Exhibit 3
Agreement and Plan of Merger
by and among
IMRglobal CORP.,
CGI GROUP INC.
and
CGI FLORIDA CORPORATION
Dated as of February 21, 2001
TABLE OF CONTENTS
ARTICLE I THE MERGER.........................................................2
Section 1.1. The Merger.................................................2
Section 1.2. Conversion and Exchange of Shares..........................2
Section 1.3. Surrender and Exchange.....................................3
Section 1.4. Company Stock Options......................................6
Section 1.5. Fractional Shares..........................................6
Section 1.6. The Surviving Corporation..................................7
Section 1.7. Lost, Stolen or Destroyed Certificates.....................8
Section 1.8. Dissenters' Rights.........................................8
Section 1.9. Withholding Rights.........................................8
Section 1.10. Shares Held by Company Affiliates..........................8
ARTICLE II REPRESENTATIONS AND WARRANTIES....................................9
Section 2.1. Representations and Warranties of the Company..............9
2.1.1. Organization, Good Standing and Qualification...9
2.1.2. Capital Structure..............................10
2.1.3. Authority, Approval and Fairness Opinion.......11
2.1.4. Governmental Filings, No Violations............12
2.1.5. Reports; Financial Statements..................13
2.1.6. Absence of Certain Changes.....................14
2.1.7. Litigation and Liabilities.....................15
2.1.8. Employee Benefit Plans.........................16
2.1.9. Labor and Employment Matters...................18
2.1.10. Non-competition Agreements.....................19
2.1.11. Absence of Sensitive Payments..................19
2.1.12. Affiliate Transactions.........................20
2.1.13. Licenses.......................................20
2.1.14. Intellectual Property..........................20
2.1.15. Continuity of Business.........................22
2.1.16. Compliance with Laws...........................23
2.1.17. Certain Contracts..............................23
2.1.18. Tax Treatment..................................23
2.1.19. Tax Matters....................................24
2.1.20. Environmental Matters..........................25
2.1.21. Registration Rights Agreements.................26
2.1.22. Takeover Statutes..............................26
2.1.23. Real Property..................................27
2.1.24. Brokers and Finders............................28
Section 2.2. Representations and Warranties of Parent..................29
2.2.1. Organization, Good Standing and Qualification..29
2.2.2. Capital Structure..............................30
2.2.3. Corporate Authority and Approval...............30
2.2.4. Governmental Filings, No Violations............31
2.2.5. Reports; Financial Statements..................32
2.2.6. Absence of Certain Changes.....................32
2.2.7. Litigation and Liabilities.....................33
2.2.8. Employee Benefit Plans.........................33
2.2.9. Labor and Employment Matters...................34
2.2.10. Licenses.......................................35
2.2.11. Intellectual Property..........................35
2.2.12. Continuity of Business.........................37
2.2.13. Compliance with Laws...........................37
2.2.14. Tax Treatment..................................37
2.2.15. Merger Sub's Operations........................37
2.2.16. Tax Matters....................................37
2.2.17. Environmental Matters..........................39
2.2.18. Brokers and Finders...........................39
ARTICLE III COVENANTS.......................................................39
Section 3.1. Interim Operations of the Company.........................39
Section 3.2. Interim Operations of Parent..............................43
Section 3.3. Acquisition Proposals.....................................44
Section 3.4. Information Supplied......................................46
3.4.1. Registration Statement; Other SEC Filings......46
Section 3.5. Meetings..................................................48
Section 3.6. Filings; Other Actions; Notification......................48
Section 3.7. Access....................................................50
Section 3.8. Publicity.................................................50
Section 3.9. Benefits and Other Matters................................51
3.9.1. Employee Benefits..............................51
3.9.2. Director and Officer Indemnification and
Insurance....................................52
Section 3.10. Expenses..................................................53
Section 3.11. Other Actions by the Company and Parent...................53
3.11.1. Takeover Statutes..............................53
3.11.2. Notices of Certain Events......................53
Section 3.12. Listing Applications; Establishment of Parent Common
Shares.......................................54
Section 3.13. Letters of Accountants....................................54
Section 3.14. Agreements of Company Affiliates..........................55
Section 3.15. Tax Representation Letters................................55
Section 3.16. Information to be Supplied to Five Percent Transferee
Shareholder..................................55
ARTICLE IV CONDITIONS.......................................................55
Section 4.1. Conditions to Each Party's Obligation to Effect the
Merger.......................................55
4.1.1. Company Shareholder Approval...................56
4.1.2. Regulatory Consents............................56
4.1.3. Laws and Orders................................56
4.1.4. Effectiveness of Form F-4......................56
4.1.5. Listing........................................56
4.1.6. Third Party Consents...........................56
4.1.7. Parent Shareholder Approval....................57
Section 4.2. Conditions to Obligations of Parent and Merger Sub........57
4.2.1. Representations and Warranties of the Company..57
4.2.2. Performance of Obligations of the Company......58
4.2.3. Tax Opinion....................................58
4.2.4. Executive Agreements...........................58
4.2.5. Affiliate Letters..............................58
4.2.6. Voting Agreement...............................58
Section 4.3. Conditions to Obligation of the Company...................58
4.3.1. Representations and Warranties of Parent and
Merger Sub...................................59
4.3.2. Performance of Obligations of Parent...........59
4.3.3. Tax Opinion....................................59
ARTICLE V TERMINATION.......................................................60
Section 5.1. Termination by Mutual Consent.............................60
Section 5.2. Termination by Either Parent or the Company...............60
Section 5.3. Termination by the Company................................60
Section 5.4. Termination by Parent.....................................61
Section 5.5. Effect of Termination and Abandonment.....................61
ARTICLE VI MISCELLANEOUS AND GENERAL........................................63
Section 6.1. Survival..................................................63
Section 6.2 Modification or Amendment.................................63
Section 6.3. Waiver of Conditions......................................63
Section 6.4. Failure or Indulgence not Waiver; Remedies Cumulative.....63
Section 6.5. Counterparts..............................................64
Section 6.6. Governing Law.............................................64
Section 6.7. Notices...................................................64
Section 6.8. Entire Agreement..........................................65
Section 6.9 Severability..............................................65
Section 6.10. Interpretation............................................66
Section 6.11. Assignment................................................66
Section 6.12. Specific Performance......................................66
Section 6.13. Forms of Currency.........................................66
EXHIBITS
--------
Exhibit A Executive Agreements
Exhibit B Form of Company Affiliate Letter
Exhibit C Voting Agreement
DEFINITIONS
-----------
TERM SECTION
---- -------
Acquisition Proposal......................................................3.3.1
Affiliate................................................................2.1.12
Agreement..............................................................preamble
Antitrust Division........................................................3.6.6
Bankruptcy and Equity Exception...........................................2.1.3
Business Day................................................................6.7
Canadian GAAP.............................................................2.2.5
CCA ....................................................................2.1.4.1
Certificate...............................................................1.2.3
Class B Shares............................................................2.2.2
Closing...................................................................1.1.3
Closing Date..............................................................1.1.3
Code...................................................................recitals
Company................................................................preamble
Company Affiliates.........................................................3.14
Company Balance Sheet.....................................................2.1.5
Company Balance Sheet Date................................................2.1.5
Company Common Shares..................................................recitals
Company Disclosure Schedule.................................................2.1
Company Employee Plans..................................................2.1.8.1
Company Employees.......................................................2.1.8.1
Company Employment Agreements...........................................2.1.8.1
Company Foreign Plan....................................................2.1.8.1
Company Indemnification Rights...........................................2.1.20
Company Lease Consents...................................................2.1.23
Company Lease List.......................................................2.1.23
Company Officers..................................................2.1.11. 2.1.7
Company Preference Shares.................................................2.1.2
Company Proxy Statement.................................................3.4.1.1
Company Reports...........................................................2.1.5
Company Required Consents...............................................2.1.4.1
Company Requisite Vote....................................................2.1.3
Company Shareholders' Meeting...............................................3.5
Company Stock Option......................................................1.4.1
Company Stock Plans.......................................................2.1.2
Confidentiality Agreement.................................................3.3.1
Contracts...............................................................2.1.4.2
control..................................................................2.1.12
Disclosure Schedules........................................................2.2
Effective Time............................................................1.1.2
Environmental Laws.......................................................2.1.20
ERISA...................................................................2.1.8.1
ERISA Affiliate.........................................................2.1.8.2
Excess Shares...............................................................1.5
Excess Shares Trust.........................................................1.5
Exchange Act............................................................2.1.4.1
Exchange Agent............................................................1.3.1
Exchange Ratio............................................................1.2.2
Excluded Share............................................................1.2.1
Executive Agreements...................................................recitals
FBCA......................................................................1.1.1
Five-Percent Transferee Shareholder........................................3.16
Form F-4................................................................3.4.1.1
FTC ......................................................................3.6.6
Governmental Consents.....................................................4.1.2
Governmental Entity.....................................................2.1.4.1
HSR Act.................................................................2.1.4.1
Indemnitee................................................................3.9.2
IP Rights................................................................2.1.14
Law ....................................................................2.1.4.2
Licenses.................................................................2.1.13
Lien....................................................................2.1.4.2
Material Adverse Effect...................................................2.1.1
Merger.................................................................recitals
Merger Agreement.......................................................preamble
Merger Sub.............................................................preamble
Nasdaq....................................................................1.3.4
NYSE....................................................................2.1.4.1
Orders....................................................................4.1.3
Parent.................................................................preamble
Parent Balance Sheet......................................................2.2.5
Parent Balance Sheet Date.................................................2.2.5
Parent Certificates.......................................................1.3.1
Parent Common Shares......................................................1.2.2
Parent Disclosure Schedule..................................................2.2
Parent Employee Plans...................................................2.2.8.1
Parent Employees........................................................2.2.8.1
Parent Executive Officers.................................................2.2.7
Parent Foreign Plan.....................................................2.2.8.1
Parent Reports............................................................2.2.5
Parent Required Consents................................................2.2.4.1
Parent Shareholder Approval...............................................4.1.7
Payment..................................................................2.1.11
Person....................................................................2.1.1
Reports...................................................................2.2.5
Representatives...........................................................3.3.1
SEC ......................................................................1.4.2
Securities Act............................................................1.4.2
Subsidiary................................................................2.1.1
Superior Proposal.........................................................3.3.1
Surviving Corporation.....................................................1.1.1
Takeover Statute.........................................................2.1.22
Tax Representation Letter..................................................3.15
Tax Returns...........................................................2.1.19(a)
Taxes.................................................................2.1.19(c)
Termination Date............................................................5.2
TSE ....................................................................2.1.4.1
U.S. GAAP.................................................................2.1.5
Voting Agreement.......................................................recitals
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of February 21, 2001
(this "Agreement" or the "Merger Agreement"), by and among CGI GROUP INC.,
a company incorporated under the laws of Quebec ("Parent"), IMRglobal
CORP., a Florida corporation (the "Company") and CGI FLORIDA CORPORATION, a
Florida corporation and a direct, wholly owned subsidiary of Parent
("Merger Sub").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of the Company,
Parent and Merger Sub have adopted this Agreement and have determined that
it is advisable and in the best interests of their respective shareholders
to consummate the merger of Merger Sub with and into the Company on the
terms and conditions set forth in this Agreement (the "Merger");
WHEREAS, for U.S. federal income tax purposes, it is intended
that the Merger qualify as a reorganization under the provisions of Section
368 of the Internal Revenue Code of 1986, as amended (the "Code"), and the
rules and regulations promulgated thereunder;
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Parent to
enter into this Agreement, Parent and Merger Sub are entering into a Voting
Agreement, dated as of the date of this Agreement (the "Voting Agreement"),
with certain shareholders of the Company pursuant to which these
shareholders, among other things, are agreeing to vote all of their shares
of common stock, par value $0.10, of the Company ("Company Common Shares")
in favor of the approval of this Agreement and the Merger, and the Board of
Directors of the Company has approved the entry into the Voting Agreement
by the parties thereto; and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Parent to
enter into this Agreement, Parent, the Company and Merger Sub are entering
into a Letter Agreement, dated as of the date of this Agreement, with Xx.
Xxxxxx X. Xxxxx, the Chairman and Chief Executive Officer of the Company,
and the Company and Parent are entering into an Executive Employment
Agreement, dated as of the date of this Agreement, with Xx. Xxxxx, each in
the form attached hereto as Exhibit A (together, the "Executive
Agreements").
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained in this Agreement, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
THE MERGER
Section 1.1. The Merger.
----------
1.1.1. At the Effective Time (as defined in Section 1.1.2),
Merger Sub shall be merged with and into the Company in accordance with the
Florida Business Corporation Act (the "FBCA"), whereupon the separate
existence of Merger Sub shall cease, and the Company shall be the surviving
corporation in the Merger (the "Surviving Corporation") and shall continue
as a wholly owned subsidiary to be governed by the laws of the State of
Florida, and the separate corporate existence of the Company, with all its
rights, privileges, immunities, powers, franchises, restrictions,
disabilities and duties, shall continue unaffected by the Merger except as
set forth in this Article I. The Merger shall have the effects specified in
the FBCA.
1.1.2. On the Closing Date (as defined in Section 1.1.3), the
Company and Merger Sub will file articles of merger with the Secretary of
State of the State of Florida and make all other filings or recordings
required by applicable Law (as defined in Section 2.1.4.2) in connection
with the Merger. The Merger shall become effective at the time the articles
of merger are duly filed with the Secretary of State of the State of
Florida or at any later time as Parent and the Company shall agree and
shall specify in the articles of merger (the "Effective Time").
1.1.3. The consummation of the Merger (the "Closing") shall take
place (i) at 10:00 A.M. (New York City time) at the offices of Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx, One New York Plaza, New York, New York,
as soon as practicable, but in any event within three Business Days (as
defined in Section 6.7) after the day on which the last to be fulfilled or
waived of the conditions set forth in Article IV (other than those
conditions that by their nature are to be fulfilled at the Closing, but
subject to the fulfillment or waiver of these conditions) shall be
fulfilled or waived in accordance with this Agreement unless otherwise
agreed by the Company and Parent (the "Closing Date").
1.1.4. Parent shall have the right to elect to cause Merger Sub
to be a second-tier, wholly-owned subsidiary of Parent; provided that this
election shall not in any material respect adversely affect the rights of
the Company under this Agreement, the benefits to the Company shareholders
of the Merger (including the tax-free nature of the Merger) or otherwise
materially delay the consummation of the Merger.
Section 1.2. Conversion and Exchange of Shares. At the Effective Time,
automatically by virtue of the Merger and without any action on the part of
any party or shareholder:
1.2.1. Each Company Common Share held by the Company or any
wholly-owned subsidiary of the Company as treasury stock or held by Parent
or any Subsidiary (as defined in Section 2.1.1) of Parent immediately prior
to the Effective Time (each, an "Excluded Share") shall be canceled and no
consideration shall be exchanged with respect to these shares.
1.2.2. Subject to Section 1.5, each Company Common Share
outstanding immediately prior to the Effective Time, other than the
Excluded Shares, shall be converted into and shall be canceled in exchange
for the right to receive 1.5974 (the "Exchange Ratio") Class A Subordinate
Shares, without par value, of Parent ("Parent Common Shares").
1.2.3. At the Effective Time, all Company Common Shares shall no
longer be outstanding, shall be canceled and retired and shall cease to
exist, and each certificate (a "Certificate") formerly representing any
Company Common Shares (other than Excluded Shares) shall thereafter
represent only the right to receive Parent Common Shares as provided in
Section 1.2.2 and the right, if any, to receive cash in lieu of fractional
interests in Parent Common Shares pursuant to Section 1.5 and any
distribution or dividend pursuant to Section 1.3.6, in each case without
interest.
1.2.4. Each share of common stock of Merger Sub, par value $0.10
per share, outstanding immediately prior to the Effective Time shall be
converted into one newly issued, fully-paid and non-assessable share of
common stock, par value $0.10 per share, of the Surviving Corporation.
1.2.5. At the Effective Time, the Surviving Corporation will
issue shares of its common stock to Parent in consideration for Parent's
issuing Parent Common Shares to the holders of Company Common Shares. The
fair market value and number of shares issued to Parent will be equal to
the fair market value and number of Company Common Shares (other than
Excluded Shares) outstanding immediately before the Effective Time.
1.2.6. In the event that, subsequent to the date of this
Agreement but prior to the Effective Time, the Company changes the number
of Company Common Shares, or Parent changes the number of Parent Common
Shares, issued and outstanding, as a result of a stock split, reverse stock
split, stock dividend, recapitalization or redenomination of share capital,
the Exchange Ratio and other items dependent thereon shall be appropriately
adjusted.
Section 1.3. Surrender and Exchange.
----------------------
1.3.1. Prior to the Effective Time, Parent shall appoint an agent
reasonably acceptable to the Company as exchange agent (the "Exchange
Agent") in connection with the Merger for the purpose of exchanging
Certificates for certificates representing Parent Common Shares ("Parent
Certificates"), and cash in lieu of fractional Parent Common Shares in
accordance with Section 1.5, in connection with the Merger. Parent shall
deposit with the Exchange Agent, from time to time that number of Parent
Certificates, in any denominations as the Exchange Agent shall specify, as
are issuable in respect of Company Common Shares for which Certificates
have been properly delivered to the Exchange Agent. Parent shall also from
time to time deposit or cause to deposit with the Exchange Agent U.S.
dollars in an amount sufficient to provide the Exchange Agent with the cash
to fund payments to be made pursuant to Section 1.3.6.
1.3.2. As promptly as reasonably practicable after the Effective
Time, the Surviving Corporation shall send, or shall cause the Exchange
Agent to send, to each holder of record as of the Effective Time of Company
Common Shares (other than holders of shares that constitute Excluded
Shares) a letter of transmittal, in a form upon which the Company and
Parent may reasonably agree, for use in effecting delivery of Certificates
to the Exchange Agent. Each holder of Company Common Shares that have been
converted in the Merger into the right to receive the consideration set
forth in Section 1.2.2 shall, upon surrender to the Exchange Agent of a
Certificate or Certificates, together with a properly completed letter of
transmittal covering the Company Common Shares represented by the
Certificate or Certificates, be entitled to receive (i) the number of whole
Parent Common Shares into which all of the Company Common Shares,
represented by the holder's Certificate or Certificates, are converted in
accordance with Section 1.2.2 and (ii) a check in an amount of U.S. dollars
(after giving effect to any required tax withholdings) of (A) any cash in
lieu of fractional interests in shares to be paid pursuant to Section 1.5
without interest, plus (B) any cash dividends or other distributions that
any holder has the right to receive pursuant to Section 1.3.6. Until so
surrendered, each Certificate shall, after the Effective Time, represent
for all purposes only the right to receive the number of whole Parent
Common Shares into which the Company Common Shares represented by that
Certificate are converted in accordance with Section 1.2.2 and the
applicable amounts provided in the foregoing clause (ii).
1.3.3. If any Parent Common Shares are to be issued, or if any
cash in lieu of fractional interests pursuant to Section 1.5 or any cash
dividends or distributions pursuant to Section 1.3.6 are to be paid, to a
person other than the registered holder of Company Common Shares
represented by a Certificate or Certificates surrendered with respect
thereto, it shall be a condition to this issuance or payment that the
Certificate or Certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person (as defined in
Section 2.1.1) requesting this issuance or payment shall pay to the
Exchange Agent any transfer or other taxes required as a result of this
issuance or payment to a Person other than the registered holder of these
Company Common Shares or establish to the satisfaction of the Exchange
Agent that this tax has been paid or is not payable.
1.3.4. The stock transfer books of the Company shall be closed on
the close of trading on the Nasdaq National Market System ("Nasdaq") on the
day prior to the Effective Time, and thereafter there shall be no further
registration of transfers of Company Common Shares that were outstanding
prior to the Effective Time. After the Effective Time, Certificates
presented to the Surviving Corporation for transfer shall be canceled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article I.
1.3.5. Any Parent Common Shares issued in respect of Company
Common Shares pursuant to this Article I and any cash in lieu of fractional
interests in Parent Common Shares to be paid pursuant to Section 1.5, plus
any cash dividend or other distribution that a former holder of Company
Common Shares has the right to receive pursuant to Section 1.3.6, that
remains unclaimed by any former holder of Company Common Shares six months
after the Effective Time shall be delivered by the Exchange Agent to Parent
and the Exchange Agent's duties shall terminate. Thereafter, each holder of
a Certificate which had represented Company Common Shares may surrender
such Certificate to the Surviving Corporation or Parent and (subject to the
provisions of this Section and applicable abandoned property, escheat and
similar laws) receive in exchange therefor Parent Common Shares, together
with any cash for the payment of any fractional shares referred to in
Section 1.5, into which the Company Common Shares theretofore represented
by the Certificate were converted by virtue of the Merger. Parent shall not
be liable to any former holder of Company Common Shares for any securities
delivered or any amount paid by the Exchange Agent or its nominee to a
public official pursuant to applicable abandoned property, escheat or
similar laws. Any cash and Parent Common Shares remaining unclaimed by
holders of Company Common Shares three years after the Effective Time (or
any earlier date immediately prior to that time as this cash would
otherwise escheat to or become property of any Governmental Entity (as
defined in Section 2.1.4.1)) or as is otherwise provided by applicable Law
shall, to the extent permitted by applicable Law, become the property of
the Surviving Corporation or Parent, as Parent may determine, free and
clear of any claims or interest of any Person previously entitled thereto.
1.3.6. No dividends or other distributions with respect to Parent
Common Shares payable with respect to the Company Common Shares shall be
paid to the holder of any unsurrendered Certificates until those
Certificates are surrendered as provided in this Article I. Upon surrender,
there shall be issued and/or paid to the holder of Parent Common Shares
issued in exchange therefor, without interest, (A) at the time of
surrender, the dividends or other distributions payable with respect to
those Parent Common Shares with a record date on or after the date of the
Effective Time and a payment date on or prior to the date of such surrender
and not previously paid and (B) at the appropriate payment date, the
dividends or other distributions payable with respect to those Parent
Common Shares with a record date on or after the date of the Effective Time
but with a payment date subsequent to surrender. For purposes of dividends
or other distributions in respect of Parent Common Shares, all Parent
Common Shares to be issued and delivered pursuant to the Merger shall be
deemed issued and outstanding as of the Effective Time.
Section 1.4. Company Stock Options.
---------------------
1.4.1. At the Effective Time, all employee and director stock
options to purchase Company Common Shares (each, a "Company Stock Option")
which are then outstanding and unexercised shall cease to represent a right
to acquire Company Common Shares and shall be converted automatically into
options to acquire Parent Common Shares as provided below, and Parent shall
assume each Company Stock Option subject to the terms of any of the Company
Stock Plans (as defined in Section 2.1.2) and the agreements evidencing
grants thereunder. From and after the Effective Time, (i) the number of
Parent Common Shares purchasable upon exercise of each outstanding Company
Stock Option shall be equal to the product of (x) the number of Company
Common Shares that were purchasable under that Company Stock Option
immediately prior to the Effective Time multiplied by (y) the Exchange
Ratio (subject to adjustment as provided in Section 1.2.5), rounded down to
the nearest whole Parent Common Share, and (ii) the exercise price per
Parent Common Share under each Company Stock Option shall be obtained by
dividing (x) the exercise price per Company Common Share of each Company
Stock Option immediately prior to the Effective Time by (y) the Exchange
Ratio (subject to adjustment as provided in Section 1.2.5), and rounding up
or down to the nearest cent. The Board of Directors of the Company (or a
duly empowered committee thereof) has adopted all resolutions and otherwise
taken all action necessary to effectuate the foregoing. If any further
action is necessary or appropriate to implement the foregoing, each of
Parent and the Company agrees to take such action.
1.4.2. Prior to the Effective Time, Parent shall reserve for
issuance and make available for issuance in accordance with Section 1.4.1
the number of Parent Common Shares necessary to satisfy Parent's
obligations under Section 1.4.1. As soon as reasonably practicable after
the Effective Time, but no later than three business days after the
Effective Time, Parent shall file with the U.S. Securities and Exchange
Commission (the "SEC") a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to Parent Common Shares which are subject to the Company Stock
Options as provided in Section 1.4.1, and shall use reasonable best efforts
to maintain the current status of the prospectus contained therein, as well
as comply with any applicable state securities or "blue sky" laws, for so
long as those options remain outstanding.
Section 1.5. Fractional Shares. No fraction of a Parent Common
Share will be issued pursuant to the Merger, but in lieu thereof each
former holder of Company Common Shares otherwise entitled to receive a
fractional interest in a Parent Common Share will be entitled to receive in
accordance with the provisions of this Section 1.5 a cash payment in lieu
of that fractional interest in a Parent Common Share representing the
holder's proportionate interest in the net proceeds from the sale by the
Exchange Agent on behalf of all holders otherwise entitled to fractional
interests in Parent Common Shares which would otherwise be issued pursuant
to the Merger (the "Excess Shares"). The sale of the Excess Shares by the
Exchange Agent shall be executed through the NYSE. Until the net proceeds
of the sale of the Excess Shares have been distributed to the former
holders of Company Common Shares, the Exchange Agent will hold the proceeds
in trust for those former holders (the "Excess Shares Trust"). Commissions,
transfer taxes and other out-of-pocket transaction costs, including the
expenses and compensation, of the Exchange Agent incurred in connection
with the sale of the Excess Shares shall be paid from cash held in the
Excess Shares Trust. The Exchange Agent shall determine the portion of the
Excess Shares Trust to which each former holder of Company Common Shares
shall be entitled, if any, by multiplying the amount of the aggregate net
proceeds comprising the Excess Shares Trust by a fraction the numerator of
which shall be the fractional interest of Parent Common Shares to which
such former holder would otherwise be entitled and the denominator of which
is the aggregate amount of fractional interests in Parent Common Shares to
which all former holders of Company Common Shares would otherwise be
entitled. As soon as practicable after the determination of the amount of
cash, if any, to be paid to former holders of Company Common Shares in lieu
of fractional interests in a Parent Common Share, the Exchange Agent shall
make available those amounts to the former holders without interest. The
parties hereto acknowledge that payment of the cash consideration in lieu
of issuing fractional shares was not separately bargained for consideration
but merely represents a mechanical rounding off for purposes of simplifying
the corporate and accounting problems that would otherwise be caused by the
issuance of fractional shares.
Section 1.6. The Surviving Corporation.
-------------------------
1.6.1. The articles of incorporation of Merger Sub as in effect
immediately prior to the Effective Time shall be the articles of
incorporation of the Surviving Corporation until amended as provided herein
or in accordance with applicable Law; provided, however, that at the
Effective Time, such certificate shall be amended by virtue of this
Agreement as follows:
(i) Article I shall be amended to read: "The name of the
Corporation is IMRglobal Corp.";
(ii) Section 3.1 shall be amended to read: "The Corporation
is authorized to issue seventy-five million five hundred (75,000,500)
shares, of which 75,000,000 shall be shares of common stock par value $0.10
per share and 500 shares shall be shares of preferred stock, par value
$0.10 per share."
1.6.2. The by-laws of Merger Sub as in effect immediately prior
to the Effective Time shall be the by-laws of the Surviving Corporation
until amended as provided herein or in accordance with applicable Law.
1.6.3. From and after the Effective Time, until successors are
duly elected or appointed and qualified in accordance with applicable Law,
(i) the directors of Merger Sub at the Effective Time shall be the
directors of the Surviving Corporation, and (ii) the officers of Merger Sub
immediately prior to the Effective Time shall be the officers of the
Surviving Corporation.
Section 1.7. Lost, Stolen or Destroyed Certificates. In the event
any Certificate shall have been lost, stolen or destroyed, upon the
holder's compliance with the replacement requirements established by the
Exchange Agent, including, if necessary, the posting by the holder of a
bond in customary amount as indemnity against any claim that may be made
against it with respect to the Certificate, the Exchange Agent will issue
and deliver in exchange for the lost, stolen or destroyed Certificate the
applicable number of whole Parent Common Shares (including cash in lieu of
fractional shares in accordance with Section 1.5), and any unpaid dividends
or other distributions deliverable pursuant to Section 1.3.6 in respect of
Company Common Shares represented by the Certificate pursuant to this
Agreement.
Section 1.8. Dissenters' Rights. In accordance with Section 607.1302
of the FBCA, no dissenters' rights shall be available to holders of Company
Common Shares in connection with the Merger.
Section 1.9. Withholding Rights. Each of the Surviving
Corporation and Parent shall be entitled to deduct and withhold from the
consideration otherwise payable to any person pursuant to this Article I
such amounts as it is required to deduct and withhold with respect to the
making of such payment under any provision of federal, state, local or
foreign tax law. To the extent that amounts are so withheld by the
Surviving Corporation or Parent, as the case may be, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to
the holder of Company Common Shares in respect of which such deduction and
withholding was made by the Surviving Corporation or Parent, as the case
may be.
Section 1.10. Shares Held by Company Affiliates. Anything to the
contrary herein notwithstanding, no Parent Common Shares (or certificates
therefor) shall be issued in exchange for any Certificate to any Person who
may be an "affiliate" of the Company (identified pursuant to Section 3.14)
until such Person shall have delivered to Parent a duly executed letter as
contemplated by Section 3.14. Such Person shall be subject to the
restrictions described in such letter, and such Parent Common Shares (or
certificates therefor) shall bear a legend describing such restrictions.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company.
Except as disclosed in the Company Reports (as defined in Section 2.1.5)
filed with the SEC prior to the date of this Agreement and except as set
forth in the corresponding sections of the disclosure schedule to this
Agreement (the "Company Disclosure Schedule") (it being agreed that
disclosure of any item under a subsection of this Section 2.1 in the
Company Disclosure Schedule shall be deemed disclosure with respect to
other subsections of this Section 2.1 if the applicability of such item to
any such other subsection is reasonably apparent from the face of the
Company Disclosure Schedule), the Company represents and warrants to Parent
and Merger Sub as follows:
2.1.1. Organization, Good Standing and Qualification.
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Each of the Company and its Subsidiaries is duly organized,
validly existing and in good standing or with active status (with respect
to jurisdictions that recognize the concept of good standing or active
status) under the Laws of its respective jurisdiction of organization and
has all requisite corporate or similar power and authority, and all
government licenses, authorizations, consents and approvals required to
own, operate and lease its properties and assets and to carry on its
business as presently conducted and is duly qualified to do business and is
in good standing or with active status (with respect to jurisdictions that
recognize the concept of good standing or active status) in each
jurisdiction where the ownership, operation or leasing of its assets or
properties or conduct of its business requires qualification, except where
the failure to be so organized, qualified or in good standing or with
active status (with respect to jurisdictions that recognize the concept of
good standing or active status) or to have such power or authority, would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (as defined below) on the Company. The Company has
made available to Parent complete and correct copies of the articles of
incorporation and by-laws, in each case as amended to the date of this
Agreement, of the Company and each of its Subsidiaries listed on Schedule
2.1.1 hereto. These articles of incorporation and by-laws, as so made
available, are in full force and effect. As used in this Agreement, the
term (i) "Subsidiary" means, with respect to the Company or Parent, any
entity, whether incorporated or unincorporated, in which the Company or
Parent, as the case may be, owns, directly or indirectly, more than fifty
percent of the securities or other ownership interests having by their
terms ordinary voting power to elect more than fifty percent of the
directors or other persons performing similar functions, or the management
and policies of which the Company or Parent, as the case may be, otherwise
has the power to direct; (ii) "Material Adverse Effect", with respect to
any party, means a material adverse effect on the business, properties,
results of operations, or financial condition of such party and its
Subsidiaries taken as a whole, other than any conditions, events, changes
or effects that result from or arise out of (a) changes in the economy in
general or (b) changes or circumstances affecting the industries in which
such party operates which change or circumstance does not affect the
Company or Parent, as the case may be, disproportionately relative to the
other entities in such industry; and (iii) "Person" shall mean any
individual, corporation, general or limited partnership, limited liability
or unlimited liability company, joint venture, estate, trust, association,
organization, Governmental Entity or other entity of any kind or nature.
2.1.2. Capital Structure. The authorized capital stock of the
Company consists of 100,000,000 Company Common Shares and 10,000,000 shares
of Preferred Stock, par value $0.10 per share (the "Company Preferred
Shares"). As of the close of business on February 14, 2001, (i) 43,963,742
shares of Company Common Shares were issued and outstanding (ii) no Company
Preferred Shares were issued and outstanding, (iii) 331,360 Company Common
Shares and no Company Preferred Shares were held as treasury shares by the
Company or any of its Subsidiaries and (iv) 19,340,955 Company Common
Shares were reserved for issuance upon exercise of options issued pursuant
to the Company Stock Plans (as hereinafter defined) and there were
outstanding options to purchase an aggregate of 6,513,093 Company Common
Shares under the Company Stock Plans. All of the outstanding Company Common
Shares have been duly authorized and validly issued and are fully paid and
nonassessable and are free of preemptive rights. The exercise prices,
vesting schedules and expiration dates of the stock options issued by the
Company, the plans or agreements pursuant to which these stock options have
been issued (the "Company Stock Plans") and the holders of these stock
options are set forth in Section 2.1.2 of the Company Disclosure Schedule.
Except as set forth in this Section, the Company has no outstanding stock
or securities convertible into or exchangeable for any shares of its equity
securities, or any outstanding rights (either preemptive or other) to
subscribe for or to purchase, or any outstanding options for the purchase
of, or any agreements providing for the issuance (contingent or otherwise)
of, or any outstanding calls, commitments, obligations to purchase or
redeem, or claims of any character relating to, any equity securities or
any stock or securities convertible into or exchangeable for any equity
securities of the Company, including any rights plan or any other
anti-takeover agreement. Since February 14, 2001, except as permitted by
this Agreement, the Company has not (i) issued, granted or sold any Company
Common Shares or any other shares of its capital stock, other than pursuant
to the exercise of Company Stock Options outstanding on February 14, 2001
or pursuant to the Company's Employee Stock Purchase Plan or (ii) issued or
granted any options, warrants, or securities convertible into or
exercisable for shares of its capital stock.
Each of the outstanding shares of capital stock or other
ownership interests of each of the Company's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and owned by the
Company or a direct or indirect wholly owned Subsidiary of the Company, in
each case free and clear of any lien, pledge, security interest, claim or
other encumbrance and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose
of such capital stock or other ownership interests). Except as set forth
above, as of the date of this Agreement, there are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements, calls, commitments or rights of any kind which obligate the
Company or any of its Subsidiaries to issue or sell any shares of capital
stock or other securities of the Company or any of its Subsidiaries or any
securities or obligations convertible or exchangeable into or exercisable
for, or giving any Person a right to subscribe for or acquire from the
Company or any of its Subsidiaries, any securities of the Company or any of
its Subsidiaries, and no securities or obligations evidencing any rights
are authorized, issued or outstanding. As of the date of this Agreement,
neither the Company nor any of its Subsidiaries has outstanding any bonds,
debentures, notes or other obligations (i) the holders of which have the
right to vote with the shareholders of the Company or of any of its
Subsidiaries on any matter or (ii) which are convertible, exchangeable or
exercisable for or into shares of capital stock or other voting securities
or ownership interests in the Company or in any significant Subsidiary of
the Company. There are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any of its
outstanding securities.
2.1.3. Authority, Approval and Fairness Opinion. (a) The Company
has all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Merger and the other transactions contemplated hereby, subject only to the
approval of this Agreement by the affirmative vote of the holders of record
of not less than a majority of all of the votes entitled to be cast by
holders of Company Common Shares at the Company Shareholders' Meeting (as
defined in Section 3.5) (the "Company Requisite Vote"). Each Company Common
Share entitles its record holder to one vote per share in connection with a
vote of the shareholders of the Company with respect to the approval of
this Agreement. The execution and delivery of this Agreement, the
performance by the Company of its obligations hereunder and the
consummation by the Company of the Merger and the other transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of the Company, subject only to approval of the Merger
Agreement by the shareholders of the Company pursuant to the Company
Requisite Vote, and assuming the due authorization, execution and delivery
of this Agreement by Parent and Merger Sub, this Agreement constitutes a
valid and binding agreement of the Company enforceable against the Company
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (collectively, the "Bankruptcy and Equity Exception").
The Board of Directors of the Company has adopted resolutions (A) adopting
this Agreement and approving the Merger and the other transactions
contemplated hereby and thereby, (B) declaring the advisability of this
Agreement, (C) determining that this Agreement, the Merger and the other
transactions contemplated hereby are in the best interests of the Company's
shareholders, (D) recommending that the Company's shareholders vote in
favor of the approval of this Agreement at the Company Shareholders'
Meeting, (E) approving the Voting Agreement and the execution thereof by
Parent and Merger Sub and certain shareholders of the Company, and (F)
approving the Executive Agreements and the execution thereof by the
Company, Parent and Xx. Xxxxxx X. Xxxxx. The Board of Directors of the
Company has received the opinion of its financial advisor, Updata Capital
Inc., to the effect that, as of the date of this Agreement, the Exchange
Ratio is fair to the holders of Company Common Shares from a financial
point of view.
2.1.4. Governmental Filings, No Violations.
-----------------------------------
2.1.4.1. Other than the necessary filings, notices,
approvals, confirmations, consents, declarations and/or decisions (A)
pursuant to Sections 1.1.2 and 3.4, (B) under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Securities Act, the Canadian Securities laws, and the Competition Act
(Canada) (the "CCA"), and any approvals for the European Commission or the
European Union, (C) to comply with the rules and regulations of the New
York Stock Exchange (the "NYSE"), the Toronto Stock Exchange (the "TSE")
and the Nasdaq and (D) under the "blue sky" laws in the United States and
similar Canadian securities laws (such filings, notices, approvals,
confirmations, consents, declarations and/or decisions to be made, given or
obtained by the Company being, if any, the "Company Required Consents"), no
filings, notices, declarations and/or decisions are required to be made by
the Company or any of its Subsidiaries with, nor are any approvals or other
confirmations or consents required to be obtained by the Company or any of
its Subsidiaries from, any governmental or regulatory (including stock
exchange) authority, agency, court, commission, body or other governmental
entity (each, a "Governmental Entity"), in connection with the execution
and delivery by the Company of this Agreement and the performance by the
Company of its obligations hereunder and the consummation by the Company of
the Merger and the other transactions contemplated by this Agreement,
except those the failure of which to make, give or obtain, individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on the Company or prevent, materially delay or materially
impair the Company's ability to consummate the Merger or any of the other
transactions contemplated by this Agreement.
2.1.4.2. The execution, delivery and performance of this
Agreement by the Company do not, and the performance by the Company of its
obligations hereunder and the consummation by the Company of the Merger and
the other transactions contemplated by this Agreement will not, constitute
or result in (A) a breach or violation of, or a default under, the
Company's articles of incorporation or by-laws (as amended from time to
time), (B) a breach or violation of, or a default under, or the
acceleration or creation of any obligations, or the creation of a lien,
pledge, security interest, right of purchase, sale or termination or other
encumbrance (each a "Lien") on the assets of the Company or any of its
Subsidiaries (with or without notice, lapse of time or both) under any
provisions of any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or any of its Subsidiaries or any of
their respective properties or assets, (C) subject to making, giving or
obtaining all necessary filings, notices, approvals, confirmations,
declarations and/or decisions specified by Section 2.1.4.1, a breach or
violation of, or a default under, the acceleration or creation of any
obligations or the creation of any Lien pursuant to any agreement, license,
contract, note, mortgage, indenture, arrangement or other obligation
("Contracts") binding upon the Company or any of its Subsidiaries or any
law, ordinance, regulation, judgment, order, decree, injunction,
arbitration, award, license or permit of any Governmental Entity ("Law") or
governmental or non-governmental permit or license to which the Company or
any of its Subsidiaries is subject, or (D) any change in the rights or
obligations of any party under any of these Contracts, except, in the case
of clause (B), (C) or (D) above, for any breach, violation, default,
acceleration, creation or change that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on the
Company or prevent, materially delay or materially impair the Company's
ability to consummate the Merger or any of the other transactions
contemplated by this Agreement.
2.1.5. Reports; Financial Statements. Since December 31, 1997,
the Company has filed with the SEC all material forms, statements, reports
and documents (including all exhibits, post-effective amendments and
supplements thereto) required to be filed by it under each of the
Securities Act, the Exchange Act and the respective rules and regulations
thereunder (such filings through the date hereof collectively, the "Company
Reports"). As of their respective dates, the Company Reports did not
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 the light of the circumstances under which they were made, not
misleading. Each of the consolidated balance sheets included in or
incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents, in all material respects, the
financial position of the Company and its Subsidiaries as of its date, and
each of the related consolidated statements of operations, cash flows and
charges in equity (deficit) included in or incorporated by reference into
the Company Reports (including any related notes and schedules) fairly
presents, in all material respects, the results of operations and cash
flows of the Company and its Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to notes and normal year-end
audit adjustments that will not be material in amount or effect), in each
case in conformity with generally accepted accounting principles in the
United States ("U.S. GAAP") consistently applied during the periods
involved except as may be noted therein. "Company Balance Sheet" means the
consolidated balance sheet of the Company as of December 31, 2000 set forth
in Schedule 2.1.5 and "Company Balance Sheet Date" means December 31, 2000.
2.1.6. Absence of Certain Changes. Except as expressly
contemplated by this Agreement, since the Company Balance Sheet Date, the
Company and its Subsidiaries have conducted their respective businesses
only in, and have not engaged in any material transaction or incurred any
material expenditure other than in accordance with, the ordinary and usual
course of such businesses, and since the Company Balance Sheet Date there
has not been (i) any change in the financial condition, properties,
business or results of operations of it and its Subsidiaries except those
changes that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect on the Company;
(ii) any declaration, setting aside or payment of any dividend or other
distribution in cash, stock or property in respect of its capital stock or
any securities convertible, exchangeable or exercisable for or into shares
of its capital stock, except for dividends paid by Subsidiaries of the
Company solely to the Company or any of its wholly owned Subsidiaries;
(iii) any redemption, repurchase or other acquisition of any shares of its
capital stock or any securities convertible, exchangeable or exercisable
for or into shares of its capital stock; (iv) any split in its capital
stock, combination, subdivision or reclassification of any of its capital
stock or issuance or authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital
stock; (v) any change by it in accounting principles, practices or methods
except as required by changes in U.S. GAAP; (vi) any amendment of any
material term of any outstanding security of the Company or any of its
Subsidiaries; (vii) any transaction or commitment made, or any contract,
agreement or settlement entered into, by (or judgment, order or decree
affecting) the Company or any of its Subsidiaries relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any of its Subsidiaries of any contract or
other right, in either case, material to the Company and its Subsidiaries
taken as a whole, other than transactions, commitments, contracts,
agreements or settlements (including without limitation settlements of
litigation and tax proceedings) in the ordinary course of business
consistent with past practice, those contemplated by this Agreement, or as
agreed to in writing by Parent; (viii) any (a) grant of any severance or
termination pay to (or amendment to any such existing arrangement with) any
director, officer or employee of the Company or any of its Subsidiaries
other than pursuant to existing arrangements or, with respect to employees
who are not directors or executive officers, consistent with past practice,
not to exceed, in any event, more than thirty (30) days' pay, (b) entering
into of any employment, deferred compensation or other similar agreement
(or any amendment to any such existing agreement) with any director,
officer or employee of the Company or any of its Subsidiaries except with
respect to persons who are not directors or executive officers and whose
agreements do not provide for more than a maximum severance or other
obligation upon termination of thirty days' pay, (c) except as set forth in
Section 2.1.6 of the Company Disclosure Schedule, increase in benefits
payable under any existing severance or termination pay policies or
employment agreements or (d) increase in (or amendments to the terms of)
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any of its Subsidiaries, other than as
permitted by this Agreement, or as agreed to in writing by Parent; (ix) any
material Tax election made or changed, any audit settled or any amended Tax
returns filed; (x) any incurrence, assumption or guarantee by the Company
or any of its Subsidiaries of any indebtedness for borrowed money or any
other agreement or arrangement entered into by the Company or any of its
Subsidiaries except pursuant to loan and other financing agreements
disclosed in the Company Reports; (xi) any loans, advances or capital
contributions by the Company to or investments in, any other person, other
than to any direct or indirect wholly-owned Subsidiary of the Company and
other than payroll (not to exceed $3,000 with respect to any one employee)
travel and entertainment advances to employees of the Company in the
ordinary course of business consistent with past practices or in connection
with development projects disclosed to Parent; (xii) except for this
Agreement and any other agreement executed and delivered pursuant to this
Agreement, any material expenditure incurred by the Company other than in
the ordinary course of business or permitted under other Sections of this
Agreement or in connection with the transactions contemplated hereby; and
(xiii) except as specifically contemplated by Section 2.1.6 of the Company
Disclosure Schedule, any payments or other distributions by the Company or
any of its Subsidiaries to any of its officers, directors or affiliates,
except for compensation for service as a director or officer as disclosed
in the Company Reports.
2.1.7. Litigation and Liabilities. (a) There are no civil,
criminal or administrative actions, suits, claims, hearings, investigations
or proceedings pending or, to the knowledge of the Company's executive
officers (as defined in the Exchange Act) ("Company Officers"), threatened
against the Company or any of its Subsidiaries or to which any of their
respective properties, assets, or rights are reasonably likely to be
subject, nor is there any judgment, decrees, injunction, rule or order of
any court or arbitrator or any governmental body, agency or official
outstanding against the Company or any of its Subsidiaries except, in each
case, for those that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Material Adverse Effect on the
Company or prevent, materially delay or materially impair the Company's
ability to consummate the Merger or any of the other transactions
contemplated by this Agreement.
(b) Neither the Company nor any of its Subsidiaries had at
Company Balance Sheet Date, or has incurred since that date and as of the
date of this Agreement, any liabilities or obligations (whether absolute,
accrued, contingent or otherwise) of any nature, except (i) liabilities,
obligations or contingencies (1) which are accrued or reserved against in
the Company Balance Sheet or reflected in the notes thereto, (2) which
would not, individually or in the aggregate, be reasonably expected to have
a Material Adverse Effect on the Company (3) which have been disclosed in
the Company Reports filed prior to the date of this Agreement (4) which
were incurred after Company Balance Sheet Date in the ordinary course of
business and consistent with past practices, or (5) which have been
discharged or paid in full prior to the date of this Agreement in the
ordinary course of business.
2.1.8. Employee Benefit Plans.
----------------------
2.1.8.1. Set forth in Section 2.1.8.1 of the Company
Disclosure Schedule is a list of each stock option, stock purchase, stock
appreciation right or stock based incentive plan, or other similar
arrangement or policy applicable to any current, former, or retired
employee, officer, consultant, independent contractor, agent or director of
the Company or any of its Subsidiaries (collectively, the "Company
Employees"), each plan, program, or policy providing for bonuses,
profit-sharing or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage and self-insured arrangements, health
or medical benefits, disability benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and post-employment
or retirement benefits or other employee benefits of any kind, whether
funded or unfunded, which is maintained, administered or contributed to by
the Company or any of its Subsidiaries and covers any Company Employee
employed or providing services or formerly employed or providing services
in the United States or Canada to the Company or any of its Subsidiaries,
or under which the Company or any of its Subsidiaries has any liability,
contingent or otherwise (including but not limited to each "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), but excluding any plan that is
a "multiemployer plan" as defined in Section 3(37) of ERISA) (collectively,
the "Company Employee Plans"), and each employment, severance, consulting,
non-compete, or similar agreement or contract between the Company or any
Subsidiary and any Company Employee employed or providing services or
formerly employed or providing services in the United States or Canada to
the Company or any of its Subsidiaries who received in 2000 total salary
and bonuses in excess of $125,000 ("Company Employment Agreements"). True
and complete copies of all Company Employee Plans, including, but not
limited to, any trust instruments and insurance contracts forming a part of
any Company Employee Plan, and all amendments have been provided or made
available to Parent. For purposes of this Agreement, the term "Company
Foreign Plan" shall refer to each plan, program or contract maintained,
sponsored or contributed to by the Company or a Subsidiary that is subject
to or governed by the laws of any jurisdiction other than the United States
or Canada, and which would have been treated as a Company Employee Plan had
it been a United States or Canada plan, program or contract. The Company
shall use its reasonable commercial efforts to make available to Parent,
within forty-five (45) days following the date of this Agreement, a list
and copies of the Company Foreign Plans.
2.1.8.2. Each Company Employee Plan, Company Foreign Plan
and Company Employment Agreement has been established and maintained in all
material respects in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations
(including but not limited to ERISA and the Code) which are applicable to
the plan or agreement, except where failure to comply would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Neither the Company, any of its Subsidiaries nor any ERISA
Affiliate contributes to, or is or has ever been required to contribute to,
any "multiemployer plan" as defined in Section 3(37) of ERISA. Neither the
Company, any of its Subsidiaries, nor any of its ERISA Affiliates presently
sponsors, maintains, contributes to, nor is the Company, any of its
Subsidiaries or any of its ERISA Affiliates required to contribute to, nor
has the Company, any of its Subsidiaries, nor any of its ERISA Affiliates
ever sponsored, maintained, contributed to, or been required to contribute
to, an "employee pension benefit plan" within the meaning of Section 3(2)
of ERISA which is subject to Title IV of ERISA. For purposes of this
Agreement, "ERISA Affiliate" means, with respect to the Company or Parent,
as applicable, each business or entity which is a member of a "controlled
group of corporations," under "common control" or an "affiliated service
group" with the Company or Parent, as applicable, within the meaning of
Sections 414(b), (c) or (m) of the Code, or required to be aggregated with
the Company or Parent, as applicable, under Section 414(o) of the Code, or
is under "common control" with the Company or Parent, as applicable, within
the meaning of Section 4001(a)(14) of ERISA. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, all contributions required to be made under
the terms of any Company Employee Plan or Company Foreign Plan have been
made. Each Company Employee Plan which is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service that it is so qualified, and each trust
forming a part thereof is exempt from federal income tax pursuant to
Section 501(a) of the Code and, to the knowledge of the Company Officers,
no circumstances exist which would reasonably be expected to adversely
affect qualification or exemption. There is no pending or, to the knowledge
of the Company Officers, threatened litigation or governmental audit,
examination or investigation relating to any Company Employee Plan or
Company Foreign Plan, except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
2.1.8.3. Neither the Company, any of its Subsidiaries nor
any of its ERISA Affiliates (i) maintains, contributes to or is party to
any Company Employee Plan, any Company Foreign Plan, or any Company
Employment Agreement which provides, or has any liability to provide, life
insurance, medical, severance or other employee welfare benefits to any
Company Employee upon his retirement or termination of employment, except
as may be required by Section 4980B of the Code; or (ii) has ever
represented, promised or contracted (whether in oral or written form) to
any Company Employee (either individually or to the Company Employees as a
group) that the Company Employee(s) would be provided with life insurance,
medical, severance or other employee welfare benefits upon their retirement
or termination of employment, except to the extent required by Section
4980B of the Code.
2.1.8.4. Except as set forth in Section 2.1.8.4 of the
Company Disclosure Schedule, the execution, delivery of and performance by
the parties hereto of their obligations under, and the consummation of the
transactions contemplated by, this Agreement will not (either alone or upon
the occurrence of any additional or subsequent events) (i) constitute an
event under any Company Employee Plan, any Company Foreign Plan or any
trust or loan related to a plan or agreement, that will or may result in
any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Company Employee, or (ii)
result in the triggering or imposition of any restrictions or limitations
on the right of the Company, any of its Subsidiaries or Parent to amend or
terminate any Company Employment Agreement, any Company Foreign Plan or any
Company Employee Plan. No payment or benefit which will or may be made by
the Company, any of the Subsidiaries of the Company, Parent or any of their
respective ERISA Affiliates with respect to any Company Employee will be
characterized as an "excess parachute payment" within the meaning of
Section 280G(b)(1) of the Code. There is no commitment covering any Company
Employee that, individually or in the aggregate, would reasonably be
expected to give rise to the payment of any amount that would result in a
material loss of tax deductions pursuant to Section 162(m) of the Code.
2.1.8.5. There has been no amendment to, written
interpretation or announcement (whether or not written) by the Company, or,
to the knowledge of the Company's Officers, any of its Subsidiaries or any
of its ERISA Affiliates relating to, or change in employee participation or
coverage under, any Company Employee Plan, Company Foreign Plan or Company
Employment Agreement which would significantly increase the expense of
maintaining the plan or agreement above the level of the expense incurred
in respect thereof for the 12 months ended on December 31, 2000. Except as
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Company, all Company Foreign Plans (i)
have been maintained in accordance with all applicable requirements; (ii)
if they are intended to qualify for special tax treatment, meet all
requirements for that treatment; and (iii) if they are intended to be
funded and/or book-reserved are fully funded and/or book reserved, as
appropriate, based upon reasonable actuarial assumptions.
2.1.9. Labor and Employment Matters. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, the Company and each Subsidiary (i) is in
compliance with all applicable Laws respecting employment, employment
practices, labor, terms and conditions of employment and wages and hours;
and (ii) is not liable for any payment to any trust or other fund or to any
Governmental Entity, with respect to unemployment compensation benefits,
social security or other similar benefits for the Company Employees outside
the ordinary course of business. No work stoppage or labor strike against
the Company or any Subsidiary is pending or, to the knowledge of the
Company Officers, threatened. Neither the Company, nor any Subsidiary (i)
is involved in or threatened with any labor dispute, grievance, or
litigation relating to labor matters, including, without limitation,
violation of any federal, state or local labor, safety or employment laws
(domestic or foreign), charges of unfair labor practices or discrimination
complaints; or (ii) except as previously disclosed to Parent regarding the
Company Employees located in France, is presently, nor has been in the past
a party to, or bound by, any collective bargaining agreement or union
contract with respect to Company Employees and no such agreement or
contract is currently being negotiated by the Company or any Subsidiary.
2.1.10. Non-competition Agreements. Neither the Company nor any
of its Subsidiaries is a party to any agreement which (i) purports to
restrict or prohibit in any material respect any of them or any corporation
affiliated with any of them from, directly or indirectly, engaging in any
business and (ii) would restrict or prohibit Parent or any Subsidiary of
Parent (other than the Company and its Subsidiaries that are currently so
restricted or prohibited) from engaging in such business.
2.1.11. Absence of Sensitive Payments. To the knowledge, of the
Company Officers none of the Company, or any Subsidiary or affiliate or any
officer or director of any of them acting alone or together, has performed
any of the following acts, except to the extent that such acts,
individually or collectively, would not reasonably be expected to have a
Material Adverse Effect on the Company: (i) the making of any contribution,
payment, remuneration, gift or other form of economic benefit (a "Payment")
to or for the private use of any governmental official, employee or agent
where the Payment or the purpose of the payment was illegal under the laws
of the United States or the jurisdiction in which such payment was made,
(ii) the establishment or maintenance of any unrecorded fund, asset or
liability for any purpose or the making of any false or artificial entries
on its books, (iii) the making of any Payment to any person or the receipt
of any Payment with the intention or understanding that any part of the
Payment was to be used for any purpose other than that described in the
documents supporting the Payment, or (iv) the giving of any Payment to, or
the receipt of any Payment from, any person who was or could have been in a
position to help or hinder the business of the Company or any Subsidiary
(or assist the Company or any Subsidiary in connection with any actual or
proposed transaction) which (A) would reasonably have been expected to
subject the Company or any Subsidiary to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (B) if not given
in the past, would have had a Material Adverse Effect on the Company or (C)
if it had not continued in the future, would have had a Material Adverse
Effect on the Company. "Company Officers" means the officers (as such term
is defined in Rule 16(a)-1(f) under the Exchange Act) of the Company.
2.1.12. Affiliate Transactions. Except to the extent disclosed in
any Company Report or set forth in Section 2.1.12 of the Company Disclosure
Schedule, there are no other transactions, agreements, arrangements or
understandings between the Company or its Subsidiaries, on the one hand,
and the Company's Affiliates (other than wholly-owned Subsidiaries of the
Company) or other Persons, on the other hand, that would be required to be
disclosed under Regulation S-K under the Securities Act. For purposes of
this Agreement, the term "Affiliate" when used with respect to any Person,
means any other Person directly or indirectly controlling, controlled by,
or under common control with such Person. As used in the definition of
Affiliate the term "control" means possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of
a Person, whether through the ownership of voting securities, by contract
or otherwise.
2.1.13. Licenses. Each of the Company and its Subsidiaries has
all material permits, licenses, certificates, waivers or authorizations
("Licenses") from all Governmental Entities having jurisdiction over any
part of its business necessary for the conduct of any of its activities and
all Licenses are valid and in full force and effect, except for any
Licenses the failure of which to have or to be in full force and effect
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Company. Except as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect on the Company, no event has occurred or other fact exists with
respect to any of the Licenses held by the Company or any of its
Subsidiaries which permits, or after notice or lapse of time or both would
permit, revocation or termination thereof or would result in any other
material impairment of the rights of the holder of any of the Licenses.
2.1.14. Intellectual Property. (a) Each of the Company and its
Subsidiaries owns or has a valid right to use patents, trademarks, trade
names, domain names, service marks, copyrights, processes, formulae,
methods, schedules, technology, know-how, computer software programs and
applications and other proprietary information ("IP Rights") as are
necessary in connection with its respective businesses, except where the
failure to own or have a valid right to use the IP Rights, individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on the Company.
(b) Section 2.1.14(b) of the Company Disclosure Schedule contains
an accurate and complete list as of the date of this Agreement of the
following categories of IP Rights of the Company and its Subsidiaries: (A)
trademarks that are registered or for which an application for registration
is pending; (B) patents; (C) software (other than commercial shrink-wrap,
click-wrap or other similarly available off-the-shelf-type software); (D)
copyrights that are registered or for which an application for registration
is pending; (E) key trade secrets; (F) mask works that are registered or
for which an application for registration is pending. Where listed IP
Rights are registered with a Governmental Entity or an application for
registration is pending, the jurisdiction, registration or application
number, date of registration or application, named owner and/or assignee,
and international classes of registration are indicated, as applicable.
(c) Section 2.1.14(c) of the Company Disclosure Schedule contains
an accurate and complete list as of the date of this Agreement of (A) all
material licenses, sublicenses and other agreements under which the Company
or its Subsidiaries are licensed to use third party IP Rights (other than
(1) shrink-wrap, click-wrap or other similarly available off-the-shelf type
software and any related trade secrets and (2) customary rights included in
confidentiality, non-disclosures or similar agreements) and (B) all
material licenses and sublicenses, except for rights granted specifically
for use with a hardware product sold by the Company or its Subsidiaries,
under which the Company or its Subsidiaries have granted rights to third
parties to use IP Rights of the Company or its Subsidiaries. The Company
and its Subsidiaries are not currently required to pay any royalties, fees
or other amounts to any Person in connection with the use of the their
respective IP Rights.
(d) The Company and its Subsidiaries have good and valid title to
all IP Rights owned by any of them and valid and enforceable license rights
to all IP Rights used under license, free and clear, to the knowledge of
the Company Officers, of all material liens, security interests and other
encumbrances (other than Taxes not yet due and payable), and to the
knowledge of the Company Officers, all IP Rights are in full force and
effect and will remain in full force and effect immediately following the
Effective Time.
(e) The Company and its Subsidiaries have a practice to secure,
and have secured, from all current and former employees, consultants and
independent contractors who contribute or have contributed to the creation
or development of their IP Rights valid written assignments by such persons
to the Company and its Subsidiaries of the rights to such contributions the
Company and its Subsidiaries do not already own by operation of law. The
Company and its Subsidiaries have taken reasonable steps to protect and
preserve the confidentiality of all of their trade secrets, and to the
knowledge of the Company Officers (i) as of the date of this Agreement,
there are no unauthorized uses, disclosures or infringements of any IP
Rights of the Company or its Subsidiaries, and (ii) as of the date of this
Agreement, all use by, and disclosure to, any Person of trade secrets that
comprise any part of the IP Rights of the Company or its Subsidiaries has
been pursuant to the terms of a written agreement with such Person, and
(iii) all use by the Company and its Subsidiaries of trade secrets owned by
another Person has been pursuant to the terms of a written agreement with
such Person or is otherwise lawful. If after the date of this Agreement the
Company has knowledge of any of the foregoing conditions, the Company shall
take appropriate and prompt action to remedy such conditions. Neither the
IP Rights owned by the Company or its Subsidiaries or incorporated into any
products or services currently provided by the Company or its Subsidiaries
nor the use or other exploitation thereof by the Company or its
Subsidiaries in the conduct of their business, nor any product or service
currently provided by the Company or its Subsidiaries, infringes on,
misappropriates, breaches or violates any third party IP Rights.
(f) Neither the Company nor any of its Subsidiaries: (A) has been
notified or has knowledge of any actual or threatened adverse proceeding
brought by any Person pertaining to any challenge to the scope, validity or
enforceability of (provided, however, no representation or warranty is made
regarding the scope, validity or enforceability of any patent application),
or the Company's ownership of, any of the IP Rights owned by the Company
and its Subsidiaries; (B) is the subject of any claim of infringement or
misappropriation by the Company or any of its Subsidiaries of any third
party IP Rights; or (C) to the knowledge of the Company Officers, has any
claim for infringement or misappropriation of, or breach of any license or
agreement involving, any of the IP Rights owned by the Company and its
Subsidiaries.
(g) (A) The Company has not taken any action or failed to take
any action (including the manner in which it has conducted its business, or
used or enforced, or failed to use or enforce, any of the IP Rights of the
Company and its Subsidiaries) that would result in the abandonment,
cancellation, forfeiture, relinquishment, invalidation or unenforceability
of any of the IP Rights of the Company and its Subsidiaries, (B) the
Company has taken reasonable steps (based on standard industry practices)
to protect and maintain the Company's and its Subsidiaries' rights in and
to IP Rights of the Company and its Subsidiaries, (C) all registered
trademarks and all IP registered copyrights of the Company and its
Subsidiaries and registered mask works of the Company and its Subsidiaries
have been registered and all owned patents of the Company and its
Subsidiaries have been filed and obtained, in accordance with all
applicable legal requirements and are currently in effect and in compliance
with all applicable legal requirements, and without limiting the generality
of any of the foregoing, the Company has timely paid all filing,
examination, issuance, post-registration and maintenance fees, annuities
and the like associated or required with respect to any of the IP Rights of
the Company and its Subsidiaries.
2.1.15. Continuity of Business. Section 2.1.15 of the Company
Disclosure Schedule sets forth certain clients of the Company and its
Subsidiaries. No client of the Company or any of its Subsidiaries
identified on Section 2.1.15 of the Company Disclosure Schedule has advised
the Company or any Subsidiary orally or in writing that it (y) is
terminating or considering terminating the handling of its business by the
Company or any of its Subsidiaries, as applicable, as a whole or in respect
of any particular project or service or (z) is planning to reduce the
amount contracted with the Company or any of its Subsidiaries in any
material manner.
2.1.16. Compliance with Laws. Except with respect to Taxes and
Environmental Laws, which are the subject of Sections 2.1.19 and 2.1.20,
respectively, (a) neither the Company nor any of its Subsidiaries is in
violation of, or has violated, any applicable provisions of any Laws except
for any violations that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company.
(b) Neither the Company nor any of its Subsidiaries has received
since January 1, 1998 any written notification or communication from any
Governmental Entity (A) asserting that the Company or any of its
Subsidiaries is not in compliance with any of the statutes, regulations or
ordinances which such Governmental Entity enforces or (B) threatening to
revoke any license, franchise, permit or governmental authorization, except
for notices or other written communication asserting or relating to
noncompliance with any statute, regulation or ordinance or threatening to
revoke any license, franchise, permit or governmental authorization that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on the Company.
2.1.17. Certain Contracts. Section 2.1.17 of the Company
Disclosure Schedule sets forth a list of all material Contracts to which
the Company or any of its Subsidiaries is a party. Within two weeks of the
date hereof, the Company shall deliver to Parent additional information
with respect to such material Contracts as follows: (1) Contracts with
customers - the project or engagement name, the contract date, the parties
to the contract, and the contract value, (ii) credit facilities - the
parties, the date of the contract and the amount of the credit line; (iii)
any material performance bonds - name of the parties and the amount, (iv)
material technology agreements - the date of the contract, the parties and
the nature of the contract, and (v) any other material Contracts - the
parties and the date. Neither the Company nor any of its Subsidiaries is in
default under any material Contract to which it is a party, by which its
respective assets, business, or operations may be bound or affected, and
there has not occurred any event that, with the lapse of time or the giving
of notice or both, would constitute such a default, except for such
defaults that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Company.
2.1.18. Tax Treatment. From and after the date of this Agreement,
neither the Company nor any of its Subsidiaries has taken or agreed to take
any action, and the Company Officers do not know of any other action taken
by any other Person, which action would jeopardize the treatment of the
Merger as a reorganization within the meaning of Section 368 of the Code or
the ability of counsel to render the opinions described in Sections 4.2.3
and 4.3.3 of this Agreement.
2.1.19. Tax Matters.
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(a) All returns, declarations, reports, estimates, information
returns and statements required to be filed on or before the Effective Time
under United States federal or state or local or any foreign tax laws ("Tax
Returns") with respect to (i) the Company and its Subsidiaries, and (ii)
any of their respective income, properties, or operations, have been or
will be timely filed, or requests for extensions have been timely filed and
have not expired, except where a failure or failures to so timely file
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Company.
(b) All material Tax Returns filed by the Company and its
Subsidiaries are complete and accurate in all material respects.
(c) The Company and its Subsidiaries have paid all Taxes due
and payable (without regard to whether those taxes have been assessed), or
adequate reserves have been established for the payment of those Taxes. No
governmental authority in a jurisdiction where the Company or any of its
Subsidiaries does not file a Tax Return has made a claim, assertion, or
threat that the Company or any of its Subsidiaries is or may be subject to
Taxes in such jurisdiction. For purposes of this Agreement, "Taxes" shall
mean all taxes, charges, fees, levies or other assessments, however
denominated, including, without limitation, all net income, gross income,
gross receipts, sales, use, ad valorem, goods and services, capital,
transfer, franchise, profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp, occupation, property
or other taxes, custom duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax
or additional amounts imposed by any taxing authority whether arising
before, on or after the Effective Time.
(d) Except as set forth in Section 2.1.19(d) of the Company
Disclosure Schedule, there are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any material
Tax Returns required to be filed by or with respect to the Company or any
of its Subsidiaries.
(e) The proper and accurate amounts have been withheld from
all employees, customers, and other applicable payees (and timely paid to
the appropriate Governmental Entity or set aside in an account for these
purposes) for all periods through the Closing Date in compliance in all
material respects with all Tax withholding provisions of applicable
federal, state, local and foreign laws (including, without limitation,
income, social security, and employment Tax withholding for all types of
compensation).
(f) Neither the Company nor any of its Subsidiaries is a
party to any Tax sharing or similar agreement or any agreement pursuant to
which it or any of its Subsidiaries has an obligation to indemnify any
party (other than the Company or one of its Subsidiaries) with respect to
Taxes or has been a member of an affiliated group filing consolidated or
combined tax returns (other than a group the common parent of which was the
Company).
(g) All Taxes due with respect to completed and settled
examinations or concluded litigation relating to the Company or any of its
Subsidiaries have been paid in full or adequate reserves have been
established for the payment thereof.
(h) Except as set forth in Section 2.1.19(h) of the Company
Disclosure Schedule, no material audit or examination or refund litigation
with respect to any Tax Return is pending.
(i) The Company is not, nor has it ever been, a United
States real property holding corporation within the meaning of Section
897(c)(2) of the Code.
2.1.20. Environmental Matters.
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(a) As used in this Agreement, "Environmental Laws" means
all environmental, health and safety Laws (including common law) and
regulations in effect on the date of this Agreement, relating to the
protection of human health and safety as affected by exposure to
pollutants, contaminants, or hazardous or toxic wastes, substances or
materials and to the protection of the environment including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water
Act, the Federal Clean Air Act, and the Occupational Safety and Health Act,
each as amended, regulations promulgated thereunder, and state
counterparts.
(b) (x) Neither the conduct or operations of the Company or its
Subsidiaries nor any condition of any property presently or previously
owned, leased or operated by any of them violates or, within the applicable
statute of limitations period, violated Environmental Laws, except for
violations that are not material and (y) no condition has existed or event
has occurred with respect to any of them or any such property that would
reasonably be expected to result in a Material Adverse Effect on the
Company. Neither the Company nor any of its Subsidiaries has received any
written notice from any Governmental Entity that it or its Subsidiaries or
the operation or condition of any property ever owned, leased, operated,
held as collateral or held as a fiduciary by any of them are or were in
material violation of or otherwise are alleged to have material liability
under any Environmental Law, including, but not limited to, responsibility
(or potential responsibility) for the cleanup or other remediation of any
pollutants, contaminants, or hazardous or toxic wastes, substances or
materials at, on, beneath, or originating from any such property.
(c) To the knowledge of the Company Officers, none of the
property currently owned, leased or operated by the Company or by its
Subsidiaries is subject to, or as a result of this transaction would be
subject to, (i) any Environmental Laws which would impose restrictions,
such as notice, disclosure or obtaining advance approval prior to this
transaction, or (ii) any liens under any Environmental Laws.
(d) All indemnification provisions and rights in any
contract, agreement, license, permit, authorization, or other arrangement
which are in favor of the Company or any of its Subsidiaries as set forth
on Schedule 2.1.20(d) hereto (the "Company Indemnification Rights") are,
and shall remain, in full force and effect, and the execution and delivery
of this Agreement by the Company do not, and the performance by the Company
of its obligations hereunder will not, and the consummation of the Merger
and the other transactions contemplated hereby will not, affect any such
Company Indemnification Rights in any manner adverse to the Company or any
of its Subsidiaries or Parent or any of its Subsidiaries. In addition, the
Company and any of its applicable Subsidiaries are, and shall remain, in
compliance with all their duties and obligations under any agreement,
contract, license, permit, authorization or other arrangement granting the
Company or any of its Subsidiaries any Company Indemnification Rights, and
the Company Indemnification Rights are, and shall remain, fully assignable
and transferable by the Company and any of its applicable Subsidiaries to
Parent or any of its Subsidiaries, free and clear of any Liens and without
the consent of any third parties or any Governmental Entity.
2.1.21. Registration Rights Agreements. Schedule 2.1.21
hereto is a complete list of each agreement which requires the Company to
register any Company Common Shares under the Securities Act.
2.1.22. Takeover Statutes. The Board of Directors of the
Company has taken all action appropriate and necessary to render Section
607.0901 of the FBCA, and any other potentially applicable control share
acquisition, anti-takeover or similar statute or regulation inapplicable to
this Agreement, the Merger and the other transactions contemplated hereby
or by the Voting Agreement. No other "fair price," "moratorium," "control
share acquisition" or other similar anti-takeover statute or regulation,
including Section 607.0902 of the FBCA (each, a "Takeover Statute"), and no
anti-takeover or similar provision in the articles of incorporation or
by-laws of the Company, is applicable to this Agreement, the Merger or any
of the other transactions contemplated hereby or by the Voting Agreement.
Without limiting the foregoing, the Board of Directors of the Company has
approved the entry into the Voting Agreement by Parent, Merger Sub and
certain shareholders of the Company and (i) neither Parent nor Merger Sub
shall be an "interested person" for purposes of Section 607.0901 of the
FBCA and the provisions of such Section shall not apply to the Merger and
(ii) the entry into the Voting Agreement shall not result in a "control
share acquisition" within the meaning of Section 607.0902 of the FBCA and
the record holders of the Company Common Shares subject to the Voting
Agreement, Parent or Merger Sub shall not be restricted by such Section
from voting those Company Common Shares.
2.1.23. Real Property. (a) Schedule 2.1.23(a) hereto sets
forth all real property owned of record or beneficially by the Company or
any of its Subsidiaries and all leases or subleases of real property to
which any of them is a party (including through assignment, change of
control or otherwise) and a brief description of each property, with the
annual rental of each lease, the size of each property in square feet, the
termination date of each lease being given in each case. In addition,
Schedule 2.1.23(a) hereto sets forth all leases of personal property to
which the Company or any of its Subsidiaries is a party (including through
assignment, change of control or otherwise) with any vendor, who, together
with its Affiliates, receives annual rental payments of $200,000 or more
pursuant to such leases. Except as set forth on Schedule 2.1.23(a) hereto,
the Company and its Subsidiaries have good, valid, marketable and fee
simple title to all of their real properties listed on Schedule 2.1.23(a)
and have good title to, or valid and enforceable leasehold interests in,
their leased real properties and all their other properties and assets
listed on Schedule 2.1.23(a) hereto, in each such case, free and clear of
all Liens, individually or in the aggregate, except, in the case of owned
real property, (i) Liens for current taxes, payments of which are not yet
delinquent, and (ii) such imperfections in title and easements and
encumbrances, if any, as are not substantial in character, amount or extent
and do not materially detract from the value, or interfere with the present
use of the property subject thereto or affected thereby, or otherwise
materially impair the Company's and its Subsidiaries' business operations
(in the manner presently carried on by the Company and its Subsidiaries).
The leases pursuant to which the Company or any of its Subsidiaries leases
any real or personal property as listed on Schedule 2.1.23(a) hereto are
valid and binding on the Company or the applicable Subsidiary and valid and
binding on all other respective parties to such leases in accordance with
their respective terms. Except as set forth on Schedule 2.1.23(a), none of
the rights of the Company or any of its Subsidiaries under any such leases
of real or personal property is subject to termination or modification as a
result of or in connection with the transactions contemplated hereby. None
of the Company or any of its Subsidiaries is subject to, or will be subject
to, as a result of the consummation of the transactions contemplated
hereby, any penalties, liabilities or charges (including any increases in
rental payments or any liabilities incurred due to the modification,
termination or replacement of such leases or subleases) under any leases or
subleases of real or personal property to which it, its Subsidiaries or any
of their respective predecessors or acquired companies is a party, except
for those which, individually or in the aggregate, would not reasonably be
expected to have aggregate economic costs of more than $3 million. There
are not under any leases or subleases of real or personal property set
forth on Schedule 2.1.23(a) any existing breaches, defaults, events of
default by the Company or any of its Subsidiaries or events which with
notice and/or lapse of time would constitute a breach, default or event of
default by the Company or any of its Subsidiaries, nor does the Company
know, nor has the Company received any notice of, or made a claim with
respect to, any breach of default, the consequences of which, individually
or in the aggregate, would have a Material Adverse Effect on the Company
and its Subsidiaries. True and complete copies of all the leases and
subleases (including any amendments, annexes or schedules thereto) of real
and personal property (in the case of leases or subleases of personal
property, those with annual rental payments of $200,000 or more) to which
the Company, any of its Subsidiaries, or any of their respective
predecessors or acquired companies is a party and true and complete copies
of which have not, as of the date of this Agreement, yet been provided to
Parent shall have been delivered to Parent and Merger Sub on or prior to
March 31, 2001. In addition, all the information the Company is required to
disclose pursuant to this Section 2.1.23(a) on Schedule 2.1.23(a) hereto
shall have been delivered to Parent as Schedule 2.1.23(a), in the form and
substance reasonably acceptable to Parent on or prior to March 31, 2001.
The Company shall promptly notify Parent on a Business Day that the
delivery of all such leases and subleases and of Schedule 2.1.23(a) to
Parent and Merger Sub has been completed. Within fourteen (14) days after
the receipt of such notice from the Company regarding the completion of the
delivery of true and complete copies of all such leases and subleases and
of Schedule 2.1.23(a), Parent shall notify the Company whether it will
reasonably require the Company to obtain required consents under any leases
or subleases to which the Company or any of its Subsidiaries, or any of
their respective predecessors or acquired companies is a party (the
"Company Lease Consents") and provide the Company with a list of any such
leases or subleases under which such Company Lease Consents are to be
obtained (the "Company Lease List"), and the Company (with reasonable
support from Parent) shall use its reasonable best efforts to obtain any
such Company Lease Consents. If Parent does not so notify the Company
within such fourteen (14) day period, the Company shall not be obligated to
obtain any such Company Lease Consents. The real properties owned, leased
or licensed by the Company or any of its Subsidiaries listed on Schedule
2.1.23(a) constitute all real properties used or held for use in, and
necessary to, the conduct of the business of the Company and its
Subsidiaries as presently conducted or proposed to be conducted.
(b) Except as set forth on Schedule 2.1.23(b), the
buildings, facilities, machinery, equipment, furniture, leasehold and other
improvements, fixtures, vehicles, structures, any related items and other
tangible property that are owned or leased by the Company or any of its
Subsidiaries or that are required to properly conduct the business of the
Company and its Subsidiaries are in good operating condition and repair
(normal wear and tear excepted), free of any material structural or
engineering defects, are being maintained and replaced in accordance with
good business practice, and are suitable for their current and intended
uses.
2.1.24. Brokers and Finders. Neither the Company nor any of
its Subsidiaries, officers, directors or employees has employed any broker
or finder or incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the execution and delivery of this
Agreement or the Merger or the other transactions contemplated by this
Agreement, except that the Company has retained Updata Capital Inc. as its
financial advisor, the fees and expenses of which will be paid by the
Company and the arrangements with which have been disclosed to Parent prior
to the date of this Agreement. The Company has delivered to Parent true and
complete copies of all agreements under which any such fees or expenses are
payable and all indemnifications and other agreements related to the
engagement of the persons to whom such fees are payable. The Company has
previously provided Parent with its good faith current estimate of the
aggregate of the fees and expenses of any accountant, broker, financial
advisor, consultant, legal counsel or other person retained by the Company
or any of its Subsidiaries in connection with this Agreement or the
transactions contemplated hereby which will be paid by or on behalf of the
Company in connection with this Agreement and the transactions contemplated
hereby.
Section 2.2. Representations and Warranties of Parent. Except as
disclosed in the Parent Reports (as defined in Section 2.2.5) filed with
the SEC or with the Canadian securities regulatory authorities prior to the
date of this Agreement and except as set forth in the corresponding
sections of Parent's disclosure schedule to this Agreement (the "Parent
Disclosure Schedule" and, together with the Company Disclosure Schedule,
the "Disclosure Schedules") (it being agreed that disclosure of any item
under a subsection of this Section 2.2 in the Parent Disclosure Schedule
shall be deemed disclosure with respect to other subsections of this
Section 2.2 if the applicability of such item to any such other subsection
is reasonably apparent from the face of the Parent Disclosure Schedule),
Parent represents and warrants to the Company that:
2.2.1. Organization, Good Standing and Qualification. Each of
Parent and its Subsidiaries is duly organized, validly existing and in good
standing (with respect to jurisdictions that recognize the concept of good
standing) under the Laws of its jurisdiction or organization and has all
requisite corporate or similar power and authority, and all government
licenses, authorizations, consents and approvals required to own, operate
and lease its properties and assets and to carry on its business as
presently conducted and is duly qualified to do business and is in good
standing (with respect to jurisdictions that recognize the concept of good
standing) in each jurisdiction where the ownership, operation or leasing of
its assets or properties or conduct of its business requires this
qualification, except where the failure to be so organized, qualified or in
good standing (with respect to jurisdictions that recognize the concept of
good standing), or to have this power or authority, would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect on Parent. Parent has made available to the Company complete and
correct copies of its certificate of incorporation, as amended to the date
of this Agreement. This certificate of incorporation, as so made available,
is in full force and effect.
2.2.2. Capital Structure. The authorized share capital of Parent
is comprised of an unlimited number of First Preferred Shares, Second
Preferred Shares, Parent Common Shares and Class B Shares (multiple voting)
("Class B Shares") of which, as at February 14, 2001, 255,162,941 Parent
Common Shares and 34,846,526 Class B Shares were validly issued and
outstanding. All of the outstanding Parent Common Shares and Class B Shares
are, and all of Parent Common Shares to be issued pursuant to the Merger
are, or will be when issued, duly authorized and validly issued and fully
paid and non-assessable. Except as set forth in Section 2.22 of the Parent
Disclosure Schedule, as of the date of this Agreement, Parent has no Parent
Common Shares reserved for or otherwise subject to issuance, except no more
than 8,506,275 Parent Common Shares subject to issuance pursuant to
outstanding options to purchase Parent Common Shares. As of the date of
this Agreement, except as set forth above, Parent or any of its
Subsidiaries does not have outstanding any bonds, debentures, notes or
other obligations (i) the holders of which have the right to vote with the
shareholders of Parent or any of its Subsidiaries on any matter or (ii)
which are convertible into or exercisable for shares of capital stock or
other voting securities or ownership interests in Parent or any Significant
Subsidiary of Parent.
(b) Each of the outstanding shares of capital stock or other
ownership interests of each of Parent's Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable and owned by Parent or a
direct or indirect wholly owned Subsidiary of Parent, in each case free and
clear of any material lien, pledge, security interest, claim or other
encumbrance and free of any other material limitation or restriction
(including any restriction or the right to vote, sell or otherwise dispose
of such capital stock or ownership interests).
2.2.3. Corporate Authority and Approval. Each of Parent and
Merger Sub has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to
consummate the Merger and the other transactions contemplated hereby. The
execution and delivery by each of Parent and Merger Sub of this Agreement,
the performance by each of Parent and Merger Sub of its obligations
hereunder and, subject to the Company's shareholders' approval of this
Agreement, the Merger, and the other transactions contemplated hereby, the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Merger Sub, and assuming the due
authorization, execution and delivery of this Agreement by the Company,
this Agreement constitutes valid and binding agreement of Parent and Merger
Sub, enforceable against Parent and Merger Sub in accordance with its
terms, subject to the Bankruptcy and Equity Exception. The Board of
Directors of Parent has approved this Agreement and the Merger and the
other transactions contemplated hereby.
2.2.4. Governmental Filings, No Violations.
-----------------------------------
2.2.4.1. Other than the necessary filings, notices,
approvals, confirmations, consents, declarations and/or decisions (A)
pursuant to Sections 1.1.2 and 3.4, (B) under the HSR Act, the Exchange
Act, the Securities Act, the Canadian securities laws, and the CCA, and any
approvals from the European Commission or the European Union, (C) to comply
with the rules and regulations of the NYSE, the TSE and the Nasdaq, and (D)
under the "blue sky" laws in the United States and similar Canadian
securities laws (such filings, notices, approvals, confirmations, consents,
declarations and/or decisions to be made, given or obtained by Parent being
the "Parent Required Consents"), no filings, notices, declarations and/or
decisions are required to be made by Parent with, nor are any approvals or
other confirmations or consents required to be obtained by Parent from, any
Governmental Entity, in connection with the execution and delivery by
Parent and Merger Sub of this Agreement, the performance by Parent and
Merger Sub of their obligations hereunder and the consummation by Parent
and Merger Sub of the Merger and the other transactions contemplated by
this Agreement, except those the failure of which to make, give or obtain,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect on Parent or prevent, materially delay or
materially impair Parent's or Merger Sub's ability to consummate the Merger
or any of the other transactions contemplated by this Agreement.
2.2.4.2. The execution and delivery of this Agreement by
Parent and Merger Sub do not, and the performance of Parent and Merger Sub
of their obligations hereunder and the consummation by Parent and Merger
Sub of the Merger and the other transactions contemplated hereby (including
the issuance of Parent Common Shares) will not, constitute or result in (A)
a breach or violation of, or a default under Parent's certificate of
incorporation or by-laws (as amended from time to time) or the articles of
incorporation and by-laws of Merger Sub (as amended from time to time), (B)
a breach or violation of or a default under, or the acceleration or
creation of any obligations, or the creation of any Lien on the assets of
Parent or any of its Subsidiaries (with or without notice, lapse of time or
both) pursuant to any provisions of any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Parent or any of its
Subsidiaries or any of their respective properties or assets, (C) subject
to making, giving or obtaining all necessary filings, notices, approvals,
confirmations, declarations and/or decisions specified by Section 2.2.4.1,
a breach or violation of, or a default under, the acceleration of any
obligations or the creation of any Lien on the assets of Parent or any of
its Subsidiaries (with or without notice, lapse of time or both) pursuant
to any Contract binding upon Parent or any of its Subsidiaries or any Law
or governmental or non-governmental permit or license to which Parent or
any of its Subsidiaries is subject, or (D) any change in the rights or
obligations of any party under any of its Contracts, except, in the case of
clause (B), (C) or (D) above, for any breach, violation, default,
acceleration, creation or change that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
Parent or prevent, materially delay or materially impair Parent's or Merger
Sub's ability to consummate the Merger or any of the other transactions
contemplated by this Agreement.
2.2.5. Reports; Financial Statements. Since December 31, 1998,
Parent has filed with the SEC and the appropriate Canadian securities
regulatory authorities all material forms, statements and documents
(including all exhibits, post-effective amendments and supplements thereto)
required to be filed by it under each of the Securities Act, the Exchange
Act and the respective rules and regulations thereunder (such filings
through the date hereof, collectively the "Parent Reports" and, together
with the Company Reports, the "Reports"). As of their respective dates, the
Parent Reports did not 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. Each of the consolidated balance sheets of
Parent and its subsidiaries included in or incorporated by reference into
the Parent Reports (including the related notes and schedules) presents
fairly, in all material respects, the financial position of Parent and its
subsidiaries as of its date, and each of the related consolidated
statements of income, changes in equity (deficit) and cash flows included
in or incorporated by reference into the Parent Reports (including any
related notes and schedules) presents fairly, in all material respects, the
results of operations and cash flows of Parent and its subsidiaries for the
periods set forth therein (subject, in the case of unaudited statements, to
notes and normal year-end audit adjustments that will not be material in
amount or effect), in each case in conformity with generally accepted
accounting principles in Canada ("Canadian GAAP") consistently applied
during the periods involved except as may be noted therein. The related
notes reconciling to U.S. GAAP the consolidated financial statements of
Parent, or any portion thereof, as applicable, comply in all material
respects with the requirements of the SEC applicable to such
reconciliation. "Parent Balance Sheet" means the consolidated balance sheet
of Parent as of September 30, 2000 set forth in the Parent 2000 Annual
Report and "Parent Balance Sheet Date" means September 30, 2000.
2.2.6. Absence of Certain Changes. Since the Parent Balance Sheet
Date there has not been (i) any change in the financial condition,
properties, business or results of operations of Parent and its
Subsidiaries except those changes that, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material
Adverse Effect on Parent; (ii) any declaration, setting aside or payment of
any dividend or other distribution in cash, stock or property in respect of
Parent's capital stock, except for regular cash dividends in the ordinary
course, or (iii) any change by Parent in accounting principles, practices
or methods, except as required by changes in Canadian GAAP or U.S. GAAP, as
applicable.
2.2.7. Litigation and Liabilities. (a) There are no civil,
criminal or administrative actions, suits, claims, hearings, investigations
or proceedings pending or, to the knowledge of Parent's executive officers
(the "Parent Executive Officers"), threatened against Parent or any of its
Subsidiaries or to which any of their respective properties, assets or
rights are reasonably likely to be subject nor is there any judgment,
decrees, injunction, rule or order of court arbitrator or any governmental
body, agency or official outstanding against Parent or any of its
Subsidiaries, except, in each case, for those that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on Parent or prevent, materially delay or materially impair Parent's
or Merger Sub's ability to consummate the Merger or any of the other
transactions contemplated by this Agreement.
(b) Neither Parent nor any of its Subsidiaries had at Parent
Balance Sheet Date, or has incurred since that date and as of the date of
this Agreement, any liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of any nature, except (i) liabilities, obligations
or contingencies (1) which are accrued or reserved against in the Parent
Balance Sheet or reflected in the notes thereto, (2) which were incurred
after Parent Balance Sheet Date in the ordinary course of business and
consistent with past practices, (3) which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Parent, (4) which have been discharged or paid in full prior to the date of
this Agreement in the ordinary course of business, or (5) which are of a
nature not required to be reflected in the consolidated financial
statements of Parent and its Subsidiaries prepared in accordance with
Canadian GAAP consistently applied.
2.2.8. Employee Benefit Plans.
----------------------
2.2.8.1. Each stock option, stock purchase, stock
appreciation right or stock based incentive plan, or other similar
arrangement or policy, each plan, program, or policy providing for bonuses,
profit-sharing or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage and self-insured arrangements, health
or medical benefits, disability benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and post-employment
or retirement benefits or other employee benefits of any kind, whether
funded or unfunded, and each "employee pension benefit" plan as defined in
Section 3(2) of ERISA, and each "registered pension plan" as that term is
defined in subsection 248(1) of the Income Tax Act, Canada, in which
directors, former directors, employees and former employees of Parent or
any of its Subsidiaries (collectively "Parent Employees") may participate
are collectively referred to as "Parent Employee Plans". For purposes of
this Agreement, the term "Parent Foreign Plan" shall refer to each plan,
program or contract maintained, sponsored or contributed to by the Parent
or a Subsidiary that is subject to or governed by the laws of any
jurisdiction other than the United States or Canada, and which would have
been treated as a Parent Employee Plan had it been a United States or
Canada plan, program or contract.
2.2.8.2. Each Parent Employee Plan and Parent Foreign Plan
has been established and maintained in compliance with its terms and with
the requirements prescribed by any and all statutes, orders, rules and
regulations which are applicable to such plan, except where failure to so
comply would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Parent. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent, neither Parent, any of its Subsidiaries nor any
ERISA Affiliate contributes to, or is or has ever been required to
contribute to, any "multiemployer plan" as defined in Section 3(37) of
ERISA. Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent, neither Parent, any
of its Subsidiaries nor any of its ERISA Affiliates has incurred a
liability, contingent or otherwise, under Title IV of ERISA that has not
been satisfied in full.
2.2.8.3. The execution, delivery of and performance by the
parties hereto of their obligations under and the consummation of the
transactions contemplated by this Agreement will not (either alone or upon
the occurrence of any additional or subsequent events) (i) constitute an
event under any Parent Employee Plan, trust or loan that will or may result
in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Parent Employee, or (ii)
result in the triggering or imposition of any restrictions or limitations
on the right of Parent or any of its Subsidiaries to amend or terminate any
Parent Employee Plan and receive the full amount of any excess assets
remaining or resulting from such amendment or termination, subject to
applicable taxes.
2.2.8.4. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Parent, all Parent Foreign Plans (i) have been maintained in accordance
with all applicable requirements; (ii) if they are intended to qualify for
special tax treatment, meet all requirements for that treatment; and (iii)
if they are intended to be funded and/or book-reserved are fully funded
and/or book reserved, as appropriate, based upon reasonable actuarial
assumptions.
2.2.9. Labor and Employment Matters. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent, Parent and each Subsidiary (i) is in compliance
with all applicable Laws respecting employment, employment practices,
labor, terms and conditions of employment and wages and hours, in each
case, with respect to the Parent Employees; and (ii) is not liable for any
payment to any trust or other fund or to any Governmental Entity, with
respect to unemployment compensation benefits, social security or other
benefits for the Parent Employees. No work stoppage or labor strike against
Parent or any Subsidiary by the Parent Employees is pending or, to the
knowledge of the Parent Executive Officers, threatened.
2.2.10. Licenses. Each of Parent and its Subsidiaries has all
material Licenses from all Governmental Entities having jurisdiction over
any part of its business necessary for the conduct of any of its activities
and all such material Licenses are valid and in full force and effect,
except for any Licenses the failure of which to have or to be in full force
and effect would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent, no event has occurred or other fact exists with
respect to any of the Licenses held by Parent or any of its Subsidiaries
which permits, or after notice or lapse of time or both would permit,
revocation or termination thereof or would result in any other material
impairment of the rights of the holder of any of the Licenses.
2.2.11. Intellectual Property. (a) Each of Parent and its
Subsidiaries own or have a valid right to use IP Rights as are necessary in
connection with its respective businesses, except where the failure to own
or have a valid right to use such IP Rights, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on Parent. Except as would not, individually or in the aggregate,
have a Material Adverse Effect on Parent, neither Parent nor any of its
Subsidiaries has infringed on any IP Rights of any third party.
(b) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Parent, Parent
and its Subsidiaries have good and valid title to all IP Rights owned by
any of them and valid and enforceable license rights to all IP Rights used
under license, free and clear, to Parent's knowledge, of all material
liens, security interests and other encumbrances (other than Taxes not yet
due and payable), and to Parent's knowledge, all IP Rights are in full
force and effect and will remain in full force and effect immediately
following the Effective Time, except for IP Rights, the failure of which to
be in full force and effect would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Parent.
(c) Parent and its Subsidiaries have a practice to secure, and
have secured, from all current and former employees, consultants and
independent contractors who contribute or have contributed to the creation
or development of their IP Rights valid written assignments by such persons
to Parent and its Subsidiaries of the rights to such contributions Parent
and its Subsidiaries do not already own by operation of law, except where
the failure to secure such written assignments would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect
on Parent. Parent and its Subsidiaries have taken reasonable steps to
protect and preserve the confidentiality of all of their trade secrets, and
to Parent's knowledge (i) as of the date of this Agreement, there are no
unauthorized uses, disclosures or infringements of any IP Rights of Parent
or its Subsidiaries, and (ii) as of the date of this Agreement, all use by,
and disclosure to, any Person of trade secrets that comprise any part of
the IP Rights of Parent or its Subsidiaries has been pursuant to the terms
of a written agreement with such Person, and (iii) all use by Parent and
its Subsidiaries of trade secrets owned by another Person has been pursuant
to the terms of a written agreement with such Person or is otherwise
lawful, except, in each case, for such uses, disclosures or infringements,
that would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Parent. If after the date of this
Agreement Parent has knowledge of any of the foregoing conditions, Parent
shall take appropriate and prompt action to remedy such conditions. Neither
the IP Rights owned by Parent or its Subsidiaries or incorporated into any
products or services currently provided by Parent or its Subsidiaries nor
the use or other exploitation thereof by Parent or its Subsidiaries in the
conduct of their business, nor any product or service currently provided by
Parent or its Subsidiaries, infringes on, misappropriates, breaches or
violates any third party IP Rights, except for such infringements,
misappropriations, breaches and violations that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(d) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Parent, neither
Parent nor any of its Subsidiaries: (A) has been notified or has knowledge
of any actual or threatened adverse proceeding brought by any Person
pertaining to any challenge to the scope, validity or enforceability of
(provided, however, no representation or warranty is made regarding the
scope, validity or enforceability of any patent application), or Parent's
ownership of, any of the IP Rights owned by Parent and its Subsidiaries;
(B) is the subject of any claim of infringement or misappropriation by
Parent or any of its Subsidiaries of any third party IP Rights; or (C) to
Parent's knowledge, has any claim for infringement or misappropriation of,
or breach of any license or agreement involving, any of the IP Rights owned
by Parent and its Subsidiaries.
(e) Except as would not, individually or in the aggregate
reasonably be expected to have a Material Adverse Effect on Parent, (A)
Parent has not taken any action or failed to take any action (including the
manner in which it has conducted its business, or used or enforced, or
failed to use or enforce, any of the IP Rights of Parent and its
Subsidiaries) that would result in the abandonment, cancellation,
forfeiture, relinquishment, invalidation or unenforceability of any of the
IP Rights of Parent and its Subsidiaries, (B) Parent has taken reasonable
steps (based on standard industry practices) to protect and maintain
Parent's and its Subsidiaries' rights in and to IP Rights of Parent and its
Subsidiaries, (C) all registered trademarks and all IP registered
copyrights of Parent and its Subsidiaries and registered mask works of
Parent and its Subsidiaries have been registered and all owned patents of
Parent and its Subsidiaries have been filed and obtained, in accordance
with all applicable legal requirements and are currently in effect and in
compliance with all applicable legal requirements, and without limiting the
generality of any of the foregoing, Parent has timely paid all filing,
examination, issuance, post-registration and maintenance fees, annuities
and the like associated or required with respect to any of the IP Rights of
Parent and its Subsidiaries.
2.2.12. Continuity of Business. Section 2.2.12 of the Parent
Disclosure Schedule sets forth certain clients of Parent and its
Subsidiaries. No client of Parent or any of its Subsidiaries identified on
Section 2.2.12 of Parent Disclosure Schedule has advised Parent or any
Subsidiary orally or in writing that it (y) is terminating or considering
terminating the handling of its business by Parent or any of its
Subsidiaries, as applicable, as a whole or in respect of any particular
project or service or (z) is planning to reduce the amount contracted with
Parent or any of its Subsidiaries in any material manner.
2.2.13. Compliance with Laws. (a) Except with respect to Taxes
and Environmental Laws, which are the subject of Sections 2.2.16 and
2.2.17, respectively, neither Parent nor any of its Subsidiaries is in
violation of, or has violated, any applicable provisions of any Laws except
for any violations that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Parent.
(b) Neither Parent nor any of its Subsidiaries has received since
January 1, 1998 any written notification or communication from any
Governmental Entity (A) asserting that Parent or any of its Subsidiaries is
not in compliance with any of the statutes, regulations or ordinances which
such Governmental Entity enforces or (B) threatening to revoke any license,
franchise, permit or governmental authorization.
2.2.14. Tax Treatment. From and after the date of this Agreement,
neither Parent nor any of its Subsidiaries has taken or agreed to take any
action, and the Parent Executive Officers do not know of any action taken
by any other Person, which action would jeopardize the treatment of the
Merger as a reorganization within the meaning of Section 368 of the Code or
the ability of counsel to render the opinions described in Sections 4.2.3
and 4.3.3 of this Agreement.
2.2.15. Merger Sub's Operations. Merger Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby and has not
(i) engaged in any business activities, (ii) conducted any operations or
(iii) incurred any liabilities other than pursuant to this Agreement and in
connection with the Merger and other transactions contemplated by this
Agreement, the Executive Agreements and the Voting Agreement.
2.2.16. Tax Matters. (a) All Tax Returns required to be filed on
or before the Effective Time under Canadian federal or provincial or United
States Federal or state or local or any foreign tax laws with respect to
(i) Parent and its Subsidiaries, and (ii) any of their income, properties,
or operations have been or will be timely filed, or requests for extensions
have been timely filed and have not expired, except where a failure or
failures to so timely file would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Parent.
(b) All material Tax Returns filed by Parent and its
Subsidiaries are complete and accurate in all material respects.
(c) Parent and its Subsidiaries have paid all Taxes due and
payable (without regard to whether those taxes have been assessed), or
adequate reserves have been established for the payment of those Taxes. No
governmental authority in a jurisdiction where Parent or any of its
Subsidiaries does not file a Tax Return has made a claim, assertion, or
threat that Parent or any of its Subsidiaries is or may be subject to Taxes
in such jurisdiction. All Taxes shown to be due and payable (without regard
to whether those such Taxes have been assessed) on the Tax Returns of
Parent or any of its Subsidiaries have been paid or adequate reserves have
been established for the payment of those Taxes.
(d) There are no outstanding agreements or waivers extending
the statutory period of limitations applicable to any material Tax Returns
required to be filed by or with respect to Parent or any of its
Subsidiaries.
(e) The proper and accurate amounts have been withheld from
all employees, customers, and other applicable payees (and timely paid to
the appropriate Governmental Entity or set aside in an account for these
purposes) for all periods through the Closing Date in compliance in all
material respects with all Tax withholding provisions of applicable
federal, state, local and foreign laws (including, without limitation,
income, social security, and employment Tax withholding for all types of
compensation).
(f) Neither Parent nor any of its Subsidiaries is a party to
any Tax sharing or similar agreement or any agreement pursuant to which it
or any of its Subsidiaries has an obligation to indemnify any party (other
than Parent or one of its Subsidiaries) with respect to Taxes or has been a
member of an affiliated group filing consolidated or combined tax returns
(other than a group the common parent of which was Parent).
(g) All Taxes due with respect to completed and settled
examinations or concluded litigation relating to Parent or any of its
Subsidiaries have been paid in full or adequate reserves have been
established for the payment thereof.
(h) No material audit or examination or refund litigation
with respect to any Tax Return is pending.
(i) Parent is not, nor has it ever been, a United States
real property holding corporation within the meaning of Section 897(c)(2)
of the Code.
2.2.17. Environmental Matters. (a) (x) Neither the conduct or
operations of Parent or its Subsidiaries nor any condition of any property
presently or previously owned, leased or operated by any of them violates
or, within the applicable statute of limitations period, violated
Environmental Laws, except for violations that are not material and (y) no
condition has existed or event has occurred with respect to any of them or
any such property that would reasonably be expected to result in a Material
Adverse Effect on Parent. Neither Parent nor any of its Subsidiaries has
received any written notice from any Governmental Entity that it or its
Subsidiaries or the operation or condition of any property ever owned,
leased, operated, held as collateral or held as a fiduciary by any of them
are or were in material violation of or otherwise are alleged to have
material liability under any Environmental Law, including, but not limited
to, responsibility (or potential responsibility) for the cleanup or other
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on, beneath, or originating from any such
property.
(b) To Parent's knowledge, none of the property currently owned,
leased or operated by Parent or by its Subsidiaries is subject to, or as a
result of this transaction would be subject to, (i) any Environmental Laws
which would impose restrictions, such as notice, disclosure or obtaining
advance approval prior to this transaction, or (ii) any liens under any
Environmental Laws.
2.2.18. Brokers and Finders. Neither Parent nor any of its
Subsidiaries, officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the execution and delivery of this
Agreement, the Merger or the other transactions contemplated hereby, except
that Parent has employed Xxxxxxx Xxxxx Xxxxxx as its financial advisor.
ARTICLE III
COVENANTS
Section 3.1. Interim Operations of the Company. During the period from
the date of this Agreement until the Effective Time, the Company shall, and
shall cause each of its Subsidiaries to (unless Parent shall otherwise
approve in writing (which consent shall not be unreasonably withheld) and
except as otherwise expressly contemplated by or provided in this
Agreement):
3.1.1. conduct its businesses in the ordinary and usual course
consistent with past practice in all material respects and, to the extent
consistent therewith, use reasonable best efforts to preserve its business
organization intact and maintain its existing relations and goodwill with
employees, customers, clients, suppliers, creditors, lessors, employees and
business associates;
3.1.2. not (i) amend, or propose any change in, the articles of
incorporation or by-laws of the Company or any of its Subsidiaries; (ii)
split, combine, subdivide or reclassify any of the outstanding shares of
capital stock of the Company or any of its Subsidiaries; or (iii) adopt a
plan of complete or partial liquidation;
3.1.3. (i) not declare, set aside or pay any dividend or
distribution payable in cash, stock or property in respect of any of its
capital stock or any securities convertible, exchangeable or exercisable
for or into shares of its capital stock, other than dividends paid to the
Company or to wholly owned Subsidiaries of the Company by any of the
Subsidiaries of the Company; and (ii) not repurchase, redeem or otherwise
acquire any shares of its capital stock, or any securities convertible,
exchangeable or exercisable for or into any shares of its capital stock;
3.1.4. not (i) issue, sell, pledge, dispose of or encumber any
shares of, or securities convertible into or exchangeable or exercisable
for, or rights, options, warrants, conversion rights, stock appreciation
rights, redemption rights, repurchase rights, agreements, arrangements,
calls, commitments or rights of any kind to acquire, its capital stock
(other than Company Common Shares issuable upon the exercise of Company
Stock Options outstanding on the date of this Agreement under the Company
Stock Plans or pursuant to the Company's Employee Stock Purchase Plan);
(ii) incur or modify in any material respect (x) any material indebtedness
or any of the terms of any material indebtedness or (y) any other liability
except in the ordinary and usual course of business; (iii) enter into any
merger, reorganization, consolidation or share exchange; (iv) sell, lease,
license to any Person(s) or otherwise dispose of any business or any
assets, outside the ordinary and usual course of business (by merger,
consolidation, stock or asset disposition or otherwise); or (v) purchase,
lease or license from any Person or otherwise acquire any assets and/or
business(es) (by merger, consolidation, stock or asset acquisition or
otherwise), except for such purchases, leases, or acquisitions requiring
payments which do not in the aggregate exceed $300,000 in any single
purchase, lease or acquisition (or series of related transactions), or
enter into any agreement with respect to any of the foregoing;
3.1.5. except as set forth on Schedule 3.1.5 of the Company
Disclosure Schedule, not (i) terminate, establish, adopt, enter into,
implement, make any new grants or awards of equity-based compensation or
other benefits under, amend or otherwise modify any compensation or benefit
plan or outstanding award thereunder or agreement or increase the salary,
wage, bonus or other compensation of any directors, officers or employees,
or enter into or adopt any employment or severance agreement or arrangement
except for increases in salary, wages or non-equity bonus compensation or
non-equity benefits for employees other than directors or executive
officers in the ordinary and usual course of business consistent with past
practice, (ii) cause the acceleration of the time of payment or vesting or
trigger any payment or funding of any compensation, benefits or awards,
under any Company Employment Agreement, any Company Employee Plan or any
Company Foreign Plan, except in each case as required by applicable Company
Employment Agreement, Company Employee Plan or Company Foreign Plan
pursuant to the terms in effect as of the date of this Agreement, (iii)
permit a cashless exercise of stock options, except as currently permitted
by the Company Stock Plans, or (iv) settle the exercise of stock options in
other than Company Common Shares;
3.1.6. not take any action or omit to take any action which to
the knowledge of the Company Officers would prevent, materially delay or
materially impede the consummation of the Merger or the other transactions
contemplated by this Agreement, or take any action that would cause the
Merger to fail to qualify as a reorganization under Section 368 of the
Code;
3.1.7. not waive any of its rights under, or release any other
party from, amend, or fail to enforce its rights under, any provision of
any standstill agreement;
3.1.8. not enter into, or modify, amend the terms of, or
terminate any material joint venture, partnership or similar arrangement or
any material contract;
3.1.9. not (i) change its (w) Tax accounting policies, practices
or methods, or (x) Tax elections; and (ii) settle any material audits,
examinations or litigation with respect to Taxes;
3.1.10. not take any action to cause the Company Common Shares to
cease to be listed on the Nasdaq;
3.1.11. except for any change which is not material or which is
required by reason of a concurrent change in U.S. GAAP, not change any
method or principle of accounting or accounting practice used by it;
3.1.12. not take any action that would make any representation or
warranty of the Company hereunder inaccurate in any material respect at, or
as of any time prior to, the Effective Time;
3.1.13. not adopt, enter into or amend to increase benefits or
obligations any pension or retirement plan, trust or fund and not adopt,
enter into or amend in any material respect any bonus, profit sharing,
compensation, stock option, deferred compensation, health care, employment
or other employee benefit plan, agreement, trust, fund or arrangement for
the benefit or welfare of any employees or retirees generally, other than
in the ordinary course of business, except (i) as required to comply with
changes in applicable law, (ii) any of the foregoing involving any such
then existing plans, agreements, trusts, funds or arrangements of any
company acquired after the date hereof, or (iii) as required pursuant to an
existing contractual arrangement or agreement;
3.1.14. not (i) incur or become contingently liable with respect
to any indebtedness for borrowed money other than (A) borrowings in the
ordinary course of business (other than pursuant to credit facilities) or
borrowings under the existing credit facilities of the Company or any of
its Subsidiaries or borrowings under the credit facilities to be entered
into substantially on the terms set forth in Section 3.1.14 of the Company
Disclosure Schedule as such facilities may be amended in a manner that does
not have a Material Adverse Effect on the Company up to the existing
borrowing limit on the date hereof;
3.1.15. not enter into any contract or commitment or make
expenditures, including, but not limited to, capital expenditures, or enter
into any binding commitment or contract to make expenditures, (i) other
than any contract or commitment (or series of related contracts or
commitments) providing for the provision of services by the Company or any
of its Subsidiaries to any new client of the Company or any of its
Subsidiaries which is reasonably expected to generate less than $2 million
in revenues over its term or (ii) other than contracts or commitments which
are reasonably expected to involve payments by or to the Company or any of
its Subsidiaries of less than $300,000 in any single contract or commitment
(or series of contracts or commitments relating to the same matter) over
its term; provided, that this clause (ii) does not apply to those contracts
or commitments which are referred to in clause (i) of this paragraph;
3.1.16. timely satisfy, or cause to be timely satisfied, all
applicable Tax reporting and filing requirements contained in the Code with
respect to the transactions contemplated by this Agreement, including,
without limitation, the reporting requirements contained in United States
Treasury Regulation Section 1.367(a)-3(c)(6), which covenant shall continue
after the Effective Time until such time as all such reporting and filing
requirements are satisfied;
3.1.17. use best efforts to obtain waivers, by March 15, 2001,
under its credit facility with First Union Bank dated December 28, 1999, as
amended from time to time, and its credit facility with AmSouth Bank dated
December 8, 2000, as amended from time to time, so that the Company shall
no longer be in violation of its covenants thereunder;
3.1.18. subject to restrictions imposed by applicable law, confer
with one or more representatives of Parent to report operational matters of
materiality and the general status of ongoing operations; or
3.1.19. not authorize or enter into an agreement to take any of
the actions referred to in subsections 3.1.2 through 3.1.15.
Section 3.2. Interim Operations of Parent. During the period from the
date of this Agreement until the Effective Time, Parent shall, and shall
cause each of its Subsidiaries to, as applicable (unless the Company shall
otherwise approve in writing (which consent shall not be unreasonably
withheld) and except as otherwise expressly contemplated by or provided in
this Agreement or as set forth in the corresponding section of the Parent
Disclosure Schedule):
3.2.1. not take any action which would reasonably be expected to
materially impair or delay the ability of Parent or Merger Sub to
consummate the Merger;
3.2.2. not (i) amend, or propose any change in, the certificate
of incorporation of Parent; (ii) split, combine, subdivide or reclassify
the outstanding share capital of Parent or (iii) adopt a plan of complete
or partial liquidation;
3.2.3. (i) not declare, set aside or pay any dividend or
distribution payable in cash, stock or property in respect of any of its
capital stock, other than regular cash dividends, consistent with past
practice (including increases consistent with past practice); or (ii)
repurchase, redeem or otherwise acquire (except for repurchases,
redemptions or acquisitions (A) required by the terms of its capital stock
or securities outstanding on the date of this Agreement, (B) required by
the terms as of the date of this Agreement of, or in the ordinary course of
the operation of, any Parent employee stock option or other employee plan
or scheme or (C) otherwise in the ordinary course) any shares of its
capital stock or any securities convertible, exchangeable or exercisable
for or into shares of its capital stock;
3.2.4. not take any action or omit to take any action which, to
the knowledge of the Parent Executive Officers, would prevent, materially
delay or materially impede the consummation of the Merger or the other
transactions contemplated by this Agreement or take any action that would
cause the Merger to fail to qualify as a reorganization under Section 368
of the Code;
3.2.5. not take any action to cause Parent Common Shares to cease
to be listed on the NYSE or the TSE;
3.2.6. except for any change which is not material or which is
required by reason of a concurrent change in Canadian GAAP, not change any
method of accounting practice used by it;
3.2.7. not take any action that would make any representation or
warranty of Parent hereunder inaccurate in any material respect at, or as
of any time prior to, the Effective Time;
3.2.8. timely satisfy, or cause to be timely satisfied, all
applicable Tax reporting and filing requirements contained in the Code with
respect to the transactions contemplated by this Agreement, including,
without limitation, the reporting requirements contained in United States
Treasury Regulation Section 1.367(a)-3(c)(6), which covenant shall continue
after the Effective Time until all such reporting and filing requirements
are satisfied; or
3.2.9. not authorize or enter into an agreement to take any of
the actions referred to in subsections 3.2.1 through 3.2.7.
Section 3.3. Acquisition Proposals.
---------------------
3.3.1. After the execution of this Agreement and prior to the
Effective Time, the Company agrees that neither it nor any of its
Subsidiaries nor any of its or any of its Subsidiaries' officers or
directors shall, and the Company shall direct and use its best efforts to
cause its and its Subsidiaries' officers, directors, employees, investment
bankers, attorneys, accountants, financial advisors, agents or other
representatives (collectively, the "Representatives") not to, directly or
indirectly, initiate, solicit, encourage or otherwise facilitate any
inquiries by any Person not a party to this Agreement or the making of any
proposal or offer by any Person not a party to this Agreement with respect
to, a merger, reorganization, share exchange, business combination,
liquidation, dissolution, recapitalization, consolidation or similar
transaction involving the Company or any purchase of, or offer to purchase,
(i) 10% or more of the outstanding shares of the capital stock of the
Company or capital stock of, or other equity or voting interests in, any of
the Company's Subsidiaries, or (ii) assets or businesses of the Company and
its Subsidiaries taken as a whole that constitute or represent 10% or more
of the assets or businesses of the Company and its Subsidiaries (any
indication of interest in any of the foregoing or inquiry, proposal or
offer relating to or reasonably likely to lead to any of the foregoing
being an "Acquisition Proposal"). The Company further agrees that neither
it nor any of its Subsidiaries nor any of its or any of its Subsidiaries'
officers or directors will, and that it will direct and use its best
efforts to cause its Representatives not to, directly or indirectly, engage
in or continue any discussions or negotiations with or provide any
confidential information or data to any Person not a party to this
Agreement relating to an Acquisition Proposal or engage in any negotiations
concerning an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal. Notwithstanding the
foregoing, prior to receipt of the Company Requisite Vote, in the event
that (i) the Company shall receive an Acquisition Proposal and has not at
any time violated the terms of this Section 3.3.1, (ii) the Board of
Directors of the Company determines in its good faith judgment (x) after
receiving the advice of its financial advisor that this Acquisition
Proposal is reasonably likely to result in a Superior Proposal and (y)
after receiving the advice of its outside counsel that, in light of this
Acquisition Proposal, if the Company fails to participate in discussions or
negotiations with, or furnish confidential information or data to, the
Person making the Acquisition Proposal, that the Board of Directors would
be in violation of its fiduciary duties under applicable Law and (iii)
after giving Parent three Business Days notice of its intention to do so,
the Company may, prior to the receipt of the Company Requisite Vote, engage
in discussions and/or negotiations with the Person that made the
Acquisition Proposal and/or furnish confidential information and data to
that Person pursuant to a customary confidentiality agreement containing
terms no less restrictive than those set forth in the Confidentiality
Agreement previously entered into by the Company and Parent (the
"Confidentiality Agreement"); provided that a copy of all written
information furnished to the Person that made the Acquisition Proposal is
promptly provided to Parent. For purposes of this Agreement, a "Superior
Proposal" means any bona fide written Acquisition Proposal that (A) shall
have a value of at least 105% of the value of the consideration offered
pursuant to the Merger and (B) the Board of Directors of the Company
determines in its good faith judgment (x) after consultation with its
financial advisors (and taking into account all the terms and conditions of
the Acquisition Proposal deemed relevant by the Company's Board of
Directors, including any break-up fees, expense reimbursement provisions,
conditions to consummation, and the ability of the Person making the
Acquisition Proposal to obtain any financing necessary to effect the
transactions contemplated by the Acquisition Proposal), to be more
favorable from a financial point of view to its shareholders than the
Merger, and (y) taking into account all legal, financial, regulatory and
other aspects of the Acquisition Proposal, to constitute a transaction that
is reasonably likely to be consummated on the terms set forth in the
Acquisition Proposal.
3.3.2. As of the date of this Agreement, the Company has and has
caused each of its Subsidiaries and Representatives to have (i) terminated
any existing activities, discussions or negotiations with any Person not a
party to this Agreement conducted heretofore with respect to any
Acquisition Proposal and (ii) requested the prompt return of all
confidential information relating to the Company or any of its Subsidiaries
previously furnished to any such third parties.
3.3.3. The Company agrees that it will take the necessary steps
promptly to inform its Subsidiaries and its Subsidiaries' Representatives
of the obligations undertaken in this Section 3.3. The Company agrees that
it will promptly (and in no event later than 24 hours after receipt of an
Acquisition Proposal) notify Parent (which notice shall be provided orally
and in writing and shall identify the Person making the Acquisition
Proposal and set forth its material terms) after receipt of an Acquisition
Proposal, or if any nonpublic information is requested from, or any
discussions or negotiations are sought to be initiated or continued with,
any of its or its Subsidiaries' Representatives and thereafter shall keep
Parent informed, on a current basis, of the status and material terms of
any proposals or offers.
3.3.4. Except as provided in Section 3.3.5, nothing contained in
this Agreement shall prohibit the Company from (i) taking and disclosing to
its shareholders a position contemplated by Rule 14e-2(a) under the
Exchange Act with respect to an Acquisition Proposal by means of a tender
or exchange offer or (ii) making any disclosure to its shareholders if, in
the good faith judgment of the Board of Directors of the Company, after
consultation with outside counsel, failure so to disclose would be
inconsistent with applicable Law.
3.3.5. The Board of Directors of the Company shall recommend that
the shareholders of the Company vote to approve this Agreement (and this
recommendation shall be included in the Company Proxy Statement (as defined
in Section 3.4.1.1)) and it may not withdraw or modify its recommendation
in a manner adverse to Parent or recommend that the Company's shareholders
vote in favor of or accept an Acquisition Proposal; provided that the Board
of Directors of the Company (i) will not be required to make its
recommendation described above, (ii) may withdraw or modify its
recommendation described above, and (iii) may recommend that its
shareholders vote in favor of or accept an Acquisition Proposal, if (w)
after receiving an Acquisition Proposal that constitutes a Superior
Proposal, the Board of Directors of the Company determines in its good
faith judgment, after receiving the advice of outside counsel that, in
light of this Superior Proposal, if it makes its recommendation described
above, fails to withdraw or modify its recommendation described above or
fails to recommend that its shareholders vote in favor of or accept the
Superior Proposal, as applicable, there is a reasonable possibility that
the Board of Directors of the Company would be in violation of its
fiduciary duties under applicable Law, (x) after five Business Days have
elapsed following delivery by the Board of Directors of the Company of
written notice advising Parent that it intends to do so absent modification
to the terms and conditions of this Agreement, (y) assuming this Agreement
were amended by Parent before the expiration of this five Business Day
period, the Acquisition Proposal would nonetheless constitute a Superior
Proposal, and (z) the Company has complied with its obligations set forth
in Section 3.3.1.
Section 3.4. Information Supplied.
--------------------
3.4.1. Registration Statement; Other SEC Filings.
-----------------------------------------
3.4.1.1. Each of Parent and the Company shall cooperate and
as promptly as reasonably practicable prepare and Parent shall file with
the SEC as soon as reasonably practicable a Registration Statement on Form
F-4 (or any successor form) (the "Form F-4") under the Securities Act with
respect to Parent Common Shares issuable and deliverable pursuant to this
Agreement. A portion of the Form F-4 shall serve as a prospectus with
respect to Parent Common Shares issuable and deliverable pursuant to the
terms of this Agreement and as the Company's proxy statement with respect
to the Company Shareholders' Meeting (as defined in Section 3.5) (the
"Company Proxy Statement"). The parties hereto will cause the Form F-4 to
comply as to form in all material applicable respects with the applicable
provisions of the Securities Act and Exchange Act and the rules and
regulations under the Securities Act and Exchange Act. Each of Parent and
the Company shall use reasonable best efforts to have the Form F-4 declared
effective by the SEC as promptly as reasonably practicable after the
filing. Parent shall use reasonable best efforts to obtain, prior to the
effective date of the Form F-4, all necessary state securities law or "blue
sky" permits or approvals required to effect the transactions contemplated
by this Agreement. Parent will advise the Company, as promptly as
practicable after it receives notice, of the time when the Form F-4 has
become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of Parent
Common Shares issuable and deliverable in connection with the Merger for
offering or sale in any jurisdiction.
3.4.1.2. The Company and Parent each agrees, as to itself
and its Subsidiaries, that none of the information supplied or to be
supplied by it or its Subsidiaries for inclusion or incorporation by
reference in the Form F-4 or the Company Proxy Statement, including any
amendment or supplement, will, at the time the Form F-4 becomes effective
under the Securities Act, or in the case of the Company Proxy Statement, at
the date of mailing to shareholder and at the time of Company Shareholder
Meeting, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. If at any time prior to the date of the
consummation of the Merger any information relating to the Company or
Parent, or any of their respective Affiliates, officers or directors,
should be discovered by the Company or Parent which should be set forth in
an amendment and/or a supplement to the Form F-4 or the Company Proxy
Statement, so that the Form F-4 or the Company Proxy Statement would not,
at the time the Form F-4 becomes effective under the Securities Act, or, in
the case of the Company Proxy Statement, at the date of mailing to
shareholders and at the time of the Company Shareholder Meeting, include
any misstatement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, the party which discovers this information shall promptly
notify the other party and, to the extent required by Law, an appropriate
amendment or supplement describing such information shall be as promptly as
reasonably practicable filed with the SEC or any other applicable
Governmental Entity and, to the extent required by Law, disseminated to the
Company's shareholders.
3.4.1.3. The Company will use reasonable best efforts to
cause the Company Proxy Statement to be mailed to its shareholders as
promptly as practicable after the date of this Agreement.
Section 3.5. Meetings. The Company will take all action necessary
to convene a meeting to be held as promptly as reasonably practicable after
the Form F-4 has been declared effective by the SEC, of the holders of
Company Common Shares at which those shareholders will vote with respect to
the approval of this Agreement (the "Company Shareholders' Meeting").
Section 3.6. Filings; Other Actions; Notification.
------------------------------------
3.6.1. The Company and Parent shall each cooperate with the other
and (i) use (and shall cause their respective Subsidiaries to use) their
reasonable best efforts as promptly as practicable to take or cause to be
taken all actions, and do or cause to be done all things, necessary, proper
or advisable under this Agreement and applicable Laws to consummate the
Merger and the other transactions contemplated by this Agreement as soon as
practicable, including preparing and filing as promptly as reasonably
practicable all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of information,
applications and other documents, and (ii) use (and shall cause their
respective Subsidiaries to use) reasonable best efforts to obtain as
promptly as practicable all approvals, consents, registrations, permits,
authorizations and other confirmations required to be obtained from any
third party, including the Company Required Consents and the Parent
Required Consents, necessary, proper or advisable to consummate the Merger
and the other transactions contemplated by this Agreement; provided,
however, that neither party shall be required by this Section 3.6.1 to take
any action, including to accept or agree to any conditions, terms or
restrictions or any disposition of assets or businesses, as the case may
be, which, individually or in the aggregate, would reasonably be expected
to have either a Material Adverse Effect on Parent or a Material Adverse
Effect on the Company. The Company shall not accept or agree to any
conditions, terms, or restrictions or any disposition of assets or business
pursuant to this Section 3.6.1 without the prior written consent of Parent
(not to be unreasonably withheld). Subject to applicable Laws relating to
the exchange of information, the Company and Parent shall have the right to
review in advance, and to the extent practicable each will consult the
other on, all the information relating to the Company and its Subsidiaries
or Parent and its Subsidiaries, as the case may be, that appears in any
filing made with, or written materials submitted to, any third party and/or
any Governmental Entity in connection with the Merger and the other
transactions contemplated by this Agreement. In exercising the foregoing
right, each of the Company and Parent shall act reasonably and as promptly
as practicable.
3.6.2. The Company and Parent each shall, upon request by the
other, furnish the other with all information concerning itself, its
Subsidiaries, directors, officers and shareholders and shareholders, as
applicable, and any other matters as may be reasonably necessary or
advisable in connection with the Form F-4, the Company Proxy Statement, or
any other necessary filing, notice, statement, registration, submission of
information or application made by or on behalf of the Company or Parent or
any of their respective Subsidiaries to any third party and/or any
Governmental Entity in connection with the Merger and the other
transactions contemplated by this Agreement.
3.6.3. The Company and Parent each shall keep the other apprised
of the status of matters relating to the Merger and the other transactions
contemplated by this Agreement, including promptly furnishing the other
with copies of notices or other communications received by the Company or
Parent, as the case may be, or any of its Subsidiaries, from any third
party whose consent or approval is required or advisable and/or any
Governmental Entity with respect to the Merger and the other transactions
contemplated by this Agreement. The Company and Parent each shall give
prompt notice to the other of any change that would reasonably be expected
to have a Material Adverse Effect on it or of any failure of any condition
set forth in Article IV to the other party's obligations to effect the
Merger.
3.6.4. Prior to making any filing, notice, petition, statement,
registration, submission of information or application to or with any third
party and/or Governmental Entity (including any securities exchange) in
connection with the consummation of the Merger and the other transactions
contemplated by this Agreement and except as may be required by Law or by
obligations pursuant to any listing agreement with or the rules of any
securities exchange, each party shall make all reasonable best efforts to
consult with the other party with respect to the content of the filing,
notice, petition, statement, registration, submission of information or
application and to provide the other party with copies of the proposed
filing, notice, petition, statement, registration, submission of
information or application. The Company and Parent each shall not agree to
participate in any meeting with any Governmental Entity in respect of any
filings, investigation or other inquiry relating to the Merger and the
other transactions contemplated by this Agreement unless it consults with
the other party in advance and, to the extent practicable and permitted by
the Governmental Entity, gives the other party the opportunity to attend
and participate thereat.
3.6.5. In the event any claim, action, suit, investigation or
other proceeding by any Governmental Entity or other Person or other legal
or administrative proceeding is commenced that questions the validity or
legality of this Agreement, the Merger or the other transactions
contemplated hereby or claims or damages in connection therewith, the
parties hereto agree to cooperate and use commercially reasonable efforts,
subject to the limitations set forth in Section 3.6.1, to defend against
and respond thereto.
3.6.6. Without limitation of the foregoing, each of Parent and
the Company undertakes and agrees to file as promptly as practicable, and
in any event prior to 15 days after the date hereof, a Notification and
Report Form under the HSR Act with the Federal Trade Commission (the "FTC")
and the Antitrust Division of the Justice Department (the "Antitrust
Division"). Each of Parent and the Company shall (i) respond as promptly as
practicable to any inquiries received from the FTC or the Antitrust
Division for additional information or documentation and to all inquires
and requests received from any State Attorney General or other governmental
authority in connection with antitrust matters, and (ii) not extend any
waiting period under the HSR Act or enter into any agreement with the FTC
or the Antitrust Division not to consummate the transactions contemplated
by this Agreement, except with the prior written consent of the other
parties hereto. Parent shall take all reasonable steps necessary to avoid
or eliminate impediments under any antitrust, competition, or trade
regulation law that may be asserted by the FTC, the Antitrust Division, any
State Attorney general or any other governmental entity with respect to the
Merger so as to enable the Closing to occur as soon as reasonably possible.
Each party shall promptly notify the other parties hereto of any written
communication to that party from the FTC, the Antitrust Division, any State
Attorney General or any other governmental entity and permit the other
parties hereto to review in advance any proposed written communication to
any of the foregoing.
Section 3.7. Access. In order to facilitate the consummation of the
Merger and the other transactions contemplated by this Agreement, the
Company agrees that, upon reasonable request to any executive officer of
the Company designated for the purpose, and except as may otherwise be
required by applicable Law, the Company shall (and shall cause its
Subsidiaries to) provide reasonable access to Parent and the
Representatives of Parent, during normal business hours throughout the
period prior to the Effective Time, to its and its Subsidiaries'
properties, books, contracts, commitments and records (including any tax
returns) and, during this period, the Company shall (and shall cause its
Subsidiaries to) furnish promptly to the other all information concerning
its business, properties and personnel as may reasonably be requested by
Parent or Merger Sub and furnish promptly a copy of each report, schedule
and other document filed or received by the Company or its Subsidiaries
promptly pursuant to the requirements of federal or state securities laws;
provided that no receipt of information pursuant to this Section 3.7 shall
affect or be deemed to modify any representation or warranty made by the
Company hereunder; and provided, further, that the foregoing shall not
require the Company to permit any inquiry, or to disclose any information,
that in the reasonable judgment of the Company, would (i) violate any
antitrust or competition Law or (ii) result in the disclosure of any trade
secrets of third parties or violate any of its obligations with respect to
confidentiality to third parties if the Company shall have used
commercially reasonable efforts to obtain the consent of the third party to
inspection or disclosure.
Section 3.8. Publicity. The initial press release concerning this
Agreement, the Merger and the other transactions contemplated by this
Agreement shall be a joint press release, and thereafter the Company and
Parent shall consult with each other prior to issuing any press releases or
otherwise making public announcements with respect to the Merger and the
other transactions contemplated by this Agreement.
Section 3.9. Benefits and Other Matters.
--------------------------
3.9.1. Employee Benefits.
-----------------
3.9.1.1. For at least the twelve month period immediately
following the Effective Time, Parent intends to, and intends to cause the
Surviving Corporation to, provide to Company Employees (i) employee
benefits (other than salary, incentive compensation or stock-based
benefits) which in the aggregate are substantially comparable to the
benefits provided pursuant to the Company Employee Plans and Company
Foreign Plans as in effect on the date hereof and (ii) salary, incentive
compensation and stock-based benefits pursuant to criteria and procedures
established by Parent which will be substantially similar to the criteria
and procedures applied to similarly situated employees of Parent or its
Subsidiaries; provided, however, that, (x) with respect to Company
Employees who are subject to collective bargaining or other labor
agreements, all benefits shall be provided in accordance with the
applicable collective bargaining or other labor agreements and (y) with
respect to Company Employees party to an employment agreement with the
Company, all salary, incentive compensation and other employee benefits
shall be provided in accordance with the employment agreement with the
Company Employee; and provided, further, that the foregoing shall not be
construed to limit Parent's flexibility in determining the design of any
benefit plan or program, or prevent the amendment or termination of any
Company Employee Plan or Company Foreign Plan to the extent permitted by
the terms and conditions thereof as in effect on the date hereof.
3.9.1.2. As of and after the Effective Time, Parent will, or
will cause the Surviving Corporation to, give Company Employees full credit
for purposes of eligibility and vesting, but not benefit accrual, under any
employee benefit plans, programs, policies and arrangements maintained for
the benefit of Company Employees as of and after the Effective Time by
Parent, its Subsidiaries or the Surviving Corporation for the Company
Employees' service with the Company, its Subsidiaries and their predecessor
entities to the same extent recognized by the Company immediately prior to
the Effective Time.
3.9.1.3 Parent agrees to grant options to purchase an
aggregate of 1,000,000 Parent Common Shares as promptly as practicable
after the Effective Time, but in no event later than 90 days thereafter.
Such options shall be issued to current members of senior management of the
Company who remain with the Company after the Effective Time, as determined
by Parent after consultation with the Chief Executive Officer of Parent.
Such options shall be granted at fair market value at the time of grant and
shall have such other terms as are consistent with Parent's stock option
plans.
3.9.1.4. Nothing expressed or implied in this Agreement
shall confer upon any employee or any beneficiary, dependent, legal
representative, or collective bargaining agent of such employee any right
or remedy or any nature or kind whatsoever under or by reason of this
Agreement, including without limitation any right to employment or
continued employment for any specified period, at any specified location or
under any specified job category.
3.9.2. Director and Officer Indemnification and Insurance. (a)
Parent agrees that all rights to indemnification and all limitations on
liability existing in favor of each present or former director or officer
of the Company or any of its Subsidiaries (each, an "Indemnitee") in
respect of acts or omissions of such Indemnitees on or prior to the
Effective Time as provided in an agreement between an Indemnitee and the
Company or its Subsidiaries in effect as of the date of this Agreement
shall continue in full force and effect in accordance with its terms as
obligations of the Surviving Corporation.
(b) The articles of incorporation and by-laws of the Surviving
Corporation shall contain the provisions with respect to indemnification
set forth in the articles of incorporation and the by-laws of the Company,
which provisions shall not be amended, modified or otherwise repealed for a
period of six years from the Effective Time in any manner that would
adversely affect the rights thereunder as of the Effective Time of
individuals who at the Effective Time were directors, officers, employees
or agents of the Company, unless such modification is required after the
Effective Time by law and then only to the minimum extent required by such
law.
(c) For six years after the Effective Time, Parent shall procure
the provision of officers' and directors' liability insurance in respect of
acts or omissions occurring prior to the Effective Time covering each
Person currently covered by the Company's officers' and directors'
liability insurance policy on terms with respect to coverage and in amounts
no less favorable than those of the policy in effect on this date;
provided, however, that during this period, Parent shall not be required to
procure any coverage in excess of the amount that can be obtained for the
remainder of the period for an annual premium of 250% of the current annual
premium paid by the Company for its existing coverage.
(d) For six years after the Effective Time, Parent shall
indemnify and hold harmless the Indemnitees (i) with respect to all acts or
omissions by them in their capacities as officers or directors of the
Company or any of its Subsidiaries in connection with the adoption and
approval of this Agreement and the transactions contemplated hereby and
(ii) to the fullest extent permitted under applicable law, with respect to
all other actions or omissions by them prior to the Effective Time in their
capacities as officers or directors of the Company or any of its
Subsidiaries or taken by them at the request of, the Company or any of its
Subsidiaries. In the event any claim in respect of which indemnification is
available pursuant to the foregoing provisions is asserted or made within
such six-year period, all rights to indemnification shall continue until
such claim is disposed of or all judgments, orders, decrees or other
rulings in connection with such claim are duly satisfied.
Section 3.10. Expenses. Except as otherwise provided in Section 5.5,
whether or not the Merger is consummated, all costs and expenses incurred
in connection with this Agreement, the Merger and the other transactions
contemplated hereby and thereby shall be paid by the party incurring the
expense, except that the Company and Parent shall share equally the costs
and expenses of filing, printing and distributing the Form F-4, the Company
Proxy Statement and related documents, provided, however, that Parent shall
pay all fees required in connection with any filing required under the HSR
Act.
Section 3.11. Other Actions by the Company and Parent.
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3.11.1. Takeover Statutes. If any Takeover Statute is or may
become applicable to the Merger or the other transactions contemplated by
this Agreement the Company and its Board of Directors shall, subject to
applicable Law, grant any approvals and take any actions as are necessary
so that the Merger and the other transactions contemplated by this
Agreement may be consummated as promptly as reasonably practicable on the
terms contemplated by this Agreement, and otherwise act to eliminate or
minimize the effects of any Takeover Statute on these transactions.
3.11.2. Notices of Certain Events.
3.11.2.1. The Company shall as promptly as practicable after
executive officers of the Company acquire knowledge thereof, notify Parent
of: (i) any notice or other communication from any person alleging that the
consent of such person (or another person) is or may be required in
connection with the transactions contemplated by this Agreement which
consent relates to a material Contract to which the Company or any of its
Subsidiaries is a party or the failure of which to obtain would materially
delay the consummation of the Merger; (ii) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by this Agreement; and (iii)
any actions, suits, claims, investigations or proceedings commenced or, to
the best of its knowledge threatened against, relating to or involving or
otherwise affecting the Company or any of its Subsidiaries that, if pending
on the date of this Agreement, would have been required to have been
disclosed pursuant to this Agreement or which relate to the consummation of
the transactions contemplated by this Agreement.
3.11.2.2. Each of Parent and Merger Sub shall as promptly as
practicable after executive officers of Parent acquire knowledge thereof,
notify the Company of: (i) any notice or other communication from any
person alleging that the consent of such person (or other person) is or may
be required in connection with the transactions contemplated by this
Agreement which consent relates to a material Contract to which Parent or
its Subsidiaries are a party or the failure of which to obtain would
materially delay the Merger, (ii) any notice or other communication from
any governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement, and (iii) any actions, suits,
claims, investigations or proceedings commenced or, to the best of its
knowledge threatened, against Parent or Merger Sub, which relate to
consummation of the transactions contemplated by this Agreement.
3.11.2.3. Each of the Company, Parent and Merger Sub agrees
to give prompt notice to each other of, and to use commercially reasonable
efforts to remedy, (i) the occurrence or failure to occur of any event
which occurrence or failure to occur would be likely to cause any of its
representations or warranties in this Agreement to be untrue or inaccurate
at the Effective Time unless such failure or occurrence would not have a
Material Adverse Effect on such party giving notice and (ii) any failure on
its part to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder unless such failure or
occurrence would not have a Material Adverse Effect on such party giving
notice; provided, however, that the delivery of any notice pursuant to this
Section 3.11.2.3 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
Section 3.12. Listing Applications; Establishment of Parent Common
Shares. Parent shall as promptly as reasonably practicable prepare and
submit to the NYSE and the TSE a listing application with respect to Parent
Common Shares issuable pursuant to the Merger, and shall use reasonable
best efforts to obtain, approval for the listing, subject to official
notice of issuance, of such Parent Common Shares.
Section 3.13. Letters of Accountants.
----------------------
(a) The Company shall use commercially reasonable efforts to
cause to be delivered to Parent "comfort" letters of Ernst & Young, the
Company's independent public accountants, dated the effective date of the
Form F-4 and the Closing Date, respectively, and addressed to the Company
and its directors and Parent and its directors, in form reasonably
satisfactory to Parent and customary in scope and substance for "comfort"
letters delivered by independent public accountants in connection with
registration statements similar to the Form F-4.
(b) Parent shall use commercially reasonable efforts to cause to
be delivered to the Company "comfort" letters of Samson, Belair, Deloitte &
Touche, Parent's independent public accountants, dated the effective date
of the Form F-4 and the Closing Date, respectively, and addressed to Parent
and its directors and the Company and its directors, in form reasonably
satisfactory to the Company and customary in scope and substance for
"comfort" letters delivered by independent public accountants in connection
with registration statements similar to the Form F-4.
Section 3.14. Agreements of Company Affiliates. The Company shall
promptly cause to be prepared and delivered to Parent a list identifying
all persons who may be deemed to be as of the date of the Company
Shareholders' Meeting "affiliates" of the Company for purposes of Rule 145
under the Securities Act (the "Company Affiliates"), and shall use
reasonable best efforts to cause each Company Affiliate to deliver to
Parent an executed agreement in the form attached as Exhibit B as promptly
as practicable prior to the Closing Date.
Section 3.15. Tax Representation Letters. Parent shall deliver to
counsel to Parent and to counsel to the Company as of the Closing Date a
"Tax Representation Letter" containing such customary representations as
shall be necessary to enable counsel to render the opinions described in
Sections 4.2.3 and 4.3.3 of this Agreement. The Company shall deliver to
counsel to the Company and to counsel to Parent as of the Closing Date a
Tax Representation Letter containing such customary representations as
shall be necessary to enable counsel to render the opinions described in
Sections 4.2.3 and 4.3.3 of this Agreement.
Section 3.16. Information to be Supplied to Five Percent Transferee
Shareholder. Parent shall cooperate with any reasonable request by any
"five-percent transferee shareholder" with respect to Parent within the
meaning of the United States Treasury Regulation Section
1.367(a)-3(c)(5)(ii) (a "Five-Percent Transferee Shareholder"), in order
for the Five-Percent Transferee Shareholder to be able to comply with the
gain recognition agreement requirements of United States Treasury
Regulation Section 1.367(a)-8, including the annual certification required
thereunder. This cooperation shall solely require the provision of
information upon specific written request for information to Parent, with
sufficient advance notice, on a timely basis to the Five-Percent Transferee
Shareholder as to transfers of shares of stock or assets of the Company
that are required to be reported by the Five-Percent Transferee Shareholder
to the Internal Revenue Service pursuant to United States Treasury
Regulation Section 1.367(a)-8, in each case in a manner consistent with
Parent's obligations under applicable securities and other law, as
determined by Parent in its discretion. Each Five-Percent Transferee
Shareholder agrees to keep confidential all information received from the
Company pursuant to this Section 3.16 and not use such information for any
purpose other than compliance with United States Treasury Regulation
Section 1.367(a)-8.
ARTICLE IV
CONDITIONS
Section 4.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each of Parent, Merger Sub and the
Company to effect the Merger are subject to the satisfaction or waiver of
each of the following conditions:
4.1.1. Company Shareholder Approval. This Agreement shall have
been approved by the shareholders of the Company by the Company Requisite
Vote.
4.1.2. Regulatory Consents. All the Company Required Consents and
the Parent Required Consents from or with any Governmental Entity
(collectively, "Governmental Consents") in connection with the consummation
of the Merger and the other transactions contemplated by this Agreement
shall have been made or obtained, except where the failure to obtain any
Governmental Consent would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Parent or on
the Company after the Effective Time or would result in a violation of the
civil or criminal law of that jurisdiction. No Governmental Consents shall
contain any terms or impose any condition or restriction relating or
applying to, or requiring changes in or limitations on, the operation of
any asset or businesses of the Company, Parent or any of their respective
Subsidiaries which term, condition or restriction, individually or in the
aggregate, would reasonably be expected to have either a Material Adverse
Effect on Parent or a Material Adverse Effect on the Company. Any
applicable waiting period under the HSR Act or the CCA relating to the
Merger shall have expired.
4.1.3. Laws and Orders. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any Law (whether temporary, preliminary or permanent) that is in effect and
restrains, enjoins or otherwise prohibits the consummation of the Merger,
or that would materially frustrate the express intent and purposes of this
Agreement (collectively, "Order") and no Government Entity shall have
instituted or threatened any proceeding seeking any Order.
4.1.4. Effectiveness of Form F-4. The Form F-4 shall have become
effective and no stop order suspending the effectiveness of the Form F-4
shall then be in effect, and no proceeding for that purpose shall then be
threatened by the SEC or shall have been initiated by the SEC and not
concluded or withdrawn; and all state securities or "blue sky" permits or
approvals required to consummate the Merger shall have been received.
4.1.5. Listing. Parent Common Shares to be issued pursuant to the
Merger and those to be reserved for issue upon exercise of stock options
shall have been authorized for listing on the NYSE and the TSE, subject to
official notice of issuance.
4.1.6. Third Party Consents. Any consents of third parties
required in connection with the consummation of the Merger and the other
transactions contemplated by this Agreement shall have been obtained,
except where the failure to obtain such consents would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect
on the Company or Parent after the Effective Time. In addition, the
obligations of each of Parent and Merger Sub to effect the Merger are
subject to the condition that (i) any consents or waivers of third parties
listed on Schedule 4.1.6(a) which may be required in connection with the
consummation of the Merger and the transactions contemplated by this
Agreement shall have been obtained, and (ii) the Company shall have used
its reasonable best efforts to avoid the termination or modification of the
agreements, contracts or arrangements listed on Schedule 4.1.6(b) by any of
the respective parties thereto and to avoid any adverse effect to, or
change in, the benefits to the Company or its Subsidiaries thereunder,
which termination, modification, effect or change arises in connection with
or as a result of the consummation of the Merger and the transactions
contemplated by this Agreement, and (iii) any penalties, liabilities or
charges arising in connection with or as a result of the consummation of
the transactions contemplated hereby under any leases or subleases of real
or personal property listed or referred to on the Company Lease List
(including any penalties, liabilities or charges arising pursuant to any of
the provisions of such leases or subleases and any penalties, liabilities
or charges incurred due to the modification, termination, amendment,
re-negotiation or replacement of such leases or subleases (including
increased rentals payments or replacement values) and any penalties,
liabilities or charges in connection with or arising out of the failure to
obtain any Company Lease Consents), shall not have exceeded, in Parent's
reasonable and informed assessment, aggregate economic costs of more than
$3 million, and that the Company shall have used reasonable best efforts to
help Parent assess such aggregate economic costs.
4.1.7. Parent Shareholder Approval. If any approvals by the
shareholders of Parent for the issuance of Parent Common Shares, this
Agreement or the transactions required hereby are required by the rules of
the NYSE or the TSE ("Parent Shareholder Approval"), then such approvals
shall have been obtained.
Section 4.2. Conditions to Obligations of Parent and Merger Sub.
The obligation of Parent to effect the Merger is also subject to the
satisfaction or waiver by Parent prior to the Closing Date of the following
conditions:
4.2.1. Representations and Warranties of the Company. The
representations and warranties of the Company set forth in Section 2.1.2 of
this Agreement shall be true and correct in all material respects, all
representations and warranties set forth in this Agreement (other than
Section 2.1.2) that are qualified as to material, materiality or Material
Adverse Effect shall be true and correct in all respects, and all
representations and warranties set forth in this Agreement other than
Section 2.1.2 not so qualified shall be true and correct except as would
not reasonably be expected to have a Material Adverse Effect on the Company
in each case when made and as of the Closing Date as if made on and as of
that date (provided that, in either case, those representations and
warranties which are by their express provisions made as of a specific date
need be true and correct only as of the specified date), and Parent shall
have received a certificate signed on behalf of the Company by an executive
officer of the Company to that effect.
4.2.2. Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations and covenants
required to be performed by it or complied with by it under this Agreement
at or prior to the Closing Date, and Parent shall have received a
certificate signed on behalf of the Company by an executive officer of the
Company to that effect.
4.2.3. Tax Opinion. Parent shall have received an opinion from
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx (or, if Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx refuses to issue such opinion, from other counsel
reasonably satisfactory to Parent), dated as of the Closing Date,
substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in the opinion, (i) the Merger
will be treated for U.S. federal income tax purposes as a reorganization
within the meaning of Section 368 of the Code, (ii) Parent will be treated
as a corporation under Section 367(a) of the Code with respect to each
transfer of property thereto pursuant to the Merger, (iii) no gain or loss
will be recognized by the shareholders of the Company who exchange Company
Common Shares solely for Parent Common Shares pursuant to the Merger
(except with respect to cash received in lieu of fractional interests in
Parent Common Shares), and (iv) each of Parent, Merger Sub and the Company
will be a party to the reorganization within the meaning of Section 368 of
the Code. The opinion set forth in clause (ii) shall not address the Tax
consequences applicable to any shareholder of the Company who, immediately
after the Merger, will be a "five-percent transferee shareholder" with
respect to Parent within the meaning of United States Treasury Regulation
Section 1.367(a)-3(c)(5)(ii). In rendering its opinion, counsel shall be
entitled to rely upon customary representations of Parent and the Company
reasonably requested by counsel.
4.2.4. Executive Agreements. Xx. Xxxxxx Xxxxx shall have executed
and delivered to the other parties thereto the Executive Agreements in the
form attached hereto as Exhibit A, and the Executive Agreements shall be in
full force and effect. In addition, Xx. Xxxxxx Xxxxx shall have performed
all of his duties and obligations under the Executive Agreements which are
required to be performed by him prior to or at the Effective Time pursuant
to the terms of the Executive Agreements.
4.2.5. Affiliate Letters. Each Company Affiliate shall have
executed and delivered to Parent an Affiliate Letter in the form attached
as Exhibit B, and each such Affiliate Letter shall be in full force and
effect.
4.2.6. Voting Agreement. Xx. Xxxxxx Xxxxx and A&S Family Limited
Partnership shall have executed and delivered to Parent a Voting Agreement
in the form attached as Exhibit C, and each such Voting Agreement shall be
in full force and effect.
Section 4.3. Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is also subject to the
satisfaction or waiver by the Company prior to the Closing Date of the
following conditions:
4.3.1. Representations and Warranties of Parent and Merger Sub.
The representations and warranties of Parent set forth in Section 2.2.2 of
this Agreement shall be true and correct in all material respects, all
representations and warranties set forth in this Agreement (other than
Section 2.2.2) that are qualified as to material, materially or Material
Adverse Effect shall be true and correct in all respects, and all
representations and warranties set forth in this Agreement (other than
Section 2.2.2) not so qualified shall be true and correct except as would
not reasonably be expected to have a Material Adverse Effect on Parent, in
each case when made and as of the Closing Date as if made on and as of that
date (provided that, in either case, those representations and warranties
which are by their express provisions made of a specific date need be true
and correct only as of the specified date), and the Company shall have
received a certificate signed on behalf of Parent by an executive officer
of Parent to that effect.
4.3.2. Performance of Obligations of Parent. Parent shall have
performed in all material respects all obligations and covenants required
to be performed by it or complied with by it under this Agreement at or
prior to the Closing Date, and the Company shall have received a
certificate signed on behalf of Parent by an executive officer of Parent to
that effect.
4.3.3. Tax Opinion. The Company shall have received an opinion
from Holland & Knight LLP (or, if Holland & Knight LLP refuses to issue
such opinion, from other counsel reasonably satisfactory to the Company),
dated as of the Closing Date, substantially to the effect that, on the
basis of the facts, representations and assumptions set forth in the
opinion, (i) the Merger will be treated for U.S. federal income tax
purposes as a reorganization within the meaning of Section 368 of the Code,
(ii) Parent will be treated as a corporation under Section 367(a) of the
Code with respect to each transfer of property thereto pursuant to the
Merger, (iii) no gain or loss will be recognized by the shareholders of the
Company who exchange Company Common Shares solely for Parent Common Shares
pursuant to the Merger (except with respect to cash received in lieu of
fractional Parent Common Shares) and (iv) each of Parent, Merger Sub and
the Company will be a party to the reorganization within the meaning of
Section 368 of the Code. The opinion set forth in clause (ii) shall not
address the Tax consequences applicable to any shareholder of the Company
who, immediately after the Merger, will be a "five-percent transferee
shareholder" with respect to Parent within the meaning of United States
Treasury Regulation Section 1.367(a)-3(c)(5)(ii). In rendering this
opinion, counsel shall be entitled to rely upon customary representations
of Parent and the Company reasonably requested by counsel.
ARTICLE V
TERMINATION
Section 5.1. Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, before or after the approval of this Agreement by the
shareholders of the Company by mutual written consent of the Company and
Parent, by action of their respective Boards of Directors.
Section 5.2. Termination by Either Parent or the Company. This
Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time by action of the Board of Directors of either
Parent or the Company if (i) the Merger shall not have been consummated by
the eight month anniversary of the date of this Agreement (the "Termination
Date"), whether this date is before or after the date of approval of this
Agreement by shareholders of the Company; provided that the right to
terminate this Agreement pursuant to this clause (i) shall not be available
to any party whose failure to fulfill in any material respect its
obligations under this Agreement has caused or resulted in the failure of
the Merger to have been consummated on or before the Termination Date; (ii)
a Governmental Entity of competent jurisdiction shall have enacted any Law
or issued a final non-appealable permanent injunction or order that
prohibits the consummation of the Merger; provided that the right to
terminate this Agreement pursuant to this clause (ii) shall not be
available to any party who has not used reasonable best efforts to prevent
this injunction or order from being issued or this injunction or order is
due to a material breach by a party of its obligations under this
Agreement; (iii) the Company Requisite Vote shall not have been obtained at
a duly held Company Shareholders' Meeting after such Company Shareholders'
Meeting has been held, including any adjournments or postponements; or (iv)
if Parent Shareholder Approval is required, such Approval shall not have
been obtained at a meeting of Parent shareholders, duly held, after such
meeting has been held (or has not been obtained by written consent of
shareholders).
Section 5.3. Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, whether before or after the approval of this Agreement by
the shareholders of the Company, by action of the Board of Directors of the
Company, if (i) any representation or warranty of Parent contained in this
Agreement shall be inaccurate or Parent shall breach any covenant or
agreement contained in this Agreement, in either case as a result of which
(because of the failure of Parent to cure within twenty (20) Business Days
following written notice of this breach from the Company) a condition set
forth in Sections 4.3.1 or 4.3.2 would not be satisfied prior to or as of
the Termination Date, (ii) prior to receipt of the Company Requisite Vote,
the Company receives a Superior Proposal, resolves to accept such Superior
Proposal, and the Company shall have given Parent five days' prior written
notice of its intention to terminate pursuant to this provision; provided,
however, that such termination shall not be effective until such time as
the payment required by Section 5.5.2 shall have been received by Parent,
or (iii) prior to receipt of the Company Requisite Vote (A) a tender or
exchange offer is commenced by a potential acquirer for all outstanding
shares of Company Common Shares, (B) the Company's Board of Directors
determines, in good faith and after consultation with an independent
financial advisor, that such offer constitutes a Superior Proposal and
resolves to accept such Superior Proposal or recommend to the shareholders
that they tender their shares in such tender or exchange offer, and (C) the
Company shall have given Parent five days' prior written notice of its
intention to terminate pursuant to this provision; provided, however, that
such termination shall not be effective until such time as the payment
required by Section 5.5.2 shall have been received by Parent.
Section 5.4. Termination by Parent. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, by
action of the Board of Directors of Parent, if (i) the Board of Directors
of the Company shall have withdrawn or adversely modified its
recommendation that the Company's shareholders vote to approve this
Agreement and the transactions contemplated by this Agreement or failed to
reconfirm this recommendation within two Business Days after a written
request by Parent to do so; (ii) the Company or its Board of Directors
shall recommend an Acquisition Proposal to its shareholders; or (iii) any
representation or warranty of the Company contained in this Agreement shall
be inaccurate or the Company shall breach any covenant or agreement
contained in this Agreement, in either case as a result of which (because
of the failure of the Company to cure within twenty (20) Business Days
following written notice of this breach from Parent) a condition set forth
in Sections 4.2.1 or 4.2.2 would not be satisfied prior to or as of the
Termination Date.
Section 5.5. Effect of Termination and Abandonment.
-------------------------------------
5.5.1. In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article V, this Agreement (other
than as set forth in Section 6.1) shall become void and of no effect with
no liability on the part of either party (or of any of their
Representatives); provided, however, that no termination shall relieve
either Parent or the Company of any liability for damages resulting from
any willful and intentional breach of this Agreement or from any obligation
to pay, if applicable, the amounts payable pursuant to Section 5.5.2 or
5.5.3.
5.5.2. (a) If:
(i) Parent shall terminate this Agreement pursuant to clauses (i)
or (ii) of Section 5.4;
(ii) any Person shall have made a bona fide Acquisition Proposal
relating to the Company or shall have publicly announced such an
Acquisition Proposal (or an intention to make such an Acquisition
Proposal) and thereafter (x) this Agreement is terminated pursuant to
clause (i) of Section 5.2, and (y) within 9 months after the
termination of this Agreement, the Company enters into an agreement in
respect of any Acquisition Proposal or a transaction pursuant to an
Acquisition Proposal is consummated;
(iii) Parent shall terminate this Agreement pursuant to clause
(iii) of Section 5.4 and either (x) prior thereto a bona fide
Acquisition Proposal relating to the Company shall have been made by
any Person to the Company or a Person shall have publicly announced
such an Acquisition Proposal (or an intention to make such an
Acquisition Proposal) or (y) within 9 months after termination of this
Agreement, the Company enters into an agreement in respect of an
Acquisition Proposal or a transaction pursuant to an Acquisition
Proposal is consummated;
(iv) either the Company or Parent shall terminate this Agreement
pursuant to clause (iii) of Section 5.2 and (x) prior thereto a bona
fide Acquisition Proposal relating to the Company shall have been made
or a Person shall have publicly announced such an Acquisition Proposal
Company (or any intention to make such an Acquisition Proposal) and
(y) within 9 months after the termination of this Agreement, the
Company enters into an agreement in respect of any Acquisition
Proposal or a transaction with respect to an Acquisition Proposal is
consummated; or
(v) the Company shall terminate this Agreement pursuant to
clauses (ii) or (iii) of Section 5.3,
then in any case as described in clause (i), (ii), (iii), (iv) or (v) the
Company shall pay to Parent (by wire transfer of immediately available
funds not later than, in the case of clauses (i), (iv) and (v) the date of
termination of this Agreement or, in the case of clauses (ii) and (iii),
the date of the agreement in respect of the Acquisition Proposal or, if
earlier, consummation of the transaction in respect thereof) an amount
equal to $13 million. The termination of this Agreement by the Company
under Sections 5.3(ii) and 5.3(iii) hereto shall not be effective until
such time as the payment required by this Section shall have been received
by Parent.
5.5.3. If Parent or the Company shall terminate this Agreement
pursuant to clause (iv) of Section 5.2, Parent shall pay to the Company (by
wire transfer of immediately available funds no later than the date of
termination of this Agreement) an amount equal to $3.0 million.
The parties acknowledge that the agreements contained in Sections
5.5.2 and 5.5.3 are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, the parties would not
enter into this Agreement; accordingly, if the Company or Parent fails
promptly to pay any amounts due pursuant to Sections 5.5.2 or 5.5.3, as the
case may be, and, in order to obtain the payment, either the Company or
Parent commences a suit which results in a judgment against the other party
for the payments set forth in this Section 5.5.2 or 5.5.3, as the case may
be, the prevailing party shall be entitled to its costs and expenses
(including attorneys' fees) in connection with its suit from the
non-prevailing party, together with interest on the amounts due from each
date for payment until the date of the payment at the prime rate of
Citibank, N.A. in effect on the date the payment was required to be made
plus 2 percent.
ARTICLE VI
MISCELLANEOUS AND GENERAL
Section 6.1. Survival. This Article VI and the agreements of the
Company and Parent contained in Section 3.9 shall survive the Effective
Time. This Article VI, the representations and warranties contained in
Sections 2.1.24 and 2.2.17, the agreements of the Company and Parent
contained in Sections 3.10 and 5.5 shall survive the termination of this
Agreement. All other representations, warranties, agreements and covenants
in this Agreement shall not survive the Effective Time or the termination
of this Agreement.
Section 6.2 Modification or Amendment. This Agreement may be modified
or amended by agreement of the parties, by action taken or authorized by
their respective Boards of Directors, at any time prior to the Effective
Time; provided, however, that, after approval by shareholders of the
Company of the matters presented at the Company Shareholders' Meeting, no
modification or amendment shall be made which under applicable Law requires
further approval by the shareholders without such further approval. This
Agreement may not be modified or amended except by an instrument in writing
executed and delivered by duly authorized officers of each of the parties.
Section 6.3. Waiver of Conditions. Any provision of this Agreement may
be waived prior to the Effective Time if, and only if, such waiver is in
writing and signed by the party against whom the waiver is to be effective.
Section 6.4. Failure or Indulgence not Waiver; Remedies Cumulative. No
failure or delay by any party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. Except as otherwise
herein provided, the rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by Law.
Section 6.5. Counterparts. This Agreement may be executed in any
number of counterparts, each such counterpart being deemed to be an
original instrument, and all counterparts shall together constitute the
same agreement.
Section 6.6. Governing Law. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed and governed by and
in accordance with the laws of the State of Florida applicable to contracts
to be performed wholly in such state.
Section 6.7. Notices. Notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (i) when sent if sent by facsimile, provided that the
facsimile is promptly confirmed by telephone confirmation thereof, (ii)
when delivered, if delivered personally to the intended recipient, and
(iii) one Business Day later, if sent by overnight delivery via a national
courier service, and in each case, addressed to a party at the following
address for that party:
If to IMRglobal CORP.:
Xx. Xxxxxx X. Xxxxx
IMRglobal Corp.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
HOLLAND & KNIGHT LLP
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
If to CGI GROUP INC. or CGI FLORIDA CORPORATION:
CGI GROUP INC.
0000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
Attention: Executive Vice President
Mergers and Acquisitions
Facsimile: (000) 000-0000
with a copy to:
XxXXXXXX XXXXXXXX
Xxxxxxx Xxxxx, 0xx Xxxxx
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Xxxxxx
Attention: Xxxxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
and
FRIED, FRANK, HARRIS, XXXXXXX & XXXXXXXX
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Attention: Xxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other Persons or addresses as may be designated in writing by
the party to receive such notice as provided above. For purposes of this
Agreement, "Business Day" means any day other than a Saturday, Sunday or a
bank holiday in the United States or Canada.
Section 6.8. Entire Agreement. This Agreement (including the
exhibits), the Disclosure Schedules (including the exhibits thereto),
constitute the entire agreement, and supersede all other prior agreements,
understandings, representations and warranties both written and oral,
between the parties hereto with respect to the subject matter of this
Agreement. References to this Agreement shall for all purposes be deemed to
include references to the Disclosure Schedules (including the exhibits).
Except as set forth in Section 3.9.2, this Agreement is not intended to
confer upon any Person other than the parties hereto any rights (including
third party beneficiary rights) or remedies hereunder.
Section 6.9 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions. If
any provision of this Agreement, or the application to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as
may be valid and enforceable, the intent and purpose of the invalid or
unenforceable provision unless the substitution of that provision would
materially frustrate the express intent and purposes of this Agreement and
(b) the remainder of this Agreement and the application of this provision
to other Persons or circumstances shall not be affected by its invalidity
or unenforceability, nor shall invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof,
in any other jurisdiction.
Section 6.10. Interpretation. The headings in this Agreement are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions
hereof. Where a reference in this Agreement is made to a Section or
Exhibit, such reference shall be to a Section of or Exhibit to this
Agreement unless otherwise indicated. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation."
Section 6.11. Assignment. Except as provided in Section 1.1.4, this
Agreement shall not be assignable by operation of law or otherwise, and any
purported assignment in violation of this provision shall be void.
Section 6.12. Specific Performance. Each party hereto acknowledges and
agrees that the other parties hereto could be irreparably damaged in the
event that its obligations contained in this Agreement are not performed in
accordance with their specific terms or are otherwise breached in each case
on or prior to the Effective Time. Accordingly, each party hereto agrees
that the other parties will be entitled to an injunction or injunctions to
enforce specifically such covenants in any action in any court having
personal and subject matter jurisdiction, in addition to any other remedy
to which each such party may be entitled at law or in equity.
Section 6.13. Forms of Currency. Unless otherwise specified in this
Agreement, all forms of currency shall be denominated in United States
dollars.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of Parent, the Company and Merger
Sub as of the date of this Agreement.
IMRglobal CORP.
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Executive Vice President
and Chief Administrative Officer
CGI GROUP INC.
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Chairman, president and chief
executive officer
CGI FLORIDA CORPORATION
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Executive vice president and
chief financial officer
