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EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
OMNICOM GROUP INC.,
XXXXXXX XXXXX GROUP INC.,
CAREER MOSAIC INC.,
XXXXXXXXXX.XXX, INC.,
RESUME ACQUISITION CORPORATION
AND
ITC HOLDING COMPANY, INC.
DATED AS OF APRIL 15, 2000
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made
and entered into as of April 15, 2000, by and among OMNICOM GROUP INC.
("Omnicom"), XXXXXXX XXXXX GROUP INC. ("BHA"), CAREER MOSAIC INC., a wholly
owned subsidiary of BHA ("Career Mosaic"), XXXXXXXXXX.XXX, INC.
("XxxxXxxxxx.XXX"), RESUME ACQUISITION CORPORATION, a wholly owned subsidiary of
XxxxXxxxxx.XXX ("Merger Sub"), and ITC HOLDING COMPANY, INC., a shareholder of
XxxxXxxxxx.XXX ("ITC") solely for the purposes of the covenants contained in
Sections 5.3, 5.5, 5.11 and 5.12 hereof.
PREAMBLE
The respective boards of directors of BHA, Career Mosaic,
XxxxXxxxxx.XXX and Merger Sub are of the opinion that the transactions described
herein are in the best interests of the parties to this Agreement and their
respective shareholders. This Agreement provides for the combination of
XxxxXxxxxx.XXX and the Career Mosaic Business (as defined in Section 13.1
hereof) pursuant to the formation of Merger Sub as a wholly owned subsidiary of
XxxxXxxxxx.XXX, and the merger of Career Mosaic with and into Merger Sub. At the
effective time of such merger, the outstanding shares of the capital stock of
Career Mosaic shall be converted into the right to receive shares of
XxxxXxxxxx.XXX common stock as set forth herein. As a result, the stockholders
of Career Mosaic shall become shareholders of XxxxXxxxxx.XXX, and Merger Sub
shall continue to conduct business as a wholly owned subsidiary of
XxxxXxxxxx.XXX. The transactions described in this Agreement are subject to the
approval of the shareholders of XxxxXxxxxx.XXX, expiration of the required
waiting period under the HSR Act and the satisfaction of certain other
conditions described in this Agreement. It is the intention of the parties
hereto that the Merger (as defined below) for federal income taxes shall qualify
as a "reorganization" within the meaning of Section 368(a)(2)(D) of the Internal
Revenue Code.
Certain terms used in this Agreement are defined in Section
13.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Career Mosaic shall be merged with and into
Merger Sub in accordance with the provisions of Section 251 of the DGCL, and
with the effect provided in the DGCL (the "Merger"). Merger Sub shall be the
Surviving Corporation resulting from the Merger and shall
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be a wholly owned subsidiary of XxxxXxxxxx.XXX. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective Boards of Directors of BHA, Career Mosaic, XxxxXxxxxx.XXX, Merger
Sub and ITC, and by XxxxXxxxxx.XXX, as sole shareholder of Merger Sub, and BHA
and the other stockholders of Career Mosaic, as stockholders of Career Mosaic.
1.2 TIME AND PLACE OF CLOSING. The closing of the
transactions contemplated hereby (the "Closing") will take place at 9:00 A.M. on
the date that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the parties,
acting through their authorized officers, may mutually agree. The Closing shall
be held at such location as may be mutually agreed upon by the parties.
1.3 EFFECTIVE TIME. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Certificate of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Delaware (the "Effective Time"). Subject
to the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by each party, the parties shall use their commercially reasonable best
efforts to cause the Effective Time to occur on the first business day following
the latest to occur of (i) the effective date (including expiration of any
applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger or (ii)
the date on which the shareholders of XxxxXxxxxx.XXX approve this Agreement, or
such later date within 30 days thereof as may be specified by the parties.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Certificate of Incorporation of Merger
Sub in effect immediately prior to the Effective Time shall be the Certificate
of Incorporation of the Surviving Corporation until duly amended or repealed.
2.2 BYLAWS. The Bylaws of Merger Sub in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation until duly amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Merger Sub
in office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the directors of the
Surviving Corporation from and after the Effective Time in accordance with the
Bylaws of the Surviving Corporation. The officers of Merger Sub in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation.
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ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of
this Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of the parties hereto or the shareholders thereof, the shares
of the constituent corporations shall be converted as follows:
(a) Each share of Merger Sub common stock issued and
outstanding immediately prior to the Effective Time shall continue to be
outstanding.
(b) Each share of Career Mosaic common stock issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for the right to
receive 750 shares of XxxxXxxxxx.XXX common stock (as adjusted, if
applicable, pursuant to Section 3.2, the "Exchange Ratio").
(c) Each share of XxxxXxxxxx.XXX common stock issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding.
3.2 ANTI-DILUTION PROVISIONS. In the event XxxxXxxxxx.XXX
changes the number of shares of its common stock issued and outstanding prior to
the Effective Time as a result of a stock split, stock dividend,
reclassification, combination, share exchange, recapitalization, issuance or
exercise of rights or common stock under the Rights Plan or other similar event
and the record date therefor (in the case of a stock dividend) or the effective
date thereof (in the case of a stock split, reclassification, combination, share
exchange, recapitalization or other similar event for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 FRACTIONAL SHARES. Notwithstanding any other
provision of this Agreement, each holder of shares of Career Mosaic common stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of XxxxXxxxxx.XXX common stock shall receive, in
lieu thereof, cash (without interest) in an amount equal to such fractional part
of a share of XxxxXxxxxx.XXX common stock multiplied by the average market value
for shares of XxxxXxxxxx.XXX common stock for the ten (10) trading days
immediately prior to the Effective Time. The market value for XxxxXxxxxx.XXX
common stock shall be the last sale price each day of such common stock on the
Nasdaq National Market (as reported by Bloomberg's Financial Service). No such
holder will be entitled to dividends, voting rights or any other rights as a
shareholder in respect of any fractional shares.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. After the Effective Time, each
stockholder of Career Mosaic shall deliver to XxxxXxxxxx.XXX the certificate(s)
which represented shares of Career Mosaic common stock outstanding immediately
prior to the Effective Time and shall
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promptly upon surrender thereof receive in exchange therefor the consideration
provided in Section 3.1. Such certificate(s) shall be duly endorsed as
XxxxXxxxxx.XXX may reasonably require. In the event of a transfer of ownership
of shares of Career Mosaic common stock represented by certificates that are not
registered in the transfer records of Career Mosaic, the consideration provided
in Section 3.1 may be issued to a transferee if the certificate(s) representing
such shares are delivered to XxxxXxxxxx.XXX, accompanied by all documents
required to evidence such transfer and by evidence satisfactory to
XxxxXxxxxx.XXX that any applicable stock transfer taxes have been paid. If any
certificate shall have been lost, stolen, mislaid or destroyed, upon receipt of
(i) an affidavit of that fact from the holder claiming such certificate to be
lost, mislaid, stolen or destroyed and (ii) any other documents necessary to
evidence and effect the bona fide exchange thereof, XxxxXxxxxx.XXX shall cause
to be issued to such holder the consideration into which the shares represented
by such lost, stolen, mislaid or destroyed certificate shall have been
converted. To the extent required by Section 3.4, each holder of shares of
Career Mosaic common stock issued and outstanding at the Effective Time also
shall receive, upon surrender of the certificate, cash in lieu of any fractional
share of XxxxXxxxxx.XXX common stock to which such holder may be otherwise
entitled (without interest). XxxxXxxxxx.XXX shall not be obligated to deliver
the consideration to which any former holder of Career Mosaic common stock is
entitled as a result of the Merger until such holder surrenders such holder's
certificate for exchange as provided in this Section 4.1(a). Any other provision
of this Agreement notwithstanding, neither XxxxXxxxxx.XXX, nor the Surviving
Corporation shall be liable to a holder of Career Mosaic common stock for any
amounts paid or property delivered in good faith to a public official pursuant
to any applicable abandoned property, escheat or similar Law.
4.2 RIGHTS OF FORMER CAREER MOSAIC SHAREHOLDERS. At the
Effective Time, the stock transfer books of Career Mosaic shall be closed as to
holders of Career Mosaic common stock immediately prior to the Effective Time
and no transfer of Career Mosaic common stock by any such holder shall
thereafter be made or recognized. Until surrendered for exchange in accordance
with the provisions of Section 4.1, each certificate theretofore representing
shares of Career Mosaic common stock shall from and after the Effective Time
represent for all purposes only the right to receive the consideration provided
in Section 3.1 in exchange therefor. To the extent permitted by Law, former
stockholders of record of Career Mosaic shall be entitled to vote after the
Effective Time at any meeting of XxxxXxxxxx.XXX shareholders the number of whole
shares of XxxxXxxxxx.XXX common stock into which their respective shares of
Career Mosaic common stock are converted, regardless of whether such holders
have exchanged their certificates for certificates representing XxxxXxxxxx.XXX
common stock in accordance with the provisions of this Agreement.
ARTICLE 5
OTHER AGREEMENTS
5.1 DIRECTORS OF XXXXXXXXXX.XXX. At the Effective Time,
(i) the written resignations of J. Xxxxxxx Xxx, Xxxxxx X. Xxxxx and Xxxxxxx X.
Xxxxxxxx, dated as of the date of this Agreement, shall become effective, (ii)
the Board of Directors of XxxxXxxxxx.XXX shall set the size of the Board of
Directors of XxxxXxxxxx.XXX at seven (7) members with three
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members to serve as Class I directors, two members to serve as Class II members
and two members to serve as Class III directors and (iii) the Board of Directors
shall fill the vacancies on the Board of Directors by appointing or electing (A)
one individual designated by BHA (who shall have been approved by
XxxxXxxxxx.XXX, such approval not to be unreasonably withheld or delayed) to
serve as a Class I director, (B) one individual designated by BHA, who may be
any officer or director of BHA or Omnicom or any other person if such person is
approved by XxxxXxxxxx.XXX (such approval not to be unreasonably withheld or
delayed), to serve as a Class II director and (C) one individual designated by
BHA, who may be any officer or director of BHA or Omnicom or any other person if
such person is approved by XxxxXxxxxx.XXX (such approval not to be unreasonably
withheld or delayed), to serve as a Class III director, with Xxxxxx X.
Xxxxxxxxxx, Xx. and Xxxxxx X. Xxxxxxxxx, Xx. each continuing to serve as a Class
I director, Xxxxxxxxx X. Xxxxxxxx continuing to serve as a Class II director and
Xxxxxxx X. Xxxxx, III continuing to serve as a Class III director.
5.2 SHAREHOLDER PROTECTION RIGHTS AGREEMENT.
Simultaneously with the execution of this Agreement, XxxxXxxxxx.XXX has adopted
and approved a Shareholder Protection Rights Agreement in the form as Exhibit
5.2 attached hereto (the "Rights Plan"). Prior to the Effective Time,
XxxxXxxxxx.XXX agrees not to amend or terminate the Rights Plan or waive any
material provision thereof or redeem the rights issued thereunder without the
prior written consent of BHA.
5.3 SHAREHOLDERS' AGREEMENT. At the Effective Time,
XxxxXxxxxx.XXX, Omnicom, Resume and ITC shall enter into a Shareholders'
Agreement in substantially the form as Exhibit 5.3 attached hereto.
5.4 ADMINISTRATIVE SERVICES AGREEMENT. At the Effective
Time, Resume and XxxxXxxxxx.XXX shall enter into an Administrative Services
Agreement in substantially the form as Exhibit 5.4 attached hereto (the
"Services Agreement);
5.5 REGISTRATION RIGHTS AGREEMENT. At the Effective Time,
BHA, ITC and XxxxXxxxxx.XXX shall enter into a Registration Rights Agreement in
substantially the form as Exhibit 5.5 attached hereto.
5.6 CREDIT AGREEMENT. At the Effective Time, Omnicom
Finance, Inc. shall enter into a Credit Agreement (the "Credit Agreement") with
XxxxXxxxxx.XXX in substantially the form as Exhibit 5.6 attached hereto.
5.7 AGENCY AGREEMENT. At the Effective Time, BHA and
XxxxXxxxxx.XXX shall enter into a Agency Agreement (the "Agency Agreement") in
substantially the form as Exhibit 5.7 attached hereto.
5.8 ACCESS TO INFORMATION; AUDIT COOPERATION. From the
date of this Agreement until the Effective Time, Omnicom, BHA and Career Mosaic
shall afford XxxxXxxxxx.XXX and its officers, employees, accountants,
consultants, legal counsel and other representatives full and complete access
during normal business hours to the properties, books, records, contracts,
facilities, premises and equipment comprising or relating to the Transferred
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Assets, the Transferred Liabilities and the Career Mosaic Business. From the
date of this Agreement until the Effective Time, XxxxXxxxxx.XXX and Merger Sub
shall afford BHA and its officers, employees, accountants, consultants, legal
counsel and other representatives full and complete access during normal
business hours to the properties, books, records, contracts, facilities,
premises and equipment of XxxxXxxxxx.XXX. Omnicom, BHA and Career Mosaic shall
cooperate with and assist XxxxXxxxxx.XXX and its officers, employees,
accountants, consultants, legal counsel and other representatives in preparing,
in accordance with the SEC requirements in connection with the Merger: (i)
audited financial statements of the Career Mosaic Business for the last three
(3) fiscal years; (ii) unaudited financial statements for any interim periods
since the end of the last fiscal year; and (iii) any other report, proxy
statement or other document, all as related to the Career Mosaic Business or the
Transferred Assets.
5.9 NON-COMPETITION AGREEMENT. At the Effective Time,
XxxxXxxxxx.XXX and BHA shall enter into a Non-Competition Agreement
substantially in the form of Exhibit 5.9 attached hereto.
5.10 INDEMNITY AGREEMENTS. At the Effective Time,
XxxxXxxxxx.XXX shall enter into an Indemnity Agreement, in substantially the
form as Exhibit 5.10 attached hereto, with each of the director nominees and
directors named in Section 5.1 of this Agreement.
5.11 BHA AND ITC INDEMNITY AGREEMENT. At the Effective
Time, XxxxXxxxxx.XXX shall enter into an Indemnity Agreement, in substantially
the form as Exhibit 5.11 attached hereto, with each of BHA and ITC.
5.12 SUPPORT AGREEMENT. Simultaneously with the execution
and delivery of this Agreement, BHA, ITC and Xxxxxx X. Xxxxxxxxxx, Xx. have
executed and delivered a Support Agreement in the form of Exhibit 5.12 attached
hereto.
5.13 AMENDED AND RESTATED BYLAWS. At the Effective Time,
XxxxXxxxxx.XXX shall have amended its Bylaws in the form of Exhibit 5.13
attached hereto (the "Amended Bylaws").
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXXX.XXX AND MERGER
SUB
XxxxXxxxxx.XXX and Merger Sub, jointly and severally, hereby
represent and warrant to BHA and Career Mosaic as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Each of
XxxxXxxxxx.XXX and Merger Sub is a corporation duly organized, validly existing
and in good standing under the Laws of the State of Georgia and Delaware,
respectively, and has the corporate power and authority to carry on its business
as now conducted and to own, lease and operate its Assets. Each of
XxxxXxxxxx.XXX and Merger Sub is duly qualified or licensed to transact business
as a foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so
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qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a XxxxXxxxxx.XXX Material Adverse Effect. The minute books and
other organizational documents for each of XxxxXxxxxx.XXX and Merger Sub have
been made available to Omnicom, BHA and Career Mosaic for their review and,
except as disclosed in Section 6.1 of the XxxxXxxxxx.XXX Disclosure Memorandum,
are true and complete in all material respects as in effect as of the date of
this Agreement and accurately reflect in all material respects all amendments to
such organizational documents and all proceedings of the Board of Directors and
shareholders thereof.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Each of XxxxXxxxxx.XXX and Merger Sub has
the corporate power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of each of XxxxXxxxxx.XXX and Merger Sub, subject, in the
case of performance only, to any required approval of this Agreement by the
holders of XxxxXxxxxx.XXX common stock. The Board of Directors of XxxxXxxxxx.XXX
has taken all action necessary to render the limitations on business
combinations contained in Sections 14-2-1111 and 14-2-1132 of the GBCC (or any
similar provision) inapplicable to the Merger. This Agreement represents a
legal, valid and binding obligation of each of XxxxXxxxxx.XXX and Merger Sub,
enforceable against each of them in accordance with its terms, except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium or similar
Laws affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought.
(b) Neither the execution and delivery of this
Agreement by XxxxXxxxxx.XXX or Merger Sub, nor the consummation by
XxxxXxxxxx.XXX or Merger Sub of the transactions contemplated hereby, nor
compliance by XxxxXxxxxx.XXX or Merger Sub with any of the provisions hereof,
will (i) conflict with or result in a breach of any provision of the Articles of
Incorporation of XxxxXxxxxx.XXX, the Certificate of Incorporation of Merger Sub
or the Bylaws of XxxxXxxxxx.XXX or Merger Sub, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of XxxxXxxxxx.XXX under, any Contract or Permit of
XxxxXxxxxx.XXX, where such Default or Lien, or any failure to obtain such
Consent, is reasonably likely to have, individually or in the aggregate, a
XxxxXxxxxx.XXX Material Adverse Effect, or, (iii) subject to receipt of the
requisite Consents referred to in Section 11.1(b), constitute or result in a
Default under, or require any Consent pursuant to, any Law or Order applicable
to XxxxXxxxxx.XXX or any of its material Assets, or to Merger Sub.
(c) Other than in connection or compliance with
applicable Laws, and rules of the NASD and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty
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Corporation with respect to any employee benefit plans, or under the HSR Act,
and other than Consents, filings or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
XxxxXxxxxx.XXX Material Adverse Effect, no notice to, filing with, or Consent
of, any public body or authority is necessary for the consummation by
XxxxXxxxxx.XXX or Merger Sub of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK.
(a) The authorized capital stock of
XxxxXxxxxx.XXX consists of (i) 45,500,000 shares of XxxxXxxxxx.XXX common stock,
of which 10,912,700 shares are issued and outstanding as of the date of this
Agreement, (ii) 7,500,000 shares of Class A Preferred Stock, none of which are
issued and outstanding, and (iii) 5,000,000 shares of Class B Serial Preferred
Stock, 500,000 shares of which will be designated as Junior Participating
Preferred Stock in connection with the adoption of the Rights Plan, none of
which are issued and outstanding. All of the issued and outstanding shares of
capital stock of XxxxXxxxxx.XXX are, and all of the shares of common stock of
XxxxXxxxxx.XXX to be issued in connection with the Merger, when issued in
accordance with the terms of this Agreement, will be, duly and validly issued
and outstanding, fully paid and nonassessable. None of the outstanding shares of
capital stock of XxxxXxxxxx.XXX has been, and none of the shares of
XxxxXxxxxx.XXX common stock to be issued in connection with the Merger will be,
issued in violation of any preemptive rights of the current or past shareholders
of XxxxXxxxxx.XXX. The authorized capital stock of Merger Sub consists of 1,000
shares of common stock, of which 1,000 shares are issued and outstanding as of
the date of this Agreement, all of which are owned of record and beneficially by
XxxxXxxxxx.XXX.
(b) Except as set forth in Section 6.3(a),
pursuant to the Rights Plan or as disclosed in Section 6.3(b) of the
XxxxXxxxxx.XXX Disclosure Memorandum, there are no shares of capital stock or
other equity securities of XxxxXxxxxx.XXX outstanding and no outstanding Equity
Rights relating to the capital stock of XxxxXxxxxx.XXX. All outstanding stock
options listed on Section 6.3(b) of the XxxxXxxxxx.XXX Disclosure Memorandum
will, in accordance with their terms or by action of the XxxxXxxxxx.XXX Board of
Directors, vest fully upon the Effective Time of the Merger, except for the
stock options held by Xxxxxx X. Xxxxxxxxxx, Xx. to purchase up to 310,000 shares
of XxxxXxxxxx.XXX common stock, which shall vest in accordance with their
respective original terms.
6.4 XXXXXXXXXX.XXX SUBSIDIARIES. XxxxXxxxxx.XXX has
disclosed in Section 6.4 of the XxxxXxxxxx.XXX Disclosure Memorandum all of its
subsidiaries (identifying the Law under which such entity is organized, each
jurisdiction in which it is qualified and/or licensed to transact business, and
the amount and nature of the ownership interest therein). Except as disclosed in
Section 6.4 of the XxxxXxxxxx.XXX Disclosure Memorandum, XxxxXxxxxx.XXX, or one
of its wholly owned subsidiaries, owns all of the issued and outstanding shares
of capital stock (or other equity interests) of each of XxxxXxxxxx.XXX's
subsidiaries. No capital stock (or other equity interest) of any XxxxXxxxxx.XXX
subsidiary is or may become required to be issued by reason of any Equity
Rights, and there are no Contracts by which any XxxxXxxxxx.XXX subsidiary is
bound to issue additional shares of its capital stock (or other equity
interests) or Equity Rights or by which any XxxxXxxxxx.XXX subsidiary is or may
be bound to transfer any shares of capital stock (or
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other equity interests). All of the outstanding shares of capital stock (or
other equity interests) of each XxxxXxxxxx.XXX subsidiary are fully paid and
nonassessable and are owned free and clear of any Lien. Except as disclosed in
Section 6.4 of the XxxxXxxxxx.XXX Disclosure Memorandum, each XxxxXxxxxx.XXX
subsidiary is duly organized, validly existing, and (as to corporations) in good
standing under the Laws of the jurisdiction in which it is incorporated or
organized, and has the corporate power and authority necessary for it to own,
lease, and operate its Assets and to carry on its business as now conducted.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) XxxxXxxxxx.XXX has timely filed and made
available to Omnicom, BHA and Career Mosaic all SEC Documents required to be
filed by XxxxXxxxxx.XXX since August 19, 1999, the effective date of the
registration statement on Form S-1 filed with the SEC by XxxxXxxxxx.XXX in
connection with its initial public offering (the "XxxxXxxxxx.XXX SEC Reports").
The XxxxXxxxxx.XXX SEC Reports (i) at the time filed, complied in all material
respects with the applicable requirements of the Securities Laws and other
applicable Laws and (ii) did not, at the time they were filed (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such XxxxXxxxxx.XXX SEC Reports or
necessary in order to make the statements in such XxxxXxxxxx.XXX SEC Reports, in
light of the circumstances under which they were made, not misleading.
(b) Each of the XxxxXxxxxx.XXX Financial
Statements (including, in each case, any related notes) contained in the
XxxxXxxxxx.XXX SEC Reports, as amended, including any XxxxXxxxxx.XXX SEC Reports
filed after the date of this Agreement until the Effective Time, complied or
will comply as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto; was or will be prepared
in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim statements, as permitted by Form 10-Q of
the SEC); and fairly presented or will present in all material respects the
consolidated financial position of XxxxXxxxxx.XXX and its subsidiaries as at the
respective dates and the consolidated results of operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
were or will be subject to normal and recurring year-end adjustments which were
not or are not expected to be material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. Neither
XxxxXxxxxx.XXX nor any of its subsidiaries has any Liabilities that are
reasonably likely to have, individually or in the aggregate, a XxxxXxxxxx.XXX
Material Adverse Effect, except Liabilities which are accrued or reserved
against in the consolidated balance sheets of XxxxXxxxxx.XXX included in the
XxxxXxxxxx.XXX Financial Statements or reflected in the notes thereto, or which
have arisen in the ordinary course of business since the latest date covered by
the XxxxXxxxxx.XXX Financial Statements.
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6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December
31, 1999, except as disclosed in the XxxxXxxxxx.XXX Financial Statements filed
with the SEC prior to the date hereof or as disclosed in Section 6.7 of the
XxxxXxxxxx.XXX Disclosure Memorandum, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, a XxxxXxxxxx.XXX Material Adverse Effect, and (ii) neither
XxxxXxxxxx.XXX nor Merger Sub has taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of their respective covenants contained herein.
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or
on behalf of XxxxXxxxxx.XXX have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1999, except to the extent that all such failures to file,
taken together, are not reasonably likely to have a XxxxXxxxxx.XXX Material
Adverse Effect, and all Tax Returns filed are complete and accurate to the
Knowledge of XxxxXxxxxx.XXX. All Taxes shown on filed Tax Returns have been
paid. There is no audit examination, deficiency or Litigation with respect to
any Taxes, except as reserved against in the XxxxXxxxxx.XXX Financial Statements
or as disclosed in Section 6.8 of the XxxxXxxxxx.XXX Disclosure Memorandum.
There are no Liens with respect to Taxes upon any of XxxxXxxxxx.XXX's Assets,
except for Liens for taxes not yet due and payable and any Liens which are not
reasonably likely to have a XxxxXxxxxx.XXX Material Adverse Effect.
(b) XxxxXxxxxx.XXX has not executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due that is currently in effect.
(c) The provision for any Taxes due or to become
due for XxxxXxxxxx.XXX for the period or periods through and including the date
of the XxxxXxxxxx.XXX Financial Statements that has been made and is reflected
on such XxxxXxxxxx.XXX Financial Statements is adequate in accordance with GAAP
to cover all such Taxes.
(d) Deferred Taxes of XxxxXxxxxx.XXX have been
provided adequately for in accordance with GAAP.
(e) XxxxXxxxxx.XXX is not a party to any Tax
allocation or sharing agreement and XxxxXxxxxx.XXX has not been a member of an
affiliated group filing a consolidated federal income Tax Return (other than a
group the common parent of which was XxxxXxxxxx.XXX) and does not have any
Liability for Taxes of any Person (other than XxxxXxxxxx.XXX and its
subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law) as a transferee or successor or by
Contract or otherwise.
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(f) XxxxXxxxxx.XXX is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state and local Tax Laws.
(g) Except as disclosed in Section 6.8 of the
XxxxXxxxxx.XXX Disclosure Memorandum, XxxxXxxxxx.XXX has not made any payments,
is not obligated to make any payments, and is not a party to any Contract that
could obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Internal Revenue Code.
(h) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of XxxxXxxxxx.XXX that occurred
during or after any Taxable Period in which XxxxXxxxxx.XXX incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1999.
(i) XxxxXxxxxx.XXX has no and has not had in any
foreign country a permanent establishment, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
6.9 ASSETS.
(a) Except as disclosed in Section 6.9 of the
XxxxXxxxxx.XXX Disclosure Memorandum or as disclosed or reserved against in the
XxxxXxxxxx.XXX Financial Statements filed with the SEC prior to the date hereof,
XxxxXxxxxx.XXX and its subsidiaries have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except for any such Liens
or other defects of title which are not reasonably likely to have a
XxxxXxxxxx.XXX Material Adverse Effect. All tangible properties used in the
businesses of XxxxXxxxxx.XXX and its subsidiaries are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with past practices.
(b) All Assets which are material to
XxxxXxxxxx.XXX's business on a consolidated basis held under leases or subleases
by XxxxXxxxxx.XXX or its subsidiaries are held under valid Contracts enforceable
in accordance with their respective terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
(c) The Assets of XxxxXxxxxx.XXX and its
subsidiaries include all Assets required to operate the business of
XxxxXxxxxx.XXX as presently conducted.
6.10 INTELLECTUAL PROPERTY. XxxxXxxxxx.XXX or its
subsidiaries own or have a valid license to use all of the Intellectual Property
material to the conduct of XxxxXxxxxx.XXX's business. XxxxXxxxxx.XXX or any
subsidiary thereof is the owner of or has a license to any
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Intellectual Property sold or licensed to a third party by XxxxXxxxxx.XXX or any
subsidiary thereof in connection with XxxxXxxxxx.XXX's business operations, and
XxxxXxxxxx.XXX has the right to convey by sale or license any Intellectual
Property so conveyed. XxxxXxxxxx.XXX is not in Default under any of its
Intellectual Property licenses, except for Defaults which are not reasonably
likely to have, individually or in the aggregate, a XxxxXxxxxx.XXX Material
Adverse Effect. No proceedings have been instituted, or are pending or, to the
Knowledge of XxxxXxxxxx.XXX, threatened, which challenge the rights of
XxxxXxxxxx.XXX with respect to Intellectual Property used, sold or licensed by
XxxxXxxxxx.XXX in the course of its business, nor has any person claimed or
alleged any rights to such Intellectual Property. The conduct of the business of
XxxxXxxxxx.XXX does not infringe any Intellectual Property of any other person.
XxxxXxxxxx.XXX is not aware of any third party infringement of any of the
Intellectual Property used in the course of its business. Except as disclosed in
Section 6.10 of the XxxxXxxxxx.XXX Disclosure Memorandum, XxxxXxxxxx.XXX is not
obligated to pay any recurring royalties to any Person with respect to any such
Intellectual Property. Except as disclosed in Section 6.10 of the XxxxXxxxxx.XXX
Disclosure Memorandum, every officer, director, or employee of XxxxXxxxxx.XXX is
a party to a Contract which requires such officer, director or employee to
assign any interest in any Intellectual Property to XxxxXxxxxx.XXX and to keep
confidential any trade secrets, proprietary data, customer information or other
business information of XxxxXxxxxx.XXX, and no such officer, director or
employee is party to any Contract with any Person other than XxxxXxxxxx.XXX
which requires such officer, director or employee to assign any interest in any
Intellectual Property to any Person other than XxxxXxxxxx.XXX or to keep
confidential any trade secrets, proprietary data, customer information or other
business information of any Person other than XxxxXxxxxx.XXX. Except as
disclosed in Section 6.10 of the XxxxXxxxxx.XXX Disclosure Memorandum, no
officer, director or employee of XxxxXxxxxx.XXX is party to any Contract which
restricts or prohibits such officer, director or employee from engaging in
activities competitive with any Person, including XxxxXxxxxx.XXX.
6.11 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of XxxxXxxxxx.XXX,
XxxxXxxxxx.XXX, its Participation Facilities and its Operating Properties are,
and have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
XxxxXxxxxx.XXX Material Adverse Effect.
(b) There is no Litigation pending or, to the
knowledge of XxxxXxxxxx.XXX, threatened before any court, governmental agency,
or authority or other forum in which XxxxXxxxxx.XXX or any of its Operating
Properties or Participation Facilities (or XxxxXxxxxx.XXX in respect of such
Operating Property or Participation Facility) has been or, with respect to
threatened Litigation, may be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release, discharge, spillage, or disposal into the environment of any
Hazardous Material, whether or not occurring at, on, under, adjacent to, or
affecting (or potentially affecting) a site owned, leased, or operated by
XxxxXxxxxx.XXX or any of its Operating Properties or Participation Facilities,
except for such Litigation pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a XxxxXxxxxx.XXX Material Adverse
Effect.
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(c) During the period of (i) XxxxXxxxxx.XXX's
ownership or operation of any of its current properties, (ii) XxxxXxxxxx.XXX's
participation in the management of any Participation Facility, or (iii)
XxxxXxxxxx.XXX's holding of a security interest in a Operating Property, there
have been no releases, discharges, spillages or disposals of Hazardous Material
in, on, under, adjacent to or affecting such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a XxxxXxxxxx.XXX
Material Adverse Effect. Prior to the period of (i) XxxxXxxxxx.XXX's ownership
or operation of any of its respective current properties, (ii) XxxxXxxxxx.XXX's
participation in the management of any Participation Facility, or (iii)
XxxxXxxxxx.XXX's holding of a security interest in Operating Property, to the
Knowledge of XxxxXxxxxx.XXX, there were no releases, discharges, spillages, or
disposals of Hazardous Material in, on, under, or affecting any such property,
Participation Facility or Operating Property, except such as are not reasonably
likely to have, individually or in the aggregate, a XxxxXxxxxx.XXX Material
Adverse Effect.
6.12 COMPLIANCE WITH LAWS. XxxxXxxxxx.XXX has in effect
all Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
XxxxXxxxxx.XXX Material Adverse Effect, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a XxxxXxxxxx.XXX Material Adverse Effect.
Except as disclosed in Section 6.12 of the XxxxXxxxxx.XXX Disclosure Memorandum,
XxxxXxxxxx.XXX:
(a) is not in Default under any of the provisions of its
Articles of Incorporation or Bylaws;
(b) is not in Default under any Laws, Orders or Permits
applicable to its business or employees conducting its business, except
for Defaults which are not reasonably likely to have, individually or
in the aggregate, a XxxxXxxxxx.XXX Material Adverse Effect; or
(c) has not received any notification or communication
from any agency or department of federal, state or local government or
any Regulatory Authority or the staff thereof (i) asserting that
XxxxXxxxxx.XXX is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces,
where such noncompliance is reasonably likely to have, individually or
in the aggregate, a XxxxXxxxxx.XXX Material Adverse Effect, (ii)
threatening to revoke any Permits, the revocation of which is
reasonably likely to have, individually or in the aggregate, a
XxxxXxxxxx.XXX Material Adverse Effect, or (iii) requiring
XxxxXxxxxx.XXX to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which materially restricts the conduct of its business or in any manner
relates to its capital adequacy, its credit or reserve policies, its
management or the payment of dividends.
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Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to
Omnicom, BHA and Career Mosaic.
6.13 LABOR RELATIONS. XxxxXxxxxx.XXX is not the subject of
any Litigation asserting that it or any of its subsidiaries has committed an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment, nor is XxxxXxxxxx.XXX
party to any collective bargaining agreement, nor is there any strike or other
labor dispute involving XxxxXxxxxx.XXX, pending or, to the Knowledge of
XxxxXxxxxx.XXX, threatened, or to the Knowledge of XxxxXxxxxx.XXX, is there any
activity involving XxxxXxxxxx.XXX's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
6.14 EMPLOYEE BENEFIT PLANS.
(a) XxxxXxxxxx.XXX has disclosed in Section 6.14
of the XxxxXxxxxx.XXX Disclosure Memorandum, and has delivered or made available
to Omnicom, BHA and Career Mosaic prior to the execution of this Agreement
copies in each case of, all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay, vacation,
bonus, or other incentive plan, all other written employee programs,
arrangements or agreements, all medical, vision, dental or other health plans,
all life insurance plans, and all other employee benefit plans or fringe benefit
plans, including "employee benefit plans" as that term is defined in Section
3(3) of ERISA, currently adopted, maintained by, sponsored in whole or in part
by, or contributed to by XxxxXxxxxx.XXX or ERISA Affiliate thereof for the
benefit of employees, retirees, dependents, spouses, directors, independent
contractors or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
are eligible to participate (collectively, the "XxxxXxxxxx.XXX Benefit Plans").
Any of the XxxxXxxxxx.XXX Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to herein
as a "XxxxXxxxxx.XXX ERISA Plan." Each XxxxXxxxxx.XXX ERISA Plan which is also a
"defined benefit plan" (as defined in Section 414(j) of the Internal Revenue
Code) is referred to herein as an "XxxxXxxxxx.XXX Pension Plan." No
XxxxXxxxxx.XXX Pension Plan is or has been a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(b) All XxxxXxxxxx.XXX Benefit Plans are in
compliance in all material respects with the applicable terms of ERISA, the
Internal Revenue Code and any other applicable Laws. Each XxxxXxxxxx.XXX ERISA
Plan which is intended to be qualified under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the Internal
Revenue Service, and XxxxXxxxxx.XXX is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. To the
Knowledge of XxxxXxxxxx.XXX, XxxxXxxxxx.XXX has not engaged in a transaction
with respect to any XxxxXxxxxx.XXX Benefit Plan that, assuming the taxable
period of such transaction expired as of the date hereof, would subject
XxxxXxxxxx.XXX to a Tax imposed by either Section 4975 of the Internal Revenue
Code or Section 502(i) of ERISA.
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(c) No XxxxXxxxxx.XXX Pension Plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, and the fair market value of the assets of any such plan exceeds the
plan's "benefit liabilities," as that term is defined in Section 4001(a)(16) of
ERISA. Since the date of the most recent actuarial valuation, there has been (i)
no material change in the financial position of any XxxxXxxxxx.XXX Pension Plan,
(ii) no change in the actuarial assumptions with respect to any XxxxXxxxxx.XXX
Pension Plan, and (iii) no increase in benefits under any XxxxXxxxxx.XXX Pension
Plan as a result of plan amendments or changes in applicable Law which is
reasonably likely to have, individually or in the aggregate, a XxxxXxxxxx.XXX
Material Adverse Effect or materially adversely affect the funding status of any
such plan. Neither any XxxxXxxxxx.XXX Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by XxxxXxxxxx.XXX, or the single-employer plan of any entity which is
considered one employer with XxxxXxxxxx.XXX under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code or Section 302 of ERISA (an "ERISA
Affiliate") has an "accumulated funding deficiency" (whether or not waived)
within the meaning of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, which is reasonably likely to have a XxxxXxxxxx.XXX Material Adverse
Effect. XxxxXxxxxx.XXX has not provided, and is not required to provide,
security to a XxxxXxxxxx.XXX Pension Plan or to any single-employer plan of an
ERISA Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.
(d) No Liability under Subtitle C or D of Title
IV of ERISA has been or is expected to be incurred by XxxxXxxxxx.XXX with
respect to any ongoing, frozen or terminated single-employer plan or the
single-employer plan of any ERISA Affiliate, which Liability is reasonably
likely to have a XxxxXxxxxx.XXX Material Adverse Effect. XxxxXxxxxx.XXX has not
incurred any withdrawal Liability with respect to a multiemployer plan under
Subtitle B of Title IV of ERISA (regardless of whether based on contributions of
an ERISA Affiliate), which Liability is reasonably likely to have a
XxxxXxxxxx.XXX Material Adverse Effect. No notice of a "reportable event,"
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
XxxxXxxxxx.XXX Pension Plan or by any ERISA Affiliate within the 12-month period
ending on the date hereof.
(e) Except as disclosed in Section 6.14 of the
XxxxXxxxxx.XXX Disclosure Memorandum, XxxxXxxxxx.XXX has no Liability for
retiree health and life benefits under any of the XxxxXxxxxx.XXX Benefit Plans
and there are no restrictions on the rights of XxxxXxxxxx.XXX to amend or
terminate any such retiree health or benefit Plan without incurring any
Liability thereunder, which Liability is reasonably likely to have a
XxxxXxxxxx.XXX Material Adverse Effect.
(f) Except as disclosed in Section 6.14 of the
XxxxXxxxxx.XXX Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director or any employee of
XxxxXxxxxx.XXX from XxxxXxxxxx.XXX under any XxxxXxxxxx.XXX Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any XxxxXxxxxx.XXX
Benefit Plan, or (iii) result in any acceleration of the time of payment or
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vesting of any such benefit, where such payment, increase, or acceleration is
reasonably likely to have, individually or in the aggregate, a XxxxXxxxxx.XXX
Material Adverse Effect.
(g) The actuarial present values of all accrued
deferred compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of XxxxXxxxxx.XXX and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been adequately reflected on the XxxxXxxxxx.XXX Financial Statements to the
extent required by and in accordance with GAAP.
6.15 MATERIAL CONTRACTS. Except as disclosed in Section
6.15 of the XxxxXxxxxx.XXX Disclosure Memorandum or otherwise reflected in the
XxxxXxxxxx.XXX Financial Statements, neither XxxxXxxxxx.XXX nor any of its
Assets, businesses or operations, is a party to, or is bound or affected by, or
receives benefits under any Contract or amendment thereto that would constitute
a "material contract" as defined in Item 601(b)(10) of Regulation S-K under the
1933 Act, which is not filed as an exhibit to XxxxXxxxxx.XXX's registration
statement on Form S-1 which was declared effective on August 19, 1999 or to the
most recent Annual Report on Form 10-K filed by XxxxXxxxxx.XXX (collectively,
all Contracts which constitute "material contracts" for XxxxXxxxxx.XXX under
Item 601(b)(10) of Regulation S-K under the 1933 Act, the "XxxxXxxxxx.XXX
Contracts"). With respect to each XxxxXxxxxx.XXX Contract and except as
disclosed in Section 6.15 of the XxxxXxxxxx.XXX Disclosure Memorandum: (i) the
Contract is in full force and effect; (ii) XxxxXxxxxx.XXX is not in Default
thereunder, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a XxxxXxxxxx.XXX Material Adverse Effect;
(iii) XxxxXxxxxx.XXX has not repudiated or waived any material provision of any
such Contract; (iv) no other party to any such Contract is, to the Knowledge of
XxxxXxxxxx.XXX, in material Default in any respect, and (v) no other party to
such Contract has, to the Knowledge of XxxxXxxxxx.XXX, repudiated or waived any
material provision thereunder.
6.16 LEGAL PROCEEDINGS. There is no Litigation instituted,
pending or, to the Knowledge of XxxxXxxxxx.XXX, threatened against
XxxxXxxxxx.XXX, or against any director, employee or employee benefit plan of
XxxxXxxxxx.XXX, or against any Asset, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a XxxxXxxxxx.XXX
Material Adverse Effect, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against
XxxxXxxxxx.XXX, that are reasonably likely to have, individually or in the
aggregate, a XxxxXxxxxx.XXX Material Adverse Effect. Section 6.16 of the
XxxxXxxxxx.XXX Disclosure Memorandum contains a summary of all Litigation as of
the date of this Agreement to which XxxxXxxxxx.XXX is a party and which names
XxxxXxxxxx.XXX as a defendant or cross-defendant or for which XxxxXxxxxx.XXX has
any potential Liability.
6.17 REPORTS. Since the date of XxxxXxxxxx.XXX's
organization XxxxXxxxxx.XXX has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with Regulatory Authorities (except for failures to file
reports or statements which are not reasonably likely to have,
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individually or in the aggregate, a XxxxXxxxxx.XXX Material Adverse Effect). As
of their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not, in all material respects, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
6.18 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by XxxxXxxxxx.XXX or Merger Sub for inclusion in the
Registration Statement to be filed by XxxxXxxxxx.XXX with the SEC, will, when
the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein not misleading. None of the information supplied or
to be supplied by XxxxXxxxxx.XXX or Merger Sub for inclusion in the Proxy
Statement to be mailed to XxxxXxxxxx.XXX's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by XxxxXxxxxx.XXX
with the SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time such documents
are filed, and with respect to the Proxy Statement, when first mailed to the
shareholders of XxxxXxxxxx.XXX or at the time of the Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement or any amendment thereof or supplement thereto, at the time of
the Shareholders' Meeting, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that XxxxXxxxxx.XXX and Merger Sub are
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby, including the Registration Statement and the
Proxy Statement, will comply as to form in all material respects with the
provisions of applicable Law.
6.19 REGULATORY MATTERS. Neither XxxxXxxxxx.XXX nor Merger
Sub has taken or agreed to take any action and neither has Knowledge of any fact
or circumstance that is reasonably likely to materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 11.1(b) or
result in the imposition of a condition or restriction of the type referred to
in the last sentence of such Section.
6.20 PRIVACY; WEB SITE. XxxxXxxxxx.XXX has complied with
the terms of the privacy policy stated on its web site. No web site owned by
XxxxXxxxxx.XXX contains content or links to other web sites which contain
content that is illegal, obscene or defamatory. No personally identifiable data
with respect to users of XxxxXxxxxx.XXX's web sites have been provided to third
parties without the consent of such users.
6.21 OPINION OF FINANCIAL ADVISOR. XxxxXxxxxx.XXX has
received the opinion of First Union Securities, Inc., dated the date of this
Agreement, to the effect that, as of such date, the consideration to be received
by XxxxXxxxxx.XXX in the Merger is fair from a
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financial point of view to XxxxXxxxxx.XXX, a signed copy of which has been or
promptly will be delivered to BHA.
6.22 BROKERS, ETC. No broker, investment banker, financial
advisor or other Person, other than First Union Securities, Inc., the fees,
commissions and expenses of which will be paid by XxxxXxxxxx.XXX, is entitled to
any broker's, finder's, financial advisor's or other similar fee or commission,
or the reimbursement of expenses, in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
XxxxXxxxxx.XXX or any of its subsidiaries. XxxxXxxxxx.XXX has furnished to BHA
true and complete copies of all agreements under which any such fees,
commissions or expenses are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees, commissions or
expenses are payable.
6.23 VOTING REQUIREMENTS . The affirmative vote of the
holders of a majority of the voting power of all outstanding shares of
XxxxXxxxxx.XXX common stock at the Shareholders' Meeting to adopt this Agreement
is the only vote of the holders of any class or series of XxxxXxxxxx.XXX's
capital stock necessary to approve and adopt this Agreement and the transactions
contemplated hereby or thereby.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF OMNICOM, BHA AND CAREER
MOSAIC
Omnicom, BHA and Career Mosaic, jointly and severally, hereby
represent and warrant to XxxxXxxxxx.XXX and Merger Sub (i) as of the date of
this Agreement with respect to Sections 7.1, 7.2, 7.3, 7.4, 7.9(c), 7.9(d),
7.10, 7.13, 7.18, 7.19, 7.20, 7.21 and 7.22 and (ii) as of the date that Xxxxxx
Xxxxxxxx LLP delivers Career Mosaic Financial Statements to XxxxXxxxxx.XXX as
contemplated in Section 11.3(e) of this Agreement (the "Delivery Date") with
respect to Sections 7.5, 7.6, 7.7, 7.8, 7.9(a), 7.9(b), 7.11, 7.12, 7.14, 7.15,
7.16, and 7.17, as follows:
7.1 ORGANIZATION, STANDING, AND POWER. Each of Omnicom,
BHA and Career Mosaic is a corporation duly organized, validly existing, and in
good standing under the Laws of the States of New York, Delaware and Delaware,
respectively. Each of Omnicom, BHA and Career Mosaic has the corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its Assets. Career Mosaic is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or
Liabilities, including the Transferred Assets and Transferred Liabilities, or
the nature or conduct of its business, including the Career Mosaic Business,
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have individually or in the aggregate, an Career Mosaic Business Material
Adverse Effect. The minute books and other organizational documents for Omnicom
and BHA (with respect to the Transferred Assets or Career Mosaic Business) and
Career Mosaic have been made available to XxxxXxxxxx.XXX for its review and,
except as disclosed in Section 7.1 of the Career Mosaic Disclosure Memorandum,
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are true and complete in all material respects as in effect as of the date of
this Agreement and accurately reflect in all material respects all amendments to
such organizational documents and all proceedings of the Board of Directors and
shareholders thereof.
7.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Each of Omnicom, BHA and Career Mosaic has
the corporate power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Omnicom, BHA and Career Mosaic. This Agreement represents
a legal, valid, and binding obligation of each of Omnicom, BHA and Career
Mosaic, enforceable against each in accordance with its terms, except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium or similar
Laws affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought.
(b) Neither the execution and delivery of this
Agreement by Omnicom, BHA or Career Mosaic, nor the consummation by any of them
of the transactions contemplated hereby, nor compliance by them with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of their respective Certificates of Incorporation or Bylaws, or (ii) constitute
or result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset used in, or necessary for, the operation
of the Career Mosaic Business (including the Transferred Assets) under, any
Contract or Permit of any of them, or (iii) subject to receipt of the requisite
Consents referred to in Section 11.1(b), constitute or result in a Default
under, or require any Consent pursuant to, any Law or Order applicable to
Omnicom, BHA or Career Mosaic, the Career Mosaic Business or any of the Assets
used in, or necessary for, the operation of the Career Mosaic Business
(including the Transferred Assets).
(c) Other than in connection or compliance with
applicable Laws, rules of the NASD, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, an Career Mosaic Business Material
Adverse Effect, no notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation of the Merger and the other
transactions contemplated in this Agreement.
7.3 CAPITAL STOCK.
(a) The authorized capital stock of Career
Mosaic consists of 10,000 shares of common stock, of which (i) 100 shares are
issued and outstanding as of the date
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of this Agreement and (ii) 10,000 shares will be issued and outstanding
immediately prior to the Effective Time. All of the issued and outstanding
shares of capital stock of Career Mosaic are duly and validly issued and
outstanding, fully paid and nonassessable. None of the outstanding shares of
Career Mosaic capital stock has been issued in violation of any preemptive
rights of the current or past shareholders of Career Mosaic.
(b) Except as set forth in Section 7.3(a), or as
disclosed in Section 7.3 of the Career Mosaic Disclosure Memorandum, there are
no shares of capital stock or other equity securities of Career Mosaic
outstanding and no outstanding Equity Rights relating to the capital stock of
Career Mosaic.
7.4 SUBSIDIARIES. Career Mosaic has no subsidiaries.
There are no Contracts relating to the rights of BHA to vote or to dispose of
any shares of the capital stock of Career Mosaic. All of the shares of
outstanding capital stock of Career Mosaic are fully paid and nonassessable and
are owned by BHA and the other stockholders free and clear of any Lien.
7.5 FINANCIAL STATEMENTS. The Career Mosaic Financial
Statements (including, in each case, any related notes) are or will be prepared
in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements),
and fairly present or will present in all material respects the financial
position of Career Mosaic (or the Career Mosaic Business) as at the respective
dates and the results of operations and cash flows for the periods indicated,
except that unaudited interim financial statements will be subject to normal and
recurring year-end adjustments which are not expected to be material in amount
or effect.
7.6 ABSENCE OF UNDISCLOSED LIABILITIES. Neither Career
Mosaic nor the Career Mosaic Business has any Liabilities that are reasonably
likely to have, individually or in the aggregate, an Career Mosaic Business
Material Adverse Effect, except Liabilities which are accrued or reserved
against in the balance sheets of Career Mosaic or the Career Mosaic Business
included in the Career Mosaic Financial Statements or reflected in the notes
thereto, or which have arisen in the ordinary course of business since the
latest date covered by the Career Mosaic Financial Statements.
7.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December
31, 1999, except as disclosed in the Career Mosaic Financial Statements or as
disclosed in Section 7.7 of the Career Mosaic Disclosure Memorandum, (i) there
have been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, an Career Mosaic Business
Material Adverse Effect, and (ii) neither Omnicom, BHA nor Career Mosaic has
taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this Agreement,
would represent or result in a material breach or violation of any of their
respective covenants contained herein.
7.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or
on behalf of Career Mosaic, or with respect to the Career Mosaic Business, or
for which Career Mosaic could be held
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primarily liable, have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1999, except to the extent that all such failures to file, taken
together, are not reasonably likely to have an Career Mosaic Business Material
Adverse Effect, and all such Tax Returns filed are complete and accurate to the
Knowledge of Omnicom, BHA and Career Mosaic. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency or Litigation
with respect to any Taxes, except as reserved against in the Career Mosaic
Financial Statements or as disclosed in Section 7.8 of the Career Mosaic
Disclosure Memorandum. There are no Liens with respect to Taxes upon any of
Career Mosaic's Assets (including the Transferred Assets), except for Liens for
taxes not yet due and payable and any Liens which are not reasonably likely to
have an Career Mosaic Business Material Adverse Effect.
(b) Except as set forth in Section 7.8(b) of the
Career Mosaic Disclosure Memorandum, Career Mosaic has not, and neither Omnicom
nor BHA with respect to the Career Mosaic Business or any Transferred Assets
has, executed an extension or waiver of any statute of limitations on the
assessment or collection of any Tax due or for which Career Mosaic would be
liable that is currently in effect.
(c) The provision for any Taxes due or to become
due for Career Mosaic or with respect to the Career Mosaic Business for the
period or periods through and including the date of the Career Mosaic Financial
Statements that has been made and is reflected on such Career Mosaic Financial
Statements is adequate in accordance with GAAP to cover all such Taxes.
(d) Deferred Taxes of Career Mosaic, and
deferred Taxes related to the Career Mosaic Business or Transferred Assets, have
been provided adequately for in accordance with GAAP.
(e) Career Mosaic is not a party to any Tax
allocation or sharing agreement and Career Mosaic has not been a member of an
affiliated group filing a consolidated federal income Tax Return and does not
have any Liability for Taxes of any Person (in each case, other than as a member
of Omnicom' consolidated group) under Treasury Regulation Section 1.1502-6 (or
any similar provision of state, local or foreign Law) as a transferee or
successor or by Contract or otherwise.
(f) Career Mosaic is in compliance with, and its
records contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
Tax withholding requirements under federal, state and local Tax Laws.
(g) Except as disclosed in Section 7.8 of the
Career Mosaic Disclosure Memorandum, Career Mosaic has not made any payments, is
not obligated to make any payments, and is not a party to any Contract that
could obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Internal Revenue Code.
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(h) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of Career Mosaic that occurred
during or after any Taxable Period in which Career Mosaic incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1999.
(i) Career Mosaic has no and has not had in any
foreign country a permanent establishment, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
7.9 ASSETS.
(a) Except as disclosed in Section 7.9 of the
Career Mosaic Disclosure Memorandum or as disclosed or reserved against in the
Career Mosaic Financial Statements, Career Mosaic has good and marketable title,
free and clear of all Liens, to all of its Assets, including all of the
Transferred Assets, except for any such Liens or other defects of title which
are not reasonably likely to have an Career Mosaic Business Material Adverse
Effect. All tangible properties used in the Career Mosaic Businesses are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with past practices.
(b) All Assets (including Transferred Assets)
which are material to the Career Mosaic Business held under leases or subleases
by Career Mosaic are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect.
(c) Except for the Assets related to the
provision of services under the Administrative Services Agreement which are not
primarily used in the conduct of the Career Mosaic Business, the Assets of
Career Mosaic include all Assets required to operate the Career Mosaic Business
as presently conducted. Neither Omnicom nor BHA has retained any Asset which is
necessary for, or is used in, the operation of the Career Mosaic Business.
Except for Assets related to the provision of services under the Administrative
Services Agreement which are not primarily used in the conduct of the Career
Mosaic Business, the Transferred Assets constituted all of the Assets which were
necessary for, or which were used primarily in, the operation of the Career
Mosaic Business in all material respects as it was conducted at the time that
BHA contributed the Transferred Assets to Career Mosaic.
7.10 INTELLECTUAL PROPERTY. Career Mosaic owns or has a
valid license to use all of the Intellectual Property (i) material to the
conduct of the Career Mosaic Business or (ii) included in the Transferred
Assets. Career Mosaic is the owner of or has a license to any Intellectual
Property sold or licensed to a third party by Career Mosaic in connection with
the Career Mosaic Business, and Career Mosaic has the right to convey by sale or
license any Intellectual Property so conveyed. Career Mosaic is not in Default
under any of its Intellectual
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Property licenses, except for Defaults which are not reasonably likely to have,
individually or in the aggregate, an Career Mosaic Business Material Adverse
Effect. No proceedings have been instituted, or are pending or, to the Knowledge
of Omnicom, BHA and Career Mosaic, threatened, which challenge the rights of BHA
or Career Mosaic with respect to Intellectual Property used, sold or licensed in
the course of the Career Mosaic Business, nor has any person claimed or alleged
any rights to such Intellectual Property. The conduct of the Career Mosaic
Business does not infringe any Intellectual Property of any other person.
Neither Omnicom, BHA nor Career Mosaic is aware of any third party infringement
of any of the Intellectual Property used in, or necessary for, the operation of
the Career Mosaic Business. Except as disclosed in Section 7.10 of the Career
Mosaic Disclosure Memorandum, Career Mosaic is not obligated to pay any
recurring royalties to any Person with respect to any such Intellectual
Property. Except as disclosed in Section 7.10 of the Career Mosaic Disclosure
Memorandum, every officer, director, or employee of Career Mosaic and every
employee of BHA materially related to the operation of the Career Mosaic
Business is a party to a Contract which requires such officer, director or
employee to assign to BHA or Career Mosaic any interest in any Intellectual
Property, which is included in the Transferred Assets or which is used in or
necessary for the operation of the Career Mosaic Business, and to keep
confidential any trade secrets, proprietary data, customer information or other
business information of Career Mosaic or which relates to the Career Mosaic
Business or Transferred Assets (such Contracts collectively, the "IP Assignment
Contracts"). All IP Assignment Contracts have been assigned to Career Mosaic. No
officer, director or employee of Career Mosaic and no employee of Omnicom or BHA
related to the operation of the Career Mosaic Business is party to any Contract
with any Person other than Career Mosaic which requires such officer, director
or employee to (i) assign to any Person other than Career Mosaic any interest in
any Intellectual Property which is used in or necessary for the operation of the
Career Mosaic Business or included in the Transferred Assets, or (ii) keep
confidential any trade secrets, proprietary data, customer information or other
business information of any Person other than Career Mosaic. Except as disclosed
in Section 7.10 of the Career Mosaic Disclosure Memorandum, no officer, director
or employee of Career Mosaic or any employee of Omnicom or BHA related to the
operation of the Career Mosaic Business is party to any Contract which restricts
or prohibits such officer, director or employee from engaging in activities
competitive with any Person.
7.11 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Omnicom, BHA and Career
Mosaic, Career Mosaic, its Participation Facilities and its Operating Properties
are, and have been, in compliance with all Environmental Laws, except for
violations which are not reasonably likely to have, individually or in the
aggregate, an Career Mosaic Business Material Adverse Effect.
(b) There is no Litigation pending or threatened
before any court, governmental agency, or authority or other forum in which
Career Mosaic or any of its Operating Properties or Participation Facilities (or
Career Mosaic in respect of such Operating Property or Participation Facility)
has been or, with respect to threatened Litigation, may be named as a defendant
(i) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release, discharge, spillage, or
disposal into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or
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potentially affecting) a site owned, leased, or operated by Omnicom, BHA, Career
Mosaic or any of their respective Operating Properties or Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, an Career Mosaic
Business Material Adverse Effect.
(c) During the period of (i) Career Mosaic's
ownership or operation of any of its current properties, (ii) Career Mosaic's
participation in the management of any Participation Facility, or (iii) Career
Mosaic's holding of a security interest in a Operating Property, there have been
no releases, discharges, spillages or disposals of Hazardous Material in, on,
under, adjacent to or affecting such properties, except such as are not
reasonably likely to have, individually or in the aggregate, an Career Mosaic
Business Material Adverse Effect. Prior to the period of (i) Career Mosaic's
ownership or operation of any of its respective current properties, (ii) Career
Mosaic's participation in the management of any Participation Facility, or (iii)
Career Mosaic's holding of a security interest in Operating Property, to the
Knowledge of Omnicom, BHA and Career Mosaic, there were no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, or affecting any
such property, Participation Facility or Operating Property, except such as are
not reasonably likely to have, individually or in the aggregate, an Career
Mosaic Material Adverse Effect.
7.12 COMPLIANCE WITH LAWS. Career Mosaic has in effect all
Permits necessary for it to own, lease or operate its material Assets (including
the Transferred Assets) and to carry on the Career Mosaic Business as now
conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, an Career Mosaic Business
Material Adverse Effect, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, an Career Mosaic Business Material Adverse
Effect. Except as disclosed in Section 7.12 of the Career Mosaic Disclosure
Memorandum, neither Career Mosaic, nor Omnicom or BHA with respect to the
Transferred Assets or Career Mosaic Business:
(a) is in Default under any of the provisions of their
respective Certificates of Incorporation and Bylaws;
(b) is in Default under any Laws, Orders or Permits
applicable to the Career Mosaic Business or employees conducting the
Career Mosaic Business, except for Defaults which are not reasonably
likely to have, individually or in the aggregate, an Career Mosaic
Business Material Adverse Effect; or
(c) has received any notification or communication from
any agency or department of federal, state or local government or any
Regulatory Authority or the staff thereof (i) asserting that Career
Mosaic is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, an Career Mosaic Business Material Adverse Effect, (ii)
threatening to revoke any Permits, the revocation of which is
reasonably likely to have, individually or in the aggregate, an Career
Mosaic Business Material Adverse Effect, or (iii) requiring Career
Mosaic to enter into or consent to the issuance of a cease and desist
order, formal agreement, directive,
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commitment or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which materially restricts the
conduct of the Career Mosaic Business or in any manner relates to its
capital adequacy, its credit or reserve policies, its management or the
payment of dividends.
Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to
XxxxXxxxxx.XXX.
7.13 LABOR RELATIONS. Neither Career Mosaic nor the Career
Mosaic Business is the subject of any Litigation asserting that an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state law) has been committed or seeking to compel the bargaining with any labor
organization as to wages or conditions of employment. Neither Career Mosaic nor
Omnicom or BHA with respect to the employees associated with the Career Mosaic
Business are party to any collective bargaining agreement. There is no strike or
other labor dispute involving Career Mosaic or the Career Mosaic Business,
pending or, to the Knowledge of Omnicom, BHA and Career Mosaic, threatened, or
to the Knowledge of Omnicom, BHA and Career Mosaic, is there any activity
involving employees of Career Mosaic or employees of BHA primarily associated
with the Career Mosaic Business seeking to certify a collective bargaining unit
or engaging in any other organization activity.
7.14 EMPLOYEE BENEFIT PLANS.
(a) Career Mosaic has disclosed in Section 7.14
of the Career Mosaic Disclosure Memorandum, and has delivered or made available
to XxxxXxxxxx.XXX prior to the execution of this Agreement copies in each case
of, all pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus, or other
incentive plan, all other written employee programs, arrangements, or agreements
all medical, vision, dental or other health plans, all life insurance plans, and
all other employee benefit plans or fringe benefit plans, including "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
Career Mosaic, Omnicom and BHA (with respect to employees associated with the
Career Mosaic Business) or ERISA Affiliate thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors or other beneficiaries are eligible to
participate (collectively, the "Career Mosaic Benefit Plans"). Any of the Career
Mosaic Benefit Plans which is an "employee pension benefit plan," as that term
is defined in Section 3(2) of ERISA, is referred to herein as a "Career Mosaic
ERISA Plan." Each Career Mosaic ERISA Plan which is also a "defined benefit
plan" (as defined in Section 414(j) of the Internal Revenue Code) is referred to
herein as an "Career Mosaic Pension Plan." No Career Mosaic Pension Plan is or
has been a multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All Career Mosaic Benefit Plans are in
compliance in all material respects with the applicable terms of ERISA, the
Internal Revenue Code and any other applicable Laws. Each Career Mosaic ERISA
Plan which is intended to be qualified under
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Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service, and neither Omnicom, BHA
nor Career Mosaic is aware of any circumstances likely to result in revocation
of any such favorable determination letter. To the Knowledge of BHA and Career
Mosaic, Career Mosaic has not engaged in a transaction with respect to any
Career Mosaic Benefit Plan that, assuming the taxable period of such transaction
expired as of the date hereof, would subject Career Mosaic to a Tax imposed by
either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.
(c) No Career Mosaic Pension Plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, and the fair market value of the assets of any such plan exceeds the
plan's "benefit liabilities," as that term is defined in Section 4001(a)(16) of
ERISA. Since the date of the most recent actuarial valuation, there has been (i)
no material change in the financial position of any Career Mosaic Pension Plan,
(ii) no change in the actuarial assumptions with respect to any Career Mosaic
Pension Plan, and (iii) no increase in benefits under any Career Mosaic Pension
Plan as a result of plan amendments or changes in applicable Law which is
reasonably likely to have, individually or in the aggregate, an Career Mosaic
Material Adverse Effect or materially adversely affect the funding status of any
such plan. Neither any Career Mosaic Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by Career Mosaic, or the single-employer plan of any entity which is
considered one employer with Career Mosaic under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code or Section 302 of ERISA (an "ERISA
Affiliate") has an "accumulated funding deficiency" (whether or not waived)
within the meaning of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, which is reasonably likely to have an Career Mosaic Business Material
Adverse Effect. Career Mosaic has not provided, and is not required to provide,
security to an Career Mosaic Pension Plan or to any single-employer plan of an
ERISA Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.
(d) No Liability under Subtitle C or D of Title
IV of ERISA has been or is expected to be incurred by Career Mosaic with respect
to any ongoing, frozen or terminated single-employer plan or the single-employer
plan of any ERISA Affiliate, which Liability is reasonably likely to have an
Career Mosaic Business Material Adverse Effect. Career Mosaic has not incurred
any withdrawal Liability with respect to a multiemployer plan under Subtitle B
of Title IV of ERISA (regardless of whether based on contributions of an ERISA
Affiliate), which Liability is reasonably likely to have an Career Mosaic
Business Material Adverse Effect. No notice of a "reportable event," within the
meaning of Section 4043 of ERISA for which the 30-day reporting requirement has
not been waived, has been required to be filed for any Career Mosaic Pension
Plan or by any ERISA Affiliate within the 12-month period ending on the date
hereof.
(e) Except as disclosed in Section 7.14 of the
Career Mosaic Disclosure Memorandum, Career Mosaic has no Liability for retiree
health and life benefits under any of the Career Mosaic Benefit Plans and there
are no restrictions on the rights of Career Mosaic to amend or terminate any
such retiree health or benefit Plan without incurring any Liability thereunder,
which Liability is reasonably likely to have an Career Mosaic Business Material
Adverse Effect.
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(f) Except as disclosed in Section 7.14 of the
Career Mosaic Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director or any employee of Career
Mosaic from Career Mosaic under any Career Mosaic Benefit Plan or otherwise,
(ii) increase any benefits otherwise payable under any Career Mosaic Benefit
Plan, or (iii) result in any acceleration of the time of payment or vesting of
any such benefit, where such payment, increase, or acceleration is reasonably
likely to have, individually or in the aggregate, an Career Mosaic Business
Material Adverse Effect.
(g) The actuarial present values of all accrued
deferred compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of Career Mosaic and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been adequately reflected on the Career Mosaic Financial Statements to the
extent required by and in accordance with GAAP.
7.15 MATERIAL CONTRACTS. Except as disclosed in Section
7.15 of the Career Mosaic Disclosure Memorandum or otherwise reflected in the
Career Mosaic Financial Statements, neither Career Mosaic nor any of its Assets
or the Career Mosaic Business, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination, consulting
or retirement Contract, (ii) any Contract relating to the borrowing of money by
Career Mosaic or the guarantee by Career Mosaic of any such obligation, (iii)
any Contract which prohibits or restricts (A) the engagement of the Career
Mosaic Business or (B) competition with any other Person, (iv) any Contract
between Omnicom, BHA or any Affiliate thereof on one hand, and Career Mosaic on
the other, (v) any Contract involving Intellectual Property used in the
operation of the Career Mosaic Business or included in the Transferred Assets
(other than Contracts entered into in the ordinary course of the Career Mosaic
Business, (vi) any Contract relating to the purchase or sale of any goods or
services, other than Contracts entered into in the ordinary course of the Career
Mosaic Business and involving payments under any individual Contract not in
excess of $100,000, (vii) any other Contract that would be required to be filed
as an exhibit to a Form 10-K as of the date of this Agreement if Career Mosaic
were required to file a Form 10-K on such date (collectively, the "Career Mosaic
Contracts"). The Career Mosaic Contracts constitute all of the material
Contracts necessary for, or used in connection with, the operation of the Career
Mosaic Business as presently conducted. With respect to each Career Mosaic
Contract and except as disclosed in Section 7.15 of the Career Mosaic Disclosure
Memorandum: (i) the Contract is in full force and effect; (ii) Career Mosaic is
not in Default thereunder, other than Defaults which are not reasonably likely
to have, individually or in the aggregate, an Career Mosaic Business Material
Adverse Effect; (iii) Career Mosaic has not repudiated or waived any material
provision of any such Contract; (iv) no other party to any such Contract is, to
the Knowledge of Omnicom, BHA and Career Mosaic, in Default in any respect,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, an Career Mosaic Business Material Adverse Effect, and (v) no
other party to such Contract has, to the Knowledge of Omnicom, BHA and Career
Mosaic, repudiated or
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waived any material provision thereunder. All Career Mosaic Contracts which were
included in the Transferred Assets have been assigned to Career Mosaic and all
Consents required in connection therewith have been obtained.
7.16 LEGAL PROCEEDINGS. There is no Litigation instituted,
pending or, to the Knowledge of Omnicom, BHA and Career Mosaic, threatened
against Career Mosaic, the Career Mosaic Business, or against any director,
employee or employee benefit plan of Career Mosaic, or against any Asset
(including the Transferred Assets), interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, an Career Mosaic
Business Material Adverse Effect, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
Career Mosaic or the Career Mosaic Business, that are reasonably likely to have,
individually or in the aggregate, an Career Mosaic Business Material Adverse
Effect. Section 7.16 of the Career Mosaic Disclosure Memorandum contains a
summary of all Litigation as of the date of this Agreement to which (i) Career
Mosaic is a party and which names Career Mosaic as a defendant or
cross-defendant or for which Career Mosaic has any potential Liability, or (ii)
the Transferred Assets or the Career Mosaic Business is the subject.
7.17 REPORTS. Since the date of Career Mosaic's
organization, Career Mosaic has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with Regulatory Authorities (except for failures to file
reports or statements which are not reasonably likely to have, individually or
in the aggregate, an Career Mosaic Business Material Adverse Effect). As of
their respective dates, each of such reports and documents complied in all
material respects with all applicable Laws. As of its respective date, each such
report and document did not, in all material respects, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
7.18 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by Omnicom, BHA or Career Mosaic for inclusion in the
Registration Statement to be filed by XxxxXxxxxx.XXX with the SEC, will, when
the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein no misleading. None of the information supplied or
to be supplied by Omnicom, BHA or Career Mosaic for inclusion in the Proxy
Statement to be mailed to XxxxXxxxxx.XXX's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed with the SEC or any
other Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with respect
to the Proxy Statement, when first mailed to the shareholders of XxxxXxxxxx.XXX
or at the time of the Shareholders' Meeting, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Shareholders' Meeting. All documents that
Omnicom, BHA
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or Career Mosaic are responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
7.19 REGULATORY MATTERS. Neither Omnicom, BHA nor Career
Mosaic has taken or agreed to take any action and has any Knowledge of any fact
or circumstance that is reasonably likely to materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 11.1(b) or
result in the imposition of a condition or restriction of the type referred to
in the last sentence of such Section.
7.20 OWNERSHIP OF XXXXXXXXXX.XXX COMMON STOCK. As of the
date of this Agreement, neither Omnicom nor any of its majority owned
subsidiaries (including BHA) owns, and at the Effective Time neither Omnicom nor
any of its majority owned subsidiaries will own, of record or beneficially, any
shares of XxxxXxxxxx.XXX common stock nor does Omnicom or any of such
subsidiaries (including BHA) have any Equity Rights with respect to
XxxxXxxxxx.XXX capital stock, except for the shares of XxxxXxxxxx.XXX common
stock to be received in the Merger and no more than 100,000 shares owned
pursuant to independently trusteed employee plans of Omnicom and its majority
owned subsidiaries.
7.21 PRIVACY; WEB SITE. Each of Omnicom, BHA and Career
Mosaic have complied with the terms of the privacy policy stated on the web site
used in the operation of the Career Mosaic Business at all times during which
Omnicom, BHA and Career Mosaic have operated the Career Mosaic Business. No web
site used in the operation of the Career Mosaic Business contains content or
links to other web sites which contain content that is illegal, obscene or
defamatory. No personally identifiable data with respect to users of the Career
Mosaic Business' web sites have been provided to third parties without the
consent of such user.
7.22 BROKERS, ETC. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisors or other similar fee or commission, or the reimbursement of expenses,
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Omnicom, BHA or Career Mosaic.
ARTICLE 8
CONDUCT OF BUSINESS PENDING CONSUMMATION
8.1 COVENANTS OF XXXXXXXXXX.XXX. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of BHA shall have been obtained
(which consent shall not be unreasonably withheld or delayed), and except as
otherwise expressly contemplated herein, XxxxXxxxxx.XXX shall and shall cause
each of its subsidiaries to (a) operate its business in all material respects
only in the ordinary course thereof, (b) use commercially reasonable best
efforts to preserve intact its business as conducted on the date hereof in all
material respects and its material Assets and maintain its material rights and
franchises, and (c) take no action which would (i) materially adversely affect
the ability of any party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the
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last sentences of Section 11.1(b) or 11.1(c), or (ii) materially adversely
affect the ability of any party to perform its covenants and agreements under
this Agreement.
8.2 NEGATIVE COVENANTS OF XXXXXXXXXX.XXX. From the date
of this Agreement until the earlier of the Effective Time or the termination of
this Agreement, except as otherwise provided in this Agreement, unless the prior
written consent of BHA shall have been obtained (which consent shall not be
unreasonably withheld or delayed), XxxxXxxxxx.XXX covenants that it will not do
or agree or commit to do, or permit any of its subsidiaries to do or agree or
commit to do, any of the following:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of XxxxXxxxxx.XXX or its subsidiaries, except in
connection with the adoption of the Rights Plan or as otherwise
required by this Agreement, or
(b) incur any additional debt obligation or other
obligation for borrowed money in excess of an aggregate of $2,000,000,
except in the ordinary course of the business of XxxxXxxxxx.XXX
consistent with past practices or as contemplated in the Credit
Agreement, or impose, or suffer the imposition, on any Asset of
XxxxXxxxxx.XXX and its subsidiaries of any Lien or permit any such Lien
to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities convertible
into any shares, of the capital stock of XxxxXxxxxx.XXX or its
subsidiaries or declare or pay any dividend or make any other
distribution in respect of XxxxXxxxxx.XXX's capital stock; or
(d) except for (1) this Agreement, (2) pursuant to the
exercise of stock options and warrants outstanding as of the date hereof
and listed in Section 6.3 of the XxxxXxxxxx.XXX Disclosure Schedule
(which, except as set forth in Section 6.3(b), all shall fully vest upon
the Effective Time of the Merger) or in respect of up to 400,000 shares
of XxxxXxxxxx.XXX common stock pursuant to stock options awarded after
the date of this Agreement in the ordinary course of business consistent
with past practice to employees who are not directors or officers of
XxxxXxxxxx.XXX (which shall vest in accordance with the terms approved by
the XxxxXxxxxx.XXX Board of Directors, which shall not accelerate as a
result of the Effective Time), (3) as disclosed in Section 8.2(d) of the
XxxxXxxxxx.XXX Disclosure Memorandum and (4) pursuant to the Rights Plan
in accordance with its terms, issue, sell, pledge, encumber, authorize
the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of XxxxXxxxxx.XXX common stock or any
other capital stock of any subsidiary, or any stock appreciation rights,
or any option, warrant, or other Equity Right; or
(e) adjust, split, combine or reclassify any capital
stock of XxxxXxxxxx.XXX or its subsidiaries or issue or authorize the
issuance of any other securities in respect of or in substitution for
shares of XxxxXxxxxx.XXX common stock, or sell, lease, mortgage or
otherwise dispose of or otherwise encumber (x) any shares of capital
stock of
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XxxxXxxxxx.XXX or its subsidiaries or (y) any material Asset other than
in the ordinary course of business for reasonable and adequate
consideration; or
(f) grant any increase in compensation or benefits to the
employees, officers or directors of XxxxXxxxxx.XXX, except in accordance
with the ordinary course of business consistent with past practice,
subsection (d) above or as required by Law; pay any severance or
termination pay or any bonus other than pursuant to written policies or
written Contracts in effect on the date of this Agreement; enter into or
amend any severance agreements with officers of XxxxXxxxxx.XXX; grant
any increase in fees or other increases in compensation or other
benefits to directors of XxxxXxxxxx.XXX; or enter into any other
Contract or arrangement with any director or officer of XxxxXxxxxx.XXX
or any other Person who, to the Knowledge of XxxxXxxxxx.XXX, is a
relative of a director or officer of XxxxXxxxxx.XXX; or
(g) enter into or amend any employment Contract between
XxxxXxxxxx.XXX and any Person (unless such amendment is required by Law)
that XxxxXxxxxx.XXX does not have the unconditional right to terminate
without Liability (other than Liability for services already rendered),
at any time on or after the Effective Time, except as otherwise
contemplated in this Agreement; or
(h) adopt any new employee benefit plan of XxxxXxxxxx.XXX
or terminate or withdraw from, or make any material change in or to,
any existing employee benefit plans of XxxxXxxxxx.XXX, other than as
otherwise contemplated in Section 9.10 of this Agreement, the
acceleration of the vesting of all options outstanding prior to the
Effective Time (except as otherwise provided in Section 6.3(b) of this
Agreement), or any such change that is required by Law or that, in the
opinion of counsel, is necessary or advisable to maintain the
tax-qualified status of any such plan, or make any distributions from
such employee benefit plans, except as required by Law or the terms of
such plans; or
(i) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(j) commence any Litigation other than in accordance with
past practice, or settle any Litigation involving any Liability of
XxxxXxxxxx.XXX for material money damages or restrictions upon the
operations of XxxxXxxxxx.XXX; or
(k) except in the ordinary course of business, as
otherwise contemplated by this Agreement or for advertising, marketing
or co-branding agreements under which XxxxXxxxxx.XXX's aggregate
annual payment obligations do not exceed $2,000,000, enter into,
modify, amend or terminate any material Contract or waive, release,
compromise or assign any material rights or claims; or
(l) take any action that would cause the representations
and warranties of XxxxXxxxxx.XXX and Merger Sub set forth in Article 6
to no longer be true and correct in all material respects; or
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(m) authorize, commit or agree to take any of the
foregoing actions.
8.3 OMNICOM, BHA AND CAREER MOSAIC COVENANTS. From the
date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent of the
XxxxXxxxxx.XXX shall have been obtained (which consent shall not be
unreasonably withheld or delayed), and except as otherwise expressly
contemplated herein, Omnicom, BHA and Career Mosaic shall (x) operate the
Career Mosaic Business in all material respects only in the ordinary course
thereof, (y) use commercially reasonable best efforts to preserve intact the
Career Mosaic Business in all material respects and the material Assets
(including the Transferred Assets) used in, or necessary for, the operation of
the Career Mosaic Business, and maintain the Career Mosaic Business' material
rights and franchises, and (z) take no action which would (i) materially
adversely affect the ability of any party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentences of Section 11.1(b) or
11.1(c) or (ii) materially adversely affect the ability of any party to perform
its covenants and agreements under this Agreement. Omnicom, BHA and Career
Mosaic each further covenants and agrees that it will not do or agree or commit
to do any of the following without the prior written consent of XxxxXxxxxx.XXX
(which consent shall not be unreasonably withheld or delayed):
(a) amend the Certificate of Incorporation or Bylaws of
Career Mosaic, or
(b) incur any additional debt obligation or other
obligation for borrowed money in excess of an aggregate of $100,000
with respect to Career Mosaic or the Career Mosaic Business, except in
the ordinary course of the Career Mosaic Business consistent with past
practices or as otherwise contemplated by this Agreement, or impose,
or suffer the imposition, on any Asset (including any Transferred
Asset) of Career Mosaic or any Asset used in, or necessary for, the
operation of the Career Mosaic Business, of any Lien or permit any
such Lien to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange,
directly or indirectly, any shares, or any securities convertible into
any shares, of the capital stock of Career Mosaic, or declare or pay any
dividend or make any other distribution in respect of the capital stock
of Career Mosaic; or
(d) except for this Agreement or as disclosed in Section
8.3(d) of the Career Mosaic Disclosure Memorandum, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional shares of capital stock of
Career Mosaic, or any stock appreciation rights, or any option, warrant,
conversion, or other right to acquire any such stock, or any security
convertible into any such stock; or
(e) adjust, split, combine or reclassify any shares of
capital stock of Career Mosaic or issue or authorize the issuance of any
other securities in respect of or in substitution for shares of such
capital stock or sell, lease, mortgage or otherwise dispose of or
otherwise encumber any shares of capital stock of Career Mosaic, or any
Asset
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(including Transferred Assets) used in, or necessary for, the operation
of the Career Mosaic Business as presently conducted, other than in
the ordinary course of the Career Mosaic Business for reasonable and
adequate consideration; or
(f) grant any increase in compensation or benefits to the
employees or officers of Career Mosaic or individuals who are employees
of the Career Mosaic Business, except in accordance with the ordinary
course of business consistent with past practice or as required by Law;
pay any severance or termination pay or any bonus other than pursuant to
written policies or written Contracts in effect on the date of this
Agreement or the provisions of any applicable program or plan adopted
prior to the date of this Agreement; enter into or amend any severance
agreements with officers of Career Mosaic; grant any increase in fees or
other increases in compensation or other benefits to directors of Career
Mosaic; or enter into any other Contract or arrangement with any
director or officer of Career Mosaic or any Person who, to the Knowledge
of Omnicom and BHA, is a relative of a director or officer of
XxxxXxxxxx.XXX; or
(g) enter into or amend any employment Contract between
Career Mosaic and any Person (unless such amendment is required by Law)
that Career Mosaic does not have the unconditional right to terminate
without Liability (other than Liability for services already rendered or
severance pay in the ordinary course of business consistent with past
practice), at any time on or after the Effective Time; or
(h) adopt any new employee benefit plan of Career Mosaic
or which covers employees who are associated with the Career Mosaic
Business, or terminate or withdraw from, or make any material change
in or to, any existing employee benefit plans of Career Mosaic other
than any such change that is required by Law or that, in the opinion
of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan, or make any distributions from such employee
benefit plans except as required by Law or the terms of such plans; or
(i) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in applicable Tax Laws or regulatory
accounting requirements or GAAP; or
(j) commence any Litigation other than in accordance with
past practice, settle any Litigation involving any Liability of Career
Mosaic for material money damages or restrictions upon the operations of
any Career Mosaic; or
(k) except in the ordinary course of the Career Mosaic
Business, enter into, modify, amend or terminate any material Contract,
or waive, release, compromise or assign any material rights or claims;
or
(l) purchase or otherwise acquire beneficial ownership of
any shares of XxxxXxxxxx.XXX common stock or any Equity Rights with
respect to XxxxXxxxxx.XXX capital stock; or
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(m) sell, dispose or otherwise transfer any shares of
Career Mosaic common stock; or
(n) take any action that would cause the representations
and warranties of Omnicom, BHA and Career Mosaic set forth in
Article 7 to no longer be true and correct in all material
respects; or
(o) authorize, commit or agree to take any of the
foregoing actions.
8.4 ADVERSE CHANGES IN CONDITION. Each party agrees to
give written notice promptly to the other parties upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to it
or any of its subsidiaries which (i) is reasonably likely to have, individually
or in the aggregate, a XxxxXxxxxx.XXX Material Adverse Effect or an Career
Mosaic Business Material Adverse Effect, as the case may be, or (ii) would
cause or constitute a material breach of any of its representations, warranties
or covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
8.5 REPORTS. Each party and its subsidiaries shall file
all reports required to be filed by it with Regulatory Authorities between the
date of this Agreement and the Effective Time and shall deliver to the other
parties copies of all such reports promptly after the same are filed. If
financial statements are contained in any such reports filed with the SEC, such
financial statements will fairly present, in all material respects, the
consolidated financial position of the entity filing such statements as of the
dates indicated and the consolidated results of operations, changes in
shareholders' equity and cash flows for the periods then ended in accordance
with GAAP (subject in the case of interim financial statements to normal
recurring year-end adjustments that are not material). As of their respective
dates, such reports filed with the SEC will comply in all material respects
with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.
8.6 NO SOLICITATION BY XXXXXXXXXX.XXX.
(a) Except as expressly permitted by this Section 8.6,
neither the Board of Directors of XxxxXxxxxx.XXX nor any committee thereof
shall authorize or cause XxxxXxxxxx.XXX to enter into any letter of intent,
agreement in principal, acquisition agreement or other similar agreement (each,
an "Acquisition Agreement") related to any Takeover Proposal, unless such
Acquisition Agreement would not prevent consummation of the transactions
contemplated by this Agreement and, if the transactions contemplated by such
Acquisition Agreement were consummated, holders of the XxxxXxxxxx.XXX common
stock issuable in the Merger are treated in the same manner as all other
holders of XxxxXxxxxx.XXX common stock.
(b) XxxxXxxxxx.XXX shall promptly advise BHA orally and
in writing of any request for information or of any Takeover Proposal, the
material terms and conditions of such request or Takeover Proposal and the
identity of the person making such request or Takeover
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Proposal. XxxxXxxxxx.XXX will keep BHA informed of the status and material
details (including amendments or proposed amendments) of any such request or
Takeover Proposal. BHA shall maintain the confidentiality of any such
information regarding a Takeover Proposal provided to BHA by XxxxXxxxxx.XXX or
its Affiliates.
(c) Nothing contained in this Section 8.6 shall prohibit
XxxxXxxxxx.XXX from (i) taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the 1934 Act or from making any
disclosure to XxxxXxxxxx.XXX's shareholders (including with respect to the
delivery by XxxxXxxxxx.XXX to BHA of a Notice of Takeover Proposal) if, in the
good faith judgment of the Board of Directors of XxxxXxxxxx.XXX, after
consultation with, and in conformity with the advice of, outside counsel,
failure so to disclose would be inconsistent with its fiduciary obligations
under applicable law or (ii) after having consulted with and considered the
advice of outside counsel, reasonably determining in good faith that the making
of a recommendation to its shareholders for approval of the matters submitted
for approval or the failure to withdraw or modify such recommendation would
constitute a breach of the fiduciary duties of the members of the Board of
Directors of XxxxXxxxxx.XXX to its shareholders under applicable law.
ARTICLE 9
ADDITIONAL AGREEMENTS
9.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER
APPROVAL. As soon as reasonably practicable after execution of this Agreement
(and in no event later than 60 days following receipt of Career Mosaic
Financial Statements which comply in all material respects with the
requirements of the applicable Securities Laws for inclusion in the
Registration Statement), XxxxXxxxxx.XXX, BHA and Career Mosaic jointly shall
prepare and file the Registration Statement with the SEC and each shall use its
commercially reasonable best efforts to (i) cause the Registration Statement to
become effective under the 1933 Act, (ii) take any action required to be taken
under applicable state securities Laws in connection with the issuance of the
shares of XxxxXxxxxx.XXX common stock upon consummation of the Merger and (iii)
register for resale by BHA in the Registration Statement a number of shares of
XxxxXxxxxx.XXX common stock which will reduce BHA's ownership of XxxxXxxxxx.XXX
common stock to less than 20% of all shares outstanding on the filing date of
the Registration Statement; provided that (1) the Registration Statement only
shall remain effective for a period of one year after the date that the
Registration Statement is declared effective by the SEC, provided, that, BHA
shall not sell any Resale Shares under the Registration Statement if
XxxxXxxxxx.XXX furnishes BHA with written notice that facts and circumstances
which are not publicly available exist which require XxxxXxxxxx.XXX to prohibit
sales under the Registration Statement for an aggregate period of up to 90 days
in any twelve month period and (2) any Person who purchases an amount of the
Resale Shares which equals at least 1% of the total shares of XxxxXxxxxx.XXX
common stock outstanding on the date such Person purchases such Resale Shares,
BHA shall cause, as a condition to such sale, such Person to enter into a
written agreement in form and substance reasonably satisfactory to
XxxxXxxxxx.XXX whereby such Person agrees to execute promptly upon request a
customary lock-up agreement in connection with any public offering conducted by
XxxxXxxxxx.XXX within one year after the Effective Time. In addition,
XxxxXxxxxx.XXX, to
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the extent permitted under applicable Securities Laws, shall have the right, in
its sole discretion, to file post-effective amendments to the Registration
Statement to, among other things, convert the Registration Statement into a
registration statement on Form S-3, or such other appropriate form.
XxxxXxxxxx.XXX shall call a Shareholders' Meeting, to be held as soon as
reasonably practicable after the Registration Statement is declared effective
by the SEC, for the purpose of voting upon approval of the issuance of the
consideration in the Merger and such other matters as it deems appropriate. In
connection with the Shareholders' Meeting, (i) XxxxXxxxxx.XXX shall prepare and
file with the SEC a Proxy Statement and mail such Proxy Statement to its
shareholders and (ii) the parties shall furnish to each other all information
concerning them that XxxxXxxxxx.XXX may reasonably request in connection with
such Proxy Statement. The parties shall make all necessary filings with respect
to the Merger under the Securities Laws.
9.2 LISTING. XxxxXxxxxx.XXX shall use its best efforts to
list, simultaneous with the Effective Time, on the Nasdaq National Market the
shares of XxxxXxxxxx.XXX common stock issued to the holders of Career Mosaic
common stock pursuant to the Merger; and XxxxXxxxxx.XXX shall give all notices
and make all filings with the NASD required in connection with the transactions
contemplated herein.
9.3 APPLICATIONS; ANTITRUST NOTIFICATION. The parties
shall promptly prepare and file applications with all Regulatory Authorities
having jurisdiction over the transactions contemplated by this Agreement
seeking the requisite Consents necessary to consummate the transactions
contemplated by this Agreement. To the extent required by the HSR Act, each of
the parties will promptly file with the United States Federal Trade Commission
and the United States Department of Justice the notification and report form
required for the transactions contemplated hereby and any supplemental or
additional information which may reasonably be requested in connection
therewith pursuant to the HSR Act and will comply in all material respects with
the requirements of the HSR Act. The parties shall deliver to each other copies
of all filings, correspondence and orders to and from all Regulatory
Authorities in connection with the transactions contemplated hereby.
9.4 FILINGS WITH STATE OFFICES. Upon the terms and
subject to the conditions of this Agreement, Merger Sub shall execute and file
the Certificate of Merger with the Secretary of State of the State of Delaware
in connection with the Closing.
9.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the
terms and conditions of this Agreement, each party agrees to use, and to cause
its subsidiaries to use, its commercially reasonable best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper, or advisable under applicable Laws to consummate and make
effective, as soon as reasonably practicable after the date of this Agreement,
the transactions contemplated by this Agreement, including using its
commercially reasonable best efforts to lift or rescind any Order adversely
affecting its ability to consummate the transactions contemplated herein and to
cause to be satisfied the conditions referred to in Article 11; provided, that
nothing herein shall preclude either party from exercising its rights under
this Agreement. Each party shall use, and shall cause each of its subsidiaries
to use, its commercially reasonable best efforts to obtain all Consents
necessary or desirable for the consummation of the transactions contemplated by
this Agreement. Any withdrawal or modification of its
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recommendation about approval of the Merger by the XxxxXxxxxx.XXX Board of
Directors pursuant to Section 8.6(c) hereof shall not be deemed to violate or
breach this Section 9.5.
9.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each party
shall keep the other parties reasonably apprised of all material developments
relevant to its business and to consummation of the Merger and shall permit the
other party to make or cause to be made such investigation of the business and
properties of it and its subsidiaries and of their respective financial and
legal conditions as the other party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a party shall affect the representations and warranties of the
other party.
(b) Each party shall, and shall cause its
advisers and agents to, maintain the confidentiality of all confidential
information furnished to it by the other party concerning its businesses,
operations and financial positions. If this Agreement is terminated prior to
the Effective Time, each party shall promptly return or certify the destruction
of all documents and copies thereof, and all work papers containing
confidential information received from the other party.
(c) Each party agrees to give the other party
notice as soon as practicable after any determination by it of any fact or
occurrence relating to the other party which it has discovered through the
course of its investigation and which represents, or is reasonably likely to
represent, a material breach of any representation, warranty, covenant or
agreement of any other party.
9.7 PRESS RELEASES. Prior to the Effective Time, Omnicom,
BHA, Career Mosaic and XxxxXxxxxx.XXX shall consult with each other as to the
form and substance of any press release or other public disclosure related to
this Agreement or any other transaction contemplated hereby; provided, that
nothing in this Section 9.7 shall be deemed to prohibit any party from making
any disclosure which it determines in good faith to be necessary or advisable
in order to satisfy such party's disclosure obligations imposed by Law.
9.8 TAX TREATMENT. Each of the parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no
action, including merging Merger Sub with or into XxxxXxxxxx.XXX, which would
cause the Merger not to qualify as a "reorganization" within the meaning of
Section 368(a)(2)(D) of the Internal Revenue Code for federal income tax
purposes.
9.9 INDEMNIFICATION, EXCULPATION AND INSURANCE.
(a) XxxxXxxxxx.XXX agrees that any
indemnification or other agreements of Career Mosaic as in effect on the date
hereof and as disclosed on Section 9.9(a) of the Career Mosaic Disclosure
Memorandum, which are for the benefit of individuals who are not listed in
Section 5.1 of this Agreement, shall be assumed by the Surviving Corporation
and
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XxxxXxxxxx.XXX in the Merger, without further action, as of the Effective Time
and shall survive the Merger and shall continue in full force and effect in
accordance with their terms.
(b) In the event that the Surviving Corporation
or any of its successors or assigns (i) consolidates with or merges into any
other Person and is not the continuing or surviving Person of such
consolidation or merger or (ii) transfers or conveys all or substantially all
of its properties and Assets to any Person, then, and in each such case,
XxxxXxxxxx.XXX shall cause proper provision to be made so that the successors
and assigns of the Surviving Corporation assume the obligations set forth in
Section 9.9(a).
(c) For six years after the Effective Time,
XxxxXxxxxx.XXX shall cause all director nominees named in Section 5.1 hereof to
be covered under all director and officer liability insurance coverage
available to its directors and officers at the Effective Time.
(d) The provisions of this Section 9.9 are
intended to be for the benefit of, and will be enforceable by, each indemnified
party, his or her heirs and his or her representatives and are in addition to,
and not in substitution for, any other rights to indemnification or
contribution that any such Person may have by contract or otherwise.
9.10 FEES AND EXPENSES. Except as provided in this Section
9.10, all fees and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated hereby and thereby shall be paid by
the party incurring such fees or expenses, whether or not the Merger is
consummated. Without limiting the generality or effect of the foregoing,
XxxxXxxxxx.XXX and Omnicom equally shall bear and pay the costs and expenses
incurred in connection with the filing and printing of the Registration
Statement and Proxy Statement, the mailing of the Proxy Statement and the
filing fees for the premerger notification and report forms under the HSR Act.
9.11 CERTAIN EMPLOYEE MATTERS. Following the Merger,
XxxxXxxxxx.XXX will cause the Surviving Corporation to (i) honor all
obligations under employment and severance Contracts of Career Mosaic, the
existence of which have been disclosed to XxxxXxxxxx.XXX in Schedule 7.15 of
the Career Mosaic Disclosure Memorandum and otherwise do not constitute a
violation of this Agreement, in accordance with the terms thereof without
offset or deduction (other than withholding Taxes required by Law to be
withheld) and (ii) not take any action during the period from the Closing Date
to the first anniversary of the Closing Date (the "First Anniversary Date")
which results in the employees of Career Mosaic immediately prior to the
Effective Time set forth on Schedule 9.11 of the Career Mosaic Disclosure
Memorandum (the "Closing Date Employees") receiving compensation and benefits
that, in the aggregate, are less favorable than the compensation and benefits
to which other similarly situated employees of XxxxXxxxxx.XXX or its
subsidiaries are entitled, provided, however, that nothing herein will prohibit
XxxxXxxxxx.XXX from (a) taking any action required by Law or (b) substituting,
in accordance with applicable Law and the terms of any applicable benefit plan,
a benefit plan applicable to similarly situated Closing Date Employees. To the
extent that any benefit plan of XxxxXxxxxx.XXX or any of its subsidiaries
becomes applicable to any Closing Date Employees, XxxxXxxxxx.XXX will grant, or
cause to be granted, to such
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Closing Date Employees credit for their service with BHA, Career Mosaic or
their respective Affiliates for the purpose of determining eligibility to
participate and nonforfeitability of benefits under such benefit plan and for
purposes of benefit accrual under vacation and severance pay plans. With
respect to any welfare benefit plan of XxxxXxxxxx.XXX or its subsidiaries made
available to Closing Date Employees, XxxxXxxxxx.XXX will waive or cause its
subsidiaries to waive any waiting periods, pre-existing condition exclusions
and actively-at-work requirements to the extent such provisions were
inapplicable to any Closing Date Employee immediately before such plan was made
available and provide that any expenses incurred on or before the date such
plan was made available by any such individual or such individual's covered
dependents will be taken into account for purposes of satisfying applicable
deductible, coinsurance and maximum out-of-pocket provisions.
ARTICLE 10
INDEMNIFICATION
10.1 AGREEMENT OF OMNICOM TO INDEMNIFY. Subject to the
terms and conditions of this Article 10, Omnicom and BHA, jointly and
severally, agree to indemnify, defend and hold harmless XxxxXxxxxx.XXX and
Merger Sub, and each of their respective Affiliates, officers, directors,
employees, agents and representatives (collectively, the "XxxxXxxxxx.XXX
Indemnitees") from, against, for and in respect of any and all Losses asserted
against, or paid, suffered or incurred by, a XxxxXxxxxx.XXX Indemnitee and
resulting from, based upon, or arising out of:
(a) the material breach of any representation or warranty
of Omnicom, BHA or Career Mosaic contained in or made pursuant to this
Agreement or in the certificates referenced in Sections 11.3 (c) and (f)
in connection herewith, regardless of whether XxxxXxxxxx.XXX had
Knowledge of such inaccuracy, untruth, incompleteness or breach prior to
the Effective Time; and
(b) a material breach of any covenant of Omnicom, BHA or
Career Mosaic made in this Agreement; and
(c) any Loss arising out of any Tax Liability incurred by
the Surviving Corporation or XxxxXxxxxx.XXX as the result of the failure
of the contribution by BHA of the Transferred Assets to Career Mosaic to
qualify for tax-free treatment under Section 351 of the Internal Revenue
Code, or any other Tax Liability for which the Surviving Corporation is
liable as the result of Career Mosaic being a member of the Omnicom
affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which is XxxxXxxxxx.XXX) under
Treasury Regulation Section 1.1502-6.
10.2 AGREEMENT OF XXXXXXXXXX.XXX TO INDEMNIFY. Subject to
the terms and conditions of this Article 10, XxxxXxxxxx.XXX agrees to
indemnify, defend and hold harmless BHA, and each of their respective
Affiliates, officers, directors, employees, agents and representatives
(collectively, the "BHA Indemnitees") from, against, for and in respect
of any
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and all Losses asserted against, or paid, suffered or incurred by, a BHA
Indemnitee and resulting from, based upon, or arising out of:
(a) the material breach of any representation or warranty
of XxxxXxxxxx.XXX or Merger Sub contained in or made pursuant to this
Agreement or in the certificates referenced in Sections 11.2(c) and (e)
in connection herewith, regardless of whether Omnicom, BHA or Career
Mosaic had Knowledge of such inaccuracy, untruth, incompleteness or
breach prior to the Effective Time; and
(b) a material breach of any covenant of XxxxXxxxxx.XXX
or Merger Sub made in this Agreement.
10.3 PROCEDURES FOR INDEMNIFICATION.
(a) An indemnification claim shall be made by a
XxxxXxxxxx.XXX Indemnitee or BHA Indemnitee (hereinafter an "Indemnitee"), as
the case may be, by delivery of a written notice to the indemnifying party
specifying the basis on which indemnification is sought and the amount of
asserted Losses and, in the case of a Third Party Claim, containing (by
attachment or otherwise) information in reasonable detail as such Indemnitee
shall have concerning such Third Party Claim.
(b) If the indemnification claim involves a
Third Party Claim, the procedures set forth in Section 10.3 shall be observed
by the Indemnitee and the indemnifying party.
(c) If the indemnification claim involves a
matter other than a Third Party Claim, the indemnifying party shall have 30
days to object to such indemnification claim by delivery of a written notice of
such objection to such Indemnitee specifying in reasonable detail the basis for
such objection. Failure to timely so object shall constitute a final and
binding acceptance of the indemnification claim by the indemnifying party and
the indemnification claim shall be paid in accordance with subsection (d)
hereof.
(d) Upon determination of the amount of an
indemnification claim, whether by agreement between the indemnifying party and
the Indemnitee or by any final adjudication, the indemnifying party shall pay
the amount of such indemnification claim within twenty (20) days of the date
such amount is determined.
10.4 THIRD PARTY CLAIMS. The obligations and liabilities
of the parties hereunder with respect to a Third Party Claim shall be subject
to the following terms and conditions:
(a) The Indemnitee shall give the indemnifying party
written notice of a Third Party Claim promptly after receipt by the
Indemnitee of notice thereof, and the indemnifying party may undertake
the defense, compromise and settlement thereof by representatives of its
own choosing reasonably acceptable to the Indemnitee. The failure of the
Indemnitee to notify the indemnifying party of such claim shall not
relieve the
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indemnifying party of any liability that it may have with respect to such claim
except to the extent the indemnifying party demonstrates that the defense of
such claim is prejudiced by such failure. The assumption of the defense,
compromise and settlement of any such Third Party Claim by the indemnifying
party shall be an acknowledgment of the obligation of the indemnifying party to
indemnify the Indemnitee with respect to such claim hereunder. If the
Indemnitee desires to participate in, but not control, any such defense,
compromise and settlement, it may do so at its sole cost and expense. If,
however, the indemnifying party fails or refuses to undertake the defense of
such Third Party Claim within twenty (20) days after written notice of such
claim has been given to the indemnifying party by the Indemnitee, the
Indemnitee shall have the right to undertake the defense, compromise and
settlement of such claim with counsel of its own choosing. In the circumstances
described in the preceding sentence, the Indemnitee shall, promptly upon its
assumption of the defense of such claim, make an indemnification claim which
shall be deemed an indemnification claim that is not a Third Party Claim for
the purposes of the procedures set forth herein.
(b) If, in the reasonable opinion of the Indemnitee, any
Third Party Claim or the litigation or resolution thereof involves an
issue or matter which could have a material adverse effect on the
business, operations, assets, properties or prospects of the Indemnitee
(including, without limitation, the administration of the tax returns
and responsibilities under the tax laws of the Indemnitee), the
Indemnitee shall have the right to control the defense, compromise and
settlement of such Third Party Claim undertaken by the indemnifying
party, and the costs and expenses of the Indemnitee in connection
therewith shall be included as part of the indemnification obligations
of the indemnifying party hereunder. If the Indemnitee shall elect to
exercise such right, the indemnifying party shall have the right to
participate in, but not control, the defense, compromise and settlement
of such Third Party Claim at its sole cost and expense.
(c) No settlement of a Third Party Claim involving the
asserted liability of the indemnifying party under this Article shall be
made without the prior written consent by or on behalf of the
indemnifying party, which consent shall not be unreasonably withheld or
delayed. Consent shall be presumed in the case of settlements of $20,000
or less where the indemnifying party has not responded within ten (10)
business days of notice of a proposed settlement. If the indemnifying
party assumes the defense of such a Third Party Claim, (a) no compromise
or settlement thereof may be effected by the indemnifying party without
the Indemnitee's consent unless (i) there is no finding or admission of
any violation of law or any violation of the rights of any person and no
effect on any other claim that may be made against the Indemnitee, (ii)
the sole relief provided is monetary damages that are paid in full by
the indemnifying party, and (iii) the compromise or settlement includes,
as an unconditional term thereof, the giving by the claimant or the
plaintiff to the Indemnitee of a release, in form and substance
satisfactory to the Indemnitee, from all liability in respect of such
Third Party Claim, and (b) the Indemnitee shall have no liability with
respect to any compromise or settlement thereof effected without its
consent.
(d) In connection with the defense, compromise or
settlement of any Third Party Claim, the parties to this Agreement shall
execute such powers of attorney as may
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reasonably be necessary or appropriate to permit participation of
counsel selected by any party hereto and, as may reasonably be related
to any such claim or action, shall provide access to the counsel,
accountants and other representatives of each party during normal
business hours to all properties, personnel, books, tax records,
contracts, commitments and all other business records of such other
party and will furnish to such other party copies of all such documents
as may reasonably be requested (certified, if requested).
10.5 EXCLUSIVE REMEDY. The rights of the Indemnitees to
indemnification under this Article 10 are the exclusive rights and remedies
against any other party hereto for any claim based on an inaccuracy, untruth,
incompleteness or breach of any representation or warranty of any indemnifying
party contained herein or in any certificate, schedule or exhibit furnished by
such party in connection herewith, or based upon the failure of an indemnifying
party to perform any covenant, agreement or undertaking required by the terms
hereof to be performed by such indemnifying party.
10.6 SURVIVAL. Except as otherwise provided below, all
representations, warranties and covenants contained in this Agreement or in any
certificate delivered pursuant to this Agreement shall survive the Closing
until April 1, 2001, notwithstanding any investigation conducted with respect
thereto or any knowledge acquired as to the accuracy or inaccuracy of any such
representation or warranty; provided, however that (i) any representation,
warranty, covenant or agreement made or to be performed by the indemnifying
party contained in this Agreement related to any Taxes, employee benefit plans
or environmental issues shall survive until the ninetieth (90th) day after the
date upon which the liability to which any such claim may relate is barred by
all applicable statutes of limitation and (ii) any representation or warranty
contained in Sections 6.1, 6.2, 6.3, 7.1, 7.2 and 7.3 shall survive
indefinitely. Any claim for indemnification under Sections 10.1(a), 10.1(b),
11.1(a) or 11.1(b) with respect to any of such matters which is not asserted by
a notice given as herein provided specifically identifying the particular
breach underlying such claim and the facts and the Loss relating thereto,
within such specified periods of survival, may not be pursued and is hereby
irrevocably waived.
10.7 LIMITATIONS AS TO AMOUNT. No indemnifying party shall
have any liability with respect to the matters described in Sections 10.1(a) or
10.2(a) until the total of all Losses with respect thereto exceeds $1,000,000,
at which time the Indemnitee shall be entitled to indemnification for the full
amount of all Losses (including the first $1,000,000). Notwithstanding any
other provision of this Agreement to the contrary, the indemnification
obligations of Omnicom and BHA, collectively, on the one hand, and of
XxxxXxxxxx.XXX and Merger Sub, collectively, on the other hand, shall not
exceed $35 million. The limitations set forth in this Section 10.7 shall not
apply to (i) an intentional misrepresentation, (ii) an intentional breach of
warranty, (iii) fraud of any indemnifying party, (iv) an indemnification claim
based on Section 10.1(c) or (v) an indemnification claim based on a breach of
the representations and warranties set forth in Sections 6.8, 6.11, 6.14, 7.8,
7.11 and 7.14. The indemnifying party shall be liable for all Losses with
respect to any indemnification claim based on subparagraphs (i)-(v) above and
any amount recovered under such subparagraphs shall not be counted against the
$35 million limit for purposes of any other indemnification claims.
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10.8 TAX EFFECT AND INSURANCE. The liability of the
indemnifying party with respect to any indemnification claim shall be reduced
by the tax benefit if and when actually realized and any insurance proceeds
(net of collection costs) received by the Indemnitee as a result of any Losses
upon which such indemnification claim is based, and shall include any tax
detriment if and when actually suffered by the Indemnitee as a result of such
Losses or the receipt of payment therefor. The amount of any such tax benefit
or detriment shall be determined by taking into account the effect, if any and
to the extent determinable, of timing differences resulting from the
acceleration or deferral of items of gain or loss resulting from such Losses
and shall otherwise be determined so that payment by the indemnifying party of
the indemnification claim, as adjusted to give effect to any such tax benefit
or detriment, will make the Indemnitee as economically whole as is reasonably
practical with respect to the Losses upon which the indemnification claim is
based.
ARTICLE 11
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
11.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
respective obligations of each party to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both parties
pursuant to Section 13.5:
(A) SHAREHOLDER APPROVAL. The shareholders of
XxxxXxxxxx.XXX shall have approved the issuance of XxxxXxxxxx.XXX common
stock under this Agreement as and to the extent required by Law, by the
provisions of any governing instruments, and by the rules of the NASD.
(B) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
listed on Exhibit 11.1(b) shall be in full force and effect and all
waiting periods required by Law shall have expired. No such Consent
obtained from any Regulatory Authority shall be conditioned or
restricted in a manner which in the reasonable judgment of the Board of
Directors of any party would so materially adversely impact the economic
or business benefits of the transactions contemplated by this Agreement
that, had such condition or requirement been known, such party would
not, in its reasonable judgment, have entered into this Agreement.
(C) CONSENTS AND APPROVALS. Each party shall have
obtained any and all Consents and no such Consent shall be conditioned
or restricted in a manner which in the reasonable judgment of the Board
of Directors of either party would so materially adversely impact the
economic or business benefits of the transactions contemplated by this
Agreement that, had such condition or requirement been known, such party
would not, in its reasonable judgment, have entered into this Agreement.
(D) LEGAL PROCEEDINGS. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) or taken any other action
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which prohibits, restricts or makes illegal consummation of the
transactions contemplated by this Agreement.
(E) LISTING. All shares of XxxxXxxxxx.XXX common stock to
be issued to the holders of Career Mosaic common stock in the Merger
shall have been approved for listing on the Nasdaq National Market.
11.2 CONDITIONS TO OBLIGATIONS OF OMNICOM, BHA AND CAREER
MOSAIC. The obligations of Omnicom, BHA and Career Mosaic to perform this
Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by them pursuant to Section 13.5:
(A) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of XxxxXxxxxx.XXX and Merger Sub set forth in Article 6
which are qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material
respects, as of the date of this Agreement and as of the Closing Date,
as if made at and as of such time (except to the extent expressly made
as of an earlier date, in which case as of such date).
(B) PERFORMANCE OF COVENANTS. Each and all of the
covenants of XxxxXxxxxx.XXX and Merger Sub to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Closing Date shall have been duly performed and
complied with in all material respects.
(C) CERTIFICATES. XxxxXxxxxx.XXX shall have delivered to
Omnicom, BHA and Career Mosaic a certificate dated as of the Closing
Date and signed on XxxxXxxxxx.XXX's behalf by an executive officer to
the effect that the conditions set forth in Sections 11.2(a) and (b)
have been satisfied.
(D) DOCUMENTS. XxxxXxxxxx.XXX, Merger Sub and ITC shall
have executed and delivered all documents set forth in Article 5 of this
Agreement (to the extent that each is a party thereto).
(E) SECOND QUARTER REVENUES. XxxxXxxxxx.XXX shall have
either publicly announced or delivered to BHA a certificate executed by
its Chief Financial Officer certifying that XxxxXxxxxx.XXX had net
revenues (revenues reduced by agency commissions) for the quarter ended
June 30, 2000 of at least $7.05 million, determined in accordance with
GAAP.
11.3 CONDITIONS TO OBLIGATIONS OF XXXXXXXXXX.XXX AND
MERGER SUB. The obligations of XxxxXxxxxx.XXX and Merger Sub to perform this
Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by XxxxXxxxxx.XXX pursuant to Section 13.5:
(A) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Omnicom, BHA and Career Mosaic set forth in Article 7
of this Agreement which are
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qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of (1)
the date of this Agreement or the Delivery Date (as specified in the
initial paragraph of Article 7), and (2) the Closing Date, as if made at
and as of such time (except to the extent expressly made as an earlier
date, in which case as of such date).
(B) PERFORMANCE OF COVENANTS. Each and all of the
covenants of Omnicom, BHA and Career Mosaic to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Closing Date shall have been duly performed and
complied with in all material respects.
(C) CERTIFICATES. Omnicom shall have delivered to
XxxxXxxxxx.XXX a certificate dated as of the Closing Date and signed on
its behalf by an executive officer, to the effect that the conditions
set forth in Sections 11.3(a) and 11.3(b) have been satisfied.
(D) DOCUMENTS. Omnicom, BHA and Career Mosaic shall have
executed and delivered all documents set forth in Article 5 of this
Agreement (to the extent that each is a party thereto).
(E) CAREER MOSAIC FINANCIAL STATEMENTS. Xxxxxx Xxxxxxxx
LLP shall have delivered to XxxxXxxxxx.XXX the Career Mosaic Financial
Statements (not including the unaudited interim financial statements for
any period since the end of the most recent year), in form and substance
reasonably satisfactory to XxxxXxxxxx.XXX.
(F) SECOND QUARTER NET REVENUES. Career Mosaic shall have
delivered to XxxxXxxxxx.XXX a certificate executed by its Chief
Financial Officer certifying that Career Mosaic had net revenues
(revenues reduced by agency commissions) for the quarter ended June 30,
2000 of at least $4.7 million, determined in accordance with GAAP.
ARTICLE 12
TERMINATION
12.1 TERMINATION. Notwithstanding any other provision of
this Agreement, and notwithstanding the approval of this Agreement by the
shareholders of XxxxXxxxxx.XXX, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual consent of XxxxXxxxxx.XXX and BHA; or
(b) By any party (provided that the terminating party
(and each of its Affiliates which is a party hereto) is not then in
material breach of any representation, warranty or covenant contained in
this Agreement) in the event of a material breach by any other party
(which is not an Affiliate of the terminating party) of any
representation or warranty contained in this Agreement which cannot be
or has not been cured within 30 days after the giving of written notice
to the breaching party of such breach; or
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(c) By any party (provided that the terminating party
(and each of its Affiliates which is a party hereto) is not then in
material breach of any representation, warranty or covenant contained in
this Agreement) in the event of a material breach by any other party
(which is not an Affiliate of the terminating party) of any covenant
contained in this Agreement which cannot be or has not been cured within
30 days after the giving of written notice to the breaching party of
such breach; or
(d) By any party (provided that the terminating party
(and each of its Affiliates which is a party hereto) is not then in
material breach of any representation, warranty or covenant contained in
this Agreement) in the event (i) any Consent of any Regulatory Authority
listed on Exhibit 11.1(b) shall have been denied by final nonappealable
action of such authority or if any action taken by such authority is not
appealed within the time limit for appeal, or (ii) the shareholders of
XxxxXxxxxx.XXX fail to vote their approval of the matters relating to
this Agreement and the transactions contemplated hereby at the
Shareholders' Meeting where such matters were presented to such
shareholders for their approval; or
(e) By any party in the event that the Merger shall not
have been consummated by the date 120 days after the initial filing date
of the Registration Statement, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by
any breach of this Agreement by the terminating party (and each of its
Affiliates which is a party hereto); or
(f) By XxxxXxxxxx.XXX, in the event that BHA has not
provided the Career Mosaic Financial Statements by June 30, 2000; or
(g) By BHA, in the event that XxxxXxxxxx.XXX has not
filed the Registration Statement within 60 days of XxxxXxxxxx.XXX's
receipt of the Career Mosaic Financial Statements; provided that (1) the
Career Mosaic Financial Statements on the date of delivery materially
comply with the requirements of Securities Laws applicable to financial
statements to be included in the Registration Statement and (2) BHA has
not breached its covenants contained in Sections 9.1 and 9.5 and such
breach was a material factor in XxxxXxxxxx.XXX's inability to file the
Registration Statement within such 60-day period; or
(h) By BHA, in the event that the Board of Directors of
XxxxXxxxxx.XXX shall have (i) taken any action prohibited by Section 8.6
of this Agreement or (ii) failed to reaffirm its approval of the Merger
and the transactions contemplated by this Agreement (to the exclusion of
any other specific Takeover Proposal, which would prevent consummation
of the Merger), or shall have resolved not to reaffirm the Merger.
12.2 EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement pursuant to Section 12.1, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 12.2, Article 13, Section 9.6(b) and Section 9.11 shall survive
any such termination and abandonment, and (ii) a termination pursuant to
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Sections 12.1(b) or 12.1(c) shall not relieve the breaching party from
Liability for an uncured willful breach of a representation, warranty, covenant,
or agreement giving rise to such termination.
ARTICLE 13
MISCELLANEOUS
13.1 DEFINITIONS.
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"AFFILIATE" of a Person shall mean any other Person directly,
or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated herein
by reference.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses and rights of such Person of every kind, nature,
character and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"CAREER MOSAIC BUSINESS" shall mean the business transferred
by BHA to Career Mosaic pursuant to the Contribution Agreement as
conducted prior to the effective date of the Contribution Agreement by
BHA, and as now conducted by Career Mosaic.
"CAREER MOSAIC BUSINESS MATERIAL ADVERSE EFFECT" shall mean
an event, change or occurrence which, individually or together with any
other event, change or occurrence has a material adverse impact on (i)
the financial position, business or results of operations of the Career
Mosaic Business or (ii) the ability of Omnicom, BHA or Career Mosaic to
perform their respective obligations under this Agreement or to
consummate the Merger or the other transactions contemplated by this
Agreement, which shall not include actions and omissions of Omnicom, BHA
or Career Mosaic taken with the prior written Consent of XxxxXxxxxx.XXX
in contemplation of the transactions contemplated hereby.
"CAREER MOSAIC DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Career Mosaic Disclosure Memorandum" delivered
prior to the date of this Agreement to XxxxXxxxxx.XXX describing in
reasonable detail the matters contained
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therein and, with respect to each disclosure made therein, specifically
referencing each Section of this Agreement under which such disclosure
is being made. Information disclosed with respect to one Section shall
not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
"CAREER MOSAIC FINANCIAL STATEMENTS" shall mean the audited
financial statements prepared by Xxxxxx Xxxxxxxx LLP with respect to the
Career Mosaic Business for the three most recent fiscal years and the
unaudited financial statements prepared with respect to the Career
Mosaic Business for any interim periods since the end of the most recent
fiscal year.
"CLOSING DATE" shall mean the date on which the Closing
occurs.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person.
"DEFAULT" shall mean (i) any breach or violation of, default
under, contravention of or conflict with any Contract, Law, Order or
Permit, (ii) any occurrence of any event that with the passage of time
or the giving of notice or both would constitute a breach or violation
of, default under, contravention of or conflict with any Contract, Law,
Order or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise to a
right of any Person to exercise any remedy or obtain any relief under,
terminate or revoke, suspend, cancel or modify or change the current
terms of, or renegotiate, or to accelerate the maturity or performance
of, or to increase or impose any Liability under, any Contract, Law,
Order or Permit.
"DGCL" shall mean the Delaware General Corporation Law, as
amended.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to
pollution or protection of human health or the environment (including
ambient air, surface water, ground water, land surface or subsurface
strata) and which are administered, interpreted or enforced by the
United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42
U.S.C. xx.xx. 9601, et seq. ("CERCLA"), the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. xx.xx. 6901, et seq. ("RCRA"), and
other Laws relating to emissions, discharges, releases or threatened
releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of any Hazardous Material.
"EQUITY RIGHTS" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to, scrip,
understandings, warrants or other binding obligations
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of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code, as
amended.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products or oil (and specifically shall include asbestos
requiring abatement, removal or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"XXXXXXXXXX.XXX DISCLOSURE MEMORANDUM" shall mean the written
information entitled "XxxxXxxxxx.XXX Disclosure Memorandum" delivered
prior to the date of this Agreement to Omnicom, BHA and Career Mosaic
describing in reasonable detail the matters contained therein and, with
respect to each disclosure made therein, specifically referencing each
Section of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section shall not be deemed to
be disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"XXXXXXXXXX.XXX FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules) of
XxxxXxxxxx.XXX as of December 31, 1998 and as of December 31, 1999, and
the related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) for each of
the three fiscal years ended December 31, as filed by XxxxXxxxxx.XXX in
SEC Documents filed prior to the date hereof, and (ii) the consolidated
balance sheets of XxxxXxxxxx.XXX (including related notes and schedules)
and related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) included in
SEC Documents filed with respect to periods ended subsequent to December
31, 1999.
"XXXXXXXXXX.XXX MATERIAL ADVERSE EFFECT" shall mean an event,
change or occurrence which, individually or together with any other
event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of XxxxXxxxxx.XXX
and its subsidiaries, taken as a whole, or (ii) the ability of
XxxxXxxxxx.XXX to perform its obligations under this Agreement or to
consummate the Merger or the other transactions contemplated by this
Agreement, which shall not include actions and omissions of
XxxxXxxxxx.XXX (or any of its subsidiaries) taken with the prior written
Consent of BHA in contemplation of the transactions contemplated hereby.
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"XXX XXX" shall mean Section 7A of the Xxxxxxx Act, as added
by Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, domain names, data, web
site content, user data and other intellectual property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
those facts that are actually known, without independent investigation
or verification, by the chairman, president, chief financial officer,
chief accounting officer, chief operating officer, general counsel, any
assistant or deputy general counsel or any senior, executive or other
vice president of such Person.
"LAW" shall mean any code, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (ii) Liens which do
not materially impair the use of or title to the Assets subject to such
Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a party, its business, its Assets
(including Contracts related to it), or the transactions contemplated by
this Agreement.
"LOSSES" shall mean any and all demands, claims, actions or
causes of action, assessments, losses, diminution in value, damages
(including special and consequential damages, if asserted in a Third
Party claim only), liabilities, costs, and expenses, including
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interest, penalties, cost of investigation and defense, and reasonable
attorneys' and other professional fees and expenses.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System
of the National Association of Securities Dealers Automated Quotations
System.
"OPERATING PROPERTY" shall mean any property owned, leased or
operated by the party in question or by any of its subsidiaries or in
which such party or subsidiary holds a security interest or other
interest (including an interest in a fiduciary capacity), and, where
required by the context, includes the owner or operator of such
property, but only with respect to such property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the party in question or any of its subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or property.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets or business.
"PERSON" shall mean a natural person or any legal, commercial
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in concert,
or any person acting in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by
XxxxXxxxxx.XXX to solicit the approval of its shareholders of the
transactions contemplated by this Agreement, which shall include the
prospectus of XxxxXxxxxx.XXX relating to the issuance of the
XxxxXxxxxx.XXX common stock to the holders of Career Mosaic common
stock.
"REGISTRATION STATEMENT" shall mean the Registration
Statement on Form S-4, or other appropriate form, including any
pre-effective or post-effective amendments or supplements thereto, filed
with the SEC by XxxxXxxxxx.XXX under the 1933 Act with respect to the
shares of XxxxXxxxxx.XXX common stock to be issued to the holders of
Career Mosaic common stock in the Merger.
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"REGULATORY AUTHORITIES" shall mean, collectively, the SEC,
the NASD, the Federal Trade Commission, the United States Department of
Justice and all other federal, state, county, local or other
governmental or regulatory agencies, authorities (including
self-regulatory authorities), instrumentalities, commissions, boards or
bodies having jurisdiction over the parties and their respective
subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant or other representative
engaged by a Person.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules and other documents filed,
or required to be filed, by a party or any of its subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and
the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SHAREHOLDERS' MEETING" shall mean the meeting of the
shareholders of XxxxXxxxxx.XXX to be held pursuant hereto, including any
adjournment or adjournments thereof.
"SURVIVING CORPORATION" shall mean Merger Sub as the
surviving corporation resulting from the Merger.
"TAKEOVER PROPOSAL" shall mean any inquiry, proposal or offer
from any Person (other than Omnicom of an Affiliate thereof) relating to
any direct or indirect (i) sale, lease, exchange, transfer or other
disposition (including a contribution to a joint venture) of at least
30% of the Assets of XxxxXxxxxx.XXX and its subsidiaries, taken as a
whole, or (ii) a merger, reorganization, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution, tender
offer, exchange offer or other similar transaction the result of which
is that XxxxXxxxxx.XXX's shareholders immediately prior to such
transaction in the aggregate cease to own at least 50% of the voting
securities of the ultimate parent entity resulting from such
transaction.
"TAX RETURN" shall mean any report, return, information
return or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a party or its
subsidiaries.
"TAX" or "TAXES" shall mean any federal, state, county, local
or foreign taxes, charges, fees, levies, imposts, duties or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, payroll, franchise, stamp, occupation, windfall
profits, federal highway use, customs duties, capital stock, paid-up
capital, profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property, ad valorem,
value added, alternative or add-on minimum, estimated or other tax or of
any kind whatsoever, imposed or required to be withheld by the United
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States or any state, county, local or foreign government or subdivision
or agency thereof, including any interest, penalties and additions
imposed thereon or with respect thereto.
"THIRD PARTY CLAIM" shall mean any Litigation
(including, without limitation, a binding arbitration or an audit by any
taxing authority) that is instituted against an Indemnitee by a Person
other than an indemnifying party and which, if prosecuted successfully,
would result in a Loss for which such Indemnitee is entitled to
indemnification hereunder.
"TRANSFERRED ASSETS" shall mean the Assets related
to, used in or necessary for, the conduct of the Career Mosaic Business
which were transferred by BHA to Career Mosaic under that certain
Contribution and Assumption Agreement dated as of the date of this
Agreement and effective as of January 1, 2000, between BHA and Career
Mosaic (the "Contribution Agreement").
"TRANSFERRED LIABILITIES" shall mean the Liabilities
related to or used in the Career Mosaic Business which were assumed by
Career Mosaic under the Contribution Agreement.
(b) Any singular term in this Agreement shall be
deemed to include the plural, and any plural term the singular. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation."
13.2 BROKERS AND FINDERS. Except for First Union
Securities, Inc., the investment bankers for XxxxXxxxxx.XXX and Merger Sub, the
fees and expenses of which shall be paid by XxxxXxxxxx.XXX, each of the parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions or finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon his or its representing or being retained by or allegedly
representing or being retained by a party, such party agrees to indemnify and
hold the other parties harmless of and from any Liability in respect of any
such claim.
13.3 ENTIRE AGREEMENT. Except as otherwise expressly
provided herein, this Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereto, written or oral. Nothing
in this Agreement expressed or implied, is intended to confer upon any Person,
other than the parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement.
13.4 AMENDMENTS. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each of the parties
upon the approval of each of the parties, whether before or after shareholder
approval of this Agreement has been obtained.
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13.5 WAIVERS.
(a) Prior to or at the Effective Time, Omnicom,
BHA or Career Mosaic, each acting through its respective Board of Directors,
chief executive officer or other authorized officer, shall have the right to
waive any Default in the performance of any term of this Agreement by
XxxxXxxxxx.XXX or Merger Sub, to waive or extend the time for the compliance or
fulfillment by XxxxXxxxxx.XXX or Merger Sub of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to
the obligations of Omnicom, BHA or Career Mosaic under this Agreement, except
any condition which, if not satisfied, would result in the violation of any
Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Omnicom, BHA or Career Mosaic, as the case may be.
(b) Prior to or at the Effective Time,
XxxxXxxxxx.XXX or Merger Sub, each acting through its respective Board of
Directors, chief executive officer or other authorized officer, shall have the
right to waive any Default in the performance of any term of this Agreement by
Omnicom, BHA or Career Mosaic, to waive or extend the time for the compliance
or fulfillment by Omnicom, BHA or Career Mosaic of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of XxxxXxxxxx.XXX or Merger Sub under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of XxxxXxxxxx.XXX or Merger Sub.
(c) The failure of any party at any time or
times to require performance of any provision hereof shall in no manner affect
the right of such party at a later time to enforce the same or any other
provision of this Agreement. No waiver of any condition or of the breach of any
term contained in this Agreement in one or more instances shall be deemed to be
or construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
13.6 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other party. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective successors and
assigns.
13.7 NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered by hand, by facsimile transmission, by registered or certified mail,
postage pre-paid, or by courier or overnight carrier, to the persons at the
addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
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XxxxXxxxxx.XXX or Merger Sub XxxxXxxxxx.XXX, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Chief Executive Officer
Copy to Counsel: Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy Number: (000) 000-0000
Attention: J. Xxxxxxx Xxxxxx, Esq.
Omnicom, BHA or Career Mosaic: Omnicom Group Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxxxx
Copy to Counsel: Xxxxx Day Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx Bark, Esq.
ITC: ITC Holding Company, Inc.
0000 00xx Xxxxxx
X.X. Xxx 00
Xxxxxx, Xxxxxxx 00000
Telecopy Number: (___) ___-____
Attention: Chief Executive Officer
Copy to Counsel: Xxxxxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopy Number: (000) 000-0000
13.8 GOVERNING LAW; JURISDICTION.
(a) This Agreement shall be governed by and construed in
accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws principles thereof.
(b) The parties agree that any litigation arising out of
this Agreement may be brought only in any federal court located in the State of
Delaware or in Delaware state court (collectively, the "Permitted Courts"). In
furtherance thereof, each of the parties hereto (i)
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consents to submit itself to the personal jurisdiction of any Permitted Court
in the event any dispute arises out of this Agreement or any of the transaction
contemplated hereby, (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request or leave from any such
court, and (iii) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any
court other than a Permitted Court. Notwithstanding the foregoing, nothing in
this Agreement shall be construed as prohibiting a party from seeking to
enforce a judgment obtained in a Permitted Court in a court in any other
jurisdiction.
13.9 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
13.10 CAPTIONS; ARTICLES AND SECTIONS. The captions
contained in this Agreement are for reference purposes only and are not part of
this Agreement. Unless otherwise indicated, all references to particular
Articles or Sections shall mean and refer to the referenced Articles and
Sections of this Agreement.
13.11 INTERPRETATIONS. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any
party, whether under any rule of construction or otherwise. No party to this
Agreement shall be considered the draftsman. The parties acknowledge and agree
that this Agreement has been reviewed, negotiated, and accepted by all parties
and their attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the purposes and
intentions of all parties hereto.
13.12 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
13.13 SPECIFIC PERFORMANCE. The parties hereto agree that
(i) irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and (ii) the
parties will be entitled to an injunction to prevent material breaches of this
Agreement and to specific performance of the terms hereof, in addition to any
other remedy to which they may be entitled at law or in equity.
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IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement as of the day and year first above written.
OMNICOM GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
---------------------------------------------
Title: Executive Vice President and CFOfficer
--------------------------------------------
XXXXXXX XXXXX GROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
---------------------------------------------
Title: Duly Authorized
--------------------------------------------
CAREER MOSAIC INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
---------------------------------------------
Title: Duly Authorized
--------------------------------------------
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx, Xx.
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx, Xx.
---------------------------------------------
Title: President and Chief Executive Officer
--------------------------------------------
RESUME ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx, Xx.
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx, Xx.
---------------------------------------------
Title: President
--------------------------------------------
ITC HOLDING COMPANY, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
---------------------------------------------
Title: Sr. Vice President
--------------------------------------------
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TABLE OF CONTENTS
Page
----
Preamble......................................................................................................1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER..................................................................1
1.1 Merger............................................................................................1
1.2 Time and Place of Closing.........................................................................2
1.3 Effective Time....................................................................................2
ARTICLE 2 - TERMS OF MERGER...................................................................................2
2.1 Charter...........................................................................................2
2.2 Bylaws............................................................................................2
2.3 Directors and Officers............................................................................2
ARTICLE 3 - MANNER OF CONVERTING SHARES.......................................................................3
3.1 Conversion of Shares..............................................................................3
3.2 Anti-Dilution Provisions..........................................................................3
3.3 Fractional Shares.................................................................................3
ARTICLE 4 - EXCHANGE OF SHARES................................................................................4
4.1 Exchange Procedures...............................................................................4
4.2 Rights of Former Career Mosaic Shareholders.......................................................4
ARTICLE 5 - OTHER AGREEMENTS..................................................................................5
5.1 Directors of XxxxXxxxxx.XXX.......................................................................5
5.2 Shareholder Protection Rights Agreement...........................................................5
5.3 Shareholders' Agreement...........................................................................5
5.4 Administrative Services Agreement.................................................................5
5.5 Registration Rights Agreement.....................................................................5
5.6 Credit Agreement..................................................................................5
5.7 Agency Agreement..................................................................................6
5.8 Access to Information; Audit Cooperation..........................................................6
5.9 Non-Competition Agreement.........................................................................6
5.10 Indemnity Agreements..............................................................................6
5.11 BHA and ITC Indemnity Agreement...................................................................6
5.12 Support Agreement.................................................................................6
5.13 Amended and Restated Bylaws.......................................................................6
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF XXXXXXXXXX.XXX AND MERGER SUB...................................7
6.1 Organization, Standing, and Power.................................................................7
6.2 Authority; No Breach By Agreement.................................................................7
6.3 Capital Stock.....................................................................................8
6.4 XxxxXxxxxx.XXX Subsidiaries.......................................................................9
6.5 SEC Filings; Financial Statements.................................................................9
6.6 Absence of Undisclosed Liabilities................................................................10
6.7 Absence of Certain Changes or Events..............................................................10
6.8 Tax Matters.......................................................................................10
6.9 Assets............................................................................................11
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6.10 Intellectual Property.............................................................................12
6.11 Environmental Matters.............................................................................13
6.12 Compliance with Laws..............................................................................13
6.13 Labor Relations...................................................................................14
6.14 Employee Benefit Plans............................................................................14
6.15 Material Contracts................................................................................16
6.16 Legal Proceedings.................................................................................17
6.17 Reports...........................................................................................17
6.18 Statements True and Correct.......................................................................17
6.19 Regulatory Matters................................................................................18
6.20 Privacy; Web Site.................................................................................18
6.21 Opinion of Financial Advisor......................................................................18
6.22 Brokers, Etc......................................................................................18
6.23 Voting Requirements...............................................................................18
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF OMNICOM, BHA AND CAREER MOSAIC..................................19
7.1 Organization, Standing, and Power.................................................................19
7.2 Authority; No Breach By Agreement.................................................................19
7.3 Capital Stock.....................................................................................20
7.4 Subsidiaries......................................................................................20
7.5 Financial Statements..............................................................................21
7.6 Absence of Undisclosed Liabilities................................................................21
7.7 Absence of Certain Changes or Events..............................................................21
7.8 Tax Matters.......................................................................................21
7.9 Assets............................................................................................22
7.10 Intellectual Property.............................................................................23
7.11 Environmental Matters.............................................................................24
7.12 Compliance with Laws..............................................................................25
7.13 Labor Relations...................................................................................25
7.14 Employee Benefit Plans............................................................................26
7.15 Material Contracts................................................................................28
7.16 Legal Proceedings.................................................................................28
7.17 Reports...........................................................................................29
7.18 Statements True and Correct.......................................................................29
7.19 Regulatory Matters................................................................................29
7.20 Ownership of XxxxXxxxxx.XXX Common Stock..........................................................30
7.21 Privacy; Web Site.................................................................................30
7.22 Brokers, Etc......................................................................................30
ARTICLE 8 - CONDUCT OF BUSINESS PENDING CONSUMMATION..........................................................30
8.1 Covenants of XxxxXxxxxx.XXX.......................................................................30
8.2 Negative Covenants of XxxxXxxxxx.XXX..............................................................30
8.3 Omnicom, BHA and Career Mosaic Covenants..........................................................33
8.4 Adverse Changes in Condition......................................................................35
8.5 Reports...........................................................................................35
8.6 No Solicitation by XxxxXxxxxx.XXX.................................................................35
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ARTICLE 9 - ADDITIONAL AGREEMENTS............................................................................36
9.1 Registration Statement; Proxy Statement; Shareholder Approval....................................36
9.2 Listing..........................................................................................37
9.3 Applications; Antitrust Notification.............................................................37
9.4 Filings with State Offices.......................................................................37
9.5 Agreement as to Efforts to Consummate............................................................37
9.6 Investigation and Confidentiality................................................................38
9.7 Press Releases...................................................................................38
9.8 Tax Treatment....................................................................................38
9.9 Indemnification, Exculpation and Insurance.......................................................39
9.10 Fees and Expenses................................................................................39
9.11 Certain Employee Matters.........................................................................39
ARTICLE 10 - Indemnification..................................................................................40
10.1 Agreement of Omnicom to Indemnify................................................................40
10.2 Agreement of XxxxXxxxxx.XXX to Indemnify.........................................................41
10.3 Procedures for Indemnification...................................................................41
10.4 Third Party Claims...............................................................................42
10.5 Exclusive Remedy.................................................................................43
10.6 Survival.........................................................................................43
10.7 Limitations as to Amount.........................................................................43
10.8 Tax Effect and Insurance.........................................................................44
ARTICLE 11 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE................................................44
11.1 Conditions to Obligations of Each Party..........................................................44
11.2 Conditions to Obligations of Omnicom, BHA and Career Mosaic......................................45
11.3 Conditions to Obligations of XxxxXxxxxx.XXX......................................................46
ARTICLE 12 - TERMINATION......................................................................................47
12.1 Termination......................................................................................47
12.2 Effect of Termination............................................................................48
ARTICLE 13 - MISCELLANEOUS....................................................................................48
13.1 Definitions......................................................................................48
13.2 Brokers and Finders..............................................................................54
13.3 Entire Agreement.................................................................................55
13.4 Amendments.......................................................................................55
13.5 Waivers..........................................................................................55
13.6 Assignment.......................................................................................56
13.7 Notices..........................................................................................56
13.8 Governing Law; Jurisdiction......................................................................57
13.9 Counterparts.....................................................................................57
13.10 Captions; Articles and Sections..................................................................57
13.11 Interpretations..................................................................................57
13.12 Severability.....................................................................................58
13.13 Specific Performance.............................................................................58
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LIST OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
5.2 Shareholder Protection Rights Agreement
5.3 Shareholders' Agreement
5.4 Administrative Services Agreement
5.5 Registration Rights Agreement
5.6 Credit Agreement
5.7 Agency Agreement
5.9 Non-Competition Agreement
5.10 Indemnity Agreement (Directors)
5.11 Indemnity Agreement (ITC and BHA)
5.12 Support Agreement
5.13 Amended and Restated Bylaws
11.1(b) Regulatory Consents
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