Exhibit 10.1
Execution Version
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ASSET PURCHASE AGREEMENT
BY AND AMONG
TEKSYSTEMS, INC.
ALLEGIS GROUP, INC.
TEKSYSTEMS EF&I SOLUTIONS, LLC AND
ALLEGIS GROUP CANADA CORPORATION
AND
COMPUTER HORIZONS CORP.
GBS HOLDINGS PRIVATE LIMITED AND
CHC HEALTHCARE SOLUTIONS, LLC
dated as of November 7, 2006
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS; INTERPRETATION..................................................1
1.1 DEFINITIONS.............................................................1
1.3 CONSTRUCTION AND INTERPRETATION........................................12
ARTICLE II. PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES......................13
2.1 PURCHASE AND SALE OF ASSETS............................................13
2.2 EXCLUDED ASSETS........................................................15
2.3 ASSUMED LIABILITIES....................................................16
2.4 EXCLUDED LIABILITIES...................................................16
2.5 NONASSIGNABLE CONTRACTS................................................17
2.6 INSURANCE..............................................................18
2.7 AFFILIATES.............................................................19
ARTICLE III. PURCHASE PRICE..............................................................19
3.1 PURCHASE PRICE.........................................................19
3.2 PURCHASE PRICE ADJUSTMENT..............................................19
3.3 ALLOCATION OF PURCHASE PRICE...........................................20
3.4 CURRENCY CONVERSIONS...................................................20
ARTICLE IV. CLOSING.....................................................................21
4.1 THE CLOSING............................................................21
4.2 SELLER'S CLOSING DELIVERIES............................................21
4.3 PURCHASER'S CLOSING DELIVERIES.........................................23
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER....................................23
5.1 CORPORATE ORGANIZATION; GOOD STANDING.................................23
5.2 AUTHORIZATION AND EFFECT OF AGREEMENT.................................24
5.3 NO CONFLICT...........................................................24
5.4 FINANCIAL STATEMENTS AND RELATED FINANCIAL MATTERS....................25
5.5 ABSENCE OF CHANGES....................................................27
5.6 COMPLIANCE WITH LAWS; PERMITS.........................................27
5.7 SUFFICIENCY OF ASSETS.................................................27
5.8 TITLE TO ASSETS.......................................................27
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TABLE OF CONTENTS
(continued)
PAGE
5.9 REAL PROPERTY.........................................................28
5.10 INSURANCE.............................................................28
5.11 INTELLECTUAL PROPERTY.................................................29
5.12 LEGAL PROCEEDINGS.....................................................31
5.13 MATERIAL CONTRACTS....................................................31
5.14 LABOR AND EMPLOYMENT MATTERS..........................................33
5.15 EMPLOYEE BENEFIT PLANS................................................35
5.16 GUARANTEES............................................................38
5.17 ENVIRONMENTAL, SAFETY AND HEALTH MATTERS..............................38
5.18 TAX MATTERS...........................................................39
5.19 CUSTOMER RELATIONS; WARRANTIES........................................42
5.20 BROKERS...............................................................42
5.21 RELATED PARTY TRANSACTIONS; NO IMPROPER PAYMENTS OR INFLUENCE.........42
5.22 PERFORMANCE UNDER CLIENT CONTRACTS....................................44
5.23 DISCLOSURE............................................................44
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER.................................44
6.1 CORPORATE ORGANIZATION................................................44
6.2 AUTHORIZATION AND EFFECT OF AGREEMENT.................................44
6.3 NO CONFLICT...........................................................45
6.4 LITIGATION............................................................45
6.5 BROKERS...............................................................45
6.6 FINANCIAL ABILITY.....................................................45
6.7 DISCLOSURE............................................................46
ARTICLE VII. COVENANTS...................................................................46
7.1 PRESS RELEASES........................................................46
7.2 REGULATORY FILINGS; STEPS TO OBTAIN SHAREHOLDER APPROVAL..............46
7.3 EXCLUSIVITY...........................................................47
7.4 INVESTIGATION BY PURCHASER............................................48
7.5 CONFIDENTIAL NATURE OF INFORMATION....................................49
7.6 OPERATION OF THE BUSINESS.............................................49
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TABLE OF CONTENTS
(continued)
PAGE
7.7 PERSONNEL MATTERS.....................................................50
7.8 GENERAL POST CLOSING MATTERS..........................................52
7.9 BEST EFFORTS..........................................................56
7.10 CLIENT MEETINGS.......................................................57
7.11 DETERMINATION OF PURCHASE PRICE ALLOCATION............................57
7.12 BRINGDOWN REPORTS.....................................................57
ARTICLE VIII.CONDITIONS TO CLOSING.......................................................57
8.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER......................57
8.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.........................59
ARTICLE IX. INDEMNIFICATION.............................................................61
9.1 INDEMNIFICATION BY SELLER.............................................61
9.2 INDEMNIFICATION BY PURCHASER..........................................62
9.3 NOTICE OF CLAIMS......................................................62
9.4 PROCEDURE FOR THIRD PARTY CLAIMS......................................63
9.5 CLAIMS PERIOD; SURVIVAL...............................................65
9.6 LIMITS ON INDEMNIFICATION.............................................66
9.7 EXCLUSIVE REMEDY......................................................66
ARTICLE X. TERMINATION.................................................................66
10.1 TERMINATION...........................................................66
10.2 EFFECT OF TERMINATION.................................................67
10.3 TERMINATION FEE; TERMINATION EXPENSES.................................67
ARTICLE XI. MISCELLANEOUS...............................................................68
11.1 NOTICES...............................................................68
11.2 EXPENSES..............................................................69
11.3 SUCCESSORS AND ASSIGNS; GUARANTEE OF AFFILIATE OBLIGATIONS............69
11.4 WAIVER................................................................69
11.5 ENTIRE AGREEMENT......................................................70
11.6 AMENDMENTS, SUPPLEMENTS, ETC..........................................70
11.7 RIGHTS OF THE PARTIES.................................................70
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TABLE OF CONTENTS
(continued)
PAGE
11.8 FURTHER ASSURANCES....................................................70
11.9 BULK SALES............................................................70
11.10 PASSAGE OF TITLE AND RISK OF LOSS.....................................71
11.11 APPLICABLE LAW; DISPUTE RESOLUTION; JURY TRIAL WAIVER.................71
11.12 EXECUTION IN COUNTERPARTS.............................................71
11.13 TITLES AND HEADINGS...................................................71
EXHIBITS:
A.................. Form of Xxxx of Sale
B.................. Form of Stock Power
C.................. Form of Assumption Agreement
D.................. Form of Transition Services Agreement
E.................. Form of Non-Compete
F.................. Form of License Agreement
G.................. Form of Certificate of Non-U.S. Real Property Interest
H.................. Form of Seller's Counsel's Opinion
I.................. Letter to Investissement Quebec
J.................. Form of Purchaser's Counsel's Opinion
K.................. Form of Solvency Certificate
SCHEDULES:
1.1(a)............ Reserve Calculation Methodology
1.1(b)............ Seller's Knowledge
2.1(b)(iii) ...... Tangible Personal Property
2.2(g)............ Excluded Contracts
2.2(j)............ Excluded Assets
2.4(d)............ Excluded Liabilities
5.1(b)............ Seller Subs
5.1(c)............ Foreign Qualifications
5.3(a)............ No Conflict
5.3(b)............ Approvals
5.4(c)............ Financial Statements
5.4(g)............ Bank Accounts
5.5(a)............ Absence of Changes
5.5(b)............ Absence of Changes
5.6(b)............ Permits
5.9............... Exceptions to Real Property
5.10.............. Insurance
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TABLE OF CONTENTS
(continued)
PAGE
5.11(a) ......... Patents, Trademarks and Copyrights
5.11(b)........... Inbound License Agreements
5.11(c)........... Outbound License Agreements
5.11(d)........... Owned Software
5.11(e)........... Owned Technical Identifiers
5.11(o)........... Maintenance and Support Obligations
5.12.............. Legal Proceedings
5.13(a)........... Material Contracts
5.13(b)........... Exceptions to Material Contracts
5.14(a)........... Business Personnel
5.14(b)........... Labor & Employment Matters
5.15(a)........... Employee Benefit Plans
5.15(f)........... Agreements Causing Acceleration
5.16.............. Guarantees
5.18.............. Tax Matters
5.18(g)........... Canadian Tax Assessment / Reassessment Notices
5.19(a)........... Customer Relations
5.19(c)........... Warranties
5.20.............. Seller's Brokers
5.21.............. Related Party Transactions; No Improper Payments or Influence
8.1(f)............ Approvals to be Delivered
8.1(m)............ Client Consents
8.2(e)............ Seller's Approvals to be Delivered
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of November 7, 2006 by and among TEKSYSTEMS, INC., a Maryland
corporation ("PURCHASER"), TEKSYSTEMS EF&I SOLUTIONS, LLC, a Maryland limited
liability company ("TEFIS"), ALLEGIS GROUP CANADA CORPORATION, a Nova Scotia
unlimited liability corporation ("AGCC"), COMPUTER HORIZONS CORP., a New York
corporation ("SELLER"), GBS HOLDINGS PRIVATE LIMITED, a corporation organized
under the laws of Mauritius ("GBS"), CHC HEALTHCARE SOLUTIONS, LLC, a Maryland
limited liability company ("HEALTHCARE SUB" and, together with Seller and GBS,
the "SELLER PARTIES"), and, solely for purposes of Section 11.14, Allegis Group,
Inc., a Maryland corporation (the "SPONSOR"). Purchaser, TEFIS, AGCC, Sponsor,
GBS, Healthcare Sub and Seller are sometimes referred to herein individually as
a "PARTY" and collectively as the "PARTIES."
WHEREAS, through the Seller's Commercial Services Business Unit, the
Seller Entities (as defined herein) are and have been engaged in the business
(the "Business") of (1) providing skilled information technology personnel to
clients on a temporary basis, including support personnel, programmers,
architects and project managers and (2) providing clients with a range of
technical knowledge and solutions, focusing on application management and
support, application development and software quality management; and
WHEREAS, the Seller Parties desire to sell and assign to Purchaser,
TEFIS and AGCC, and Purchaser, TEFIS and AGCC desire to purchase and assume from
the Seller Parties, substantially all of the assets of the Business (other than
the Excluded Assets (as defined herein)) and the Assumed Liabilities (as defined
herein) on the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
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ARTICLE I. DEFINITIONS; INTERPRETATION
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1.1 DEFINITIONS.
The terms defined in this Section 1.1 shall, for all purposes of this
Agreement, have the meanings herein specified:
"ACQUISITION AGREEMENTS" means, interchangeably and collectively as
context requires, this Agreement, the Non-Compete, the License Agreement, the
Transfer Documents, the Transition Services Agreement and the Assumption
Agreement.
"ACTION" means any action, claim, proceeding, arbitration or suit
(whether civil, criminal, administrative or judicial), or any appeal therefrom
(including any claim, audit, litigation, administrative proceeding or
arbitration against any Person involving any matter related to employment
including, but not limited to, claims of discrimination, claims of unpaid wages,
claims of wrongful discharge, claims of unfair labor practices, workers'
compensation claims, and claims related to occupational safety and health law).
"AFFILIATE" has the meaning given to that term in Rule 405 under the
Securities Act, and includes any Subsidiary.
"ALTERNATIVE TRANSACTION" means (other than the transactions
contemplated by this Agreement) a transaction involving the acquisition of all
or a substantial portion of the Assets (but not a material portion of any of
Seller's other assets) whether through asset purchase, merger, consolidation or
other business combination.
"APPROVAL" means any approval, authorization, consent, license,
franchise, order, registration, permit or other confirmation of or by, filing
with, or notice to, a Person.
"ARM'S LENGTH" has the meaning set out in the ITA.
"BENCHMARK NET WORKING CAPITAL" means Twenty-Five Million Dollars
($25,000,000).
"BUSINESS DAY" means any day except Saturday, Sunday or any day on
which banks are authorized or required by Law to close in New York, New York.
"BUSINESS PERSONNEL" means, interchangeably and collectively as context
requires, Employees and individuals engaged as independent contractors (whether
engaged on an individual basis or through another Person) in connection with the
Business.
"CANADA INTERCOMPANY NOTE" means a promissory note dated December 23,
1998 from Canada Sub to Seller in the amount (as of the date hereof) of
CAN$22,133,580.
"CANADA BENEFIT PLANS" means Canada Plans that are not Pension Plans.
"CANADA PLANS" means Plans for which Canada Sub or an Affiliate of
Canada Sub (which Affiliate is incorporated or organized in Canada) is the Plan
Sponsor.
"CANADA SUB" means Computer Horizons (Canada) Corp., an Ontario
corporation.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, 42 U.S.C. xx.xx. 9601 ET SEQ.
"CIT" means CIT Group/Business Credit, Inc.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRACT" means any written or oral agreement, lease (including all
real and personal property leases), mortgage, policy, plan, instrument,
contract, note, power of attorney, insurance policy covenant, guaranty
arrangement, escrow account, commitment or other instrument.
"CONTROLLED GROUP BENEFIT PLAN" means "employee benefit plan", as such
term is defined in Section 3(3) of ERISA, that provides welfare, retirement or
deferred compensation benefits, and each other employment, bonus, incentive
compensation, severance, salary continuation, change of control, retention,
stock option, other equity based performance, vacation, sick leave, holiday pay,
fringe benefit, reimbursement program, incentive, insurance, welfare, or other
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employee benefit plan, program, agreement or policy that provides benefits or
compensation and that is maintained by any Seller Entity or any ERISA Affiliate,
or to which any Seller Entity or any ERISA Affiliate contributes, has any
obligation to contribute, or is a party.
"COPYRIGHTS" means all copyrights, the content contained on or the
"look and feel" of any World Wide Web site, all mask works, registrations and
applications for any of the foregoing, and the right to xxx for past
infringement for any of the foregoing.
"DAMAGES" means any damages, Liabilities, losses, fines, penalties,
judgments, awards, costs or expenses (including, without limitation, reasonable
attorneys' fees or any other reasonable out-of-pocket expenses) arising from or
incurred in connection with any Action.
"DOLLARS" and "$" shall mean United States Dollars.
"ELIGIBLE EMPLOYEE" means an employee of Canada Sub who (i) holds, in
the course of carrying out the Eligible Contract, a full-time job, with a
minimum of 26 hours of work a week, for a stipulated minimum of 40 weeks, (ii)
spends at least seventy-five percent (75%) of his or her time and duties devoted
to carrying out, supervising or directly supporting activities carried out in
the course of the Eligible Contract, and (iii) is not a shareholder of Canada
Sub.
"ELIGIBLE CONTRACT" means the Master Consulting Agreement dated as of
January 3, 2005 between Seller and Canada Sub, which Master Consulting Agreement
has been approved by Investissement Quebec as the "eligible contract" for
purposes of Canada Sub's participation in the refundable tax credit program for
Major Employment-Generating Projects offered by Investissement Quebec.
"EMPLOYEE" means any employee of any Seller Entity or any ERISA
Affiliate employed or formerly employed in the operation of the Business
(including those who are actively employed or on leave, disability or other
absence from employment, and including officers).
"ENVIRONMENTAL LAWS" means all Laws relating to the protection of the
environment, safety or health; the conservation, management, or use of soil,
land surface, subsurface strata, wildlife, plants, surface water, groundwater,
ambient air, and other natural resources; or the management, manufacture,
processing, distribution, emission, discharge, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to any
Hazardous Substances including CERCLA, the Resource Conservation and Recovery
Act, 42 U.S.C. xx.xx. 690 ET SEQ., the Clean Water Act, 33 U.S.C. xx.xx. 1251 ET
SEQ., the Clean Air Act, 42 U.S.C. xx.xx. 7401 ET SEQ. and the Toxic Substances
Control Act, 15 U.S.C. xx.xx. 2601 ET SEQ., each as amended and any "transaction
triggered" or "responsible property transfer" statute or similar requirement.
"ENVIRONMENTAL PERMITS" means any federal, state, provincial or local
permit, license, registration, consent, order, administrative consent order,
certificate, approval or other authorization necessary for the operation of the
Business or use of any owned Real Property or Leased Property as currently
operated or used.
"ERISA" means the United States Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations promulgated thereunder.
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"ERISA AFFILIATE" means any other trade or business, whether or not
incorporated, which, together with any Seller Entity, is or would be treated as
a single employer under Section 4001(b) of ERISA (excluding any such subsidiary
or trade or business only employing persons with no U.S. source income, as
defined in Section 862 of the Code).
"ETA" means the Canadian Excise Tax Act, as amended.
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"EXCLUDED SUBS" means, interchangeably and collectively as context
requires, GBS, Healthcare Sub, Horizon Enterprises, Inc., Horizon Technologies,
Inc., Computer Horizons E-Solutions (Europe) Ltd., GBTS America LLC, Integrated
Computer Management, Inc., CG Computer Services Corp., CHC/Prince Co., Inc.
(f/k/a Princeton Softech, Inc.), Computer Horizons Web Development Corp., eB
Networks, Inc., eB Networks, LLC, G. Triad Development Corp., Millenium Users
Group, Inc., Xxxxxx Holdings, Inc., Xxxxxx Holdings II, Inc. and Strategic
Outsourcing Services, Inc.
"FACILITIES" means the real property leased by (i) Canada Sub at 0000
Xxxxxxxx Xxxxxxxxx Xxxx, 0xx Xxxxx, Xxxxxxxxxxx, Xxxxxxx, (xx) Xxxxxx Sub at
0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx, and (iii) India Sub at XXX Xxxxxxxx
Xxxxx, Xx. 00, Xxxxx Xxxx, Xxxxxxx, Xxxxx.
"FACILITY LEASES" means the leases or leave and license agreements
pursuant to which Canada Sub or India Sub, as applicable, leases the Facilities.
"GAAP" means United States generally accepted accounting principles as
in effect on the applicable date, consistently applied.
"GBTSA, INC." means GBTS America, Inc., a Delaware corporation.
"GOVERNMENTAL AUTHORITY" means any federal, state or local or foreign
government or any court, administrative, arbitrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign.
"HAZARDOUS SUBSTANCES" means any substance, chemical, compound,
product, solid, gas, liquid, waste, byproduct, pollutant, contaminant or
material that (a) is defined, listed, identified or regulated as a "hazardous
waste," "hazardous material" or "hazardous substance", "pollutant,"
"contaminant," "toxic substance" or words of similar meaning and regulatory
effect under CERCLA, the Resource Conservation and Recovery Act or any other
Environmental Law (including petroleum, petroleum derivatives and products and
fractions thereof) and (b) requires investigation, removal or remediation under
Environmental Law.
"INACTIVE CONTRACT" means a Contract to which any Seller Party is a
party and under which there are no unperformed duties of, and no rights accruing
to, such Seller Party as of the Closing Date.
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"INBOUND LICENSE AGREEMENT" means any License Agreement pursuant to
which any Seller Entity is granted any rights in any Intellectual Property.
"INDEMNIFIED PARTY" means any party entitled to indemnification
pursuant to Article IX.
"INDEMNIFYING PARTY" means any party required to indemnify an
Indemnified Party pursuant to Article IX.
"INDIA INTERCOMPANY PAYABLE" means the collective net intercompany
payables from GBS, India Sub and GBTSA, Inc. to Seller appearing on the books of
GBS, India Sub and GBTSA, Inc., which net amount is $319,000 as of the date
hereof.
"INDIA PLANS" means Plans for which India Sub or an Affiliate of India
Sub is the Plan Sponsor.
"INDIA SUB" means Global Business Technology Services Private Limited,
a corporation organized under the laws of India.
"INDIA TAX ACT" means the Indian Income-Tax Act of 1961, as amended.
"INTELLECTUAL PROPERTY" means, interchangeably and collectively as
context requires, the following: (a) Copyrights; (b) Patents; (c) Trademarks;
(d) Trade Secrets; (e) rights of publicity and privacy relating to the use of
the names, likenesses, voices, signatures and biographical information of
natural Persons; (f) all rights with respect to Software, to the extent not
otherwise embodied in the foregoing clauses (a)-(e); (g) all rights with respect
to Technical Identifiers, to the extent not otherwise embodied in the foregoing
clauses (a)-(e); and (h) all moral rights and/or rights of attribution and/or
integrity in any of the foregoing.
"ITA" means the Canadian Income Tax Act, as amended.
"LAWS" means all applicable federal, state, local or foreign laws
(including common law), codes, statutes, ordinances, orders, judgments,
arbitration awards, decrees, administrative or judicial promulgations,
injunctions, determinations, approvals, rules, regulations, permits,
certificates, licenses and authorizations of, and agreements with, all
Governmental Authorities with jurisdiction having the force of law and binding
on or affecting the Person referred to in the context in which such word is
used, including all Environmental Laws.
"LIABILITY" means any debt, liability, loss, commitment or obligation
of any kind, character or nature whatsoever, secured or unsecured, accrued,
fixed, absolute, contingent or otherwise, and whether due or to become due.
"LICENSE AGREEMENT" means any agreement (including, without limitation,
any outstanding decrees, orders, judgments, settlement agreements or
stipulations) pursuant to which a Person is granted any rights in any
Intellectual Property, including any right to distribute, promote, market or
sell any Intellectual Property.
"LICENSED INTELLECTUAL PROPERTY" means Intellectual Property in which
any Seller Entity is granted any rights pursuant to an Inbound License
Agreement.
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"LIENS" means all mortgages, hypothecs, liens, pledges, security
interests, charges, claims, restrictions, leases, possessory rights, options,
rights of first refusal, covenants, easements, title and survey matters and any
other encumbrance of any kind or character.
"LEASED REAL PROPERTY" means any and all real property in which any
Seller Entity has any leasehold interest.
"MATERIAL ADVERSE EFFECT" means with respect to a Party other than a
Seller Entity, any event, change or effect that has occurred that (when taken
together with all other events, changes or effects that have occurred) is likely
to prevent or materially delay the performance of a Party under this Agreement
or the transactions contemplated hereby.
"MEDICAL LEAVE" means, in respect of any Business Personnel of Canada
Sub, any leave of absence from active employment for medical reasons,
statutorily authorized or otherwise, including sick leave, short term disability
leave, long term disability leave and workplace safety and insurance leave,
worker's compensation leave or health and safety leave.
"NET WORKING CAPITAL" means the following Assets and Liabilities of the
Business transferred to the Purchaser Entities pursuant to SECTIONS 2.1 and 2.3
below, determined as of the Closing Date in accordance with GAAP (except to the
extent item (c)(iii) below and the reserve calculation methodology set forth on
SCHEDULE 1.1(A) deviates from GAAP, if at all) and the requirements of SCHEDULE
1.1(A) and SECTION 3.2:
(a) the accounts receivable, less a reserve for uncollectible accounts
calculated in accordance with the methodology set forth on SCHEDULE 1.1(A);
(b) PLUS the other current assets (but in no event shall the Quebec Tax
Receivable be included in other current assets);
(c) LESS the sum of:
(i) the accounts payable;
(ii) the accrued payroll expenses; and
(iii) the other accrued expenses.
"NYBCL" means the New York Business Corporation Law as in effect from
time to time.
"ORDINARY COURSE" means the ordinary course of the Business, consistent
with past practice in nature, scope and magnitude; provided, the definition of
"Ordinary Course" excludes any and all actions requiring any approval or consent
of the Seller Board, any committee of the Seller Board, the shareholders of
Seller, or the board of directors (or any committee thereof), manager(s),
shareholders, members or partners of any Affiliate of Seller (including, for
avoidance of doubt, any of the Seller Subs).
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"ORGANIZATIONAL DOCUMENTS" means (a) with respect to a corporation, the
corporation's articles or certificate of incorporation and by-laws; or (b) with
respect to a limited liability company, the limited liability company's articles
or certificate of organization or formation and operating agreement; (c) with
respect to a partnership, the partnership's certificate of partnership and
partnership agreement; (d) with respect to a trust, the trust's certificate or
declaration of trust and other governing instruments; (e) with respect to any
other form of entity, the documents that are reasonably similar to the documents
described in the preceding clauses (a) through (d); and (f) all amendments and
supplements to any of the foregoing.
"OTHER CANADIAN LEASES" means any and all leases under which Canada Sub
leases real property other than the Lease dated September 27, 2002 between
Ivanhoe Cambridge Inc., 9084-4069 Quebec Inc. and Canada Sub relating to at 0000
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx.
"OUTBOUND LICENSE AGREEMENT" means any License Agreement pursuant to
which any Seller Entity grants any rights in any Owned Intellectual Property to
any other Person.
"OWNED INTELLECTUAL PROPERTY" means Intellectual Property owned by any
Seller Entity.
"OWNED TECHNICAL IDENTIFIER" means a Technical Identifier owned by,
allocated to (in the case of ranges of internet protocol addresses and
individual internet protocol addresses), or issued to (in the case of secure
socket layer certificates and Software code signing certificates) any Seller
Entity.
"OWNED SOFTWARE" means Software included in the Owned Intellectual
Property.
"PATENTS" means all patents, industrial designs and invention
disclosures, including any continuations, divisionals, continuations-in-part,
renewals, reissues and applications for any of the foregoing, and the right to
xxx for past infringement thereof.
"PENSION PLANS" means those Canada Plans that provide pension benefits
for the benefit of current or former Business Personnel of Canada Sub, and their
respective beneficiaries.
"PERMITS" means all notifications, licenses, permits (including
environmental, construction and operation permits), governmental franchises,
registrations, certificates, approvals, exemptions, classifications,
registrations and other similar documents, rights and authorizations issued by
any Governmental Authority, including Environmental Permits, but not including
any Patents, Copyrights and Trademarks.
"PERMITTED LIENS" means: (a) liens imposed by Law for Taxes,
assessments or charges or claims by Governmental Authorities that are not yet
due or are being properly contested, which contest tolls collection of such
taxes and the lien thereof and provided that reasonably acceptable reserves are
being maintained; (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlords' and other like liens imposed by Law or contract, arising
in the Ordinary Course and securing obligations that are not due and payable;
(c) solely with respect to personal property, pledges and deposits made in the
Ordinary Course in compliance with workers' compensation, unemployment insurance
and other social security Laws or regulations; and (d) solely with respect to
personal property, deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety, indemnity and appeal bonds, performance
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and return-of-money and fiduciary bonds and other obligations of a like nature,
in each case in the Ordinary Course.
"PERSON" means an individual, a sole proprietorship, a partnership, a
corporation, an association, an institution, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization, or
a Governmental Authority or any other legal entity.
"POTENTIAL ACQUIRER" means the person making an inquiry, offer or
proposal with respect to an Alternative Transaction or a Total Company Sale.
"PROPOSED TOTAL COMPANY SALE" means, collectively, (a) the transactions
to be consummated under this Agreement, and (b) the transactions that Seller is
separately and contemporaneously negotiating for the sale of Seller's business
units other than Seller's Commercial Services Business Unit.
"PURCHASER ENTITIES" means, collectively, Purchaser, Sponsor, TEFIS and
AGCC.
"QUEBEC SALES TAX ACT" means an Act Respecting the Quebec Sales Tax.
"QUEBEC TAX RECEIVABLE" means the refundable tax credit payable by
Revenu Quebec to Canada Sub with respect to the E-Commerce tax credit program
for tax years 2005 and 2006.
"RELEASE" shall have the meaning assigned thereto in CERCLA, the
Resource Conservation and Recovery Act, the Federal Clear Water Act, or any
other Environmental Law defining such term.
"REMEDIAL ACTION" means all actions required by Governmental Authority
pursuant to Environmental Law or otherwise taken as necessary to comply with any
Environmental Law to (i) clean up, remove, treat or in any other way remediate
any Hazardous Substances; (ii) prevent the Release or threatened Release of
Hazardous Substances so that they do not migrate or endanger or threaten to
endanger public health or welfare or the environment; (iii) perform studies,
investigations or monitoring in respect of any such matter; or (iv) comply with
any Environmental Law.
"REPRESENTATIVES" means with respect to any Person, its stockholders,
employees, officers, directors, investment bankers, accountants, attorneys,
agents, representatives or Affiliates.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"SELLER BOARD" means the board of directors of Seller.
"SELLER ENTITIES" means, interchangeably and collectively as context
requires, Seller, each of the Seller Subs, and each of the Excluded Subs.
"SELLER MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, financial condition or results of operations of the Business or the
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ability for any Seller Party to consummate the transactions contemplated by this
Agreement, except in each case for any such effects resulting from, arising out
of, or relating to (a) the taking of any action or incurring of any expense in
connection with this Agreement or the transactions contemplated hereby, (b) any
change in or interpretations of GAAP, (c) any change in interest rates or
general economic conditions in the industries or markets in which Seller or any
of its subsidiaries operates or affecting United States or foreign economies in
general or the United States or foreign financial, banking or securities
markets, (d) any action taken by Purchaser or any of its Affiliates, or (e) any
natural disaster or act of God. Seller Material Adverse Effect does not include
any changes, events, conditions, or effects relating solely to Purchaser or its
subsidiaries' or Affiliates' financial condition, results of operations or
business.
"SELLER'S KNOWLEDGE" (and any similar phrase) shall mean the best
knowledge, after reasonable inquiry, of the Persons named in and acting in the
capacities described on SCHEDULE 1.1(B) or any of his or her direct reports.
"SOFTWARE" means all (a) computer programs, including software
implementations of algorithms, models and methodologies, whether in source code
or object code form; (b) libraries, functions, subroutines, development tools,
interfaces, displays and other work product or tools used to design, plan,
organize, develop, implement or operate any computer program; (c) databases and
compilations, including data and collections of data, in any form or format
whatsoever, and (d) documentation, including user manuals, training materials,
design documents and flowcharts relating to any of the foregoing.
"SOLVENT" means, when used with respect to any person or entity, that
at the time of determination it is then able and expects to be able to pay its
debts as they mature and it has capital sufficient to carry on its business as
conducted as proposed to be conducted.
"SOURCE CODE" means the source code for (a) Owned Software and/or (b)
Software included in the Licensed Intellectual Property.
"SUBSIDIARY" has the meaning given to that term in Rule 1-02 of
Regulation SX under the Securities Act.
"SUPERIOR ALTERNATIVE TRANSACTION" means an Alternative Transaction on
terms that the Seller Board determines, in good faith, based upon consultations
with its outside legal counsel and its financial advisor, that if consummated,
is more favorable to Seller's shareholders than the transactions contemplated by
this Agreement.
"TAX" or "TAXES" means any or all federal, state, county, local,
foreign and other taxes, governmental assessments, levies, charges, fees and
duties of any kind whatsoever, including income taxes, profit taxes, franchise
taxes, capital taxes, use taxes, gross receipts taxes, sales taxes, value added
taxes, goods and services taxes, occupation taxes, real property taxes, transfer
taxes, excise taxes, personal property taxes, ad valorem taxes, payroll related
taxes, employment taxes, social security taxes, license fees, import and export
duties, and any estimated withholding, or minimum taxes with respect thereto,
together with any related penalties, fines, additions to tax or interest.
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"TECHNICAL IDENTIFIERS" means (a) internet domain names; (b) ranges of
internet protocol addresses and, to the extent not included in such ranges,
individual internet protocol addresses, but not including any such addresses
within the three blocks reserved by the Internet Assigned Numbers Authority for
private internets (i.e., 00.0.0.0/0, 000.00.0.0/00 and 000.000.0.0/00); (c)
secure socket layer certificates; (d) Software code signing certificates; and
(e) telephone numbers and telephone directory listings.
"THIRD PARTY SOFTWARE" means Software not owned by any Seller Entity.
"TOTAL COMPANY SALE" means a merger or consolidation in which Seller
would not be the surviving entity, a purchase of all of the outstanding capital
stock of Seller, or an acquisition of all or substantially all of Seller's
assets (including, for avoidance of doubt, the assets of all of Seller's
business units, and not merely Seller's Commercial Services Business Unit).
"TRADEMARKS" means all trademarks, service marks, trade names, trade
dress, designs, logos, emblems, signs or insignia, slogans, and other similar
designations of source or origin, together with all goodwill symbolized by any
of the foregoing, registrations and applications for any of the foregoing, and
the right to xxx for past infringement thereof.
"TRADE SECRETS" means any and all forms and types of technology, trade
secrets and other confidential information, know-how, customer lists, prospect
lists, business plans, inventions, proprietary processes, formulae, algorithms,
models and methodologies.
"US PLANS" means, interchangeably and collectively as context requires,
all Plans that are neither a Canada Plan or an India Plan.
"WARN ACT" means the Worker Adjustment and Retraining Act, Public Law
100-379.
"WIRE" means a wire transfer, in Dollars, of immediately available
funds sent in accordance with instructions provided by the recipient of the wire
transfer.
1.2 ADDITIONAL DEFINED TERMS
In addition to the terms defined in Section 1.1, each of the following
terms is defined in the Section set forth opposite such term:
TERM SECTION
---- -------
AGCC.................................................Preamble
91-180 Account.................................7.8(e)(iii)(C)
Agreement............................................Preamble
Assets.................................................2.1(b)
Assumed Contracts..................................2.1(b)(iv)
Assumed Liabilities.......................................2.3
Assumption Agreement................................4.2(a)(v)
Auditor............................................3.2(c)(ii)
Base Balance Sheet................................2.1(b)(xii)
Base Balance Sheet Date...........................2.1(b)(xii)
Benefit Cutoff Time.................................7.7(b)(i)
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Xxxx of Sale........................................4.2(a)(i)
Bring-Down Statements.................................7.12(c)
Business.............................................Recitals
Claim Notice..............................................9.3
Claims Period..........................................9.5(a)
Client Contract...................................5.13(a)(iv)
Closing...................................................4.1
Closing Date..............................................4.1
COBRA..............................................7.7(b)(vi)
Completed Obligations....................................5.22
Escrow Agent........................................4.2(b)(i)
Excess Amount.......................................3.2(f)(i)
Excluded Assets...........................................2.2
Excluded Liabilities......................................2.4
Final Net Working Capital..............................3.2(d)
Final Statement........................................3.2(d)
Financial Statements...................................5.4(b)
GBS..................................................Preamble
GBS India Shares...................................2.1(a)(ii)
Guarantees...............................................5.16
Healthcare Sub.......................................Preamble
HSR Act................................................8.1(d)
India Sub Shares..................................2.1(a)(iii)
Insurance.................................................2.6
IP Transfer Documents.............................4.2(a)(iii)
License Agreement................................4.2(a)(viii)
Material Contracts....................................5.13(a)
Non-Compete.......................................4.2(a)(vii)
Over 180 Account...............................7.8(e)(iii)(C)
Parties..............................................Preamble
Plan Sponsor..........................................5.15(a)
Plans.................................................5.15(a)
Proposed Net Working Capital...........................3.2(a)
Proposed Statement.....................................3.2(a)
Purchase Price............................................3.1
Purchaser............................................Preamble
Purchaser Compliance Certificate.......................4.3(h)
Purchaser Indemnitees.....................................9.1
Records.............................................7.8(b)(i)
Response Period........................................9.4(a)
Retained Records....................................7.8(b)(i)
Seller...............................................Preamble
Seller Board Approval..................................5.2(b)
Seller Compliance Certificate.......................4.2(a)(x)
Seller Indemnitees........................................9.2
Seller India Shares...............................2.1(a)(iii)
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Seller Parties.......................................Preamble
Seller Sub..........................................2.1(b)(i)
September 30 Statements...............................7.12(b)
Shortfall Amount...................................3.2(f)(ii)
Sponsor..............................................Preamble
Statement Dispute Notice...............................3.2(b)
Statement Disputed Matters.............................3.2(b)
Stock Power........................................4.2(a)(ii)
Shareholder Approval...................................8.1(g)
Subsidiary Shares..................................2.1(a)(iv)
TEFIS................................................Preamble
Termination Fee.......................................10.3(a)
Third Party Action.....................................9.4(a)
Third Party Action Notice..............................9.4(a)
Threshold..............................................9.6(a)
Transfer...............................................2.1(a)
Transfer Documents.................................4.2(a)(iv)
Transferred Intellectual Property..................2.1(b)(vi)
Transferred Personnel..................................7.7(a)
Transferred Tangible Personal Property............2.1(b)(iii)
Transition Services Agreement......................4.2(a)(vi)
Withheld Amount........................................4.2(b)
Withholding Certificate................................4.2(b)
1.3 CONSTRUCTION AND INTERPRETATION
Unless the context of this Agreement otherwise clearly requires, (a)
references to the plural include the singular, and references to the singular
include the plural, (b) references to any gender include the other genders, (c)
the words "include," "includes" and "including" do not limit the preceding terms
or words and shall be deemed to be followed by the words "without limitation",
(d) the terms "hereof", "herein", "hereunder", "hereto" and similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement, (e) the terms "day" and "days," if not capitalized,
mean and refer to calendar day(s) and (f) the terms "year" and "years" mean and
refer to calendar year(s). Unless otherwise set forth herein, each reference in
this Agreement to any document, instrument or agreement (including this
Agreement) (A) includes and incorporates all schedules and other attachments
thereto, (B) includes all documents, instruments or agreements issued or
executed in replacement thereof, and (C) means such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified or
supplemented from time to time in accordance with its terms and in effect at any
given time. All Article, Section and Schedule references herein are to Articles,
Sections and Schedules of this Agreement, unless otherwise specified. All
accounting terms not specifically defined in this Agreement shall be construed
in accordance with GAAP. All references in this Agreement to Seller shall,
notwithstanding the absence of explicit references, be deemed to include,
respectively, the Seller Subs to the extent necessary to give effect to Article
II.
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ARTICLE II. PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
--------------------------------------------------------------------------------
2.1 PURCHASE AND SALE OF ASSETS.
(a) TRANSFER. Except as otherwise expressly set forth in SECTION 2.2,
on the terms and subject to the conditions hereof, at the Closing, Seller will
sell, transfer, convey, assign and deliver ("TRANSFER") to Purchaser, and
Purchaser will purchase and acquire from Seller, all the Assets (as defined
below); PROVIDED, HOWEVER, that:
(i) Healthcare Sub shall sell, transfer, convey, assign
and deliver to Purchaser, and Purchaser shall
purchase from Healthcare Sub, all of the Assets held
by Healthcare Sub;
(ii) GBS shall sell, transfer, convey, assign and deliver
to Purchaser, and Purchaser shall purchase from GBS,
all of the shares of capital stock of India Sub held
by GBS (the "GBS INDIA SHARES");
(iii) Seller shall sell, transfer, convey, assign and
deliver to TEFIS, and TEFIS shall purchase from
Seller, all of the shares of capital stock of India
Sub held by Seller (the "SELLER INDIA SHARES" and,
together with the GBS India Shares, the "INDIA SUB
SHARES"); and
(iv) Seller shall sell, transfer, convey, assign and
deliver to AGCC, and AGCC shall purchase from Seller,
all of the shares of capital stock of Canada Sub
(together with the India Sub Shares, the "SUBSIDIARY
SHARES").
(b) SCOPE OF ASSETS. The "Assets" consist of all the properties and
rights of the Seller Entities, whether tangible or intangible, used or held for
use in the Business, including the following:
(i) All ownership interests in Subsidiaries of Seller,
other than the Excluded Subs, that are engaged in or
relate to the Business, including Canada Sub, India
Sub and GBTSA, Inc. (each, a "SELLER SUB"), and all
goodwill associated with the portion of the Business
conducted by each such Seller Sub;
(ii) Each and every Seller Entity's interests in the
Facilities and the Facility Leases;
(iii) All tangible personal property (collectively, the
"TRANSFERRED TANGIBLE PERSONAL PROPERTY"), owned by
any Seller Entity and used or held for use in the
Business, wherever located, including those items
listed on SCHEDULE 2.1(B)(III);
(iv) All Contracts relating to the Business to which any
Seller Entity is a party, including all Material
Contracts, but not including any of the Contracts
listed on SCHEDULE 2.2(G) and not including any
Inactive Contracts (collectively, the "ASSUMED
CONTRACTS"), and all rights of every Seller Entity in
each Assumed Contract;
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(v) All accounts, notes and other receivables relating to
the Business of any and all Seller Entities as of the
Closing and all rights to xxxx and receive payment
for services performed or products sold by the
Business but unbilled or unpaid as of the Closing;
(vi) All Owned Intellectual Property used in or relating
to the Business and all rights of any and all Seller
Entities therein (the "TRANSFERRED INTELLECTUAL
PROPERTY");
(vii) All transferable Permits issued to any Seller Entity
by any Governmental Authority that relate to the
Business;
(viii) All prepaid expenses, advances to third parties and
deposits with third parties of any and all Seller
Entities as of the Closing relating to the Business
other than payments made in support of Seller's
general overhead (such as, for example, advance
payments for software licenses used to support
Seller's general ledger or email or telephone);
PROVIDED, for avoidance of doubt, that such payments
made in support of Seller's general overhead shall
not be included in the calculation of Net Working
Capital;
(ix) All Records, including all Organizational Documents,
corporate records and minute books of the Seller
Subs;
(x) All rights and interests of any and all Seller
Entities as of the Closing in and to indemnity
claims, judgments, rights of recovery, rights of
set-off and causes of action of the Business against
third parties in each case; all insurance, warranty
and condemnation proceeds received after the Closing
Date with respect to damage, nonconformance of or
loss to the Assets occurring on or prior to the
Closing Date; all rights to proceeds under insurance
policies in respect of any such damage or loss; and
all rights to enforce restrictive covenants
(including non-competition, non-solicitation,
non-hire and confidentiality provisions) contained in
any Contract with any current or former Business
Personnel, even if such Contract is not an Assumed
Contract;
(xi) All advertising, marketing and promotional materials,
and all other printed, written or electronic
materials prepared for use in the Business;
(xii) All such other assets, properties, interests in
properties and rights owned by any and all Seller
Entities as of the Closing that relate to, are used
in, or are necessary to the operation of the
Business, including those which are: (a) reflected in
the June 30, 2006 balance sheet contained in SCHEDULE
5.4(C) (the "BASE BALANCE SHEET") (or not so
reflected as a result of being fully amortized or
depreciated as of June 30, 2006 (the "BASE BALANCE
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SHEET DATE")) or on the books and records of any and
all Seller Entities relating to the Business, but
excluding any such other assets, properties,
interests and rights which have been disposed of by
any and all Seller Entities in the Ordinary Course
after the Base Balance Sheet Date in accordance
herewith; (b) acquired by any and all Seller Entities
after the Base Balance Sheet Date and relating to the
Business in accordance herewith; or (c) located as of
the Closing on the Leased Real Property and relating
to the Business;
(xiii) All Canada Plans and the rights of each and every
Seller Entity therein; and
(xiv) All India Plans and the rights of each and every
Seller Entity therein.
For the sake of clarity, the Parties acknowledge that the Assets held
by Canada Sub, India Sub and GBTSA, Inc. are being acquired through the
acquisition of the Subsidiary Shares as described in SECTIONS 2.1(A)(III) and
2.1(A)(IV). For the avoidance of doubt , the Parties agree that the Assets do
not include the capital stock of or any of the assets or rights of Seller's
Subsidiary, Chimes, Inc.
2.2 EXCLUDED ASSETS.
Notwithstanding anything contained in this Agreement to the contrary,
the following assets, properties, interests in properties and rights (the
"EXCLUDED ASSETS") will not be included in the Assets, but will be retained by
Seller:
(a) All Retained Records;
(b) All guarantees, warranties, indemnities and rights, claims and
causes of action against any Person in favor of any and all Seller Entities that
would entitle any and all Seller Entities to recompense in respect of any
Excluded Liability, except to the extent such guarantees, warranties,
indemnities, rights, claims and causes of action would entitle Purchaser to
recompense, whether in whole or in part, for any Assumed Liability or any other
liability arising out of the conduct of the Business after the Closing;
(c) All US Plans and the rights of each and every Seller Entity
therein;
(d) Subject to SECTION 2.6, all rights of any and all Seller Entities
under any past or current insurance policy or contract, and all prepaid expenses
in respect of insurance;
(e) All cash, marketable securities and other cash equivalents;
(f) Each and every Seller Entity's interest in Leased Real Property
other than the Facilities;
(g) The Contracts listed on SCHEDULE 2.2(G);
(h) The Quebec Tax Receivable;
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(i) All ownership interests in the Excluded Subs
(j) The assets listed on SCHEDULE 2.2(J);
(k) the Inactive Contracts; and
(l) all other rights of the Seller Parties under this Agreement and the
other Acquisition Agreements, including, without limitation all rights to
receive the Purchase Price (as defined herein) and all other monies to be
received by them hereunder and thereunder.
2.3 ASSUMED LIABILITIES.
At the Closing, Purchaser shall, by delivery to Seller and Healthcare
Sub of the Assumption Agreement, assume and agree to perform, pay or discharge
when due, to the extent not theretofore performed, paid or discharged, the
following specific Liabilities of Seller and Healthcare Sub, and only such
Liabilities (collectively, the "ASSUMED LIABILITIES"):
(a) post-Closing Liabilities of Seller and/or Healthcare Sub, as the
case may be, under the Assumed Contracts; PROVIDED, HOWEVER, that Purchaser
shall not assume any contingent liabilities arising out of (i) the failure of
Seller or Healthcare Sub to comply with the terms of any Assumed Contract during
the period ending prior to the Closing, or (ii) indemnity obligations under any
Assumed Contract arising out of events occurring prior to the Closing; and
(b) the Liabilities of Seller and Healthcare Sub specifically included
in the calculation of the Final Net Working Capital, as provided in SECTION
3.2(A).
For the sake of clarity, the Parties acknowledge that, except to the
extent set forth in Section 11.14 (Obligation of Sponsor), (i) AGCC, TEFIS and
Sponsor are not assuming any Liabilities of the Seller Entities and (ii) the
Liabilities of Canada Sub, India Sub and GBTSA, Inc. are not being transferred
to Purchaser and shall remain Liabilities of Canada Sub, India Sub and GBTSA,
Inc., respectively, upon the transfer of the stock of those entities as provided
in this Agreement.
2.4 EXCLUDED LIABILITIES.
Notwithstanding anything herein to the contrary, Purchaser does not
hereby and shall not assume or in any way undertake to pay, perform, satisfy or
discharge any other Liability of Seller or any Affiliate of Seller whether
existing on, before or after the Closing Date, all of which Liabilities shall be
retained by Seller (collectively, the "EXCLUDED LIABILITIES"), including the
following:
(a) all Taxes of any and all Seller Entities or which relate to the
Excluded Assets;
(b) all Taxes which relate to the Business or the Assets and which have
accrued on or before the Closing Date;
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(c) any and all Liabilities relating to, arising out of or incurred in
performance, or lack of performance, by any Seller Entity before the Closing
under any Contract, Permit, and/or Guarantee;
(d) any and all Liabilities (other than the Liabilities assumed by
Purchaser pursuant to SECTIONS 2.3(A) and (B)) with respect to the employment by
any Seller Entity of its respective Employees, or its engagement of its
professional work force as independent contractors, and salaries, payroll taxes,
withholding taxes, workers' compensation and unemployment compensation, and
contributions or payments to be made in respect of service during periods
through the termination of employment and thereafter under any employee pension
benefit plan (as defined in Section 3(2) of ERISA) or other employee benefit
plan maintained for any Business Personnel, and any and all liabilities that may
arise by virtue of the transaction contemplated herein being deemed an actual or
constructive termination of any Employee or change of control under any
agreement between Seller, GBS or Healthcare Sub and any Employee, including,
without limitation, the agreements set forth on Schedule 2.4(d),or applicable
Law;
(e) any and all Liabilities with respect to the products and services
produced or provided by any Seller Entity prior to the Closing Date arising out
of injury, death or damage, including any such liabilities for failure to warn
or breach of express or implied warranties, including warranties of
merchantability or fitness for any purpose or use, or the obligation to perform
warranty or follow-up services relative to services performed or solutions
provided by any Seller Entity prior to the Closing Date;
(f) any and all Liabilities of any Seller Entity in respect of (i)
lawsuits, claims, administrative or other proceedings, governmental or other
investigations pending or threatened by or against any Seller Entity arising out
of events occurring at or prior to the Closing; and (ii) any litigation matters
or claims described on SCHEDULE 5.12, SCHEDULE 5.14(B) or SCHEDULE 5.15(A);
(g) any other Liability of any Seller Entity, except those specifically
assumed pursuant to SECTION 2.3, regardless of when a claim thereto may be
asserted (whether known or unknown, accrued, absolute, contingent or otherwise);
(h) any and all Liabilities of any of the Excluded Subs; and
(i) any other Liability that is otherwise attributable to or arising
out of the ownership or operation of any Assets or the Business prior to the
Closing.
Except as and to the extent otherwise expressly provided in this
Agreement, Purchaser has not agreed to pay, will not be required to assume and
will not have any obligation with respect to any liability or obligation, direct
or indirect, absolute or contingent, of any Seller Entity or any other Person,
regardless of when asserted.
2.5 NON-ASSIGNABLE CONTRACTS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, to the extent that the grant, sale, assignment, transfer or delivery
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to Purchaser, of any Contract that would be an Assumed Contract, or any claim or
right or any benefit arising thereunder or resulting therefrom would require any
Approval of a Governmental Authority or other third Person and such Approvals
shall not have been obtained prior to the Closing, and Purchaser has waived in
writing the applicable condition precedent in ARTICLE VIII pursuant to which
Seller is obligated to obtain such Approvals prior to the Closing, the Closing
shall proceed, without the grant, sale, assignment, transfer or delivery of such
Contract, and this Agreement shall not constitute a grant, sale, assignment,
transfer or delivery of such Contract or an attempt thereof.
(b) If the Closing proceeds without the grant, sale, transfer,
assignment or delivery of any Contract that would be an Assumed Contract, then
following the Closing, the Parties shall use commercially reasonable efforts,
and cooperate with each other, to obtain promptly all such Approvals. Pending
such Approval, Seller shall use commercially reasonable efforts, and the Parties
shall cooperate with each other in any mutually agreeable, reasonable and lawful
arrangements designed to provide to Purchaser all of the benefits of use of such
Contract and to Seller the benefits that Seller would have obtained had the
Contract been conveyed to Purchaser at the Closing.
(c) To the extent that Purchaser is provided all of the material
benefits pursuant to this SECTION 2.5 of any Contract, Purchaser shall perform
for the benefit of the other Persons that are parties thereto all of the
obligations of Seller thereunder and any related liabilities that, but for the
lack of an Approval to assign such liabilities to such Purchaser, would be
Assumed Liabilities.
(d) Once Approval for the grant, sale, assignment, transfer or delivery
of any such Contract not granted, sold, assigned, transferred or delivered at
the Closing is obtained, such Contract shall be deemed to have been granted,
assigned, transferred and delivered to Purchaser at no additional cost to
Purchaser. To the extent that any such Contract cannot be transferred or the
material benefits of any such Contract cannot be provided to the applicable
Purchaser following the Closing pursuant to this SECTION 2.5, then Purchaser and
Seller shall enter into such arrangements (including subleasing, sublicensing or
subcontracting) to provide to the Parties the material economic (taking into
account Tax costs and benefits) and operational equivalent, of obtaining such
Approval. Seller shall hold in trust for, and pay to Purchaser promptly upon
receipt thereof, all income, proceeds and other monies received by any Seller
Entity (other than any Seller Sub) in connection with its use of any Contract
(net of any Taxes and any other costs imposed upon such Seller Entity) in
connection with the arrangements under this SECTION 2.5.
2.6 INSURANCE.
With respect to any loss or damage relating to the Assets occurring
prior to the Closing Date and for which any and all Seller Entities would be
entitled to assert, or cause any other Person to assert, a claim under any
policy of insurance maintained by, for the benefit of or insuring any and all
Seller Entities in respect of the Business or the Assets ("INSURANCE"), at the
request of Purchaser, each and every Seller Entity will use commercially
reasonable efforts to assert for Purchaser's benefit, or if for any reason any
Seller Entity is not able so to assert, to assign its rights and otherwise
assist and permit Purchaser to assert, one or more claims under such Insurance
covering such loss or damage.
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2.7 AFFILIATES.
To the extent that Assets or Assumed Liabilities are held by or reside
in any Affiliate of Seller that is not a Seller Sub, Seller will cause each such
Affiliate to transfer such Assets and Assumed Liabilities and Purchaser will
purchase and/or assume such Assets and Assumed Liabilities.
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ARTICLE III. PURCHASE PRICE
--------------------------------------------------------------------------------
3.1 PURCHASE PRICE.
The aggregate amount to be paid for the Assets will be Fifty-Seven
Million Dollars ($57,000,000.00), subject to adjustment pursuant to SECTION 3.2
(the "PURCHASE PRICE"). In addition to the foregoing payment, as consideration
for the grant, sale, assignment, transfer and delivery of the Assets, Purchaser
shall assume and discharge the Assumed Liabilities.
3.2 PURCHASE PRICE ADJUSTMENT.
(a) On or before the sixtieth (60th) day following the Closing Date,
Purchaser shall prepare and deliver to Seller a statement of the Net Working
Capital of the Business as of the Closing Date prepared in accordance with this
Agreement and GAAP (the "PROPOSED STATEMENT"). The Net Working Capital of the
Business, calculated based on the Proposed Statement, is herein called the
"PROPOSED NET WORKING CAPITAL."
(b) If Seller determines that there are any inaccuracies in the
Proposed Statement, Seller shall deliver to Purchaser a written notice (a
"STATEMENT DISPUTE NOTICE") setting forth such alleged inaccuracies (the
"STATEMENT DISPUTED MATTERS") no later than 5:00 p.m., New York City time on the
thirtieth (30th) day after receipt of the Proposed Statement from Purchaser. If
Seller does not deliver a Statement Dispute Notice to Purchaser by such date and
time, Seller shall be deemed to have accepted the Proposed Statement as prepared
by Purchaser.
(c) Purchaser and Seller shall endeavor in good faith to resolve the
Statement Disputed Matters by mutual agreement. If, within thirty (30) Business
Days after Seller delivers a Statement Dispute Notice to Purchaser:
(i) Purchaser and Seller are able to reach a mutually
satisfactory resolution of the Statement Disputed
Matters, then the Proposed Statement shall be revised
to reflect such resolution, and such Proposed
Statement will be final, binding and conclusive (but
only with respect to those Statement Disputed Matters
as to which Purchaser and Seller have reached such a
mutually satisfactory resolution); or
(ii) Purchaser and Seller are unable to reach a mutually
satisfactory resolution of the Statement Disputed
Matters, then (A) Purchaser and Seller shall promptly
submit any remaining Statement Disputed Matters to
RSM McGladrey, independent public accountants (the
"AUDITOR"); (B) Purchaser and Seller shall supply to
the Auditor only such supporting documentation and
information as the Auditor may request; (C) the scope
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of the Auditor's responsibility shall be limited to
resolving only the Statement Disputed Matters; (D)
the Auditor will deliver to Purchaser and Seller a
written determination (such determination to include
a work sheet setting forth all material calculations
used in arriving at such determination and to be
based solely on the information provided to the
Auditor by Purchaser and Seller) of the Statement
Disputed Matters within thirty (30) days of receipt
thereof; and (E) all determinations of the Auditor
shall be final and non-appealable.
(d) The Proposed Statement, as prepared by Purchaser and accepted by
Seller pursuant to SECTION 3.2(A), as agreed upon by Purchaser and Seller
pursuant to SECTION 3.2(C)(I), or as determined by the Auditor pursuant to
SECTION 3.2(C)(II), as the case may be, is herein called the "FINAL STATEMENT,"
and the Net Working Capital of the Business calculated based on the Final
Statement is herein called the "FINAL NET WORKING CAPITAL."
(e) All costs and expenses of the Auditor shall be borne one-half (1/2)
by Purchaser and one-half (1/2) by Seller.
(f) If the Final Net Working Capital is:
(i) GREATER than the Benchmark Net Working Capital (the
amount of such excess, the "EXCESS AMOUNT"),
Purchaser shall pay to Seller, by Wire, within five
(5) Business Days after the determination of the
Final Statement, such Excess Amount; or
(ii) LESS than the Benchmark Net Working Capital (the
amount of such shortfall, the "SHORTFALL AMOUNT"),
Seller shall pay to Purchaser, by Wire, within five
(5) Business Days after the determination of the
Final Statement, such Shortfall Amount.
3.3 ALLOCATION OF PURCHASE PRICE.
The Purchase Price shall be allocated in the manner determined by
Seller and Purchaser pursuant to SECTION 7.11. After the Closing, the Parties
shall make consistent use of such allocation for all Tax purposes and in all
filings with, and declarations and reports to, all Governmental Authorities in
respect thereof. In any Action relating to the determination of any Tax, no
Party shall contest such allocation, represent that such allocation is not
correct, or take any reporting position inconsistent with such allocation.
3.4 CURRENCY CONVERSIONS.
If it is necessary in connection with any calculation relating to this
Agreement or the transactions contemplated hereby to convert any component of
such calculation to Dollars from another currency, such conversion shall be
performed using the applicable noon buying rate published by the Federal Reserve
Bank of New York on the date as of which the calculation is made.
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ARTICLE IV. CLOSING
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4.1 THE CLOSING.
The closing of the transactions contemplated by this Agreement (the
"CLOSING") shall take place at the offices of Xxxxxxx LLP in Baltimore, Maryland
as soon as reasonably practicable, but in any event no later than the fifth
(5th) Business Day following the day upon which all of the conditions to Closing
have been satisfied or waived (other than those conditions which by their terms
cannot be satisfied until the Closing) or such other date and/or location as is
mutually agreed upon in writing by the Parties (the "CLOSING DATE").
4.2 SELLER'S CLOSING DELIVERIES.
(a) Subject to SECTION 2.5, at the Closing, Seller will execute (as
applicable) and deliver (or cause to be delivered) to Purchaser the following,
at the expense of Seller and in proper form for recording and/or registration
(as the case may be) in all relevant jurisdictions when appropriate:
(i) bills of sale and general assignments, each in the
form attached as EXHIBIT A (each, a "XXXX OF SALE")
from:
(A) Seller to Purchaser, and
(B) Healthcare Sub to Purchaser;
(ii) stock transfer powers, each in the form attached as
EXHIBIT B, or, with respect to the India Sub Shares,
share transfer deeds/forms in the prescribed format
(each, a "STOCK POWER"), in each case together with
all applicable stock certificates, to effect the
transfer of:
(A) the GBS India Shares from GBS to Purchaser;
(B) the Seller India Shares from Seller to TEFIS; and
(C) all of the capital stock of Canada Sub from
Seller to AGCC;
(iii) all documents as may be reasonably requested by
Purchaser to evidence and effectuate the conveyance
of the Transferred Intellectual Property, each in
form and substance satisfactory to Purchaser and duly
stamped where required in accordance with applicable
Law (the "IP TRANSFER DOCUMENTS");
(iv) such other instruments or deeds of transfer conveying
and transferring to Purchaser title to any of the
Assets as contemplated herein or by any Schedule as
provided in this Agreement (together with the Xxxx of
Sale, the Stock Powers, and the IP Transfer
Documents, the "TRANSFER DOCUMENTS");
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(v) an assumption agreement in the form attached as
Exhibit C (the "ASSUMPTION AGREEMENT");
(vi) a transition services agreement in the form attached
hereto as Exhibit D (the "TRANSITION SERVICES
AGREEMENT");
(vii) a non-competition agreement in the form attached
hereto as Exhibit E (the "Non-Compete");
(viii) a license agreement in the form of EXHIBIT F hereto
(the "LICENSE AGREEMENT");
(ix) a Certificate of Non-United States Real Property
Interest in the form attached hereto as EXHIBIT G;
(x) a certificate of the President of Seller dated as of
the Closing Date to the effect that the statements
set forth in SECTIONS 8.1(A) and (B) are true and
correct (the "SELLER COMPLIANCE CERTIFICATE"); and
(xi) all other documents and papers required to be
delivered by SECTION 8.1 as conditions to the Closing
and such other documents and papers with respect to
the corporate and other proceedings contemplated by
this Agreement and the Acquisition Agreements
(including such documentation as has been theretofore
received by Seller relating to Approvals of third
Persons that Seller is required to obtain hereunder
as a condition of Closing) as Purchaser shall
reasonably request.
(b) Seller, which is a non-resident of Canada, shall have delivered to
Purchaser a certificate pursuant to Section 116 of the ITA and any corresponding
provision of an applicable provincial Law (each a "WITHHOLDING CERTIFICATE") or,
if any such certificate is not delivered at the Closing, Seller hereby
acknowledges and agrees that such amount of the allocation of the Purchase Price
attributable to the shares of Canada Sub as may be required to be withheld under
applicable Law (the "WITHHELD AMOUNT") will be withheld by Purchaser as required
by Law and:
(i) at the Closing, deposited in escrow with an
independent escrow agent mutually satisfactory to
Purchaser and Seller (the "ESCROW AGENT") at Seller's
expense pursuant to an escrow agreement among Seller,
Purchaser and the Escrow Agent in form and substance
reasonably satisfactory to the parties thereto, and
(ii) if no Withholding Certificate is delivered to
Purchaser prior to the date Purchaser is required by
Law to remit the Withheld Amount to the applicable
Governmental Authority (subject to any written
extension of time to make such remittance by the
applicable Governmental Authority), Purchaser and
Seller shall cause the Escrow Agent to release the
Withheld Amount from escrow to Purchaser, whereupon
Purchaser shall remit the Withheld Amount to the
applicable Governmental Authority.
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4.3 PURCHASER'S CLOSING DELIVERIES.
At the Closing, Purchaser will execute (as applicable) and deliver to
Seller the following, at the expense of Purchaser:
(a) the Purchase Price by Wire;
(b) each of the Transfer Documents that Purchaser is required to
countersign;
(c) the Assumption Agreement;
(d) the Transition Services Agreement;
(e) the Non-Compete;
(f) the License Agreement;
(g) the Solvency Certificate (as hereinafter defined)
(h) a certificate of the President of Purchaser dated as of the Closing
Date to the effect that the statements set forth in Sections 8.2(a) and (b) are
true and correct (the "PURCHASER COMPLIANCE CERTIFICATE"); and
(i) all other documents and papers required to be delivered by SECTION
8.2 as conditions to the Closing and such other documents and papers with
respect to the corporate and other proceedings contemplated by this Agreement
and the Acquisition Agreements as Seller shall reasonably request.
--------------------------------------------------------------------------------
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER
--------------------------------------------------------------------------------
Seller, acknowledging that Purchaser is relying thereon, represents and
warrants to Purchaser, on the date hereof and as of the Closing Date, as
follows:
5.1 CORPORATE ORGANIZATION; GOOD STANDING.
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York, and has all requisite
corporate power and authority to own, lease or otherwise hold the Assets and to
carry on the Business as presently conducted.
(b) SCHEDULE 5.1(B) sets forth a true and complete list of all
Subsidiaries of Seller that are used in the Business or hold any of the Assets,
indicating for each (A) the type of entity, and (B) the jurisdiction of
organization. Each Subsidiary listed on SCHEDULE 5.1(B) is duly organized,
validly existing and in good standing as an entity of the type specified for
such Subsidiary on SCHEDULE 5.1(B) under the laws of the jurisdiction of
organization specified for such Subsidiary on SCHEDULE 5.1(B).
(c) SCHEDULE 5.1(C) sets forth a true and complete list of each
jurisdiction in which each Seller Party and Seller Sub is qualified or
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registered to transact business as a foreign or alien corporation. Except as
described on SCHEDULE 5.1(C), each Seller Party and Seller Sub is duly qualified
or registered to transact business and is in good standing as a foreign or alien
corporation in each jurisdiction in which the failure to be so qualified or
registered could reasonably be expected to have a Seller Material Adverse
Effect.
(d) The corporate records and minutes books of the Seller Subs contain
complete and accurate minutes of all meetings of, and all written resolutions
adopted by, the directors and shareholders of each Seller Sub.
5.2 AUTHORIZATION AND EFFECT OF AGREEMENT.
(a) Each Seller Entity has all requisite corporate (or other entity
type, if applicable) power and authority to execute and deliver the Acquisition
Agreements to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance by each Seller Entity of the Acquisition
Agreements to which it is a party, and the consummation by each such Seller
Entity of the transactions contemplated hereby and thereby, have been duly and
validly authorized by all necessary corporate or limited liability company
action on the part of such Seller Entity (other than the requisite approval of
the transactions contemplated hereby by the shareholders of Seller in accordance
with Seller's Organizational Documents and the NYBCL). This Agreement has been,
and each of the Acquisition Agreements, when executed and delivered by each
Seller Entity that is a party hereto and thereto, will have been, duly and
validly executed and delivered by such Seller Entity and each constitutes or
will constitute a valid and binding obligation of such Seller Entity,
enforceable against such Seller Entity in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to creditors rights generally, and subject
to general principles of equity.
(b) The Seller Board, by resolutions duly adopted at a meeting duly
called and held (the "SELLER BOARD APPROVAL"), has (i) determined that this
Agreement and the transactions contemplated hereby are advisable and in the best
interests of the Seller and its shareholders, (ii) approved the transactions
contemplated by this Agreement, including the Transfer, and (iii) recommended
that the shareholders of the Company adopt this Agreement and the Transfer.
5.3 NO CONFLICT.
(a) The execution, delivery and performance of this Agreement by each
Seller Entity that is a party hereto does not, and the execution and delivery by
each Seller Entity of the other Acquisition Agreements to which it is a party,
and the consummation by each such Seller Entity of the transactions contemplated
hereby and thereby, will not, conflict with, result in any violation of, or
constitute a default (with or without notice or lapse of time, or both) under,
give rise to a right of termination, cancellation or acceleration of any
obligation or to the loss of any material benefit under, or result in the
creation of any Lien upon the Business or any of the Assets under any provision
of (A) the Organizational Documents of any Seller Entity, (B) any Contract or
Permit (whether or not such Contract or Permit relates primarily to the
Business), or (C) any order, writ, judgment, injunction or decree applicable to
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any Seller Entity or any of their respective properties other than any such
conflicts, violations, defaults, rights of termination, cancellation or
acceleration, losses or Liens which are described on SCHEDULE 5.3(A).
(b) No Approval of any Governmental Authority or other Person is
required in connection with the execution, delivery and performance by any
Seller Entity of the Acquisition Agreements to which it is a party, or the
consummation by each Seller Entity of the transactions contemplated by any
Acquisition Agreement to which it is a party, except for: (A) the requisite
approval of the transactions contemplated hereby by the shareholders of Seller
in accordance with Seller's Organizational Documents and the NYBCL; (B) the
filing of a premerger notification report under the HSR Act; and (C) the
Approvals listed on SCHEDULE 5.3(B).
(c) No Person other than the Purchaser Entities has any option, right
of first refusal, right of first offer or similar right to purchase or otherwise
acquire the Assets or the Business, and neither Seller nor any of its Affiliates
has entered into any letter of intent, commitment or agreement (whether oral or
written) regarding any such purchase or acquisition other than with the
Purchaser Entities.
(d) Except for the rights of the applicable Purchaser Entities
hereunder, there are no outstanding options, warrants, conversion or other
rights or Contracts of any kind for the subscription or acquisition of any of
the Subsidiary Shares or any other ownership interest in any Seller Sub. None of
the Subsidiary Shares or other ownership interests in the Seller Subs are
subject to any Contract restricting or otherwise relating to the voting,
dividend rights or disposition thereof.
5.4 FINANCIAL STATEMENTS AND RELATED FINANCIAL MATTERS.
(a) Seller has filed all forms, reports, schedules, statements and
other documents required to be filed by Seller with the United States Securities
and Exchange Commission (the "SEC") since January 1, 2003 under the Exchange Act
or the Securities Act and has made available to Purchaser such forms, reports
and documents in the form filed with the SEC. All such required forms, reports
and documents (including those that Seller may file subsequent to the date
hereof) are referred to herein as the "SELLER SEC REPORTS." At the time when
filed (or if amended or superseded by a subsequent filing prior to the date
hereof then on the date of such filing), the Seller SEC Reports (i) as amended
to date complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, the Xxxxxxxx-Xxxxx Act
of 2002 and the rules and regulations of the SEC thereunder applicable to such
Seller SEC Reports and (ii) did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact or disclose
any matter or proceeding 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.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Seller SEC Reports as amended
to date (the "FINANCIAL STATEMENTS"), including each Seller SEC Report filed
after the date hereof until the Closing, (i) was prepared from, are in
accordance with and accurately reflect in all material respects, Seller's books
and records as of the times and for the period referred to therein, (ii)
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complied in all material respects with the published rules and regulations of
the SEC with respect thereto, (iii) was prepared in accordance with GAAP applied
on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 10-Q under the Exchange Act),
(iv) fairly presented the consolidated financial position of Seller as at the
respective dates thereof and the consolidated results of Seller's operations and
cash flows for the footnotes and were or are subject to normal and recurring
year-end adjustments and (v) was prepared from and in accordance with Seller's
books and records.
(c) Each of the unaudited balance sheets for the Business as of
December 31, 2005, March, 31, 2006 and June 30, 2006, each of which has been
attached as SCHEDULE 5.4(C), and each Summary of Income and Expenses for
Staffing and Solutions, respectively, for the year ended December 31, 2005, and
the year to date periods ended March 31, 2006 and June 30, 2006, respectively,
each of which have been attached as SCHEDULE 5.4(C) hereto, and each balance
sheet and each Summary of Income and Expenses for Staffing and Solutions
included in the Bring-Down Statements (i) was prepared from, are in accordance
with, and accurately reflect in all material respects, the Seller Entities'
books and records as of the times and for the period referred to therein, (ii)
was to the extent of the detail included in each such financial report, prepared
in accordance with GAAP (other than notes to financial statements which are not
included) applied on a consistent basis throughout the periods involved, (iii)
fairly present the financial position and results of operations for the Business
as of the times and for the periods referred to therein , and (iv) was prepared
from and in accordance with the books and records of the Business.
(d) No Seller Entity has any liability or obligation of any nature,
whether primary or secondary, direct or indirect, or absolute, accrued,
contingent or otherwise, arising out of or relating to the Business, or the use,
manufacture, sale, lease, ownership or operation of any assets or property used,
manufactured, sold, owned, leased or operated in connection with the Business,
in each case as conducted at any time on or prior to the Closing, except for (i)
liabilities or obligations reflected or reserved against in the Base Balance
Sheet or to be reflected or reserved against in the Final Statement, (ii)
liabilities or obligations which have arisen after the Base Balance Sheet Date,
in the Ordinary Course (other than those that will not be reflected or reserved
against in the Final Statement and that result from or arise out of or which are
in the nature of any breach of contract, breach of warranty, tort, infringement,
or violation of law, all of which are Excluded Liabilities hereunder) none of
which are material, and (iii) Excluded Liabilities.
(e) All accounts receivable included in the Assets represent sales
actually made in the Ordinary Course, and, to Seller's Knowledge, are current
and collectible, net of any reserves shown on the Final Statement.
(f) No inventory is maintained in connection with the Business.
(g) SCHEDULE 5.4(G) sets forth a complete and accurate list of each
bank or other depository in which Seller Subs maintain any bank account, trust
account or safety deposit box, and identified for each the names of all
individuals authorized to draw thereon or who have access thereto.
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5.5 ABSENCE OF CHANGES.
Since June 30, 2006:
(a) except (i) as disclosed in any filing made by Seller with the SEC
prior to execution of this Agreement, or (ii) as described on SCHEDULE 5.5(A)
hereto, the Business has been conducted in the Ordinary Course and there has not
been any event, occurrence or development which, individually or in the
aggregate, would have a Seller Material Adverse Effect; and
(b) except as described on SCHEDULE 5.5(B) hereto, there has not
occurred any action, event or failure to act, that if it had occurred after the
date of this Agreement, would have required the consent of the Purchaser under
SECTION 7.6.
5.6 COMPLIANCE WITH LAWS; PERMITS.
(a) Each Seller Entity, the Assets and the Business are in compliance
with all Laws, and neither Seller nor any other Seller Entity has received any
notification that has not lapsed or been withdrawn by any Governmental Authority
(i) asserting a violation by any Seller Entity or the Business of any Law, (ii)
threatening to revoke any Permit applicable to the conduct of the Business, or
(iii) materially restricting or in any material way limiting the operations of
the Business.
(b) SCHEDULE 5.6(B) lists all Permits required for the operation of the
Business. Seller (or the applicable Seller Sub) has obtained and maintained all
such Permits.
5.7 SUFFICIENCY OF ASSETS.
(a) The Assets:
(i) include all assets, properties, interests in
properties and rights (real, personal and mixed,
tangible and intangible) used or held for use in the
Business; and,
(ii) are all of the assets necessary to operate the Business
as it is currently conducted.
(b) No Excluded Sub (other than Healthcare Sub and GBS) owns or
possesses any properties or rights, whether tangible or intangible, used or held
for use in the Business.
5.8 TITLE TO ASSETS.
(a) Each Seller Entity has good, valid and marketable title to the
respective Assets free and clear of all Liens, except for Permitted Liens. This
Agreement and the Transfer Documents are sufficient to Transfer to the Purchaser
Entities all right, title and interest of the Seller Entities in and to the
Assets that are being Transferred to the Purchaser Entities free and clear of
all Liens (other than Permitted Liens) and to vest in the Purchaser Entities
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good, valid and marketable title thereto and title sufficient to conduct the
Business as conducted as of the Closing Date.
(b) The Subsidiary Shares constitute all of the issued and outstanding
ownership interests in the Seller Subs.
(c) Except for the GBS India Shares, Seller holds all right, title and
interest in and to the Subsidiary Shares, free and clear of all Liens. GBS holds
all right, title and interest in and to the GBS India Shares free and clear of
all Liens.
(d) All the issued and outstanding shares of capital stock of, or other
ownership interests of any kind whatsoever in, the Seller Subs have been duly
authorized, validly issued and are fully-paid and non-assessable.
5.9 REAL PROPERTY.
(a) No Seller Entity owns any real property.
(b) Except as described on SCHEDULE 5.9 hereto, with respect to each
Facility and the Facility Leases:
(i) a Seller Entity has a good and valid leasehold
interest in, or license to use, such Facility;
(ii) no Seller Entity has subleased any Facility or any
part thereof, or given any third Person any license
or other right to occupy any portion of any Facility;
(iii) neither any Seller Entity nor any other party to any
Facility Lease has waived any term or condition
thereof, and all covenants to be performed under any
Facility Lease by any Seller Entity, or any other
party to such Facility Lease, prior to the Closing
have been performed;
(iv) no Seller Entity has collaterally assigned or granted
any security interest in any Facility Lease or any
interest therein;
(v) no Seller Entity is obligated under or a party to,
any option, right of first refusal or other
contractual right to purchase any Facility or any
portion thereof or interest therein; and
(vi) to the extent required by applicable Law, each
Facility Lease has been duly stamped and registered
with applicable Governmental Authorities.
5.10 INSURANCE.
Seller has made available to Purchaser complete and accurate schedules
of all policies of fire, liability and other forms of Insurance in effect as of
the date hereof and maintained by or for the benefit of any Seller Entity with
respect to the Business or the Assets. All such policies are listed on SCHEDULE
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5.10 and, except as set forth on SCHEDULE 5.10, each of such policies is in full
force and effect on the date hereof. No Seller Entity has received any
notification or threat by any insurer to revoke or rescind any policy of
insurance in any respect material to the Business or the Assets. To the extent
any Seller Entity is required by applicable Law to maintain any insurance with
respect to the Business, the Assets and/or the Business Personnel, such Seller
Entity maintains such insurance.
5.11 INTELLECTUAL PROPERTY.
(a) SCHEDULE 5.11(A) sets forth a complete and correct list of all
Copyrights, Patents and Trademarks included in the Owned Intellectual Property
included in the Assets.
(b) SCHEDULE 5.11(B) sets forth a complete and correct list of all
Inbound License Agreements included in the Assets, identifying for each: (i) the
licensor(s) thereunder; (ii) the date thereof; and (iii) the Intellectual
Property licensed thereunder.
(c) SCHEDULE 5.11(C) sets forth a complete and correct list of all
Outbound License Agreements included in the Assets, identifying for each: (i)
the licensee(s) thereunder; (ii) the date thereof; and (iii) the Owned
Intellectual Property licensed thereunder.
(d) SCHEDULE 5.11(D) sets forth a complete and correct list of all
Owned Software included in the Assets, identifying for each all Third Party
Software that is (i) required to be used in conjunction with such Owned Software
in order for such Owned Software to function in accordance with its design
specifications; or (ii) otherwise used by any Seller Entity in conjunction with
such Owned Software in the Ordinary Course.
(e) SCHEDULE 5.11(E) sets forth a complete and correct list of all
Owned Technical Identifiers included in the Assets.
(f) One or more Seller Entities owns all right, title and interest in
and to the Owned Intellectual Property included in the Assets, free and clear of
all Liens. The Owned Intellectual Property included in the Assets has been duly
maintained, is valid and subsisting, is in full force and effect and has not
been cancelled, expired or abandoned.
(g) To Seller's Knowledge, the Licensed Intellectual Property in which
any Seller Entity is granted any rights pursuant to any Inbound License
Agreement that is included in the Assets has been duly maintained, is valid and
subsisting, is in full force and effect and has not been cancelled, expired or
abandoned.
(h) All Owned Software included in the Assets and other works
protectable by Copyright that are included in the Owned Intellectual Property
included in the Assets were created, developed and authored by either (i)
Employees within the scope of their employment; or (b) independent contractors
who have assigned all of their rights to a Seller Entity pursuant to a written
agreement. No Owned Software included in the Assets was jointly developed with
any third Person who has not assigned all of his, her or its rights to a Seller
Entity pursuant to a written agreement.
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(i) None of the Owned Intellectual Property included in the Assets and,
to Seller's Knowledge, no other product, service or technology used, sold,
licensed, offered for sale or license, or proposed to be developed, used, sold,
licensed or offered for sale or license by any Seller Entity as part of the
Business, infringes, violates or dilutes, or interferes with, any Intellectual
Property rights of any Person.
(j) No Seller Entity has brought or threatened a claim against any
Person (i) alleging infringement, violation, misappropriation, or dilution of,
or interference with, any Intellectual Property included in the Assets or any
License Agreement included in the Assets; (ii) challenging any Person's
ownership or use of, or the validity or enforceability of, any Intellectual
Property included in the Assets; or (iii) challenging the validity or
enforceability of any License Agreement included in the Assets and, to Seller's
Knowledge, there are no facts or circumstances that might reasonably provide a
basis for any claim described in the foregoing clauses (i)-(iii).
(k) All pending and registered Trademarks included in the Owned
Intellectual Property included in the Assets are in use by one or more Seller
Entities in the form appearing in, and in connection with the goods and services
listed in, their respective registration certificates (with respect to
registered Trademarks) or applications (with respect to unregistered Trademarks
for which an application has been filed).
(l) The Seller Entities take commercially reasonable measures to
protect the confidentiality of (i) the Source Code and (ii) Trade Secrets
included in the Owned Intellectual Property included in the Assets and the
Licensed Intellectual Property in which any Seller Entity is granted any rights
pursuant to any Inbound License Agreement that is included in the Assets,
including requiring all Business Personnel and third Persons having access
thereto to execute written non-disclosure agreements. No Trade Secrets included
in the Owned Intellectual Property included in the Assets or the Licensed
Intellectual Property included in the Assets have been disclosed or authorized
to be disclosed to any third Person other than pursuant to a written
non-disclosure agreement; and (ii) to Seller's Knowledge, no third Person that
is a party to any non-disclosure agreement with any Seller Entity is in breach
or default thereof. No Person other than a Seller Entity is in possession of any
Source Code included in the Assets.
(m) No Owned Software included in the Assets is a derivative of any
Software (i) for which the source code is in the public domain, or (ii) that
includes "open source" code or is licensed pursuant to an "open source" license,
including by way of example, but not in limitation, the GNU General Public
License, the Mozilla Public License, the BSD License or the Apache Software
License.
(n) In each Outbound License Agreement included in the Assets, no
Seller Entity has warranted the performance, functionality or capability of the
Software licensed thereunder, except to state that such Software would perform
in accordance with its published specifications and/or documentation.
(o) Except as set forth on SCHEDULE 5.11(O), no Seller Entity has any
obligation to provide technical support or Software maintenance services to any
third Person.
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5.12 LEGAL PROCEEDINGS.
Except as disclosed in SCHEDULE 5.12, there are no Actions pending, or
to Seller's Knowledge threatened, by or against any Seller Entity relating to
the Business or any of the Assets. There are no pending or, to Seller's
Knowledge threatened, judgments, writs, orders, injunctions or decrees or
similar actions of any Governmental Authority applicable to the conduct of the
Business or the Assets.
5.13 MATERIAL CONTRACTS.
(a) SCHEDULE 5.13(A) sets forth a complete and accurate list of all
Contracts relating to the Assets or the Business (that are not Excluded Assets)
of the following types to which any Seller Entity is a party, by which any
Seller Entity or any of its properties or assets are bound, or which otherwise
relate to the Business (the contracts listed below in this SECTION 5.13(A),
together with the Facility Leases, the Inbound License Agreements and the
Outbound License Agreements are herein collectively called the "MATERIAL
CONTRACTS"):
(i) any agreement relating to employment, consulting,
continuation of benefits, retention, change of
control, severance or termination with any Business
Personnel;
(ii) any collective bargaining agreement with any labor
union relating to current Employees;
(iii) any agreement for capital expenditures or the
acquisition or construction of fixed assets which
requires aggregate future payments in excess of
$25,000;
(iv) any agreement to provide services (including
consulting services and temporary staffing services)
to a client or customer of the Business (each, a
"CLIENT CONTRACT")
(v) any agreement (other than a purchase order issued by
any Seller Entity in connection with the conduct of
the Business in the Ordinary Course) for (i) the
purchase, maintenance or acquisition of materials,
supplies, merchandise, equipment or other property
which requires aggregate future payments or expenses
by any Seller Entity in excess of $25,000 or which
cannot be cancelled by any Seller Entity without
payment of a fee in excess of $25,000 or (ii) the
sale, lease, license or furnishing of materials,
supplies, merchandise, equipment or other property,
rights or services (including consulting services)
which requires aggregate future payments to any
Seller Entity in excess of $25,000 or which cannot be
cancelled by such Seller Entity without payment of a
fee in excess of $25,000;
(vi) except for agreements relating to the sale of
Products in the Ordinary Course, any agreement
granting to any Person a right to purchase or acquire
any Assets;
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(vii) any license or royalty agreement having an aggregate
payment obligation of $10,000 or more;
(viii) any indenture, mortgage, loan or credit agreement
under which any Seller Entity has borrowed any money
or issued any note, bond, debenture or other evidence
of indebtedness, or pledged Assets or otherwise
created any Lien or directly or indirectly guaranteed
indebtedness or financial obligations of others;
(ix) any agreement with any distributor, dealer, sales or
advertising agency or manufacturer's representative,
franchise or similar contract or any other contract
relating to the payment of a commission or other
compensation;
(x) any lease under which Seller or any other Seller
Entity is (i) a lessee of any real or personal
property owned by a third Person or (ii) a lessor of,
or makes available for use by any third Person, any
real or personal property owned by any Seller Entity,
in either such case which requires aggregate annual
payments in excess of $25,000;
(xi) any intercompany agreement or agreement with any
Affiliate or ERISA Affiliate;
(xii) any agreement which restricts any Seller Entity or
any Business Personnel in any respect from engaging
in the Business as presently conducted;
(xiii) any agreement pursuant to which any Seller Entity has
granted any power of attorney to any Person; or
(xiv) any other agreement material to the Business, whether
or not entered into in the Ordinary Course.
(b) Except as set forth on SCHEDULE 5.13(B):
(i) Seller has made available a complete and accurate
copy of each Material Contract to Purchaser (together
with all amendments thereto);
(ii) each Material Contract is in full force and effect
and is legal, valid, binding and enforceable against
each Seller Entity that is a party thereto and, to
Seller's Knowledge, all other parties thereto in
accordance with its terms,
(iii) there does not exist under any Material Contract any
default or condition or event that, after notice or
lapse of time or both, would constitute a material
default on the part of any Seller Entity, or to
Seller's Knowledge, on the part of any other party to
such Material Contract;
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(iv) with respect to each Client Contract, the applicable
Seller Entity is capable of completing the
performance of such Contract in accordance with its
terms; and
(v) no Seller Entity is a party to any Contract pursuant
to which a current or former Business Personnel or
director of Seller is, or could reasonably be,
entitled to indemnification by Seller.
5.14 LABOR AND EMPLOYMENT MATTERS.
(a) SCHEDULE 5.14(A) sets forth a true and complete list of all
Business Personnel and:
(i) also sets forth, as of August 14, 2006, for each
employee listed thereon, (A) the employee's 2006 base
annual salary or base hourly pay rate, as the case
may be, (B) the amount of salary or hourly pay, as
the case may be, and any other wages (as "wages" is
defined in Section 3401 of the Code) actually paid to
such employee since December 31, 2005, and (C) to the
extent that such employee was assigned to a customer
to perform services, the name of each customer of the
Business for whose benefit such employee has
performed any services since December 31, 2005;
(ii) also sets forth, as of August 14, 2006, for each
independent contractor listed thereon, (A) the total
amount paid by any Seller Entity to such independent
contractor since December 31, 2005, and (B) the name
of each customer of the Business for whose benefit
such independent contractor has performed any
services since December 31, 2005; and
(iii) in the aggregate, there has been no material change
in the information set forth on SCHEDULE 5.14(B)
since August 14, 2006.
(b) Except as set forth on SCHEDULE 5.14(B), there is/are no:
(i) collective bargaining agreements or union contracts
to which any Seller Entity is a party or otherwise
bound;
(ii) labor unions representing any Business Personnel;
(iii) to Seller's Knowledge, overt organizational efforts
with respect to the formation of a collective
bargaining unit presently being made or threatened by
Business Personnel;
(iv) to Seller's Knowledge, pending or threatened strike,
slowdown, work stoppage or lockout with respect to
any Business Personnel;
(v) written personnel policy, rule or procedure generally
applicable to Business Personnel; or
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(vi) trade union, association, council of trade unions,
employee bargaining agency or affiliated bargaining
agent that:
(A) holds bargaining rights with respect to any
of the Business Personnel of Canada Sub by
way of certification, interim certification,
voluntary recognition, designation or
successor rights;
(B) to Seller's Knowledge, has applied to be
certified or requested to be voluntarily
recognized as the bargaining agent of any of
the Business Personnel of Canada Sub;
(C) to Seller's Knowledge, has applied to have
Canada Sub declared a related or successor
employer under applicable Canadian
provincial labor or employment legislation;
or
(D) to Seller's Knowledge, has filed a complaint
or charge under applicable Canadian
provincial labor or employment legislation.
(c) During the past three (3) years, no Seller Entity has (i)
effectuated 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 any Seller Entity; (ii) effectuated a "mass layoff"
(as defined in the WARN Act) affecting any site of employment or facility of any
Seller Entity; or (iii) been affected by any transaction or engaged in layoffs
or employment terminations sufficient in number to trigger application of any
similar state Law. No Business Personnel have suffered an "employment loss" (as
defined in the WARN Act) since three months prior to the date of this Agreement.
(d) The Seller Entities have at all times properly classified (A)
Business Personnel as employees or independent contractors, as appropriate; and
(B) those Business Personnel who are employees as exempt or non-exempt for
purposes of the Fair Labor Standards Act. All Employees have been paid
appropriately under applicable federal, state, local and, to the extent
applicable, foreign wage and hour Laws.
(e) All employment terminations effectuated by any Seller Entity
including, but not limited to, layoffs, were effectuated in compliance, in all
material respects, with all Laws governing employment or separation from
employment including, but not limited to, the Age Discrimination In Employment
Act (29 U.S.C. xx.xx. 626 ET SEQ.), Title VII of the Civil Rights Acts of 1964
and 1991 as amended (42 U.S.C. xx.xx. 2000e ET SEQ.), the Consolidated Omnibus
Budget Reconciliation Act of 1985 (29 U.S.C. xx.xx. 1161 ET SEQ.), the AmericANs
With Disabilities Act (42 U.S.C. xx.xx. 12101 ET SEQ.), the Rehabilitation Act
of 1973 (29 U.S.C. xx.xx. 701 ET SEQ.), the Family and Medical Leave Act (29
U.S.C. xx.xx. 2601 ET SEQ.), the Fair Labor Standards Act (29 U.S.C. xx.xx. 201
ET seq.), ERISA and the WARN Act. No Seller Entity has any liability in respect
of any contract of service or for services for redundancy payments or for
compensation for wrongful dismissal or unfair dismissal or for failure to comply
with any order for the reinstatement or re-engagement of any Business Personnel.
(f) With respect to Canada Sub:
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(i) To Seller's Knowledge, no Business Personnel of
Canada Sub is in violation of any term of any
employment contract, proprietary information
agreement or any other agreement relating to the
right of that individual to be employed by or to
contract with, Canada Sub because of the nature of
the business to be conducted by Canada Sub, and, to
Seller's Knowledge, the continued employment or
contractual engagement (as applicable) by Canada Sub
of its present Business Personnel, will not result in
any such violation. Canada Sub has not received any
notice alleging that any such violation has occurred.
(ii) All of the Business Personnel of Canada Sub who are
employees are employed for an indefinite term and are
not subject to written employment agreements other
than any such agreements that may be identified on
SCHEDULE 5.13(A). To Seller's Knowledge, no officer
or key employee of Canada Sub, nor any group of key
employees, has given notice, oral or written, of
their intention to terminate their employment with
Canada Sub nor does Canada Sub intend to terminate
the employment of any officer, key employee or group
of key employees, other than as may be required in
the Ordinary Course.
(iii) There are no employment Law-related Actions,
grievances, proceedings or outstanding orders, awards
or rulings relating to the Business which are pending
or, to Seller's Knowledge, threatened which might
materially and adversely affect, or could reasonably
be expected to materially and adversely affect,
Canada Sub or the portion of the Business conducted
through Canada Sub.
(iv) Seller or Canada Sub has obtained such consents as
are necessary for the collection, use and disclosure
of personal information of Canadian Business
Personnel to Purchaser, including but not limited to
any health information relating to the non active
status of any such Business Personnel, in accordance
with applicable Canadian privacy legislation.
5.15 EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 5.15(A) identifies (i) each "employee benefit plan", as
such term is defined in Section 3(3) of ERISA, that provides welfare, retirement
or deferred compensation benefits, and each other employment bonus, incentive
compensation, severance, salary continuation, change of control, retention,
stock option, other equity based performance, vacation, sick leave, holiday pay,
fringe benefit, reimbursement program, incentive, insurance, welfare, or other
employee benefit plan, program, agreement or policy that provides benefits or
compensation in respect of any Employee and that is maintained by any Seller
Entity incorporated in the United States or to which any Seller Entity
incorporated in the United States contributes, has any obligation to contribute,
or is a party, and (ii) each "employee benefit plan" maintained by a Seller
Entity not incorporated in the United States or to which a Seller Entity not
incorporated in the U.S. contributes (collectively, the "PLANS"). Seller has
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made available to Purchaser a true and complete copy of the Plans, trust
agreements, annuity contracts and other funding arrangements, IRS determination
or opinion letters and all related summary Plan descriptions, relating to the
Plans. Schedule 5.15(a) identifies, for each Plan listed thereon, the Seller
Entity who maintains, contributes to, has any obligation to contribute to, or is
a party to such Plan (the "PLAN SPONSOR").
(b) Except as required by Section 4980B of the Code, neither any Seller
Entity nor any ERISA Affiliate maintains has promised, contributes to, or has an
obligation to provide or contribute to, any post-employment (or post-service, in
the case of a service provider who is not an employee), medical, life or other
benefit coverage, plan, policy or arrangement For greater certainty, there is no
(and has never been any) Canada Plan providing post employment or post
retirement benefits pertaining to current or former business personnel of Canada
Sub.
(c) Except as disclosed in SCHEDULE 5.15(A), each Plan sponsored by a
Seller Entity incorporated in the United States intended to be qualified under
Section 401(a) of the Code, and the trust (if any) forming a part thereof, has
received a favorable determination letter from the IRS as to its qualification
under the Code and to the effect that each such trust is exempt from taxation
under Section 501(a) of the Code, and no event has occurred since the date of
such determination letter which could adversely affect such qualified or tax
exempt status.
(d) No Seller Entity nor any ERISA Affiliate has ever maintained,
sponsored, contributed to, or had any obligation to contribute to (i) any
"pension plan" (within the meaning of Section 3(2) of ERISA) subject to Title IV
of ERISA, Section 302 of ERISA or Section 412 of the Code, or (ii) any
"multiemployer plan" (within the meaning of Section 3(37) of ERISA). No Seller
Entity has engaged in any transaction that could be subject to Section 4069 of
ERISA. No Seller Entity has incurred any liability under Title IV of ERISA, and
no event has occurred with respect to any Plan which could result in any such
liability to Purchaser. No Seller Entity has engaged in any non exempt
"prohibited transaction" in connection with which such Seller Entity could be
subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed pursuant to Section 4975 of the Code. To Seller's Knowledge,
each of the Plans has been operated and administered in all material respects in
accordance with the Plan and all Laws, including but not limited to ERISA, the
Code and COBRA requirements thereof. The Controlled Group Benefit Plans that are
subject to COBRA have been operated and administered in all material respects in
accordance with the requirements of COBRA. There are no material pending or, to
Seller's Knowledge, threatened claims by any Employee, spouse or other
beneficiary involving any Plan (other than routine claims for benefits). All
contributions required to have been made by Seller or any ERISA Affiliate to any
Controlled Group Benefit Plan pursuant to such plan and Law (including ERISA and
the Code) have been made within the time prescribed by such plan and Law.
(e) SCHEDULE 5.15(A) identifies each Employee who, as of the third
Business Day prior to the date of this Agreement was hospitalized or on short
term disability status, long term disability status, worker's compensation
leave, or other leave of absence status from employment in connection with the
Business or otherwise not at work for a period of over five (5) days.
(f) No amounts payable under the Plans will fail to be deductible for
federal income tax purposes by virtue of Section 280G of the Code. Except as
disclosed on SCHEDULE 5.15(F), the consummation of the transactions contemplated
-36-
by this Agreement will not accelerate the time of payment or vesting, or
increase the amount of compensation or benefits due any Employee or liability
under any Plan. Full payments of all amounts which Seller or any ERISA Affiliate
is required or committed to pay to each of the Plans has been made for all
periods prior to and as of the Closing Date; provided, however, that the profit
sharing contribution to Seller's 401(k) plan for 2006 will not be made as of the
Closing Date, but will be fully accrued on Seller's financial statements.
(g) Seller has made available to Purchaser the last annual return,
including the actuarial report and all attachments thereto, filed for each Plan
and such returns and reports fully and accurately set forth the financial and
actuarial condition of such Plans and each trust funding such Plans.
(h) Seller has made available to Purchaser an accurate and complete
copy of each Seller Entity's standard severance policy. Except for such policies
and as disclosed in SCHEDULE 5.15(A), the Seller Entities and ERISA Affiliates
do not maintain, and do not have any potential liability for, severance or other
termination obligations to any Business Personnel.
(i) No Canada Plan is a registered pension plan, or a plan, whether
funded or not funded, which provides retirement income and is not registered.
(j) All employee data necessary to administer each Canada Plan in
respect of current and former Business Personnel of Canada Sub and their
respective beneficiaries is in the possession of Canada Sub, and is complete,
correct and in a form which is sufficient for the proper administration of the
Canada Plans in respect of current and former Business Personnel of Canada Sub
and their respective beneficiaries.
(k) To the Seller's knowledge, there exists no Liability in connection
with any former benefit plan relating to the current or former Business
Personnel of Canada Sub or any of their respective beneficiaries that has
terminated, and all procedures for termination of each former pension or benefit
plan has been properly followed in accordance with the terms of the former
pension or benefit plan and applicable Laws.
(l) None of the execution and delivery of this Agreement, the
performance of the Seller Entities' obligations under this Agreement or the
consummation of any of the transactions contemplated in this Agreement will:
(i) result in any payment (including bonus, golden
parachute, retirement, severance, unemployment
compensation, or other benefit or enhanced benefit)
becoming payable under any Canada Plan;
(ii) increase any benefits otherwise payable under any
Canada Plan;
(iii) entitle any Business Personnel of Canada Sub to any
job security or similar benefit or any enhanced
benefits; or
(iv) result in the acceleration of the time of payment or
vesting of any benefits otherwise payable under any
Canada Plan, or result in any Canada Plan becoming
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terminable other than at the sole and unfettered
discretion of Canada Sub.
(m) The summary plan descriptions prepared for, and circulated to, the
current and former Business Personnel of Canada Sub and their respective
beneficiaries concerning each Canada Plan, together with all written
communications of a general nature provided to those persons or any of them,
accurately describe in all material respects the benefits provided under each
Canada Plan referred to therein.
(n) Upon termination of employment, all sick leave benefits accrued by
any Business Personnel of Canada Sub will lapse and no payment is required to be
made by Canada Sub in respect of the lapsed benefit.
5.16 GUARANTEES.
SCHEDULE 5.16 sets forth an accurate and complete list of all
guarantees, bid bonds, performance bonds, payment bonds, cash deposits, letters
of credit, foreign exchange contracts and other agreements or commitments
relating to the foregoing guaranteeing or securing liabilities or obligations
arising out of or relating to the Business pursuant to which any Seller Entity
has any liability (collectively "GUARANTEES"), and setting forth with respect to
each such Guaranty, the amount thereof and the beneficiary thereof, complete and
accurate copies of which Seller has made available to Purchaser.
5.17 ENVIRONMENTAL, SAFETY AND HEALTH MATTERS.
(a) No Seller Entity has entered into any written agreement with any
Governmental Authority or any other Person by which any Seller Entity has
assumed responsibility, either directly or as an indemnitor, guarantor or
surety, for the investigation or remediation of any condition arising from or
relating to a Release or threatened Release of Hazardous Substances in
connection with or relating to the Assets or any location to which Hazardous
Substances related to or generated by the Business come to be located.
(b) There is not now and has not been at any time in the past a Release
into the environment of Hazardous Substances in violation of or in a manner that
could result in liability under any Environmental Laws for which any Seller
Entity, with respect to the Assets or any location to which Hazardous Substances
related to or generated by the Business are located, may be directly or
indirectly responsible.
(c) No Seller Entity has transported, stored, treated or disposed of,
nor has it allowed or arranged for any third Person to transport, store, treat
or dispose of, any Hazardous Substances to or at any location other than a site
lawfully permitted to receive such substances; nor has it performed, arranged
for or allowed by any method or procedure such transportation, storage,
treatment or disposal in violation of or in a manner that could result in
liability under any Environmental Laws.
(d) Seller has made available copies to Purchaser of any reports,
assessments, analytical results, correspondence, pleadings, or other documents
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related to compliance with or liability under any Environmental Law of the
Business, including any Phase I or II reports and any compliance audits.
5.18 TAX MATTERS.
Except as set forth on SCHEDULE 5.18:
(a) Each Seller Entity has duly filed, in accordance with Laws, all Tax
returns and reports required to be filed on or prior to the Closing Date by or
on behalf of such Seller Entity relative to the Business (including all
declarations, reports and statements required to be filed with relevant
Governmental Authorities regulating software technology park units in India).
Such Tax returns and reports as filed (or to be filed) are (or will be) true,
correct and complete in all respects. All Taxes due and payable as shown in such
Tax returns and reports or otherwise (including all Taxes any Seller Entity was
required to withhold from Employees, agents, contractors, and nonresidents) or
otherwise required to be paid by any Seller Entity, have been paid.
(b) No Tax deficiency, assessment or penalty is proposed or assessed
against any Seller Entity with respect to the Business or Assets. Seller has
made available to Purchaser copies of all federal, state and foreign tax returns
filed by any Seller Entity in the past three (3) years. Except as set forth on
SCHEDULE 5.18, there is no ongoing audit, litigation, or similar proceeding
concerning any Tax returns of any Seller Entity.
(c) None of the Assets is property required to be treated as being
owned by any other person or entity pursuant to the so-called safe harbor
provisions of former section 168(f)(8) of the Code. None of the Assets is
property that is tax exempt use property under section 168(h) of the Code.
(d) None of the Assets secures any debt the interest on which is tax
exempt under section 103 of the Code.
(e) No Seller Entity is a foreign person within the meaning of Code
Section 1445.
(f) India Sub:
(i) has not been required, and is not required, to file
any Tax return with any Governmental Authority
outside India, and no Governmental Authority has made
any claim that India Sub is or may be subject to Tax
in any jurisdiction where India Sub has not filed a
Tax return;
(ii) is a software technology park unit as referred to in
Section 10A of the India Tax Act;
(iii) is entitled to exemption from Tax on income under
Section 10A of the India Tax Act; and
(iv) has fully complied with all the terms, conditions and
obligations required to be fulfilled by it as a
software technology park unit.
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(g) Canada Sub:
(i) has not been required, and is not required, to file
any Tax return with any Governmental Authority
outside Canada, and no Governmental Authority has
made any claim that Canada Sub is or may be subject
to Tax in any jurisdiction where Canada Sub has not
filed a Tax return;
(ii) has not previously claimed reserves under the ITA or
any other Tax Law for the most recent taxation year
ending prior to the date hereof;
(iii) has not, directly or indirectly, transferred property
to, or acquired property from, any Person with whom
Canada Sub was not dealing at Arm's Length, or
provided services to or received services from any
such Person for consideration that is materially less
than the fair market value of the property or service
at the time of the disposition or acquisition thereof
(in the case of property) or the provision or receipt
thereof (in the case of services), or been a party to
any contract or transaction that could result in a
liability for Tax under Section 160 of the ITA or any
substantially similar provisions of other applicable
Tax Laws;
(iv) has made available to Purchaser copies of all
Contracts and other documents relating to
transactions entered into by it prior to the Closing
Date with Persons with whom the Canada Sub was not
dealing at Arm's Length at the time the transaction
occurred;
(v) is registered for purposes of the ETA;
(vi) has complied, in all material respects, on a timely
basis with all registration, reporting, collection,
remittance and other requirements in respect of all
applicable sales and value-added Tax Laws, including
the ETA, the Quebec Sales Tax Act and the Retail
Sales Tax Act (Ontario);
(vii) has made available to Purchaser all invoices,
purchase orders and all such other documents as are
necessary to make any claim for input tax credits,
refunds or rebates claimed or to be claimed under the
applicable sales tax and value-added Tax Laws;
(viii) has not made any elections or designations for the
purposes of the ITA or the ETA or other applicable
Tax Law;
(ix) without limiting the generality of clause (viii) of
this SECTION 5.18(G), has not acquired any property
on a tax-deferred or rollover basis and no election
under Sections 13, 44, 83 or 85 of the ITA (or any
substantially similar provision of any applicable Tax
Law) has been made or filed by or on behalf of Canada
Sub with respect to the acquisition or disposition of
property;
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(x) without limiting the generality of clause (viii) of
this SECTION 5.18(G), except for elections under
section 167 of the ETA and under section 75 of the
Quebec Sales Tax Act, Canada Sub is not a party to
any elections made under the ETA or the Quebec Sales
Tax Act;
(xi) has not made or authorized any payments to its
directors, officers, former directors, shareholders
or employees or to any person or corporation not
dealing at Arm's Length with any of the foregoing
except in the Ordinary Course and at the regular
rates payable to them of salary, pension, bonuses,
rents or other payments of any nature;
(xii) has no loans or indebtedness outstanding made to
directors, former directors, officers, shareholders
or employees of Canada Sub or to any person not
dealing at Arm's Length with any of the foregoing;
(xiii) in the three (3) years prior to the date of this
Agreement, has not received or taken advantage of,
directly or indirectly, any grants, Tax benefits, ,
subsidies, loan guarantees, government contracts, or
other forms of preferential treatment or assistance
from any Governmental Authority, other than those
provided for in the ITA or other Tax Laws;
(xiv) has not changed its taxation year end (which is
December 31) since its incorporation; and
(xv) has, in all material respects, properly and timely
deducted, withheld and remitted all Taxes required to
be deducted, withheld or remitted by Canada Sub under
any applicable Law from amounts paid or credited by
Canada Sub to or for the account or benefit of any
Person, including Taxes on payments to any of its
present or former Business Personnel, officers or
directors, and Taxes on payments to any Person who is
a non-resident of Canada.
(xvi) There are no circumstances existing which could
result, and the Closing will not result, in the
application to the Canada Sub of Sections 80 through
80.4 of the ITA or any substantially similar
provisions of any applicable provincial Tax Laws.
(xvii) The Records of Canada Sub fairly and correctly set
out and disclose in all material respects, all
liabilities and unclaimed input tax credits under the
ETA for purposes of the goods and services or
harmonized sales tax and any unclaimed credits or
refunds under other similar provincial value added or
multi staged Tax. All financial transactions of
Canada Sub have been recorded in its Records for Tax
purposes in all material respects in accordance with
generally accepted accounting principles of Canada.
(xviii) Copies of all Tax rulings pertaining to Canada Sub
have been made available to Purchaser. There is no
action or, to Seller's Knowledge, threatened action
to revoke any such Tax ruling. There are no requests
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for Tax rulings pertaining to Canada Sub that could
affect the liability of Canada Sub or any affiliate
of Canada Sub for Taxes or the amount of the taxable
income or loss for any taxation year or period ending
after the Closing Date.
(xix) SCHEDULE 5.18(G) accurately reflects all notices of
assessment and reassessment of Taxes that have been
received by Canada Sub from all relevant Governmental
Authorities with respect to the Tax liabilities of
Canada Sub for all taxation years and other periods
subsequent to January 1, 1998, and no Governmental
Authority is entitled to assess or reassess Canada
Sub for any Tax in respect of a taxation year or
other period prior to January 1, 1998.
(xx) For purposes of this Section 5.18 and Section 2.4(a),
reference to a Seller Entity shall include any
predecessor to such Seller Entity or any Person from
which such Seller Entity incurs a liability for Taxes
as a result of joint and several liability,
transferee liability, a contract or otherwise.
5.19 CUSTOMER RELATIONS; WARRANTIES.
(a) Except as set forth on SCHEDULE 5.19(A), since December 31, 2005,
no Seller Entity has received any indication from any customer to the effect
that such customer will stop, or materially decrease the rate of, buying
services, materials or products from the Business.
(b) Seller has made available Purchaser with complete and accurate
copies of all written (and accurate written summaries of all oral) customer
warranties currently in effect with respect to the Business.
(c) There are no service warranty or product liability claims or causes
of action pending or, to Seller's Knowledge threatened, against any Seller
Entity relating to the Business. Complete and accurate summaries of the types
and durations of the warranties provided to customers are contained in SCHEDULE
5.19(C).
5.20 BROKERS.
Except as set forth on SCHEDULE 5.20, no Seller Entity has any
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
5.21 RELATED PARTY TRANSACTIONS; NO IMPROPER PAYMENTS OR INFLUENCE.
(a) Except as described on SCHEDULE 5.21:
(i) no officer or director of any Seller Entity, or any
immediate family member or Affiliate of any such
officer or director, is currently indebted to any
Seller Entity, nor is any Seller Entity indebted (or
committed to make loans or extend or guarantee
credit) to any of such Persons; and
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(ii) no officer or director of any Seller Entity, or any
immediate family member or Affiliate of any such
officer or director, has any direct or indirect
ownership interest in any Person with which any
Seller Entity has a business relationship; PROVIDED,
HOWEVER, that the foregoing representation in this
SECTION 5.21(A)(II) shall not apply in cases where an
officer or director of a Seller Entity, or immediate
family member or Affiliate thereof, owns stock of a
publicly-traded company, provided that such ownership
constitutes less than one percent (1%) of the
outstanding capital stock of such publicly traded
company.
(b) Without limiting the generality of SECTION 5.6:
(i) Neither any Seller Entity nor any Affiliate, agent or
Employee of Seller has used any funds or assets or
otherwise made any payment in connection with the
Business that would violate any Law. Neither any
Seller Entity nor any Affiliate, agent or Employee of
Seller has used any corporate or other funds in
connection with the Business for unlawful
contributions, payments, gifts, or entertainment, or
made an unlawful expenditure in connection with the
Business relating to political activity to government
officials or others or established or maintained any
unlawful or unrecorded funds in connection with the
Business in violation of Section 30A of the Exchange
Act. Neither any Seller Entity nor any Affiliate,
agent or Employee of Seller has accepted or received
any unlawful contributions, payments, gifts, or
expenditures in connection with the Business.
(ii) Each Seller Entity and its Affiliates have complied
with the U.S. Foreign Corrupt Practices Act and the
Export Administration Regulations promulgated by the
Office of Export Administration, United States
Department of Commerce. Each Seller Entity and its
Affiliates have not, directly or indirectly, offered,
paid, promised to pay or authorized the payment of
any money or anything of value to: (a) any
governmental official, any political party or
official, or any candidate for political office; or
(b) any other Person, in any case, while knowing or
having reason to know that all or a portion of such
money or thing of value has been offered, given or
promised, directly or indirectly, to any such
official, to any political party or party official,
or to any candidate for political office, for the
purpose of (i) influencing any action or decision of
such official, party or party official, or candidate
in his, her or its official capacity, including a
decision to fail to perform his, her or its official
functions, or (ii) inducing such official, party or
party official, or candidate to use his, her or its
influence with any Governmental Authority to affect
or influence any act or decision of such Governmental
Authority in order to assist Seller or its
Affiliates, directly or indirectly, in obtaining or
retaining business for or with, or directing business
to, any Person.
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5.22 PERFORMANCE UNDER CLIENT CONTRACTS.
With respect to each Client Contract under which any Seller Entity
purports to have fully performed any of its obligations ("COMPLETED
OBLIGATIONS") prior to the Closing Date:
(a) there exist no facts, circumstances or events that constitute a
breach of any warranty made by the applicable Seller Entity in or in connection
with such Completed Obligations; and
(b) the applicable Seller Entity has fully performed such Completed
Obligations in accordance with the terms and conditions of the applicable Client
Contract.
5.23 DISCLOSURE.
None of the representations or warranties made by Seller herein or in
any Exhibit or Schedule hereto, or in any certificate furnished by Seller
pursuant to this Agreement, when all such documents are read together in their
entirety, contains any untrue statement of a material fact, or omits to state
any material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading.
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ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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Purchaser, acknowledging that Seller is and will be relying thereon,
represents and warrants to Seller, on the date hereof and as of the Closing
Date, as follows:
6.1 CORPORATE ORGANIZATION.
(a) Each of Purchaser and Sponsor is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland
and has all requisite corporate power and authority to own, lease or otherwise
hold its assets, properties, interests in properties and rights and to carry on
its business as presently conducted and to carry on the Business upon
consummation of the transactions contemplated hereby.
(b) TEFIS is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Maryland and has
all requisite limited liability company power and authority to own, lease or
otherwise hold its assets, properties, interests in properties and rights and to
carry on its business as presently conducted.
(c) AGCC is an unlimited liability company duly organized, validly
existing and in good standing under the laws of Nova Scotia and has all
requisite unlimited liability company power and authority to own, lease or
otherwise hold its assets, properties, interests in properties and rights and to
carry on its business as presently conducted.
6.2 AUTHORIZATION AND EFFECT OF AGREEMENT.
Each of the Purchaser Entities has all requisite corporate power and
authority to execute and deliver this Agreement and the other Acquisition
Agreements to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
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The execution, delivery and performance by each of the Purchaser Entities of its
respective obligations under this Agreement and the other Acquisition Agreements
to which it is to be a party, and the consummation by the Purchaser Entities of
the transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action on the part of each such Purchaser
Entity. This Agreement has been and each of the other Acquisition Agreements to
which each Purchaser Entity is to be a party when executed and delivered will
have been, duly and validly executed and delivered by such Purchaser Entity, and
constitutes or will constitute a valid and binding obligation of such Purchaser
Entity, enforceable against such Purchaser Entity in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws relating to creditors rights
generally, and subject to general principles of equity.
6.3 NO CONFLICT.
(a) The execution, delivery and performance by each Purchaser Entity of
this Agreement and the other Acquisition Agreements to which it is to be a party
does not, and the consummation by the Purchaser Entities of the transactions
contemplated hereby and thereby will not, conflict with, result in any violation
of, or constitute a default (with or without notice or lapse of time, or both)
under, give rise to a right of termination, cancellation or acceleration of any
obligation or to the loss of any material benefit under, or result in the
creation of any Lien upon any of its assets under any provision of (A) the
Organizational Documents of any Purchaser Entity, (B) any contract to which any
Purchaser Entity is a party, or (C) any order, writ, judgment, injunction or
decree applicable to any Purchaser Entity or any of its properties.
(b) No Approval of any Governmental Authority or other Person is
required in connection with the execution, delivery and performance by each of
the Purchaser Entities of the Acquisition Agreements to which it is a party, or
the consummation by each Purchaser Entity of the transactions contemplated by
the Acquisition Agreement(s) to which it is a party, except for the filing of a
premerger notification report under the HSR Act.
6.4 LITIGATION.
There are no actions, suits or proceedings pending or, to the knowledge
of Purchaser, threatened, which question the validity of this Agreement or any
other Acquisition Agreement or any action taken or to be taken in connection
herewith or therewith.
6.5 BROKERS.
Neither Purchaser nor any of its Affiliates has any obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
6.6 FINANCIAL ABILITY.
Purchaser has, and will have at Closing, cash on hand sufficient to pay
the Purchase Price in full.
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6.7 DISCLOSURE.
None of the representations or warranties made by Purchaser herein or
in any Exhibit or Schedule hereto, or in any certificate furnished by Purchaser
pursuant to this Agreement, when all such documents are read together in their
entirety, contains any untrue statement of a material fact, or omits to state
any material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading.
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ARTICLE VII. COVENANTS
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7.1 PRESS RELEASES.
Prior to the Closing, no Party will issue or cause publication of any
press release or other announcement or public communication with respect to this
Agreement or the transactions contemplated hereby without the prior consent of
the other, which consent will not be unreasonably withheld; PROVIDED, HOWEVER,
that nothing herein will prohibit any Party from issuing or causing publication
of any such press release, announcement or public communication to the extent
that such Party reasonably determines such action to be required by Law, the
rules of any national stock exchange applicable to it or its Affiliates or any
other regulatory authority.
7.2 REGULATORY FILINGS; STEPS TO OBTAIN SHAREHOLDER APPROVAL.
(a) As soon as practicable after the date hereof, Purchaser and Seller
will make such filings as are required by the HSR Act with respect to the
consummation of the transactions contemplated by this Agreement. As soon as
practicable after the date hereof, Purchaser and Seller will make or cause to be
made such filings as may be required by any comparable Law of any other country
with respect to the consummation of the transactions contemplated by this
Agreement. Purchaser and Seller will file or cause to be filed as promptly as
practicable with the United States Federal Trade Commission and the United
States Department of Justice and any comparable foreign government agency any
supplemental information which may be required pursuant to the HSR Act or
foreign Law. All such filings comply or will comply in all material respects
with the requirements of the respective Laws pursuant to which they are filed.
Seller and Purchaser shall each pay its own costs and expenses incurred in
connection with such filings; PROVIDED, HOWEVER, that all filing fees required
under the HSR Act shall be paid one-half (1/2) by Purchaser and one-half (1/2)
by Seller.
(b) Purchaser and Seller shall coordinate and cooperate with one
another and shall each use reasonable best efforts to comply with, and shall
each refrain from taking any action that would impede compliance with, all Laws,
and, as promptly as practicable after the date hereof, each of the Purchaser and
Seller shall make all filings, notices, petitions, statements, registrations,
submissions of information, applications or submissions of other documents
required by any Governmental Authority in connection with the Transfer and the
transactions contemplated hereby, including any filings required under the
Securities Act of 1933 (as amended), the Exchange Act, any applicable state
securities or "blue sky" laws and the securities laws of any foreign country.
Each of the Purchaser and the Seller Entities will cause all documents that it
is responsible for filing with any Governmental Authority under this SECTION
7.2(B) to comply in all material respects with all Laws.
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(c) Each of the Parties will use its commercially reasonable efforts to
obtain, and to cooperate with the other in obtaining, all Approvals of
Governmental Authorities that may be or become necessary in connection with the
consummation of the transactions contemplated by this Agreement prior to or
after the Closing.
(d) Seller, acting through the Seller Board, shall, in accordance with
the applicable provisions of its Organizational Documents and the NYBCL:
(i) As promptly as practicable following the execution
and delivery of this Agreement, duly call, give
notice of, convene and hold a special meeting of its
shareholders for the purposes of considering and
taking action upon the approval of this Agreement and
the transactions contemplated hereby and, subject to
SECTION 7.3(D), include disclosure regarding the
Seller Board Approval in the materials disseminated
to the Seller's shareholders; and
(ii) As promptly as practicable, but in no event later
than thirty (30) days following the execution and
delivery of this Agreement, file with the SEC a
preliminary proxy or information statement relating
to this Agreement and the transactions contemplated
hereby. Such proxy statement may also include, in
Seller's sole discretion, proposals relating to the
sale of substantially all of the assets of or related
to the operations of Seller's Chimes, Inc. subsidiary
and the adoption of a plan of liquidation for Seller.
Seller shall obtain and furnish the information
required to be included by the SEC in the proxy or
information statement, respond promptly to any
comments made by the SEC with respect to the
preliminary proxy or information statement and cause
a definitive proxy or information statement,
including any amendments or supplements thereto, to
be mailed to its shareholders at the earliest
practicable date. Seller shall provide to Purchaser
drafts of the preliminary proxy or information
statement and any amendments thereto prior to filing
them or disseminating them to its shareholders and
shall not include therein any description of any of
the Purchaser Entities without Purchaser's prior
written consent, which consent shall not be
unreasonably withheld.
Notwithstanding anything herein to the contrary, in no event shall
Seller or the Seller Board be required to take any of the actions set forth in
this SECTION 7.2(D) prior to the date that is thirty (30) days following the
execution and delivery of this Agreement.
7.3 EXCLUSIVITY.
(a) NO SOLICITATION OF ALTERNATIVE TRANSACTIONS. The Seller Entities
will not, and will not permit or authorize any of their Representatives to,
directly or indirectly, take any of the following actions with any Person other
than the Purchaser without the prior written consent of the Purchaser: (i)
solicit, initiate, facilitate or encourage, or furnish information with respect
to any of the Seller Entities, in connection with any inquiry, proposal or offer
with respect to an Alternative Transaction; (ii) negotiate, discuss, explore or
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otherwise communicate or cooperate in any way with any third Person with respect
to any Alternative Transaction; or (iii) enter into any agreement, arrangement
or understanding with respect to an Alternative Transaction or requiring any
Seller Entity to abandon, terminate or refrain from consummating the
transactions contemplated by this Agreement with the Purchaser. Each Seller
Entity shall immediately cease any discussions or negotiations existing as of
the date hereof with any third Person relating to any proposed Alternative
Transaction, and shall request that all confidential information furnished on
behalf of any Seller Entity to any such Persons be returned. This Section 7.3(a)
shall not apply to a Total Company Sale.
(b) ALTERNATIVE TRANSACTION. Notwithstanding the provisions of Section
7.3(a), Seller may, in response to an unsolicited bona fide written inquiry,
offer or proposal with respect to an Alternative Transaction furnish
confidential or nonpublic information to (pursuant to a customary
confidentiality agreement), and engage in discussions and negotiate with, the
Potential Acquirer making such written inquiry, offer or proposal.
(c) NOTICE TO PURCHASER. Seller shall, and shall use its best efforts
to cause its Representatives to, notify the Purchaser orally and in writing no
later than forty-eight (48) hours after receipt by Seller of any inquiry, offer
or proposal with respect to an Alternative Transaction or Total Company Sale,
including the identity of the Potential Acquirer and stating the terms thereof,
and shall thereafter keep Purchaser reasonably informed of any material change
in the status of any discussions or negotiations with such Potential Acquirer
and any material changes to the terms and conditions of such Alternative
Transaction or Total Company Sale, and shall promptly give the Purchaser a copy
of any business or financial information related to any Seller Entity delivered
to such Potential Acquirer which has not previously been reviewed by the
Purchaser.
(d) FIDUCIARY "OUT". Notwithstanding anything in this Agreement to the
contrary, including SECTION 7.3(A), the Seller Board may at any time prior to
the effectiveness of the Shareholder Approval, (x) withdraw or modify its
approval or recommendation of this Agreement and the transactions contemplated
hereby or (y) approve or recommend an Alternative Transaction or a Total Company
Sale provided that, in the case of an Alternative Transaction: (A) an
unsolicited bona fide written offer or proposal is made to Seller by a third
party with respect to such Alternative Transaction and such offer or proposal
for an Alternative Transaction is not withdrawn; (B) the Seller Board determines
in good faith, after consultation with its financial advisor, that such offer or
proposal constitutes a Superior Alternative Transaction; and (C) following
consultation with outside legal counsel, the Seller Board or a committee of
disinterested directors determines that the withdrawal or modification of its
approval or recommendation of this Agreement or the transactions contemplated
hereby is required to comply with the fiduciary duties of the Seller Board to
the shareholders of Seller under applicable Law.
7.4 INVESTIGATION BY PURCHASER.
Prior to the Closing, upon reasonable notice from Purchaser to Seller
given in accordance with this Agreement, the Seller Entities will afford to the
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officers, attorneys, accountants and other authorized representatives of
Purchaser complete access during normal business hours (upon reasonable advance
notice) to the assets, properties, officers, Employees and books and records of
the Seller Entities so as to afford Purchaser full opportunity to make such
review, examination and investigation of the Business as Purchaser may desire to
make. Purchaser will be permitted to make extracts from or to make copies of the
Seller Entities' books and records as it may deem necessary. Prior to the
Closing, the Seller Entities will furnish or cause to be furnished, to the
extent it is available, such financial and operating data and other information
as to the Business as Purchaser may reasonably request.
7.5 CONFIDENTIAL NATURE OF INFORMATION.
Subject to SECTION 7.1, for the period from the date hereof until the
Closing, the provisions of that certain Confidentiality Agreement between Seller
and Allegis Group Services, Inc. dated January 6, 2006 are hereby incorporated
herein in all respects by reference thereto and shall also apply to Evaluation
Material (as defined therein) which is disclosed to Purchaser hereunder prior to
Closing. In addition to using such Evaluation Material for the purpose of
evaluation as permitted under such Confidentiality Agreement, the Purchaser
shall also be permitted to use such Evaluation Material to carry out the
transactions contemplated by this Agreement.
7.6 OPERATION OF THE BUSINESS.
Except as expressly contemplated by this Agreement or otherwise
consented to by Purchaser in writing, between the date hereof and the Closing,
Seller will, and will cause the other Seller Entities to:
(a) conduct their business in the Ordinary Course, and use all
commercially reasonable efforts to maintain the goodwill and reputation
associated with the Business and to avoid taking any action that would cause or
constitute a breach of any of the warranties contained in ARTICLE V;
(b) use commercially reasonable efforts to maintain the employment of
all Business Personnel who have executed employment agreements with a Purchaser
Entity that are contingent upon the Closing;
(c) not enter into any contract or commitment by or on behalf of the
Business, except (i) contracts or commitments to provide the services regularly
offered by the Business in the Ordinary Course, and (ii) other contracts and
commitments in the Ordinary Course requiring payments not in excess of $100,000
in the aggregate;
(d) not amend or terminate any Material Contract, other than any such
amendment or termination of any Material Contract in the Ordinary Course;
(e) not license, transfer, pledge, mortgage or otherwise dispose of any
tangible or intangible asset that is material to the Business, except in the
Ordinary Course;
(f) not cancel, amend, release, waive or compromise, except in the
Ordinary Course, any debts or claims in favor of any Seller Entity in excess of
$100,000;
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(g) except in the Ordinary Course, not institute any material change in
the method of purchase, sale, lease, management, marketing, operation or
accounting, in each case in respect of the Business;
(h) not materially increase the compensation payable to any Business
Personnel or grant to any Business Personnel any unusual or extraordinary
bonuses, benefits or other forms of direct or indirect compensation (including,
without limitation, severance, termination or "change of control" benefits);
(i) not amend any employment terms for any Business Personnel whose
compensation from the Business in the last fiscal year exceeded $75,000;
(j) not amend or make any changes with respect to any other plan,
program, policy or arrangement covering such Employees, including any Plan;
(k) not change any accounting method, practice or policy used by the
Business;
(l) not incur any capital expenditure or acquire any assets,
properties, capital stock or business of any other Person (except for the
acquisition of assets used in the Ordinary Course); and
(m) not agree or commit to do anything described in the foregoing
clauses (c) through (l).
7.7 PERSONNEL MATTERS.
(a) EMPLOYMENT OF SELLER'S EMPLOYEES. Purchaser will offer employment
to a substantial number of Business Personnel employed or engaged by Seller or
Healthcare Sub. Purchaser may, upon prior notice to Seller, interview and
discuss potential employment with all Business Personnel. Purchaser will provide
Seller with a list of Business Personnel to whom Purchaser has made an offer of
employment that has been accepted to be effective upon the Closing (the
"TRANSFERRED PERSONNEL") (the foregoing is in addition to, and not in limitation
of, any rights of access provided to Purchaser pursuant to SECTION 7.4). After
the Closing, Seller and Healthcare Sub shall be solely responsible for, and
shall pay and discharge, all Liabilities (including any severance benefits or
dues, whether statutory or otherwise) arising in connection with the end of the
independent contractor relationship or employment (as applicable) with Seller or
Healthcare Sub of all Transferred Personnel. The foregoing sentence shall not
apply to any termination by any Purchaser Entity of the independent contractor
relationship or employment (as applicable) of any person except that Seller
shall reimburse Canada Sub for any severance obligations Canada Sub is required
to be pay to those employees of Canada Sub the employment of whom Purchaser has
notified Seller in writing prior to Closing that it intends to terminate.
(b) EMPLOYEE BENEFIT ARRANGEMENTS.
(i) Seller shall cause all group health plans that are US
Plans and under which Business Personnel and their
beneficiaries are covered on the Closing Date to
continue to cover such Business Personnel until 11:59
p.m., New York City time, on the last calendar day of
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the month in which the Closing Date occurs (the
"BENEFIT CUTOFF TIME"). As of the Benefit Cutoff
Time, all Transferred Personnel shall cease
participation in all US Plans, except with respect to
benefits accrued as of, or claims incurred on or
prior to, such time. Purchaser shall bear all
responsibility for providing to Transferred Personnel
and their beneficiaries who are otherwise eligible
under the terms of Purchaser's group health plans,
coverage under a group health plan beginning as of
the Benefit Cutoff Time.
(ii) Seller shall continue to maintain a "group health
plan" (within the meaning of Section 4980B(g)(2) of
the Code) until the date that Seller completes the
winding up of its business. Seller shall provide
Purchaser with written notice at least 30 days before
Seller will cease to maintain a group health plan.
Such notice will include such information regarding
the individuals covered under Seller's group health
plan as Purchaser may reasonably request in order to
permit Purchaser to comply with any obligations it
might have under COBRA when Seller ceases to maintain
the group health plan.
(iii) Purchaser assumes no liability with respect to, and
receives no right or interest in, any Controlled
Group Benefit Plan.
(iv) With respect to claims by Transferred Personnel and
their beneficiaries and dependents for workers'
compensation or for the type of benefits described in
Section 3(1) of ERISA (whether or not covered by
ERISA), (i) Seller shall assume and be responsible
for such claims that are incurred on or prior to the
Closing Date; and (ii) Purchaser shall assume and be
responsible for such claims that are incurred after
the Closing Date. For purposes of the foregoing, a
medical/dental claim shall be considered incurred
when the medical services are rendered or medical
supplies are provided, and not when the condition
arose; provided that claims relating to a hospital
confinement that commences on or prior to the Closing
Date but continuing thereafter shall be treated as
incurred on or prior to the Closing Date. A
disability or workers' compensation claim shall be
considered incurred on or prior to the Closing Date
if the injury or condition giving rise to the claim
occurred on or prior to the Closing Date.
(v) Seller shall not offer to any Business Personnel
healthcare flexible spending account coverage for
2007.
(vi) Seller shall be responsible for satisfying any and
all obligations and liabilities under the
continuation coverage provisions of the CONSOLIDATED
OMNIBUS BUDGET RECONCILIATION ACT OF 1985, as amended
("COBRA"), and any applicable state Law to provide
continuation coverage to or with respect to all
employees or former employees of Seller and
Healthcare Sub and their beneficiaries as a result of
any "qualifying event" occurring prior to the Closing
or as a result of the transactions contemplated by
this Agreement. Seller shall not take any action or
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cause any action to be taken that would trigger
liability to Purchaser with respect to any M&A
qualified beneficiary within the meaning of Section
54.4980B-9 of the Treasury Regulations of the Code.
(vii) Purchaser will absorb all accrued but unpaid vacation
pay for all Transferred Personnel up to forty hours
per Transferred Person. All bonuses due to employees
to be paid in the year of closing shall be prorated
between Seller and Purchaser as of the Closing Date
with the Seller being responsible for the fraction of
such bonus equal to the number of days from the first
day of the calendar year in which the Closing Date
occurs to the Closing Date divided by 365. Any
severance pay due to Transferred Personnel who are
subsequently terminated by the Purchaser shall be
payable by the Purchaser. All bonuses paid or payable
to Transferred Personnel with respect to 2006 shall
be paid by Seller.
(c) WARN ACT NOTICES. In respect of notices and payments relating to
events occurring on or prior to the Closing, Seller shall be responsible for and
assume all liability for any and all notices, payments, fines or assessments due
to any government authority, pursuant to any Law with respect to the employment,
discharge or layoff of Business Personnel by any Seller Entity as of or before
the Closing, including but not limited to the WARN Act.
(d) NO THIRD PARTY RIGHTS. Nothing expressed or implied in this SECTION
7.7 will confer upon any Business Personnel, any employee or independent
contractor of Purchaser, or any legal representative of any such Person, any
rights or remedies, including any right to employment or continued employment
for any specified period, of any nature or kind whatsoever under or by reason of
this Agreement. Except as provided in SECTION 7.7(B)(II), nothing in this
Agreement will limit or restrict in any way the right of the Seller or the
Purchaser to modify, amend, terminate or establish employee benefit plans or
arrangements in whole or in part at any time after the Closing Date.
(e) NUMBER OF EMPLOYEES. Seller agrees to cause Canada Sub to maintain
the employment of Eligible Employees so that the number of Eligible Employees
employed by Canada Sub on December 31, 2006 and on each day thereafter up to and
including the Closing Date shall be equal to or greater than three hundred
fifteen (315).
7.8 GENERAL POST CLOSING MATTERS.
(a) POST CLOSING NOTIFICATIONS; COOPERATION.
(i) Each of Purchaser and Seller will, and will cause its
Affiliates to, comply with any applicable
post-Closing notification or other requirements
relating to the transactions contemplated hereby of
any antitrust, trade competition, investment or
control, export or other Law of any Governmental
Authority having jurisdiction over the Business.
(ii) To the extent lawful, Purchaser and Seller will
cooperate to obtain favorable unemployment insurance
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and workers' compensation ratings with respect to
those states in which any material operations of the
Business are conducted.
(b) ACCESS.
(i) On the Closing Date or as soon thereafter as
practicable, but in no event later than ninety (90)
calendar days after the Closing Date, Seller will
deliver or cause to be delivered to Purchaser all
original agreements, documents, books, records and
files (whether in machine or human-readable format)
in the possession of Seller and its Affiliates
relating to the Business or the Assets, including
property records, production records, engineering
records, purchasing and sales records, personnel and
payroll records (to the extent permitted by Law),
accounting records, mailing lists, customer and
vendor lists and records, contractor and candidate
lists and records, and databases containing any of
the foregoing (collectively, "RECORDS"), except that,
subject to Purchaser's right to have reasonable
access, Seller shall retain and not Transfer to
Purchaser (i) Records which contain only incidental
information relating to the Business or primarily
relating to Seller or the businesses of Seller other
than the Business; (ii) personnel and payroll Records
that Seller is prohibited by Law from transferring to
Purchaser; and (iii) the Organizational Documents of
Seller, Healthcare Sub and GBS (collectively, the
"RETAINED RECORDS").
(ii) For a period of five (5) years after the Closing,
upon reasonable notice, each of Purchaser and Seller
will give, or cause to be given, to the
Representatives of the other access to and permission
to copy, at the requesting Party's expense, during
normal business hours, Records relating to periods
prior to the Closing and access to employees, to the
extent reasonably requested by the other Party in
connection with financial reporting matters, audits,
legal proceedings, employee benefit claims,
governmental investigations and other reasonable
business purposes related to the fact of its
ownership of the Business; PROVIDED, HOWEVER, that
nothing herein will obligate any Party to take
actions that would unreasonably disrupt the normal
course of its business, violate the terms of any
contract to which it is a party or to which it or any
of its assets is subject, or grant access to any of
its proprietary, confidential or classified
information which does not relate to the Business or
the Assets; provided, HOWEVER, that Purchaser, its
Affiliates and the employees, officers, directors and
agents of any of them shall not have any liability in
connection therewith. Notwithstanding anything herein
to the contrary, this SECTION 7.8(B)(II) shall not
apply with respect to Actions or other disputes
between the Parties.
(iii) In the event and for so long as any Party actively is
pursuing an affirmative recovery or contesting or
defending against any charge, complaint, action,
suit, proceeding, hearing, investigation, claim or
demand in connection with (i) any transaction
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contemplated under this Agreement or any Acquisition
Agreement or (ii) any fact, situation, circumstance,
status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act
or transaction on or prior to the Closing Date
involving the Business or the Assets, the other Party
will cooperate with such Party and its counsel in the
pursuit, contest or defense as may be reasonably
requested.
(c) CERTAIN TAX MATTERS.
(i) Except as otherwise expressly provided in this
Agreement, Purchaser and Seller will share equally
and promptly reimburse the other for its share of any
applicable sales, use, transfer, stamp, conveyance,
value added or other similar taxes, duties, excises
or governmental charges imposed by any taxing
jurisdiction, domestic or foreign, with respect to
the Transfer of the Assets (including but not limited
to Transferred Intellectual Property) and any
deficiency, interest or penalty asserted with respect
thereto; and for all recording or filing fees,
notaries fees and other similar costs of closing with
respect to Transfer of the Assets or otherwise on
account of this Agreement or the transactions
contemplated hereby.
(ii) Seller and Purchaser shall each (i) provide the other
Party with such information or assistance as may be
reasonably requested of such Party in connection with
the preparation and filing of any return or report,
any audit or examination by any taxing authority, any
judicial or administrative proceeding, or any other
reasonable business purpose relating to liability for
Taxes with respect to the Business or Assets; (ii)
retain for the statute of limitations (including any
extensions) applicable with respect to such returns,
audits, examinations, or proceedings, such material
records or information as may be relevant thereto;
(iii) provide the other Party with reasonable access
to, and allow the other Party to make copies and
extracts of, such records or information, and prior
to disposing of any such records or information allow
the other Party (at the first Party's cost and
expense of shipping) the right to obtain the
originals of such records or information; (iv) in
connection with such returns, audits, examinations,
and proceedings, cause its relevant employees and
representatives to be reasonably available to the
other Party and to provide to the other Party
reasonable technical support (including the provision
of interpretations, analyses, and testimony with
respect to operation of the Business and other
intangibles); and (v) provide the other Party with
any final determination of any such audit,
examination, or proceeding that affects the amount
required to be shown on any tax return of the other
Party for any period. The Party requiring assistance
shall reimburse the other Party for all reasonable
out of pocket costs incurred as a direct result
thereof (excluding costs of time expended by
employees and representatives), but only if and to
the extent that the first Party was informed of and
approved of the costs prior to the provision of
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assistance. Access to records and information
relating to Taxes shall be governed by this SECTION
7.8(C)(II), and not SECTION 7.8(B)(II).
(iii) Notwithstanding any other provision in this
Agreement, Seller shall indemnify and hold Purchaser
harmless from all Taxes attributable to the ownership
or sale of the Assets or the operations of the
Business for all taxable periods ending on or before
the Closing Date. In case of a period that includes,
but does not end on the Closing Date, Taxes which are
in the nature of real property or personal property
Taxes shall be allocated to the Seller for the
portion of the period ending on or before the Closing
Date, pro rata based on the ratio of the number of
days in the portion of the period ending on or before
the Closing Date to the total number of days in the
period. All other Taxes shall be allocated based on
the date they actually accrue.
(iv) Seller hereby agrees and acknowledges that after the
Closing Date Purchaser shall be entitled to make an
election pursuant to Section 338(g) of the Code.
(d) MATERIALS RECEIVED AFTER CLOSING. Following the Closing, Purchaser
may receive and open all mail, electronic mail and telecopies addressed to any
Seller Entity or any of their Affiliates and deal with the contents thereof in
its discretion to the extent that such mail, electronic mail or telecopies and
the contents thereof relate to the Business or the Assets. Seller agrees to
promptly deliver to Purchaser all of the mail, electronic mail, checks, money,
telecopies and any other information related to the Business, the Assumed
Liabilities or the Assets received by Seller or any of its Affiliates following
the Closing. Seller will cooperate with Purchaser, and take such actions as
Purchaser reasonably requests, to assure that customers of the Business send
their remittances directly to Purchaser. Purchaser agrees to promptly deliver to
Seller all of the mail, electronic mail, checks, money, telecopies and other
information related to the Excluded Assets or the Excluded Liabilities received
by Purchaser following the Closing.
(e) COLLECTION AND REMITTANCE OF ACCOUNTS RECEIVABLE.
(i) Seller agrees to promptly remit to Purchaser all
amounts collected by any Seller Entity (other than
any Seller Sub) or any of their Affiliates after the
Closing in respect of any account receivable related
to the Business that was included in the Assets, or
otherwise relates to or arises from the operation of
the Business by Purchaser after the Closing.
(ii) Purchaser agrees to promptly remit to Seller all
amounts collected by Purchaser after the Closing in
respect of (x) any account receivable related to the
Business that was not included in the Assets and (y)
the Quebec Tax Receivable and to file, or cause
Canada Sub to file, such forms with such Governmental
Authorities and take, or cause Canada Sub to take,
such other actions as Seller may reasonably request
promptly after any such request with respect to
collection of the Quebec Tax Receivable and otherwise
to use reasonable efforts to collect, or cause Canada
Sub to collect, such receivables and the Quebec Tax
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Receivable; PROVIDED, HOWEVER, that if it is
reasonably necessary for Purchaser or Canada Sub to
engage any third party professional service provider
to provide assistance with the actions contemplated
by this clause (y), Seller shall be responsible for
the fees and expenses of such third party
professional service provider. If Seller has ceased
to exist at the time Purchaser would otherwise make
any such remittance, Purchaser shall remit such
amount to Seller's successors or assigns, as the case
may be. If Purchaser is unable to locate any
successors or assigns of Seller after reasonable good
faith efforts to do so (not including individual
shareholders of Seller), Purchaser shall be entitled
to retain amounts collected by Purchaser that would
otherwise be payable to Seller under this SECTION
7.8(E).
(iii) Notwithstanding anything to the contrary in this
SECTION 7.8(E):
(A) if any Over 180 Account is collected by a
Purchaser Entity, in whole or in part,
within sixty (60) days after the Closing
Date, Purchaser shall pay to Seller
ninety-five percent (95%) of such collected
amount (and Purchaser shall be entitled to
retain the remaining five percent (5%) of
such collected amount);
(B) to the extent the aggregate amount of 91-180
Accounts collected by the Purchaser Entities
exceeds the amount of 91-180 Accounts that
are reserved as uncollectible for purposes
of calculating Net Working Capital, and such
excess amounts are collected within sixty
(60) days after the Closing Date, Purchaser
shall pay to Seller ninety-five percent
(95%) of such excess collected amounts (and
Purchaser shall be entitled to retain the
remaining five percent (5%) of such excess
collected amounts); and
(C) as used herein, (1) "OVER 180 ACCOUNT" means
any account receivable related to the
Business that was included in the Assets and
that was aged over 180 days as of the
Closing Date; and (2) "91-180 ACCOUNT" means
any account receivable related to the
Business that was included in the Assets and
that was aged more than 90 days and less
than 181 days as of the Closing Date.
7.9 BEST EFFORTS.
Without limiting the generality or effect of any provision of ARTICLES
VIII or IX and subject to SECTION 2.5, prior to the Closing, each of the parties
hereto will use reasonable best efforts with due diligence and in good faith to
satisfy promptly all conditions required hereby to be satisfied by such Party in
order to expedite the consummation of the transactions contemplated hereby.
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7.10 CLIENT MEETINGS.
Prior to the Closing, Seller shall assist Purchaser in all reasonable
respects in promptly scheduling and conducting meetings with mutually
agreed-upon clients of the Business.
7.11 DETERMINATION OF PURCHASE PRICE ALLOCATION.
Prior to the Closing, Seller and Purchaser shall use their best efforts
to agree in writing to an allocation of the Purchase Price among the Purchased
Assets for all purposes (including Tax and financial accounting). The failure of
Seller and Purchaser to reach agreement on a Purchase Price allocation shall not
constitute grounds for termination of this Agreement by any Party and agreement
by Seller and Purchaser to a Purchase Price allocation shall not be a condition
to the obligation of any Party to consummate the transactions contemplated by
this Agreement.
7.12 BRING-DOWN REPORTS.
Seller shall deliver to Purchaser:
(a) a true and complete revised version of SCHEDULE 5.14(A), as of a
date no less than seven (7) days prior to the Closing Date;
(b) an unauditied balance sheet of the Business as of September 30,
2006 and a Summary of Income and Expenses for Staffing and Solutions for the
year-to-date period ended September 30, 2006 (the "SEPTEMBER 30 STATEMENTS"), as
soon as each is available, but in any event no later than fifteen (15) days
after the date on which Seller files a Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006; and
(c) if available prior to Closing, an unauditied balance sheet of the
Business as of December 31, 2006 and a Summary of Income and Expenses for
Staffing and Solutions for the year ended December 31, 2006 (together with the
September 30 Statements, the "BRING-DOWN STATEMENTS"), as soon as each is
available.
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ARTICLE VIII. CONDITIONS TO CLOSING
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8.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser under this Agreement to consummate the
transactions contemplated hereby are subject to the satisfaction, at or prior to
the Closing, of all of the following conditions, any one or more of which may be
waived at the option of Purchaser (in its sole discretion):
(a) PERFORMANCE OF COVENANTS. Seller and each other Seller Entity shall
have performed, in all material respects, all of their respective obligations
required to be performed by each of them under this Agreement at or prior to the
Closing (except that Seller and Canada Sub shall have complied with the covenant
in Section 7.7(e) in all respects).
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Seller set forth in this Agreement shall be true and correct in all material
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respects (except that those representations and warranties that are limited by
materiality shall be true and correct in all respects) as of the Closing Date as
if made at and as of the Closing Date (except where such representations or
warranties are made expressly as of a specific date, and then as of such date).
(c) CERTIFICATE FROM OFFICER OF SELLER. Seller shall have delivered to
Purchaser the Seller Compliance Certificate.
(d) NO LEGAL OBSTRUCTION. All required waiting periods under the Xxxx
Xxxxx Xxxxxx Antitrust Improvement Act of 1976, as amended ("HSR ACT") or any
similar act, foreign or domestic, shall have expired or been terminated. There
shall not have been entered a preliminary or permanent injunction, temporary
restraining order or other judicial or administrative order or decree in any
jurisdiction, the effect of which prohibits the Closing. No law, rule or
regulation shall have been enacted or promulgated, and no investigation, action,
suit or proceeding shall have been threatened or instituted against Seller or
Purchaser which, in any such case, in the reasonable judgment of Purchaser,
challenges, or might result in a challenge to, the consummation of the
transactions contemplated hereby, or which claims, or might give rise to a claim
for, damages against Purchaser as a result of the consummation of such
transaction.
(e) ABSENCE OF CHANGES. There shall not have occurred any Seller
Material Adverse Effect.
(f) CONSENTS. All consents of any Governmental Authority that are
necessary for the consummation of the transactions contemplated by this
Agreement or for the assignment of any of the Assets by Seller and each other
Seller Entity to Purchaser shall have been obtained. Seller shall have obtained,
and delivered to Purchaser copies of, (i) all Approvals listed on SCHEDULE
8.1(F), each of which shall be in form and substance reasonably acceptable to
Purchaser; and (ii) written evidence from CIT that CIT has released all Liens on
the Assets.
(g) SHAREHOLDER APPROVAL. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the requisite
affirmative vote of the shareholders of Seller in accordance with the NYBCL and
the Organizational Documents of Seller ("SHAREHOLDER APPROVAL"). Seller shall
have delivered to Purchaser a copy of the resolutions adopted by the
shareholders of Seller for the Shareholder Approval, which shall be certified by
the Secretary of Seller.
(h) OPINION OF COUNSEL. Purchaser shall have received an opinion of
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, counsel to Seller, covering the
matters set forth in EXHIBIT H, addressed to Purchaser and dated as of the
Closing Date.
(i) CORPORATE DOCUMENTS. Seller shall have delivered the following
documents to Purchaser:
(i) the certificate of incorporation or organization of
each Seller Party and Seller Sub, certified as of a
recent date by the applicable Governmental Authority;
(ii) a certificate of the Secretary or Assistant Secretary
of each Seller Party as to the incumbency of persons
signing this Agreement on their behalf, the
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Organizational Documents of such Seller Party and
Seller Sub (other than those Organizational Documents
delivered pursuant to clause (i) of this SECTION
8.1(I)) and, (A) in the case of the certificate
delivered in respect of Seller, the resolutions for
the Seller Board Approval, (B) in the case of the
certificate delivered in respect of GBS, the
resolutions of the board of directors of GBS
authorizing the execution, delivery and performance
by GBS of the Acquisition Agreements, (C) in the case
of the certificate delivered in respect of Healthcare
Sub, the resolutions of the manager or managing
member of Healthcare Sub authorizing the execution,
delivery and performance by Healthcare Sub of the
Acquisition Agreements all of which shall be attached
thereto; and
(iii) a certificate of good standing for each Seller Party
and Seller Sub from the applicable Governmental
Authority in the jurisdiction where such entity was
incorporated or organized and each jurisdiction where
such entity is required to be qualified or registered
to transact business as a foreign or alien
corporation except where the failure to be so
qualified or registered would not have a Seller
Material Adverse Effect; PROVIDED, HOWEVER, that
Seller shall only be obligated to use commercially
reasonable efforts to obtain a certificate of good
standing for India Sub from the applicable
Governmental Authorities in India.
(j) CANADA INTERCOMPANY NOTE. Seller shall have contributed the Canada
Intercompany Note to Canada Sub as capital of Canada Sub, such that all of
Canada Sub's obligations under the Canada Intercompany Note have been fully and
forever paid in full and satisfied.
(k) INDIA INTERCOMPANY PAYABLE. Seller shall have taken all such
actions as are necessary to cause all of India Sub's obligations under the India
Intercompany Payable to have been fully and forever paid in full and satisfied.
(l) INVESTISSEMENT QUEBEC CONFIRMATION. Purchaser shall have received a
letter from INVESTISSEMENT Quebec confirming the matters set forth in the letter
attached hereto as EXHIBIT I.
(m) CONSENT OF CERTAIN CLIENTS. Eighty percent (80%) of the clients in
each of the two categories listed on SCHEDULE 8.1(M) shall have either (as
indicated on such SCHEDULE) (i) consented to the assignment to the applicable
Purchaser Entity of the contract between the applicable Seller Entity and such
client, or (ii) agreed that future business between the applicable Purchaser
Entity and such client will be governed by such Purchaser Entity's existing
contract with such client.
(n) TERMINATION OR ASSIGNMENT OF OTHER CANADIAN LEASES. Canada Sub
shall have terminated or assigned all of its rights and obligations under the
Other Canadian Leases.
8.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.
The obligations of Seller under this Agreement to consummate the
transactions contemplated hereby will be subject to the satisfaction, at or
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prior to the Closing, of all the following conditions, any one or more of which
may be waived at the option of Seller (in its sole discretion).
(a) PERFORMANCE OF COVENANTS. Purchaser and each other Purchaser Entity
shall have performed, in all material respects, all of their respective
obligations required to be performed by each of them under this Agreement at or
prior to the Closing.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Purchaser set forth in this Agreement shall be true and correct in all
material respects (except that those representations and warranties that are
limited by materiality shall be true and correct in all respects) as of the
Closing Date as if made at and as of the Closing Date (except where such
representations or warranties are made expressly as of a specific date, and then
as of such date).
(c) CERTIFICATE FROM OFFICER OF PURCHASER. Purchaser shall have
delivered to Seller the Purchaser Compliance Certificate.
(d) NO LEGAL OBSTRUCTION. All required waiting periods under the HSR
Act and any similar act, foreign or domestic, shall have expired or been
terminated. There shall not have been entered a preliminary or permanent
injunction, temporary restraining order or other judicial or administrative
order or decree in any jurisdiction, the effect of which prohibits the Closing.
No law, rule or regulation shall have been enacted or promulgated, and no
investigation, action, suit or proceeding shall have been threatened or
instituted against Seller or Purchaser which, in any such case, in the
reasonable judgment of Seller, challenges, or might result in a challenge to the
consummation of the transactions contemplated hereby, or which claims, or might
give rise to a claim for, damages against Seller as a result of the consummation
of such transactions.
(e) CONSENTS. All consents of any Governmental Authority that are
necessary for the consummation of the transactions contemplated by this
Agreement or for the assignment of any of the Assets by Seller and each other
Seller Entity to Purchaser shall have been obtained. Seller shall have obtained
all Approvals listed on SCHEDULE 8.2(E), each of which shall be in form and
substance reasonably acceptable to Purchaser.
(f) SHAREHOLDER APPROVAL. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the requisite
affirmative vote of the shareholders of Seller in accordance with the NYBCL and
the Organizational Documents of Seller.
(g) OPINION OF COUNSEL. Seller shall have received an opinion of
Xxxxxxx LLP, counsel to Purchaser, covering the matters set forth in EXHIBIT J,
addressed to Seller and dated as of the Closing Date.
(h) PURCHASE PRICE. Purchaser shall have paid the Purchase Price as
provided in Section 3.1.
(i) SOLVENCY CERTIFICATE. Purchaser shall have delivered a certificate
dated the Closing Date, substantially in the form attached as EXHIBIT K, signed
by the principal financial officer of Purchaser, certifying that Purchaser is
Solvent on the Closing Date and after giving effect to the transactions
contemplated hereby (the "SOLVENCY CERTIFICATE").
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(j) FAIRNESS OPINION NOT WITHDRAWN OR MODIFIED. Any financial advisors'
opinion received by the Seller Board to the effect that this Agreement and the
transactions contemplated hereby and the consideration to be received by Seller
in connection herewith is fair to Seller from a financial point of view shall
not have been withdrawn or materially and adversely modified.
(k) CORPORATE DOCUMENTS. The following documents or agreements shall
have been obtained and delivered to Seller:
(i) the articles of incorporation of each Purchaser
Entity, certified as of a recent date by the Maryland
State Department of Assessments and Taxation or, in
the case of AGCC, the appropriate Governmental
Authority of the Province of Nova Scotia;
(ii) a certificate of the Secretary or Assistant Secretary
of each of the Purchaser Entities as to incumbency,
the bylaws of such Purchaser Entity and the
resolutions of the board of directors of such
Purchaser Entity authorizing and approving the
execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated
hereunder, each of which shall be attached thereto;
and
(iii) a certificate of good standing for each Purchaser
Entity from the Maryland State Department of
Assessments and Taxation or, in the case of AGCC, the
appropriate Governmental Authority of the Province of
Nova Scotia.
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ARTICLE IX. INDEMNIFICATION
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9.1 INDEMNIFICATION BY SELLER.
From and after the Closing Date, Seller shall, in accordance with this
Article IX, indemnify, defend, protect and hold harmless the Purchaser Entities
and their respective assigns, successors and Affiliates (collectively, the
"Purchaser Indemnitees") from, against and in respect of all Actions asserted
against, and all Damages actually suffered, sustained, incurred or paid by, any
Purchaser Indemnitee in connection with, resulting from or arising out of:
(a) the breach of any representation or warranty of Seller set forth in
this Agreement, any Transfer Document or the Seller Compliance Certificate;
(b) the nonfulfillment of any covenant or agreement on the part of any
Seller Entity set forth in an Acquisition Agreement;
(c) the Excluded Liabilities;
(d) the failure by any Person to which Canada Sub has assigned an Other
Canada Lease pursuant to SECTION 8.1(N) to comply with any term or condition of
such Other Canada Lease; and
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(e) any and all Tax Liabilities resulting from or arising in connection
with the (i) contribution of the Canada Intercompany Note pursuant to SECTION
8.1(J); or (ii) satisfaction of the India Intercompany Payable pursuant to
Section 8.1(k).
9.2 INDEMNIFICATION BY PURCHASER.
From and after the Closing Date, Purchaser shall, in accordance with
this ARTICLE IX, indemnify, defend, protect and hold harmless Seller, GBS and
Healthcare Sub and their respective assigns, successors and Affiliates
(collectively, the "SELLER INDEMNITEES") from, against and in respect of all
Actions asserted against, and all Damages actually suffered, sustained, incurred
or paid by, any Seller Indemnitee in connection with, resulting from or arising
out of:
(a) the breach of any representation or warranty of Purchaser set forth
in this Agreement, any Transfer Document or the Purchaser Compliance
Certificate;
(b) the nonfulfillment of any covenant or agreement on the part of
Purchaser set forth in an Acquisition Agreement; and
(c) the Assumed Liabilities.
9.3 NOTICE OF CLAIMS.
The Indemnified Party shall notify the Indemnifying Party in writing
promptly after becoming aware of any Damages which an Indemnified Party shall
have determined has given rise to a claim for indemnification under this ARTICLE
IX. Such written notice (a "CLAIM NOTICE") shall include an estimate of the
Damages, if known, the method of computation thereof and a reference to the
specific provisions of this Agreement in respect of which it seeks
indemnification. As soon as practicable after the date of such Claim Notice, the
Indemnified Party shall provide the Indemnifying Party or his or her agents
access to all books and records in the possession or control of the Indemnified
Party which the Indemnifying Party reasonably determines to be related to such
claim. If the Indemnifying Party notifies the Indemnified Party that it does not
dispute the claim or the estimated amount of Damages described in such Claim
Notice, or fails to notify the Indemnified Party within thirty (30) days after
delivery of such Claim Notice whether the Indemnifying Party disputes the claim
or the estimated amount of Damages described in such Claim Notice, the estimated
Damages in the amount specified in the Indemnified Party's Claim Notice will be
conclusively deemed a Liability of the Indemnifying Party and the Indemnifying
Party shall pay the amount of such Damages to the Indemnified Party. If the
Indemnifying Party has timely disputed its liability with respect to such claim
or the estimated amount of Damages, the dispute shall be resolved, and the
amount, if any, of Damages payable by the Indemnifying Party to the Indemnified
Party shall be determined, in accordance with SECTION 11.11 below. It is agreed
that no delay on the part of any Indemnified Party in notifying the Indemnifying
Party shall relieve the Indemnifying Party from its obligations hereunder,
except to the extent said Indemnifying Party is prejudiced by such failure to
give notice. The provisions of this SECTION 9.3 do not apply to Third Party
Actions.
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9.4 PROCEDURE FOR THIRD PARTY CLAIMS.
(a) If any third Person shall commence an Action against any
Indemnified Party with respect to any matter (a "THIRD PARTY ACTION") which may
give rise to a claim for indemnification under this ARTICLE IX, then the
Indemnified Party shall notify the Indemnifying Party in writing promptly after
becoming aware of such Third Party Action describing in reasonable detail the
Third Party Action (such notice being hereinafter called a "THIRD PARTY ACTION
NOTICE"), which notice shall include a reference to the specific provisions of
this Agreement in respect of which it seeks indemnification. It is agreed that
no delay on the part of any Indemnified Party in notifying the Indemnifying
Party shall relieve the Indemnifying Party from its obligations hereunder,
except to the extent said Indemnifying Party is prejudiced by such failure to
give notice. The Indemnifying Party will have thirty (30) days from the delivery
of such Third Party Action Notice (the "RESPONSE PERIOD") to determine whether
or not (i) the Indemnifying Party will, at its sole cost and expense, defend
against such Third Party Action and/or (ii) the Indemnifying Party is disputing
the claim for indemnity hereunder.
(b) If the Indemnifying Party (i) does not respond to the Third Party
Action Notice by 5:00 p.m., New York City time, on the last day of the Response
Period, (ii) responds to the Third Party Action Notice, but disputes the claim
for indemnity hereunder and elects not to assume the defense, or (iii) responds
to the Third Party Action Notice and does not dispute the claim for indemnity
but elects not to assume the defense, in each case within the period allowed
after delivery of the Third Party Action Notice, the Indemnified Party shall
have the right to defend against any such Third Party Action by appropriate
proceedings or to settle or pay any such Third Party Action for such an amount
as the Indemnified Party shall deem appropriate and the Indemnifying Party shall
promptly pay all Damages resulting from such Third Party Action in accordance
with subparagraph (e) below; provided that in the case of clause (ii), any right
of the Indemnified Party to recover from the Indemnifying Party shall depend on
the resolution of the dispute as to the right of indemnity in accordance with
SECTION 11.11 hereof.
(c) If the Indemnifying Party affirmatively disputes the right to
indemnity, but nevertheless elects to defend against any such Third Party Action
or settle or pay any such Third Party Action, any right of the Indemnified Party
to recover from the Indemnifying Party shall depend on the resolution of the
dispute as to the right of indemnity in accordance with SECTION 11.11 hereof.
(d) Notwithstanding anything herein to the contrary, if the
Indemnifying Party notifies the Indemnified Party that it will defend against or
settle any Third Party Action:
(i) such defense or settlement shall be at the sole cost
and expense of the Indemnifying Party, except for
costs and expenses of the Indemnified Party's
counsel, if any, pursuant to items (v) and (vi)
below;
(ii) the Indemnifying Party and its counsel shall conduct
such defense or settlement at all times in good
faith;
(iii) the Indemnifying Party and its counsel shall, at the
reasonable request of the Indemnified Party, provide
periodic updates to the Indemnified Party in order to
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keep the Indemnified Party reasonably informed as to
its conduct of such defense or settlement, and shall
not compromise or settle such Third Party Action
without the prior written consent of the Indemnified
Party (not to be unreasonably withheld or delayed)
unless such settlement or compromise does not subject
the Indemnified Party to any monetary liability, and
includes a complete, unconditional release of the
Indemnified Party from all Liability with respect to
such Third Party Action;
(iv) the Indemnified Party shall reasonably cooperate with
the Indemnifying Party, including making available to
the Indemnifying Party, all relevant witnesses and
pertinent documents and information and appropriate
personnel;
(v) the Indemnified Party may elect to employ its own
counsel and participate in such defense or settlement
at the Indemnified Party's sole cost and expense, but
the control of such defense and the settlement shall
rest with the Indemnifying Party;
(vi) notwithstanding the Indemnifying Party's election to
defend against or settle the Third Party Action, the
Indemnified Party may, upon written notice to the
Indemnifying Party, elect to employ its own counsel
(who shall be reasonably acceptable to the
Indemnifying Party) at the Indemnifying Party's
expense (except that the Indemnifying Party shall not
be obligated to pay the fees of more than one
separate counsel for all Indemnified Parties, taken
together) if (A) the Indemnifying Party is also a
Person against whom the Third Party Action is made
and the Indemnified Party has been advised by counsel
that (x) representation of both parties by the same
counsel would be inappropriate under applicable
standards of professional conduct or (y) the
Indemnified Party has available to it one or more
defenses or counterclaims that are inconsistent with,
different from, or in addition to one or more of
those that may be available to the Indemnifying Party
with respect to such Third Party Action; or (B) the
Indemnifying Party shall not in fact have employed
counsel reasonably satisfactory to the Indemnified
Party for the defense or settlement of such Third
Party Action; PROVIDED, HOWEVER, that the assumption
of control of the defense or settlement of a Third
Party Action by the Indemnified Party pursuant to
this item (vi) shall not relieve the Indemnifying
Party of its obligation to indemnify and hold the
Indemnified Party harmless; and
(vii) in no event shall the Indemnified Party consent to
the entry of any judgment or enter into any
settlement with respect to such Third Party Action
without the prior written consent of the Indemnifying
Party (which consent shall not be unreasonably
withheld or delayed).
(e) Subject to the other provisions of this SECTION 9.4, the Damages
resulting from the settlement or the final, non-appealable adjudication of such
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Third Party Action, or that portion thereof as to which the defense is
unsuccessful, shall promptly be paid by the Indemnifying Party to (x) Purchaser,
if any Purchaser Indemnitee is the Indemnified Party, or (y) Seller, if any
Seller Indemnitee is the Indemnified Party, if, in either case, the Indemnifying
Party:
(i) does not respond to a Third Party Action Notice by
5:00 p.m., New York City time on the last day of the
Response Period;
(ii) does not elect to defend against any Third Party
Action for which it does not dispute the Indemnified
Party's right to indemnity;
(iii) does not elect to defend against any Third Party
Action for which it disputes the Indemnified Party's
right to indemnity, and such dispute is resolved, in
accordance with SECTION 11.11, in a manner affirming
the Indemnified Party's right to indemnity;
(iv) elects to defend against any Third Party Action for
which it does not dispute the Indemnified Party's
right to indemnity hereunder; or
(v) elects to defend against any Third Party Action for
which it does dispute the right to indemnity, to the
extent the dispute is resolved, in accordance with
SECTION 11.11, in a manner affirming the Indemnified
Party's right to indemnity.
9.5 CLAIMS PERIOD; SURVIVAL.
(a) The period during which a claim for indemnification may be asserted
under this Agreement by an Indemnified Party (the "CLAIMS PERIOD") shall begin
on the Closing Date and shall terminate on the date that is nine (9) months
after the date of this Agreement; PROVIDED, HOWEVER, that notwithstanding the
foregoing, the Claims Period during which a claim for indemnification may be
asserted with respect to SECTIONS 5.2 AND 5.8 shall begin on the Closing Date
and shall continue until the final liquidation or dissolution of Seller.
(b) Notwithstanding the foregoing, if, prior to the close of business
on the last day of the Claims Period, an Indemnifying Party shall have been
properly notified of a claim for indemnity hereunder and such claim shall not
have been finally resolved or disposed of at such date, such claim shall
continue to survive and shall remain a basis for indemnity hereunder until such
claim is finally resolved or disposed of in accordance with the terms hereof.
(c) All representations and warranties herein shall survive the Closing
until the last day of the Claims Period.
(d) Seller shall maintain assets reasonably sufficient to satisfy its
reasonably foreseeable indemnification obligations hereunder at all times during
the Claims Period. Seller shall not finally liquidate or dissolve prior to the
end of the Claims Period unless a liquidating trust has assumed in writing all
of the obligations of the Seller Parties under this Agreement and Seller has
given notice to Purchaser of such event.
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9.6 LIMITS ON INDEMNIFICATION.
The Parties' liability under this ARTICLE IX shall be limited as
follows:
(a) THRESHOLD. No Purchaser Indemnitee, on the one hand, and no Seller
Indemnitee, on the other hand, shall be entitled to assert any claim for
indemnification pursuant to this Article IX unless and until the total aggregate
cumulative Damages incurred by all Purchaser Indemnitees or all Seller
Indemnitees, as applicable, exceed One Hundred Thousand Dollars ($100,000) (the
"THRESHOLD"), in which case such Indemnified Party shall be entitled to recover
the full amount of such Damages (including the initial Threshold amount).
(b) MAXIMUM LIABILITY. The aggregate monetary liability of Seller, on
one hand, and Purchaser, on the other hand, pursuant to this Article IX shall be
limited, with respect to each of them, to a maximum amount of Ten Million
Dollars ($10,000,000).
9.7 EXCLUSIVE REMEDY.
Except for fraud, willful or intentional misrepresentation or willful
or intentional breach of warranty, covenant or agreement, the indemnification
provided in this ARTICLE IX shall be the sole and exclusive post-Closing remedy
available to any party against any other party for any claim arising out of any
breach of a representation, warranty or covenant made in or pursuant to this
Agreement, any Transfer Document or the Seller Compliance Certificate or for any
Excluded Liability or Assumed Liability.
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ARTICLE X. TERMINATION
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10.1 TERMINATION.
This Agreement may be terminated at any time prior to the Closing:
(a) by mutual written consent of Purchaser and Seller;
(b) by Purchaser:
(i) if the Seller Board withdraws, or modifies in any
manner adverse to Purchaser, the Seller Board
Approval; or
(ii) if there has been a material breach by Seller of any
representation or warranty contained herein or in the
due and timely performance of any covenant or
agreement contained herein and Purchaser shall have
notified Seller of such breach in writing and the
breach has not been cured within twenty (20) Business
Days after the notice of the breach; or
(iii) if the Closing shall not have occurred on or before
March 31, 2007 by reason of the failure of any
condition precedent under SECTION 8.1 (unless such
failure was within the control of Purchaser); or
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(iv) if there shall be in effect a final non-appealable
court order restraining, enjoining or otherwise
prohibiting the consummation of the transactions
contemplated hereby.
(c) by Seller:
(i) if Seller Board shall have withdrawn or modified in a
manner adverse to Purchaser the approval or
recommendation of this Agreement or the transactions
contemplated hereby; and Purchaser acknowledges and
agrees that concurrently with such termination the
Seller Entities may enter into a definitive agreement
providing for implementation of a Superior
Alternative Transaction in accordance with SECTION
7.3(D); or
(ii) if there has been a material breach by Purchaser of
any representation or warranty contained herein or in
the due and timely performance of any covenant or
agreement contained herein and Seller shall have
notified Purchaser of such breach in writing and the
breach has not been cured within twenty (20) Business
Days after the notice of the breach; or
(iii) if the Closing shall not have occurred on or before
March 31, 2007 by reason of the failure of any
condition precedent under SECTION 8.2 (unless such
failure was within the control of Seller); or
(iv) if there shall be in effect a final non-appealable
court order restraining, enjoining or otherwise
prohibiting the consummation of the transactions
contemplated hereby; or
(v) if Seller desires to accept an offer with respect to
a Total Company Sale.
10.2 EFFECT OF TERMINATION.
Subject to SECTION 10.3: (a) each Party's right of termination under
SECTION 10.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of such right of termination will not be an
election of remedies; and (b) if this Agreement is terminated pursuant to
SECTION 10.1, all obligations of the Parties under this Agreement will
terminate, PROVIDED, HOWEVER, that, if this Agreement is terminated because of a
breach of this Agreement by the nonterminating Party or because one or more of
the conditions to the terminating Party's obligations under this Agreement is
not satisfied as a result of the Party's failure to comply with its obligations
under this Agreement, the terminating Party's right to pursue all legal remedies
will survive such termination unimpaired.
10.3 TERMINATION FEE; TERMINATION EXPENSES.
(a) If this Agreement is terminated pursuant to SECTION 10.1(B)(I),
(C)(I) or (C)(V), Seller shall pay to Purchaser a termination fee of Two Million
Dollars ($2,000,000) (the "TERMINATION FEE"), which includes all fees and
expenses incurred in connection with the negotiation and execution of this
Agreement, by Wire contemporaneously therewith.
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(b) Notwithstanding anything to the contrary in this Agreement,
Purchaser's right to receive payment of the Termination Fee pursuant to this
SECTION 10.3 shall be the exclusive remedy of Purchaser for the loss suffered as
a result of the failure of the transactions contemplated hereby to be
consummated in connection with a termination pursuant to SECTION 10.1(B)(I),
10.1(C)(I) or 10.1(C)(V), and upon payment of the Termination Fee in accordance
with this SECTION 10.3, Seller shall have no further liability or obligation
relating to or arising out of this Agreement or the transactions contemplated
hereby. This SECTION 10.3(B) shall only apply to terminations pursuant to
SECTION 10.1(B)(I), 10.1(C)(I) and 10.1(C)(V).
--------------------------------------------------------------------------------
ARTICLE XI. MISCELLANEOUS
--------------------------------------------------------------------------------
11.1 NOTICES.
Unless otherwise provided in this Agreement, all notices and other
communications required or permitted hereunder will be in writing and will be
deemed to have been duly given when delivered in person or when dispatched by
telegram or electronic facsimile transfer (confirmed in writing by mail within
24 hours of such dispatch), three Business Days after being sent by registered
or certified mail, return receipt requested or one Business Day after having
been dispatched by a nationally recognized overnight carrier service to the
appropriate Party at the address specified below:
IF TO SELLER, GBS OR HEALTHCARE SUB: Computer Horizons Corp.
00 Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attn: President
Facsimile: (000)-000-0000
WITH A COPY TO: Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx
& Wolosky LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
IF TO THE PURCHASER OR TEFIS: TEKsystems, Inc.
0000 Xxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, President
Facsimile: (000) 000-0000
(with a copy to Sponsor)
IF TO SPONSOR OR AGCC: Allegis Group, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.,
General Counsel
Facsimile: (000) 000-0000
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WITH COPIES OF NOTICES TO PURCHASER, Xxxxxxx LLP
SPONSOR, TEFIS OR AGCC TO: 1800 Mercantile Bank & Trust Building
Two Xxxxxxx Plaza
Baltimore, Maryland 21201
Attn: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or addresses as any such Party may from time to time
designate as to itself by like notice.
11.2 EXPENSES.
Except as otherwise expressly provided herein (i) Seller will pay any
expenses incurred by the Seller Entities with respect to the preparation and
negotiation of this Agreement and in preparing to consummate and consummating
the transactions provided for herein and (ii) Purchaser will pay any expenses
incurred by the Purchaser Entities with respect to the preparation and
negotiation of this Agreement and in preparing to consummate and consummating
the transactions provided for herein. Purchaser and Seller shall each pay
one-half of the filing fee in connection with the filing by Purchaser and Seller
under the HSR Act.
11.3 SUCCESSORS AND ASSIGNS; GUARANTEE OF AFFILIATE OBLIGATIONS.
(a) This Agreement will be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns, but will not be
assignable or delegable by any Party without the prior written consent of the
other Party, except that Purchaser may assign its rights, but not its
obligations, under this Agreement, in whole or in part, to any Subsidiary of
Purchaser. Nothing in this Agreement is intended to limit Purchaser's ability to
assign or to transfer any of the Assets following the Closing Date.
(b) Seller and Purchaser each unconditionally guarantees the full and
timely performance by their respective Affiliates of all obligations of such
entities under this Agreement and any other Acquisition Agreement and agrees to
cause their respective Affiliates to take all action contemplated by this
Agreement.
11.4 WAIVER.
Purchaser and Seller, by written notice to the other, may (a) extend
the time for performance of any of the obligations or other actions of the other
under this Agreement, (b) waive any inaccuracies in the representations or
warranties of the other contained in this Agreement, (c) waive compliance with
any of the conditions or covenants of the other contained in this Agreement or
(d) waive or modify performance of any of the obligations of the other under
this Agreement; PROVIDED, HOWEVER, that no Party may, without the prior written
consent of such other Party, make or grant such extension of time, waiver of
inaccuracies or compliance or waiver or modification of performance with respect
to its own obligations, representations, warranties, conditions or covenants
hereunder. Except as provided in the immediately preceding sentence, no action
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taken pursuant to this Agreement will be deemed to constitute a waiver of
compliance with any representations, warranties, covenants or agreements
contained in this Agreement and will not operate or be construed as a waiver of
any subsequent breach, whether of a similar or dissimilar nature.
11.5 ENTIRE AGREEMENT.
Subject to SECTION 7.5, this Agreement (together with the Exhibits and
Schedules hereto) constitutes the entire agreement by and among Seller and
Purchaser and their Affiliates relating to the matters contemplated hereby, and
supersedes all other agreements and understandings, whether written or oral,
that may have been made or entered into by Purchaser or Seller (or by any
Representative thereof) relating to the matters contemplated hereby.
11.6 AMENDMENTS, SUPPLEMENTS, ETC.
This Agreement may not be amended, supplemented or waived orally, but
only by an instrument in writing signed by each of the Parties hereto.
11.7 RIGHTS OF THE PARTIES.
Nothing expressed or implied in this Agreement is intended or will be
construed to confer upon or give any Person or entity other than the Parties
(and their respective Affiliates any rights or remedies under or by reason of
this Agreement or any transaction contemplated hereby. Without limiting the
generality of the foregoing, the assumption of the Assumed Liabilities by
Purchaser pursuant to the terms of this Agreement shall be solely for the
benefit of Seller, and all claims, demands and rights of any nature whatsoever
arising under this Agreement as a result of the assumption of such Assumed
Liabilities, shall be enforced solely by Seller and its permitted successors and
assigns and shall not inure to the benefit of any other Person.
11.8 FURTHER ASSURANCES.
(a) After the Closing, Seller will, from time to time, at Purchaser's
request and subject to SECTIONS 2.5 and 8.1(B), execute and deliver to Purchaser
such other instruments of conveyance and transfer and take such other action as
Purchaser may reasonably request so as to effectuate the Transfer of the Assets
to Purchaser.
(b) After the Closing, Purchaser will from time to time, at Seller's
request, execute and deliver to Seller such other instruments of assumption or
transfer and take such other action as Seller may reasonably request so as to
effectuate the assumption by Purchaser of the Assumed Liabilities and to
Transfer to Seller any Excluded Assets.
11.9 BULK SALES.
To the extent applicable, if at all, the Parties waive compliance with
the provisions of the so called bulk sales or transfer laws of any jurisdiction
in connection with the Transfer of the Assets pursuant to this Agreement.
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11.10 PASSAGE OF TITLE AND RISK OF LOSS.
Legal title, equitable title and risk of loss with respect to the
Assets will not pass to Purchaser until the Assets are Transferred at the
Closing, which Transfer, once it has occurred, will be deemed effective for Tax,
accounting and other computational purposes as of 11:59 p.m. (New York City
time) on the Closing Date.
11.11 APPLICABLE LAW; DISPUTE RESOLUTION; JURY TRIAL WAIVER.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Maryland without regard to principles
of conflicts of laws.
(b) Each of the parties hereto hereby irrevocably submits to the
exclusive jurisdiction of any Maryland state or federal court regarding any and
all disputes between the parties hereto, whether in law or equity, arising out
of or relating to this Agreement and the agreements, instruments and documents
contemplated hereby and the parties consent to and agree to submit to the
jurisdiction of such courts. Each of the parties hereby waives and agrees not to
assert in any such dispute, to the fullest extent permitted by applicable Law,
any claim that (i) such Party is not personally subject to the jurisdiction of
such courts, (ii) such Party and such Party's property is immune from any legal
process issued by such courts, or (iii) any litigation or other proceeding
commenced in such courts is brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES,
AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.12 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
11.13 TITLES AND HEADINGS.
Titles and headings to sections herein are inserted for convenience of
reference only, and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
11.14 OBLIGATION OF SPONSOR.
Sponsor hereby guarantees the due and punctual payment and performance
when due of each of the obligations of Purchaser, AGCC and TEFIS under this
Agreement and the other Acquisition Agreements.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
SIGNATURES FOLLOW ON THE NEXT PAGE.
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SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Asset
purchase agreement as of the date first written above.
TEKSYSTEMS, INC. COMPUTER HORIZONS CORP.
("PURCHASER") ("SELLER")
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------------- ----------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxxx
---------------------------- ----------------------------
Title: Vice President - Finance Title: President & CEO
---------------------------- ----------------------------
TEKSYSTEMS EF&I SOLUTIONS, LLC GBS HOLDINGS PRIVATE LIMITED
("TEFIS") ("GBS")
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxx Delle Donne
---------------------------- ----------------------------
Name: Xxxx X. Xxxxx Name: Xxxxx Delle Donne
---------------------------- ----------------------------
Title: Manager Title: Director C.O.O. CHC
---------------------------- ----------------------------
ALLEGIS GROUP CANADA CORPORATION CHC HEALTHCARE SOLUTIONS, LLC
("AGCC") ("HEALTHCARE SUB")
By: /s/ Xxxxx X. Standevien By: /s/ Xxxxxx X. Xxxxxx
---------------------------- ----------------------------
Name: Xxxxx X. Standevien Name: Xxxxxx X. Xxxxxx
---------------------------- ----------------------------
Title: Vice President - Finance Title: President & CEO
---------------------------- ----------------------------
ALLEGIS GROUP, INC.
("SPONSOR")
By: /s/ Xxxxx X. Standevien
----------------------------
Name: Xxxxx X. Standevien
----------------------------
Title: Executive Vice President
----------------------------
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
