Exhibit 2.1
DISTRIBUTION AGREEMENT
BY AND BETWEEN
TMP WORLDWIDE INC.
AND
XXXXXX HIGHLAND GROUP, INC.
DATED AS OF MARCH 31, 2003
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
1.01 Definitions.................................................................................................1
ARTICLE 2
PRE-DISTRIBUTION TRANSACTIONS; CERTAIN COVENANTS
2.01 Corporate Restructuring Transactions........................................................................6
2.02 Charter and Bylaws of HHGI..................................................................................6
2.03 Election of Directors of HHGI...............................................................................6
2.04 TMP Board Action............................................................................................6
2.05 Transfer and Assignment of Certain Licenses and Permits.....................................................6
2.06 Transfer and Assignment of Certain Agreements...............................................................7
2.07 Consents....................................................................................................8
2.08 Other Transactions..........................................................................................8
2.09 Preparation and Filing of Form 10...........................................................................8
2.10 Election of Officers........................................................................................8
2.11 Employee Benefit Plans......................................................................................8
2.12 State Securities Laws.......................................................................................8
2.13 Listing Application.........................................................................................8
2.14 Certain Financial and Other Arrangements....................................................................9
2.15 Director, Officer and Employee Resignations.................................................................9
2.16 Transfer Not Effected Prior to the Distribution; Transfer Deemed Effective as of the Distribution Date......9
2.17 Ancillary Agreements.......................................................................................10
ARTICLE 3
THE DISTRIBUTION
3.01 Conditions Precedent to the Distribution...................................................................11
3.02 The Distribution...........................................................................................12
3.03 Subdivision of HHGI Common Stock to Accomplish the Distribution............................................12
3.04 Fractional Shares..........................................................................................12
ARTICLE 4
INDEMNIFICATION
4.01 Release of Pre-Distribution Claims.........................................................................12
4.02 HHGI Indemnification of the TMP Group......................................................................14
4.03 TMP Indemnification of the HHGI Group......................................................................15
4.04 Insurance; Third Party Obligations; Tax Benefits...........................................................15
4.05 Notice and Payment of Claims...............................................................................16
4.06 Notice and Defense of Third-Party Claims...................................................................16
4.07 Contribution...............................................................................................17
4.08 Non-Exclusivity of Remedies................................................................................17
TABLE OF CONTENTS
(continued)
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ARTICLE 5
EMPLOYEE MATTERS
5.01 Certain Employee and Employee Benefits Matters.............................................................17
5.02 Payment of Outstanding Credit Card Balances................................................................21
ARTICLE 6
ACCESS TO INFORMATION
6.01 Provision of Corporate Records.............................................................................21
6.02 Access to Information......................................................................................22
6.03 Litigation Cooperation.....................................................................................22
6.04 Reimbursement..............................................................................................22
6.05 Retention of Records.......................................................................................22
6.06 Confidential Information...................................................................................22
6.07 Inapplicability of Article 6 to Tax Matters................................................................23
ARTICLE 7
CERTAIN OTHER AGREEMENTS
7.01 Leased Real Property.......................................................................................23
7.02 Insurance Policies.........................................................................................23
7.03 Tax Matters................................................................................................25
7.04 Use of Names, Trademarks, etc..............................................................................25
7.05 Intellectual Property......................................................................................30
7.06 Certain Business Matters...................................................................................32
7.07 Reimbursement of HHGI Group Liabilities....................................................................32
7.08 Delivery of Property.......................................................................................32
7.09 Further Assurances and Consents............................................................................32
7.10 Confidential Treatment.....................................................................................33
ARTICLE 8
MISCELLANEOUS
8.01 Notices....................................................................................................33
8.02 Amendments; No Waivers.....................................................................................34
8.03 Expenses...................................................................................................34
8.04 Successor and Assigns......................................................................................34
8.05 Governing Law..............................................................................................34
8.06 Counterparts; Effectiveness................................................................................34
8.07 Entire Agreement...........................................................................................34
8.08 Set-Offs...................................................................................................35
8.09 Arbitration................................................................................................35
8.10 Existing Arrangements......................................................................................35
8.11 Termination Prior to the Distribution......................................................................35
8.12 Publicity..................................................................................................36
8.13 Captions...................................................................................................36
8.14 Third Party Beneficiaries..................................................................................36
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DISTRIBUTION AGREEMENT
This
DISTRIBUTION AGREEMENT, dated as of March 31, 2003 (this "AGREEMENT"),
is by and between
TMP Worldwide Inc., a Delaware corporation ("TMP"), and Xxxxxx
Highland Group, Inc., a Delaware corporation ("HHGI").
W I T N E S S E T H:
WHEREAS, HHGI is presently a wholly-owned subsidiary of TMP;
WHEREAS, the Board of Directors of TMP has determined that it is in the
best interests of TMP, its stockholders and HHGI that all shares of HHGI Common
Stock (as defined below) owned by TMP be distributed pro rata to TMP's
stockholders;
WHEREAS, TMP and HHGI are concurrently herewith entering into the Tax
Separation Agreement (as defined below); and
WHEREAS, the parties hereto desire to set forth herein the principal
corporate transactions to be effected in connection with the Distribution (as
defined below) and certain other matters relating to the relationship and the
respective rights and obligations of the parties following the Distribution.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.01 DEFINITIONS. The following terms, as used herein, have the
following meanings:
"ACTION" means any claim, suit, action, arbitration, inquiry, investigation
or other proceeding by or before any court, governmental or other regulatory or
administrative agency or commission or any other tribunal.
"AFFILIATE" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such other
Person. For the purposes of this definition, "CONTROL" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "CONTROLLING" and
"CONTROLLED" have meanings correlative to the foregoing.
"ANCILLARY AGREEMENT" means each of the Contribution Agreement, each
Financing Agreement, each Real Estate Agreement, the Services Agreement and the
Tax Separation Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the Securities and Exchange Commission.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement, dated as of
March 31, 2003, between TMP and HHGI, providing for the contribution of all of
the outstanding shares of capital stock held by TMP of certain Subsidiaries of
TMP to HHGI.
"CORPORATE RESTRUCTURING TRANSACTIONS" means, collectively, (i) each of the
distributions, transfers, conveyances, contributions, assignments and other
transactions described in the Contribution Agreement, and (ii) such other
distributions, transfers, conveyances, contributions, assignments and other
transactions (so long as such other distributions, transfers, conveyances,
contributions, assignments and other transactions do not, individually or in the
aggregate, adversely affect the TMP Business (other than to a de minimis
extent)) that may be required to be accomplished, effected or consummated by
TMP, HHGI or any of their respective Subsidiaries or Affiliates in order to
separate and divide, in a series of transactions that, to the extent possible,
shall qualify for tax-free treatment under the Code, the existing businesses of
TMP so that, except as otherwise provided in the Distribution Documents, (A) the
business, assets and liabilities necessary for the continuing operation of the
HHGI Business shall be owned, directly or indirectly, by HHGI, and (B) the
business, assets and liabilities of TMP that remain after the separations and
divisions described above, including, without limitation, the business, assets
and liabilities necessary for the continuing operation of the TMP Business, are,
after giving effect to the Distribution, owned, directly or indirectly, by TMP.
"DISTRIBUTION" means a distribution by TMP of all HHGI Common Stock owned
by it to the holders of TMP Common Stock as of the Record Date.
"DISTRIBUTION AGENT" means The Bank of
New York.
"DISTRIBUTION DATE" means the day as of which the Distribution shall be
effected.
"DISTRIBUTION DOCUMENTS" means all of the agreements and other documents
entered into in connection with the Distribution as contemplated hereby,
including, without limitation, this Agreement and the Ancillary Agreements.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, codes, plans, permits, licenses and governmental restrictions,
whether now or hereafter in effect, relating to the environment, the effect of
the environment on human health or to emissions, discharges, releases,
manufacturing, storage, processing, distribution, use, treatment, disposal,
transportation or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic, radioactive or hazardous substances or
wastes or the clean-up or other remediation thereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"FINALLY DETERMINED" means, with respect to any Action or other matter,
that the outcome or resolution of such Action or matter has been determined by
judgment or order not subject to further appeal or discretionary review.
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"FINANCING AGREEMENTS" shall mean the following agreements and instruments
to be entered into by TMP and/or HHGI on or prior to the Distribution Date (as
such agreements and instruments may thereafter be amended, modified or
supplemented in accordance with their respective terms): (i) the promissory note
in the principal amount of $15,000,000 from HHGI to and in favor of TMP; (ii)
the loan agreement between TMP and HHGI entered into in connection with such
promissory note; (iii) the security agreement entered into between TMP and HHGI
in connection with such loan agreement; and (iv) any other supplementary
agreements or instruments delivered to TMP by HHGI in connection with the
foregoing.
"FORM 10" means the registration statement on Form 10 filed by HHGI with
the Commission to effect the registration of HHGI Common Stock pursuant to the
Exchange Act in connection with the Distribution, as such registration statement
may be amended from time to time.
"GROUP" means, as the context requires, the HHGI Group or the TMP Group.
"HHGI BUSINESS" means the businesses, including TMP's existing executive
search and eResourcing businesses, that, after giving effect to the Corporate
Restructuring Transactions, are conducted by (i) the HHGI Group and (ii) any
business entity acquired or established by or for TMP or HHGI or any of their
respective Subsidiaries between the date of this Agreement and the close of
business on the Distribution Date that is engaged in, or intends to engage in,
any business that is of a type or nature that would have resulted in such
business being a Subsidiary included in, or an asset of, the HHGI Group.
"HHGI COMMON STOCK" means the common stock, par value $.001 per share, of
HHGI.
"HHGI GROUP" means HHGI and its Subsidiaries as of and after the
Distribution Date (including all predecessors to such Persons).
"HHGI LIABILITIES" means all (i) Liabilities of the HHGI Group under this
Agreement and (ii) except as otherwise specifically provided herein or in any
Ancillary Agreement, other Liabilities, whether arising before, on or after the
Distribution Date, of or relating to the HHGI Group or arising from or in
connection with the conduct of the HHGI Business or the ownership or use of
assets in connection therewith, including, without limitation, any Liabilities
arising under or relating to Environmental Laws and any liabilities under the
provisions of any joint agreement assigned to it pursuant to Section 2.06(c).
Notwithstanding the foregoing, "HHGI LIABILITIES" shall exclude (x) any
Liabilities for Taxes (since such Liabilities shall be governed by the Tax
Separation Agreement) and (y) any Liabilities specifically retained or assumed
by TMP pursuant to this Agreement.
"INFORMATION STATEMENT" means the information statement sent to each holder
of TMP Common Stock in connection with the Distribution.
"INTELLECTUAL PROPERTY" means (a) inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents (including utility and design patents, industrial designs and
utility models), patent applications, patent and invention disclosures and all
other rights of inventorship, worldwide, together with all
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reissuances, continuations, continuations-in-part, divisions, revisions,
supplementary protection certificates, extensions and re-examinations thereof;
(b) copyrights in copyrightable works and all other rights of authorship,
worldwide, and all applications (including the right to file applications),
registrations and renewals in connection therewith; (c) trade secrets and
confidential business and technical information (including ideas, research and
development, know-how, formulas, technology, compositions, manufacturing and
production processes and techniques, technical data, engineering, production and
other designs, drawings, engineering notebooks, industrial models, software and
specifications and any other information meeting the definition of a trade
secret under the Uniform Trade Secrets Act); (d) computer and electronic data
processing programs and software, both source code and object code (including
data and related documentation, flow charts, diagrams, descriptive texts and
programs, computer print-outs, underlying tapes, computer databases and similar
items), computer applications and operating programs; (e) rights to xxx for and
remedies against past, present and future infringements of any or all of the
foregoing and rights of priority and protection of interests therein under the
laws of any jurisdiction worldwide; (f) all copies and tangible embodiments of
any or all of the foregoing (in whatever form or medium, including electronic
media); (g) all other proprietary and intellectual property rights and interests
(excluding names, trademarks and other rights and interests that are the subject
of Section 7.04 hereof); and (h) all other rights relating to any or all of the
foregoing.
"LIABILITIES" means any and all claims, debts, liabilities and obligations,
absolute or contingent, matured or not matured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, including all costs
and expenses relating thereto, and including, without limitation, those debts,
liabilities and obligations arising under this Agreement, any law, rule,
regulation, any action, order, injunction or consent decree of any governmental
agency or entity, or any award of any arbitrator of any kind, and those arising
under any agreement, commitment or undertaking.
"LOSSES" means, with respect to any Person, any and all damage, loss,
liability and expense incurred or suffered by such Person (including, without
limitation, reasonable expenses of investigation and reasonable attorneys' fees
and expenses in connection with any and all Actions or threatened Actions).
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
governmental or political subdivision or an agency or instrumentality thereof.
"REAL ESTATE AGREEMENTS" means all subleases, releases, assignments,
consents and agreements relating to the division of real property and interests
therein between members of the TMP Group and members of the HHGI Group entered
into as of or prior to the Distribution Date, in each case as amended from time
to time.
"RECORD DATE" means May 14, 2003, the date determined by TMP's Board of
Directors (or determined by a committee of such Board of Directors pursuant to
authority delegated to such committee by TMP's Board of Directors) as the record
date for determining the holders of TMP Common Stock entitled to receive the
Distribution.
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"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SERVICES AGREEMENT" means the Transition Services Agreement, dated as of
the date hereof, between TMP and HHGI.
"SUBSIDIARY" means, with respect to any Person, any other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"TAX" means tax of any kind, a levy or other like assessment, customs,
duties, imposts, charges or fees imposed or payable to the United States or any
state, county, local or foreign government or subdivision or agency thereof, and
in each instance such term shall include any interest, penalties or additions to
tax attributable to any such Tax.
"TAX SEPARATION AGREEMENT" means the Tax Separation Agreement, dated as of
the date hereof, between TMP and HHGI.
"TMP BUSINESS" means the businesses (other than the HHGI Business) that,
after giving effect to the Corporate Restructuring Transactions, are or were
conducted by (i) the TMP Group, (ii) any other division, Subsidiary or
investment of TMP, any TMP Subsidiary or any of the other members of the TMP
Group managed or operated or in existence as of the date of this Agreement or
any prior time, unless such other division, Subsidiary or investment is
expressly included in the HHGI Group immediately after giving effect to the
Corporate Restructuring Transactions, and (iii) any business entity acquired or
established by or for TMP or any of its Subsidiaries between the date of this
Agreement and the close of business on the Distribution Date that is engaged in,
or intends to engage in, any business that is of a type or nature that would
have resulted in such business being a Subsidiary included in, or an asset of,
the TMP Group.
"TMP COMMON STOCK" means the common stock, par value $.001 per share, of
TMP.
"TMP GROUP" means TMP and its Subsidiaries (other than any Subsidiary or
member of, or other entity in, the HHGI Group).
"TMP LIABILITIES" means all (i) Liabilities of the TMP Group under this
Agreement and (ii) except as otherwise specifically provided herein or in any
Ancillary Agreement, other Liabilities, whether arising before, on or after the
Distribution Date, of or relating to the TMP Group or arising from or in
connection with the conduct of the businesses of the TMP Group (other than the
HHGI Business) or the ownership or use of assets in connection therewith,
including, without limitation, any Liabilities arising under or relating to
Environmental Laws and any liabilities under the provisions of any joint
agreement assigned to it pursuant to Section 2.06(c). Notwithstanding the
foregoing, "TMP LIABILITIES" shall exclude (x) any Liabilities for Taxes (since
such Liabilities shall be governed by the Tax Separation Agreement) and (y) any
Liabilities specifically retained or assumed by HHGI pursuant to this Agreement.
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ARTICLE 2
PRE-DISTRIBUTION TRANSACTIONS;
CERTAIN COVENANTS
2.01 CORPORATE RESTRUCTURING TRANSACTIONS. On or prior to the
Distribution Date, TMP and HHGI shall, and shall cause each of their respective
Subsidiaries to, as applicable, take such actions as are necessary to cause,
effect and consummate the Corporate Restructuring Transactions. TMP and HHGI
hereby agree that any one or more of the Corporate Restructuring Transactions
may be modified, supplemented or eliminated; provided such modification,
supplement or elimination (i) is necessary or appropriate to divide the existing
businesses of TMP so that the HHGI Business shall be owned, directly or
indirectly, by HHGI, and (ii) does not, individually or in the aggregate,
adversely affect the TMP Business (other than to a de minimis extent). After the
completion of the Corporate Restructuring Transactions, the Subsidiaries listed
on SCHEDULE 2.01 (other than any such Subsidiary that is liquidated or merged
into or consolidated with another entity in connection with the Corporate
Restructuring Transactions) shall be direct or indirect Subsidiaries of HHGI. On
or prior to the Distribution Date, TMP and HHGI shall cause the name of any
Subsidiary listed on SCHEDULE 2.01 that includes the name "TMP" to be changed
such that "TMP" is no longer included in the name of such Subsidiary; PROVIDED,
HOWEVER, that in the case of any such Subsidiary organized under the laws of a
European jurisdiction, TMP and HHGI shall cause such Subsidiary, on or prior to
the Distribution Date, to adopt a resolution and to submit to any applicable
authority a duly completed application to change its name such that "TMP" is no
longer included in the name of such Subsidiary.
2.02 CHARTER AND BYLAWS OF HHGI. On or prior to the Distribution Date,
TMP and HHGI shall take all necessary actions so that, as of the Distribution
Date, HHGI's certificate of incorporation (the "HHGI CHARTER") and bylaws will
be substantially in the forms attached hereto as EXHIBITS A and B, respectively.
2.03 ELECTION OF DIRECTORS OF HHGI. As of the date hereof, TMP, as the
sole stockholder of HHGI, has approved Xxx Xxxxx as the sole director of HHGI.
As of the Distribution Date, Xx. Xxxxx shall take all necessary action so that
as of the Distribution Date the directors of HHGI will be as set forth in the
Information Statement.
2.04 TMP BOARD ACTION. TMP's Board of Directors shall, in its
discretion, establish (or delegate authority to establish) the Record Date and
the Distribution Date and any appropriate procedures in connection with the
Distribution.
2.05 TRANSFER AND ASSIGNMENT OF CERTAIN LICENSES AND PERMITS.
(a) LICENSES AND PERMITS RELATING TO THE HHGI BUSINESS. On or
prior to the Distribution Date, or as soon as reasonably practicable thereafter,
TMP shall (and, if applicable, shall cause any other Person over which it has
legal or effective direct or indirect control to) duly and validly transfer or
cause to be duly and validly transferred to the appropriate member of the HHGI
Group (as directed by HHGI) all material transferable licenses, permits and
authorizations issued by any governmental authority which relate to the HHGI
Business but which are held in
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the name of any member of the TMP Group, or any of their respective employees,
officers, directors, stockholders or agents.
(b) LICENSES AND PERMITS RELATING TO THE TMP BUSINESS. On or
prior to the Distribution Date, or as soon as reasonably practicable thereafter,
HHGI shall (and, if applicable, shall cause any other Person over which it has
legal or effective direct or indirect control to) duly and validly transfer or
cause to be duly and validly transferred to the appropriate member of the TMP
Group (as directed by TMP) all material transferable licenses, permits and
authorizations issued by any governmental authority which relate to the TMP
Business but which are held in the name of any member of the HHGI Group, or any
of their respective employees, officers, directors, stockholders or agents.
2.06 TRANSFER AND ASSIGNMENT OF CERTAIN AGREEMENTS.
(a) TRANSFER AND ASSIGNMENT OF TMP BUSINESS AGREEMENTS.
Subject to the limitations set forth in this Section 2.06 and in Section 2.16,
HHGI hereby, on behalf of itself and any of the other members of its Group over
which it has, or upon completion of the Corporate Restructuring Agreements
contemplated by this Agreement will have, legal or effective direct or indirect
control, assigns, transfers and conveys to TMP (or such other member of the TMP
Group as TMP shall direct) all of its (or such other member of its Group's)
right, title and interest in and to any and all agreements that relate
exclusively to the TMP Business or any member of the TMP Group.
(b) TRANSFER AND ASSIGNMENT OF HHGI BUSINESS AGREEMENTS.
Subject to the limitations set forth in this Section 2.06 and in Section 2.16,
TMP hereby, on behalf of itself and any of the other members of its Group over
which it has, or upon completion of the Corporate Restructuring Agreements
contemplated by this Agreement will have, legal or effective direct or indirect
control, assigns, transfers and conveys to HHGI (or such other member of the
HHGI Group as HHGI shall direct) all of its (or such member of its Group's)
right, title and interest in and to any and all agreements that relate
exclusively to the HHGI Business or any member of the HHGI Group.
(c) JOINT AGREEMENTS. Subject to the provisions of
Section 2.16 below, any agreement to which any party hereto (or any other member
of such party's Group) is a party that inures to the benefit of both the TMP
Business and the HHGI Business is hereby assigned in part so that each party (or
such other member of such party's Group) is entitled to the rights and benefits
inuring to its business under such agreement. Notwithstanding the foregoing, to
the extent that any such agreement contains a mandatory arbitration clause,
non-solicitation or non-competition covenant or provision restricting disclosure
of confidential information (i) for the benefit of the TMP Business, the full
benefit of such clause, covenant or provision is hereby retained by or assigned
to the applicable member of the TMP Group and (ii) exclusively for the benefit
of the HHGI Business, the full benefit of such clause, covenant or provision is
hereby retained or assigned to the applicable member of the HHGI Group.
(d) OBLIGATIONS OF ASSIGNEES. The assignee of any agreement
assigned, in whole or in part, hereunder (an "ASSIGNEE"), hereby assumes and
agrees to pay, perform and
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fully discharge all obligations of the assignor under such agreement (whether
such obligations arose or were incurred prior to, on or subsequent to the
Distribution Date and irrespective of whether such obligations have been
asserted as of the Distribution Date) or, in the case of a partial assignment
under Section 2.06(c) above, such Assignee's related portion of such obligations
as determined in accordance with the terms of the relevant agreement, where
determinable on the face thereof, and otherwise as determined in accordance with
the practice of the parties prior to the Distribution. Furthermore, the Assignee
shall use its commercially reasonable efforts to cause the assignor of such
agreement to be released from its obligations under the assigned agreements (or,
in the case of joint agreements, under the assigned portion of such joint
agreement), and shall indemnify and hold harmless such assignor to the extent
such assignor is not released from its obligations under the assigned
agreements.
2.07 CONSENTS. The parties hereto shall use their commercially
reasonable efforts to obtain any third-party consents or approvals that are
required to consummate the Corporate Restructuring Transactions, the
Distribution and the other transactions contemplated herein.
2.08 OTHER TRANSACTIONS. On or prior to the Distribution Date, TMP and
HHGI shall have consummated those other transactions in connection with the
Corporate Restructuring Transactions and the Distribution that are contemplated
by the Information Statement and not specifically referred to in Sections 2.01
through 2.07 above; PROVIDED, HOWEVER, that such other transactions do not,
individually or in the aggregate, adversely affect the TMP Business (other than
to a de minimis extent).
2.09 PREPARATION AND FILING OF FORM 10. TMP and HHGI have prepared, and
HHGI has filed with the Commission, the Form 10, which includes or incorporates
by reference the Information Statement, which sets forth appropriate disclosure
concerning HHGI and the Distribution. The Form 10 has become effective under the
Exchange Act. TMP has mailed the Information Statement on the date stated
therein to the holders of TMP Common Stock as of the Record Date.
2.10 ELECTION OF OFFICERS. On or prior to the Distribution Date, TMP
and HHGI shall, as applicable, take all actions necessary and desirable so that
as of the Distribution Date the officers of HHGI will be as set forth in the
Information Statement.
2.11 EMPLOYEE BENEFIT PLANS. TMP and HHGI shall cooperate in preparing,
filing with the Commission and causing to become effective any registration
statements or amendments thereto that are appropriate to reflect the
establishment of or amendments to any employee benefit plans contemplated by
this Agreement, as set forth in Section 5.01.
2.12 STATE SECURITIES LAWS. Prior to the Distribution Date, TMP and
HHGI shall take all such action as may be necessary or appropriate under the
securities or blue sky laws of states or other political subdivisions of the
United States (and any comparable laws of any foreign jurisdiction) in
connection with the transactions contemplated by this Agreement.
2.13 LISTING APPLICATION. TMP and HHGI have prepared and filed with The
Nasdaq National Market ("NASDAQ") a listing application and related documents
and shall take all such
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other actions with respect thereto as shall be necessary or desirable in order
to cause Nasdaq, on or prior to the Distribution Date, to approve the HHGI
Common Stock for quotation, subject to official notice of issuance.
2.14 CERTAIN FINANCIAL AND OTHER ARRANGEMENTS.
(a) SETTLEMENT OF INTERCOMPANY ACCOUNTS BETWEEN THE HHGI GROUP
AND THE TMP GROUP. All intercompany receivables, payables and loans outstanding
as of the Distribution Date (other than receivables, payables and loans
otherwise specifically provided for in any of the Distribution Documents),
including, without limitation, in respect of any cash balances, any cash
balances representing deposited checks or drafts for which only a provisional
credit has been allowed or any cash held in any centralized cash management
system, between any member of the HHGI Group and any member of the TMP Group
shall, as of the close of business on the Distribution Date, be offset against
each other and the net intercompany balance remaining, if any, shall be
contributed to the HHGI Group.
(b) OPERATIONS IN ORDINARY COURSE. Except as otherwise
provided in any of the Distribution Documents, during the period from the date
of this Agreement through the Distribution Date, TMP and HHGI shall, and shall
cause any entity that is a Subsidiary of such party at any time during such
period, to conduct its business in a manner substantially consistent with
current and past operating practices and in the ordinary course, including,
without limitation, with respect to the payment and administration of accounts
payable and the collection and administration of accounts receivable.
(c) FINANCING AGREEMENTS. As of the Distribution Date, TMP
and HHGI shall enter into the Financing Agreements.
2.15 DIRECTOR, OFFICER AND EMPLOYEE RESIGNATIONS. Subject to the
provisions of Section 2.03 and Section 2.10 above:
(a) RESIGNATIONS BY DIRECTORS AND EMPLOYEES OF THE TMP GROUP.
TMP shall cause all of its directors and all employees of the TMP Group to
resign, effective as of the close of business on the Distribution Date, from all
boards of directors or similar governing bodies of each member of the HHGI Group
on which they serve, and from all positions as officers or employees of any
member of the HHGI Group, except for those TMP Group employees who will be
employees of the HHGI Group following the Distribution Date or as mutually
agreed to in writing on or prior to the Distribution Date by TMP and HHGI.
(b) RESIGNATIONS BY DIRECTORS AND EMPLOYEES OF THE HHGI GROUP.
HHGI shall cause all of its directors and all employees of HHGI Group to resign,
effective as of the close of business on the Distribution Date, from all boards
of directors or similar governing bodies of each member of the TMP Group on
which they serve, and from all positions as officers or employees of any member
of the TMP Group, except as mutually agreed to in writing on or prior to the
Distribution Date by HHGI and TMP.
2.16 TRANSFER NOT EFFECTED PRIOR TO THE DISTRIBUTION; TRANSFER DEEMED
EFFECTIVE AS OF THE DISTRIBUTION DATE. To the extent that any transfer
contemplated by this Article 2 shall not
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have been consummated on or prior to the Distribution Date, the parties hereto
shall cooperate (and shall cause each of their respective Affiliates and each
member of their respective Groups over which they have legal or effective direct
or indirect control to cooperate) to effect such transfers as promptly following
the Distribution Date as shall be practicable. Nothing herein shall be deemed to
transfer or require the transfer of any assets or the assumption of any
Liabilities which by their terms or operation of law cannot be transferred or
assumed (including, without limitation, the assignment of any agreement if the
consent, waiver or approval of another party is required for such assignment
which consent, waiver, or approval has not been given or if such assignment
otherwise would constitute a breach of, or cause a loss of benefits (except as
specifically provided in Section 2.06(c)) under, any such agreement); PROVIDED,
HOWEVER, that the parties hereto shall cooperate (and shall cause each of their
respective Affiliates and each member of their respective Groups over which they
have legal or effective direct or indirect control to cooperate) to seek to
obtain any necessary consents, waivers or approvals for the transfer of all
assets and Liabilities contemplated to be transferred or assigned pursuant to
this Article 2. In the event that any such transfer of assets or Liabilities has
not been consummated or any required consent, waiver or approval has not been
obtained, from and after the Distribution Date, the party retaining such asset
or Liability (or, as applicable, such other member or members of such party's
Group) shall hold such asset in trust for the use and benefit of the party
entitled thereto (at the expense of the party entitled thereto) or retain such
Liability for the account of the party by whom such Liability is to be assumed
pursuant hereto, as the case may be, and take such other action as may be
reasonably requested by the party to whom such asset is to be transferred or by
whom such Liability is to be assumed (including the enforcement, for the benefit
of the intended assignee hereunder, of any provision of any agreement the
assignment of which has not occurred as contemplated in this Agreement), as the
case may be, in order to place such party, insofar as is reasonably possible, in
the same position as would have existed had such asset or Liability been
transferred or assumed as contemplated hereby. As and when any such asset or
Liability becomes transferable or assumable, such transfer shall be effected
forthwith. As of the Distribution Date, each party hereto (or, if applicable,
such other members of such party's Group) shall be deemed to have acquired (or
as applicable, retained) complete and sole beneficial ownership over all of the
assets, together with all rights, powers and privileges incident thereto, and
shall be deemed to have assumed in accordance with the terms of this Agreement
all of the Liabilities, and all duties, obligations and responsibilities
incident thereto, which such party (or any other member of such party's Group)
is entitled to acquire or required to assume pursuant to the terms of this
Agreement.
2.17 ANCILLARY AGREEMENTS. Prior to the Distribution Date, TMP and HHGI
shall enter into, and/or where applicable shall cause such other members of
their respective Groups to enter into, (i) the Ancillary Agreements and (ii) any
other agreements in respect of the Corporate Restructuring Transactions and the
Distribution as are reasonably necessary or appropriate in connection with the
transactions contemplated hereby and thereby, so long as such agreements do not
adversely affect the TMP Business (other than to a de minimis extent).
ARTICLE 3
THE DISTRIBUTION
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3.01 CONDITIONS PRECEDENT TO THE DISTRIBUTION. In no event shall the
Distribution occur unless the following conditions shall have been waived by TMP
or shall have been satisfied:
(a) there shall be no stop order in effect with respect to the
Form 10 and no proceeding for that purpose shall have been instituted by the
Commission;
(b) the actions with respect to the securities or blue sky
laws of states or other political subdivisions of the United States (and any
comparable laws of any foreign jurisdiction) in connection with the transactions
contemplated by this Agreement described in Section 2.12 shall have been taken,
and, where applicable, have become effective or been accepted;
(c) the HHGI Common Stock to be delivered in the Distribution
shall have been admitted on Nasdaq, subject to official notice of issuance;
(d) TMP's Board of Directors shall be satisfied that the
Distribution will be made out of surplus within the meaning of Section 170 of
the General Corporation Law of the State of Delaware;
(e) TMP's Board of Directors shall have received a solvency
opinion with respect to HHGI;
(f) TMP's Board of Directors shall not have abandoned,
deferred or modified the Distribution at any time prior to the Distribution
Date;
(g) the Corporate Restructuring Transactions referred to in
Section 2.01 of this Agreement, and the other transactions referred to in
Section 2.08 of this Agreement (if any), shall have been effected;
(h) each of the Ancillary Agreements and other agreements
reasonably necessary or appropriate to consummate the Corporate Restructuring
Transactions and the Distribution shall have been duly executed and delivered by
the parties thereto;
(i) no order, injunction or decree issued by any court or
agency of competent jurisdiction or other legal restraint or prohibition
preventing the Distribution or any of the other transactions contemplated by any
of the Distribution Documents shall be in effect; and
(j) any material governmental approvals and consents necessary
to consummate the Distribution shall have been obtained and shall be in full
force and effect.
The foregoing conditions are for the sole benefit of TMP and shall not give
rise to or create any duty on the part of TMP or TMP's Board of Directors to
waive or not waive such conditions or in any way to limit TMP's rights to
terminate this Agreement pursuant to Section 8.11 hereof. Any determination made
by the TMP Board of Directors prior to the Distribution concerning the
satisfaction or waiver of any or all of the conditions set forth in this Section
3.01 shall be conclusive.
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3.02 THE DISTRIBUTION. Subject to the terms and conditions set forth in
this Agreement, (i) prior to the Distribution Date, TMP shall deliver to the
Distribution Agent for the benefit of holders of record of TMP Common Stock on
the Record Date, a stock certificate or certificates, endorsed by TMP in blank,
representing all of the then outstanding shares of HHGI Common Stock owned by
TMP, (ii) the Distribution shall be effective at 11:59 p.m.,
New York City time,
on the Distribution Date and (iii) TMP shall instruct the Distribution Agent to
distribute, on or as soon as practicable after the Distribution Date, to each
holder of record of TMP Common Stock as of the Record Date one share of HHGI
Common Stock for each 13 1/3 shares of TMP Common Stock so held. HHGI agrees to
provide all certificates for shares of HHGI Common Stock that the Distribution
Agent shall require (after giving effect to Section 3.03) in order to effect the
Distribution.
3.03 SUBDIVISION OF HHGI COMMON STOCK TO ACCOMPLISH THE DISTRIBUTION.
Effective upon the filing of the HHGI Charter with the Secretary of State of the
State of Delaware, each share of HHGI Common Stock then issued and outstanding
shall, without any action on the part of the holder thereof, be subdivided and
converted into that number of fully paid and non-assessable shares of HHGI
Common Stock issued and outstanding as shall be necessary to accomplish the
Distribution.
3.04 FRACTIONAL SHARES. No certificates representing fractional shares
of HHGI Common Stock will be distributed in the Distribution. The Distribution
Agent will be directed to determine the number of whole shares and fractional
shares of HHGI Common Stock allocable to each holder of TMP Common Stock as of
the Record Date. The Distribution Agent shall aggregate all such fractional
shares of HHGI Common Stock and sell them in an orderly manner promptly after
the Distribution Date in the open market at the then-prevailing prices and,
after completion of all such sales, distribute a pro rata portion of the gross
proceeds from such sales, less appropriate deductions of the amount required to
be withheld for federal income tax purposes, to each record holder of TMP Common
Stock who would otherwise have received a fractional share of HHGI Common Stock.
TMP shall bear the cost of all brokerage charges, commissions and transfer taxes
incurred in connection with the sale of fractional shares pursuant to this
Section 3.04.
ARTICLE 4
INDEMNIFICATION
4.01 RELEASE OF PRE-DISTRIBUTION CLAIMS.
(a) Except as provided in Section 4.01(c) and subject to
Section 4.03, effective as of the Distribution Date, HHGI does hereby, for
itself and each other member of the HHGI Group, their respective Affiliates
(other than any member of the TMP Group), successors and assigns, remise,
release and forever discharge each of TMP, the members of the TMP Group, their
Affiliates (other than any member of the HHGI Group), successors and assigns,
and all Persons who at any time prior to the Distribution Date have been
stockholders, directors, officers, agents or employees of any member of the TMP
Group (in each case, in their respective capacities as such), and their
respective heirs, executors, administrators, successors and assigns, from any
and all Liabilities whatsoever, whether at law or in equity (including any right
of
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contribution), whether arising under any contract or agreement, by operation of
law or otherwise, existing or arising from any acts or events occurring or
failing to occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the Distribution
Date, including in connection with the Corporate Restructuring Transactions and
all other activities to implement the Distribution.
(b) Except as provided in Section 4.01(c) and subject to
Section 4.02, effective as of the Distribution Date, TMP does hereby, for itself
and each other member of the TMP Group, its Affiliates (other than any member of
the HHGI Group), successors and assigns, remise, release and forever discharge
HHGI, the members of the HHGI Group, their Affiliates (other than any member of
the TMP Group), successors and assigns, and all Persons who at any time prior to
the Distribution Date have been stockholders, directors, officers, agents or
employees of any member of the HHGI Group (in each case, in their respective
capacities as such), and their respective heirs, executors, administrators,
successors and assigns, from any and all Liabilities whatsoever, whether at law
or in equity (including any right of contribution), whether arising under any
contract or agreement, by operation of law or otherwise, existing or arising
from any acts or events occurring or failing to occur or alleged to have
occurred or to have failed to occur or any conditions existing or alleged to
have existed on or before the Distribution Date, including in connection with
the Corporate Restructuring Transactions and all other activities to implement
the Distribution.
(c) Nothing contained in Section 4.01(a) or (b) shall impair
any right of any Person to enforce this Agreement, any Ancillary Agreement or
any agreements, arrangements, commitments or understandings that are specified
in SCHEDULE 8.10 not to terminate as of the Distribution Date, in each case in
accordance with its terms. Nothing contained in Section 4.01(a) or (b) shall
release any Person from:
(i) any Liability provided in or resulting from any
agreement among any members of the TMP Group or the HHGI Group that is specified
in SCHEDULE 8.10 as not to terminate as of the Distribution Date;
(ii) any Liability assumed, transferred, assigned or
allocated to the Group of which such Person is a member in accordance with, or
any other Liability of any member of any Group under, this Agreement or any
Ancillary Agreement;
(iii) any Liability for the sale, lease or receipt of
goods, property or services purchased, obtained or used in the ordinary course
of business by a member of one Group from a member of any other Group prior to
the Distribution Date;
(iv) any Liability for Taxes to the extent set forth
in the Tax Separation Agreement;
(v) any Liability that the parties may have with
respect to indemnification or contribution pursuant to this Agreement for claims
brought against the parties by third Persons, which Liability shall be governed
by the provisions of this Article 4 and, if applicable, the appropriate
provisions of the Ancillary Agreements; or
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(vi) any Liability the release of which would result
in the release of any Person other than a Person released pursuant to this
Section 4.01.
In addition, nothing contained in Section 4.01(a) shall release TMP from
honoring its existing obligations to indemnify any director, officer or employee
of HHGI who was a director, officer or employee of TMP or its Subsidiaries on or
prior to the Distribution Date, to the extent such director, officer or employee
becomes a named defendant in any litigation involving TMP and was entitled to
such indemnification pursuant to then existing obligations.
(d) HHGI shall not make, and shall not permit any member of
the HHGI Group to make, any claim or demand, or commence any Action asserting
any claim or demand, including any claim of contribution or any indemnification,
against TMP or any member of the TMP Group or any other Person released pursuant
to Section 4.01(a), with respect to any Liabilities released pursuant to Section
4.01(a). TMP shall not make, and shall not permit any member of the TMP Group to
make, any claim or demand, or commence any Action asserting any claim or demand,
including any claim of contribution or any indemnification against HHGI or any
member of the HHGI Group, or any other Person released pursuant to Section
4.01(b), with respect to any Liabilities released pursuant to Section 4.01(b).
(e) It is the intent of TMP and HHGI by virtue of the
provisions of this Section 4.01 to provide for a full and complete release and
discharge of all Liabilities existing or arising from all acts and events
occurring or failing to occur or alleged to have occurred or to have failed to
occur and all conditions existing or alleged to have existed on or before the
Distribution Date, between or among HHGI or any member of the HHGI Group on the
one hand, and TMP or any member of the TMP Group on the other hand (including
any contractual agreements or arrangements existing or alleged to exist between
or among any such members on or before the Distribution Date), except as
expressly set forth in Section 4.01(c). At any time, at the request of any other
party, each party shall cause each member of its respective Group to execute and
deliver releases reflecting the provisions hereof.
4.02 HHGI INDEMNIFICATION OF THE TMP GROUP.
(a) Subject to Section 4.04, on and after the Distribution
Date, HHGI shall indemnify, defend and hold harmless the TMP Group and the
respective directors, officers and Affiliates of each Person in the TMP Group
(the "TMP INDEMNITEES") from and against any and all Losses incurred or suffered
by any of the TMP Indemnitees arising out of, or due to the failure of any
Person in the HHGI Group to pay, perform or otherwise discharge any of the HHGI
Liabilities.
(b) Subject to Section 4.04, HHGI shall indemnify, defend and
hold harmless each of the TMP Indemnitees and each Person, if any, who controls
any TMP Indemnitee within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all Losses caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Form 10 or any amendment thereof or the Information Statement (as amended or
supplemented if HHGI shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary
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to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except insofar as such Losses are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information furnished to HHGI in writing by TMP expressly for use therein.
4.03 TMP INDEMNIFICATION OF THE HHGI GROUP.
(a) Subject to Section 4.04, on and after the Distribution
Date, TMP shall indemnify, defend and hold harmless the HHGI Group and the
respective directors, officers and Affiliates of each Person in the HHGI Group
(the "HHGI INDEMNITEES") from and against any and all Losses incurred or
suffered by any of the HHGI Indemnitees arising out of, or due to the failure of
any Person in the TMP Group to pay, perform or otherwise discharge any of the
TMP Liabilities.
(b) Subject to Section 4.04, TMP shall indemnify, defend and
hold harmless each of the HHGI Indemnitees and each Person, if any, who controls
any HHGI Indemnitee within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all Losses caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Form 10 or any amendment thereof or the Information Statement (as amended
or supplemented if HHGI shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such Losses are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished to HHGI in writing by TMP expressly for use therein.
4.04 INSURANCE; THIRD PARTY OBLIGATIONS; TAX BENEFITS. The parties
intend that any Liability subject to indemnification pursuant to Sections 4.02
or 4.03 shall be paid net of the amount of any insurance or other amounts that
actually reduce the amount of the Liability ("PROCEEDS"). Accordingly, the
amount which the Indemnifying Party (as defined below) is required to pay to any
Indemnified Party (as defined below) will be reduced by any Proceeds actually
recovered by or on behalf of the Indemnified Party in reduction of the related
Liability. If an Indemnified Party receives an indemnity payment required by
this Agreement from an Indemnifying Party in respect of any Liability and
subsequently receives Proceeds, then the Indemnified Party will pay to the
Indemnifying Party an amount equal to the excess of such indemnity payment
received over the amount of the indemnity payment that would have been due if
the Proceeds had been received, realized or recovered before the indemnity
payment was made. Any indemnification pursuant to Sections 4.02 or 4.03 shall be
paid net of any tax benefit to the Indemnified Party attributable to the
relevant payment or Liability. Such indemnification shall be increased to
reflect any tax liability of the Indemnified Party so that the Indemnified Party
receives 100% of the after-tax amount of any payment or liability. It is
expressly agreed that no insurer or any other third party shall be (i) entitled
to a benefit it would not be entitled to receive in the absence of the foregoing
indemnification provisions, (ii) relieved of the responsibility to pay any
claims to which it is obligated or (iii) entitled to any subrogation rights with
respect to any obligation hereunder.
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4.05 NOTICE AND PAYMENT OF CLAIMS. If any TMP Indemnitee or HHGI
Indemnitee (the "INDEMNIFIED PARTY") determines that it is or may be entitled to
indemnification by any party (the "INDEMNIFYING PARTY") under Article 4 (other
than in connection with any Action subject to Section 4.06), the Indemnified
Party shall deliver to the Indemnifying Party a written notice specifying, to
the extent reasonably practicable, the basis for its claim for indemnification
and the amount for which the Indemnified Party reasonably believes it is
entitled to be indemnified. Within 30 days after receipt of such notice, the
Indemnifying Party shall pay the Indemnified Party such amount in cash or other
immediately available funds unless the Indemnifying Party objects to the claim
for indemnification or the amount thereof. If the Indemnifying Party does not
give the Indemnified Party written notice objecting to such indemnity claim and
setting forth the grounds therefor within such 30-day period, the Indemnifying
Party shall be deemed to have acknowledged its liability for such claim and the
Indemnified Party may exercise any and all of its rights under applicable law to
collect such amount. In the event of such a timely objection by the Indemnifying
Party, the amount, if any, that is Finally Determined pursuant to Section 8.09
to be required to be paid by the Indemnifying Party in respect of such indemnity
claim shall be paid by the Indemnifying Party to the Indemnified Party in cash
within 15 days after such indemnity claim has been so Finally Determined.
4.06 NOTICE AND DEFENSE OF THIRD-PARTY CLAIMS. Promptly following the
earlier of (i) receipt of notice of the commencement by a third party of any
Action against or otherwise involving any Indemnified Party or (ii) receipt of
information from a third party alleging the existence of a claim against an
Indemnified Party, in either case, with respect to which indemnification may be
sought pursuant to this Agreement (a "THIRD-PARTY CLAIM"), the Indemnified Party
shall give the Indemnifying Party written notice thereof. The failure of the
Indemnified Party to give notice as provided in this Section 4.06 shall not
relieve the Indemnifying Party of its obligations under this Agreement, except
to the extent that the Indemnifying Party is prejudiced by such failure to give
notice. Within 15 days after receipt of such notice, the Indemnifying Party may
(i) by giving written notice thereof to the Indemnified Party, acknowledge
liability for such indemnification claim and at its option elect to assume the
defense of such Third-Party Claim at its sole cost and expense or (ii) object to
the claim for indemnification set forth in the notice delivered by the
Indemnified Party pursuant to the first sentence of this Section 4.06; provided
that if the Indemnifying Party does not within such 15-day period give the
Indemnified Party written notice objecting to such indemnification claim and
setting forth the grounds therefor, the Indemnifying Party shall be deemed to
have acknowledged its liability for such indemnification claim. If the
Indemnifying Party has elected to assume the defense of a Third-Party Claim, (x)
the defense shall be conducted by counsel retained by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party, provided that the Indemnified
Party shall have the right to participate in such proceedings and to be
represented by counsel of its own choosing at the Indemnified Party's sole cost
and expense; and (y) the Indemnifying Party may settle or compromise the
Third-Party Claim without the prior written consent of the Indemnified Party so
long as such settlement includes an unconditional release of the Indemnified
Party from all claims that are the subject of such Third-Party Claim, provided
that the Indemnifying Party may not agree to any such settlement pursuant to
which any remedy or relief, other than monetary damages for which the
Indemnifying Party shall be responsible hereunder, shall be applied to or
against the Indemnified Party, without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld. If the
Indemnifying
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Party does not assume the defense of a Third-Party Claim for which it has
acknowledged liability for indemnification hereunder, the Indemnified Party may
require the Indemnifying Party to reimburse it on a current basis for its
reasonable expenses of investigation, reasonable attorneys' fees and reasonable
out-of-pocket expenses incurred in defending against such Third-Party Claim and
the Indemnifying Party shall be bound by the result obtained with respect
thereto by the Indemnified Party; provided that the Indemnifying Party shall not
be liable for any settlement effected without its consent, which consent shall
not be unreasonably withheld. The Indemnifying Party shall pay to the
Indemnified Party in cash the amount, if any, for which the Indemnified Party is
entitled to be indemnified hereunder, plus its reasonable expenses of
investigation, reasonable attorneys' fees and reasonable out-of-pocket expenses
incurred in defending against such Third-Party Claim, within 15 days after such
Third-Party Claim has been Finally Determined, in the case of an indemnity claim
as to which the Indemnifying Party has acknowledged liability or, in the case of
any indemnity claim as to which the Indemnifying Party has not acknowledged, or
has objected to, liability, within 15 days after it has been Finally Determined
that such Indemnifying Party has liability hereunder.
4.07 CONTRIBUTION. If for any reason the indemnification provided for
in Section 4.02 or 4.03 is unavailable to any Indemnified Party, or insufficient
to hold it harmless, then the Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses in such
proportion as is appropriate to reflect all relevant equitable considerations.
4.08 NON-EXCLUSIVITY OF REMEDIES. The remedies provided for in this
Article 4 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Party at law or in equity.
ARTICLE 5
EMPLOYEE MATTERS
5.01 CERTAIN EMPLOYEE AND EMPLOYEE BENEFITS MATTERS.
(a) DEFINITIONS. The following terms, as used in this
Section 5.01, have the following meanings:
(i) "COBRA" means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
(ii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
(iii) "HHGI EMPLOYEES" means all employees whose
employment relates primarily to the HHGI Business, whether directly as an
employee of the HHGI Group or indirectly as an employee of the TMP Group, as
determined by TMP, in its sole discretion, including, for this purpose, any such
employee who is not actively performing services on the Distribution Date
because of (A) leave of absence, whether paid or unpaid, within a job protection
period, or (B) disability within a job protection period.
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(iv) "HHGI 401(k) PLAN" means the HHGI 401(k)
Plan to be established by HHGI pursuant to Section 5.01(d).
(v) "HHGI GROUP EMPLOYEE PLANS" means the employee
plans established by the HHGI Group pursuant to Section 5.01(d) hereof.
(vi) "TMP 401(k) PLAN" means the TMP 401(k) Plan.
(vii) "TMP GROUP EMPLOYEE PLANS" means the "employee
benefit plans" (within the meaning of Section 3(3) of ERISA) of the TMP Group
and any other severance, bonus, incentive or other compensatory plans or
arrangements covering one or more current or former HHGI Employees or their
dependents or beneficiaries.
(b) EMPLOYMENT OF HHGI EMPLOYEES. Immediately prior to the
Distribution, the TMP Group shall transfer to the HHGI Group those HHGI
Employees who are employed by the TMP Group so that no such employee who becomes
employed by the HHGI Group experiences any termination or other interruption in
employment. From and after the Distribution, the HHGI Group will continue to
employ all HHGI Employees on substantially the same terms and conditions
(including compensation and benefits, other than equity compensation) as in
effect immediately prior to the Distribution. Nothing stated in this Section
5.01(b) shall be construed to limit the right of the HHGI Group following the
Distribution to prospectively terminate the employment of any HHGI Employee or
to prospectively change the position, responsibilities, compensation or benefits
of any HHGI Employee.
(c) ASSUMPTION OF LIABILITIES. From and after the
Distribution, the HHGI Group will assume, pay, perform and discharge any and all
outstanding Liabilities or other obligations to or with respect to all current
and former HHGI candidates, employees, consultants or independent contractors
and their dependents and beneficiaries (other than Liabilities associated with
TMP stock options) arising out of or in connection with their employment or
association with the TMP Group or their participation in a TMP Group Employee
Plan. Except as otherwise provided in the last paragraph of Section 4.01(c), the
HHGI Group will indemnify the TMP Group and the TMP Group Employee Plans and
hold them harmless from and against any and all claims or expenses made or
incurred against or by the TMP Group or the TMP Group Employee Plans on account
of, or in connection with, any such Liabilities and other obligations. Without
limiting the generality of the previous sentence, in the event that the transfer
of employment to the HHGI Group immediately prior to the Distribution of those
HHGI Employees who are then employed by the TMP Group, as provided in Section
5.01(b) above, is deemed to be a termination or severance of employment of any
such HHGI Employee for purposes of any policy, plan, program, employment
agreement or other arrangement of the TMP Group that provides for the payment of
severance, salary continuation, stay, retention or other bonuses, forgiveness of
indebtedness or similar benefits to such HHGI Employee or would otherwise
trigger any expense or charge or impose any other Liability on any member of the
TMP Group, the HHGI Group shall pay all such benefits to such HHGI Employee in
accordance with the terms of the applicable policy, plan, program, employment
agreement or other arrangement and assume, pay, perform and discharge any and
all such expenses, charges and other Liabilities.
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(d) HHGI GROUP EMPLOYEE PLANS. On or prior to the Distribution
Date, HHGI will establish employee plans that are substantially similar to the
TMP Group Employee Plans listed on SCHEDULE 5.01(d). Any current or former HHGI
Employee (or beneficiary or dependent thereof) who is a participant in a TMP
Group Employee Plan immediately prior to the Distribution Date will
automatically become a participant in the corresponding HHGI Group Employee Plan
on the Distribution Date, with full credit for contributions, deductibles,
co-payments, service and other attributes of his or her participation in the TMP
Group Employee Plan. Consistent with the foregoing, the participation by any
member of the HHGI Group or by any current or former HHGI Employee (or
beneficiary or dependent thereof) in any TMP Group Employee Plan will be
discontinued as of the Distribution Date. Notwithstanding the provisions of this
Section 5.01(d), in order to effectuate the intent and purposes of this Section
5.01, TMP may, its sole discretion, cause any or all of the TMP Group Employee
Plans listed on SCHEDULE 5.01(d) to be divided into separate, component plans
covering, respectively, (i) all current and former HHGI Employees (and their
beneficiaries and dependents) who are participants in such a TMP Group Employee
Plan immediately prior to the Distribution Date, and (ii) all other participants
in the TMP Group Employee Plan, in which case, TMP shall cause the plans
relating to HHGI, and their respective assets and/or liabilities, to be
transferred to HHGI on or prior to the Distribution Date.
(e) COBRA. The HHGI Group will assume responsibility for
administering and providing health care continuation coverage under COBRA and
other applicable law to all former HHGI Employees and the "qualified
beneficiaries" of all current and former HHGI Employees with respect to whom a
"qualifying event" occurred prior to the Distribution Date, and to all current
and future HHGI Employees and their "qualified beneficiaries" with respect to
whom a "qualifying event" occurs on or after the Distribution Date.
(f) 401(k) PLAN TRANSFER. Promptly after the Distribution
Date, unless the TMP 401(k) Plan shall have been divided into separate,
component plans pursuant to the last sentence of Section 5.01(d), the parties
will take such actions as are necessary to cause the orderly transfer from the
TMP 401(k) Plan to the HHGI 401(k) Plan of the account balances held for the
benefit of current and former HHGI Employees and their beneficiaries in a
plan-to-plan transfer of assets and liabilities that satisfies the requirements
of applicable law (including Sections 411(d) and 414(l) of the Code, Section 306
of the Xxxxxxxx-Xxxxx Act of 2002, Regulation 2520.101-3 and any related
applicable regulations promulgated by the United States Department of Labor and
Regulation BTR promulgated by the Commission). As soon as practicable following
the adoption of the HHGI 401(k) Plan, the HHGI Group will apply to the Internal
Revenue Service for a determination letter on the initial qualification of the
HHGI 401(k) Plan and the exempt status of the trust maintained as a part
thereof, and the HHGI Group will adopt such amendments and take such other and
further actions as are required by the Internal Revenue Service in order to
obtain such determination letter. The plan-to-plan transfer of assets and
liabilities from the TMP 401(k) Plan to the HHGI 401(k) Plan may be completed
prior to the time such determination letter is obtained, subject to such further
assurances as the TMP Group may reasonably require of the HHGI Group that the
determination letter will be issued retroactively as of the Distribution Date
(or the earlier effective date of the HHGI 401(k) Plan). Pending the
plan-to-plan transfer as contemplated hereby, the HHGI Group will withhold from
HHGI Employees' pay and remit to the TMP 401(k) Plan all required loan payments
due
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on such HHGI Employees' participant loans from their TMP 401(k) Plan accounts,
and the TMP 401(k) Plan will process distributions of terminated employees
following their termination from the HHGI Group in the normal course, subject to
notification or confirmation of such termination by the HHGI Group.
(g) ADMINISTRATION OF WELFARE BENEFIT CLAIMS. TMP shall
administer claims made under the TMP Group Employee Plans that are "welfare
plans" within the meaning of Section 3(1) of ERISA by current or former HHGI
Employees (and their beneficiaries and dependents) before the Distribution Date
and any determination made or settlements entered into by TMP with respect to
such claims shall be final and binding. Effective as of the Distribution Date,
HHGI shall assume sole responsibility for administering all claims made by
current or former HHGI Employees (and their beneficiaries and dependents) on or
after the Distribution Date (including claims for expenses incurred or events
occurring before the Distribution Date) and HHGI shall administer such claims in
a substantially similar manner, using substantially similar methods and
procedures, as TMP used in administering such claims. HHGI shall have sole and
absolute discretionary authority to make any necessary determinations with
respect to such claims, including entering into settlements with respect to such
claims.
(h) FLEXIBLE SPENDING ACCOUNTS. Promptly following the
Distribution Date, unless the TMP flexible spending account program shall have
been divided into separate, component plans pursuant to the last sentence of
Section 5.01(d), TMP and HHGI shall cooperate with each other to effectuate the
prompt transfer by TMP of each current and former HHGI Employee's unused
balances under the transportation, health care reimbursement and dependent care
flexible spending accounts under the TMP flexible spending account program to
the corresponding HHGI flexible spending account program.
(i) EMPLOYEE BENEFITS MATTERS OUTSIDE THE UNITED STATES. With
respect to the business and operations of HHGI in jurisdictions outside the
United States, HHGI shall (and, as applicable, shall cause each other member of
the HHGI Group to) assume, adopt similar or replacement plans, or retain, as the
case may be, any and all employee-related Liabilities, obligations, plans and
arrangements to or with respect to current and former HHGI Employees (and their
dependents and beneficiaries) consistent with the other provisions of this
Section and in accordance with applicable law. TMP shall provide health
insurance coverage to HHGI Employees in the United Kingdom under its health
insurance scheme on the same terms that similarly situated TMP employees are
provided such coverage, from the Distribution Date until the policy renewal in
October 2003 (the "INTERIM PERIOD"), whereupon such HHGI Employees shall no
longer be eligible for coverage under TMP's health insurance scheme and HHGI
shall have sole responsibility for providing health insurance coverage for such
HHGI Employees under its own benefit plans. HHGI shall pay TMP, in accordance
with the terms of the Service Agreement, the total cost of providing health
insurance to such HHGI Employees during the Interim Period.
(j) WORKERS' COMPENSATION. HHGI shall be responsible for all
workers' compensation obligations related to claim events occurring on or after
the Distribution Date, with respect to any HHGI Employee. TMP shall be
responsible for all workers compensation
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obligations related to claim events occurring prior to the Distribution Date
with respect to any HHGI Employee.
(k) CONFIDENTIALITY AND PROPRIETARY INFORMATION. No provision
of any Distribution Document shall be deemed to release any current or former
HHGI Employee for any violation of any applicable Employee Confidentiality and
Non-Solicitation Agreement or other agreement entered into by such Person in
favor of any member of the TMP Group or any other applicable policy pertaining
to confidential or proprietary information of any member of the TMP Group, or
otherwise relieve any such Person of his or her obligations under any such
agreement or policy.
(l) MISCELLANEOUS.
(i) NO THIRD PARTY BENEFICIARIES. No current or
former HHGI Employee (or any beneficiary or dependent thereof) shall be entitled
to enforce the provisions of this Section 5.01 against the respective parties as
third party beneficiaries thereof.
(ii) COSTS AND EXPENSES. Each party shall bear all
costs and expenses, including but not limited to legal and consulting fees,
incurred from and after the Distribution Date in the design, drafting and
implementation of any and all plans and compensation structures which it
establishes or creates and the amendment of its existing plans or compensation
structures.
(iii) SHARING OF PARTICIPANT INFORMATION. From and
after the Distribution Date, TMP and HHGI shall share, and shall cause each
member of their respective Groups to share, with each other and with their
respective agents and vendors all participant information necessary and
appropriate for the efficient and accurate administration of each party's
respective employee benefit plans and performance of their respective
obligations under this Section 5.01. TMP and HHGI shall, subject to all
applicable laws concerning confidentiality, be given reasonable and timely
access to, and may make copies of, all information relating to the subjects of
this Section 5.01 in the custody of another party, to the extent necessary and
appropriate for such administration and performance.
5.02 PAYMENT OF OUTSTANDING CREDIT CARD BALANCES. TMP shall close all
credit card accounts procured by the TMP Group for use by current or former HHGI
Employees as of the Distribution Date. Prior to April 26, 2003, HHGI shall remit
payment to TMP for the outstanding balances on all such credit card accounts.
ARTICLE 6
ACCESS TO INFORMATION
6.01 PROVISION OF CORPORATE RECORDS. Immediately prior to or as soon as
practicable following the Distribution Date, each Group shall provide to the
other Group all documents, contracts, books, records and data (including, but
not limited to, minute books, stock registers, stock certificates and documents
of title) in its possession relating to such other Group or such other Group's
business and affairs; provided that if any such documents, contracts, books,
records or data relate to both Groups or the business and operations of both
Groups, each such
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Group shall provide to the other Group true and complete copies of such
documents, contracts, books, records or data.
6.02 ACCESS TO INFORMATION. From and after the Distribution Date, each
Group shall, for a reasonable period of time, afford promptly to the other Group
and its accountants, counsel and other designated representatives reasonable
access during normal business hours to all documents, contracts, books, records,
computer data and other data in such Group's possession relating to such other
Group or the business and affairs of such other Group (other than data and
information subject to an attorney/client or other privilege), insofar as such
access is reasonably required by such other Group, including, without
limitation, for audit, accounting, litigation, regulatory compliance and
disclosure and reporting purposes.
6.03 LITIGATION COOPERATION. Each Group shall use reasonable efforts to
make available to the other Group and its accountants, counsel and other
designated representatives, upon written request, its directors, officers,
employees and representatives as witnesses, and shall otherwise cooperate with
the other Group, to the extent reasonably required in connection with any legal,
administrative or other proceedings arising out of either Group's business and
operations prior to the Distribution Date in which the requesting party may from
time to time be involved.
6.04 REIMBURSEMENT. Each Group providing information or witnesses to
the other Group, or otherwise incurring any expense in connection with
cooperating, under Sections 6.01, 6.02 or 6.03 shall be entitled to receive from
the recipient thereof, upon the presentation of invoices therefor, payment for
all out-of-pocket costs and expenses as may be reasonably incurred in providing
such information, witnesses or cooperation.
6.05 RETENTION OF RECORDS. Except as otherwise required by law or
agreed to in writing, each party shall, and shall cause the members of its
respective Group to, retain all information relating to the other Group's
business and operations in accordance with the past practice of such party.
Notwithstanding the foregoing, any party may destroy or otherwise dispose of any
such information at any time, provided that, prior to such destruction or
disposal, (i) such party shall provide not less than 90 days' prior written
notice to the other party, specifying the information proposed to be destroyed
or disposed of, and (ii) if the recipient of such notice shall request in
writing prior to the scheduled date for such destruction or disposal that any of
the information proposed to be destroyed or disposed of be delivered to such
requesting party, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such of the information as was requested at the
expense of the requesting party.
6.06 CONFIDENTIAL INFORMATION. HHGI and TMP hereby covenant and agree
to hold in trust and maintain confidential, and to cause their respective
directors, officers, employees, agents, consultants and advisors to hold in
trust and maintain confidential, all Confidential Information relating to the
other party or any of such other party's Subsidiaries. Without limiting the
generality of the foregoing, Confidential Information relating to a party or any
of its Subsidiaries shall be disclosed only to those employees, agents,
consultants and advisors of the other party who need to know such information in
connection with their ordinary course employment activities and in no event
shall any such Confidential Information be disclosed to
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any other Person. "CONFIDENTIAL INFORMATION" shall mean all information,
materials and processes relating to a party or any Subsidiary of such party
obtained by the other party or any Subsidiary of such other party at any time
(whether prior to or after the date hereof and whether in connection with any of
the Distribution Documents or otherwise) in any format whatsoever (whether
orally, visually, in writing, electronically or in any other form) and shall
include, but not be limited to, economic and business information or data,
business plans, computer software and information relating to employees,
vendors, customers, services, financial performance and projections, processes,
strategies and systems, but shall not include (i) information which becomes
generally available other than by release in violation of the provisions of this
Section 6.06, (ii) information which becomes available on a non-confidential
basis to a party from a source other than the other party to this Agreement,
provided the party in question reasonably believes that such source is not or
was not bound to hold such information confidential and (iii) information
acquired or developed independently by a party without violating this Section
6.06 or any other confidentiality agreement with the other party.
Notwithstanding any provision of this Section 6.06 to the contrary, a party may
disclose such portion of the Confidential Information relating to the other
party to the extent, but only to the extent, the disclosing party reasonably
believes that such disclosure is required under law or the rules of a securities
exchange; provided that the disclosing party first notifies the other party
hereto of such requirement and allows such party a reasonable opportunity to
seek a protective order or other appropriate remedy to prevent such disclosure.
The parties acknowledge that money damages would not be a sufficient remedy for
any breach of the provisions of this Section 6.06 and that the non-breaching
party shall be entitled to equitable relief in a court of law in the event of,
or to prevent, a breach or threatened breach of this Section 6.06.
6.07 INAPPLICABILITY OF ARTICLE 6 TO TAX MATTERS. Notwithstanding
anything to the contrary in Article 6, Article 6 shall not apply with respect to
information, records and other matters relating to Taxes, all of which shall be
governed by the Tax Separation Agreement.
ARTICLE 7
CERTAIN OTHER AGREEMENTS
7.01 LEASED REAL PROPERTY. On or prior to the Distribution Date
(or such later date as agreed by the parties), the appropriate members of the
TMP Group and the HHGI Group will enter into the Real Estate Agreements with
respect to the properties specified on SCHEDULE 7.01. All matters relating to
real property to be leased, subleased, occupied or shared by the TMP Group or
the HHGI Group from and after the Distribution Date shall be governed by the
Real Estate Agreements, except as may be expressly stated herein or therein. In
the event of any inconsistency with respect to such matters between the Real
Estate Agreements and any other Distribution Document, the Real Estate
Agreements shall govern to the extent of the inconsistency.
7.02 INSURANCE POLICIES. With respect to matters relating to
insurance coverage from and after the Distribution Date, the parties hereto
agree as follows:
(a) HHGI INSURANCE COVERAGE AFTER THE DISTRIBUTION DATE. From
and after the Distribution Date, HHGI shall be responsible for obtaining and
maintaining insurance programs
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for its risk of loss and such insurance arrangements shall be separate and apart
from TMP's insurance programs. Notwithstanding the foregoing, TMP, upon the
request of HHGI and in accordance with the terms of the Services Agreement,
shall use commercially reasonable efforts to assist HHGI in the transition to
its own separate insurance programs from and after the Distribution Date, and
shall provide HHGI with any information that is in the possession of TMP and
would in any way facilitate HHGI's ability to either obtain insurance coverage
for HHGI or to assist HHGI in preventing unintended self-insurance, in whatever
form.
(b) COOPERATION AND AGREEMENT NOT TO RELEASE CARRIERS. Each of
TMP and HHGI will share such information as is reasonably necessary in order to
permit the other to manage and conduct its insurance matters in an orderly
fashion. Each of TMP and HHGI, at the request of the other, shall cooperate with
and use commercially reasonable efforts to assist the other in recoveries for
claims made under any insurance policy for the benefit of any insured party, and
neither TMP nor HHGI, nor any of their Subsidiaries shall take any action which
would intentionally jeopardize or otherwise interfere with either party's
ability to collect any proceeds payable pursuant to any insurance policy. Except
as otherwise contemplated by this
Distribution Agreement or any other
Distribution Document, after the Distribution Date neither TMP nor HHGI shall
(and shall ensure that no member of their respective Groups shall), without the
consent of the other, provide any insurance carrier with a release, or amend,
modify or waive any rights under any such policy or agreement, if such release,
amendment, modification or waiver would adversely affect any rights or potential
rights of any member of the other Group thereunder. However, nothing in this
Section 7.02(b) shall (i) preclude any member of any Group from presenting any
claim or from exhausting any policy limit, (ii) require any member of any Group
to pay any premium or other amount or to incur any Liability, or (iii) require
any member of any Group to renew, extend or continue any policy in force.
(c) PROCEDURES WITH RESPECT TO TMP-INSURED HHGI LIABILITIES.
(i) INSURANCE PURSUIT. TMP shall obtain HHGI's prior
approval, which approval shall not be unreasonably withheld, prior to pursuing
insurance recoveries from insurance policies for any HHGI Liability covered
under the terms of TMP's insurance policies ("TMP-INSURED HHGI LIABILITIES");
PROVIDED, HOWEVER, that HHGI's consent shall not be required in respect of any
TMP-Insured HHGI Liability for which HHGI is seeking indemnification from TMP
hereunder. TMP will xxxx HHGI and HHGI will reimburse TMP on a monthly basis for
all such amounts incurred to pursue insurance recoveries from insurance policies
for TMP-Insured HHGI Liabilities, in accordance with Section 3.04 of the
Services Agreement.
(ii) MANAGEMENT OF CLAIMS. Except as otherwise
inconsistent with the provisions of any applicable insurance policy and except
for claims for which HHGI is seeking indemnification from TMP hereunder, the
defense of claims, suits or actions giving rise to potential or actual
TMP-Insured HHGI Liabilities will be managed (in conjunction with TMP's
insurers, as appropriate) by the representative of HHGI that would have had
responsibility for managing such claims, suits or actions had such TMP-Insured
HHGI Liabilities been HHGI Liabilities not covered under the terms of TMP's
insurance policies.
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(d) COOPERATION. TMP and HHGI will cooperate with each other
in all respects, and they shall execute any additional documents which are
reasonably necessary, to effectuate the provisions of this Section 7.02.
(e) NO ASSIGNMENT OR WAIVER. The provisions of this
Section 7.02 shall not be considered as an attempted assignment of any policy of
insurance or as a contract of insurance and shall not be construed to waive any
right or remedy of any member of the TMP Group or the HHGI Group in respect of
any insurance policy or any other contract or policy of insurance.
(f) NO LIABILITY. HHGI does hereby, for itself and as agent
for each other member of the HHGI Group, agree that no member of the TMP Group
shall have any Liability whatsoever as a result of the insurance policies and
practices of TMP and its Subsidiaries as in effect at any time after the
Distribution Date, including without limitation as a result of the level or
scope of any such insurance, the creditworthiness of any insurance carrier, the
terms and conditions of any policy, the adequacy or timeliness of any notice to
any insurance carrier with respect to any claim or potential claim or otherwise.
(g) FURTHER AGREEMENTS. The parties acknowledge that they
intend to allocate financial obligations without violating any laws regarding
insurance, self-insurance or other financial responsibility. If it is determined
that any action undertaken pursuant to this
Distribution Agreement or any other
Distribution Document is violative of any insurance, self-insurance or related
financial responsibility law or regulation, the parties agree to work together
to do whatever is necessary to comply with such law or regulation while trying
to accomplish, as much as possible, the allocation of financial obligations as
intended in this
Distribution Agreement and any other Distribution Document.
7.03 TAX MATTERS.
(a) Except as otherwise provided herein and not inconsistent
with the Tax Separation Agreement, this Agreement shall not govern any Tax, and
any and all claims, losses, damages, demands, costs, expenses or liabilities
relating to Taxes shall be exclusively governed by the Tax Separation Agreement.
(b) After the Distribution Date, neither TMP nor HHGI shall
take, or permit any member of its respective Group to take, any action which
could reasonably be expected to prevent the Distribution from qualifying as a
tax-free distribution within the meaning of Section 355 of the Code, or any
other transaction contemplated by this Agreement or an Ancillary Agreement which
is intended by the parties to be tax-free from failing to so qualify.
7.04 USE OF NAMES, TRADEMARKS, ETC.
(a) From and after the Distribution Date, TMP will own or
continue to own, exclusive of HHGI, all rights in, and to the use of, the names,
brands and marks that (i) directly or indirectly pertain to the TMP Business,
(ii) do not pertain exclusively to the HHGI Business and otherwise pertain to
both the TMP Business and the HHGI Business, or (iii) pertain to neither the TMP
Business or the HHGI Business, but in or of which TMP and/or HHGI has rights,
title or any interest, including, without limitation, those set forth on
SCHEDULE 7.04(a) (all
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of the foregoing in this Section 7.04(a) referred to as the "MARKS"), and all
corporate symbols and logos related thereto, and any name, brand, trademark,
trade name, domain name (including registrations therefor) or service xxxx which
includes any of the Marks and all derivatives thereof, and any other name,
xxxxx, xxxx, symbol or logo connoting the Marks or which constitutes a formative
thereof, in all cases existing now or in the future (all of the foregoing in
this Section 7.04(a) referred to as the "TMP MARKS"). From and after the
Distribution Date, except as permitted in Section 7.04(b), no member of the HHGI
Group will use or have any rights in, or to the use of, the TMP Marks or any
name, brand or xxxx which includes the TMP Marks or any derivative thereof or
any name or xxxx confusingly similar thereto, or any special script, type font,
form, style, logo, design, device, trade dress or symbol which contains,
represents or evokes any branding, trade dress, trademark, trade name, domain
name or service xxxx of or relating to the TMP Marks or any derivatives thereof,
or any name or xxxx confusingly similar thereto. From and after the Distribution
Date, no member of the HHGI Group will hold itself out as having any affiliation
with TMP.
(b) (i) TMP hereby grants to HHGI, subject to this
Section 7.04(b), and Sections 7.04(c) and 7.04(e), a limited, revocable,
non-exclusive, non-transferable (other than by way of sublicenses only to
members of the HHGI Group, without the right to grant further sublicenses)
license to utilize, without obligation to pay royalties to TMP, the seven (7)
trade names that incorporate the name "TMP" that are specifically identified
below in Sections 7.04(b)(i)(A) through 7.04(b)(i)(G), only in the combined
format shown below, and solely for the corresponding limited purposes indicated
below, and subject to any and all rights granted any other party in respect
thereof (the seven (7) trade names identified below shall be referred to
collectively as the "HHGI NAMES"): (A) "TMP/Xxxxxx Global Resources" solely as a
trade name for the entire global eResourcing staffing business or division of
HHGI; (B) "TMP/Xxxxxx Human Resource Consulting" solely as a trade name for the
entire global eResourcing consulting business or division of HHGI; (C)
"TMP/Highland Partners" solely as a trade name for the entire global executive
search business or division of HHGI; (D) "TMP xx Xxxxx & Xxxxx" solely as a
trade name in Belgium for the staffing business or division of HHGI in Belgium
only and such other business as conducted by HHGI in Belgium only as of the
Distribution Date; (E) "TMP Xxxxxxxx Xxxxx" solely as a trade name in Scotland
for the staffing business or division of HHGI in Scotland only and such other
business as conducted by HHGI in Scotland only as of the Distribution Date; (F)
"TMP Xxxxx" solely as a trade name in Norway for the staffing business or
division of HHGI in Norway only and such other business as conducted by HHGI in
Norway only as of the Distribution Date; and (G) "TMP Legal Flex Force" solely
as a trade name in the Netherlands for the legal staffing business or division
of HHGI in the Netherlands only and such other business as conducted by HHGI in
the Netherlands only as of the Distribution Date.
(ii) As a condition to the license granted by this
Section 7.04(b), each of the seven (7) HHGI Names: (A) must be used in exactly
the format, order and combination of words and symbols as listed within the
respective quotation marks above in Sections 7.04(b)(i)(A) through
7.04(b)(i)(G); (B) must be used exclusively for the corresponding limited
purposes indicated above in Sections 7.04(b)(i)(A) through 7.04(b)(i)(G); and
(C) must only be used in connection with businesses conducted by HHGI as of the
Distribution Date.
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(iii) Without in any way broadening the limited scope
of the license or limiting the breadth of the restrictions on use provided
herein, it is understood and agreed that HHGI shall not: (A) use any
abbreviations, variations or derivatives of the HHGI Names which include the
name "TMP" or any abbreviation, variation or derivative of the name "TMP"; (B)
use the name "TMP" or any abbreviation, variation or derivative thereof in the
name of any corporation, partnership or business entity; or (C) use the name
"TMP" or any abbreviation, variation or derivative thereof as part of the name
or description of any unit, practice area, discipline, sector or subdivision of
eResourcing staffing, eResourcing consulting or executive search businesses of
HHGI.
(iv) As a condition to the license granted by this
Section 7.04(b), HHGI will use the HHGI Names and will ensure that any permitted
sublicensee of the HHGI Names uses the HHGI Names (A) in connection with its
business operations or divisions having a level of quality at least as high as
that established by the HHGI Business for those business operations or divisions
prior to the Distribution Date, and (B) in compliance with all applicable laws
and regulations.
(v) TMP will have the right to exercise quality
control over the HHGI Names and any permitted sublicensee's presentation or use
of the HHGI Names to that degree reasonably necessary, in the sole opinion of
TMP, to maintain the validity and enforceability of the HHGI Names and the name,
brand, trademark, trade name, domain name or service xxxx "TMP", and to protect
the goodwill associated with any of the foregoing. HHGI will (A) upon request by
TMP, submit to TMP materials bearing the HHGI Names as TMP may reasonably
require to ensure HHGI's and any permitted sublicensee's compliance with the
obligations set forth in this Section 7.04(b), and (B) comply with the requests
of TMP to bring HHGI and any member of the HHGI Group into conformity with this
Section 7.04(b).
(vi) TMP will have the right to terminate the license
granted in Section 7.04(b), and all rights appurtenant thereto of all members of
the HHGI Group, including any and all permitted sublicenses, in the event of a
breach of this Section 7.04 by any member of the HHGI Group that has not been
cured within thirty days after written notice by TMP to HHGI. The license
granted under Section 7.04(b), and all rights appurtenant thereto of all members
of the HHGI Group, including any and all permitted sublicenses, shall terminate
automatically on the two year and six month anniversary of the Distribution
Date. Notwithstanding the foregoing, the HHGI Group shall begin to transition
away from the use of the HHGI Names on or before the two year anniversary of the
Distribution Date and shall have completed such transition and discontinued all
use of the HHGI Names on or before the two year and six month anniversary of the
Distribution Date.
(vii) The exercise of the rights under this Section
7.04(b) shall inure to the benefit of TMP.
(c) (i) Apart from the rights expressly granted under
Section 7.04(b), no member of the HHGI Group shall have any right, title or
interest in, or to the use of, the HHGI Names or the TMP Marks or any name,
brand, trade dress, trademarks, trade names, domain names, service marks,
corporate symbols or logos related thereto, either alone or in combination
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with any other word, name, brand, symbol, logo, device, trademark, trade name,
domain name, service xxxx or any combination thereof. Anything contained herein
to the contrary notwithstanding, except as expressly permitted by Section
7.04(b), in no event will any member of the HHGI Group utilize the HHGI Names or
the TMP Marks, or any corporate symbol or logo related thereto, as a component
of a company or trade name, or in a trademark, trade name, domain name or
service xxxx. HHGI will not, and will cause each other member of the HHGI Group
not to, challenge or contest the validity of the HHGI Names, the TMP Marks and
such other names, brands, trade dress, trademarks, trade names, domain names,
service marks, corporate symbols and logos referred to in this
Section 7.04(c)(i), or the registration or ownership thereof by TMP. HHGI will
not, and will cause each other member of the HHGI Group not to, apply anywhere
at any time for any registration as owner or exclusive licensee or rights holder
of any of the HHGI Names, the TMP Marks or any other names, brands, trade dress,
trademarks, trade names, domain names, service marks, corporate symbols or logos
referred to in this Section 7.04(c)(i). If, notwithstanding the foregoing, any
member of the HHGI Group has, develops, adopts or acquires, directly or
indirectly, any right, title or interest in, or to the use of, any HHGI Name,
TMP Xxxx or any other name, brand, trade dress, trademark, trade name, domain
name, service xxxx, corporate symbol or logo referred to in this
Section 7.04(c)(i), in any jurisdiction, or any goodwill incident thereto, HHGI
hereby, on behalf of itself and any of its Subsidiaries (and any Person over
which HHGI has legal or effective direct or indirect control), transfers and
assigns all right, title and interest in, and to the use of, the HHGI Name, TMP
Xxxx or such other name, brand, trade dress trademark, trade name, domain name,
service xxxx, corporate symbol or logo, in any and all jurisdictions, together
with any goodwill incident thereto. If for any reason the rights contemplated by
the foregoing sentence cannot be transferred or assigned to TMP, HHGI hereby, on
behalf of itself and any of its Subsidiaries (and any Person over which HHGI has
legal or effective direct or indirect control), waives the enforcement of such
rights, and if any such rights cannot be transferred, assigned or waived, HHGI
hereby, on behalf of itself and any of its Subsidiaries (and any Person over
which HHGI has legal or effective direct or indirect control), grants to TMP an
exclusive, unrestricted, irrevocable, perpetual, worldwide, fully-paid,
royalty-free, fully transferable, assignable, sub-licensable (with the right to
sublicense multiple tiers) license to such rights. The foregoing transfers,
assignments, waivers and grants shall be effective without either party having
to take any further action, provided, however, that if requested by TMP, HHGI
agrees to execute all additional documents and to take reasonable measures to
evidence such transfers, assignments, waivers and grants consistent with its
obligations in Section 7.04(c)(iv).
(ii) If the laws of any country require that any xxxx
subject to Section 7.04(b), or the right of any member of the HHGI Group to use
any HHGI Name as permitted by Section 7.04(b), be registered in order to fully
protect TMP, then HHGI and TMP will cooperate in constituting such member of the
HHGI Group as a registered user (or its equivalent) in each of the countries in
which such registration is necessary. Any expenses for registration or for
constituting such member of the HHGI Group as a registered user in any country
shall be borne by HHGI and any such registration and use shall be subject to
Sections 7.04(b), 7.04(c) and 7.04(e). At the request of TMP, any registration
of such member of the HHGI Group as a registered user of any HHGI Name hereunder
shall be expunged on termination of the period of permitted use under this
Agreement or upon a breach or threatened breach by any member of the HHGI Group
of the terms of this Section 7.04 and HHGI will, upon request of TMP, take all
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necessary steps to cause such registration to be so expunged upon such
termination or breach or threatened breach. In addition, HHGI hereby constitutes
and appoints TMP the true and lawful attorney of HHGI and each member of the
HHGI Group, with full power of substitution, in the name and on behalf of HHGI
and each member of the HHGI Group (and at the cost of HHGI), to take all
necessary steps to cause such registration to be so expunged upon such
termination or breach or threatened breach by a member of the HHGI Group. The
registration and/or use of any HHGI Name under this Section 7.04(c) shall inure
to the benefit of TMP.
(iii) Without in any way limiting the rights and
obligations herein, HHGI hereby, on behalf of itself and any of its Subsidiaries
(and any Person over which HHGI has legal or effective direct or indirect
control), transfers and assigns to TMP, effective as of the Distribution Date,
any and all rights of each member of the HHGI Group in all Internet domain names
and the registrations therefor that are registered by or on behalf of HHGI or
any member of the HHGI Group. As of the Distribution Date, TMP shall have all
rights in, and to the use of, all such domain names and the registrations
therefor. To the extent that a member of the HHGI Group has any rights
contemplated by this Section 7.04(c)(iii), HHGI represents and warrants that it
has taken all necessary measures to ensure full compliance with this
Section 7.04(c)(iii), including without limitation, if applicable, causing any
other Person over which it has legal or effective direct or indirect control to
duly and validly transfer or assign, or cause to be duly and validly transferred
or assigned, all such rights.
(iv) HHGI shall, and shall cause each member of the
HHGI Group to, cooperate with and assist TMP, or any designee of TMP, in
applying for, obtaining, perfecting, evidencing, sustaining and enforcing the
rights, and the transfer, assignment, waiver and grant of rights, contemplated
by this Section 7.04(c). HHGI hereby constitutes and appoints TMP the true and
lawful attorney of HHGI and its Subsidiaries and each member of the HHGI Group
to act as their attorney-in-fact to execute any documents and to take all
necessary steps to cause HHGI and its Subsidiaries and each member of the HHGI
Group to perform any of their obligations set forth in this Section 7.04(c).
(d) On or prior to the Distribution Date, or as soon as
reasonably practicable thereafter, and subject to Section 7.04(e), TMP shall
duly and validly transfer or assign, to the appropriate member of the HHGI Group
(as directed by HHGI) any and all of its rights in, and to the use of, the
names, brands, trademarks, trade names, domain names and/or service marks set
forth on SCHEDULE 7.04(d). On or prior to the Distribution Date, or as soon as
reasonably practicable thereafter, TMP shall, and shall cause each member of the
TMP Group to, transfer, or have transferred, to HHGI, or any designee of HHGI,
the actual registrations of any and all Internet domain names that are
registered under TMP or any member of the TMP Group and for which, after the
Distribution Date, HHGI shall have all rights in, and to the use of, pursuant to
this Section 7.04.
(e) None of TMP or its Subsidiaries or the TMP Group makes any
representations or warranties of any kind, nor shall have any liability
whatsoever, with respect to any names, brands or marks subject to Section 7.04,
without limitation as to the validity, non-infringement, right to use, scope or
enforceability of such names, brands or marks, whether in the United States or
in any other jurisdiction worldwide, and none of TMP or its Subsidiaries or the
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TMP Group has any obligation to file or prosecute any applications or
registrations or maintain any applications or registrations in force in
connection therewith, or to otherwise pursue, enforce or prosecute any rights
with regard to any names, brands or marks of TMP or its Subsidiaries or the TMP
Group, or to defend any demands, actions or other claims regarding any names,
brands or marks of TMP or its Subsidiaries or the TMP Group.
7.05 INTELLECTUAL PROPERTY.
(a) From and after the Distribution Date, TMP will own or
continue to own, exclusive of HHGI, all rights in, and to the use of, (i) all
Intellectual Property owned by TMP prior to the Distribution Date, and (ii) all
Intellectual Property of the TMP Group or of the HHGI Group that (A) directly or
indirectly pertains to the TMP Business, (B) does not pertain exclusively to the
HHGI Business and otherwise pertains to both the TMP Business and the HHGI
Business, or (C) pertains to neither the TMP Business or the HHGI Business, but
in or of which TMP and/or HHGI has rights, title or any interest, and any and
all inventions, formulations, products, software, data, algorithms and code
structure, data bases, client lists, processes, know-how, designs, formulas,
methods, developmental or experimental work, clinical data, improvements,
derivatives, discoveries, plans for research, new products, marketing and
selling information, business plans, business methods, trade secrets,
copyrights, patents or other rights arising from any of the foregoing in this
Section 7.05(a) (all of the foregoing in this Section 7.05(a) referred to as the
"TMP IP"). TMP IP includes, without limitation, all Intellectual Property
relating to the product and service referred to as "Job VIPeR." From and after
the Distribution Date, except as permitted in Section 7.05(b), no member of the
HHGI Group will use or have any rights in, or to the use of, the TMP IP or any
rights arising therefrom.
(b) As soon as reasonably practicable thereafter the
Distribution Date, subject to any required consents, in such case upon receipt
of the required consent, and subject to mutually agreeable licensing terms, TMP,
on behalf of itself and its Subsidiaries, shall grant to HHGI, subject to
Section 7.05(c), a limited, revocable, non-exclusive, non-transferable (other
than by way of sublicenses only to members of the HHGI Group, without the right
to grant further sublicenses) license under such Intellectual Property which
immediately after the Distribution Date is owned exclusively by TMP or its
Subsidiaries as TMP and HHGI shall mutually agree, subject to any and all rights
granted any other party in respect thereof. To the extent that the HHGI Group
does not have copies of any information or materials relating to Intellectual
Property licensed under this Section 7.05(b) that are essential to exercising
such rights, TMP will, upon reasonable request, supply to HHGI copies of any
such information or materials relating to such Intellectual Property in the
possession of TMP. In no event shall HHGI utilize the subject matter of any
Intellectual Property licensed under this Section 7.05(b) in the areas of the
TMP Business or in a manner that is competitive with the TMP Business as such
business is being conducted as of the Distribution Date, or any related
extensions or expansions thereof.
(c) None of TMP or its Subsidiaries or the TMP Group makes any
representations or warranties of any kind, nor shall have any liability
whatsoever, with respect to any Intellectual Property subject to Section 7.05,
without limitation as to the validity, non-infringement, right to use, scope or
enforceability of such Intellectual Property, whether in the
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United States or in any other jurisdiction worldwide, and none of TMP or its
Subsidiaries or the TMP Group has any obligation to file or prosecute any patent
applications or maintain any patents in force in connection therewith, or to
file any copyright registrations or to otherwise pursue, enforce or prosecute
any rights with regard to any Intellectual Property of TMP or its Subsidiaries
or the TMP Group, or to defend any demands, actions or other claims regarding
any Intellectual Property of TMP or its Subsidiaries or the TMP Group.
Notwithstanding anything contained herein to the contrary, Section 7.05(b) will
not be applicable to any rights in, and to the use of, the HHGI Names, TMP Marks
or any names, brands trademarks, trade names, domain names, service marks,
corporate symbols and logos related thereto and any names, brands, trademarks,
trade names, domain names, service marks, corporate symbols or logos which
include any of the HHGI Names, TMP Marks or any derivatives thereof.
(d) HHGI hereby, on behalf of itself and any of its
Subsidiaries (and any Person over which HHGI has legal or effective direct or
indirect control), transfers and assigns to TMP, effective as of the
Distribution Date, all rights, title and interest in, and to the use of, all
Intellectual Property that (i) directly or indirectly pertains to the TMP
Business, (ii) does not pertain exclusively to the HHGI Business and otherwise
pertains to both the TMP Business and the HHGI Business, or (iii) pertains to
neither the TMP Business or the HHGI Business, but in or of which HHGI or any
member of the HHGI Group has rights, title or interest. To the extent that a
member of the HHGI Group has any rights, title or interest contemplated by this
Section 7.05(d), HHGI represents and warrants that it has taken all necessary
measures to ensure full compliance with this Section 7.05(d), including without
limitation, if applicable, causing any other Person over which it has legal or
effective direct or indirect control to duly and validly transfer or assign, or
cause to be duly and validly transferred or assigned, all such rights. If for
any reason the rights contemplated by the foregoing two sentences cannot be
transferred or assigned to TMP, HHGI hereby, on behalf of itself and any of its
Subsidiaries (and any Person over which HHGI has legal or effective direct or
indirect control), waives the enforcement of such rights, and if any such rights
cannot be transferred, assigned or waived, HHGI hereby, on behalf of itself and
any of its Subsidiaries (and any Person over which HHGI has legal or effective
direct or indirect control), grants to TMP an exclusive, unrestricted,
irrevocable, perpetual, worldwide, fully-paid, royalty-free, fully transferable,
assignable, sub-licensable (with the right to sublicense multiple tiers) license
to such rights. The foregoing transfers, assignments, waivers and grants shall
be effective without either party having to take any further action, provided,
however, that if requested by TMP, HHGI agrees to execute all additional
documents and to take reasonable measures to evidence such transfers,
assignments, waivers and grants consistent with the following. HHGI shall, and
shall cause each member of the HHGI Group to (and any Person over which HHGI has
legal or effective direct or indirect control), cooperate with and assist TMP or
any designee of TMP in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing the rights and assignment of rights contemplated by
this Section 7.05(d). HHGI hereby, on behalf of itself and any of its
Subsidiaries (and any Person over which HHGI has legal or effective direct or
indirect control), constitutes and appoints TMP the true and lawful attorney of
HHGI and its Subsidiaries and each member of the HHGI Group to act as their
attorney-in-fact to execute any documents and to take all necessary steps to
cause HHGI and its Subsidiaries and each member of the HHGI Group to perform any
of their obligations set forth in this Section 7.05(d).
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7.06 CERTAIN BUSINESS MATTERS. Following the Distribution, no member of
a Group shall have any duty to refrain from (i) engaging in the same or similar
activities or lines of business as any member of the other Group, (ii) doing
business with any potential or actual supplier or customer of any member of the
other Group, or (iii) engaging in, or refraining from, any other activities
whatsoever relating to any of the potential or actual suppliers or customers of
any member of the other Group, but nothing in this Section 7.06 shall give HHGI
any rights to any TMP's Names or Intellectual Property except as expressly set
forth in Sections 7.04 and 7.05.
7.07 REIMBURSEMENT OF HHGI GROUP LIABILITIES. As of the Distribution
Date, TMP and HHGI shall have agreed on a schedule of those accrued integration
and restructuring costs, as shown on HHGI's most recent balance sheet, which
will be payable by HHGI during the fiscal quarters ended June 30, 2003,
September 30, 2003, December 31, 2003 and March 31, 2004 ("COSTS"), segregated
by each such fiscal quarter. TMP hereby agrees to reimburse the Costs paid by
HHGI during each of such quarters, at a rate of $2.5 million per fiscal quarter,
equal to an aggregate amount of $10 million. The reimbursement payments shall be
made in immediately available funds to HHGI on each of July 15, 2003 (with
respect to the quarter ended June 30, 2003), October 15, 2003 (with respect to
the quarter ended September 30, 2003), January 15, 2004 (with respect to the
quarter ended December 31, 2003) and April 15, 2004 (with respect to the quarter
ended March 31, 2004).
7.08 DELIVERY OF PROPERTY. TMP agrees that it will transfer or make
available to HHGI, promptly after the receipt thereof, any property that any
member of the TMP Group receives after the Distribution Date intended to be
property of HHGI or any member of the HHGI Group under this Agreement, and HHGI
agrees that it will transfer or make available to TMP, promptly after the
receipt thereof, any property that any member of the HHGI Group receives after
the Distribution Date intended to be property of TMP or any member of the TMP
Group under this Agreement.
7.09 FURTHER ASSURANCES AND CONSENTS. In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto shall (i) use its best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things reasonably necessary in
connection with the prompt and timely preparation of financial statements with
respect to periods that include the Distribution Date and any Commission filings
relating to the transactions contemplated by this Agreement and (ii) use its
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things, reasonably necessary, proper or advisable under
applicable laws, regulations and agreements or otherwise to consummate and make
effective the transactions contemplated by this Agreement, including, but not
limited to, using its reasonable efforts to obtain any consents and approvals
and to make any filings and applications necessary or desirable in order to
consummate the transactions contemplated by this Agreement; provided that no
party hereto shall be obligated to pay any consideration therefor (except for
filing fees and other similar charges) to any third party from whom such
consents or approvals are requested or to take any action or omit to take any
action if the taking of or the omission to take such action would be
unreasonably burdensome to the party, its Group or its Group's business.
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7.10 CONFIDENTIAL TREATMENT. The parties hereto acknowledge that
certain information contained herein (including information set forth in the
Schedules hereto) may constitute confidential business information and/or trade
secret information, and the parties shall cooperate with each other from and
after the Distribution Date in requesting from the Commission or any other
applicable governmental authority appropriate confidential treatment of such
information, if necessary, prior to any filing with the Commission or such other
governmental authority.
ARTICLE 8
MISCELLANEOUS
8.01 NOTICES. All notices and other communications to any party
hereunder shall be in writing (including facsimile or similar writing) and shall
be deemed given when received addressed as follows:
If to TMP, to:
TMP Worldwide Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxx
With a copy to:
TMP Worldwide Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx
Xxxxxxxxx & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile:(000) 000-0000
Attention:Xxxxx X. Xxxxxx, Esq.
If to HHGI, to:
Xxxxxx Highland Group, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile:(000) 000-0000
Attention: Xxx X. Xxxxx
With a copy to:
Xxxxxx Highland Group, Inc.
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000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
Any party may, by written notice so delivered to the other parties, change
the address to which delivery of any notice shall thereafter be made.
8.02 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement (including any Schedule
hereto) may be amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by TMP and HHGI, or in the case
of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
8.03 EXPENSES. Except as specifically provided otherwise in this
Agreement or any Ancillary Agreement, all costs and expenses incurred in
connection with the preparation, execution and delivery of the Distribution
Documents and the consummation of the Distribution and the other transactions
contemplated hereby (including the fees and expenses of all counsel, accountants
and financial and other advisors of both Groups in connection therewith, and all
expenses in connection with preparation, filing and printing of the Form 10 and
the Information Statement) shall be paid by TMP.
8.04 SUCCESSOR AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that neither party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the consent of the other parties hereto.
8.05 GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the law of the State of
New York, without regard to the
conflicts of laws rules thereof.
8.06 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other parties hereto.
8.07 ENTIRE AGREEMENT. This Agreement and the other Distribution
Documents constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior agreements,
understandings and negotiations, both written and oral, between the parties with
respect to the subject matter hereof and thereof. No representation,
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inducement, promise, understanding, condition or warranty not set forth herein
or in the other Distribution Documents has been made or relied upon by any party
hereto. Neither this Agreement nor any provision hereof is intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder.
To the extent that the provisions of this Agreement are inconsistent with the
provisions of any other Distribution Document, the provisions of such other
Distribution Document shall prevail.
8.08 SET-OFFS. If, at the time HHGI is required to make any payment to
TMP under this Agreement, and TMP owes HHGI any amount under this Agreement or
any Ancillary Agreement, then such amounts shall be offset and the excess shall
be paid by the party liable for such excess. Similarly, if at the time TMP is
required to make any payment to HHGI under this Agreement, and HHGI owes TMP any
amount under this Agreement or any Ancillary Agreement, then such amounts shall
be offset and the excess shall be paid by the party liable for such excess.
8.09 ARBITRATION. Except with respect to disputes arising under
Section 6.06, 7.04 or 7.05 for which injunctive relief is sought, the parties
hereto agree that any dispute arising out of or in connection with this
Agreement or the transactions contemplated hereby shall be submitted to
arbitration. The parties shall negotiate in good faith and use all reasonable
efforts to agree upon a resolution of any dispute after receipt of written
notice of such dispute from a party. If the parties cannot agree on an amicable
settlement within 30 days from written submission of the matter by the party to
the other party, the matter shall be submitted to arbitration. Each party shall
select one arbitrator, and the two arbitrators so appointed shall select a third
arbitrator. In the event such arbitrators cannot agree upon a third arbitrator,
a third arbitrator shall be selected in accordance with the rules as then in
effect of the American Arbitration Association. The decision of two of the three
arbitrators so appointed shall be conclusive and binding upon the parties to
this Agreement. Any such arbitration shall be held in
New York,
New York under
the rules to be mutually agreed upon by the arbitrators selected by the parties
or, if no such agreement can be reached, under the rules as then in effect of
the American Arbitration Association. Each party to any such arbitration shall
pay its own expenses; provided that the fees, costs and expenses of the third
arbitrator shall be borne equally by the parties.
8.10 EXISTING ARRANGEMENTS. Except as described in SCHEDULE 8.10, all
prior agreements and arrangements, including those relating to goods, rights or
services provided or licensed, between the HHGI Group and the TMP Group shall be
terminated by TMP and HHGI, and, to the extent such agreements or arrangements
are between Subsidiaries of TMP or HHGI, TMP and HHGI shall cause their
respective Subsidiaries to terminate such agreements and arrangements effective
as of the Distribution Date, if not theretofore terminated. No such agreements
or arrangements shall be in effect after the Distribution Date unless embodied
in the Distribution Documents.
8.11 TERMINATION PRIOR TO THE DISTRIBUTION. TMP's Board of Directors
may at any time prior to the Distribution terminate this Agreement (whether or
not TMP Board of Directors has theretofore approved this Agreement and/or the
Distribution). In the event that this Agreement is terminated pursuant to this
Section 8.11, neither party to this Agreement, nor any of its officers or
directors, shall have any Liability or further obligation to the other party
hereto.
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8.12 PUBLICITY. Prior to the Distribution, HHGI shall not, without the
prior written consent of TMP, make any public announcement or issue any press
release with respect to the Distribution or with respect to any material event.
8.13 CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
8.14 THIRD PARTY BENEFICIARIES. Except for the indemnification rights
under this Agreement of any TMP Indemnitee or HHGI Indemnitee in their
respective capacities as such, (i) the provisions of this Agreement and each
Ancillary Agreement are solely for the benefit of the parties and are not
intended to confer upon any Person except the parties any rights or remedies
hereunder, and (ii) there are no third party beneficiaries of this Agreement or
any Ancillary Agreement and neither this Agreement nor any Ancillary Agreement
shall provide any third Person with any remedy, claim, liability, reimbursement,
claim of action or other right in excess of those existing without reference to
this Agreement or any Ancillary Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Distribution
Agreement to be duly executed by their respective authorized officers as of the
date first above written.
TMP WORLDWIDE INC.
By: /s/ Xxxxxx X. XxXxxxxx
--------------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Chairman and CEO
XXXXXX HIGHLAND GROUP, INC.
By: /s/ Xxx X. Xxxxx
--------------------------------
Name: Xxx X. Xxxxx
Title: Chairman, President and CEO
The Schedules to this Agreement have been omitted. The omitted Schedules
consist of (i) a list of corporate subsidiaries of Xxxxxx Highland
Group, Inc. ("HHGI"), (ii) a list of employee benefit plans which HHGI
intends to adopt which are intended to be similar to certain
TMP Worldwide
Inc. ("TMP") employee benefit plans, (iii) a list of real property which HHGI
and TMP have entered into real estate agreements with respect to; (iv) a list
of intellectual property, including trademarks, which TMP will retain
ownership of, (v) a list of intellectual property, including trademarks,
which TMP will contribute to HHGI and (vi) a list of arrangements between
TMP and HHGI which will continue after the effective date of the Distribution.
The Schedules to this Agreement will be furnished to the Securities and
Exchange Commission supplementally upon request.
