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EXHIBIT (c)(1)
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AGREEMENT AND PLAN OF MERGER
AMONG
TECHFORCE CORPORATION,
EQUANT N.V.,
EQUANT HOLDINGS U.S., INC.
AND
EQUANT ACQUISITION CORP.
DATED AS OF JUNE 30, 1999
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TABLE OF CONTENTS
PAGE
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ARTICLE I.........................................................................................................2
Section 1.1 The Offer....................................................................................2
Section 1.2 Company Action...............................................................................3
ARTICLE II........................................................................................................4
Section 2.1 The Merger...................................................................................4
Section 2.2 Effective Time; Closing......................................................................4
Section 2.3 Effects of the Merger; Subsequent Actions....................................................5
Section 2.4 Articles of Incorporation; Bylaws............................................................5
Section 2.5 Directors....................................................................................5
Section 2.6 Officers.....................................................................................5
Section 2.7 Conversion of Securities.....................................................................6
Section 2.8 Stock Options; Employee Stock Purchase Plan..................................................6
Section 2.9 Stockholders'Meeting.........................................................................7
ARTICLE III.......................................................................................................8
Section 3.1 Dissenting Shares............................................................................8
Section 3.2 Exchange of Certificates.....................................................................8
ARTICLE IV.......................................................................................................10
Section 4.1 Organization and Qualification; Subsidiaries................................................10
Section 4.2 Capitalization of the Company and Its Subsidiaries..........................................10
Section 4.3 Authority...................................................................................11
Section 4.4 Non-Contravention; Required Filings and Consents............................................12
Section 4.5 SEC Reports.................................................................................12
Section 4.6 Absence of Certain Changes; Derivatives.....................................................13
Section 4.7 Schedule 14D-9; Offer Documents; Proxy Statement............................................13
Section 4.8 Finder's Fee................................................................................14
Section 4.9 Absence of Litigation.......................................................................14
Section 4.10 Taxes......................................................................................14
Section 4.11 Employee Benefits..........................................................................16
Section 4.12 Compliance.................................................................................18
Section 4.13 Environmental Matters......................................................................19
Section 4.14 Intellectual Property......................................................................21
Section 4.15 Significant Agreements.....................................................................22
Section 4.16 Insurance..................................................................................23
Section 4.17 Title to and Condition of Properties; Leases...............................................24
Section 4.18 Labor Matters..............................................................................24
Section 4.19 Voting Requirements........................................................................25
Section 4.20 State Takeover Laws; No Anti-Takeover Measures.............................................25
Section 4.21 Codes and Policies.........................................................................26
Section 4.22 Year 2000 Compliance.......................................................................26
Section 4.23 U.K. Operations............................................................................26
Section 4.24 Opinion of Financial Advisor...............................................................26
Section 4.25 Employment and Labor Contracts.............................................................27
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Section 4.26 Disclosure..................................................................................27
ARTICLE V.........................................................................................................27
Section 5.1 Organization.................................................................................27
Section 5.2 Authority....................................................................................27
Section 5.3 Non-Contravention: Required Filings and Consents.............................................28
Section 5.4 Offer Documents; Schedule 14D-9; Proxy Statement.............................................29
Section 5.5 No Prior Activities..........................................................................29
Section 5.6 Financing....................................................................................29
Section 5.7 No Finder's Fee..............................................................................29
ARTICLE VI........................................................................................................30
Section 6.1 Conduct of Business of the Company...........................................................30
Section 6.2 Access to Information........................................................................32
Section 6.3 Reasonable Best Efforts......................................................................32
Section 6.4 Public Announcements.........................................................................33
Section 6.5 Indemnification..............................................................................33
Section 6.6 Notification of Certain Matters..............................................................34
Section 6.7 Termination of Stock Plans...................................................................34
Section 6.8 No Solicitation..............................................................................34
ARTICLE VII.......................................................................................................36
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger...................................36
Section 7.2 Conditions to the Obligation of Ultimate Parent, Parent and Acquisition to Effect the Merger.36
Section 7.3 Conditions to the Obligation of the Company to Effect the Merger.............................37
ARTICLE VIII......................................................................................................37
Section 8.1 Termination..................................................................................37
Section 8.2 Effect of Termination........................................................................39
Section 8.3 Fees and Expenses............................................................................40
Section 8.4 Amendment....................................................................................40
Section 8.5 Extension; Waiver............................................................................40
ARTICLE IX........................................................................................................41
Section 9.1 Nonsurvival of Representations and Warranties................................................41
Section 9.2 Entire Agreement; Assignment.................................................................41
Section 9.3 Notices......................................................................................41
Section 9.4 Governing Law................................................................................42
Section 9.5 Parties in Interest..........................................................................42
Section 9.6 Specific Performance.........................................................................42
Section 9.7 Severability.................................................................................43
Section 9.8 Descriptive Headings.........................................................................43
Section 9.9 Certain Definitions..........................................................................43
Section 9.10 Counterparts................................................................................44
Annex A - Conditions of the Offer
Annex B - Joint Press Release
Annex C - 1994 Option Election Form
Annex D - Tech Force Indemnification Agreements
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of June 30, 1999, is by and
among TECHFORCE CORPORATION, a Georgia corporation (the "COMPANY"), Equant N.V.,
a Netherlands corporation (the "ULTIMATE PARENT"), Equant Holdings U.S., Inc., a
Delaware corporation and an indirect wholly owned subsidiary of Ultimate Parent
("PARENT"), and Equant Acquisition Corp., a Delaware corporation a wholly owned
subsidiary of Parent ("ACQUISITION").
WHEREAS, the Boards of Directors of Ultimate Parent, Parent,
Acquisition and the Company have each approved the acquisition of the Company by
Parent upon the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance thereof, it is proposed that Acquisition shall
make a tender offer to acquire all outstanding shares ("SHARES") of common
stock, par value $0.01 per share, of the Company (the "COMMON STOCK"), for a
cash amount of $8.50 per Share (such amount, or any greater amount per Share
paid pursuant to the tender offer, being hereinafter referred to as the "PER
SHARE AMOUNT") in accordance with the terms and subject to the conditions
provided for herein (the "OFFER");
WHEREAS, the Board of Directors of the Company (the "BOARD") has (i)
determined that the consideration to be paid for each Share in the Offer and the
Merger (as defined below) is fair to and in the best interests of the
stockholders of the Company, and (ii) approved this Agreement and the
transactions contemplated hereby and resolved to recommend acceptance of the
Offer and approval and adoption of this Agreement and the transactions
contemplated hereby by the stockholders of the Company;
WHEREAS, certain holders of the Common Stock have entered into letter
agreements as of the date hereof, pursuant to which, among other things, such
shareholders have agreed to tender their Shares in the Offer and to vote their
Shares of Common Stock in favor of the adoption of this Agreement and the
transactions contemplated hereby (the "SHAREHOLDER AGREEMENTS"); and
WHEREAS, the Boards of Directors of Ultimate Parent, Parent and
Acquisition have each approved the merger (the "MERGER") of Acquisition with and
into the Company following the Offer in accordance with the Georgia Business
Corporation Code ("GEORGIA LAW") and the Delaware General Corporation Law
("DELAWARE LAW") upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company, Parent and Acquisition hereby agree as follows;
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ARTICLE I
THE OFFER
SECTION 1.1 THE OFFER.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 8.1 and no event shall have occurred or
circumstance shall exist which constitutes a material failure to satisfy any of
the conditions set forth in Annex A hereto, as promptly as practicable, but in
no event later than the fifth (5th) business day following the public
announcement of the terms of this Agreement, Acquisition shall commence the
Offer. The obligation of Acquisition to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject to the condition that a number
of Shares representing not less than a majority of the outstanding Shares shall
have been validly tendered and not withdrawn prior to the Expiration Date (as
defined below) of the Offer (the "MINIMUM CONDITION"), and further there shall
have been no material failure to satisfy any of the conditions set forth in
ANNEX A hereto. The Per Share Amount payable in the Offer shall be paid net to
the tendering stockholders in cash, upon the terms and subject to the conditions
of the Offer. There shall not be deductible from the Per Share Amount any
expenses or costs of Ultimate Parent, Parent or Acquisition associated with,
arising out of or in connection with the transaction contemplated by this
Agreement or otherwise. Acquisition expressly reserves the right in its sole
discretion to waive, in whole or in part, at any time or from time to time, any
condition to the Offer (other than the Minimum Condition), to increase the price
per Share payable in the Offer or to make any other changes in the terms and
conditions of the Offer; provided that, unless previously approved by the
Company in writing, no change may be made that decreases the Per Share Amount,
waives or changes the Minimum Condition, changes the form of consideration
payable in the Offer, reduces the number of Shares to be purchased in the Offer,
imposes conditions to the Offer in addition to those set forth in Annex A hereto
or extends the Offer beyond the Outside Date (as defined in Section 8.1(c)). The
Offer shall be scheduled to expire as of the end of the twentieth (20th) day
following the commencement of the Offer, subject to any extensions thereof
permitted in this Agreement (the "EXPIRATION DATE"). If the Minimum Condition is
satisfied and the conditions set forth in Annex A hereto are satisfied in all
material respects or waived by Acquisition as of the Expiration Date, then
Acquisition shall promptly accept and pay for all Shares validly tendered and
not withdrawn pursuant to the Offer (the "TENDER CLOSING"); provided, that if
the Minimum Condition is satisfied and the other conditions set forth in Annex A
hereto are satisfied in all material respects or waived by Acquisition as of the
Expiration Date but fewer than 90% of the outstanding Shares have been validly
tendered and not withdrawn at such time, then Acquisition may, on more than one
occasion, extend the Expiration Date for a period of ten (10) business days but
not beyond the Outside Date. Unless this Agreement has been terminated pursuant
to Article VIII, if the Minimum Condition has not been satisfied or the
conditions set forth in Annex A hereto have not been satisfied in all material
respects or waived by Acquisition as of the Expiration Date (including any
extensions thereof), then Acquisition shall extend the Offer for an additional
period of not less than five (5) business days and not more than twenty (20)
business days; provided, that Acquisition shall not be required to extend the
Offer beyond the Outside Date.
(b) As soon as practicable on the date of commencement of
the Offer, Ultimate Parent, Parent and Acquisition shall file with the
Securities and Exchange Commission (the
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"COMMISSION") a Tender Offer Statement on Schedule 14D-1 with respect to the
Offer which will contain the offer to purchase and form of the related letter of
transmittal (together with any supplements or amendments thereto, the "OFFER
DOCUMENTS"). Ultimate Parent, Parent, Acquisition and the Company each agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that any such information shall have become false
or misleading in any material respect and Ultimate Parent, Parent and
Acquisition each further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the Commission and to be disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given a reasonable
opportunity to review and comment on the Offer Documents prior to their filing
with the Commission and shall be provided with any comments Ultimate Parent,
Parent, Acquisition and their counsel may receive from the Commission or its
staff with respect to the Offer Documents promptly after receipt of such
comments.
SECTION 1.2 COMPANY ACTION.
(a) The Company hereby approves of and consents to the
Offer and represents and warrants that the Board, at a meeting duly called and
held on June 28, 1999, unanimously (i) determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are
advisable and are fair to and in the best interests of the stockholders of the
Company, (ii) approved this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, and (iii) resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares thereunder to
Acquisition and, if required by applicable law, approve and adopt this Agreement
and the Merger. The Company has been authorized by Deutsche Bank Securities Inc.
("DEUTSCHE BANK") to permit the inclusion of its fairness opinion to the Company
(as described in Section 4.24) in the Offer Documents and the Schedule 14D-9
referred to below and the Proxy Statement referred to in Section 4.7. The
Company hereby consents to the inclusion in the Offer Documents of the
recommendations of the Board described in this Section 1.2(a).
(b) As soon as practicable on the date of commencement of
the Offer, the Company shall file with the Commission a Solicitation/
Recommendation Statement on Schedule 14D-9 (together with any amendments or
supplements thereto, the "SCHEDULE 14D-9") and shall mail the Schedule 14D-9 to
the stockholders of the Company promptly after the commencement of the Offer.
The Schedule 14D-9 shall at all times contain the determinations, approvals and
recommendations described in Section 1.2 (a), unless, subject to the
requirements of Section 6.8, the Company's directors determine in good faith,
based upon the advice of legal counsel, that the withdrawal of any of such
determinations is required for the discharge of their fiduciary duties to
stockholders under applicable law. Ultimate Parent, Parent, Acquisition and the
Company each agrees promptly to correct any information provided by it for use
in the Schedule 14D-9 if and to the extent that any such information shall have
become false or misleading in any material respect and the Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the Commission and to be disseminated to holders of Shares, in
each case as and to the extent required by applicable federal securities laws.
Ultimate Parent, Parent, Acquisition and their counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 prior to its
filing with the Commission and shall be provided with any
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comments the Company and its counsel may receive from the Commission or its
staff with respect to the Schedule 14D-9 promptly after receipt of such
comments.
(c) In connection with the Offer, the Company shall cause
its transfer agent to promptly furnish Acquisition with mailing labels, security
position listings and any available listing or computer file containing the
names and addresses of the record holders of the Shares as of a recent date and
shall furnish Acquisition with such additional information and assistance
(including, without limitation, updated lists of stockholders, mailing labels
and lists of securities positions) as Acquisition or its agents may reasonably
request in communicating the Offer to the record and beneficial holders of
Shares. Subject to the requirements of applicable law, and except for such steps
as are necessary to disseminate the Offer Documents and any other documents
necessary to consummate the Merger, Acquisition and its affiliates and
associates shall hold in confidence the information contained in any such
labels, listings and files, will use such information only in connection with
the Offer and the Merger, and, if this Agreement shall be terminated, will
deliver to the Company (or destroy and certify in writing such destruction) all
copies (in any form of media) of such information then in their possession.
ARTICLE II
THE MERGER
SECTION 2.1 THE MERGER.
Subject to the satisfaction or waiver of the conditions set forth in
Article VII, at the Effective Time (as defined below) and upon the terms and
subject to the conditions of this Agreement and Georgia Law and Delaware Law,
Acquisition shall be merged with and into the Company whereupon the separate
corporate existence of Acquisition shall cease and the Company shall continue as
the surviving corporation (the "SURVIVING CORPORATION"). The name of the
Surviving Corporation shall be changed to "Equant Integration Services, Inc."
upon the closing of the Merger transaction. At Acquisition's option, the Merger
may be structured so that (i) the Company is merged with and into Parent,
Acquisition or any other direct or indirect subsidiary of Parent or (ii) any
direct or indirect subsidiary of Parent is merged with and into the Company. In
the event of such election, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect such election.
SECTION 2.2 EFFECTIVE TIME; CLOSING.
As soon as practicable after the satisfaction or waiver of the
conditions set forth in Article VII, the parties hereto shall file articles of
merger or certificates of merger with the Secretary of State of the State of
Georgia and the Secretary of State of the State of Delaware and make all other
filings or recordings required by Georgia Law and Delaware Law in connection
with the Merger. The Merger shall become effective at such time as articles of
merger or a certificate of merger are duly filed with the Secretary of State of
the State of Georgia (the "GEORGIA FILING") and articles of merger or a
certificate of ownership and merger are duly filed with the Secretary of State
of the State of Delaware (the "DELAWARE FILING") or at such later time as is
specified in the Georgia Filing and the Delaware Filing (the "EFFECTIVE TIME").
Prior to such filing, a closing (the "CLOSING") shall be held at the offices of
Hunton & Xxxxxxxx, 600
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Peachtree Street, N.E., NationsBank Plaza, Suite 4100, Xxxxxxx, Xxxxxxx 00000,
or such other place as the parties shall agree, for the purpose of confirming
the satisfaction or waiver of the conditions set forth in Article VII.
SECTION 2.3 EFFECTS OF THE MERGER; SUBSEQUENT ACTIONS.
(a) The Merger shall have the effects set forth in
Georgia Law and Delaware Law. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company and Acquisition shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Acquisition shall become the debts, liabilities and duties of the Surviving
Corporation.
(b) If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of the Company or Acquisition acquired or to be acquired by
the Surviving Corporation as a result of or in connection with the Merger, or
otherwise to carry out this Agreement, the officers and directors of the
Surviving Corporation shall be authorized to execute and deliver, in the name
and on behalf of the Company or Acquisition, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of such corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm of record or otherwise any
and all right, title and interest in, to and under such rights, properties or
assets of the Surviving Corporation or otherwise to carry out this Agreement.
SECTION 2.4 ARTICLES OF INCORPORATION; BYLAWS.
(a) The Articles of Incorporation (the "ARTICLES OF
INCORPORATION") of the Company in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Corporation until
amended in accordance with applicable law.
(b) The Bylaws of the Company (the "BYLAWS") in effect at
the Effective Time shall be the Bylaws of the Surviving Corporation until
amended in accordance with applicable law.
SECTION 2.5 DIRECTORS.
The directors of Acquisition at the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with
the Articles of Incorporation and Bylaws of the Surviving Corporation and until
his or her successor is duly elected and qualified.
SECTION 2.6 OFFICERS.
The officers of the Company at the Effective Time, and any additional
individuals designated by Parent, shall be the initial officers of the Surviving
Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation and until his or her
successor is duly appointed and qualified.
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SECTION 2.7 CONVERSION OF SECURITIES.
At the Effective Time, by virtue of the Merger and without any action
on the part of Ultimate Parent, Parent, Acquisition, the Company or the holder
of any of the following securities:
(a) Each Share issued and outstanding immediately prior
to the Effective Time (other than Shares to be canceled pursuant to Section
2.8(b) and Dissenting Shares (as defined in Section 3.1)) shall by virtue of the
Merger and without any action on the part of the holder thereof be canceled and
extinguished and be converted into the right to receive an amount in cash equal
to the Per Share Amount (the "MERGER CONSIDERATION").
(b) Each Share issued and outstanding immediately prior
to the Effective Time and owned by Ultimate Parent, Parent or Acquisition or any
direct or indirect subsidiary of Parent or Acquisition, or which is held in the
treasury of the Company or any of its Subsidiaries, shall be canceled and
retired and no payment of any consideration shall be made with respect thereto.
(c) Each share of common stock, par value $0.01 per
share, of Acquisition issued and outstanding immediately prior to the Effective
Time shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
SECTION 2.8 STOCK OPTIONS; EMPLOYEE STOCK PURCHASE PLAN.
(a) Immediately prior to the Effective Time, the Company
shall cause each Option to purchase Shares ("1994 OPTIONS") under the TechForce
Corporation 1994 Incentive Stock Option Plan (the "1994 PLAN") that is
outstanding but unvested to become fully vested and exercisable pursuant to the
last sentence of Section 14 of the 1994 Plan. At the time of commencement of the
Offer, the Company shall provide an option election form to all holders of 1994
Options substantially in the form of ANNEX C hereto. As contemplated by Annex C
and in accordance with Section 14 of the Plan, each holder of a 1994 Option
shall be permitted to exercise such 1994 Option, with such exercise to be
effective no later than immediately prior to the Effective Time. The Company
shall take all actions necessary under the 1994 Plan to cause all 1994 Options
which have not been exercised prior to the Effective Time to terminate as of the
Effective Time without any payment thereon.
(b) Immediately prior to the Effective Time, each
outstanding Option to purchase Shares ("1995 OPTIONS") under the TechForce
Corporation 1995 Stock Incentive Plan (the "1995 PLAN"), whether or not then
vested and exercisable, shall be canceled by the Company pursuant to Section
3.1(d) of the 1995 Plan, upon which cancellation each holder of a 1995 Option
shall be entitled to receive from the Company in consideration for the
cancellation of such 1995 Option an amount in cash (less applicable withholding
taxes) equal to the product of (i) the number of Shares previously subject to
such 1995 Option and (ii) the excess, if any, of the Merger Consideration over
the exercise price per Share pursuant to such 1995 Option.
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(c) It is understood and agreed that the Surviving
Corporation shall not issue any substitute Options as contemplated by Section 7
of the Terms and Conditions to the Non-Qualified Stock Option Awards under the
TechForce Corporation 1995 Outside Directors Stock Option Plan (the "DIRECTOR
PLAN"). Accordingly, immediately prior to the Effective Time, each outstanding
Option to purchase Shares ("DIRECTOR OPTIONS") issued pursuant to the Director
Plan, whether or not then vested and exercisable, shall terminate in accordance
with such Section 7, upon which termination each holder of a Director Option
shall be entitled to receive from the Company in consideration for the
cancellation of such Director Option an amount in cash (less applicable
withholding taxes) equal to the product of (i) the number of Shares previously
subject to such Director Option and (ii) the excess, if any, of the Merger
Consideration over the exercise price per Share pursuant to such Director
Option.
(d) The Company shall cause the TechForce Corporation
Amended and Restated Employee Stock Purchase Plan (the "ESPP") to be suspended
(and inoperative) as of the date hereof until the Effective Time or the date
this Agreement is terminated, whichever occurs first, as set forth herein.
Pursuant to Section 11(b) of the ESPP, each participant in the ESPP shall be
entitled to receive after the Closing an amount in cash equal to the net amount
which such participant would have received if the total amount of payroll
deductions accumulated in such participant's account under the ESPP up to the
date of termination had been used to exercise the option to purchase Shares
under the ESPP on such date and the Shares so purchased had been sold to the
Company at the Per Share Amount.
SECTION 2.9 STOCKHOLDERS' MEETING.
If approval by the Company's stockholders is required by applicable law
to consummate the Merger, the Company, acting through the Board, shall in
accordance with applicable law as soon as practicable following the consummation
of the Offer:
(i) establish and give any required notice of a
record date for the taking of action by written consent or duly call,
give notice of, convene and hold an annual or special meeting of its
stockholders (the "STOCKHOLDERS' MEETING") for the purpose of
considering and taking action upon this Agreement and the Merger;
(ii) include in the Proxy Statement (as defined in
Section 4.7) the recommendation of the Board that stockholders of the
Company vote in favor of the approval and adoption of this Agreement
and the transactions contemplated hereby including, without limitation,
the Merger; and
(iii) use its best efforts (A) to obtain and furnish
the information required to be included by it in the Proxy Statement
and, after consultation with Parent, respond promptly to any comments
made by the Commission with respect to the Proxy Statement and any
preliminary version thereof and cause the Proxy Statement to be mailed
to its stockholders at the earliest practicable time following the
consummation of the Offer and (B) to obtain the necessary approvals by
its stockholders of this Agreement and the transactions contemplated
hereby.
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At such meeting, Parent and Acquisition will vote or cause to be voted
all Shares beneficially owned by them in favor of this Agreement and the
transactions contemplated hereby, including, without limitation, the Merger.
SECTION 2.10 APPOINTMENT OF DIRECTORS.
Promptly after the Tender Closing through the consummation of the
Stockholders' Meeting, Parent shall have the right to appoint to the Company's
Board of Directors a number of directors so that the number of such appointed
directors reflects (as closely as practicable) the percentage of the Company's
outstanding common stock owned by Acquisition immediately after the Tender
Closing, provided, that such appointment of directors shall comply in all
respects with Section 14(f) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") and Regulation 14f-1 thereunder.
ARTICLE III
DISSENTING SHARES; EXCHANGE OF SHARES
SECTION 3.1 DISSENTING SHARES.
Notwithstanding anything in this Agreement to the contrary, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with Georgia Law ("DISSENTING
SHARES") shall not be converted into a right to receive the Per Share Amount
unless such holder fails to perfect or withdraws or otherwise loses his, her or
its right to appraisal. If, after the Effective Time, such holder fails to
perfect or withdraws or loses his, her or its right to appraisal, such Shares
shall be treated as if they had been converted as of the Effective Time into a
right to receive the Per Share Amount without interest thereon. The Company
shall give Parent prompt notice of any demands received by the Company for
appraisal of Shares, and, prior to the Effective Time, Parent shall have the
right to participate in all negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
SECTION 3.2 EXCHANGE OF CERTIFICATES.
(a) From and after the Effective Time, American Stock
Transfer & Trust Co., or such other bank or trust company as the Surviving
Corporation and Parent shall mutually determine, (the "DEPOSITARY") shall act as
Depositary in effecting the payment of the Merger Consideration upon surrender
of certificates (the "CERTIFICATES") that, prior to the Effective Time,
represented Shares. Upon the surrender of each such Certificate formerly
representing Shares, the Depositary shall pay the holder of such Certificate the
Per Share Amount multiplied by the number of Shares formerly represented by such
Certificate, in exchange therefor, and such Certificate shall forthwith be
canceled. Until so surrendered and exchanged, each such Certificate (other than
Certificates representing Dissenting Shares or Shares held by Parent,
Acquisition or the Company, or any direct or indirect Subsidiary thereof) shall
represent solely the right to receive the Per Share Amount. No interest shall be
paid or accrue on the Per Share Amount. If the Per Share Amount (or
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any portion thereof) is to be delivered to any person other than the person in
whose name the Certificate formerly representing Shares surrendered in exchange
therefor is registered, it shall be a condition to such exchange that the
Certificate so surrendered shall be properly endorsed or otherwise be in proper
form for transfer and that the person requesting such exchange shall pay to the
Depositary any transfer or other taxes required by reason of the payment of the
Per Share Amount to a person other than the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of the Depositary that such
tax has been paid or is not applicable.
(b) When and as needed, Parent or the Surviving
Corporation shall deposit, or cause to be deposited, in trust with the
Depositary the Merger Consideration to which holders of Shares shall be entitled
at the Effective Time pursuant to Section 2.7(a).
(c) The Merger Consideration shall be invested for the
benefit of Parent by the Depositary, as directed by Parent, provided such
investments shall be limited to direct obligations of the United States of
America, obligations for which the full faith and credit of the United States of
America is pledged to provide for the payment of principal and interest,
commercial paper rated of the highest quality by Xxxxx'x Investors Services,
Inc. or Standard & Poor's Corporation, or certificates of deposit issued by a
commercial bank having at least $1,000,000,000 in assets.
(d) Promptly following the date which is six months after
the Effective Time, Parent shall cause the Depositary to deliver to the
Surviving Corporation all cash and documents in its possession relating to the
transactions described in this Agreement, and the Depositary's duties (which
shall be defined in a "Paying Agency Agreement" to be entered into between
Parent, Acquisition and Depositary) shall terminate. Thereafter, each holder of
a Certificate formerly representing a Share may surrender such Certificate to
the Surviving Corporation and (subject to applicable abandoned property, escheat
and similar laws) receive in exchange therefor the Merger Consideration, without
any interest thereon. After such termination of the Depositary's duties under
the Paying Agency Agreement, Parent shall assure that the Surviving Corporation
has sufficient funds to pay the Merger Consideration when and as needed and
shall cause the Surviving Corporation to pay the Merger Consideration to holders
of Certificates formerly representing Shares upon the proper surrender of such
Certificates for payment.
(e) Promptly after the Effective Time and in connection
with the Merger, Parent shall cause the Depositary to mail to each record holder
of Certificates that immediately prior to the Effective Time represented Shares
a form of letter of transmittal and instructions for use in surrendering such
Certificates and receiving the Per Share Amount in exchange therefor.
(f) After the close of business on the day prior to the
date of the Effective Time, there shall be no transfers on the stock transfer
books of the Surviving Corporation of any Shares. If, after the Effective Time,
Certificates formerly representing Shares are presented to the Surviving
Corporation or the Depositary, they shall be canceled and exchanged for the Per
Share Amount, as provided in this Article III, subject to applicable law in the
case of Dissenting Shares.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as described in the Disclosure Schedules accompanying this
Agreement, the Company represents and warrants to Ultimate Parent, Parent and
Acquisition as follows:
SECTION 4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each of the Company and, except for TechForce U.K.
Limited, its Subsidiaries (as hereinafter defined) is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization. TechForce
U.K. Limited is a limited liability company duly incorporated and validly
existing under the laws of England. Each of the Company and its Subsidiaries has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
(b) Except as described in Schedule 4.1(b), each of the
Company and its Subsidiaries is duly qualified or licensed and in good standing
to do business in each jurisdiction (including any foreign country) in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except where the failure
to be so duly qualified or licensed and in good standing would not, individually
or in the aggregate, have a material adverse effect on the business, assets,
liabilities, results of operations, prospects or financial condition of the
Company and its Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
(c) The Company has heretofore furnished to Parent
complete and correct copies of the Company's Articles of Incorporation and
Bylaws and the equivalent organizational documents of each of its Subsidiaries,
each as amended to the date hereof. Such Articles of Incorporation, Bylaws and
equivalent organizational documents are in full force and effect and no other
organizational documents are applicable to or binding upon the Company or its
Subsidiaries. The Company is not in violation of any of the provisions of its
Articles of Incorporation or Bylaws and no Subsidiary of the Company is in
violation of any of the provisions of such Subsidiary's equivalent
organizational documents.
(d) Schedule 4.1(d) is a complete and correct list of all
entities in which the Company owns, directly or indirectly, any equity or voting
interest (each, a "Subsidiary" and, collectively, the "Subsidiaries"), which
list sets forth (i) the amount of capital stock of or other equity interests in
such entities so owned, directly or indirectly, (ii) the total amount of
authorized capital stock of or other equity interests in such entities, (iii)
the jurisdiction of incorporation of each such entity and the jurisdiction(s) in
which each such entity is qualified or otherwise licensed to do business, and
(iv) the duly elected directors and officers of such entities.
SECTION 4.2 CAPITALIZATION OF THE COMPANY AND ITS SUBSIDIARIES.
The authorized capital stock of the Company consists of 30,000,000
shares of common stock and 4,259,350 shares of preferred stock of which, as of
June 28, 1999, 8,280,765 shares of
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common stock were issued and outstanding and no shares of preferred stock were
issued and outstanding. All outstanding shares of capital stock of the Company
have been validly issued, and are fully paid, nonassessable and free of
preemptive rights. As of June 28, 1999, Options (as hereinafter defined) to
purchase an aggregate of 1,242,960 Shares were outstanding and the weighted
average exercise price of such Options was $6.25 per Share, provided, that an
aggregate of 3,606 additional shares of the Company's common stock may be issued
in connection with the ESPP prior to the Effective Time. Except as set forth
above, there are outstanding (i) no shares of capital stock or other securities
of the Company, (ii) no securities of the Company convertible into or
exchangeable for shares of capital stock or securities of the Company, (iii) no
options, subscriptions, warrants, convertible securities, calls or other rights
to acquire from the Company, and no obligation of the Company to issue, deliver
or sell any capital stock, securities or securities convertible into or
exchangeable for capital stock or securities of the Company, and (iv) no equity
equivalents, interests in the ownership or earnings of the Company or other
similar rights (collectively, "COMPANY SECURITIES"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any Company Securities, other than the Company's obligations
hereunder with respect to the 1994 Options, 1995 Options and Director Options as
contemplated by Section 2.8(a), (b) and (c), respectively, and the Company's
obligations under the ESPP as contemplated by Section 2.8(d). Except as set
forth on Schedule 4.2 each of the outstanding shares of capital stock of each of
the Company's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and is directly or indirectly owned by the Company, free and clear
of all security interests, liens, claims, pledges, charges, voting agreements or
other encumbrances of any nature whatsoever (collectively, "LIENS"). The Company
is directly or indirectly the record (or legal and registered) and beneficial
owner of all of the outstanding shares of capital stock of each of such entities
as set forth on Schedule 4.1(d), there are no proxies with respect to such
shares, and no equity securities of any of such entities are or may be required
to be issued by reason of any options, warrants, scrip, rights to subscribe for,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of any capital stock of any
such entity, and there are no contracts, commitments, understandings or
arrangements by which any such entity is bound to issue additional shares of its
capital stock or securities convertible into or exchangeable for such shares.
SECTION 4.3 AUTHORITY.
The Company has all necessary corporate power and authority to execute
and deliver this Agreement and, subject to Article VII with respect to the
Merger, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of this Agreement and the Merger by the holders of a
majority of the outstanding Shares if and to the extent required by applicable
law and the filing of the appropriate merger documents as required by Georgia
Law and Delaware Law). This Agreement has been duly and validly executed and
delivered by the Company and constitutes a legal, valid and binding agreement of
the Company enforceable against the Company in accordance with its terms.
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SECTION 4.4 NON-CONTRAVENTION; REQUIRED FILINGS AND CONSENTS.
(a) Except as set forth on Schedule 4.4, the execution,
delivery and performance by the Company of this Agreement and the consummation
of the transactions contemplated hereby (including the Merger) do not and will
not (i) contravene or conflict with the Articles of Incorporation or Bylaws of
the Company or the equivalent organizational documents of any of its
Subsidiaries; (ii) assuming that all consents, authorizations and approvals
contemplated by subsection (b) below have been obtained and all filings
described therein have been made, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to the Company, any of its Subsidiaries or
any of their respective assets; (iii) conflict with, or result in the breach or
termination of any provision of or constitute a default (with or without the
giving of notice or the lapse of time or both) under, or give rise to any right
of termination, cancellation, or loss of any benefit to which the Company or any
of its Subsidiaries is entitled under any provision of, or allow the
acceleration of the performance of, any obligation of the Company or any of its
Subsidiaries under, any indenture, mortgage, deed of trust, lease, license,
contract, instrument or other agreement to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
any of their respective assets is subject or bound; or (iv) result in the
creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries, except in the case of clauses (ii), (iii) and (iv) for any such
contraventions, conflicts, violations, breaches, terminations, defaults,
cancellations, losses, accelerations and Liens which would not, individually or
in the aggregate, have a Material Adverse Effect or prevent or materially delay
the consummation of the transactions contemplated by this Agreement.
(b) The execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby (including the Merger) require no action by or
in respect of, or filing with, any governmental body, agency, official or
authority (either domestic, foreign or supranational) other than (i) the filing
of the Georgia Filing in accordance with Georgia Law and the Delaware Filing in
accordance with Delaware Law; (ii) compliance with any applicable requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"); (iii) compliance with any applicable requirements of the Exchange
Act (including, without limitation, the proxy and tender rules) and state
securities, takeover and Blue Sky laws and the requirements of the Nasdaq Stock
Market; and (iv) such actions or filings which, if not taken or made, would not,
individually or in the aggregate, have a Material Adverse Effect or materially
interfere with the consummation of the Offer or the Merger.
SECTION 4.5 SEC REPORTS.
(a) The Company has filed all required forms, reports and
documents required to be filed by it with the Commission since December 14, 1995
(collectively, the "SEC REPORTS"), each of which, as amended prior to the date
hereof, has complied in all material respects with applicable requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT"), and the Exchange
Act. As of their respective dates, none of the SEC Reports, as amended prior to
the date hereof, including, without limitation, any financial statements or
schedules included therein, contained any untrue statement of a material fact or
omitted to state a material fact required to be
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stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited consolidated interim financial
statements of the Company included in the SEC Reports present fairly in all
material respects, in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in the notes thereto),
the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements). The
Company has heretofore provided complete and correct copies of each of the SEC
Reports to Parent.
(b) Except as reflected or reserved against in the
audited consolidated balance sheet of the Company and its Subsidiaries at
December 31, 1998, the Company and its Subsidiaries have no liabilities of any
nature (whether accrued, absolute, contingent or otherwise), except for
liabilities incurred in the ordinary course of business since December 31, 1998
which would not, individually or in the aggregate, have a Material Adverse
Effect.
SECTION 4.6 ABSENCE OF CERTAIN CHANGES; DERIVATIVES.
(a) Since December 31, 1998, except as specifically
disclosed in the SEC Reports filed prior to the date of this Agreement, neither
the Company nor any of its Subsidiaries has (i) taken any of the actions set
forth in Section 6.1 except as permitted thereunder or (ii) entered into any
transaction, or conducted its business or operations other than in the ordinary
course of business consistent with past practice. Since December 31, 1998,
except as specifically disclosed in the SEC Reports filed prior to the date of
this Agreement, there has not been any event or circumstances that has resulted
in a Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is a
party or subject to or bound by any future, forward, swap, option or swap
contract, or any other financial instrument with similar characteristics or
generally characterized as a "derivative" security.
SECTION 4.7 SCHEDULE 14D-9; OFFER DOCUMENTS; PROXY STATEMENT.
Neither the Schedule 14D-9, nor any of the information provided by the
Company and/or by its auditors, legal counsel, financial advisors or other
consultants or advisors specifically for use in the Offer Documents shall, on
the date hereof and on the respective dates the Schedule 14D-9, the Offer
Documents or any supplements or amendments thereto are filed with the Commission
or on the date first published, sent or given to the Company's stockholders, as
the case may be, 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 light of the circumstances under which they were
made, not misleading. The proxy or information statement or similar materials
distributed to the Company's stockholders in connection with the Merger,
including any amendments or supplements thereto (the "PROXY STATEMENT"), shall
not, at the time filed with the Commission, at the time mailed to the Company's
stockholders, at the time of the Stockholders' Meeting or at the Effective Time,
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 light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, the Company makes no representation
or warranty of any kind
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with respect to any information provided by Parent, Acquisition and/or by their
auditors, legal counsel, financial advisors or other consultants or advisors
specifically for use in the Schedule 14D-9 or the Proxy Statement. The Schedule
14D-9 and the Proxy Statement will comply as to form in all material respects
with the applicable provisions of the Exchange Act and the rules and regulations
thereunder.
SECTION 4.8 FINDER'S FEE.
No broker, finder, investment banker or other intermediary other than
Deutsche Bank and Xxxxxx Xxxxxx (the material terms of the Xxxxxx obligation
being described on Schedule 4.8) is entitled to any brokerage, finder's,
financial advisory or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of the Company or any of its Subsidiaries. The Company has heretofore
furnished to Parent a complete and correct copy of all agreements between the
Company and Deutsche Bank pursuant to which Deutsche Bank would be entitled to
any payment relating to the transactions contemplated hereby.
SECTION 4.9 ABSENCE OF LITIGATION.
Except as specifically disclosed on Schedule 4.9, there is no action,
suit, claim, investigation or proceeding, to the best knowledge of the Company,
filed or, to the knowledge of the Company, pending against the Company or any of
its Subsidiaries, or to the knowledge of the Company, threatened against, the
Company or any of its Subsidiaries or any of their respective assets before any
court or arbitrator or any administrative, regulatory or governmental body, or
any agency or official (collectively, "LITIGATION"). No such Litigation (i)
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect; (ii) in any manner challenges or seeks to prevent,
enjoin, alter or delay the Offer or the Merger or any of the other transactions
contemplated hereby; or (iii) alleges criminal action or inaction by the Company
or any of its officers or directors in their capacities as such. Neither the
Company nor any of its Subsidiaries nor any of their respective assets is
subject to any order, writ, judgment, injunction, decree, determination or award
ordering payment of damages in excess of $100,000 (including unquantified
damages) or any injunctive or other equitable relief or having, or which would
reasonably be expected to have, a Material Adverse Effect or which would prevent
or materially delay the consummation of the transactions contemplated hereby.
SECTION 4.10 TAXES. Except as set forth on Schedule 4.10:
(a) All material federal, state, local, foreign and other
tax returns, reports, information returns and statements of the Company and each
of its Subsidiaries (including any consolidated tax returns that include the
income or loss of the Company or any of its Subsidiaries) ("TAX RETURNS")
required by law to be filed or sent have been duly filed or sent, and such
returns, reports and statements are true, complete and correct in all material
respects. All material federal, state, local, foreign and other taxes, duties,
levies, assessments, fees and other governmental charges, including, without
limitation, income, gross receipts, net proceeds, alternative or add-on minimum,
ad valorem, value added, turnover, sales, use, property, personal property
(tangible and intangible), stamp, leasing, lease, user, excise, duty, franchise,
transfer, license, withholding, payroll, employment, fuel, excess profits,
occupational and interest equalization, windfall profits,
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severance, and other charges (including interest and penalties) (collectively,
"TAXES" and individually a "TAX") imposed upon the Company or any of its
Subsidiaries or any of the assets or income of the Company or any of its
Subsidiaries which are due and payable or claimed by any taxing authority to be
due and payable have been fully paid or adequately reserved for, or adequate
provision has been made therefor, other than Taxes being contested in good faith
by the Company or any of its Subsidiaries concerning an aggregate amount which
is not material to the business of the Company or such of its Subsidiaries and
which have been adequately reserved for. The most recent financial statements
contained in the SEC Reports reflect an adequate tax reserve in accordance with
generally accepted accounting principles. The Company and its Subsidiaries have
made all required current estimated payments of Taxes sufficient to avoid any
material underpayment penalties.
(b) (i) There are no Tax claims pending against the
Company or any of its Subsidiaries and neither the Company nor any of its
Subsidiaries knows of any threatened claim for Tax deficiencies or any basis for
such claims, (ii) there are no liens for Taxes upon any property or assets of
the Company or any of its Subsidiaries, (iii) there are no Tax Returns for the
Company or any of its Subsidiaries have been or are currently being examined by
any taxing authority and the Company has not received any notice that any such
examination is contemplated, (iv) there are not now in force any waivers or
agreements by the Company or any of its Subsidiaries for the extension of time
for the assessment or collection of any Tax or the filing of any Tax Return, nor
has any such waiver or agreement been requested by the Internal Revenue Service
or any other taxing authority, (v) the statute of limitations with respect to
any year or period to and including the fiscal year ended 1994 has expired, and
(vi) neither the Company nor any of its Subsidiaries is or has been a party to
any Tax sharing agreement with any person other than the Company and its
Subsidiaries; which (as to (i) through (iv) above) would reasonably be expected
to have a Material Adverse Effect.
(c) The Company and all of its Subsidiaries have paid or
are withholding and will pay when due to the proper taxing authorities all
material withholding amounts required to be withheld with respect to all Taxes,
including without limitation sales and use Taxes and Taxes on income or benefits
and taxes for unemployment, social security or other similar programs with
respect to salary and other compensation of directors, officers and employees of
the Company and its Subsidiaries. The Company and each Subsidiary has undertaken
in good faith to classify appropriately all service providers as either
employees or independent contractors for all Tax purposes. Neither the Company
nor any of its Subsidiaries has made any material payment or is a party to any
agreement that, individually or in the aggregate, or when taken together with
any payment that may be made under this Agreement or any agreements contemplated
herein, could obligate it to make any material payment that will not be
deductible under Section 280G of the Internal Revenue Code of 1986, as amended
(the "CODE"), or require withholding under Section 4999 of the Code.
(d) Neither the Company nor any Subsidiary (i) has made a
transfer of intangible property with respect to which Section 367(d) or 482 of
the Code will require the recognition of additional income for any period (or
portion thereof) after the date hereof; (ii) has owned stock in a "passive
foreign investment company" within the meaning of Section 1296(a) of the Code;
or an agreement with a governmental authority related to Taxes, that would have
any continuing effect after the Effective Time.
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(e) Except for taxes due and payable in the ordinary
course of business, neither the Company nor any of its Subsidiaries has any
liability for any material federal, state, local, foreign or other Taxes of any
corporation or entity (excluding natural persons) other than the Company and its
Subsidiaries, including, without limitation any liability arising from the
application of U.S. Treasury Regulation ss. 1.1502-6 or any analogous provision
of state, local or foreign law.
(f) The Company has delivered or made available to Parent
correct and complete copies of all Tax Returns, audit reports and statements of
deficiencies assessed against or agreed to by the Company or any of its
Subsidiaries since January 1, 1995.
(g) The Company is not, nor has it ever been, a United
States real property holding corporation as defined in Section 897(c)(2) of the
Code.
(h) Schedule 4.10(h) sets forth as of the date of this
Agreement: (i) a complete schedule of the tax and book bases of the Company and
each of its Subsidiaries in its respective assets; (ii) a complete listing of
the amount of any net operating loss (as well as jurisdiction and expiration
dates), net capital loss, unused investment or other credits, unused foreign tax
credits, or excess charitable contributions allocable to the Company or any of
its Subsidiaries and any current limitation or restriction as to the utilization
thereof; (iii) a complete listing of the amount of any deferred gain or loss
allocable to the Company or any of its Subsidiaries; and (iv) all current
material elections with respect to Taxes by or affecting the Company or any
subsidiary. The Company has not agreed to make, nor is it required to make, any
adjustments under Section 481(a) of the Code by reason of a change in accounting
method or otherwise.
SECTION 4.11 EMPLOYEE BENEFITS.
(a) Schedule 4.11(a) contains a true and complete list of
each material bonus, deferred compensation, incentive compensation, stock
purchase, stock option, severance or termination pay, hospitalization or other
medical, life, disability or other insurance, supplemental unemployment
benefits, fringe benefit, profit-sharing, pension, or retirement plan, program,
agreement or arrangement, each material employment agreement and each other
material employee benefit plan, program, agreement or arrangement sponsored,
maintained or contributed to or required to be contributed to by the Company, or
by any Subsidiary of the Company or by any trade or business, whether or not
incorporated (any such Subsidiary, trade or business an "ERISA AFFILIATE"), that
together with the Company would be deemed in a "controlled group" within the
meaning of section 4001 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or with respect to which the Company or any ERISA
Affiliate has any liability or contingent liability (collectively, the "PLANS"
and, individually, a "PLAN"), whether or not any such Plan is subject to ERISA.
Schedule 4.11 (a) identifies each of the Plans that is an "employee benefit
plan" as that term is defined in section 3(3) of ERISA (the "ERISA PLANS").
(b) The Company has heretofore delivered to Parent true
and complete copies of each of the Plans, all summary plan descriptions, a
description of any Plan that has not been reduced to writing and all material
contracts relating to any Plan, or to the funding thereof, including, without
limitation, all material trust agreements, insurance contracts, administration
contracts, investment management agreements, subscription and participation
agreements, and
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record keeping agreements, each as in effect on the date hereof. A true and
correct copy of the most recent annual report, actuarial report, accountant's
opinion of the Plan's financial statements, and Internal Revenue Service
determination letter with respect to each Plan, to the extent applicable, and a
current schedule of assets (and the fair market value thereof assuming
liquidation of any asset which is not readily tradable) held with respect to any
funded Plan has been supplied to the Parent, and there have been no material
changes in the financial condition in the respective Plans from that stated in
the annual reports and actuarial reports supplied.
(c) None of the Plans is subject to title IV of ERISA and
none of the Plans is a Multiemployer Plan (as defined in section 3(37) of ERISA)
or a Multiple Employer Plan within the meaning of Section 413(e) of the Code.
(d) With respect to any Plan subject to ERISA, neither
the Company nor any ERISA Affiliate, nor any Plan, nor any trust created
thereunder, nor any trustee or administrator thereof has engaged in a prohibited
transaction (as defined in section 406 of ERISA or section 4975 of the Code)
with respect to any such Plan nor have there been any other prohibited
transactions with respect to any such Plans.
(e) Each Plan complies and has been operated and
administered in form and operation in all material respects in accordance with
its terms and applicable law, including but not limited to ERISA and the Code,
and no event has occurred which will or could cause any Plan to fail to
materially comply with such requirements and no notice has been issued by any
governmental authority questioning or challenging such compliance.
(f) Except as set forth on Schedule 4.11(f), each Plan
which is an "employee pension benefit plan" (as defined in section 3(2) of
ERISA) materially complies in form and in operation with all applicable
requirements of sections 401(a) and 501(a) of the Code; there have been no
amendments to any such Plan which are not the subject of a favorable
determination letter issued with respect thereto by the Internal Revenue
Service; and no event has occurred which will or could give rise to
disqualification of any such Plan under such sections or to a tax under section
511 of the Code. No Plan is funded by a "voluntary employees beneficiary
association" (within the meaning of section 501 (c)(9) of the Code).
(g) Each Plan which is a "group health plan" (within the
meaning of Section 4980B of the Code) has been administered in compliance with
the coverage requirements contained in the Consolidated Budget Reconciliation
Act of 1985 and as provided under Section 4908B of the Code and any rules and
regulations issued or proposed under the Code.
(h) None of the assets of any Plan are invested in
employer securities or employer real property.
(i) There have been no acts or omissions by the Company
or any ERISA Affiliate which have given rise to or may give rise to fines,
penalties, taxes or related charges under section 502 of ERISA or Chapters 43,
47, 68 or 100 of the Code for which the Company or any ERISA Affiliate may be
liable.
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(j) Actuarially adequate accruals for all obligations
under the Plans are reflected in the financial statements of the Company.
(k) Each Plan which is intended to be "qualified" within
the meaning of section 401(a) of the Code is so qualified and the trusts
maintained thereunder are exempt from taxation under section 501(a) of the Code.
(l) The Company has the right to amend or terminate any
Plan.
(m) Except as set forth on Schedule 4.11(m), no Plan
provides benefits, including, without limitation, death or medical benefits
(whether or not insured), with respect to current or former employees of the
Company or any ERISA Affiliate beyond their retirement or other termination of
service (other than (i) coverage mandated by applicable law, or (ii) death
benefits or retirement benefits under any employee pension benefit plan).
(n) Except as provided in Schedule 4.11(n), the
consummation of the transactions contemplated by this Agreement will not (either
alone or upon the occurrence of any additional or subsequent event presently
contemplated by the Company) (i) entitle any current or former employee or
officer of the Company or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment, except as expressly provided in this
Agreement, or (ii) accelerate the time of payment or vesting, or increase the
amount, of compensation due any such employee or officer.
(o) There are no pending (or, to the knowledge of the
Company, threatened or anticipated) material claims by, on behalf of, or against
any Plan, by any employee or beneficiary covered under any such Plan, or
otherwise involving any such Plan (other than routine claims for benefits).
SECTION 4.12 COMPLIANCE.
Neither the Company nor any of its Subsidiaries is in violation of, or
has violated, any applicable provisions of (i) any law, rule, statute, order,
ordinance or regulation, of any foreign, federal, state or local government or
any other governmental department or agency, or any judgment, decree or order of
any court, applicable to its business or operations or the conduct thereof by
the Company and its Subsidiaries or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise, or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or its or any of their respective
assets are bound or affected, which, individually or in the aggregate, would
result or reasonably be expected to result in a Material Adverse Effect. Without
limiting the generality of the foregoing, neither the Company nor any of its
Subsidiaries is in violation of, or has violated, any applicable provision of
the Foreign Corrupt Practices Act, the Trading with the Enemy Act or the
Anti-Economic Discrimination Act. The Company and its Subsidiaries have all
permits, licenses and franchises from governmental agencies required to conduct
their businesses as now being conducted, except for any permits, licenses,
franchises, the absence of which could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
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SECTION 4.13 ENVIRONMENTAL MATTERS.
(a) The Company and its Subsidiaries are in compliance
with all applicable Environmental Laws (as defined below) (which compliance
includes, but is not limited to, the possession by the Company and its
Subsidiaries of all permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof), except for any noncompliance that individually or in the aggregate
would not have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received any written communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges that the Company
or any of its Subsidiaries is not in such compliance, and there are no past or
present actions, activities, circumstances, conditions, events or incidents that
might prevent or interfere with such compliance.
(b) There is no Environmental Claim (as defined below)
pending or to the knowledge of the Company threatened against the Company or any
of its Subsidiaries, or to the knowledge of the Company against any person whose
liability for any Environmental Claim the Company or any of its Subsidiaries has
or may have retained or assumed either contractually or by operation of law,
which individually or in the aggregate would have a Material Adverse Effect.
(c) There are no past or present actions, activities,
circumstances, conditions, events or incidents (including, without limitation,
the release, emission, discharge, presence or disposal of any Hazardous Material
(as defined below)) which would form the basis of any Environmental Claim
against the Company or any of its Subsidiaries, or, to the knowledge of the
Company against any person whose liability for any Environmental Claim the
Company or any of its Subsidiaries has retained or assumed either contractually
or by operation of law, which individually or in the aggregate would have a
Material Adverse Effect.
(d) Except in compliance with the Environmental Laws and
as would not give rise to any material liability or obligation to the Company or
any of its Subsidiaries, neither the Company nor any of its Subsidiaries has,
and, to the knowledge of the Company no other person has, Released (as defined
below), placed, stored, buried or dumped Hazardous Materials produced by, or
resulting from, any business, commercial or industrial activities, operations or
processes, on, beneath or adjacent to any property owned, operated or leased or
formerly owned, operated or leased by the Company or any of its Subsidiaries,
and neither the Company nor any of its Subsidiaries has received written notice
that it is a potentially responsible party for the Cleanup (as defined below) of
any property, whether or not owned or operated by the Company or any of its
Subsidiaries, which individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect.
(e) The Company and its Subsidiaries have delivered or
otherwise made available for inspection to Parent true, complete and correct
copies and results of any reports, studies, analyses, tests or monitoring
possessed or initiated by the Company or any of its Subsidiaries pertaining to
Hazardous Materials in, on, beneath or adjacent to the property now or
previously owned or leased by the Company or any of its Subsidiaries or
regarding the Company's and its Subsidiaries' compliance with applicable
Environmental Laws.
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(f) No transfers of permits or other governmental
authorizations under Environmental Laws, and no additional permits or other
governmental authorizations under Environmental Laws, will be required to permit
the Company and its Subsidiaries or the Surviving Corporation and its
subsidiaries, as the case may be, to be in full compliance with all applicable
Environmental Laws immediately after the Effective Time. To the extent that such
transfers or additional permits and other governmental authorizations are
required, the Company and its Subsidiaries agree to effect such transfers and
obtain such permits and other governmental authorizations prior to the
consummation of the Offer.
(g) The following terms as used in this Section shall
have the following meanings:
"CLEANUP" means all actions required to: (1) cleanup, remove, treat or
remediate Hazardous Materials in the outdoor environment; (2) prevent the
Release of Hazardous Materials so that they do not migrate, or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; (3) perform pre-remedial investigations or post-remedial
monitoring; or (4) respond to any government requests for information or
documents in any way relating to cleanup, removal, treatment or remediation or
potential cleanup, removal, treatment or remediation of Hazardous Materials in
the indoor or outdoor environment.
"ENVIRONMENTAL CLAIM" means any claim, action, cause of action,
investigation or written notice by any person alleging actual or potential
liability or obligation (including, without limitation, actual or potential
liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (a) the presence, or Release or
threatened Release into the indoor or outdoor environment, of any Hazardous
Materials at any location, whether or not owned or operated by the Company or
any of its Subsidiaries, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"ENVIRONMENTAL LAWS" means all federal, state, local and foreign laws
and regulations, as now or previously in effect, relating to pollution or
protection of human health or the environment, including, without limitation,
laws relating to Releases or threatened Releases of Hazardous Materials into the
indoor or outdoor environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
Release, disposal, transport or handling of Hazardous Materials and all laws and
regulations with regard to record keeping, notification, disclosure and
reporting requirements respecting Hazardous Materials.
"HAZARDOUS MATERIALS" means hazardous substances, toxic or extremely
toxic substances, oils, pollutants or contaminants or any substances identified
in or regulated under Environmental Laws as potentially harmful to human health,
natural resources or the environment.
"RELEASE" means any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, dispersal, leaching or migration into the
indoor or outdoor environment (including, without limitation, ambient air,
surface water, ground water land surface or
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subsurface strata) or into or out of any property, including without limitation
the movement of Hazardous Materials through or in air, soil, surface water,
groundwater or property.
SECTION 4.14 INTELLECTUAL PROPERTY.
(a) The Intellectual Property Rights (as defined below)
comprise all of the intellectual property rights necessary for or used in the
operation of the business of the Company and its Subsidiaries as currently
conducted or as currently proposed by the Company to be conducted (assuming the
transactions contemplated by this Agreement are not consummated). Schedule 4.14
sets forth a true, correct and complete list of all: (i) patented or registered
Intellectual Property Rights and pending patent applications or other
applications for registrations of the Intellectual Property Rights owned or
filed by or on behalf of the Company or any of its Subsidiaries; (ii) all
registered trademarks and service marks owned by the Company or any of its
Subsidiaries; (iii) all registered copyrights owned by the Company or any of its
Subsidiaries and material to the financial condition, operating results, assets,
operations or business prospects of the Company or any of its Subsidiaries; and
(iv) all licenses or similar agreements or arrangements relating to the
Intellectual Property Rights to which the Company or any Subsidiary of the
Company is a party, either (A) as licensee and that require payments aggregating
more than $5,000 in any 12-month period, or (B) as a licensor and that require
payments aggregating more than $50,000 in any 12-month period.
(b) Except as set forth in Schedule 4.14 (i) the Company
and its Subsidiaries own and possess all right, title and interest in and to, or
has a valid and enforceable license to use, the Intellectual Property Rights
necessary for the operation of the business of the Company and its Subsidiaries
as currently conducted or as currently proposed by the Company to be conducted
(assuming the transactions contemplated by this Agreement are not consummated)
free and clear of all Liens; (ii) no written claim by any third party contesting
the validity, enforceability, use or ownership of any of the Intellectual
Property Rights is currently outstanding or is threatened, and, to the knowledge
of the Company, there are no grounds for the same; (iii) no loss or expiration
of any material Intellectual Property Right or related group of material
Intellectual Property Rights is pending or, to the knowledge of the Company,
threatened; (iv) neither the Company nor any of its Subsidiaries has received
any written notice of, or has any knowledge of any facts which indicate a
likelihood of, any currently existing or otherwise unresolved infringement or
misappropriation by, or conflict with, any third party with respect to the
Intellectual Property Rights (including, without limitation, any demand or
request that the Company or any of its Subsidiaries license any rights from a
third party); and (v) to the Company's knowledge neither the Company nor its
Subsidiaries has infringed, misappropriated or otherwise conflicted with any
intellectual property rights or other similar rights of any third parties, other
than any of the foregoing which may have occurred in the past and have been
fully and finally resolved prior to the date of this Agreement and neither the
Company nor its Subsidiaries has any knowledge of any infringement,
misappropriation or conflict which will occur as a result of the continued
operation of the business of the Company and its Subsidiaries as currently
conducted or as currently proposed by the Company to be conducted (assuming the
transaction contemplated by this Agreement are not consummated).
(c) The transactions contemplated hereby (including the
Offer and the Merger) will have no adverse effect on the right, title and
interest of the Company and its Subsidiaries in and
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to any material Intellectual Property Rights or the validity and enforceability
thereof. All material Intellectual Property Rights owned by the Company will be
the property of the Surviving Corporation as a result of the Merger.
(d) Except as set forth on Schedule 4.14, no copy of
software owned by the Company is subject to or held in escrow or is in any third
party's possession, other than the object code version in accordance with the
licenses listed on Schedule 4.14 hereto and other than for software tools
distributed by the Company to its customers in the ordinary course of business.
(e) For purposes of this Agreement, "INTELLECTUAL
PROPERTY RIGHTS" means all of the following owned by, issued to or licensed to
the Company or any of its Subsidiaries, along with all income, royalties,
damages and payments due or payable to the Company or any of its Subsidiaries at
the Effective Time or thereafter (including, without limitation, damages and
payments for past or future infringements or misappropriations thereof), the
right to xxx and recover for past infringements or misappropriations thereof and
any and all corresponding rights that are secured by the Company or any of its
Subsidiaries throughout the world: patents, patent applications, patent
disclosures and inventions (whether or not patentable and whether or not reduced
to practice and including, without limitation, all inventions of employees of
the Company or any of its Subsidiaries) and any reissues, continuations,
continuations-in-part, revisions, extensions or reexaminations thereof;
trademarks, service marks, trade dress, logos, trade names and corporate names,
together with all goodwill associated therewith (including, without limitation,
the use of the current corporate name and trade names(s) listed on Schedule 4.14
and all translations, adaptations, derivative works and combinations of the
foregoing); copyrights and copyrightable works; Internet domain names; mask
works; and registrations, applications and renewals for any of the foregoing;
trade secrets and confidential information (including, without limitation,
ideas, formulae, compositions, know-how, manufacturing and production processes
and techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial and accounting data,
business and marketing plans, and customer and supplier lists and related
information; computer software (in object code and source code form and
including, without limitation, data, related data bases and documentation,
including all works in progress relating to corrections, modifications or
enhancements thereto as well as all current and prior (but only to the extent
still maintained) versions of such software); other intellectual property
rights; and all copies and tangible embodiments of the foregoing (in whatever
form or medium), in each case including, without limitation, the items set forth
on Schedule 4.14.
SECTION 4.15 SIGNIFICANT AGREEMENTS.
Schedule 4.15 includes a complete and correct list of all contracts,
agreements, indentures, leases, mortgages, licenses, plans, arrangements,
understandings, commitments (whether oral or written) and instruments to which
the Company or any of its Subsidiaries is a party (collectively, "CONTRACTS")
that are material to the Company and its Subsidiaries individually or in the
aggregate. Without limiting the generality of the foregoing, Schedule 4.15 lists
the following: (i) each Contract filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998, (ii) any
Contract calling for any payment by or to the Company of $100,000 or more or
payments in any twelve-month period aggregating $150,000 or more, (iii) any
Contract relating to material Intellectual Property
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Rights, (iv) any Contract purporting to restrict or prohibit the Company or any
affiliate or Subsidiary of the Company from engaging or competing in any
business or engaging or competing in any business in any geographic area, and
(v) any Contract between the Company or any of its Subsidiaries, on the one
hand, and any officer or director of the Company or any person who, to the
knowledge of the Company is the beneficial owner of more than 25,000 Shares on
the other hand (the Contracts listed in Schedule 4.15, collectively, the
"SIGNIFICANT AGREEMENTS"). The Company has heretofore furnished to Parent
complete and correct copies of the Significant Agreements, each as amended or
modified to the date hereof (including any waivers with respect thereto). Since
December 31, 1998, there have been no transactions between the Company or any of
its Subsidiaries, on the one hand, and the other parties to the Significant
Agreements or any of their respective affiliates, on the other hand, other than
transactions in the ordinary course of business consistent with past practice
pursuant to and in accordance with the terms of the Significant Agreements. Each
of the Significant Agreements is in full force and effect and enforceable in
accordance with its terms, except to the extent such enforceability may be
limited by (x) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and (y) general principals of equity regardless of whether determined in equity
or at law. Neither the Company nor any of its Subsidiaries has received any
notice (written or, to the knowledge of the Company, oral) of cancellation or
termination of any of the Significant Agreements. No Significant Agreement is
the subject of, or, to the knowledge of the Company, has been threatened to be
made the subject of, any arbitration, suit or other legal proceeding. With
respect to any Significant Agreement which by its terms will terminate as of a
certain date unless renewed or unless an option to extend such Significant
Agreement is exercised, neither the Company nor any of its Subsidiaries has
received any notice (written or, to the knowledge of the Company, oral), that
any such Significant Agreement will not be so renewed or that any such extension
option will not be exercised. There exists no event of default or occurrence,
condition or act on the part of the Company or any of its Subsidiaries or, to
the knowledge of the Company, on the part of any of the other parties to the
Significant Agreements which constitutes or would constitute (with notice or
lapse of time or both) a material breach of or material default under any of the
Significant Agreements.
SECTION 4.16 INSURANCE.
Schedule 4.16 sets forth a complete and correct list of all insurance
policies (including a brief summary of the nature and terms thereof and any
amounts paid or payable to the Company or any of its Subsidiaries thereunder)
providing material coverage in favor of the Company or any of its Subsidiaries
or any of their respective assets. Each such policy is in full force and effect,
no notice (written or, to the knowledge of the Company, oral) of termination,
cancellation, reduction of coverage or reservation of rights or notice of
intention to terminate, cancel, reduce coverage or reserve rights has been
received with respect to any such policy, there is no default with respect to
any provision contained in any such policy, and there has not been any failure
to give any notice or present any claim under any such policy in a timely
fashion or in the manner or detail required by any such policy, except for any
such failures to be in full force and effect, any such terminations,
cancellations, reservations or defaults, or any such failures to give notice or
present claims which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. The coverage provided by such
policies is appropriate and
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reasonable in scope and amount, in light of the risks attendant to the business
and activities of the Company and its Subsidiaries and all premiums due on such
policies have been paid in full.
SECTION 4.17 TITLE TO AND CONDITION OF PROPERTIES; LEASES.
(a) Each of the Company and its Subsidiaries (i) except as set forth on
Schedule 4.17, has good and marketable title to all of the properties and assets
reflected on the Company's December 31, 1998 audited consolidated balance sheet
contained in the Company's Form 10-K for the fiscal year ended December 31, 1998
filed with the SEC (the "Balance Sheet") as being owned by the Company or its
Subsidiaries, except for any property or asset sold or otherwise disposed of
since the date thereof in the ordinary course of business and consistent with
past practice.
(b) The Company does not own any real property. Schedule 4.17 sets
forth a complete list of all material real property and material personal
property leases of the Company and its Subsidiaries. All such leases are valid,
binding and enforceable against the Company and its Subsidiaries (and, to the
knowledge of the Company, against each other party thereto) in accordance with
their respective terms (except to the extent such enforceability may be limited
by (i) bankruptcy, insolvency reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and (ii)
general principals of equity regardless of whether determined in equity or at
law), and there does not exist, under any lease of real property or personal
property, any material default or any event which, with notice or lapse of time
or both, would constitute a material default by the Company or any of its
Subsidiaries or, to the knowledge of the Company, by any other party thereto.
(c) The Company or the relevant Subsidiary or Subsidiaries has valid,
effective, enforceable and continuing leasehold rights in all property leased by
it under such leases, free and clear of all encumbrances, except (i) statutory
liens securing payments not yet due and (ii) such imperfections or
irregularities of title, claims, liens, charges, security interests or
encumbrances as do not materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially impair the business
operations at such properties. The assets and properties of the Company and its
Subsidiaries are in good operating condition and repair, subject to normal wear
and tear, and are adequate for the uses to which they are being put, all of
which are lawful.
(d) Except for the "discounted loan transactions" described on Schedule
4.15, the Company is not a party to any executory contract to sell or transfer
any part of any leasehold interest of the Company. True and accurate copies of
all leases, and of all amendments, supplements, extensions and modifications
thereof, have been delivered to Acquisition or Parent by the Company.
SECTION 4.18 LABOR MATTERS.
(a) Neither the Company nor any of its Subsidiaries is a party to any
collective bargaining or other labor union contract applicable to persons
employed by the Company or any of its Subsidiaries, no collective bargaining
agreement is being negotiated by the Company or any of its Subsidiaries and the
Company has no knowledge of any activities or proceedings of
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any labor union to organize any of their respective employees. There is no labor
dispute, strike or work stoppage against the Company or any of its Subsidiaries
pending or, to the knowledge of the Company, threatened which may interfere with
the respective business activities of the Company or any of its Subsidiaries.
(b) Except as disclosed on Schedule 4.18, there are no complaints,
charges or claims against the Company pending or, to the Company's knowledge,
threatened to be brought or filed with any Governmental Body based on, arising
out of, in connection with, or otherwise relating to, the employment or
termination of employment of any Company Employee (as defined below) by the
Company.
(c) The Company is in material compliance with the provisions of the
Occupational Safety and Health Act and Workers Adjustment and Retraining
Notification Act ("WARN"), and with respect to the Company Employees, all other
federal, state and local laws, regulations and orders relating to wages, hours,
collective bargaining, discrimination, harassment, civil rights, safety and
health and workers' compensation.
(d) Schedule 4.18(d) sets forth a list containing the name, position
and date of employment of each employee recorded on the Company's payroll
records as of June 9, 1999 (a "COMPANY EMPLOYEE"). A list setting forth each
Company Employee's current base salary or wage rate, including without
limitation commission or bonus or incentive compensation schedule, has been
delivered to the Parent by the Company.
(e) Neither the Company nor any of its Subsidiaries is a party to any
severance contract, salary continuation agreement or change of control agreement
or other similar contract or any other contract providing for the payment of
severance or benefits to any current or former Company Employee upon termination
or a change of control, other than those set forth in Schedule 4.11(a), Schedule
4.11(m) and Schedule 4.11(n) and other than the agreements executed by or
policies provided to employees generally, copies of which have been delivered to
the Parent and Acquisition.
SECTION 4.19 VOTING REQUIREMENTS.
The affirmative vote of a majority of the outstanding Shares approving
and adopting this Agreement and the Merger is the only vote of the holders of
any class or series of Company Securities necessary to approve this Agreement
and the transactions contemplated by this Agreement, including, without
limitation, the Merger. Assuming the satisfaction of the Minimum Condition, upon
the purchase of Shares pursuant to the Offer, Acquisition will own Shares having
sufficient voting power to approve the Merger without the vote of any other
holder of voting securities of the Company.
SECTION 4.20 STATE TAKEOVER LAWS; NO ANTI-TAKEOVER MEASURES.
The provisions of Section 14-2-1111 and Section 14-2-1132 of Georgia
Law are not applicable to the Company or the transactions contemplated by this
Agreement, including, without limitation, the Offer and the Merger, by reason of
the provisions of Section 14-2-1113 and Section 14-2-1133, respectively, of
Georgia Law. The Company has taken all steps
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necessary irrevocably to exempt the Merger and the other transactions
contemplated by this Agreement from any applicable provisions of Georgia Law,
the Company's Articles of Incorporation and the Company's Bylaws which would
have the effect of (i) prohibiting or materially restricting the Company's
ability to perform its obligations under this Agreement or its ability to
consummate the Merger and the other transactions contemplated hereby; (ii)
invalidating or voiding this Agreement or any provision hereof; or (iii)
delaying, preventing or materially reducing the expected benefits to Parent or
Acquisition of the transactions contemplated by this Agreement. The Company has
not issued or adopted, and is not subject to, any shareholder rights plan or
agreement, "poison pill" or any similar security, plan or agreement.
SECTION 4.21 CODES AND POLICIES.
The Company has heretofore furnished Parent with true and correct
copies of all material corporate codes of conduct, policy manuals or other
materials setting forth the Company's or any of its Subsidiaries' policies,
procedures or standards of general applicability relating to employment or
operations.
SECTION 4.22 YEAR 2000 COMPLIANCE.
The Company implemented its Y2K readiness assessment project in 1998. A
full-time consultant was retained to manage the project under the general
supervision of senior management of the Company. The project included assessment
of the various areas of the Company's business to identify areas of possible
concern. Project plans were developed and implemented to test compliance in
suspect areas and to provide for remediation of identified problems, and such
plans were provided by the Company to Parent. The Company's program and status
of its activities have been reviewed by its Board of Directors. The Company's
descriptions and disclosures in its Exchange Act reports under the heading "Year
2000" (and in its Y2K program information on its web site) accurately disclose
and reflect the Company's Year 2000 analysis, remediation and contingency plans
and activities. The Company has reviewed with representatives of Parent and
Acquisition the Company's Year 2000 third party communications program and the
results of the Company's Year 2000 third party communications program to date in
that regard. As a result of the third party communications program and the
Company's related Year 2000 remediation initiatives, the Company is not
presently aware of any Year 2000 compliance concerns which would result in a
Material Adverse Effect.
SECTION 4.23 U.K. OPERATIONS. Except as set forth on Schedule
4.23, neither the Company nor any of its Subsidiaries (a) has any obligation
under any Contract associated with the business conducted (whether directly or
indirectly) in the United Kingdom that is not terminable upon less than 90 days'
notice or (b) would be subject to any termination, severance or other similar
obligation respecting any employee in the United Kingdom upon the cessation of
such employee's employment or a substantial diminution in such employee's
compensation or responsibilities.
SECTION 4.24 OPINION OF FINANCIAL ADVISOR. Deutsche Bank has
delivered to the Board its written opinion dated June 28, 1999 to the effect
that, as of the date of such opinion,
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the consideration to be received by the holders of Shares pursuant to the Offer
and the Merger is fair to such holders from a financial point of view.
SECTION 4.25 EMPLOYMENT AND LABOR CONTRACTS. Neither the Company
nor any of its Subsidiaries is a party to any employment contract or other
similar contract or any other contract for the provision of management or
consulting services to the Company or any of its Subsidiaries with any past or
present officer, director, employee or, to the best of the Company's knowledge,
any entity affiliated with any past or present officer, director or employee,
other than those set forth in Schedule 4.25 and other than the agreements
executed by employees generally, the forms of which have been delivered to
Parent and Acquisition.
SECTION 4.26 DISCLOSURE. All of the facts and circumstances not
required to be disclosed as exceptions under or to any of the foregoing
representations and warranties made by the Company in this Article IV by reason
of any minimum disclosure requirement in any such representation and warranty
would not, in the aggregate, have a Material Adverse Effect. The information
contained in the Disclosure Schedules to this Agreement (and any updated
Disclosure Schedule) as it relates to the representations and warranties made by
the Company in this Article IV does not 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 information or statements contained or
referenced therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
ULTIMATE PARENT, PARENT AND ACQUISITION
Each of Ultimate Parent, Parent and Acquisition represents and warrants
to the Company as follows:
SECTION 5.1 ORGANIZATION.
Each of Ultimate Parent, Parent and Acquisition is a corporation duly
organized, validly existing and in good standing under the laws of the state or
country of its incorporation and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority would not, individually or in
the aggregate, have a material adverse effect on Ultimate Parent's, Parent's or
Acquisition's ability to consummate the transactions contemplated by this
Agreement.
SECTION 5.2 AUTHORITY.
Each of Ultimate Parent, Parent and Acquisition has all necessary
corporate power and authority to execute and deliver this Agreement and, subject
to Article VII with respect to the Merger, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the board of
directors of Ultimate Parent, Parent and by the board of directors and the sole
stockholder of Acquisition,
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and no other corporate proceedings on the part of Ultimate Parent, Parent or
Acquisition are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than with respect to the Merger and the
filing of appropriate merger documents as required by Georgia Law and Delaware
Law). This Agreement has been duly and validly executed and delivered by each of
Ultimate Parent, Parent and Acquisition and constitutes a legal, valid and
binding agreement of each of Parent and Acquisition, enforceable against each of
Ultimate Parent, Parent and Acquisition in accordance with its terms.
SECTION 5.3 NON-CONTRAVENTION: REQUIRED FILINGS AND CONSENTS.
(a) The execution, delivery and performance by Ultimate
Parent, Parent and Acquisition of this Agreement and the consummation of the
transactions contemplated hereby (including the Merger) do not and will not (i)
contravene or conflict with the Certificate of Incorporation or Bylaws of
Ultimate Parent, Parent or Acquisition; (ii) assuming that all consents,
authorizations and approvals contemplated by subsection (b) below have been
obtained and all filings described therein have been made, contravene or
conflict with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to Ultimate
Parent, Parent or Acquisition or any of their respective assets; (iii) conflict
with, or result in the breach or termination of any provision of or constitute a
default (with or without the giving of notice or the lapse of time or both)
under, or give rise to any right of termination, cancellation, or loss of any
benefit to which Ultimate Parent, Parent or Acquisition is entitled under any
provision of, or allow the acceleration of the performance of, any obligation of
Ultimate Parent, Parent or Acquisition under, any indenture, mortgage, deed of
trust, lease, license, contract, instrument or other agreement to which Ultimate
Parent, Parent or Acquisition is a party or by which Ultimate Parent, Parent or
Acquisition or any of their respective assets is subject or bound; or (iv)
result in the creation or imposition of any Lien on any asset of Ultimate
Parent, Parent or Acquisition, except in the case of clauses (ii), (iii) and
(iv) for any such contraventions, conflicts, violations, breaches, terminations,
defaults, cancellations, losses, accelerations and Liens which would not,
individually or in the aggregate, have a material adverse effect on Ultimate
Parent's, Parent's or Acquisition's ability to consummate the transactions
contemplated by this Agreement.
(b) The execution, delivery and performance by Ultimate
Parent, Parent and Acquisition of this Agreement and the consummation by
Ultimate Parent, Parent and Acquisition of the transactions contemplated hereby
(including the Merger) require no action by or in respect of, or filing with,
any governmental body, agency, official or authority (whether domestic, foreign
or supranational) other than (i) the filing of the Georgia Filing in accordance
with Georgia Law and the Delaware Filing in accordance with Delaware Law; (ii)
compliance with any applicable requirements of the HSR Act; (iii) compliance
with any applicable requirements of the Exchange Act and state securities,
takeover and Blue Sky laws; and (iv) such actions or filings which, if not taken
or made, would not, individually or in the aggregate, reasonably be expected to
prevent or materially delay the consummation of the Offer or the Merger.
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SECTION 5.4 OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT.
Neither the Offer Documents, nor any of the information provided by
Ultimate Parent, Parent or Acquisition and/or by their auditors, legal counsel,
financial advisors or other consultants or advisors specifically for use in the
Schedule 14D-9 shall, on the respective dates the Offer Documents, the Schedule
14D-9 or any supplements or amendments thereto are filed with the Commission or
on the date first published, sent or given to the Company's stockholders, as the
case may be, 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 light of the circumstances under which they were
made, not misleading. None of the information provided by Ultimate Parent,
Parent or Acquisition or by their auditors, attorneys, financial advisors or
other consultants or advisors specifically for use in the Proxy Statement shall,
at the time filed with the Commission, at the time mailed to the Company's
stockholders, at the time of the Stockholders' Meeting or at the Effective Time,
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 light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, neither Ultimate Parent, Parent nor
Acquisition makes any representation or warranty of any kind with respect to any
information provided by the Company and/or by its auditors, legal counsel,
financial advisors or other consultants or advisors specifically for use in the
Offer Documents. The Offer Documents will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder.
SECTION 5.5 NO PRIOR ACTIVITIES.
Since the date of its incorporation, Acquisition has not engaged in any
activities other than in connection with or as contemplated by this Agreement or
in connection with arranging any financing required to consummate the
transactions contemplated hereby.
SECTION 5.6 FINANCING.
Acquisition has available to it all funds necessary to satisfy its
obligations under this Agreement, including, without limitation, the obligation
to pay the Per Share Amount pursuant to the Offer and the Merger Consideration
pursuant to the Merger and to pay all related fees and expenses in connection
with the Offer and the Merger.
SECTION 5.7 NO FINDER'S FEE.
No broker, finder, investment banker or other intermediary (other than
Credit Suisse First Boston Corporation) is entitled to any brokerage, finder's,
financial advisory or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of Ultimate Parent, Parent or Acquisition.
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ARTICLE VI
COVENANTS
SECTION 6.1 CONDUCT OF BUSINESS OF THE COMPANY.
Except as otherwise expressly provided in this Agreement, during the
period from the date hereof to the time the directors are appointed pursuant to
Section 2.10 hereof, the Company and its Subsidiaries will each conduct its
operations in the ordinary course of business consistent with past practice, and
the Company and its Subsidiaries will each use its reasonable best efforts to
preserve intact, in all respects material to the Company, its business
organization, to keep available, in all respects material to the Company and its
Subsidiaries taken as a whole, the services of its officers and employees and to
maintain, in all respects material to the Company, existing relationships with
licensors, licensees, suppliers, contractors, distributors, customers and others
having business relationships with it. As used in this Section 6.1, the term
"CONSENT" shall mean the consent (written or verbal) of any authorized officer
of Parent, which (x) shall not be unreasonably withheld or delayed, and (y)
shall be either granted or withheld within twenty-four (24) hours of receiving
the Company's written or verbal request (provided, that Parent's failure to
respond within such period shall constitute Consent to the requested action).
Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Agreement or as required by law, prior to the Tender
Closing, neither the Company nor any of its Subsidiaries will, without the prior
written consent of Parent:
(a) amend or propose to amend its Articles of
Incorporation or Bylaws or equivalent organizational documents, or increase or
propose to increase the number of directors of the Company or any of its
Subsidiaries;
(b) authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise)
any Company Securities or securities of any of its Subsidiaries, stock of any
class or any other securities or equity equivalents (including, without
limitation, stock appreciation rights of the Company or any of its
Subsidiaries), except as required by option agreements in effect as of the date
hereof, or amend any of the terms of any such securities or agreements
outstanding as of the date hereof;
(c) split, combine or reclassify any shares of its
capital stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock, or property or any combination thereof) in respect of
its capital stock or the capital stock of its Subsidiaries, or redeem,
repurchase or otherwise acquire any of its securities or any securities of its
Subsidiaries;
(d) Without Consent: (i) incur any indebtedness for
borrowed money or issue any debt securities or, assume, guarantee or endorse the
obligations of any other person in excess of $200,000; (ii) make any loans,
advances or capital contributions to, or investments in, any other person (other
than to wholly owned Subsidiaries of the Company); (iii) pledge or otherwise
encumber shares of capital stock of the Company or any of its Subsidiaries; or
(iv) mortgage or pledge any of its assets, tangible or intangible, or create or
suffer to exist any Lien thereupon;
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(e) Without Consent, enter into, adopt or (except as may
be required by law) amend or terminate any bonus, profit sharing, compensation,
severance, termination, stock option, stock appreciation right, restricted
stock, performance unit, stock equivalent, stock purchase, pension, retirement,
deferred compensation, employment, severance or other employee benefit
agreement, trust, plan, fund or other arrangement for the benefit or welfare of
any director, officer or employee, or (except, in the case of employees who are
not officers or directors, for normal compensation increases in the ordinary
course of business consistent with past practice that, (x) in the aggregate do
not result in a material increase in benefits or compensation expense to the
Company, and (y) are pursuant to Consent) increase in any manner the
compensation or benefits of any director, officer or employee or pay any benefit
not required by any plan or arrangement as in effect as of the date hereof
(including, without limitation, the granting of stock options, restricted stock,
stock appreciation rights or performance units);
(f) Except upon Consent, acquire, sell, lease, encumber,
transfer or dispose of any assets outside the ordinary course of business
consistent with past practice or any assets which in the aggregate are material
to the Company and its Subsidiaries, taken as a whole, or except upon Consent,
enter into, modify, amend or terminate any material contract, agreement,
commitment or transaction except that the Company may continue to engage in the
activity of selling equipment leases;
(g) except as may be required as a result of a change in
law or in generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(h) (i) acquire (by merger, consolidation, or acquisition
of stock or assets) any corporation, partnership or other business organization
or division thereof; (ii) except as set forth on Schedule 6.1(h), without
Consent authorize any new capital expenditure or expenditures which,
individually, is in excess of $50,000 or, in the aggregate, are in excess of
$200,000; or (iii) enter into or amend any contract, agreement, commitment or
arrangement with respect to any of the foregoing;
(i) make any tax election or settle or compromise any
material Tax liability;
(j) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or otherwise
in excess of $200,000 in the aggregate), other than the payment, discharge or
satisfaction upon Consent or in the ordinary course of business consistent with
past practice or in accordance with their terms, of liabilities reflected or
reserved against in the consolidated financial statements (or the notes thereto)
of the Company and its consolidated Subsidiaries or incurred in the ordinary
course of business consistent with past practice (provided, that payment of
trade payables in the ordinary course of business shall not require Consent or
otherwise be restricted hereunder);
(k) except in the ordinary course of business consistent
with past practice and upon Consent, terminate, modify, amend or waive
compliance with any provision of, any of the Significant Agreements, or fail to
take any action necessary to preserve the benefits of any Significant Agreement
to the Company or any of its Subsidiaries;
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(l) enter into any agreement providing for the
acceleration of payment or performance or other consequence as a result of the
transactions contemplated by this Agreement or any other change in control of
the Company; or
(m) except in the ordinary course of business consistent
with past practice in connection with the sale of equipment or upon Consent,
enter into any agreement providing for any license, sale or assignment of or
otherwise transfer any Intellectual Property Rights or grant any covenant not to
xxx with respect to any of its Intellectual Property Rights or otherwise.
SECTION 6.2 ACCESS TO INFORMATION.
(a) Subject to applicable law and the agreements set
forth in Section 6.2(b), between the date hereof and the Effective Time, the
Company will give each of Ultimate Parent, Parent and Acquisition and their
counsel, financial advisors, auditors, and other authorized representatives
reasonable access to all employees, plants, offices and other facilities and to
all books and records of the Company and its Subsidiaries, will permit each of
Ultimate Parent, Parent and Acquisition and their respective counsel, advisors,
auditors and other authorized representatives to make such inspections as
Ultimate Parent, Parent or Acquisition may reasonably require and will cause the
Company's officers or representatives and those of its Subsidiaries to furnish
as soon as reasonably practicable to Ultimate Parent, Parent or Acquisition or
their representatives such financial and operating data and other information
with respect to the business and properties of the Company and any of its
Subsidiaries as Ultimate Parent, Parent or Acquisition may from time to time
reasonably request. No investigation pursuant to this Section 6.2 shall affect
any representations or warranties of the parties herein or the conditions to the
obligations of the parties hereunder.
(b) The confidentiality agreement dated June 18, 1998, as
amended on May 18, 1999 (the "CONFIDENTIALITY AGREEMENT"), between the Company
and Parent shall remain in full force and effect in accordance with its terms
except that, notwithstanding any provision of the Confidentiality Agreement,
Parent and Acquisition may (i) enter into this Agreement, (ii) acquire Shares
pursuant to the Offer and the Merger, (iii) make any further proposals,
consummate any further transactions involving the Company or its stockholders or
take any other actions respecting the Company, the Shares or any stockholder of
the Company, and (iv) make such disclosures in connection with the Offer, the
Offer Documents or the matters set forth in (iii) above as Parent and
Acquisition may determine in their reasonable discretion to be necessary or
appropriate.
SECTION 6.3 REASONABLE BEST EFFORTS.
Subject to the terms and conditions herein provided, including, without
limitation, those of Section 6.8, each of the parties hereto agrees to use its
reasonable best efforts to timely take, or cause to be taken, all actions, and
to do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, Ultimate Parent, Parent, Acquisition and the Company shall
cooperate with one another (i) in the preparation and filing of the Offer
Documents, the Schedule 14D-9, the Proxy Statement and any required filings
under the HSR Act and the other laws referred to in Sections 4.4(b), 4.20 and
5.3(b); (ii) in determining whether action by or in respect of, or filing with,
any governmental
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body, agency, official or authority (either domestic or foreign) is required,
proper or advisable or any actions, consents, waivers or approvals are required
to be obtained from parties to any contracts, in connection with the
transactions contemplated by this Agreement; and (iii) in seeking timely to
obtain any such actions, consents and waivers and to make any such filings. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party hereto shall take all such necessary action.
SECTION 6.4 PUBLIC ANNOUNCEMENTS.
Except as may be required by applicable law or by applicable rules of
any securities exchange, prior to the earlier to occur of (i) the Effective
Time, (ii) the termination of this Agreement pursuant to Article VIII, or (iii)
the making of an Acquisition Proposal by a third party, neither Ultimate Parent,
Parent and Acquisition, on the one hand, nor the Company, on the other hand,
shall issue any press release or otherwise make any public statements with
respect to the transactions contemplated by this Agreement without the prior
consent of the other, which consent shall not be unreasonably withheld, except
as may be required by applicable law or applicable rules of any securities
exchange; provided, however, that Ultimate Parent, Parent, Acquisition and the
Company will provide the other party with a copy of press releases issued or
notice of public statement with respect to the transactions contemplated by this
Agreement prior to issuance thereof for the other party(ies) prior approval,
which approval shall not be unreasonably withheld. The initial joint
announcement of the transactions contemplated by this Agreement shall be in the
form attached hereto as ANNEX B.
SECTION 6.5 INDEMNIFICATION.
(a) Ultimate Parent and Parent shall cause the Surviving
Corporation to keep in effect for a period not less than six years from the
Effective Time, the provisions in its Articles of Incorporation and Bylaws
containing the provisions with respect to exculpation of director and officer
liability and indemnification set forth in the Articles of Incorporation and
Bylaws of the Company on the date of this Agreement to the fullest extent
permitted under applicable law, which shall not, during such six-year period, be
amended, repealed or otherwise modified except as required by applicable law or
except to make changes permitted by applicable law that would enlarge the
exculpation or rights of indemnification thereunder. Prior to the commencement
of the Offer, the Company shall enter into contractual indemnification
agreements with each of the Company's directors substantially in the form
attached hereto as ANNEX D.
(b) Ultimate Parent and Parent shall cause the Surviving
Corporation to maintain in effect for six years from the Effective Time, if
available, the coverage provided by the current directors' and officers'
liability insurance policies maintained by the Company (provided that the
Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring prior to the Effective Time.
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SECTION 6.6 NOTIFICATION OF CERTAIN MATTERS.
The Company shall give prompt notice to Ultimate Parent, Parent or
Acquisition, and Ultimate Parent, Parent or Acquisition shall give prompt notice
to the Company, as the case may be, of (i) the occurrence, or non-occurrence, of
any event the respective occurrence, or non-occurrence, of which would cause, or
would be reasonably likely to cause, any representation or warranty of such
person contained in this Agreement to be untrue or inaccurate and (ii) any
failure of the Company, Ultimate Parent, Parent or Acquisition, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, that the delivery of any
notice pursuant to this Section 6.6 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
SECTION 6.7 TERMINATION OF STOCK PLANS.
Prior to the consummation of the Offer, the Board (or, if appropriate,
any committee thereof) shall adopt such resolutions or take such other actions
as are required to ensure that, following the Effective Time, no participant in
any stock, stock option, stock appreciation or other benefit plan of the Company
or any of its Subsidiaries shall have any right thereunder to acquire any
capital stock of the Surviving Corporation or any affiliate thereof.
SECTION 6.8 NO SOLICITATION.
(a) The Company shall immediately cease any existing
discussions or negotiations with any third parties conducted prior to the date
hereof with respect to any Acquisition Proposal (as defined below). The Company
shall not, directly or indirectly, through any officer, director, employee,
representative or agent or any of its Subsidiaries or otherwise, (i) solicit,
initiate, continue or encourage any inquiries, proposals or offers that
constitute, or could reasonably be expected to lead to, a proposal or offer for
a merger, consolidation, business combination, sale of substantial assets, sale
of shares of capital stock (including, without limitation, by way of a tender
offer), reorganization, extraordinary joint venture or similar transaction
involving the Company or any of its Subsidiaries, other than the transactions
contemplated by this Agreement (any of the foregoing inquiries, proposals or
offers being referred to in this Agreement as an "ACQUISITION Proposal"), (ii)
solicit, initiate, continue or engage in negotiations or discussions concerning,
or provide any non-public information or data to any person relating to, any
Acquisition Proposal, or (iii) agree to, approve or recommend any Acquisition
Proposal; provided, that nothing contained in this Section 6.8 shall prevent the
Company from (A) prior to the purchase by Acquisition of Shares pursuant to the
Offer, furnishing non-public information or data to, or entering into
discussions or negotiations with, any person in connection with an unsolicited
bona fide written Acquisition Proposal by such person if and only to the extent
that (1) the Company's directors determine in good faith, based upon the advice
of its financial advisors, that such Acquisition Proposal would, if consummated,
result in a transaction more favorable to the Company's stockholders from a
financial point of view than the transactions contemplated by this Agreement and
the Company's directors determine in good faith, based upon the advice of legal
counsel, that such action is required for the discharge of their fiduciary
duties to stockholders under applicable law, (2) prior to furnishing such
non-public information to, or entering into discussions or negotiations with,
such person, the Company receives from such person an executed confidentiality
agreement with terms
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no less favorable to the Company than those contained in the Confidentiality
Agreement and (3) simultaneously with furnishing such non-public information to
such person, the Company delivers to Parent a copy of all such information; or
(B) complying with Rule 14e-2 promulgated under the Exchange Act with regard to
an Acquisition Proposal. If the Company's directors determine in good faith that
any Acquisition Proposal constitutes a Superior Proposal (as defined below), the
Board shall promptly give written notice, specifying the parties to and the
structure and material terms of such Superior Proposal (a "NOTICE OF SUPERIOR
PROPOSAL"), to Parent. The Board may (subject to the following sentences of this
subsection and compliance with Section 8.1(f) and Section 8.2(a)), to the extent
the Company's directors determine in good faith based upon advice of legal
counsel that such action is necessary in order to comply with their fiduciary
duties under applicable law, approve or recommend any such Superior Proposal, or
approve or authorize the Company's entering into an agreement with respect to
such Superior Proposal, approve the solicitation of additional takeover or other
investment proposals or, if permitted by Section 8.1(f), terminate this
Agreement, in each case at any time after the fifth business day following
delivery to Parent of the Notice of Superior Proposal. The Company may take any
of the foregoing actions pursuant to the preceding sentence only if an
Acquisition Proposal that was a Superior Proposal at the time of delivery of a
Notice of Superior Proposal continues to be a Superior Proposal in light of any
improved transaction proposed by Parent prior to the expiration of the five
business day period specified in the preceding sentence. For purposes of this
Agreement, a "SUPERIOR PROPOSAL" means any bona fide Acquisition Proposal that
the Company's directors determine, in their good faith reasonable judgment based
on the advice of their financial advisors, to be made by a person with the
financial ability to consummate such proposal and to provide greater aggregate
value to the Company's stockholders than the transactions contemplated by this
Agreement or otherwise proposed by Parent as contemplated above.
(b) The Company shall notify Parent immediately (and in
no event later than 48 hours) after receipt by the Company of any Acquisition
Proposal or any request for non-public information in connection with an
Acquisition Proposal or for access to the properties, books or records of the
Company by any person that informs the Company that it is considering making, or
has made, an Acquisition Proposal. Such notice shall be made orally and in
writing and shall indicate in reasonable detail the identity of the offeror and
the terms and conditions of such proposal, inquiry or contract.
SECTION 6.9 PARENT GUARANTEE OF ACQUISITION OBLIGATIONS. Parent
hereby guarantees the full and faithful performance of all obligations of
Acquisition hereunder including the obligations to pay the Per Share Amount, the
Merger Consideration and the fee described in Section 8.2(c).
SECTION 6.10 QUALIFICATION. The Company will exert best
commercially reasonable efforts to become duly qualified or licensed and in good
standing to do business in each jurisdiction (including foreign country) set
forth in Schedule 4.1(b) except where the failure to do so would not have a
Material Adverse Effect.
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SECTION 6.11 CONSENTS. From the date of this Agreement through the
Tender Closing, the Company will exert commercially reasonable efforts to notify
or secure the consent of the following entities as required pursuant to their
respective contracts with the Company as set forth on Schedule 4.4: BT Squared,
Choice Courier Systems, Astea International, Ameritech, Cisco Systems, Micom,
AT&T, First Union National Bank and TrizecHahn.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER.
The respective obligations of each party hereto to effect the Merger is
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) if required by Georgia Law, this Agreement and the
Merger shall have been adopted by the affirmative vote of the stockholders of
the Company by the requisite vote in accordance with Georgia Law;
(b) there shall not be in effect any order, decree or
ruling or other action restraining, enjoining or otherwise prohibiting the
Merger, which order, decree, ruling or action shall have been issued or taken by
any court of competent jurisdiction or other governmental body located or having
jurisdiction within the United States or any country or economic region in which
the Company or any of its Subsidiaries or Parent or any of its Subsidiaries,
directly or indirectly, has material assets or operations;
(c) any waiting period applicable to the Merger under the
HSR Act shall have terminated or expired; and
(d) Acquisition shall have purchased Shares representing
not less than a majority of the outstanding Shares (assuming the full exercise
of all outstanding 1994 Options) pursuant to the Offer.
SECTION 7.2 CONDITIONS TO THE OBLIGATION OF ULTIMATE PARENT,
PARENT AND ACQUISITION TO EFFECT THE MERGER. The obligations of Ultimate Parent,
Parent and Acquisition to effect the Merger are subject to the satisfaction or
waiver by Parent at or prior to the Effective Time of the following further
conditions:
(a) Unless Acquisition shall have purchased Shares
pursuant to the Offer, the Company shall have performed in all material respects
its covenants, agreements and obligations under this Agreement up to the
Closing;
(b) Unless Acquisition shall have purchased Shares
pursuant to the Offer, the representations and warranties of the Company
contained in this Agreement which are qualified as to materiality shall be true
and correct and which are not so qualified shall be true and correct in all
material respects, in each case, as of the date when made and at and as of the
Closing as though newly made at and as of that time; and
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(c) Unless Acquisition shall have purchased Shares
pursuant to the Offer, the Company shall have delivered to Acquisition a
certificate dated as of the Closing and signed by each of the Chief Executive
Officer and the Chief Financial Officer of the Company certifying as to (i) the
accuracy, as of the date when made and at and as of the Closing as though newly
made at and as of that time, of the representations and warranties of the
Company contained in this Agreement which are qualified as to materiality, (ii)
the accuracy, as of the date when made and at and as of the Closing as though
newly made at and as of that time, in all material respects of the
representations and warranties of the Company contained in this Agreement which
are not so qualified, and (iii) the performance of the obligations required by
the Company to be performed under this Agreement as of the Closing.
SECTION 7.3 CONDITIONS TO THE OBLIGATION OF THE COMPANY TO EFFECT
THE MERGER. The obligations of the Company to effect the Merger are subject to
the satisfaction or waiver by the Company at or prior to the Effective Time of
the following further conditions:
(a) Ultimate Parent, Parent and Acquisition shall have
performed in all material respects their respective covenants, agreements and
obligations under this Agreement up to the Closing;
(b) Unless Acquisition shall have purchased Shares
pursuant to the Offer, the representations and warranties of Ultimate Parent,
Parent and Acquisition contained in this Agreement which are qualified as to
materiality shall be true and correct and which are not so qualified shall be
true and correct in all material respects, in each case, as of the date when
made and at and as of the Closing as though newly made at and as of that time;
and
(c) Unless Acquisition shall have purchased Shares
pursuant to the Offer, Parent shall have delivered to the Company a certificate
dated as of the Closing and signed by an authorized officer of Parent certifying
as to (i) the accuracy, as of the date when made and at and as of the Closing as
though newly made at and as of that time, of the representations and warranties
of Ultimate Parent, Parent and Acquisition contained in this Agreement which are
qualified as to materiality, (ii) the accuracy, as of the date when made and at
and as of the Closing as though newly made at and as of that time, in all
material respects of the representations and warranties of Ultimate Parent,
Parent and Acquisition contained in this Agreement which are not so qualified,
and (iii) the performance of the obligations required by Ultimate Parent, Parent
and Acquisition to be performed under this Agreement as of the Closing.
ARTICLE VIII
TERMINATION; EXPENSES; AMENDMENT; WAIVER
SECTION 8.1 TERMINATION.
This Agreement may be terminated and the Merger may be abandoned at any
time prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company:
(a) by mutual written consent of Parent, Acquisition and
the Company;
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(b) by Parent or the Company, without liability, if any
court of competent jurisdiction or other governmental body located or having
jurisdiction within the United States or any country or economic region in which
the Company or any of its Subsidiaries or Parent or any of its subsidiaries,
directly or indirectly, has material assets or operations, shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable;
(c) by the Company: (i) if Acquisition shall have failed
to accept for purchase and pay for Shares pursuant to the Offer on or prior to
the date that is 60 days after the date of this Agreement (the "60TH DAY")
unless a cause of such failure to accept for purchase and pay for Shares on or
prior to the 60th Day is a failure of either (A) the waiting period under the
HSR Act to have expired prior to the 60th Day, or (B) a third party having made
an Acquisition Proposal on or prior to the 60th Day (either of (A) or (B) an
"EXTENDING CAUSE"); or (ii) in the event of an Extending Cause, by the Company
if Acquisition shall have failed to accept for purchase and pay for Shares
pursuant to the Offer on or prior to the date that is 120 days after the date of
this Agreement (the "120TH DAY"). The 60th Day or the 120th Day, whichever is
applicable, is referred to herein as the "OUTSIDE DATE". The foregoing
notwithstanding, the right to terminate this Agreement under this Section 8.1(c)
shall not be available to the Company if the Company's failure to fulfill any
obligation under this Agreement has been the cause of or resulted in the failure
by Acquisition to accept for purchase and pay for Shares on or prior to the
Outside Date;
(d) by the Company if (i) there shall have been a breach
of any representation or warranty of Ultimate Parent, Parent or Acquisition
contained herein which would reasonably be expected to materially and adversely
affect the expected benefits for the Company of the transactions contemplated
hereunder or prevent the consummation of the Offer or the Merger, or (ii) there
shall have been a breach of any covenant or agreement of Parent or Acquisition
contained herein which would reasonably be expected to materially and adversely
affect the expected benefits for the Company of the transactions contemplated
hereunder or prevent the consummation of the Offer or the Merger and which shall
not have been cured prior to the earlier of (A) five business days following
notice of such breach and (B) two business days prior to the date on which the
Offer expires;
(e) by Parent if Acquisition shall not have accepted
Shares pursuant to the Offer on or prior to the Outside Date due to a failure of
the Minimum Condition to have been satisfied or any condition set forth on Annex
A to have been materially satisfied or waived by Acquisition as of any scheduled
expiration of the Offer; provided, that the right to terminate this Agreement
under this Section 8.1(e) shall not be available to Parent if Parent's or
Acquisition's failure to fulfill any obligation under this Agreement has been
the cause of or resulted in such failure to accept Shares pursuant to the Offer
on or prior to the Outside Date;
(f) by Parent prior to the purchase by Acquisition of
Shares pursuant to the Offer, if (i) there shall have been a breach of any
representation or warranty of the Company contained herein which would
reasonably be expected to materially and adversely affect the expected benefits
for Parent of the transactions contemplated hereunder or prevent the
consummation of the Offer or the Merger, or (ii) there shall have been a breach
of any covenant or agreement of the Company contained herein which would
reasonably be expected to materially
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and adversely affect the expected benefits for Parent of the transactions
contemplated hereunder or prevent the consummation of the Offer or the Merger
and which shall not have been cured prior to the earlier of (A) five business
days following notice of such breach and (B) two business days prior to the date
on which the Offer expires;
(g) prior to the purchase of Shares by Acquisition
pursuant to the Offer and no earlier than two business days after the receipt by
Parent of a Notice of Superior Proposal, by the Company if (i) the Superior
Proposal described in such Notice of Superior Proposal continues to be a
Superior Proposal in light of any transaction proposed by Parent prior to the
expiration of the fifth business day after the receipt by Parent of such Notice
of Superior Proposal, (ii) the Company's directors determine in good faith,
based upon the written advice of its independent financial advisors, that such
Acquisition Proposal would, if consummated, result in a transaction more
favorable to the Company's stockholders from a financial point of view than the
transactions contemplated by this Agreement, and (iii) the Company's directors
determine in good faith, based upon the advice of legal counsel, that such
action is required for the discharge of their fiduciary duties to stockholders
under applicable law; or
(h) by Parent if the Board shall have modified in a
manner materially adverse to Parent or Acquisition or withdrawn its approval of
the Offer, this Agreement or the Merger or its recommendation that the Company's
stockholders accept the Offer or the Company shall have entered into an
agreement providing for or implementing an Acquisition Proposal or the Board
shall have resolved to do any of the foregoing.
SECTION 8.2 EFFECT OF TERMINATION.
(a) If (i) a third party makes an Acquisition Proposal,
(ii) at any time thereafter this Agreement is terminated pursuant to either
Section 8.1(c) or Section 8.1(e), and (iii) within twelve months after the date
this Agreement is so terminated, the Company consummates or enters into an
agreement, or shareholders of the Company consummate, a transaction or series of
related transactions (whether by way of merger, recapitalization, share
exchange, share purchase, tender offer, exchange offer, asset purchase or
otherwise) resulting in any person or group (as defined in Section 13(d)(3) of
the Exchange Act) directly or indirectly becoming the beneficial owner (within
the meaning of Section 13(d)(3) of the Exchange Act) or at least a majority of
the then outstanding voting capital stock or substantially all of the assets of
the Company, then the Company shall pay Parent a non-refundable fee of
$2,200,000, which amount shall be payable by wire transfer of same day funds
within two (2) business days after the consummation of such transaction or
series of related transactions.
(b) If this Agreement is terminated pursuant to Section
8.1(f), Section 8.1(g) or Section 8.1(h), the Company shall (i) pay Parent a
non-refundable fee of $2,200,000, which amount shall be payable by wire transfer
of same day funds within two (2) business days after the date this Agreement is
so terminated.
(c) If this Agreement is terminated pursuant to Section
8.1(c)(i) in the absence of a Extending Cause or pursuant to Section 8.1(d),
Ultimate Parent, Parent and Acquisition shall, collectively, pay the Company a
nonrefundable fee of $2,200,000, which amount shall be payable
-39-
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by wire transfer of same day funds within two (2) business days after the date
this Agreement is so terminated.
(d) If a party becomes entitled to receive the amounts
described in Section 8.2(a), Section 8.2(b) or Section 8.2(c) and such amounts
are paid in full when due, then such amounts shall constitute liquidated damages
and shall be the paid party's (ies') exclusive remedy for any violation or
breach of any term or provision of this Agreement. The parties agree that actual
damages are not possible to determine and that such amounts are reasonable
pre-estimates of such damages.
(e) In the event of the termination of this Agreement
pursuant to Section 8.1, this Agreement, other than the provisions of Section
8.2, Section 8.3 and Section 9.6, shall forthwith become void and have no
effect.
SECTION 8.3 FEES AND EXPENSES.
Except as otherwise provided in Section 8.2 above, each party shall
bear its own expenses and costs in connection with this Agreement and the
transactions contemplated hereby.
SECTION 8.4 AMENDMENT.
Subject to Section 1.3(c), this Agreement may be amended by action
taken by the Company, Ultimate Parent, Parent and Acquisition at any time before
or after adoption of the Merger by the stockholders of the Company (if required
by applicable law) but, after any such approval, no amendment shall be made
which decreases the Merger Consideration or changes the form thereof, imposes
additional conditions to the Merger or which adversely affects the rights of the
Company's stockholders hereunder without the approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
SECTION 8.5 EXTENSION; WAIVER.
Subject to Section 1.3(c), at any time prior to the Effective Time, the
Company, on the one hand, and Ultimate Parent, Parent and Acquisition, on the
other hand, may (i) extend the time for the performance of any of the
obligations or other acts of the other party, (ii) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document, certificate or writing delivered pursuant hereto, or (iii) waive
compliance by the other party with any of the agreements or conditions contained
herein. Any agreement on the part of any party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties made herein shall not survive beyond
the Effective Time. The covenants and agreements herein shall survive in
accordance with their respective terms.
SECTION 9.2 ENTIRE AGREEMENT; ASSIGNMENT.
This Agreement, the Confidentiality Agreement and the Shareholder
Agreements and any other agreements contemplated hereby (i) constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersede all other prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof and (ii)
shall not be assigned by operation of law or otherwise; provided that
Acquisition may assign its rights and obligations in whole or in part to Parent
or any direct or indirect wholly-owned subsidiary of Parent, but no such
assignment shall relieve Acquisition of its obligations hereunder if such
assignee does not perform such obligations.
SECTION 9.3 NOTICES.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by facsimile or by
registered or certified mail postage prepaid, return receipt requested), to the
other party as follows:
if to Ultimate Parent, Parent or Acquisition:
Equant Acquisition Corp.
00 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxxx Xxxxxxxxx and Xxxx Xxxxxxxx
with copies to:
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx X.X.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
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if to the Company:
Techforce Corporation
0000 Xxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Fax: 000-000-0000
Attention: Xxxxxx X. Xxx
with a copy to:
Xxxxxx X. Xxxxxx
00 Xxxx Xxxxx Xxx
Xxxxxxxx, XX 00000
and
Hunton & Xxxxxxxx
600 Peachtree Street, X.X.
XxxxxxxXxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
Attention: W. Tinley Xxxxxxxx, III, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
SECTION 9.4 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the principles of conflict
of laws thereof.
SECTION 9.5 PARTIES IN INTEREST.
Except for Section 6.5, which shall inure to the benefit of the persons
identified therein, this Agreement shall be binding upon and inure solely to the
benefit of each party hereto and its successors and permitted assigns, and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
SECTION 9.6 SPECIFIC PERFORMANCE.
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement was not performed in accordance with the
terms hereof and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in equity, including
specific performance to effect and close the Merger if each condition precedent
to the Merger is satisfied in all material respects. The parties agree that the
stockholders of the Company shall be third party beneficiaries to this Section
9.6.
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SECTION 9.7 SEVERABILITY.
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity
and enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof 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 such invalid and unenforceable provision
and (b) the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
SECTION 9.8 DESCRIPTIVE HEADINGS.
The descriptive headings herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
SECTION 9.9 CERTAIN DEFINITIONS.
For purposes of this Agreement, the term:
(a) "AFFILIATE" of a person means a person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first mentioned person;
(b) "ASSOCIATE" of a person means a corporation or
organization of which such person is an officer, director or partner or is,
directly or indirectly, the beneficial owner of 10 percent or more of any class
of equity securities or any person who is a director or officer of such person
or any of its affiliates;
(c) "BUSINESS DAY" shall mean any day other than a
Saturday, Sunday or federal holiday;
(d) "CONTROL" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly, or as
trustee or executor, of the power to direct or cause the direction of the
management policies of a person, whether through the ownership of stock, as
trustee or executor, by contract or credit arrangement or otherwise;
(e) "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean
the generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession in the
United States;
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(f) "KNOWLEDGE" in the case of the Company means the
knowledge after reasonable inquiry of Xxxxxxxxx X. Xxxxxx, Xxxxxx X. Xxx, Xxxx
X. Xxxxxxx, Xxx Xxxxxxxx or Xxxxx X. Xxxxxxxxxxx;
(g) "PERSON" means an individual, corporation,
partnership, limited liability company, trust, unincorporated organization, or
other entity or group (as defined in the Exchange Act); and
(h) "SUBSIDIARY" or "SUBSIDIARIES" of any person means
any corporation, partnership, limited liability company, joint venture or other
legal entity of which such person (either alone or through or together with any
other subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests the holder of which is generally entitled to vote for the
election of the board of directors or other governing body of such corporation,
partnership, limited liability company, joint venture or other legal entity.
SECTION 9.10 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
SECTION 9.11 JURISDICTION; AGENT
The Company agrees to submit to the jurisdiction of the U.S. federal
courts sitting in the State of New York, Borough of Manhattan, for purposes of
any dispute hereunder, and appoints Xxxx Xxxxxxx as its agent for service of
process in connection therewith.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representatives thereunto duly authorized, all as
of the day and year first above written.
TECHFORCE CORPORATION
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
-------------------------------
Title: Chief Executive Officer
------------------------------
EQUANT N.V.
By: /s/ Xxxx-Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx-Xxxx Xxxxxxxx
-------------------------------
Title:
------------------------------
EQUANT HOLDINGS U.S., INC.
By: /s/ Xxxx-Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx-Xxxx Xxxxxxxx
-------------------------------
Title:
------------------------------
EQUANT ACQUISITION CORP.
By: /s/ Xxxx-Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx-Xxxx Xxxxxxxx
-------------------------------
Title: President
------------------------------
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ANNEX A
OFFER CONDITIONS
The capitalized terms used in this Annex A have the meanings set forth
in the attached Agreement, except that the term "MERGER AGREEMENT" shall be
deemed to refer to the attached Agreement.
Notwithstanding any other provision of the Offer, Acquisition shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including, without limitation, Rule 14e-1(c)
under the Exchange Act (relating to Acquisition's obligation to pay for or
return Shares promptly after termination or withdrawal of the Offer), pay for
any Shares tendered pursuant to the Offer, and may postpone the acceptance for
payment or, subject to the restriction referred to above, payment for any Shares
tendered pursuant to the Offer, and may terminate or amend the Offer and not
accept for payment any Shares, if (i) the Minimum Condition shall not have been
satisfied, (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated, or (iii) any material applicable approval, permit,
authorization, consent or waiting period shall not have been obtained or
satisfied on terms satisfactory to Parent in its reasonable discretion;
provided, that prior to the Outside Date, Acquisition shall not terminate the
Offer by reason of the nonsatisfaction of any of the conditions set forth in
clauses (ii) or (iii) above (it being understood that this proviso shall not
prohibit Acquisition from terminating the Offer or failing to extend the Offer
by reason of the nonsatisfaction of any other condition of the Offer), or (iv)
at any time prior to the acceptance for payment of Shares, any of the following
conditions occurs or has occurred or Acquisition makes a good faith
determination that any of the following conditions has occurred:
(a) there shall have been any action or proceeding
brought by any governmental authority before any court, or any order or
preliminary or permanent injunction entered in any action or proceeding before
any court or governmental, administrative or regulatory authority or agency,
located or having jurisdiction within the United States or any other country or
economic region in which the Company or any of its Subsidiaries or Parent or any
of its subsidiaries, directly or indirectly, has material assets or operations,
or any other action taken, proposed or threatened, or statute, rule, regulation,
legislation, interpretation, judgment or order proposed, sought, enacted,
entered, enforced, promulgated, amended, issued or deemed applicable to
Acquisition, the Company or any Subsidiary or affiliate of Acquisition or the
Company or the Offer, the Merger or the transactions contemplated by the Merger
Agreement, by any legislative body, court, government or governmental,
administrative or regulatory authority or agency located or having jurisdiction
within the United States or any other country or economic region in which the
Company or any of its Subsidiaries or Parent or any of its subsidiaries,
directly or indirectly, has material assets or operations, which could
reasonably be expected to have a Material Adverse Effect or to have the effect
of: (i) making illegal, or otherwise directly or indirectly restraining or
prohibiting or making materially more costly, the making of the Offer, the
acceptance for payment of, payment for, or ownership, directly or indirectly, of
some of or all the Shares by Parent or Acquisition, the consummation of any of
the transactions contemplated by the Merger Agreement or materially delaying the
Merger; (ii) prohibiting or materially limiting the ownership or operation
A-1
50
by the Company or any of its Subsidiaries, or by Parent or any of its
subsidiaries, of all or any material portion of the business or assets of the
Company or any of its Subsidiaries or Parent or any of its subsidiaries, or
compelling Acquisition, Parent or any of Parent's subsidiaries to dispose of or
hold separate all or any material portion of the business or assets of the
Company or any of its Subsidiaries or Parent or any of its subsidiaries, as a
result of the transactions contemplated by the Merger Agreement; (iii) imposing
or confirming limitations on the ability of Acquisition, Parent or any of
Parent's subsidiaries effectively to acquire or hold or to exercise full rights
of ownership of Shares, including, without limitation, the right to vote any
Shares on all matters properly presented to the stockholders of the Company,
including, without limitation, the adoption and approval of the Merger Agreement
and the Merger, or the right to vote any shares of capital stock of any
subsidiary of the Company; or (iv) requiring divestiture by Parent or
Acquisition, directly or indirectly, of any Shares; or
(b) there shall have occurred (i) any general suspension
of, or limitation on prices for, trading in securities on the NYSE or the Nasdaq
Stock Market for a period in excess of 24 hours (excluding suspensions or
limitations resulting solely from physical damage or interference with such
exchange not related to market conditions), (ii) a declaration of a banking
moratorium or any suspension of payments in respect to banks in the United
States, (iii) a commencement of a war or armed hostilities or other similar
national or international crisis directly or indirectly involving the United
States having, or which could reasonably be expected to have, a substantial
continuing general effect on business and financial conditions in the United
States except for those involving the countries of Iraq and Yugoslavia
(including Kosovo), or (iv) in the case of any of the foregoing existing on the
date hereof, a material acceleration or worsening thereof; or
(c) the Company shall have breached or failed to perform
in any material respect any of its covenants or agreements under the Merger
Agreement; or
(d) any of the representations and warranties of the
Company set forth in the Merger Agreement that are qualified as to materiality
shall not be true and correct in a manner adverse to Acquisition or Parent, or
any of the representations and warranties of the Company set forth in the Merger
Agreement that are not so qualified shall not be true and correct in any
material respect in a manner adverse to Acquisition, Ultimate Parent or Parent,
in each case as if such representation and warranties were made at the time of
such determination (or, in the case of any representation and warranty made as
of a specified date, as of such date); or
(e) the Merger Agreement shall have been terminated in
accordance with its terms or the Offer shall have been terminated with the
consent of the Company; or
(f) the Board shall have withdrawn or modified in a
manner materially adverse to Acquisition or withdrawn its approval or
recommendation of the Offer, the Merger Agreement, or the Merger or shall have
recommended, or the Company shall have entered into an agreement providing for
or implementing an Acquisition Proposal, or the Board shall have resolved to do
any of the foregoing.
A-2
51
In addition to the foregoing conditions, Acquisition shall
have received from the Company an officers certificate signed by each of the
Chief Executive Officer and the Chief Financial Officer of the Company
certifying as to (i) the accuracy, as of the date when made and at and as of the
Closing as though newly made at and as of that time, of the representations and
warranties of the Company contained in this Agreement which are qualified as to
materiality, (ii) the accuracy, as of the date when made and at and as of the
Closing as though newly made at and as of that time, in all material respects of
the representations and warranties of the Company contained in this Agreement
which are not so qualified, and (iii) the performance of the obligations
required by the Company to be performed under this Agreement as of the Closing.
The foregoing conditions (other than the Minimum Condition)
are for the sole benefit of Acquisition and the foregoing conditions (including
the Minimum Condition) may be asserted by Acquisition regardless of the
circumstances giving rise to any such condition or may be waived by Acquisition
in whole or in part at any time or from time to time in its sole discretion,
provided that the Minimum Condition may only be waived or modified with the
Company's prior written approval. The failure by Acquisition at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts or
circumstances shall not be deemed a waiver with respect to any other facts or
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time or from time to time.
A-3
[Schedules, Annexes and Exhibits are intentionally omitted
but will be provided upon request.]
