SHAREHOLDERS' AGREEMENT
THIS AGREEMENT, dated as of the __ day of ____________ 1999, by and among
Techtron, Inc. ("Techtron") and the holders of all of the outstanding capital
stock of each of TelaLink Network, Ltd. ("TelaLink") and TelaLink Acquisitions
Corp. ("LoanCo"), each of whom is listed on Schedule A hereto (collectively
referred to as the "TelaLink Group" and individually as "Members of the TelaLink
Group;" Techtron and the TelaLink Group are sometimes collectively referred to
as the "Shareholders" and individually as a "Shareholder").
W I T N E S S E T H:
WHEREAS, TelaLink, Continental Choice Care, Inc. ("CCCI") and TNL
Acquisition, Inc., a wholly owned subsidiary of CCCI, are parties to that
certain Agreement and Plan of Merger dated as of February 5, 1999 (the "Merger
Agreement"); and
WHEREAS, the Members of the TelaLink Group hold all of the TelaLink Common
Stock and all securities convertible into TelaLink Common Stock outstanding on
the date hereof; and
WHEREAS, each capitalized term not defined herein shall have the meaning
ascribed to it in the Merger Agreement; and
WHEREAS, each reference to the word "he" or "his" shall act as a reference
to the word "she" or "her" or "it" in the case of a non-natural person, as
applicable; and
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Merger Agreement that this Agreement be
executed by the parties hereto; and
WHEREAS, the Members of the TelaLink Group have voted in favor of the
Merger Agreement; and
WHEREAS, the Members of the TelaLink Group and Techtron shall receive
benefits from the consummation of the transactions contemplated by the Merger
Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. TECHTRON'S VOTING AGREEMENTS. Techtron agrees that, during the term of this
Agreement, it shall vote each share of the common stock, no par value, of CCCI
(the "CCCI Shares") held by it and shall take such further actions as are within
its legal power, including without limitation, voting to replace directors, in
furtherance of the following:
1.1 ELECTION OF TELALINK DIRECTORS. In favor of the election or
appointment, at all times, of three individuals designated by the TelaLink Group
(the "TelaLink Directors") to the Board of Directors of CCCI (the "Board"),
provided that there shall be included among such individuals not less than one
individual who shall, upon election, qualify as Independent, as hereinafter
defined. In
the event there shall, at any time and for any reason, be less than
one Independent director designated by the TelaLink Group serving on the Board,
the TelaLink Group shall take any and all action reasonably necessary to cause
not less than one Independent director to be elected or appointed to the Board
as one of the TelaLink Group's three designees, including, without limitation,
causing the resignation of one non-Independent designee. In the event that, over
a period of one hundred twenty (120) days, no Independent director is designated
by the TelaLink Group and elected or appointed to the Board, Techtron shall have
the right to designate an individual to be appointed to the Board. For purposes
of this Agreement, the term "Independent" shall mean independent in accordance
with (i) the requirements of the Internal Revenue Service for employee option
and other benefit plans; (ii) the requirements of The Nasdaq Stock Market, Inc.
and each exchange on which CCCI's securities are traded; and (iii) the
requirements of the United States Securities and Exchange Commission with
respect to audit committees, compensation committees and stock option, stock
grant and other employee plans;
1.2 BOARD SIZE. In favor of maintaining a Board comprised of seven (7)
directors.
1.3 TECHTRON. In favor of CCCI taking all actions, including without
limitation, the preparation and filing of placement memoranda, registration
statements and proxies to cause the shares of CCCI held by Techtron to be held
by the shareholders of Techtron on a tax-free basis, whether by merger, sale of
assets or other transaction.
1.4 CERTAIN ACTIONS REQUIRING TELALINK DIRECTOR APPROVAL. Unless such
action shall have been approved by the TelaLink Directors, Techtron shall vote
against any act or omission which would result in CCCI or a Subsidiary (as
defined below) engaging in the sale, lease, assignment or other transfer or
disposal of, or causing or permitting any Subsidiary to sell, lease, assign or
otherwise transfer or dispose of, in one transaction or a series of related
transactions (other than sales of inventory or services in the ordinary course
of business), all or substantially all of CCCI's assets to a third party,
whether through stock or asset sale or otherwise. As used herein, "Subsidiary"
means any corporation, partnership or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
Board (or other persons performing similar functions) are at the relevant time
directly or indirectly owned by CCCI.
1.5 CONTINGENT SHARES. In favor of the issuance of 260,000 shares of the
common stock of CCCI if and in the event the issuance of said shares is required
pursuant to Section 2.2(b) of the Merger Agreement.
1.6 In favor of the issuance of options to acquire not less than
1,000,000 shares of CCCI common stock from CCCI's 1997 Equity Incentive Plan to
new members of management of CCCI and its subsidiaries upon such terms and
conditions as the Board or the compensation committee of the Board shall
determine.
1.7 In favor of the issuance of 150,000 shares of the common stock of
CCCI, if and in the event the issuance of said shares is required pursuant to
Section 7.2 (f) of the Merger Agreement.
2. TELALINK GROUP'S VOTING AGREEMENTS. Each Member of the TelaLink Group
agrees that during the term of this Agreement he shall vote each CCCI Share held
by him and shall take such further actions as are within his legal power
including, without limitation, voting to replace directors, in furtherance of
the following:
2.1 ELECTION OF TECHTRON DIRECTORS. In favor of the election or
appointment, at all times, of four individuals designated by Techtron (the
"Techtron Directors") to the Board, provided that there shall be included among
such individuals not less than one individual who shall, upon election, qualify
as Independent. In the event there shall, at any time and for any reason, be
less than one Independent director designated by Techtron serving on the Board,
Techtron shall take any and all action reasonably necessary to cause not less
than one Independent director to be elected or appointed to the Board as one of
Techtron's four designees, including, without limitation, causing the
resignation of one non-Independent designee. In the event that, over a period of
one hundred twenty (120) days, no Independent director is designated by Techtron
and elected or appointed to the Board, TelaLink shall have the right to
designate an individual to be appointed to the Board.
2.2 BOARD SIZE. In favor of maintaining a Board comprised of seven (7)
directors.
2.3 TECHTRON. In favor of CCCI taking all actions, including without
limitation, the preparation and filing of placement memoranda, registration
statements and proxies to cause the shares of CCCI held by Techtron to be held
by the shareholders of Techtron on a tax-free basis, whether by merger, sale of
assets or other transaction.
2.4 CERTAIN ACTIONS REQUIRING TECHTRON DIRECTOR APPROVAL. Unless such
action shall have been approved by the Techtron Directors, the TelaLink Group
shall vote against any act or omission which would result in CCCI or a
Subsidiary engaging in the sale, lease, assignment or other transfer or disposal
of, or causing or permitting any Subsidiary to sell, lease, assign or otherwise
transfer or dispose of, in one transaction or a series of related transactions
(other than sales of inventory or services in the ordinary course of business),
all or substantially all of CCCI's assets to a third party, whether through
stock or asset sale or otherwise.
2.5 In favor of the issuance of 260,000 shares of the common stock of
CCCI if and in the event the issuance of said shares is required pursuant to
Section 2.2(b) of the Merger Agreement.
2.6 In favor of the issuance of options to acquire not less than
1,000,000 shares of CCCI common stock from CCCI's 1997 Equity Incentive Plan to
new members of management of CCCI and its subsidiaries upon such terms and
conditions as the Board or the compensation committee of the Board shall
determine.
2.7 At the request of Techtron, in favor of amending the terms of CCCI's
currently outstanding Common Stock Purchase Warrants and/or Underwriter's Unit
Purchase Option for not more than one year from the date upon which said
securities would otherwise expire.
3. COMMON ISSUES OF CORPORATE GOVERNANCE. The following provisions shall be
applicable to Techtron and the TelaLink Group:
3.1 REMOVAL OF DIRECTORS. Directors may be removed only by a vote of the
holders of a majority of the outstanding CCCI Shares. Except as otherwise
provided in this Section 3.1, Techtron and the TelaLink Group each agrees not to
take any action to remove, with or without cause, any director of CCCI.
Notwithstanding the foregoing, Techtron and/or the Techtron Directors shall at
all times have the right to recommend the removal, with or without cause, of any
Techtron Director; and the TelaLink Group and the TelaLink Directors shall have
the right to recommend the removal, with or without cause, of any TelaLink
Director. If the removal of any director is recommended as provided in the
immediately preceding sentence, then the parties hereto shall immediately cause
a special meeting of the Board or of the Shareholders to be held, or shall act
by written consent without a meeting, for the purpose of removing such director,
and each Shareholder agrees to vote all its CCCI Shares, or to execute a written
consent in respect of all such CCCI Shares, for the removal of such director.
3.2 VACANCIES. At any time a vacancy exists on the Board, the remaining
directors (if any) representing the Shareholders whose Board seat is vacant
shall have the right to designate and elect the person to fill such vacancy. If
no directors representing the Shareholders remain as a result of such vacancy,
the Shareholder shall have the right to designate the person to fill such
vacancy and each of Techtron and the TelaLink Group will vote in favor of and
take such other action as may be necessary or appropriate to elect or appoint
said person.
3.3 COVENANT TO VOTE. Each of the Shareholders agrees to vote, in person
or by proxy, all of the CCCI Shares beneficially owned by such Shareholder, at
any annual or special meeting of stockholders of CCCI called for the purpose of
voting on the election of directors or by consensual action of stockholders
without a meeting with respect to the election of directors, in favor of the
election of the directors nominated by the Techtron and the TelaLink Group, as
the case may be, in accordance with Sections 1.1 and 2.1 hereof, respectively.
Each Shareholder shall vote the CCCI Shares owned by such Shareholder and shall
take all other actions necessary to ensure that CCCI's Certificate of
Incorporation and By-Laws do not at any time conflict with the provisions of
this Agreement.
3.4 OPTIONS. Each of the Shareholders agrees to vote to approve issuances
of options exercisable for the purchase of up to 1,000,000 CCCI shares to new
management employees of CCCI and its subsidiaries.
3.5 QUORUM. No action shall be taken at any meeting of the Board of CCCI,
or by the written consent of a majority of the Board, except for the adjournment
of such meeting, unless at least two Techtron Directors and one TelaLink
Director shall be present. For purposes of a quorum, any director may be present
at any meeting in person, by means of telephone or similar communications
equipment by means of which each person participating in the meeting can hear
and speak to each other or, to the extent permitted under applicable law, by
proxy or by nominee director.
4. TERM. The term of this Agreement shall commence as of the date of this
Agreement and shall terminate on June 30, 2001.
5. MUTUAL REPRESENTATIONS. Each party to this Agreement hereby represents and
warrants to each other party to this Agreement that:
(a) this Agreement constitutes his legal, valid and binding obligation,
enforceable against him in accordance with its terms,
(b) he has the absolute and unrestricted right, power, authority and
capacity to execute and deliver this Agreement and to perform his obligations
hereunder,
(c) he is not required to give prior notice to, or obtain any consent,
approval or authorization of, any governmental or quasi-governmental authority,
creditor, lessor, or other person in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated by this
Agreement,
(d) there are no actions, lawsuits, audits, investigations, claims, or
proceedings pending or threatened against, involving, affecting, or relating to
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, and
(e) neither the execution and delivery of this Agreement by him nor the
consummation of the transactions contemplated by this Agreement will: (i)
violate or conflict with any provision of any law, rule, regulation, order,
permit, certificate, writ, judgment, injunction, decree, determination, award or
other decision of any court, government, governmental agency or instrumentality,
domestic or foreign, or arbitrator, binding upon him or any of his assets; or
(ii) result in, or require, the creation or imposition of, any mortgage, deed of
trust, pledge, lien, security interest or other charge or encumbrance of any
nature upon or with respect to any of CCCI Shares now owned or which may, in the
future, be owned by him.
6. NOTICES. Except as otherwise set forth herein, all notices given in
connection with this Agreement shall be in writing and shall be delivered either
by personal delivery, by telegram, telex, telecopy or similar facsimile means,
by certified or registered mail, return receipt requested, or by express courier
or delivery service, addressed to the parties hereto at the following addresses:
The TelaLink Group
------------------
Xxxxx X. Xxxxxxx
Chief Executive Officer and Chairman
00 Xxxxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
with a copy to:
Xxxxx X. XxXxxx
700 Gemini
Xxxxxxx, Xxxxx 00000
Techtron, Inc:
--------------
Xxxxx X. Xxxxx
00-X Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
with copies to:
Xxxx Xxxxxxxxx, Executive Vice President
and General Counsel
Continental Choice Care, Inc.
00-X Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
and
Xxxxxx X. XxXxxxx, Esq.
Xxxx Xxxxx Xxxx & XxXxxx LLP
Xxx Xxxxxxxxxx Xxxxx, 0xx Xx.
Xxxxxx, XX 00000
or at such other address and number as either party shall have previously
designated by written notice given to the other party in the manner hereinabove
set forth. Notices shall be deemed given when received, if sent by telegram,
telex, telecopy or similar facsimile means (confirmation of such receipt by
confirmed facsimile transmission being deemed receipt of communications sent by
telex, telecopy or other facsimile means); and when delivered and receipted for
(or upon the date of attempted delivery where delivery is refused), if
hand-delivered, sent by express courier or delivery service, or sent by
certified or registered mail, return receipt requested.
7. WAIVERS. To the maximum extent permitted by applicable law, (i) no claim or
right arising out of this Agreement or the documents referred to herein can be
discharged by one party hereto, in whole or in part, by a waiver or renunciation
of the claim or right unless in writing signed by the other parties hereto; (ii)
no waiver which may be given by a party hereto shall be applicable except in the
specific instance for which it is given; and (iii) no notice to or demand on one
party hereto shall be deemed to be, a waiver of any obligation of such party or
of the right of the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the documents referred
to herein.
8. JURISDICTION. The parties agree that any appropriate state or federal
district court located in the City of Newark, County of Essex, State of New
Jersey shall have exclusive jurisdiction over any case or controversy arising
under or in connection with this Agreement and any judgment of such court shall
be enforceable in any court having jurisdiction over the party whom such
judgment is rendered. The parties hereto knowingly and voluntarily waive
personal service of process and admit that service of process on either party
may be made by certified mail, return receipt requested, at their respective
addresses as provided herein. The parties hereto knowingly and voluntarily waive
any defense related to lack of in personam jurisdiction and any right to a trial
by jury in any case or controversy.
9. ENTIRE AGREEMENT. This Agreement and the agreements specifically described
herein are intended by the parties to this Agreement as a final expression of
their agreement with respect to the subject matter hereof, and are intended as a
complete and exclusive statement of the terms and conditions of that agreement.
This Agreement may not be modified, rescinded, or terminated orally, and no
modification, rescission, termination or attempted waiver of any of the
provisions hereof (including this Section) shall be valid unless in writing and
signed by the party against whom the same is sought to be enforced.
10. SUCCESSORS AND ASSIGNS; THIRD PARTY RIGHTS. This Agreement shall apply to
and be binding in all respects upon, and shall inure to the benefit of, the
successors of the parties hereto and to the benefit of any assignee who acquires
CCCI Shares from a party hereto. Nothing expressed or referred to in this
Agreement is intended or shall be construed to give any person or entity other
than the parties to this Agreement any legal or equitable right, remedy or claim
under or with respect to this Agreement, or any provision hereof, it being the
intention of the parties hereto that this Agreement and all of its provisions
and conditions are for the sole and exclusive benefit of the parties to this
Agreement, their successors and designated assigns, and for the benefit of no
other person or entity. In the event that any shares of CCCI held by Techtron
are sold, the purchaser thereof shall agree to become direct parties to this
Agreement as demonstrated by executing this Agreement.
11. SEVERABILITY. In the event any provisions of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provisions hereof. Any
provision of this Agreement held invalid or unenforceable only in part or degree
shall remain in full force and effect to the extent not held invalid or
unenforceable.
12. GOVERNING LAW. This Agreement shall be governed by, and construed under, the
laws of the State of New Jersey without regard to conflicts of laws, all rights
and remedies being governed by such laws.
13. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original copy of this Agreement, and all
of which, when taken together, shall be deemed to constitute but one and the
same agreement.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
executed as of the date first written above.
TECHTRON, INC.
By:
----------------------------
Name:
Title:
TELALINK NETWORK LTD.
By:
----------------------------
Name: Xxxxx X. Xxxxxxx,
Title: CEO and Chairman of the Board of Directors
BENCHMARK EQUITY GROUP, INC.
By:
----------------------------
Name: Xxxxx X. XxXxxx
Title: President
HOLDERS OF ALL OUTSTANDING CAPITAL STOCK OF EACH OF
TELALINK NETWORK, LTD. AND TELALINK ACQUISITIONS CORP.
By:
----------------------------
Attorney-in-Fact
SCHEDULE A
TO SHAREHOLDERS' AGREEMENT
TelaLink Acquisitions Corp.:
Xxxxx X. XxXxxx
Xxxxxxxxxxx Xxxxx
Trident III, LLC
TelaLink Network, Ltd.:
Benchmark Equity Group, Inc.
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxxxxx Xxxxx
Xxxxx X. XxXxxx
