the four (4) Group
A Directors and the five (5) Group B Directors specified below:
Group A Directors Group B Directors
_________________ _________________
_________________ _________________
_________________ _________________
_________________ _________________
_________________
"WHOLE BOARD" means the number of directors the Corporation would have if there
were no vacancies.
4
(c) Nomination of Directors. During the period commencing
immediately after the Effective Time and ending on the third anniversary of the
Effective Time (the "SPECIAL VOTING PERIOD"), prior to each annual meeting of
stockholders and subject to the nomination and qualification requirements of
Section 3.2 of the By-Laws, the Corporation's nominees for directors to be
elected at such meeting (other than nominees selected pursuant to the Voting
Agreement dated as of ___________, 2004, by and among the Corporation and the
stockholders of the Company named therein, as the same may be amended from time
to time (the "VOTING AGREEMENT")), shall be selected as set forth in Section
3.2(b) of the Bylaws.
(d) Vacancies and Newly Created Directorships. During the Special
Voting Period, newly created directorships resulting from an increase in the
number of directors and any vacancies on the Board of Directors resulting from
death, resignation, retirement, disqualification, removal or other cause shall
be filled solely as provided in Section 3.2 of the By-Laws and not by the
stockholders.
(e) Preferred Stock: Directors. Notwithstanding any other provision
of this Article Fifth, and except as otherwise required by law, whenever the
holders of one or more series of Preferred Stock shall have the right, voting
separately by class or series, to elect one or more directors, the term of
office, the filling of vacancies, the removal from office and other features of
such directorships shall be governed by the terms of such series of Preferred
Stock as set forth in this Certificate (including any Preferred Stock
Designation).
(f) Powers. In addition to the powers and authority hereinbefore or
by statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the provisions of the GCL,
this Certificate, and any By-Laws adopted by the stockholders; provided,
however, that no By-Laws hereafter adopted by the stockholders shall invalidate
any prior act of the directors which would have been valid if such By-Laws had
not been adopted.
Sixth. No director shall be personally liable to the Corporation or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the GCL as the same exists or may hereafter be
amended. If the GCL is amended hereafter to authorize corporate action further
eliminating or limiting the liability of directors, then the liability of a
director of the Corporation to the Corporation or its stockholders shall be
eliminated or limited to the fullest extent authorized by the GCL, as so
amended. Any repeal or amendment of this Article Sixth by the stockholders of
the Corporation or by changes in law, or the adoption of any other provision of
this Certificate inconsistent with this Article Sixth, will, unless otherwise
required by law, be prospective only (except to the extent such amendment or
change in law permits the Corporation to further limit or eliminate the
liability of directors on a retroactive basis than permitted prior thereto) and
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal, amendment or adoption of such
inconsistent provision with respect to acts or omissions occurring prior to such
repeal, amendment or adoption of such inconsistent provision.
5
Seventh.
(a) Each person who is or was made a party or is threatened to be
made a party to or is otherwise involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "PROCEEDING") by reason of the fact that he or she
is or was a director or officer of the Corporation or, while a director or
officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (hereinafter a "COVERED PERSON"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent, or in any other capacity while serving as
a director, officer, employee or agent, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized or permitted by applicable
law, as the same exists or may hereafter be amended, against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes and penalties and amounts paid in settlement)
reasonably incurred or suffered by such Covered Person in connection with such
proceeding, and such right to indemnification shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that, except for proceedings to enforce rights to indemnification, the
Corporation shall indemnify a Covered Person in connection with a proceeding (or
part thereof) initiated by such Covered Person only if such proceeding (or part
thereof) was authorized by the Board. The right to indemnification conferred by
this Article Seventh shall be a contract right and shall include the right to be
paid by the Corporation the expenses incurred in defending or otherwise
participating in any such proceeding in advance of its final disposition;
provided, however, that if the GCL requires, an advancement of expenses incurred
by a Covered Person in his or her capacity as an officer or director of the
Corporation (and not in any other capacity in which service was or is rendered
by such Covered Person, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Covered Person, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such Covered Person is not
entitled to be indemnified for such expenses under this Article Seventh or
otherwise.
(b) The rights conferred on any Covered Person by this Article
Seventh shall not be exclusive of any other rights which any Covered Person may
have or hereafter acquire under law, this Certificate, the By-Laws, an
agreement, vote of stockholders or disinterested directors, or otherwise.
(c) Any repeal or amendment of this Article Seventh by the
stockholders of the Corporation or by changes in law, or the adoption of any
other provision of this Certificate inconsistent with this Article Seventh,
will, unless otherwise required by law, be prospective only (except to the
extent such amendment or change in law permits the Corporation to provide
broader indemnification rights on a retroactive basis than permitted prior
thereto), and will not in any way diminish or adversely affect any right or
protection existing at the time of such repeal or amendment or adoption of such
inconsistent provision in respect of any act or omission occurring prior to such
repeal or amendment or adoption of such inconsistent provision.
6
(d) This Article Seventh shall not limit the right of the
Corporation, to the extent and in the manner authorized or permitted by law, to
indemnify and to advance expenses to persons other than Covered Persons.
Eighth. Meetings of stockholders may be held within or without the State
of Delaware, as the By-Laws may provide. The books of the Corporation may be
kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws.
Ninth. In furtherance and not in limitation of the powers conferred upon
it by the laws of the State of Delaware, the Board of Directors shall have
concurrent power with the stockholders to adopt, amend, alter, add to or repeal
the By-Laws. Except as set forth in Article Twelfth hereof, the affirmative vote
of a majority of the Whole Board shall be required for the Board to adopt,
amend, alter, add to or repeal the By-Laws.
Tenth. The Corporation hereby elects not to be governed by Section 203 of
the GCL pursuant to Section 203(b)(3) therein.
Eleventh. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate and any other provisions
authorized by the laws of the State of Delaware in force at the time may be
added or inserted, in the manner now or hereafter prescribed in this
Certificate, the By-Laws or the GCL, and, except as set forth in Article
Seventh, all rights, preferences and privileges herein conferred upon
stockholders, directors or any other persons by or pursuant to this Certificate
are granted subject to such reservation.
Twelfth. During the Special Voting Period, in addition to any other vote
or determination required by applicable law, this Certificate or the By-Laws:
(a) Any Related Party Transaction between the Corporation and a
Significant Stockholder shall require the approval of the Board of Directors by
a vote of at least 75% of the Whole Board prior to the consummation of such
Related Party Transaction; and
(b) The following matters shall require either (i) the approval of
the Board of Directors by vote of at least 75% of the Whole Board and approval
by the holders of a majority of the then issued and outstanding Common Stock
entitled to vote thereon, or (ii) the approval of the Board of Directors by vote
of a majority of directors at a meeting of the Board of Directors at which a
quorum is present and approval by the holders of at least 66-2/3 % of the then
issued and outstanding shares of Common Stock entitled to vote thereon:
(i) a merger or consolidation involving the Corporation for
which approval of the Corporation's stockholders is required under the
GCL;
(ii) a sale, lease or exchange of all or substantially all of
the Corporation's property and assets;
(iii) the liquidation or dissolution of the Corporation;
7
(iv) any amendment to this Certificate (other than any
amendment that relates solely to the terms of one or more outstanding
series of Preferred Stock if the holders of such affected series are
entitled, either separately or together with the holders of one or more
other such series, to vote thereon pursuant to this Certificate (including
any Preferred Stock Designation)); and
(v) any amendment of Section 3.2 of the By-Laws.
Thirteenth. The following definitions shall apply with respect to this
Certificate:
(a) "RELATED PARTY TRANSACTION" shall mean any transaction required
to be disclosed by the Corporation pursuant to Item 404(a) of Regulation S-K,
but excluding any transaction or agreement in effect as of the Effective Time.
(b) The term "CAPITAL STOCK" shall mean all capital stock of the
Corporation authorized to be issued from time to time under Article Fourth of
this Certificate of Incorporation; and the term "VOTING STOCK" shall mean the
Common Stock and any other Capital Stock which by its terms may be voted on all
matters submitted to stockholders of the Corporation generally.
(c) The term "SIGNIFICANT HOLDER" shall mean any person (other than
the Corporation or any Subsidiary and other than any profit-sharing, employee
stock ownership or other employee benefit plan of the Corporation or any
Subsidiary or any trustee of or fiduciaries with respect to any such plan when
acting in such capacity) who is the Beneficial Owner of Voting Stock
representing thirty percent (30%) or more of the votes entitled to be cast by
the holders of all then outstanding shares of Voting Stock;
(d) A person shall be a "BENEFICIAL OWNER" of any Capital Stock (A)
which such person or any of its Controlled or Controlling Affiliates owns,
directly or indirectly; (B) which such person or any of its Controlled or
Controlling Affiliates has, directly or indirectly, (1) the right to acquire
(whether such right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding (other than
customary arrangements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) or upon the exercise
of conversion rights, exchange rights, warrants or options or otherwise, or (2)
the right to vote pursuant to any agreement, arrangement or understanding; or
(C) which are owned, directly or indirectly, by any other person with which such
person or any of its Controlled or Controlling Affiliates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Capital Stock. Notwithstanding anything in this
definition of Beneficial Ownership to the contrary (i) a person shall not be
deemed to be the beneficial owner of shares that such person has the right to
acquire upon the exercise of those certain rights or options set forth in that
certain Option Agreement dated as of July __, 2004 by and among Wachovia
Investors, Inc. and the option holders party thereto unless and until such
rights or options are exercised by such person, and (ii) a person shall not be
deemed to be the beneficial owner of any other person's shares solely by virtue
of being a party to the Voting Agreement.
8
(e) The term "CONTROLLED" or "CONTROLLING AFFILIATE" shall mean with
respect to a specified person, a person that directly or indirectly through one
or more intermediaries, controls or is controlled by, or is under common control
with, the person specified; provided that the Corporation and its Subsidiaries
shall not, and the executive officers or directors of the Corporation or any of
its Subsidiaries shall not, solely as a result of holding such office, be deemed
a "CONTROLLED OR CONTROLLING AFFILIATE" of a Significant Holder; and provided,
further, that for purposes of this definition, the term "control" (including the
terms "controlling," "controlled by" and "under common control with") shall mean
the possession direct or indirect, of the power to direct or cause the direction
of the management and policies of a person through the ownership of more than
fifty percent (50%) of the voting securities of such person or the ability to
otherwise designate a majority of the board of directors or managers of such
person.
(f) The term "SUBSIDIARY" means any company or other entity of which
a majority of any class of equity security is beneficially owned by the
Corporation.
9
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly
executed in its name and on its behalf by _______________, its _______________,
this ____ day of _______________, 2004.
VENTURI PARTNERS, INC.
By: _______________________________
Name:
Title:
EXHIBIT L
Form of Amended and Restated Bylaws of the Company
[ATTACHED]
AMENDED AND RESTATED
BY-LAWS
OF
VENTURI PARTNERS, INC.,
a Delaware corporation
(the "CORPORATION")
(Adopted as of__________, 2004)
AMENDED AND RESTATED
BY-LAWS
OF
VENTURI PARTNERS, INC.
ARTICLE I
OFFICES
SECTION 1.1 REGISTERED OFFICE. The registered office of the
Corporation within the State of Delaware shall be located at either (a) the
principal place of business of the Corporation in the State of Delaware or (b)
the office of the corporation or individual acting as the Corporation's
registered agent in Delaware.
SECTION 1.2 ADDITIONAL OFFICES. The Corporation may, in addition to
its registered office in the State of Delaware, have such other offices and
places of business, both within and outside the State of Delaware, as the Board
of Directors of the Corporation (the "BOARD") may from time to time determine or
as the business and affairs of the Corporation may require.
ARTICLE II
STOCKHOLDERS MEETINGS
SECTION 2.1 ANNUAL MEETINGS. The annual meeting of stockholders
shall be held at such place and time and on such date as shall be determined by
the Board and stated in the notice of the meeting, provided that the Board may
in its sole discretion determine that the meeting shall not be held at any
place, but may instead be held solely by means of remote communication pursuant
to Section 9.5(a). At each annual meeting, the stockholders shall elect
directors of the Corporation and may transact any other business as may properly
be brought before the meeting.
SECTION 2.2 SPECIAL MEETINGS. Except as otherwise required by
applicable law or provided in the Corporation's Amended and Restated Certificate
of Incorporation, as the same may be amended or restated from time to time (the
"CERTIFICATE OF INCORPORATION"), special meetings of stockholders, for any
purpose or purposes, may be called only by (a) the Chairman of the Board, (b)
the Chief Executive Officer, (c) the Board pursuant to a resolution adopted by a
majority of the Whole Board (as defined below) or (d) the Secretary at the
request in writing of stockholders holding shares representing a majority of the
voting power of the outstanding shares entitled to vote on the matter for which
such meeting is to be called. The Secretary shall call such a meeting upon
receiving such a request. Special meetings of stockholders shall be held at such
place and time and on such date as shall be determined by the Board and stated
in the Corporation's notice of the meeting, provided that the Board may in its
sole discretion determine that the meeting shall not be held at any place, but
may instead be held solely by means of
remote communication pursuant to Section 9.5(a). "WHOLE BOARD" shall mean the
total number of directors the Corporation would have if there were no vacancies.
SECTION 2.3 NOTICES. Notice of each stockholders meeting stating the
place, if any, date, and time of the meeting, and the means of remote
communication, if any, by which stockholders and proxyholders may be deemed to
be present in person and vote at such meeting, shall be given in the manner
permitted by Section 9.3 to each stockholder entitled to vote thereat by the
Corporation not less than 10 nor more than 60 days before the date of the
meeting. If said notice is for a stockholders meeting other than an annual
meeting, it shall in addition state the purpose or purposes for which the
meeting is called, and the business transacted at such meeting shall be limited
to the matters so stated in the Corporation's notice of meeting (or any
supplement thereto). Any meeting of stockholders as to which notice has been
given may be postponed, and any special meeting of stockholders as to which
notice has been given may be cancelled, by the Board upon public announcement
(as defined in Section 2.7(c)) given before the date previously scheduled for
such meeting.
SECTION 2.4 QUORUM. Except as otherwise provided by applicable law,
the Certificate of Incorporation or these By-Laws, the presence, in person or by
proxy, at a stockholders meeting of the holders of shares of outstanding capital
stock of the Corporation representing a majority of the voting power of all
outstanding shares of capital stock of the Corporation entitled to vote at such
meeting shall constitute a quorum for the transaction of business at such
meeting, except that when specified business is to be voted on by a class or
series of stock voting as a class, the holders of shares representing a majority
of the voting power of the outstanding shares of such class or series shall
constitute a quorum of such class or series for the transaction of such
business. If a quorum shall not be present or represented by proxy at any
meeting of the stockholders, the chairman of the meeting may adjourn the meeting
from time to time in the manner provided in Section 2.6 until a quorum shall
attend. The stockholders present at a duly convened meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Shares of its own stock belonging to
the Corporation or to another corporation, if a majority of the voting power of
the shares entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the Corporation, shall neither
be entitled to vote nor be counted for quorum purposes; provided, however, that
the foregoing shall not limit the right of the Corporation or any such other
corporation to vote shares held by it in a fiduciary capacity.
SECTION 2.5 VOTING OF SHARES.
(a) Voting Lists. The Secretary shall prepare, or shall cause the
officer or agent who has charge of the stock ledger of the Corporation to
prepare, at least 10 days before every meeting of stockholders, a complete list
of the stockholders of record entitled to vote thereat arranged in alphabetical
order and showing the address and the number of shares registered in the name of
each stockholder. Nothing contained in this Section 2.5(a) shall require the
Corporation to include electronic mail addresses or other electronic contact
information on such list. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least 10 days prior to the meeting: (i) on a reasonably
accessible electronic network, provided that the information required to gain
access to such list is provided with the notice of the meeting, or (ii) during
ordinary business hours, at the principal place of business of the Corporation.
In the event that
2
the Corporation determines to make the list available on an electronic network,
the Corporation may take reasonable steps to ensure that such information is
available only to stockholders of the Corporation. If the meeting is to be held
at a place, then the list shall be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present. If a meeting of stockholders is to be held solely by
means of remote communication as permitted by Section 9.5(a), the list shall be
open to the examination of any stockholder during the whole time of the meeting
on a reasonably accessible electronic network, and the information required to
access such list shall be provided with the notice of meeting. The stock ledger
shall be the only evidence as to who are the stockholders entitled to examine
the list required by this Section 2.5(a) or to vote in person or by proxy at any
meeting of stockholders.
(b) Manner of Voting. At any stockholders meeting, every stockholder
entitled to vote may vote in person or by proxy. If authorized by the Board, the
voting by stockholders or proxyholders at any meeting conducted by remote
communication may be effected by a ballot submitted by electronic transmission
(as defined in Section 9.3), provided that any such electronic transmission must
either set forth or be submitted with information from which the Corporation can
determine that the electronic transmission was authorized by the stockholder or
proxyholder. The Board, in its discretion, or the chairman of the meeting of
stockholders, in such person's discretion, may require that any votes cast at
such meeting shall be cast by written ballot.
(c) Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for such
stockholder by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. Proxies need
not be filed with the Secretary of the Corporation until the meeting is called
to order, but shall be filed with the Secretary before being voted. Without
limiting the manner in which a stockholder may authorize another person or
persons to act for such stockholder as proxy, either of the following shall
constitute a valid means by which a stockholder may grant such authority.
(i) A stockholder may execute a writing authorizing another
person or persons to act for such stockholder as proxy. Execution may be
accomplished by the stockholder or such stockholder's authorized officer,
director, employee or agent signing such writing or causing such person's
signature to be affixed to such writing by any reasonable means,
including, but not limited to, by facsimile signature.
(ii) A stockholder may authorize another person or persons to
act for such stockholder as proxy by transmitting or authorizing the
transmission of an electronic transmission to the person who will be the
holder of the proxy or to a proxy solicitation firm, proxy support service
organization or like agent duly authorized by the person who will be the
holder of the proxy to receive such transmission, provided that any such
electronic transmission must either set forth or be submitted with
information from which it can be determined that the electronic
transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission authorizing another person or persons to act as proxy
for a stockholder may be
3
substituted or used in lieu of the original writing or transmission for any and
all purposes for which the original writing or transmission could be used;
provided that such copy, facsimile telecommunication or other reproduction shall
be a complete reproduction of the entire original writing or transmission.
(d) Required Vote. Subject to the rights of the holders of one or
more series of preferred stock of the Corporation ("PREFERRED STOCK"), voting
separately by class or series, to elect directors pursuant to the terms of one
or more series of Preferred Stock, the election of directors shall be determined
by a plurality of the votes cast by the stockholders present in person or
represented by proxy at the meeting and entitled to vote thereon. All other
matters shall be determined by the vote of a majority of the votes cast by the
stockholders present in person or represented by proxy at the meeting and
entitled to vote thereon, unless the matter is one upon which, by applicable
law, the Certificate of Incorporation, these By-Laws or applicable stock
exchange rules, a different vote is required, in which case such provision shall
govern and control the decision of such matter.
(e) Inspectors of Election. The Board may appoint one or more
persons as inspectors of election, who may be employees of the Corporation or
otherwise serve the Corporation in other capacities, to act at any meeting of
stockholders or any adjournment thereof and to make a written report thereof.
The Board may appoint one or more persons as alternate inspectors to replace any
inspector who fails to act. If no inspectors of election or alternates are
appointed by the Board, the chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before discharging his or her
duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspectors shall ascertain and report the number of outstanding
shares and the voting power of each; determine the number of shares present in
person or represented by proxy at the meeting and the validity of proxies and
ballots; count all votes and ballots and report the results; determine and
retain for a reasonable period a record of the disposition of any challenges
made to any determination by the inspectors; and certify their determination of
the number of shares represented at the meeting and their count of all votes and
ballots. No person who is a candidate for an office at an election may serve as
an inspector at such election. Each report of an inspector shall be in writing
and signed by the inspector or by a majority of them if there is more than one
inspector acting at such meeting. If there is more than one inspector, the
report of a majority shall be the report of the inspectors.
SECTION 2.6 ADJOURNMENTS. Any meeting of stockholders, annual or
special, may be adjourned by the chairman of the meeting, from time to time,
whether or not there is a quorum, to reconvene at the same or some other place.
Notice need not be given of any such adjourned meeting if the date, time, place,
if any, thereof, and the means of remote communication, if any, by which
stockholders and proxyholders may be deemed to be present in person and vote at
such adjourned meeting are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the stockholders, or the holders of any class or
series of stock entitled to vote separately as a class, as the case may be, may
transact any business which might have been transacted at the original meeting.
If the adjournment is for more than 30 days, or if after the adjournment a new
record date is fixed for the adjourned meeting, notice of the adjourned meeting
shall be given to each stockholder of record entitled to vote at the meeting.
4
SECTION 2.7 ADVANCE NOTICE FOR BUSINESS.
(a) Annual Meetings of Stockholders. No business may be transacted
at an annual meeting of stockholders, other than business that is either (i)
specified in the Corporation's notice of meeting (or any supplement thereto)
given by or at the direction of the Board, (ii) otherwise properly brought
before the annual meeting by or at the direction of the Board or (iii) otherwise
properly brought before the annual meeting by any stockholder of the Corporation
(x) who is a stockholder of record on the date of the giving of the notice
provided for in this Section 2.7(a) and on the record date for the determination
of stockholders entitled to vote at such annual meeting and (y) who complies
with the notice procedures set forth in this Section 2.7(a). Notwithstanding
anything in this Section 2.7(a) to the contrary, only persons nominated for
election as a director at an annual meeting pursuant to Section 3.2 will be
considered for election at such meeting.
(i) In addition to any other applicable requirements, for
business (other than nominations) to be properly brought before an annual
meeting by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the Corporation and
such business must otherwise be a proper matter for stockholder action.
Subject to Section 2.7(a)(iii), a stockholder's notice to the Secretary
with respect to such business, to be timely, must be received by the
Secretary at the principal executive offices of the Corporation not later
than the close of business on the 90th day nor earlier than the opening of
business on the 120th day before the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within 45
days before or after such anniversary date, notice by the stockholder to
be timely must be so received not earlier than the opening of business on
the 120th day before the meeting and not later than the later of (x) the
close of business on the 90th day before the meeting or (y) the close of
business on the 10th day following the day on which public announcement of
the date of the annual meeting is first made by the Corporation. In no
event shall the public announcement of an adjournment of an annual meeting
commence a new time period for the giving of a stockholder's notice as
described in this Section 2.7(a).
(ii) To be in proper written form, a stockholder's notice to
the Secretary with respect to any business (other than nominations) must
set forth as to each such matter such stockholder proposes to bring before
the annual meeting (A) a brief description of the business desired to be
brought before the annual meeting, the text of the proposal or business
(including the text of any resolutions proposed for consideration and in
the event such business includes a proposal to amend these By-Laws, the
language of the proposed amendment) and the reasons for conducting such
business at the annual meeting, (B) the name and record address of such
stockholder and the name and address of the beneficial owner, if any, on
whose behalf the proposal is made, (C) the class or series and number of
shares of capital stock of the Corporation that are owned beneficially and
of record by such stockholder and by the beneficial owner, if any, on
whose behalf the proposal is made, (D) a description of all arrangements
or understandings between such stockholder and the beneficial owner, if
any, on whose behalf the proposal is made and any other person or persons
(including their names) in connection with the proposal of such business
by such stockholder, (E) any material
5
interest of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made in such business, and (F) a representation
that such stockholder intends to appear in person or by proxy at the
annual meeting to bring such business before the meeting.
(iii) The foregoing notice requirements of this Section 2.7(a)
shall be deemed satisfied by a stockholder as to any proposal (other than
nominations) if the stockholder has notified the Corporation of such
stockholder's intention to present such proposal at an annual meeting in
compliance with Rule 14a-8 (or any successor thereof) of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and such
stockholder has complied with the requirements of such Rule for inclusion
of such proposal in a proxy statement prepared by the Corporation to
solicit proxies for such annual meeting. No business shall be conducted at
the annual meeting of stockholders except business brought before the
annual meeting in accordance with the procedures set forth in this Section
2.7(a), provided, however, that once business has been properly brought
before the annual meeting in accordance with such procedures, nothing in
this Section 2.7(a) shall be deemed to preclude discussion by any
stockholder of any such business. If the Board or the chairman of the
annual meeting determines that any stockholder proposal was not made in
accordance with the provisions of this Section 2.7(a) or that the
information provided in a stockholder's notice does not satisfy the
information requirements of this Section 2.7(a), such proposal shall not
be presented for action at the annual meeting. Notwithstanding the
foregoing provisions of this Section 2.7(a), if the stockholder (or a
qualified representative of the stockholder) does not appear at the annual
meeting of stockholders of the Corporation to present the proposed
business, such proposed business shall not be transacted, notwithstanding
that proxies in respect of such matter may have been received by the
Corporation.
(iv) In addition to the provisions of this Section 2.7(a), a
stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth herein. Nothing in this Section 2.7(a) shall be deemed
to affect any rights of stockholders to request inclusion of proposals in
the Corporation's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board may be made at a special meeting of
stockholders at which directors are to be elected pursuant to the Corporation's
notice of meeting only pursuant to Section 3.2.
(c) Public Announcement. For purposes of these By-Laws, "PUBLIC
ANNOUNCEMENT" shall mean disclosure in a press release reported by the Dow Xxxxx
News Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
SECTION 2.8 CONDUCT OF MEETINGS. The chairman of each annual and
special meeting of stockholders shall be the Chairman of the Board or, in the
absence (or
6
inability or refusal to act) of the Chairman of the Board, the Chief Executive
Officer (if he or she shall be a director) or, in the absence (or inability or
refusal to act) of the Chief Executive Officer or if the Chief Executive Officer
is not a director, the President (if he or she shall be a director) or, in the
absence (or inability or refusal to act) of the President or if the President is
not a director, such other person as shall be appointed by the Board. The date
and time of the opening and the closing of the polls for each matter upon which
the stockholders will vote at a meeting shall be announced at the meeting by the
chairman of the meeting. The Board may adopt such rules and regulations for the
conduct of the meeting of stockholders as it shall deem appropriate. Except to
the extent inconsistent with these By-Laws or such rules and regulations as
adopted by the Board, the chairman of any meeting of stockholders shall have the
right and authority to convene and to adjourn the meeting, to prescribe such
rules, regulations and procedures and to do all such acts as, in the judgment of
such chairman, are appropriate for the proper conduct of the meeting. Such
rules, regulations or procedures, whether adopted by the Board or prescribed by
the chairman of the meeting, may include, without limitation, the following: (a)
the establishment of an agenda or order of business for the meeting; (b) rules
and procedures for maintaining order at the meeting and the safety of those
present; (c) limitations on attendance at or participation in the meeting to
stockholders of record of the Corporation, their duly authorized and constituted
proxies or such other persons as the chairman of the meeting shall determine;
(d) restrictions on entry to the meeting after the time fixed for the
commencement thereof; and (e) limitations on the time allotted to questions or
comments by participants. Unless and to the extent determined by the Board or
the chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with the rules of parliamentary procedure. The secretary
of each annual and special meeting of stockholders shall be the Secretary or, in
the absence (or inability or refusal to act) of the Secretary, an Assistant
Secretary so appointed to act by the chairman of the meeting. In the absence (or
inability or refusal to act) of the Secretary and all Assistant Secretaries, the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
SECTION 2.9 CONSENTS IN LIEU OF MEETING. Unless otherwise provided
in the Certificate of Incorporation, any action required or permitted to be
taken at any annual or special meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding capital stock of the Corporation having not less than the minimum
voting power that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the Corporation to its registered office in the State of
Delaware, the Corporation's principal place of business, or the Secretary of the
Corporation. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within 60 days of the date
the earliest dated consent is delivered to the Corporation, a written consent or
consents signed by a sufficient number of holders to take such action are
delivered to the Corporation by delivery to the Corporation's registered office
in the State of Delaware, the Corporation's principal place of business, or the
Secretary. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. An electronic
transmission consenting to the action to be taken and transmitted by a
stockholder, proxyholder or a person or persons authorized to act for a
stockholder or proxyholder shall be deemed to be written, signed and dated for
purposes hereof if such electronic transmission sets forth or is delivered with
information from which the Corporation can determine that such transmission was
transmitted by
7
a stockholder or proxyholder (or by a person authorized to act for a stockholder
or proxyholder) and the date on which such stockholder, proxyholder or
authorized person transmitted such transmission. The date on which such
electronic transmission is transmitted shall be deemed to be the date on which
such consent was signed. No consent given by electronic transmission shall be
deemed to have been delivered until such consent is reproduced in paper form and
delivered to the Corporation by delivery either to the Corporation's registered
office in the State of Delaware, the Corporation's principal place of business,
or the Secretary of the Corporation. Delivery made to the Corporation's
registered office shall be made by hand or by certified or registered mail,
return receipt requested. Notwithstanding the limitations on delivery in the
previous sentence, consents given by electronic transmission may be otherwise
delivered to the Corporation's principal place of business or to the Secretary
if, to the extent, and in the manner provided by resolution of the Board. Any
copy, facsimile or other reliable reproduction of a consent in writing may be
substituted or used in lieu of the original writing for any and all purposes for
which the original writing could be used; provided that such copy, facsimile or
other reproduction shall be a complete reproduction of the entire original
writing. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing and who, if the action had been taken at a
meeting, would have been entitled to notice of the meeting if the record date
for such meeting had been the date that written consents signed by a sufficient
number of holders were delivered to the Corporation as provided in this Section
2.9.
ARTICLE III
DIRECTORS
SECTION 3.1 POWERS. The business and affairs of the Corporation
shall be managed by or under the direction of the Board, which may exercise all
such powers of the Corporation and do all such lawful acts and things as are not
by statute or by the Certificate of Incorporation or by these By-Laws required
to be exercised or done by the stockholders. Directors need not be stockholders
or residents of the State of Delaware.
SECTION 3.2 ADVANCE NOTICE FOR NOMINATION OF DIRECTORS.
(a) Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the Corporation,
except as may be otherwise provided by (x) the terms of one or more series of
Preferred Stock with respect to the rights of holders of one or more series of
Preferred Stock to elect directors or (y) the terms of any agreement between the
Corporation and another party or parties pursuant to which such party or parties
are given the contractual right to nominate persons for election as directors of
the Corporation (a "CONTRACTUAL NOMINATION RIGHT"). Nominations of persons for
election to the Board at any annual meeting of stockholders, or at any special
meeting of stockholders called for the purpose of electing directors as set
forth in the Corporation's notice of such special meeting, may be made (i) on
behalf of the Board, by the Nominating Committee of the Board in accordance with
this Section 3.2 and Article Fifth of the Certificate of Incorporation, (ii)
pursuant to a Contractual Nomination Right or (iii) by any stockholder of the
Corporation (x) who is a stockholder of record on the date of the giving of the
notice provided for in this Section 3.2 and on the record date for the
determination of stockholders entitled to vote at such meeting and (y) who
complies with the notice procedures set forth in this Section 3.2.
8
(b) Nominations by Nominating Committee.
(i) Definitions. The following definitions shall apply for
purposes of this Section 3.2:
"AUDIT COMMITTEE INDEPENDENT DIRECTOR" means a director
of the Corporation who (x) meets the definition of "independent
director" under Nasdaq rules, or if the Corporation's Common Stock
is not then traded on the Nasdaq National Market, the comparable
requirements of the principal securities exchange or market on which
the Corporation's Common Stock is then listed or approved for
trading, (y) meets the criteria under Nasdaq rule
4350(d)(2)(A)(i)-(iv) (or any successor rule) for service on the
Audit Committee of the Board or, if the Corporation's Common Stock
is not then traded on the Nasdaq National Market, the comparable
requirements of the principal securities exchange or market on which
the Corporation's Common Stock is listed or approved for trading,
and (z) is willing to serve on the Audit Committee if requested to
do so by the Board.
"AUDIT COMMITTEE FINANCIAL EXPERT" means a director of
the Corporation who meets the definition of "audit committee
financial expert" set forth in Item 401 of Regulation S-K (or any
successor rule or regulation).
"GROUP A DIRECTOR" means a director of the Corporation
who was specified as such in paragraph (b) of Article Fifth of the
Certificate of Incorporation or any director of the Corporation who
was recommended for nomination as a director of the Corporation by
the Group A Subcommittee or was selected by the Group A Subcommittee
to fill a vacancy or newly created directorship on the Board
pursuant to this Section 3.2(b).
"GROUP B DIRECTOR" means a director of the Corporation
who was specified as such in paragraph (b) of Article Fifth of the
Certificate of Incorporation, any director of the Corporation who
was designated as a nominee for director pursuant to the Voting
Agreement, any director of the Corporation who was recommended for
nomination as a director of the Corporation by the Group B
Subcommittee, or any director of the Corporation selected by the
Group B Subcommittee to fill a vacancy or newly created directorship
on the Board pursuant to this Section 3.2(b).
"INDEPENDENT GROUP A DIRECTOR" means any Group A
Director who meets the definition of "independent director" under
applicable rules and listing standards of the principal securities
exchange or market on which the Common Stock is listed or approved
for trading.
"INDEPENDENT GROUP B DIRECTOR" means any Group B
Director who meets the definition of "independent director" under
applicable rules and listing standards of the principal securities
exchange or market on which the Common Stock is listed or approved
for trading.
9
"SPECIAL VOTING PERIOD" means the period commencing
immediately after the Effective Time (as defined in the Certificate
of Incorporation) and ending on the third anniversary of the
Effective Time.
"VOTING AGREEMENT" means the Voting Agreement dated as
of ____________, 2004 by and among the Corporation and the
stockholders party thereto, as the same may be amended from time to
time.
(ii) Special Voting Period Provisions. The following
provisions shall apply during the Special Voting Period and in each case
to the extent permitted by applicable law and by applicable rules and
listing standards of the principal securities exchange or market on which
the Corporation's Common Stock is listed or approved for trading:
(A) Nominating Committee. The Nominating Committee of the
Board shall be composed of five members, (x) three of
whom shall be Independent Group B Directors if there are
three or more Independent Group B Directors on the
Board, two of whom shall be Independent B Directors if
there are only two Independent B Directors on the Board,
and one of whom shall be an Independent Group B Director
if there is only one Independent Group B Director on the
Board, and (y) two of whom shall be Independent Group A
Directors if there are two or more Independent Group A
Directors on the Board and one of whom shall be an
Independent Group A Director if there is only one
Independent Group A Director on the Board.
(B) Authority. The Nominating Committee shall have the
exclusive delegated authority of the Board to nominate,
on behalf of the Board, nominees for election as
directors, other than those nominees of the Board
designated pursuant to a Contractual Nomination Right.
(C) Nominations. Group A Directors. Prior to each annual
meeting of stockholders of the Corporation during the
Special Voting Period, a subcommittee of the Nominating
Committee comprised solely of the Independent Group A
Directors serving on the Nominating Committee (the
"GROUP A SUBCOMMITTEE") shall, subject to the procedures
and qualification requirements set forth in this Section
3.2(b), have the right to recommend to the Nominating
Committee nominees for directors to be elected by the
stockholders at such annual meeting as follows:
(x) if the size of the Whole Board is nine (9)
or ten (10), the Group A Subcommittee shall
have the right to recommend four (4)
nominees;
10
(y) if the size of the Whole Board is eleven
(11) or twelve (12), the Group A
Subcommittee shall have the right to
recommend five (5) nominees;
(z) if the size of the Whole Board is thirteen
(13), the Group A Subcommittee shall have
the right to recommend six (6) nominees.
Subject to their fiduciary duties, the Nominating
Committee shall recommend to the stockholders the
nominees recommended to the Nominating Committee by the
Group A Subcommittee. In the event the Group A
Subcommittee shall not recommend a nominee in accordance
with the procedures and qualification requirements of
this Section 3.2(b), (i) the Nominating Committee shall
proceed to select such nominee and (ii) such nominee
shall not be considered a Group A Director and shall not
be required to meet the qualification requirements of
paragraph (E) below.
Group B Directors. Prior to each annual meeting of
stockholders of the Corporation during the Special
Voting Period, a subcommittee of the Nominating
Committee comprised solely of the Independent Group B
Directors serving on the Nominating Committee (the
"GROUP B SUBCOMMITTEE") shall, subject to the procedures
and qualification requirements set forth in this Section
3.2(b), have the right to recommend to the Nominating
Committee nominees for directors which the Nominating
Committee, subject to its fiduciary duties, shall
recommend to the stockholders to be elected by the
stockholders at such annual meeting as follows:
Size of Whole Board Number of Nominees
------------------- ------------------
9 5
10 6
11 6
12 7
13 7
Notwithstanding the foregoing, the number of nominees
the Group B Subcommittee shall have the right to
recommend for election as directors at any particular
annual meeting shall be reduced by the number of
nominees who are designated as nominees for election at
such annual meeting pursuant to the Voting Agreement
(including Xxxx Xxxxxx).
(D) Vacancies and Newly Created Directorships. Group A
Directors. Subject to the procedures and qualification
requirements of this Section 3.2, the Group A
Subcommittee shall have the exclusive delegated
authority of the Board to fill any vacancy on the Board,
or any committee thereof, that was held immediately
prior to such
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vacancy by a Group A Director, and to fill any newly
created directorship for which the Group A Subcommittee
would have the right to recommend an additional nominee
pursuant to paragraph (C) above; provided, however, in
the event the Group A Subcommittee shall not fill any
such vacancy or newly created directorship pursuant to
the procedures and qualification requirements of this
Section 3.2(b), (i) the Nominating Committee shall then
have the exclusive delegated authority of the Board to
fill such vacancy or newly created directorship and (ii)
the person so chosen shall not be considered a Group A
Director and shall not be required to meet the
qualification requirements of paragraph (E) below.
Group B Directors. Subject to the procedures and
qualification requirements of this Section 3.2, the
Group B Subcommittee shall have the exclusive delegated
authority of the Board to fill any vacancy on the Board,
or any committee thereof, that was held immediately
prior to such vacancy by a Group B Director, and to fill
any newly created directorship for which the Group B
Subcommittee would have the right to recommend an
additional nominee pursuant to paragraph (C) above;
provided, however, in the event the Group B Subcommittee
shall not fill any such vacancy or newly created
directorship pursuant to the procedures and
qualification requirements of this Section 3.2, (i) the
Nominating Committee shall then have the exclusive
delegated authority of the Board to fill such vacancy or
newly created directorship and (ii) the person so chosen
shall not be considered a Group B Director and shall not
be required to meet the qualification requirements of
paragraph (E) below.
(E) Qualification Requirements. Group A Directors. The Group
A Subcommittee shall not have the right to recommend
nominees for election as directors or to fill a vacancy
or newly created directorship unless, after giving
effect to the election of such nominees or the filling
of such vacancies or newly created directorships, (i)
there would be at least three Independent Group A
Directors, (ii) there would be at least two (2) Group A
Directors who meet the definition of Audit Committee
Independent Director, and (iii) there would be at least
one Group A Director specified in (ii) who meets the
definition of Audit Committee Financial Expert;
provided, however, if the size of the Whole Board is 10,
11, 12 or 13, then there must be at least three
Independent Group A Directors.
Group B Directors. The Group B Subcommittee shall not
have the right to recommend nominees for election as
directors or to fill a vacancy or newly created
directorship, unless, after giving effect to the
election of such nominees or the filling of such
vacancies or
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newly created directorships, there would be at least
three (3) Independent Group B Directors; provided,
however, if the size of the Whole Board is 11, 12 or 13,
then there must be at least four (4), rather than three
(3), Independent Group B Directors.
(F) Procedures. The Corporation shall give the Group A
Subcommittee and the Group B Subcommittee not less than
60 days prior notice of the proposed mailing date of the
Corporation's proxy statement in connection with the
annual meeting of stockholders. The Group A Subcommittee
or Group B Subcommittee, as the case may be, shall
inform the Nominating Committee of its recommended
nominees for election of directors to the Board of
Directors by delivering written notice thereof not less
than thirty (30) days prior to the mailing of the
Corporation's proxy statement to be distributed to
stockholders in connection with the annual meeting of
stockholders. The notice shall also contain such
information relating to such nominees as is required to
be disclosed in a proxy statement or other filings
required to be made by the Corporation in connection
with the solicitation of proxies for election of
directors pursuant to Section 14 of the Exchange Act and
the rules and regulations promulgated thereunder, and
from which the Board can determine that the
qualification requirements set forth in paragraph (E)
above have been satisfied. The Group A Subcommittee or
Group B Subcommittee, as the case may be, shall inform
the Nominating Committee of the person selected by such
Subcommittee to fill a vacancy or newly created
directorship not later than thirty (30) days following
written notice to such Subcommittee of the occurrence of
such vacancy or creation of such newly created
directorship. The notice shall also contain such
information relating to such individual as is required
to be disclosed in a proxy statement or other filings
required to be made by the Corporation in connection
with the solicitation of proxies for election of
directors pursuant to Section 14 of the Exchange Act and
the rules and regulations promulgated thereunder, and
from which the Board can determine that the
qualification requirements set forth in paragraph (E)
above have been satisfied. The Group A Subcommittee and
Group B Subcommittee, as the case may be, shall be
afforded reasonable opportunity to provide any
supplemental information requested by the Nominating
Committee.
(G) Dissolution. If there ceases to be for a period of not
less than 30 days, at least one Independent Group A
Director on the Board, the Group A Subcommittee shall be
dissolved. If there ceases to be for a period of not
less than 30 days, at least one Independent Group B
Director on the Board, the Group B Subcommittee shall be
dissolved. Except as otherwise provided by the terms of
a
13
Contractual Nomination Right, after dissolution of a
Subcommittee, the Nominating Committee shall have the
exclusive delegated authority of the Board to nominate
directors and fill any vacancy or newly created
directorship that such Subcommittee had the right to
nominate or fill at the time of its dissolution.
(H) Certain Incentive Compensation Awards. The unanimous
approval of the Compensation Committee of the Board
shall be required to approve any incentive compensation
awards to be granted to senior management of the
Corporation.
(c) Nominations by Stockholders.
(i) In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder must have given
timely notice thereof in proper written form to the Secretary of the
Corporation. To be timely, a stockholder's notice to the Secretary must be
received by the Secretary at the principal executive offices of the
Corporation (A) in the case of an annual meeting, not later than the close
of business on the 90th day nor earlier than the opening of business on
the 120th day before the anniversary date of the immediately preceding
annual meeting of stockholders; provided, however, that in the event that
the annual meeting is called for a date that is not within 45 days before
or after such anniversary date, notice by the stockholder to be timely
must be so received not earlier than the opening of business on the 120th
day before the meeting and not later than the later of (x) the close of
business on the 90th day before the meeting or (y) the close of business
on the 10th day following the day on which public announcement of the date
of the annual meeting was first made by the Corporation; and (B) in the
case of a special meeting of stockholders called for the purpose of
electing directors, not later than the close of business on the 10th day
following the day on which public announcement of the date of the special
meeting is first made by the Corporation. In no event shall the public
announcement of an adjournment of an annual meeting or special meeting
commence a new time period for the giving of a stockholder's notice as
described in this Section 3.2.
(ii) Notwithstanding anything in paragraph (c)(i) to the
contrary, in the event that the number of directors to be elected to the
Board at an annual meeting is greater than the number of directors whose
terms expire on the date of the annual meeting and there is no public
announcement by the Corporation naming all of the nominees for the
additional directors to be elected or specifying the size of the increased
Board before the close of business on the 90th day prior to the
anniversary date of the immediately preceding annual meeting of
stockholders, a stockholder's notice required by this Section 3.2 shall
also be considered timely, but only with respect to nominees for the
additional directorships created by such increase that are to be filled by
election at such annual meeting, if it shall be received by the Secretary
at the principal executive offices of the Corporation not later than the
close of business on the 10th day following the date on which such public
announcement was first made by the Corporation.
(iii) To be in proper written form, a stockholder's notice to
the Secretary must set forth (A) as to each person whom the stockholder
proposes to
14
nominate for election as a director (w) the name, age, business address
and residence address of the person, (x) the principal occupation or
employment of the person, (y) the class or series and number of shares of
capital stock of the Corporation that are owned beneficially or of record
by the person and (z) any other information relating to the person that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Exchange Act and the
rules and regulations promulgated thereunder; and (B) as to the
stockholder giving the notice (v) the name and record address of such
stockholder and the name and address of the beneficial owner, if any, on
whose behalf the nomination is made, (w) the class or series and number of
shares of capital stock of the Corporation that are owned beneficially and
of record by such stockholder and the beneficial owner, if any, on whose
behalf the nomination is made, (x) a description of all arrangements or
understandings relating to the nomination to be made by such stockholder
among such stockholder, the beneficial owner, if any, on whose behalf the
nomination is made, each proposed nominee and any other person or persons
(including their names), (y) a representation that such stockholder
intends to appear in person or by proxy at the meeting to nominate the
persons named in its notice and (z) any other information relating to such
stockholder and the beneficial owner, if any, on whose behalf the
nomination is made that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14
of the Exchange Act and the rules and regulations promulgated thereunder.
Such notice must be accompanied by a written consent of each proposed
nominee to being named as a nominee and to serve as a director if elected.
(iv) In addition to the provisions of this Section 3.2, a
stockholder shall also comply with all of the applicable requirements of
the Exchange Act and the rules and regulations thereunder with respect to
the matters set forth herein. Nothing in this Section 3.2 shall be deemed
to affect any rights of the holders of Preferred Stock to elect directors
pursuant to the Certificate of Incorporation.
(d) Except as otherwise provided by the terms of one or more series
of Preferred Stock with respect to the rights of one or more series of Preferred
Stock to nominate and elect directors or the terms of any Contractual Nomination
Right, no person shall be eligible for election as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Section
3.2. If the Board or the chairman of the meeting of stockholders determines that
any nomination was not made in accordance with the provisions of this Section
3.2, then such nomination shall not be considered at the meeting in question.
Notwithstanding the foregoing provisions of this Section 3.2, if a stockholder
complying with Section 3.2(c) (or a qualified representative of such
stockholder) does not appear at the meeting of stockholders of the Corporation
to present the nomination, such nomination shall be disregarded, notwithstanding
that proxies in respect of such nomination may have been received by the
Corporation.
SECTION 3.3 COMPENSATION. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, the Board shall have the
authority to fix the compensation of directors. The directors may be reimbursed
their expenses, if any, of attendance at each meeting of the Board and may be
paid either a fixed sum for attendance at each meeting of the Board or
15
other compensation as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of committees of the Board may be allowed like compensation
and reimbursement of expenses for service on the committee.
ARTICLE IV
BOARD MEETINGS
SECTION 4.1 ANNUAL MEETINGS. The Board shall meet as soon as
practicable after the adjournment of each annual stockholders meeting at the
place of the annual stockholders meeting unless the Board shall fix another time
and place and give notice thereof in the manner required herein for special
meetings of the Board. No notice to the directors shall be necessary to legally
convene this meeting, except as provided in this Section 4.1.
SECTION 4.2 REGULAR MEETINGS. Regularly scheduled, periodic meetings
of the Board may be held without notice at such times, dates and places as shall
from time to time be determined by the Board.
SECTION 4.3 SPECIAL MEETINGS. Special meetings of the Board (a) may
be called by (i) the Chairman of the Board, (ii) Chief Executive Officer, (iii)
a majority of the Group A Directors, (iv) a majority of the Group B Directors or
(v) a majority of the all of the Directors comprising the Board and (b) shall be
called by the Chairman of the Board, Chief Executive Officer or Secretary on the
written request of at least a majority of directors then in office, or the sole
director, as the case may be, and shall be held at such time, date and place as
may be determined by the person calling the meeting or, if called upon the
request of directors or the sole director, as specified in such written request.
Notice of each special meeting of the Board shall be given, as provided in
Section 9.3, to each director (i) at least 24 hours before the meeting if such
notice is oral notice given personally or by telephone or written notice given
by hand delivery or by means of a form of electronic transmission and delivery;
(ii) at least two days before the meeting if such notice is sent by a nationally
recognized overnight delivery service; and (iii) at least five days before the
meeting if such notice is sent through the United States mail. If the Secretary
shall fail or refuse to give such notice, then the notice may be given by the
officer who called the meeting or the directors who requested the meeting. Any
and all business that may be transacted at a regular meeting of the Board may be
transacted at a special meeting. Except as may be otherwise expressly provided
by applicable law, the Certificate of Incorporation, or these By-Laws, neither
the business to be transacted at, nor the purpose of, any special meeting need
be specified in the notice or waiver of notice of such meeting. A special
meeting may be held at any time without notice if all the directors are present
or if those not present waive notice of the meeting in accordance with Section
9.4.
SECTION 4.4 QUORUM; REQUIRED VOTE. A majority of the Whole Board
shall constitute a quorum for the transaction of business at any meeting of the
Board, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board, except as may be
otherwise specifically provided by applicable law, the Certificate of
Incorporation or these By-Laws. If a quorum shall not be present at any meeting,
a majority of the directors present may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum is
present.
16
SECTION 4.5 CONSENT IN LIEU OF MEETING. Unless otherwise restricted
by the Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board or any committee thereof may
be taken without a meeting if all members of the Board or committee, as the case
may be, consent thereto in writing or by electronic transmission, and the
writing or writings or electronic transmission or transmissions (or paper
reproductions thereof) are filed with the minutes of proceedings of the Board or
committee. Such filing shall be in paper form if the minutes are maintained in
paper form and shall be in electronic form if the minutes are maintained in
electronic form.
SECTION 4.6 ORGANIZATION. The chairman of each meeting of the Board
shall be the Chairman of the Board or, in the absence (or inability or refusal
to act) of the Chairman of the Board, the Chief Executive Officer (if he or she
shall be a director) or, in the absence (or inability or refusal to act) of the
Chief Executive Officer or if the Chief Executive Officer is not a director, the
President (if he or she shall be a director) or in the absence (or inability or
refusal to act) of the President or if the President is not a director, a
chairman elected from the directors present. The Secretary shall act as
secretary of all meetings of the Board. In the absence (or inability or refusal
to act) of the Secretary, an Assistant Secretary shall perform the duties of the
Secretary at such meeting. In the absence (or inability or refusal to act) of
the Secretary and all Assistant Secretaries, the chairman of the meeting may
appoint any person to act as secretary of the meeting.
ARTICLE V
COMMITTEES OF DIRECTORS
SECTION 5.1 ESTABLISHMENT. The Board may designate one or more
committees, each committee to consist of one or more of the directors. During
the Special Voting Period, the Board shall have a Nominating Committee as set
forth in Section 3.2 of these By-Laws. Each committee shall keep regular minutes
of its meetings and report the same to the Board when required. The Board shall
have the power at any time to fill vacancies in, to change the membership of, or
to dissolve any such committee, except as otherwise provided in Section 3.2 with
respect to the Nominating Committee, the Group A Subcommittee and the Group B
Subcommittee during the Special Voting Period.
SECTION 5.2 AVAILABLE POWERS. Any committee established pursuant to
Section 5.1 hereof, to the extent permitted by applicable law and by resolution
of the Board, shall have and may exercise all of the powers and authority of the
Board in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers that may
require it.
SECTION 5.3 ALTERNATE MEMBERS. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of such committee.
SECTION 5.4 PROCEDURES. Unless the Board otherwise provides, the
time, date, place, if any, and notice of meetings of a committee and the means
of remote communication, if any, shall be determined by such committee. At
meetings of a committee, a majority of the number of members of the committee
(but not including any alternate member,
17
unless such alternate member has replaced any absent or disqualified member at
the time of, or in connection with, such meeting) shall constitute a quorum for
the transaction of business. The act of a majority of the members present at any
meeting at which a quorum is present shall be the act of the committee, except
as otherwise specifically provided by applicable law, the Certificate of
Incorporation, these By-Laws or the Board. If a quorum is not present at a
meeting of a committee, the members present may adjourn the meeting from time to
time, without notice other than an announcement at the meeting, until a quorum
is present. Unless the Board otherwise provides and except as provided in these
By-Laws, each committee designated by the Board may make, alter, amend and
repeal rules for the conduct of its business. In the absence of such rules each
committee shall conduct its business in the same manner as the Board is
authorized to conduct its business pursuant to Article III and Article IV of
these By-Laws.
ARTICLE VI
OFFICERS
SECTION 6.1 OFFICERS. The officers of the Corporation elected by the
Board shall be a Chairman of the Board, a Chief Executive Officer, a President,
a Treasurer, a Secretary and such other officers (including without limitation a
Chief Financial Officer, Vice Presidents, Assistant Secretaries and Assistant
Treasurers) as the Board from time to time may determine. Officers elected by
the Board shall each have such powers and duties as generally pertain to their
respective offices, subject to the specific provisions of this Article VI. Such
officers shall also have such powers and duties as from time to time may be
conferred by the Board. The Chairman of the Board, Chief Executive Officer or
President may also appoint such other officers (including without limitation one
or more Vice Presidents and Controllers) as may be necessary or desirable for
the conduct of the business of the Corporation. Such other officers shall have
such powers and duties and shall hold their offices for such terms as may be
provided in these By-Laws or as may be prescribed by the Board or, if such
officer has been appointed by the Chairman of the Board, Chief Executive Officer
or President, as may be prescribed by the appointing officer.
(a) Chairman of the Board. The Chairman of the Board shall preside
when present at all meetings of the stockholders and the Board. The Chairman of
the Board shall advise and counsel the Chief Executive Officer and other
officers and shall exercise such powers and perform such duties as shall be
assigned to or required of the Chairman of the Board from time to time by the
Board or these By-Laws.
(b) Chief Executive Officer. The Chief Executive Officer shall be
the chief executive officer of the Corporation, shall have general supervision
of the affairs of the Corporation and general control of all of its business
subject to the ultimate authority of the Board, and shall be responsible for the
execution of the policies of the Board. In the absence (or inability or refusal
to act) of the Chairman of the Board, the Chief Executive Officer (if he or she
shall be a director) shall preside when present at all meetings of the
stockholders and the Board.
(c) President. The President shall be the chief operating officer of
the Corporation and shall, subject to the authority of the Chief Executive
Officer and the Board, have general management and control of the day-to-day
business operations of the Corporation and shall consult with and report to the
Chief Executive Officer. The President shall put into
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operation the business policies of the Corporation as determined by the Chief
Executive Officer and the Board and as communicated to the President by the
Chief Executive Officer and the Board. The President shall make recommendations
to the Chief Executive Officer on all operational matters that would normally be
reserved for the final executive responsibility of the Chief Executive Officer.
In the absence (or inability or refusal to act) of the Chairman of the Board and
Chief Executive Officer, the President (if he or she shall be a director) shall
preside when present at all meetings of the stockholders and the Board.
(d) Vice Presidents. In the absence (or inability or refusal to act)
of the President, the Vice President (or in the event there be more than one
Vice President, the Vice Presidents in the order designated by the Board) shall
perform the duties and have the powers of the President. Any one or more of the
Vice Presidents may be given an additional designation of rank or function.
(e) Secretary.
(i) The Secretary shall attend all meetings of the
stockholders, the Board and (as required) committees of the Board and
shall record the proceedings of such meetings in books to be kept for that
purpose. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board and shall
perform such other duties as may be prescribed by the Board, the Chairman
of the Board, Chief Executive Officer or the President. The Secretary
shall have custody of the corporate seal of the Corporation and the
Secretary, or any Assistant Secretary, shall have authority to affix the
same to any instrument requiring it, and when so affixed, it may be
attested by his or her signature or by the signature of such Assistant
Secretary. The Board may give general authority to any other officer to
affix the seal of the Corporation and to attest the affixing thereof by
his or her signature.
(ii) The Secretary shall keep, or cause to be kept, at the
principal executive office of the Corporation or at the office of the
Corporation's transfer agent or registrar, if one has been appointed, a
stock ledger, or duplicate stock ledger, showing the names of the
stockholders and their addresses, the number and classes of shares held by
each and, with respect to certificated shares, the number and date of
certificates issued for the same and the number and date of certificates
cancelled.
(f) Assistant Secretaries. The Assistant Secretary or, if there be
more than one, the Assistant Secretaries in the order determined by the Board
shall, in the absence (or inability or refusal to act) of the Secretary, perform
the duties and have the powers of the Secretary.
(g) Treasurer. The Treasurer shall perform all duties commonly
incident to that office (including, without limitation, the care and custody of
the funds and securities of the Corporation which from time to time may come
into the Treasurer's hands and the deposit of the funds of the Corporation in
such banks or trust companies as the Board, the Chief Executive Officer or the
President may authorize).
(h) Assistant Treasurers. The Assistant Treasurer or, if there shall
be more than one, the Assistant Treasurers in the order determined by the Board
shall, in the absence (or
19
inability or refusal to act) of the Treasurer, perform the duties and exercise
the powers of the Treasurer.
SECTION 6.2 TERM OF OFFICE. The elected officers of the Corporation
shall be elected annually by the Board at its first meeting held after each
annual meeting of stockholders. All officers elected by the Board shall hold
office until the next annual meeting of the Board and until their successors are
duly elected and qualified or until their earlier death, resignation,
retirement, disqualification, or removal from office. Any officer may be
removed, with or without cause, at any time by the Board. Any officer appointed
by the Chairman of the Board, Chief Executive Officer or President may also be
removed, with or without cause, by the Chairman of the Board, Chief Executive
Officer or President, as the case may be, unless the Board otherwise provides.
Any vacancy occurring in any elected office of the Corporation may be filled by
the Board. Any vacancy occurring in any office appointed by the Chairman of the
Board, Chief Executive Officer or President may be filled by the Chairman of the
Board, Chief Executive Officer or President, as the case may be, unless the
Board then determines that such office shall thereupon be elected by the Board,
in which case the Board shall elect such officer.
SECTION 6.3 OTHER OFFICERS. The Board may delegate the power to
appoint such other officers and agents, and may also remove such officers and
agents or delegate the power to remove same, as it shall from time to time deem
necessary or desirable.
SECTION 6.4 MULTIPLE OFFICEHOLDERS; STOCKHOLDER AND DIRECTOR
OFFICERS. Any number of offices may be held by the same person, unless the
Certificate of Incorporation or these By-Laws otherwise provide. Officers need
not be stockholders or residents of the State of Delaware.
ARTICLE VII
SHARE CERTIFICATES
SECTION 7.1 ENTITLEMENT TO CERTIFICATES. The shares of the
Corporation shall be represented by certificates, provided that the Board may
provide by resolution or resolutions that some or all of any or all classes or
series of its stock shall be uncertificated shares. Any such resolution shall
not apply to shares represented by a certificate until such certificate is
surrendered to the Corporation. Notwithstanding the adoption of such a
resolution by the Board, every holder of stock represented by certificates and
upon request every holder of uncertificated shares shall be entitled to have a
certificate signed in accordance with Section 7.3 representing the number of
shares registered in certificate form.
SECTION 7.2 MULTIPLE CLASSES OF STOCK. If the Corporation shall be
authorized to issue more than one class of stock or more than one series of any
class, the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualification, limitations or restrictions of such preferences and/or rights
shall, unless and to the extent (and subject to applicable law) the Board shall
by resolution provide that such class or series of stock shall be
uncertificated, be set forth in full or summarized on the face or back of any
certificate that the Corporation shall issue to represent such class or series
of stock; provided that, in lieu of the foregoing requirements, there may be set
forth on the face or back of such certificate a statement that the Corporation
will furnish
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without charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional, or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.
SECTION 7.3 SIGNATURES. Each certificate representing capital stock
of the Corporation shall be signed by or in the name of the Corporation by (a)
the Chairman of the Board, the Chief Executive Officer, the President or a Vice
President; and (b) the Treasurer, an Assistant Treasurer, the Secretary, or an
Assistant Secretary of the Corporation. Any or all the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar on the date of
issue.
SECTION 7.4 ISSUANCE AND PAYMENT. Subject to applicable law, the
Certificate of Incorporation or these By-Laws, shares may be issued for such
consideration and to such persons as the Board may determine from time to time.
Shares may not be issued until the full amount of the consideration has been
paid, unless upon the face or back of each certificate issued to represent any
partly paid shares of capital stock there shall have been set forth the total
amount of the consideration to be paid therefor and the amount paid thereon up
to and including the time said certificate is issued.
SECTION 7.5 LOST CERTIFICATES. The Corporation may issue a new
certificate of stock or uncertificated shares in place of any certificate
theretofore issued by it alleged to have been lost, stolen or destroyed upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen or destroyed. When authorizing such issue, the
Corporation may require the owner of such lost, stolen or destroyed certificate,
or such owner's legal representative, to give the Corporation a bond sufficient
to indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate or uncertificated shares.
SECTION 7.6 TRANSFER OF STOCK. Stock of the Corporation shall be
transferable in the manner prescribed by applicable law and in these By-Laws.
Transfers of stock shall be made on the stock ledger of the Corporation only by
the person named as the holder thereof on the stock ledger of the Corporation or
by such person's duly constituted attorney or legal representative, and in the
case of shares represented by a certificate, upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued. No transfer of stock shall be valid as against the Corporation for any
purpose until it shall have been entered in the stock ledger of the Corporation
by an entry showing from and to whom transferred.
SECTION 7.7 REGISTERED STOCKHOLDERS. Except as otherwise required by
applicable law (a) the Corporation shall be entitled to recognize the exclusive
right of a person registered on its stock ledger as the owner of shares for all
purposes, including, without limitation, as the owner of such shares to receive
dividends, vote such shares, examine the stock ledger and the books of the
Corporation and be held liable for calls and assessments and (b) the Corporation
shall not be bound to recognize any equitable or other claim to or interest in
such
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share or shares on the part of any person other than such registered owner,
whether or not it shall have express or other notice thereof.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 RIGHT TO INDEMNIFICATION. Each person who was or is made
a party or is threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "PROCEEDING"), by
reason of the fact that he or she is or was a director or officer of the
Corporation or, while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter a "COVERED PERSON"), whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or
agent, or in any other capacity while serving as a director, officer, employee
or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized or permitted by applicable law, as the same exists or
may hereafter be amended, against all expense, liability and loss (including,
without limitation, attorneys' fees, judgments, fines, ERISA excise taxes and
penalties and amounts paid in settlement) reasonably incurred or suffered by
such Covered Person in connection with such proceeding; provided, however, that,
except as provided in Section 8.3 with respect to proceedings to enforce rights
to indemnification, the Corporation shall indemnify a Covered Person in
connection with a proceeding (or part thereof) initiated by such Covered Person
only if such proceeding (or part thereof) was authorized by the Board.
SECTION 8.2 RIGHT TO ADVANCEMENT OF EXPENSES. In addition to the
right to indemnification conferred in Section 8.1, a Covered Person shall also
have the right to be paid by the Corporation the expenses (including, without
limitation, attorneys' fees) incurred in defending, testifying, or otherwise
participating in any such proceeding in advance of its final disposition
(hereinafter an "ADVANCEMENT OF EXPENSES"); provided, however, that, if the
Delaware General Corporation Law ("DGCL") requires, an advancement of expenses
incurred by a Covered Person in his or her capacity as a director or officer of
the Corporation (and not in any other capacity in which service was or is
rendered by such Covered Person, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "UNDERTAKING"), by or on behalf of such Covered
Person, to repay all amounts so advanced if it shall ultimately be determined by
final judicial decision from which there is no further right to appeal
(hereinafter a "FINAL ADJUDICATION") that such Covered Person is not entitled to
be indemnified for such expenses under this Article VIII or otherwise.
SECTION 8.3 RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under
Section 8.1 or Section 8.2 is not paid in full by the Corporation within 60 days
after a written claim therefor has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be 20 days, the Covered Person may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the Covered Person shall
22
also be entitled to be paid the expense of prosecuting or defending such suit.
In (a) any suit brought by the Covered Person to enforce a right to
indemnification hereunder (but not in a suit brought by a Covered Person to
enforce a right to an advancement of expenses) it shall be a defense that, and
(b) in any suit brought by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the Corporation shall be entitled to
recover such expenses upon a final adjudication that, the Covered Person has not
met any applicable standard for indemnification set forth in the DGCL. Neither
the failure of the Corporation (including its directors who are not parties to
such action, a committee of such directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the Covered Person is proper in the circumstances
because the Covered Person has met the applicable standard of conduct set forth
in the DGCL, nor an actual determination by the Corporation (including a
determination by its directors who are not parties to such action, a committee
of such directors, independent legal counsel, or its stockholders) that the
Covered Person has not met such applicable standard of conduct, shall create a
presumption that the Covered Person has not met the applicable standard of
conduct or, in the case of such a suit brought by the Covered Person, shall be a
defense to such suit. In any suit brought by the Covered Person to enforce a
right to indemnification or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the Covered Person is not entitled to be
indemnified, or to such advancement of expenses, under this Article VIII or
otherwise shall be on the Corporation.
SECTION 8.4 NON-EXCLUSIVITY OF RIGHTS. The rights provided to
Covered Persons pursuant to this Article VIII shall not be exclusive of any
other right which any Covered Person may have or hereafter acquire under
applicable law, the Certificate of Incorporation, these By-Laws, an agreement, a
vote of stockholders or disinterested directors, or otherwise.
SECTION 8.5 INSURANCE. The Corporation may maintain insurance, at
its expense, to protect itself and/or any director, officer, employee or agent
of the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the DGCL.
SECTION 8.6 INDEMNIFICATION OF OTHER PERSONS. This Article VIII
shall not limit the right of the Corporation to the extent and in the manner
authorized or permitted by law to indemnify and to advance expenses to persons
other than Covered Persons. Without limiting the foregoing, the Corporation may,
to the extent authorized from time to time by the Board, grant rights to
indemnification and to the advancement of expenses to any employee or agent of
the Corporation and to any other person who is or was serving at the request of
the Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan, to the fullest extent of the
provisions of this Article VIII with respect to the indemnification and
advancement of expenses of Covered Persons under this Article VIII.
SECTION 8.7 AMENDMENTS. Any repeal or amendment of this Article VIII
by the Board or the stockholders of the Corporation or by changes in applicable
law, or the adoption of any other provision of these By-Laws inconsistent with
this Article VIII, will, to the extent permitted by applicable law, be
prospective only (except to the extent such amendment or
23
change in applicable law permits the Corporation to provide broader
indemnification rights to Covered Persons on a retroactive basis than permitted
prior thereto), and will not in any way diminish or adversely affect any right
or protection existing hereunder in respect of any act or omission occurring
prior to such repeal or amendment or adoption of such inconsistent provision.
SECTION 8.8 CERTAIN DEFINITIONS. For purposes of this Article VIII,
(a) references to "other enterprise" shall include any employee benefit plan;
(b) references to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; (c) references to "serving at the
request of the Corporation" shall include any service that imposes duties on, or
involves services by, a person with respect to any employee benefit plan, its
participants, or beneficiaries; and (d) a person who acted in good faith and in
a manner such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interest of the Corporation" for
purposes of Section 145 of the DGCL.
SECTION 8.9 CONTRACT RIGHTS. The rights provided to Covered Persons
pursuant to this Article VIII shall be contract rights and such rights shall
continue as to a Covered Person who has ceased to be a director, officer, agent
or employee and shall inure to the benefit of the Covered Person's heirs,
executors and administrators.
SECTION 8.10 SEVERABILITY. If any provision or provisions of this
Article VIII shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Article VIII shall not in any way be affected or
impaired thereby; and (b) to the fullest extent possible, the provisions of this
Article VIII (including, without limitation, each such portion of this Article
VIII containing any such provision held to be invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 PLACE OF MEETINGS. If the place of any meeting of
stockholders, the Board or committee of the Board for which notice is required
under these By-Laws is not designated in the notice of such meeting, such
meeting shall be held at the principal business office of the Corporation;
provided, however, if the Board has, in its sole discretion, determined that a
meeting shall not be held at any place, but instead shall be held by means of
remote communication pursuant to Section 9.5 hereof, then such meeting shall not
be held at any place.
SECTION 9.2 FIXING RECORD DATES.
(a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board may fix a record date, which shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board, and which record date shall not be more than 60 nor less than 10 days
before the date of such meeting. If no record date is fixed by the Board, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the business day
next preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which
24
the meeting is held. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board may fix a new record date for
the adjourned meeting.
(b) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than 60 days prior to such action. If no
record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
(c) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board, and which date
shall not be more than 10 days after the date upon which the resolution fixing
the record date is adopted by the Board. If no record date has been fixed by the
Board, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the Board
is otherwise required, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or the Secretary of the Corporation. Delivery made
to the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board and prior action by the Board is otherwise required, the record date
for determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
Board adopts the resolution taking such prior action.
SECTION 9.3 MEANS OF GIVING NOTICE.
(a) Notice to Directors. Whenever under applicable law, the
Certificate of Incorporation or these By-Laws notice is required to be given to
any director, such notice shall be given either (i) in writing and sent by hand
delivery, through the United States mail, or by a nationally recognized
overnight delivery service for next day delivery, (ii) by means of facsimile
telecommunication or other form of electronic transmission, or (iii) by oral
notice given personally or by telephone. A notice to a director will be deemed
given as follows: (i) if given by hand delivery, orally, or by telephone, when
actually received by the director, (ii) if sent through the United States mail,
when deposited in the United States mail, with postage and fees thereon prepaid,
addressed to the director at the director's address appearing on the records of
the Corporation, (iii) if sent for next day delivery by a nationally recognized
overnight delivery service, when deposited with such service, with fees thereon
prepaid, addressed to the director at the director's address appearing on the
records of the Corporation, (iv) if sent by facsimile telecommunication, when
sent to the facsimile transmission number for such director appearing on the
records of the Corporation, (v) if sent by electronic mail, when sent to the
electronic mail address for such director appearing on the records of the
Corporation, or (vi) if sent by any other form of electronic transmission, when
sent to the address, location or number (as applicable) for such director
appearing on the records of the Corporation.
25
(b) Notice to Stockholders. Whenever under applicable law, the
Certificate of Incorporation or these By-Laws notice is required to be given to
any stockholder, such notice may be given (i) in writing and sent either by hand
delivery, through the United States mail, or by a nationally recognized
overnight delivery service for next day delivery, or (ii) by means of a form of
electronic transmission consented to by the stockholder, to the extent permitted
by, and subject to the conditions set forth in Section 232 of the DGCL. A notice
to a stockholder shall be deemed given as follows: (i) if given by hand
delivery, when actually received by the stockholder, (ii) if sent through the
United States mail, when deposited in the United States mail, with postage and
fees thereon prepaid, addressed to the stockholder at the stockholder's address
appearing on the stock ledger of the Corporation, (iii) if sent for next day
delivery by a nationally recognized overnight delivery service, when deposited
with such service, with fees thereon prepaid, addressed to the stockholder at
the stockholder's address appearing on the stock ledger of the Corporation, and
(iv) if given by a form of electronic transmission consented to by the
stockholder to whom the notice is given and otherwise meeting the requirements
set forth above, (A) if by facsimile transmission, when directed to a number at
which the stockholder has consented to receive notice, (B) if by electronic
mail, when directed to an electronic mail address at which the stockholder has
consented to receive notice, (C) if by a posting on an electronic network
together with separate notice to the stockholder of such specified posting, upon
the later of (1) such posting and (2) the giving of such separate notice, and
(D) if by any other form of electronic transmission, when directed to the
stockholder. A stockholder may revoke such stockholder's consent to receiving
notice by means of electronic communication by giving written notice of such
revocation to the Corporation. Any such consent shall be deemed revoked if (1)
the Corporation is unable to deliver by electronic transmission two consecutive
notices given by the Corporation in accordance with such consent and (2) such
inability becomes known to the Secretary or an Assistant Secretary or to the
Corporation's transfer agent, or other person responsible for the giving of
notice; provided, however, the inadvertent failure to treat such inability as a
revocation shall not invalidate any meeting or other action.
(c) Electronic Transmission. "ELECTRONIC TRANSMISSION" means any
form of communication, not directly involving the physical transmission of
paper, that creates a record that may be retained, retrieved and reviewed by a
recipient thereof, and that may be directly reproduced in paper form by such a
recipient through an automated process, including but not limited to
transmission by telex, facsimile telecommunication, electronic mail, telegram
and cablegram.
SECTION 9.4 WAIVER OF NOTICE. Whenever any notice is required to be
given under applicable law, the Certificate of Incorporation, or these By-Laws,
a written waiver of such notice, signed before or after the date of such meeting
by the person or persons entitled to said notice, or a waiver by electronic
transmission by the person entitled to said notice, shall be deemed equivalent
to such required notice. All such waivers shall be kept with the books of the
Corporation. Attendance at a meeting shall constitute a waiver of notice of such
meeting, except where a person attends for the express purpose of objecting to
the transaction of any business on the ground that the meeting was not lawfully
called or convened.
26
SECTION 9.5 MEETING ATTENDANCE VIA REMOTE COMMUNICATION EQUIPMENT.
(a) Stockholder Meetings. If authorized by the Board in its sole
discretion, and subject to such guidelines and procedures as the Board may
adopt, stockholders and proxyholders not physically present at a meeting of
stockholders may, by means of remote communication:
(i) participate in a meeting of stockholders; and
(ii) be deemed present in person and vote at a meeting of
stockholders, whether such meeting is to be held at a designated place or
solely by means of remote communication, provided that (A) the Corporation
shall implement reasonable measures to verify that each person deemed
present and permitted to vote at the meeting by means of remote
communication is a stockholder or proxyholder, (B) the Corporation shall
implement reasonable measures to provide such stockholders and
proxyholders a reasonable opportunity to participate in the meeting and to
vote on matters submitted to the stockholders, including an opportunity to
read or hear the proceedings of the meeting substantially concurrently
with such proceedings, and (C) if any stockholder or proxyholder votes or
takes other action at the meeting by means of remote communication, a
record of such votes or other action shall be maintained by the
Corporation.
(b) Board Meetings. Unless otherwise restricted by applicable law,
the Certificate of Incorporation, or these By-Laws, members of the Board or any
committee thereof may participate in a meeting of the Board or any committee
thereof by means of conference telephone or other communications equipment by
means of which all persons participating in the meeting can hear each other.
Such participation in a meeting shall constitute presence in person at the
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting was not lawfully called or convened.
SECTION 9.6 DIVIDENDS. The Board may from time to time declare, and
the Corporation may pay, dividends (payable in cash, property or shares of the
Corporation's capital stock) on the Corporation's outstanding shares of capital
stock, subject to applicable law and the Certificate of Incorporation.
SECTION 9.7 RESERVES. The Board may set apart out of the funds of
the Corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve.
SECTION 9.8 CONTRACTS AND NEGOTIABLE INSTRUMENTS. Except as
otherwise provided by applicable law, the Certificate of Incorporation or these
By-Laws, any contract, bond, deed, lease, mortgage or other instrument may be
executed and delivered in the name and on behalf of the Corporation by such
officer or officers or other employee or employees of the Corporation as the
Board may from time to time authorize. Such authority may be general or confined
to specific instances as the Board may determine. The Chairman of the Board, the
Chief Executive Officer, the President or any Vice President may execute and
deliver any
27
contract, bond, deed, lease, mortgage or other instrument in the name and on
behalf of the Corporation. Subject to any restrictions imposed by the Board, the
Chairman of the Board. Chief Executive Officer, President or any Vice President
may delegate powers to execute and deliver any contract, bond, deed, lease,
mortgage or other instrument in the name and on behalf of the Corporation to
other officers or employees of the Corporation under such person's supervision
and authority, it being understood, however, that any such delegation of power
shall not relieve such officer of responsibility with respect to the exercise of
such delegated power.
SECTION 9.9 FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by the Board.
SECTION 9.10 SEAL. The seal of the Corporation shall be in such form
as shall from time to time be adopted by the Board. The seal may be used by
causing it or a facsimile thereof to be impressed, affixed or otherwise
reproduced.
SECTION 9.11 BOOKS AND RECORDS. The books and records of the
Corporation may be kept within or outside the State of Delaware at such place or
places as may from time to time be designated by the Board.
SECTION 9.12 RESIGNATION. Any director, committee member or officer
may resign by giving notice thereof in writing or by electronic transmission to
the Chairman of the Board, the Chief Executive Officer, the President or the
Secretary. The resignation shall take effect at the time specified therein, or
at the time of receipt of such notice if no time is specified or the specified
time is earlier than the time of such receipt. Unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 9.13 SURETY BONDS. Such officers, employees and agents of
the Corporation (if any) as the Chairman of the Board, Chief Executive Officer,
President or the Board may direct, from time to time, shall be bonded for the
faithful performance of their duties and for the restoration to the Corporation,
in case of their death, resignation, retirement, disqualification or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in their possession or under their control belonging to the
Corporation, in such amounts and by such surety companies as the Chairman of the
Board, Chief Executive Officer, President or the Board may determine. The
premiums on such bonds shall be paid by the Corporation and the bonds so
furnished shall be in the custody of the Secretary.
SECTION 9.14 SECURITIES OF OTHER CORPORATIONS. Powers of attorney,
proxies, waivers of notice of meeting, consents in writing and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the Chairman of the Board, Chief Executive
Officer, President or any Vice President. Any such officer, may, in the name of
and on behalf of the Corporation, take all such action as any such officer may
deem advisable to vote in person or by proxy at any meeting of security holders
of any corporation in which the Corporation may own securities, or to consent in
writing, in the name of the Corporation as such holder, to any action by such
corporation, and at any such meeting or with respect to any such consent shall
possess and may exercise any and all rights and power incident to the ownership
of such securities and which, as the owner thereof, the Corporation might have
exercised and possessed. The Board may from time to time confer like powers upon
any other person or persons.
28
SECTION 9.15 AMENDMENTS. The Board shall have the power to adopt,
amend, alter or repeal the By-Laws. Except as provided in the Certificate of
Incorporation, the affirmative vote of a majority of the Whole Board shall be
required to adopt, amend, alter or repeal the Bylaws. The By-Laws also may be
adopted, amended, altered or repealed by the stockholders.
29
EXHIBIT M
Resigning Officers of the Company
COMPANY NAME TITLE
------------------------------ ------------------- ----------------------------------------------
VENTURI PARTNERS, INC. Xxxxx X. Xxxxxxxxx Chairman and Chief Executive Officer
Xxxxx X. Xxxx President, CFO, Treasurer and Asst. Secretary
Xxxxxxx X. Xxxxxx President - Division Operations and Asst.
Secretary
Xxx X. Xxxxxxxx, Xx. SVP, General Counsel and Secretary
Xxxxxx X. Xxxxxxxx VP of Human Resources and Asst. Secretary
VENTURI TECHNOLOGY PARTNERS, LLC Xxxxxxx X. Xxxxxx President & Asst. Secretary
Xxxxx X. Xxxx SVP, CFO & Asst. Secretary
Xxx X. Xxxxxxxx, Xx. SVP & Secretary
Xxxx-Xxxxxx Xxxxx VP & Asst. Secretary
Xxxxxx Xxxxx SVP & Asst. Secretary
Xxxxxxx Xxxx AVP & Asst. Secretary
VENTURI STAFFING PARTNERS, INC. Xxxxx X. Xxxxxxxxx President & Asst. Secretary
Xxxxx X. Xxxx SVP, CFO & Asst. Secretary
Xxx X. Xxxxxxxx, Xx. SVP & Secretary
Xxxxxxx X. Xxxxxx SVP & Asst. Secretary
Xxxx Xxxxx VP & Asst. Secretary
Xxx Xxxxxxx SVP & Asst. Secretary
Xxxxxx Xxxxx AVP & Asst. Secretary
PFI CORP. Xxxxx X. Xxxxxxxxx Chief Executive Officer
Xxxxx X. Xxxx President, CFO, Treasurer and
Asst. Secretary
Xxxxxxx X. Xxxxxx President - Division Operations and Asst.
Secretary
Xxx X. Xxxxxxxx, Xx. SVP, General Counsel and
Secretary
Xxxxxx X. Xxxxxxxx VP of Human Resources and
Asst. Secretary
VENTURI STAFFING PARTNERS, LLC Xxxxx X. Xxxxxxxxx President & Asst. Secretary
Xxxxx X. Xxxx SVP, CFO & Asst. Secretary
Xxx X. Xxxxxxxx, Xx. SVP & Secretary
Xxxxxxx X. Xxxxxx SVP & Asst. Secretary
Xxxx Xxxxx VP & Asst. Secretary
Xxx Xxxxxxx SVP & Asst. Secretary
Xxxxxx Xxxxx AVP & Asst. Secretary
VENTURI TEXAS STAFFING PARTNER, LP
(VENTURI STAFFING PARTNERS, INC., AS Venturi Staffing Partners,
GENERAL PARTNER) Inc., general partner
VTP - CA, INC. Xxxxxxx X. Xxxxxx President & Asst. Secretary
Xxxxx X. Xxxx SVP, CFO & Asst. Secretary
Xxx X. Xxxxxxxx, Xx. SVP & Secretary
Xxxx Xxxxxx Xxxxx XX & Asst. Secretary
Xxxxxxx X. Xxxx Asst. Secretary
Xxxxxx Xxxxx Asst. Secretary
EXHIBIT N
New Officers of the Company
Chief Executive Officer and President Xxxxxxx X. Xxxxxx
Executive Vice President - Field Operations Xxxxxxx X. Xxxxxx
Senior Vice President and Chief Information Officer Xxxx X. Xxxxxxx
Senior Vice President - Corporate Development Xxxxx X. Xxxx
Senior Vice President, General Counsel and Corporate Secretary Xxxxxxxx X. Xxxx
Senior Vice President, Chief Financial Officer and Assistant Xxxxxx X. Xxxx, Xx.
Secretary
EXHIBIT O
Form of Voting Agreement
[ATTACHED]
VOTING AGREEMENT
BY AND AMONG
VENTURI PARTNERS, INC.
AND
THE STOCKHOLDERS NAMED HEREIN
DATED AS OF [*], 2004
VOTING AGREEMENT
This Voting Agreement (this "AGREEMENT") is made and entered into as of
[*], 2004 by and among VENTURI PARTNERS, INC., a Delaware corporation (the
"COMPANY"), and the parties identified as "Stockholders" on the signature pages
hereto.
PRELIMINARY STATEMENTS
The Company, VTP, Inc., Venturi Technology Partners, LLC, Comsys
Information Technology Services, Inc., Comsys Holding, Inc. and certain
stockholders of Holding have entered into an Agreement and Plan of Merger dated
as of July [*], 2004 (as the same may be amended from time to time, the "MERGER
AGREEMENT"), pursuant to which, upon the terms and subject to the conditions
thereof, VTP, Inc. will be merged with and into Comsys Holding, Inc. and Comsys
Holding, Inc. will be the surviving entity (the "MERGER").
As a condition to the consummation of the transactions contemplated by the
Merger Agreement, various stockholders of the Company and of Holding have
required that the Company and certain parties who are, or who as a result of the
Merger will become, stockholders of the Company, and the Company and such
parties are willing to, enter into a voting agreement with respect to
nominations to the board of directors of the Company at and after the
effectiveness of the Merger.
Capitalized terms used but not defined herein have the meanings given in
the Merger Agreement.
Now, therefore, for good, valuable and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
STATEMENT OF AGREEMENT
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"AGREEMENT" has the meaning given in the preamble to this Agreement.
"BOARD OF DIRECTORS" means the board of directors of the Company.
"BYLAWS" means the Bylaws of the Company as in effect from time to time.
"CLOSING" has the meaning given in the Merger Agreement.
"COMMISSION" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"COMMON STOCK" means the common stock of the Company now or hereafter
authorized to be issued.
"COMPANY" has the meaning given in the preamble to this Agreement.
"DIRECTOR" means a member of the Board of Directors.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect at the time.
"GROUP B DIRECTOR" means Xxxxxx, a Wachovia Director or a director who was
selected by the Group B Subcommittee of the Nominating Committee of the Board of
Directors for election to, or to fill a vacancy or newly created directorship
on, the Board of Directors pursuant to this Agreement or Section 3.2 of the
Bylaws.
"GROUP B SUBCOMMITTEE" means a subcommittee of the Nominating Committee of
the Board of Directors comprised solely of the Independent Wachovia Directors
serving on the Nominating Committee.
"HOLDING" means Comsys Holding, Inc., a Delaware corporation.
"INDEPENDENT WACHOVIA DIRECTOR" means any Wachovia Director who meets the
definition of independent director under applicable rules and listing standards
of the principal securities exchange or market on which the Common Stock is
listed or approved for trading.
"HORNETS STOCKHOLDERS" means the holders of Common Stock listed on the
signature pages of this Agreement under the title "Hornets Stockholders".
"JUNIOR STOCKHOLDERS" means the holders of Common Stock listed on the
signature pages of this Agreement under the title "Junior Stockholders" and any
Affiliate thereof to which a Junior Stockholder transfers any shares of Common
Stock and which has agreed in writing to be bound by the terms of this
Agreement.
"MAJOR STOCKHOLDER" means any Wachovia Stockholder or Hornets Stockholder
that owned, at the Effective Time, directly or beneficially as part of the
Stockholder Group of which it is a part, greater than 10% of the then
outstanding Common Stock, as such ownership is reflected on the applicable
Schedules to this Agreement.
"MERGER" has the meaning given in the preliminary statements to this
Agreement.
"MERGER AGREEMENT" has the meaning given in the preliminary statements to
this Agreement.
2
"NOMINATING COMMITTEE" means the Nominating Committee of the Board of
Directors established pursuant to and in accordance with the Bylaws.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, as the same shall be in
effect at the time.
"SHARES" means shares of Common Stock.
"SPECIAL VOTING PERIOD" means the period commencing immediately after the
Effective Time (as defined in the Certificate of Incorporation) and ending on
the third anniversary of the Effective Time.
"STOCKHOLDER" means Xxxxxx or any Wachovia Stockholder, Junior Stockholder
or Hornets Stockholder.
"STOCKHOLDER GROUP" means each of the following three groups of
Stockholders: (a) the Stockholders comprising the Wachovia Stockholders shall be
one Stockholder Group, (b) the Stockholders comprising the Junior Stockholders
shall be one Stockholder Group and (c) the Stockholders comprising the Hornets
Stockholders shall be one Stockholder Group.
"STOCKHOLDER REPRESENTATIVE" has the meaning given in Section 4.18.
"STOCKHOLDERS" means, collectively, Xxxxxx, the Wachovia Stockholders, the
Junior Stockholders and the Hornets Stockholders.
"WACHOVIA DIRECTOR" means (a) a director of the Company who was so
designated as a Wachovia Designee by Holding to serve on the Board of Directors
pursuant to Section 6.15(a) of the Merger Agreement, (b) any director of the
Company who was nominated for election as a director of the Company by the
Wachovia Stockholders or (c) any director who was nominated by the Wachovia
Stockholders to fill a vacancy that was held immediately prior to such vacancy
by a Wachovia Director or a newly created directorship on the Board of Directors
for which the Wachovia Stockholders would have the right to recommend an
additional nominee pursuant to this Agreement or Section 3.2 of the Bylaws.
"WACHOVIA STOCKHOLDERS" means the holders of Common Stock listed on the
signature pages of this Agreement under the title "Wachovia Stockholders" and
any Affiliate thereof to which a Wachovia Stockholder transfers any shares of
Common Stock and which has agreed in writing to be bound by the terms of this
Agreement.
"XXXXXX" means Xxxxxxx X. Xxxxxx.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company. The Company
hereby represents and warrants to the other parties hereto as follows: The
Company has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions
3
contemplated hereby. The execution and delivery by the Company of this
Agreement, and the consummation by the Company of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action on the part
of the Company. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required by, or with
respect to, the Company in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated hereby. The execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby by the Company does
not conflict with, or result in a breach of, any law or regulation of any
governmental authority applicable to the Company or any material agreement to
which the Company is a party.
Section 2.2. Representations and Warranties of the Stockholders.
(a) Each Stockholder that is not a natural person, severally and not
jointly, hereby represents and warrants, as to itself only and not as to any
other Stockholder, to the other parties hereto as follows:
(i) Authority. The Stockholder has all requisite corporate,
partnership or limited liability company power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery by the Stockholder of this Agreement, and the consummation by the
Stockholder of the transactions contemplated hereby, have been duly authorized
by all necessary corporate, partnership or limited liability company action on
the part of the Stockholder. This Agreement has been duly executed and delivered
by the Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
No consent, approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, is required by,
or with respect to, the Stockholder in connection with the execution and
delivery of this Agreement by the Stockholder or the consummation by the
Stockholder of the transactions contemplated hereby. The execution and delivery
of this Agreement by the Stockholder and the consummation of the transactions
contemplated hereby by the Stockholder does not conflict with, or result in a
breach of, any law or regulation of any governmental authority applicable to the
Stockholder or any material agreement to which the Stockholder is a party.
(ii) Shares. As of the Effective Time, the Stockholder is the
record and beneficial owner of the number of Shares set forth across from such
Stockholder's name on Schedule 2.2(a)(ii).
(b) Each Stockholder that is a natural person, severally and not
jointly, hereby represents and warrants, as to itself only and not as to any
other Stockholder, to the other parties hereto as follows:
4
(i) Authority. The Stockholder has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by the Stockholder of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly authorized by all necessary action on the part of the Stockholder and
does not conflict with, or result in a breach of, any law or regulation of any
governmental authority applicable to any the Stockholder or any material
agreement to which such the Stockholder is a party. This Agreement has been duly
executed and delivered by the Stockholder and constitutes a valid and binding
obligation, enforceable against the Stockholder in accordance with its terms.
(ii) Shares. As of the Effective Time, the Stockholder is the
record and beneficial owner of the number of Shares set forth across from such
Stockholder's name on Schedule 2.2(b)(ii).
ARTICLE III
CORPORATE GOVERNANCE; CERTAIN CORPORATE ACTIONS
Section 3.1. Voting of Shares; Company Actions.
(a) From and after the date hereof and until the termination of the
Special Voting Period, each Stockholder shall vote all Shares owned or
controlled by such Stockholder, and shall take all other necessary or desirable
actions within such Stockholder's control (including, if permitted, attendance
at meetings in person or by proxy for purposes of obtaining a quorum and, if
permitted, execution of written consents in lieu of meetings), so that the
composition of the Board of Directors and the manner of selecting members
thereof shall be as set forth in Article Fifth of the Company's Certificate of
Incorporation, Section 3.2 of the Bylaws and this Article III, and to otherwise
effectuate the provisions of this Agreement.
(b) From and after the date hereof, the Company shall take all
necessary or desirable actions within its control (including calling special
board and stockholder meetings) to effectuate the provisions of this Agreement.
Section 3.2. Composition of the Board of Directors.
(a) Election of Xxxxxxx Xxxxxx. During the Special Voting Period,
for so long as he is the Chief Executive Officer of the Company, the Company
shall nominate Xxxxxxx Xxxxxx to serve as a Director of the Company, and include
Xx. Xxxxxx as a nominee in its proxy statement to be distributed to stockholders
in connection with the annual meeting of stockholders. In the event the
nomination rights set forth in this provision are not permitted by applicable
Nasdaq rules, or if the Company's Common Stock is not then traded on the Nasdaq
National Market, the comparable requirements of the principal securities
exchange or market on which the Company's Common Stock is then listed or
approved for trading, the Nominating Committee will then have the exclusive
delegated authority of the Board to fill the directorship contemplated hereby.
5
(b) Nomination Rights. The following provisions shall apply during
the Special Voting Period and in each case to the extent permitted by applicable
law and by applicable rules and listing standards of the principal securities
exchange or market on which the Common Stock is listed or approved for trading:
Prior to each annual meeting of stockholders of the Company during the Special
Voting Period, the Wachovia Stockholders and, if they fail to do so, the Group B
Subcommittee will, subject to the procedures and qualification requirements set
forth in this Agreement, have the right to designate nominees for directors to
be elected by the stockholders at such annual meeting as follows:
NUMBER OF DIRECTOR DESIGNEES
WACHOVIA STOCKHOLDERS HAVE THE
SIZE OF WHOLE BOARD RIGHT TO DESIGNATE
------------------- ------------------------------
9 4
10 5
11 5
12 6
13 6
(c) Vacancies and Newly Created Directorships. Subject to the
procedures and qualification requirements of Section 3.2 of the Bylaws, the
Wachovia Stockholders, or in the event they fail to do so, the Group B
Subcommittee, shall have the exclusive delegated authority of the Board to fill
any vacancy on the Board, or any committee thereof, that was held immediately
prior to such vacancy by a Wachovia Director, and to fill any newly created
directorship for which the Wachovia Stockholders would have the right to
recommend an additional nominee pursuant to paragraph (b) above; provided,
however, that in the event the Wachovia Stockholders and the Group B
Subcommittee fail to fill any such vacancy or newly created directorship
pursuant to the procedures and qualification requirements of Section 3.2 of the
Bylaws, the Nominating Committee will then have the exclusive delegated
authority of the Board to fill such vacancy or newly created directorship until
the next annual meeting of stockholders, and the person so chosen will not be
considered a Wachovia Director, and will not be required to meet the
qualification requirements of paragraph (d) below.
(d) Qualification Requirements. The Wachovia Stockholders will not
have the right to designate nominees for election as directors and the Group B
Subcommittee will not have the right to fill a vacancy or newly created
directorship for a Wachovia Director unless, after giving effect to the election
of such nominees or the filling of such vacancies or newly created
directorships, there would be at least three (3) Independent Wachovia Directors;
provided, however, that if the size of the Board is 12 or 13, there must be at
least four (4) Independent Wachovia Directors.
6
(e) Procedures. The Wachovia Stockholders shall inform the Company
in writing of its recommended nominees for election of directors to the Board of
Directors by delivering written notice thereof not less than forty (40) days
prior to the mailing of the Company's proxy statement to be distributed to
stockholders in connection with the annual meeting of stockholders; provided,
that the Company shall give the Wachovia Stockholders at least sixty (60) days
prior written notice of such mailing date. The notice to the Company shall also
contain such information relating to such nominees as is required to be
disclosed in a proxy statement or other filings required to be made by the
Company in connection with the solicitation of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder, and from which the Board can determine that the
qualification requirements set forth in paragraph (d) above have been satisfied;
provided, however, that if any such notice does not contain such information,
the Wachovia Stockholders shall provide such information within five business
days after written request therefor.
(f) Dissolution. The Group B Subcommittee shall be dissolved, if at
all, in accordance with Section 3.2(b)(ii)(G) of the Bylaws.
Section 3.3. Nomination Rights Following Expiration of the Special Voting
Period. Upon expiration of the Special Voting Period, a Major Stockholder will
have the right to designate nominees for Directors to be elected by the
stockholders at such annual meeting as set forth in the table below, in each
case to the extent permitted by applicable law and by applicable rules and
listing standards of the principal securities exchange or market on which the
Common Stock is listed or approved for trading; provided, however, that:
(a) such Major Stockholder has continuously held shares of the
Common Stock from the date of this Agreement through and including the time the
nomination right, if any, available to such Major Stockholder is exercised;
(b) only shares of Common Stock held (i) directly by such Major
Stockholder or (ii) by other Stockholders in such Major Stockholder's
Stockholder Group and beneficially owned by such Major Stockholder will be
counted for purposes of determining the percentage of outstanding shares of
Common Stock held by such Major Stockholder;
(c) only one Major Stockholder from each Stockholder Group shall
have nomination rights pursuant to this Section 3.3; and
(d) if after the expiration of the Special Voting Period the
percentage of outstanding Common Stock owned by a Major Stockholder is reduced
so as to cause the number of Director Designees such Major Stockholder would
have the right to designate pursuant to this Section 3.3 to be reduced, then the
maximum number of Director Designees such Major Stockholder will have the right
to designate pursuant to this Section 3.3 shall be permanently reduced to such
number of Director Designees.
7
PERCENTAGE OF OUTSTANDING COMMON STOCK HELD BY NUMBER OF DIRECTOR DESIGNEES STOCKHOLDER HAS THE RIGHT
STOCKHOLDER TO DESIGNATE
---------------------------------------------- ------------------------------------------------------
30% OR GREATER 3
> OR = 20% AND < 30% 2
> OR = 10% AND < 20% 1
< 10% 0
Section 3.4. Termination of Voting Obligations. From and after the
termination of the Special Voting Period, the provisions of Section 3.1(a) shall
terminate and be of no further force or effect, and the Stockholders shall
thereafter have no obligation under this Agreement with respect to (i) the
voting of any of their respective shares of Common Stock, including any
obligation to vote for nominees nominated pursuant to Section 3.3, or (ii) the
taking of any actions described in Section 3.1 with respect to the composition
of the Board of Directors.
Section 3.5. Observer Rights.
(a) During the Special Voting Period, so long as the Junior
Stockholders continue to hold at least 50% of the shares of Common Stock they
held as of the Effective Time, the Company shall (i) give the Junior
Stockholders written notice of each meeting of its Board of Directors and (ii)
permit two representatives of the Junior Stockholders, in each case designated
by their Stockholder Representative, to attend as an observer all meetings of
its Board of Directors.
(b) During the Special Voting Period, so long as the Hornets
Stockholders continue to hold at least 50% of the shares of Common Stock they
held as of the Effective Time, the Company shall (i) give the Hornets
Stockholders written notice of each meeting of its Board of Directors and (ii)
permit one representative of the Hornets Stockholders, designated by the Hornets
Stockholder Representative, to attend as an observer all meetings of its Board
of Directors.
(c) Each representative appointed pursuant to Section 3.5(a) and
3.5(b) shall be entitled to (i) receive all written materials and other
information (including, without limitation, copies of meeting minutes) given to
Directors in connection with such meetings at the same time such materials and
information are given to the Directors, and, upon reasonable notice and during
normal business hours (ii) visit and inspect any of the properties of the
Company and its Subsidiaries and (iii) discuss the affairs, finances and
accounts of any such entities with the Directors, officers and key employees of
the Company and its Subsidiaries. All travel and other expenses incurred by a
representative in connection with attending any meeting of the Board of
Directors or otherwise in connection with the rights granted in this Section 3.5
shall be the responsibility of such representative and/or the Stockholder Group
by which such representative was designated. The Company shall have no liability
or obligation with respect to such expenses.
8
(d) As a condition to attending any meetings of the Board of
Directors and receiving the written materials and other information contemplated
in Section 3.5(c), each representative must enter into a confidentiality and
non-use agreement, in form satisfactory to the Company, pursuant to which such
representative agrees not to, without the prior written consent of the Company,
disclose to any third party any information obtained about the Company or its
operations or business which it may have acquired pursuant to this Agreement and
the observer rights granted hereunder; provided, however, that any information
that is otherwise publicly available, without breach of this provision, or has
been obtained from a third party without a breach of such third party's duties,
shall not be deemed confidential information. Notwithstanding anything to the
contrary set forth in this Section 3.5, the Company reserves the right to
exclude any representative from access to any material or meeting or portion
thereof if the Company believes (i) upon advice of counsel that such exclusion
is reasonably necessary to preserve the attorney-client privilege, to protect
highly confidential proprietary information, to satisfy the fiduciary duties of
the Board of Directors or for other similar reasons or (ii) that such
representative has or intends to use information obtained about the Company or
its operations or business which it may have acquired pursuant to this Agreement
or the observer rights granted hereunder for unlawful or improper purposes. Each
representative shall be subject to recusal in any circumstance in which a
Director would be subject to recusal.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.1. Entire Agreement. This Agreement, together with the Schedules
hereto, constitutes the entire agreement and understanding of the parties in
respect of the subject matter hereof and supersedes all prior understandings,
agreements or representations by or among the parties, written or oral, to the
extent they relate in any way to the subject matter hereof. There are no third
party beneficiaries having rights under or with respect to this Agreement.
Section 4.2. Assignment. Except as provided in this Section 4.2 and in
Section 4.3, no party may assign either this Agreement or any of its rights,
interests or obligations hereunder without the prior written approval of the
other parties. All of the terms, agreements, covenants, representations,
warranties and conditions of this Agreement are binding upon, and inure to the
benefit of and are enforceable by, the parties and their respective successors
and permitted assigns. Notwithstanding the foregoing, a Stockholder may, without
the consent of any of the parties hereto, assign its rights and obligations
hereunder to an Affiliate in connection with the sale or other transfer to such
Affiliate of shares of such Stockholder's Common Stock
Section 4.3. Transfers of Shares. Except as set forth in Section 4.2, any
transfer of shares of Common Stock by a Stockholder (other than to an Affiliate
of such Stockholder or to a party to this Agreement) will be free and clear of
any and all rights and obligations under this Agreement; provided, however, that
any purported sale or other transfer by a Stockholder of 30% or more of the
outstanding Common Stock (other than to an Affiliate of such Stockholder or to a
party to this Agreement) shall be void and have no effect unless the party to
whom such shares are transferred has agreed in writing to be bound by the terms
and conditions of this Agreement.
9
Section 4.4. Notices. All notices, requests and other communications
provided for or permitted to be given under this Agreement must be in writing
and shall be given by personal delivery, by certified or registered United
States mail (postage prepaid, return receipt requested), by a nationally
recognized overnight delivery service for next day delivery, or by facsimile
transmission, as follows (or to such other address as any party may give in a
notice given in accordance with the provisions hereof):
If to a Stockholder: To the address given under such
Stockholder's name on the Signature Pages.
If to the Company:
Venturi Partners, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
with a copy (which will not constitute notice) to:
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxx. 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, P.C.
Facsimile: 214-969-4343
All notices, requests or other communications will be effective and deemed given
only as follows: (i) if given by personal delivery, upon such personal delivery,
(ii) if sent by certified or registered mail, on the fifth business day after
being deposited in the United States mail, (iii) if sent for next day delivery
by overnight delivery service, on the date of delivery as confirmed by written
confirmation of delivery, (iv) if sent by facsimile, upon the transmitter's
confirmation of receipt of such facsimile transmission, except that if such
confirmation is received after 5:00 p.m. (in the recipient's time zone) on a
business day, or is received on a day that is not a business day, then such
notice, request or communication will not be deemed effective or given until the
next succeeding business day. Notices, requests and other communications sent in
any other manner, including by electronic mail, will not be effective.
Section 4.5. Specific Performance; Remedies. Each party acknowledges and
agrees that the other parties would be damaged irreparably if any provision of
this Agreement were not performed in accordance with its specific terms or were
otherwise breached. Accordingly, the parties will be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and its provisions in any action or
proceeding instituted in any state or federal court sitting in the State of
Delaware having jurisdiction over the parties and the matter, in addition to any
other remedy to which they may be entitled, at law or in equity. Except as
expressly provided herein, the rights, obligations and remedies created by this
Agreement are cumulative and in addition to any other rights,
10
obligations or remedies otherwise available at law or in equity. Except as
expressly provided herein, nothing herein will be considered an election of
remedies.
Section 4.6. Submission to Jurisdiction; No Jury Trial.
(a) Submission to Jurisdiction. Any action, suit or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall
only be brought in any federal court located in the State of Delaware or any
Delaware state court, and each party consents to the exclusive jurisdiction and
venue of such courts (and of the appropriate appellate courts therefrom) in any
such action, suit or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such, action, suit or proceeding in any such court or that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum. Process in any such action, suit or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, service of
process on such party as provided in Section 4.4 shall be deemed effective
service of process on such party.
(b) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES THAT ANY DISPUTE
THAT MAY ARISE OUT OF OR RELATING TO THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE SUCH PARTY HEREBY EXPRESSLY
WAIVES ITS RIGHT TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. THE SCOPE OF THIS WAIVER IS
INTENDED TO ENCOMPASS ANY AND ALL ACTIONS, SUITS AND PROCEEDINGS THAT RELATE TO
THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY REPRESENTS THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO
ENFORCE THE FOREGOING WAIVER, (ii) SUCH PARTY UNDERSTANDS AND WITH THE ADVICE OF
COUNSEL HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND REPRESENTATIONS IN THIS
SECTION 4.6(b).
Section 4.7. Headings. The article and section headings contained in this
Agreement are inserted for convenience only and will not affect in any way the
meaning or interpretation of this Agreement.
Section 4.8. Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to any choice of law principles or conflicts of law rules (whether of the
State of Delaware or any other jurisdiction)
11
that would result in the application of the substantive or procedural laws of
any other jurisdiction and, as applicable the federal laws of the United States.
Section 4.9. Amendment. This Agreement may not be amended or modified
except by a writing signed by all of the parties.
Section 4.10. Extensions; Waivers. Any party may, for itself only, (a)
extend the time for the performance of any of the obligations of any other party
under this Agreement, (b) waive any inaccuracies in the representations and
warranties of any other party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any such extension or
waiver will be valid only if set forth in a writing signed by the party to be
bound thereby. No waiver by any party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, may be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of warranty or covenant hereunder or affect in any way any rights arising
because of any prior or subsequent such occurrence. Neither the failure nor any
delay on the part of any party to exercise any right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy preclude any other or further exercise of the
same or of any other right or remedy
Section 4.11. Severability. The provisions of this Agreement will be
deemed severable and the invalidity or unenforceability of any provision will
not affect the validity or enforceability of the other provisions hereof;
provided that if any provision of this Agreement, as applied to any party or to
any circumstance, is judicially determined not to be enforceable in accordance
with its terms, the parties agree that the court judicially making such
determination may modify the provision in a manner consistent with its
objectives such that it is enforceable, and/or to delete specific words or
phrases, and in its modified form, such provision will then be enforceable and
will be enforced.
Section 4.12. Expenses. Except as otherwise expressly provided in this
Agreement, each party will bear its own costs and expenses incurred in
connection with the preparation, execution and performance of this Agreement and
the transactions contemplated hereby, including all fees and expenses of agents,
representatives, financial advisors, legal counsel and accountants.
Section 4.13. Counterparts; Effectiveness. This Agreement may be executed
in two or more counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument. This Agreement will
become effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties. For purposes of determining whether
a party has signed this Agreement or any document contemplated hereby or any
amendment or waiver hereof, only a handwritten original signature on a paper
document or a facsimile copy of such a handwritten original signature shall
constitute a signature, notwithstanding any law relating to or enabling the
creation, execution or delivery of any contract or signature by electronic
means.
12
Section 4.14. Construction. This Agreement has been freely and fairly
negotiated among the parties. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties and no presumption or burden of proof will arise favoring or
disfavoring any party because of the authorship of any provision of this
Agreement. Any reference to any law will be deemed also to refer to such law as
amended and all rules and regulations promulgated thereunder, unless the context
requires otherwise. The words "include," "includes," and "including" will be
deemed to be followed by "without limitation." Pronouns in masculine, feminine,
and neuter genders will be construed to include any other gender, and words in
the singular form will be construed to include the plural and vice versa, unless
the context otherwise requires. The words "this Agreement," "herein," "hereof,"
"hereby," "hereunder," and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited. The
parties intend that each representation, warranty, and covenant contained herein
will have independent significance. If any party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
party has not breached will not detract from or mitigate the fact that the party
is in breach of the first representation, warranty, or covenant.
Section 4.15. Confidentiality. No party to this Agreement, nor any of
their respective Affiliates, employees, agents or representatives, shall
disclose to any third party any information obtained about the Company or its
operations or business which it may have acquired pursuant to this Agreement
without the prior written consent of the Company; provided, that any information
that is otherwise publicly available, without breach of this provision, or has
been obtained from a third party without a breach of such third party's duties,
shall not be deemed confidential information.
Section 4.16. Termination.
(a) The rights and obligations specified in Sections 3.1 and 3.2
shall terminate automatically at the end of the Special Voting Period.
(b) The rights and obligations specified in Section 3.3 shall
terminate automatically on the date on which no Major Stockholder owns more than
10% of the issued and outstanding shares of Common Stock..
(c) The rights and obligations specified in Section 3.5 shall
terminate automatically on the earlier of (A) the end of the Special Voting
Period and (B) (i) as to the Hornets Stockholders, the date on which the Hornets
Stockholders and (ii) as to the Junior Stockholders, the date on which the
Junior Stockholders, hold less than 50% of the shares of Common Stock they held
as of the Effective Time.
(d) This Agreement shall terminate and cease to be binding on any
particular Stockholder on the date on which such Stockholder ceases to own any
shares of Common Stock.
13
Section 4.17. Effective Time. Notwithstanding anything herein to the
contrary, this Agreement shall become effective at the Effective Time of the
Merger, and the representations and warranties contained herein shall be deemed
made as of the Effective Time.
Section 4.18. Stockholder Representative. For administrative convenience,
each Stockholder Group shall designate an individual to serve as such group's
representative (each a "STOCKHOLDER REPRESENTATIVE") for purposes of this
Agreement to take action on behalf of such Stockholder group in connection with
this Agreement. The initial Stockholder Representative of each Stockholder Group
is identified on Schedule 4.18 and may be changed from time to time by the
applicable Stockholder Group upon notice given to the other parties pursuant to
Section 4.4 and executed by each member of such Stockholder Group. Each Wachovia
Stockholder, Junior Stockholder and Hornets Stockholder hereby appoints the
initial Stockholder Representative and each person or entity who is, from time
to time, duly appointed under this Section 4.18 as the Stockholder
Representative of the Stockholder Group to which such Stockholder is a member to
give any consent or approval, exercise any right or take any action contemplated
under this Agreement on behalf of such Stockholder. The members of each
Stockholder Group shall be bound by such Stockholder Group's Stockholder
Representative and the parties to this Agreement shall be entitled to rely on
the actions taken by the any Stockholder Representative under this Agreement.
[SIGNATURE PAGES FOLLOW]
14
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their authorized representatives as of the date stated in the introductory
paragraph of this Agreement.
VENTURI PARTNERS, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
______________________________________
Xxxxxxx X. Xxxxxx, Individually
THE WACHOVIA STOCKHOLDERS:
WACHOVIA INVESTORS, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
Address: Wachovia Capital Partners
One Wachovia Center, 12th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Principal
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx,
L.L.P.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: T. Xxxxxxx Xxxxxxxxxxx
Fax: (000) 000-0000
[Signature Page to Voting Agreement]
THE JUNIOR STOCKHOLDERS:
X.X. XXXXXX DIRECT CORPORATE FINANCE
INSTITUTIONAL INVESTORS LLC
By:___________________________________
Name:_________________________________
Title:________________________________
Address:______________________________
______________________________
______________________________
X.X. XXXXXX DIRECT CORPORATE FINANCE
PRIVATE INVESTORS LLC
By:___________________________________
Name:_________________________________
Title:________________________________
Address:______________________________
______________________________
______________________________
OLD TRAFFORD INVESTMENT PTE LTD.
By:___________________________________
Name:_________________________________
Title:________________________________
Address:______________________________
______________________________
______________________________
[Signature Page to Voting Agreement]
GTCR FUND IV, L.P.
By:___________________________________
Name:_________________________________
Title:________________________________
Address:______________________________
______________________________
______________________________
THE HORNETS STOCKHOLDERS:
By:___________________________________
Name:_________________________________
Title:________________________________
Address:______________________________
______________________________
______________________________
By:___________________________________
Name:_________________________________
Title:________________________________
Address:______________________________
______________________________
______________________________
By:___________________________________
Name:_________________________________
Title:________________________________
[Signature Page to Voting Agreement]
Address:______________________________
______________________________
______________________________
By:___________________________________
Name:_________________________________
Title:________________________________
Address:______________________________
______________________________
______________________________
By:___________________________________
Name:_________________________________
Title:________________________________
Address:______________________________
______________________________
______________________________
[Signature Page to Voting Agreement]
SCHEDULE 2.2(a)(ii)
Stockholder Shares (non-natural person)
STOCKHOLDER SHARES
Wachovia Investors, Inc. [*]
X.X. Xxxxxx Direct Corporate Finance Institutional
Investors LLC [*]
X.X. Xxxxxx Direct Corporate Finance Private Investors LLC [*]
Old Trafford Investment Pte Ltd. [*]
GTCR Fund IV, L.P. [*]
SCHEDULE 2.2(b)(ii)
Stockholder Shares (natural person)
STOCKHOLDER SHARES
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Schedule 4.18
Initial Stockholder Representatives
STOCKHOLDER GROUP INITIAL STOCKHOLDER REPRESENTATIVE
Wachovia Stockholder Group [*]
Junior Stockholder Group [*]
Hornets Stockholder Group [*]
EXHIBIT P
Certain Employees
Xxxxxx X. Xxxxxxxx
EXHIBIT Q
Form of Separation and Release Agreement
[ATTACHED]
[Date]
RE: SEPARATION AND RELEASE AGREEMENT
Dear ___________:
This letter sets forth the Separation and Release Agreement (the
"Agreement") we have entered into with respect to your separation from Venturi
Partners, Inc. ("Venturi"). The terms and conditions will be as follows:
(A) As used in the Agreement, the term "Venturi" shall mean Venturi Partners,
Inc., f/k/a _________________, Inc., its past and present corporate
parents, affiliates, subsidiaries and employee benefit plans, and their
respective past, present and future officers, directors, managers,
employees, shareholders, attorneys, agents, administrators,
representatives, subsidiaries, affiliates, successors, predecessors, and
assigns (in their individual and representative capacities).
(B) This Agreement shall supersede and replace all prior agreements and
understandings, written and oral, between you and Venturi governing the
terms and conditions of your employment with Venturi, including, but not
limited to: the Employment Agreement dated as of _______________, between
you and ________________ (your "Employment Agreement"), which is hereby
terminated, except that the post-termination obligations set forth in
Sections ____ of your Employment Agreement shall survive its termination.
(C) Your employment with Venturi terminated effective as of _____________ (the
"Termination Date"), and you hereby resign your position as ___________
effective the Termination Date.
(D) Conditioned upon your compliance with all terms and conditions of this
Agreement and provided that you do not revoke this Agreement pursuant to
paragraph 4(f) below, you shall be entitled to receive the benefits and/or
payments set forth in this Agreement.
1. INTRODUCTION. This is an important document. As a result, you are
encouraged to discuss this Agreement with an attorney. In any event, you should
thoroughly review and understand the effect of this Agreement before acting on
it. Therefore, please carefully read this document before you reach your
decision.
2. RELEASE. In consideration for the promises made by Venturi in this
Agreement, you and your personal representatives, agents, heirs and assigns,
forever release and forever discharge Venturi from: all claims, whether known or
unknown, whether brought by you or through a suit brought by any third party on
your behalf, which you had, now have or may have against Venturi relating to or
arising out of your separation from employment, association, or transactions
with Venturi, or otherwise, from the beginning of time through the date this
Agreement is signed by you, including but not limited to any alleged violation
of Title VII of the Civil Rights Act, as
amended; the Employee Retirement Income Security Act of 1974, as amended; the
Americans With Disabilities Act of 1990, as amended; the Age Discrimination in
Employment Act of 1967, as amended; the Fair Labor Standards Act, as amended;
Section 1981 of the Civil Rights Act of 1866; the Older Workers Benefit
Protection Act of 1974; the Family and Medical Leave Act of 1993; any other
federal, state, or local civil or human rights law, any other local, state or
federal law, executive order, rule, regulation or ordinance; any public policy,
tort, breach of implied or express contract or common law claims; and any claim
for costs, fees, or other expenses including attorneys' fees incurred in these
matters. This release specifically includes the release and waiver of all claims
and causes of action that could be asserted by you under your Employment
Agreement. You understand that you are releasing claims that you may not know
about, even though you recognize that some or all of the facts you currently
believe to be true are untrue and even though you might then regret having
signed this Agreement. You expressly waive all rights you might have under any
law that is intended to protect you from waiving unknown claims. You understand
that the release of claims described in this paragraph 2 precludes you from
bringing any claim or action against Venturi except to enforce this Agreement or
challenge the validity of the waiver of ADEA claims.
3. CONSIDERATION.
3.1 In consideration of your obligations under this Agreement,
including, but not limited to your release of claims under the Age
Discrimination in Employment Act of 1967, as amended, and your continued
compliance with your post-termination obligations contained in your Employment
Agreement, Venturi shall pay you _____________($______) semi-monthly. These
semi-monthly payment shall commence on the ____ normal payroll date following
the Review Period, and shall cease upon the earlier of (i) payment by Venturi of
an aggregate gross amount of ______________ ($______) or (ii) any violation of
Sections ____ of your Employment Agreement or any other breach of any of the
terms of this Agreement.
3.2 All payments made pursuant to paragraph 3.1 will be subject to
legally-required withholdings. You understand and acknowledge that to the extent
you are entitled to severance pay and/or vacation leave, and any other
compensation as required by Venturi's policy, under any agreement or
understanding between you and Venturi, and/or pursuant to federal or state law,
those amounts are included as part of the total amount you are being paid for
signing this Agreement.
3.3 In addition to the payments set forth above, for a period of up
to ____ months following your Termination Date, Venturi will pay your monthly
payments under the Consolidated Omnibus Budget Reconciliation Act of 1985,
Section 4980B of the Internal Revenue Code of 1986 ("COBRA"), as amended, so
that you and your spouse and children may continue to receive group medical
insurance coverage at the same coverage level that you and your spouse and
children had at the time of your Termination Date ("COBRA Payments"). The COBRA
Payments shall cease upon the earlier of (i) payment by Venturi of ____ months
of COBRA coverage, (ii) the date you commence new employment or otherwise obtain
coverage under another group medical plan, which coverage does not contain any
pre-existing condition exclusions or limitations or (iii) any violation of
Sections ____ of your Employment Agreement or any other material breach of any
Venturi Partners, Inc.______________ Employee's Initials:______________
of the terms of this Agreement. At the termination of benefits coverage under
the preceding sentence, you and your spouse and children may continue to
exercise your rights to continued health benefits coverage (to the extent
permitted by applicable law), pursuant to the provisions of COBRA, at your own
expense.
3.4 Venturi agrees to reimburse you for any reasonable business
expenses incurred prior to your Termination Date in accordance with Venturi's
policies and submitted no later than forty-five (45) days from your Termination
Date.
4. You acknowledge that the terms of this Agreement fully comply with the
Older Workers' Benefits Protection Act of 1990, and that said terms therefore
are final and binding. Specifically you acknowledge, warrant and represent that:
(a) The terms of the Agreement are not only understandable, but they
are fully understood by you;
(b) This Agreement specifically refers to your rights and claims
under the Federal Age Discrimination in Employment Act, as well as state
and local law prohibiting age discrimination, and you understand that such
rights and claims are irrevocably being waived by you;
(c) The consideration received in this Agreement is adequate to make
it final and binding, and said consideration is, on the whole, greater
than the payments and benefits to which you would otherwise have been
entitled to as a former employee of Venturi;
(d) You have been advised, both orally and by this writing, of your
right to consult with an attorney before entering into this Agreement, and
you have exercised such right or expressly chosen, on your own volition,
not to exercise such right;
(e) You have been given adequate time, at least twenty-one (21) days
if you so desire, to consider this Agreement; and
(f) You may revoke your release of claims under this Agreement up to
seven (7) days after execution of this Agreement (the "Review Period"),
following which time your release of such claims shall be final and
binding. The payment by Venturi recited in paragraph 3 above shall not be
made until after the passing of the Review Period.
Rights or claims under the Age Discrimination and Employment Act that may
arise after the date this Agreement is executed, are not waived.
5. You hereby represent that you have not waived, and you further agree
that hereafter you shall not waive on behalf of Venturi any privileges or
confidences that Venturi may have with respect to any information or
communication imparted to you, including but not limited to communications with
attorneys.
Venturi Partners, Inc.______________ Employee's Initials:______________
6. To the extent not prohibited by law, you agree that you shall not
assist, encourage or promote any litigation or investigation by any private
individual or entity against Venturi or against any current or former Venturi
employee. You agree that you shall not discuss any facts arising out of or
related to your employment or anyone else's employment with Venturi or any facts
concerning Venturi's business and business practices with private parties
adverse to Venturi or their counsel, except by way of deposition or trial
testimony. The foregoing shall not be deemed to prohibit you from responding to,
or complying with, any valid subpoena served on you. In the event that you are
required by law, court order, or subpoena to make any disclosure concerning this
Agreement or any facts arising out of or related to your employment or anyone
else's employment with Venturi or facts concerning Venturi's business or
business practices, you shall promptly notify Venturi of the request for
information so as to afford Venturi sufficient opportunity to protect and/or
enforce the confidentiality provisions of this Agreement. Notice shall be given
immediately upon receipt of such an inquiry to Venturi's General Counsel, at
_______________. You represent that no communications that would be prohibited
by this Agreement, had they occurred after the date of its execution, were made
prior to the signing of this Agreement.
7. For a period of two (2) years following execution of this Agreement,
you agree to furnish Venturi with such cooperation as it may reasonably request
in the investigation, defense or prosecution of any potential or actual claim,
charge, or suit by or against Venturi, or in the ongoing operation of Venturi.
Venturi agrees to reimburse you for reasonable travel expenses (including
transportation, meals and lodging) you may incur in providing such cooperation.
As used herein, the term "cooperation" shall mean:
(a) making yourself available from time to time for meetings with
counsel to Venturi or management of Venturi;
(b) making yourself available for depositions and trial testimony
upon the request of counsel for Venturi; and
(c) executing those documents and affidavits requested from time
to time by counsel for Venturi.
8. You covenant not to disparage Venturi or make any statements calculated
to be derogatory or harmful concerning Venturi or any of its officers, employees
or directors, or to take any action calculated to be harmful to the business or
affairs of Venturi. Venturi shall follow its standard policy in responding to
any requests for references, i.e., Venturi will confirm dates of employment and
position held.
9. You covenant that you have not taken any actions, or omitted to take
action, or engaged in any conduct while employed by Venturi which would be a
violation of Venturi's policies and procedures or which would result in any
claims giving rise to liability or legal exposure to Venturi.
10. You covenant that you have returned to Venturi all documents, reports,
files, memoranda, and records, credit cards, card key passes, door and file
keys, computer access codes,
Venturi Partners, Inc.______________ Employee's Initials:______________
software, computer equipment, "Confidential Information" as described in your
Employment Agreement, and other physical or personal property which you received
or prepared or helped to prepare in connection with your employment and which
you have in your possession or control (collectively, "Venturi's Property"). You
represent that you have not retained and will not retain any copies, duplicates,
reproductions or excerpts thereof.
11. You hereby reaffirm your intention to comply with your
post-termination obligations contained in your Employment Agreement.
12. You agree that this Agreement may be used as evidence in a subsequent
proceeding in which any of the parties allege a breach of this Agreement.
However, you further agree that the fact that you and Venturi have reached this
Agreement, specifically including, but not limited to, the amount or general
magnitude of the monetary payment hereunder, will be treated as a strictly
confidential matter between the parties, and will not be released to any other
person whomsoever, nor to the news media, communicated to any future, current or
former employee of Venturi, except as may be necessary to communicate needed
information to your accountant, tax advisor, lawyer, or spouse, or under Court
direction or order.
13. The terms and conditions of this Agreement are a compromise and
settlement of disputed and potentially disputed claims, the validity,
sufficiency, existence or occurrence of which are expressly denied by Venturi.
It is understood and agreed by the parties hereto that this Agreement does not
constitute, and shall not be construed as, an admission by Venturi of any breach
of contract or other violation of any right of yours, or any harm to you of any
kind whatsoever, or of any federal, state or local statute, law, ordinance, or
regulation. This Agreement sets forth the entire agreement between the parties
hereto, and fully supersedes any and all prior agreements or understandings,
written and oral, between the parties hereto pertaining to the subject matter
hereof. No modification, amendment or waiver of any provision of this Agreement
shall be effective against a party hereto unless such modification, amendment or
waiver is approved in writing by you and the General Counsel of Venturi.
14. The parties hereto affirm that the only consideration for their
execution of this Agreement are the terms stated herein, that no other promise
or agreements of any kind have been made to or with them by any person or entity
whomsoever to cause them to execute this Agreement, and that they fully
understand the meaning and intent of this Agreement, including, but not limited
to, its final and binding effect.
15. The parties hereto expressly warrant and represent and do hereby state
and represent that no promise or agreement which is not herein expressed has
been made in executing this release, and that no party is relying upon any
statement or representation of any agent of the other party being released
hereby.
16. THIS AGREEMENT IS MADE AND ENTERED INTO IN THE STATE OF TEXAS, AND
SHALL IN ALL RESPECTS BE INTERPRETED, ENFORCED AND GOVERNED UNDER THE LAWS OF
THE STATE OF TEXAS INCLUDING ITS CHOICE OF LAW RULES. The language of all parts
of this Agreement shall in all cases be construed as a
Venturi Partners, Inc.______________ Employee's Initials:______________
whole, according to its fair meaning, and shall not be construed strictly for or
against either of the parties.
17. If, for any reason, any part of this Agreement is declared invalid,
such decision shall not affect the validity of the remaining portion, which
remaining portion shall remain in full force and effect as if this Agreement had
been executed with the invalid portions thereof eliminated. It is hereby
declared the intention of the parties that they would have executed the
remaining portion of this Agreement without including any such part, parts, or
portions that may, for any reason, be hereafter declared invalid.
18. You and Venturi understand and agree that this Agreement shall be
binding upon you and your heirs, administrators, representatives, executors and
assigns, and binding upon Venturi and its successors in interest and assigns and
its enforceability shall not be challenged.
19. It is understood and agreed that this Agreement may be executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes.
20. YOU HEREBY ACKNOWLEDGE THAT YOU HAVE READ THIS AGREEMENT AND THAT YOU
UNDERSTAND ALL OF ITS TERMS AND EXECUTE IT VOLUNTARILY WITH FULL KNOWLEDGE OF
ITS SIGNIFICANCE AND THE CONSEQUENCES THEREOF. FURTHER, YOU ACKNOWLEDGE THAT YOU
HAVE HAD AN ADEQUATE OPPORTUNITY TO REVIEW AND CONSIDER THE TERMS OF THIS
AGREEMENT, INCLUDING, AT YOUR DISCRETION, THE RIGHT TO DISCUSS THIS DOCUMENT
WITH LEGAL COUNSEL OF YOUR CHOICE. FINALLY, YOU HEREBY ACKNOWLEDGE THAT YOU
INTEND TO GRANT TO VENTURI A FULL AND FINAL RELEASE AS SET FORTH HEREIN.
Please indicate your agreement by signing in the space provided below.
Very truly yours,
Accepted and Agreed:
______________________________ _____________________________
Date
Accepted and Agreed:
Venturi Partners, Inc.
_______________________________ ____________________________
Date
Venturi Partners, Inc.______________ Employee's Initials:______________
EXHIBIT R
Form of Severance and Retention Agreement
[ATTACHED]
[Date]
[name]
[address]
[address]
RE: SEVERANCE AND RETENTION PAYMENT
Dear [_____]:
As you are aware, Venturi Partners, Inc. and certain of its affiliates
(collectively, "VENTURI") have entered into a transaction in which a
newly-formed, wholly-owned subsidiary of VENTURI will be merged with and into
Comsys Holding, Inc. ("Holdings"), a Delaware corporation that owns 100% of the
issued and outstanding capital stock of Comsys Information Technology Services,
Inc. ("COMSYS"), such that COMSYS will become an indirectly wholly-owned
subsidiary of VENTURI (such transaction referred to herein as, the "Proposed
Merger"). VENTURI and COMSYS are referred to herein as, the "Company." It is
anticipated that the merger will take place in late September 2004, although the
actual date may differ (for purposes of this letter agreement, the "Closing
Date" shall mean the actual date of the closing of the Proposed Merger).
Due to the Proposed Merger, certain positions will unfortunately be
eliminated. Your position has been selected for elimination.
At this time, it is anticipated that VENTURI will continue to employ you
through the Closing Date, and then for an additional period of time thereafter.
In order to ensure the smooth transition up to and following the Closing Date,
VENTURI will pay you severance and a retention payment pursuant to the terms and
conditions set forth below:
1. Severance and Retention Payment. It is anticipated that you will be
employed by VENTURI for a period of [___] to [___] days following
the Closing Date. The exact date of the proposed elimination of your
position (the "Retention Date") will be determined by VENTURI
following the Closing Date. Subject to the terms and conditions of
this letter agreement, if you are employed by VENTURI continuously
through the Retention Date, you will receive severance in accordance
with VENTURI's Separation Pay Policy, dated February 23, 2001.
Additionally, you will receive a retention payment in the amount of
$[__________], less applicable withholdings (collectively, these
payments shall be referred to as, the "Severance and Retention
Payment"). VENTURI may, in its sole discretion, pay your Severance
and Retention Payment in one lump sum payment or in two or more
equal payments, based on your normal semi-monthly or bi-weekly base
pay. If you voluntarily resign your employment or your employment is
terminated for cause, as determined in the sole discretion of
VENTURI, prior to the Retention Date, you will not be eligible for
any portion of the Severance and Retention Payment. If VENTURI
terminates your employment prior to your established "Retention
Date" for reasons other than cause, you will remain eligible for
payment of the "Severance and Retention Payment". The Severance and
Retention Payment set forth in this letter agreement shall be in
lieu of any severance amounts that you would otherwise be eligible
to receive under VENTURI's severance program or pursuant to any
agreements or understandings between you and VENTURI.
2. Terms and Conditions for Receiving the Severance and Retention
Payment. Payment of the Severance and Retention Payment under this
letter agreement shall be contingent upon all of the following:
a. The successful closing of the Proposed Merger. If, for any
reason, the Proposed Merger does not occur, you shall not be
entitled to any amounts under this letter agreement, and any
severance payment to you should you be terminated by VENTURI
shall be determined without regard to this letter agreement.
b. Your execution of a separation and release agreement, which
will be provided to you by VENTURI on or following the
Retention Date.
c. Your satisfactory job performance, including your attendance,
as determined in the sole discretion of VENTURI.
3. Non-Solicitation/Non-Disclosure. In the course of performing your
job duties, VENTURI may provide you with certain confidential
information, trade secrets, and access to computer information and
systems, which are the exclusive, proprietary information and
property of the Company. These include but are not limited to access
to the Company's intranet, Front Office Exchange (FOX) system, email
system, front, middle and back office systems, and PDAs. The Company
desires to protect such information from disclosure and prevent
unfair competition by you during employment and after your
separation from VENTURI. Therefore, as a further condition of your
eligibility for the Severance and Retention Payment and your
continued employment with VENTURI, and as acknowledged by your
signature below, you agree that you will not engage in the following
activities:
a. For a period of one (1) year following the termination of
your employment, you will not sell or attempt to sell any
product, process or service that is competitive with, or
similar to, a product, process or service provided directly or
indirectly by the Company to present, former or prospective
customers of the Company for whom you, while employed by
VENTURI, have provided services within the twelve (12) months
prior to the date of your termination of employment, or the
operation or branch office that you have managed or supported,
if applicable, has provided services within the twelve (12)
months prior to the date of your termination of employment.
For purposes of this paragraph, "prospective customer" is
defined as any entity or third party for which the Company has
prepared a sales proposal or has otherwise invested or
expended money in the development of good will or a business
relationship.
b. You will not, during the term of your employment and for
twelve (12) months thereafter, directly or indirectly solicit,
induce, hire, employ, retain, or attempt to hire, employ, or
retain any employee, subcontractor or independent contractor
of the Company on behalf of any individual or entity other
than the Company; solicit, induce, or attempt to induce any
employee, subcontractor or independent contractor of the
Company to leave the Company; or, solicit, induce, or attempt
to induce, any customer, supplier, vendor, person or entity to
cease doing business with the Company.
c. You will not directly or indirectly disclose to any
individual, corporation or other entity, any Trade Secrets
(defined below), or use, cause, facilitate or allow any third
party to use Trade Secrets in any way, except as required in
the course of your employment with the Company. You have a
continuing obligation to maintain the confidentiality of
Company's Trade Secrets and the Trade Secrets of any third
party for an indefinite period of time. Such obligation shall
survive the termination of your employment with the Company.
Such
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Trade Secrets are defined as all items, materials and
information which belong to the Company, relate to the past,
present or future business of the Company, are kept
confidential by the Company, and are not generally known in
the industry in which the Company is engaged. Trade Secrets
include, without limitation, customer lists, customer
contacts, customer requirements, lists of prospects, customer
and supplier contacts and needs, personnel lists, fee
schedules, orientation guides, product manuals, training
manuals, presentations, and materials, inventions, processes
and compilations of information, records and specifications,
computer database, programs and software, third party
information made available to you, financial data and plans,
profit margins and pricing policies and practices, sales and
marketing techniques, business and marketing plans, history
and data forecasts, personnel information including without
limitation compensation structures, qualifications, and hiring
practices, personnel training techniques and materials. Trade
Secrets also include information concerning or relating to any
future or ongoing requirements for services of the customer(s)
that you are or have been providing services to on behalf of
the Company, as well as the requirements of any other
customers, individuals or entities that you have been
introduced to or has otherwise gained information about,
either directly or indirectly, as a result of your employment
with VENTURI. All Trade Secrets provided to you during your
employment are the exclusive property of the Company and/or
its customers. You agree to return to the Company all written
or otherwise recorded Trade Secrets as well as any other
property that belongs to the Company upon termination of
employment or at any other time at the request of the Company.
4. At-Will Employment. This letter agreement shall not be deemed to be
a contract of employment between you and VENTURI or you and the
Company. Nothing contained herein shall be deemed to give you the
right to be retained in the employ of VENTURI or the Company, or to
restrict the right of VENTURI or the Company to discharge you at any
time, for any reason or no reason, with or without notice. Nor shall
this letter agreement be deemed to restrict your right to terminate
your employment at any time for any reason or no reasons, with or
without notice.
Please acknowledge your understanding of this letter agreement, and your
acceptance of the terms and conditions of this letter agreement, by signing in
the space provided below, and returning it to my attention.
Very truly yours,
Venturi Partners, Inc.
Xxxxxx X. Xxxxxxxx
Vice President of Human Resources
Signed and agreed to:
______________________________ _____________________
[name] Date
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