Exhibit 10.1
Execution Version
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ASSET PURCHASE AGREEMENT
BY AND AMONG
TEKSYSTEMS, INC.
ALLEGIS GROUP, INC.
TEKSYSTEMS EF&I SOLUTIONS, LLC AND
ALLEGIS GROUP CANADA CORPORATION
AND
COMPUTER HORIZONS CORP.
GBS HOLDINGS PRIVATE LIMITED AND
CHC HEALTHCARE SOLUTIONS, LLC
dated as of November 7, 2006
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TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS;
INTERPRETATION..................................................1
1.1
DEFINITIONS.............................................................1
1.3
CONSTRUCTION AND
INTERPRETATION........................................12
ARTICLE II.
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF
LIABILITIES......................13
2.1
PURCHASE AND SALE OF
ASSETS............................................13
2.2
EXCLUDED
ASSETS........................................................15
2.3
ASSUMED
LIABILITIES....................................................16
2.4
EXCLUDED
LIABILITIES...................................................16
2.5
NONASSIGNABLE
CONTRACTS................................................17
2.6
INSURANCE..............................................................18
2.7
AFFILIATES.............................................................19
ARTICLE III. PURCHASE
PRICE..............................................................19
3.1
PURCHASE
PRICE.........................................................19
3.2
PURCHASE PRICE
ADJUSTMENT..............................................19
3.3
ALLOCATION OF PURCHASE
PRICE...........................................20
3.4
CURRENCY
CONVERSIONS...................................................20
ARTICLE IV.
CLOSING.....................................................................21
4.1
THE
CLOSING............................................................21
4.2
SELLER'S CLOSING
DELIVERIES............................................21
4.3
PURCHASER'S CLOSING
DELIVERIES.........................................23
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF
SELLER....................................23
5.1
CORPORATE ORGANIZATION; GOOD
STANDING.................................23
5.2
AUTHORIZATION AND EFFECT OF
AGREEMENT.................................24
5.3
NO
CONFLICT...........................................................24
5.4
FINANCIAL STATEMENTS AND RELATED FINANCIAL
MATTERS....................25
5.5
ABSENCE OF
CHANGES....................................................27
5.6
COMPLIANCE WITH LAWS;
PERMITS.........................................27
5.7
SUFFICIENCY OF
ASSETS.................................................27
5.8
TITLE TO
ASSETS.......................................................27
i
TABLE OF CONTENTS
(continued)
PAGE
5.9
REAL
PROPERTY.........................................................28
5.10
INSURANCE.............................................................28
5.11
INTELLECTUAL
PROPERTY.................................................29
5.12
LEGAL
PROCEEDINGS.....................................................31
5.13
MATERIAL
CONTRACTS....................................................31
5.14
LABOR AND EMPLOYMENT
MATTERS..........................................33
5.15
EMPLOYEE BENEFIT
PLANS................................................35
5.16
GUARANTEES............................................................38
5.17
ENVIRONMENTAL, SAFETY AND HEALTH
MATTERS..............................38
5.18
TAX
MATTERS...........................................................39
5.19
CUSTOMER RELATIONS;
WARRANTIES........................................42
5.20
BROKERS...............................................................42
5.21
RELATED PARTY TRANSACTIONS; NO IMPROPER PAYMENTS OR
INFLUENCE.........42
5.22
PERFORMANCE UNDER CLIENT
CONTRACTS....................................44
5.23
DISCLOSURE............................................................44
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF
PURCHASER.................................44
6.1
CORPORATE
ORGANIZATION................................................44
6.2
AUTHORIZATION AND EFFECT OF
AGREEMENT.................................44
6.3
NO
CONFLICT...........................................................45
6.4
LITIGATION............................................................45
6.5
BROKERS...............................................................45
6.6
FINANCIAL
ABILITY.....................................................45
6.7
DISCLOSURE............................................................46
ARTICLE VII.
COVENANTS...................................................................46
7.1
PRESS
RELEASES........................................................46
7.2
REGULATORY FILINGS; STEPS TO OBTAIN SHAREHOLDER
APPROVAL..............46
7.3
EXCLUSIVITY...........................................................47
7.4
INVESTIGATION BY
PURCHASER............................................48
7.5
CONFIDENTIAL NATURE OF
INFORMATION....................................49
7.6
OPERATION OF THE
BUSINESS.............................................49
ii
TABLE OF CONTENTS
(continued)
PAGE
7.7
PERSONNEL
MATTERS.....................................................50
7.8
GENERAL POST CLOSING
MATTERS..........................................52
7.9
BEST
EFFORTS..........................................................56
7.10
CLIENT
MEETINGS.......................................................57
7.11
DETERMINATION OF PURCHASE PRICE
ALLOCATION............................57
7.12
BRINGDOWN
REPORTS.....................................................57
ARTICLE VIII.CONDITIONS TO
CLOSING.......................................................57
8.1
CONDITIONS PRECEDENT TO OBLIGATIONS OF
PURCHASER......................57
8.2
CONDITIONS PRECEDENT TO OBLIGATIONS OF
SELLER.........................59
ARTICLE IX.
INDEMNIFICATION.............................................................61
9.1
INDEMNIFICATION BY
SELLER.............................................61
9.2
INDEMNIFICATION BY
PURCHASER..........................................62
9.3
NOTICE OF
CLAIMS......................................................62
9.4
PROCEDURE FOR THIRD PARTY
CLAIMS......................................63
9.5
CLAIMS PERIOD;
SURVIVAL...............................................65
9.6
LIMITS ON
INDEMNIFICATION.............................................66
9.7
EXCLUSIVE
REMEDY......................................................66
ARTICLE X.
TERMINATION.................................................................66
10.1
TERMINATION...........................................................66
10.2
EFFECT OF
TERMINATION.................................................67
10.3
TERMINATION FEE; TERMINATION
EXPENSES.................................67
ARTICLE XI.
MISCELLANEOUS...............................................................68
11.1
NOTICES...............................................................68
11.2
EXPENSES..............................................................69
11.3
SUCCESSORS AND ASSIGNS; GUARANTEE OF AFFILIATE
OBLIGATIONS............69
11.4
WAIVER................................................................69
11.5
ENTIRE
AGREEMENT......................................................70
11.6
AMENDMENTS, SUPPLEMENTS,
ETC..........................................70
11.7
RIGHTS OF THE
PARTIES.................................................70
iii
TABLE OF CONTENTS
(continued)
PAGE
11.8
FURTHER
ASSURANCES....................................................70
11.9
BULK
SALES............................................................70
11.10 PASSAGE OF TITLE AND RISK OF
LOSS.....................................71
11.11 APPLICABLE LAW; DISPUTE RESOLUTION; JURY TRIAL
WAIVER.................71
11.12 EXECUTION IN
COUNTERPARTS.............................................71
11.13 TITLES AND
HEADINGS...................................................71
EXHIBITS:
A.................. Form of Bill of Sale
B.................. Form of Stock Power
C.................. Form of Assumption Agreement
D.................. Form of Transition Services Agreement
E.................. Form of Non-Compete
F.................. Form of License Agreement
G.................. Form of Certificate of Non-U.S. Real Property
Interest
H.................. Form of Seller's Counsel's Opinion
I.................. Letter to Investissement Quebec
J.................. Form of Purchaser's Counsel's Opinion
K.................. Form of Solvency Certificate
SCHEDULES:
1.1(a)............ Reserve Calculation Methodology
1.1(b)............ Seller's Knowledge
2.1(b)(iii) ...... Tangible Personal Property
2.2(g)............ Excluded Contracts
2.2(j)............ Excluded Assets
2.4(d)............ Excluded Liabilities
5.1(b)............ Seller Subs
5.1(c)............ Foreign Qualifications
5.3(a)............ No Conflict
5.3(b)............ Approvals
5.4(c)............ Financial Statements
5.4(g)............ Bank Accounts
5.5(a)............ Absence of Changes
5.5(b)............ Absence of Changes
5.6(b)............ Permits
5.9............... Exceptions to Real Property
5.10.............. Insurance
iv
TABLE OF CONTENTS
(continued)
PAGE
5.11(a)
......... Patents, Trademarks and Copyrights
5.11(b)........... Inbound License Agreements
5.11(c)........... Outbound License Agreements
5.11(d)........... Owned Software
5.11(e)........... Owned Technical Identifiers
5.11(o)........... Maintenance and Support Obligations
5.12.............. Legal Proceedings
5.13(a)........... Material Contracts
5.13(b)........... Exceptions to Material Contracts
5.14(a)........... Business Personnel
5.14(b)........... Labor & Employment Matters
5.15(a)........... Employee Benefit Plans
5.15(f)........... Agreements Causing Acceleration
5.16.............. Guarantees
5.18.............. Tax Matters
5.18(g)........... Canadian Tax Assessment / Reassessment Notices
5.19(a)........... Customer Relations
5.19(c)........... Warranties
5.20.............. Seller's Brokers
5.21.............. Related Party Transactions; No Improper Payments
or Influence
8.1(f)............ Approvals to be Delivered
8.1(m)............ Client Consents
8.2(e)............ Seller's Approvals to be Delivered
v
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE
AGREEMENT
(this
"AGREEMENT") is made and entered
into
as of
November
7,
2006
by
and
among
TEKSYSTEMS,
INC.,
a
Maryland
corporation
("PURCHASER"),
TEKSYSTEMS EF&I SOLUTIONS,
LLC, a Maryland limited
liability company
("TEFIS"),
ALLEGIS GROUP CANADA
CORPORATION,
a Nova Scotia
unlimited liability
corporation
("AGCC"),
COMPUTER HORIZONS CORP., a New York
corporation
("SELLER"),
GBS HOLDINGS PRIVATE LIMITED, a corporation
organized
under the laws of Mauritius ("GBS"), CHC HEALTHCARE
SOLUTIONS,
LLC, a Maryland
limited liability
company
("HEALTHCARE SUB" and, together with Seller and GBS,
the "SELLER PARTIES"), and, solely for purposes of Section 11.14,
Allegis Group,
Inc., a Maryland corporation (the "SPONSOR").
Purchaser,
TEFIS, AGCC, Sponsor,
GBS,
Healthcare Sub and Seller are sometimes referred to herein
individually as
a "PARTY" and collectively as the "PARTIES."
WHEREAS,
through the Seller's
Commercial
Services Business Unit, the
Seller
Entities
(as defined
herein) are and have been engaged in the business
(the "Business") of (1) providing skilled
information
technology
personnel to
clients
on
a
temporary
basis,
including
support
personnel,
programmers,
architects
and
project
managers
and (2)
providing
clients
with a range of
technical
knowledge
and
solutions,
focusing on
application
management
and
support, application development and software quality management;
and
WHEREAS,
the Seller
Parties
desire to sell and assign to
Purchaser,
TEFIS and AGCC, and Purchaser, TEFIS and AGCC desire to purchase
and assume from
the Seller Parties,
substantially all of the assets of the Business (other than
the Excluded Assets (as defined herein)) and the Assumed
Liabilities (as defined
herein) on the terms and subject to the conditions set forth in
this Agreement.
NOW,
THEREFORE,
in consideration of the mutual
agreements
contained
herein, the parties hereto agree as follows:
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ARTICLE I.
DEFINITIONS; INTERPRETATION
--------------------------------------------------------------------------------
1.1
DEFINITIONS.
The terms
defined in this Section 1.1 shall,
for all purposes of this
Agreement, have the meanings herein specified:
"ACQUISITION
AGREEMENTS"
means,
interchangeably
and collectively as
context requires, this Agreement,
the Non-Compete,
the License Agreement,
the
Transfer
Documents,
the
Transition
Services
Agreement
and
the
Assumption
Agreement.
"ACTION"
means any
action,
claim,
proceeding,
arbitration
or suit
(whether civil, criminal,
administrative or judicial),
or any appeal therefrom
(including
any
claim,
audit,
litigation,
administrative
proceeding
or
arbitration
against
any
Person
involving
any matter
related to
employment
including, but not limited to, claims of discrimination, claims of
unpaid wages,
claims
of
wrongful
discharge,
claims
of unfair
labor
practices,
workers'
compensation claims, and claims related to occupational safety and
health law).
"AFFILIATE"
has the
meaning
given to that term in Rule 405 under the
Securities Act, and includes any Subsidiary.
"ALTERNATIVE
TRANSACTION"
means
(other
than
the
transactions
contemplated by this
Agreement) a transaction
involving the acquisition of all
or a
substantial
portion of the Assets
(but not a material
portion of any of
Seller's other assets) whether through asset purchase, merger,
consolidation or
other business combination.
"APPROVAL"
means
any
approval,
authorization,
consent,
license,
franchise,
order,
registration,
permit or other confirmation of or by, filing
with, or notice to, a Person.
"ARM'S LENGTH" has the meaning set out in the ITA.
"BENCHMARK
NET WORKING
CAPITAL"
means
Twenty-Five
Million
Dollars
($25,000,000).
"BUSINESS
DAY"
means any day
except
Saturday,
Sunday or any day on
which banks are authorized or required by Law to close in New York,
New York.
"BUSINESS PERSONNEL" means, interchangeably and collectively as
context
requires,
Employees and individuals engaged as independent contractors
(whether
engaged on an individual basis or through another Person) in
connection with the
Business.
"CANADA
INTERCOMPANY
NOTE" means a promissory note dated December 23,
1998
from
Canada
Sub to
Seller
in the
amount
(as of the date
hereof)
of
CAN$22,133,580.
"CANADA BENEFIT PLANS" means Canada Plans that are not Pension
Plans.
"CANADA
PLANS"
means Plans for which
Canada Sub or an
Affiliate
of
Canada Sub (which
Affiliate is incorporated or organized in Canada) is the Plan
Sponsor.
"CANADA
SUB"
means
Computer
Horizons
(Canada)
Corp.,
an
Ontario
corporation.
"CERCLA" means the Comprehensive
Environmental Response,
Compensation
and Liability Act, as amended, 42 U.S.C. ss.ss. 9601 ET SEQ.
"CIT" means CIT Group/Business Credit, Inc.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRACT"
means any written or oral agreement,
lease
(including all
real
and
personal
property
leases),
mortgage,
policy,
plan,
instrument,
contract,
note,
power
of
attorney,
insurance
policy
covenant,
guaranty
arrangement, escrow account, commitment or other instrument.
"CONTROLLED
GROUP BENEFIT PLAN" means "employee benefit plan", as such
term is defined in Section 3(3) of ERISA, that provides
welfare,
retirement or
deferred
compensation
benefits,
and each other employment,
bonus,
incentive
compensation,
severance,
salary
continuation,
change of control,
retention,
stock option, other equity based performance, vacation, sick leave,
holiday pay,
fringe benefit,
reimbursement program, incentive,
insurance, welfare, or other
-2-
employee benefit plan,
program,
agreement or policy that provides
benefits or
compensation and that is maintained by any Seller Entity or any
ERISA Affiliate,
or to which
any
Seller
Entity
or any ERISA
Affiliate
contributes,
has any
obligation to contribute, or is a party.
"COPYRIGHTS"
means all
copyrights,
the content
contained
on or the
"look and feel" of any World Wide Web site,
all mask works,
registrations
and
applications
for
any
of
the
foregoing,
and
the
right
to
sue
for
past
infringement for any of the foregoing.
"DAMAGES" means any damages,
Liabilities,
losses,
fines,
penalties,
judgments, awards, costs or expenses (including, without
limitation,
reasonable
attorneys' fees or any other reasonable
out-of-pocket expenses) arising from or
incurred in connection with any Action.
"DOLLARS" and "$" shall mean United States Dollars.
"ELIGIBLE
EMPLOYEE"
means an employee of Canada Sub who (i) holds, in
the course of
carrying
out the
Eligible
Contract,
a full-time
job,
with a
minimum of 26 hours of work a week, for a stipulated
minimum of 40 weeks,
(ii)
spends at least seventy-five percent (75%) of his or her time and
duties devoted
to carrying out,
supervising or directly
supporting
activities carried out in
the course of the Eligible
Contract,
and (iii) is not a shareholder
of Canada
Sub.
"ELIGIBLE
CONTRACT" means the Master Consulting
Agreement dated as of
January 3, 2005 between Seller and Canada Sub, which Master
Consulting Agreement
has been
approved
by
Investissement
Quebec as the
"eligible
contract"
for
purposes of Canada Sub's
participation in the refundable tax credit program for
Major Employment-Generating Projects offered by Investissement
Quebec.
"EMPLOYEE"
means
any
employee
of any
Seller
Entity
or any
ERISA
Affiliate
employed
or
formerly
employed
in the
operation
of the
Business
(including
those who are
actively
employed or on leave,
disability
or other
absence from employment, and including officers).
"ENVIRONMENTAL
LAWS" means all Laws relating to the
protection of the
environment,
safety or health;
the conservation,
management,
or use of soil,
land surface,
subsurface strata, wildlife,
plants, surface water, groundwater,
ambient
air,
and other
natural
resources;
or the
management,
manufacture,
processing,
distribution,
emission,
discharge,
possession,
presence,
use,
generation,
transportation,
treatment,
storage, disposal, Release, threatened
Release,
abatement,
removal,
remediation
or handling
of, or exposure to any
Hazardous
Substances
including CERCLA, the Resource
Conservation and Recovery
Act, 42 U.S.C. ss.ss. 690 ET SEQ., the Clean Water Act, 33 U.S.C.
ss.ss. 1251 ET
SEQ., the Clean Air Act, 42 U.S.C.
ss.ss. 7401 ET SEQ. and the Toxic Substances
Control Act, 15 U.S.C. ss.ss. 2601 ET SEQ., each as amended and any
"transaction
triggered" or "responsible property transfer" statute or similar
requirement.
"ENVIRONMENTAL
PERMITS" means any federal,
state, provincial or local
permit, license,
registration,
consent,
order,
administrative consent order,
certificate,
approval or other authorization necessary for the operation of the
Business
or use of any owned Real
Property
or Leased
Property
as
currently
operated or used.
"ERISA" means the United States Employee Retirement Income Security
Act
of 1974, as amended, and the rules and regulations promulgated
thereunder.
-3-
"ERISA
AFFILIATE"
means any other trade or
business,
whether or not
incorporated,
which, together with any Seller Entity, is or would be treated as
a single employer under Section 4001(b) of ERISA
(excluding any such subsidiary
or trade or business
only
employing
persons with no U.S.
source
income,
as
defined in Section 862 of the Code).
"ETA" means the Canadian Excise Tax Act, as amended.
"EXCHANGE ACT" means the United States Securities Exchange Act of
1934,
as amended, and the rules and regulations promulgated thereunder.
"EXCLUDED
SUBS" means,
interchangeably
and
collectively
as context
requires, GBS, Healthcare Sub, Horizon Enterprises,
Inc., Horizon Technologies,
Inc., Computer Horizons
E-Solutions (Europe) Ltd., GBTS America LLC, Integrated
Computer
Management,
Inc., CG Computer
Services
Corp.,
CHC/Prince Co., Inc.
(f/k/a Princeton
Softech,
Inc.),
Computer Horizons Web Development
Corp., eB
Networks,
Inc., eB Networks,
LLC, G. Triad Development Corp.,
Millenium Users
Group,
Inc.,
Spargo
Holdings,
Inc.,
Spargo
Holdings II, Inc. and Strategic
Outsourcing Services, Inc.
"FACILITIES"
means the real property
leased by (i) Canada Sub at 2700
Matheson
Boulevard East, 4th Floor,
Mississauga,
Ontario,
(ii) Canada Sub at
1500 University
Avenue,
Montreal,
Quebec, and (iii) India Sub at SAI Business
Point, No. 17, Mount Road, Chennai, India.
"FACILITY
LEASES"
means the
leases or leave and
license
agreements
pursuant to which Canada Sub or India Sub, as applicable, leases
the Facilities.
"GAAP" means United States generally accepted accounting
principles as
in effect on the applicable date, consistently applied.
"GBTSA, INC." means GBTS America, Inc., a Delaware corporation.
"GOVERNMENTAL
AUTHORITY" means any federal,
state or local or foreign
government or any court,
administrative,
arbitrative
or regulatory
agency or
commission or other governmental authority or agency, domestic or
foreign.
"HAZARDOUS
SUBSTANCES"
means
any
substance,
chemical,
compound,
product,
solid,
gas,
liquid,
waste,
byproduct,
pollutant,
contaminant
or
material
that (a) is defined,
listed,
identified or regulated as a "hazardous
waste,"
"hazardous
material"
or
"hazardous
substance",
"pollutant,"
"contaminant,"
"toxic
substance"
or words of similar
meaning and
regulatory
effect under
CERCLA,
the Resource
Conservation
and Recovery Act or any other
Environmental Law (including
petroleum,
petroleum derivatives and products and
fractions thereof) and (b) requires investigation,
removal or remediation under
Environmental Law.
"INACTIVE
CONTRACT"
means a Contract
to which any Seller
Party is a
party and under which there are no unperformed duties of, and no
rights accruing
to, such Seller Party as of the Closing Date.
-4-
"INBOUND
LICENSE
AGREEMENT" means any License
Agreement
pursuant to
which any Seller Entity is granted any rights in any Intellectual
Property.
"INDEMNIFIED
PARTY"
means
any
party
entitled
to
indemnification
pursuant to Article IX.
"INDEMNIFYING
PARTY"
means
any
party
required
to
indemnify
an
Indemnified Party pursuant to Article IX.
"INDIA
INTERCOMPANY
PAYABLE" means the
collective
net
intercompany
payables from GBS, India Sub and GBTSA, Inc. to Seller appearing on
the books of
GBS,
India Sub and GBTSA,
Inc.,
which net amount is
$319,000
as of the date
hereof.
"INDIA
PLANS" means Plans for which India Sub or an Affiliate of India
Sub is the Plan Sponsor.
"INDIA SUB" means Global Business
Technology Services Private Limited,
a corporation organized under the laws of India.
"INDIA TAX ACT" means the Indian Income-Tax Act of 1961, as
amended.
"INTELLECTUAL
PROPERTY"
means,
interchangeably
and
collectively as
context requires,
the following:
(a) Copyrights;
(b) Patents; (c) Trademarks;
(d) Trade
Secrets;
(e) rights of publicity and privacy
relating to the use of
the names,
likenesses,
voices,
signatures
and
biographical
information
of
natural
Persons;
(f) all rights with
respect to
Software,
to the extent not
otherwise embodied in the foregoing clauses (a)-(e); (g) all rights
with respect
to Technical Identifiers,
to the extent not otherwise embodied in the foregoing
clauses
(a)-(e);
and (h) all moral rights and/or rights of attribution
and/or
integrity in any of the foregoing.
"ITA" means the Canadian Income Tax Act, as amended.
"LAWS"
means all
applicable
federal,
state,
local or foreign
laws
(including
common
law),
codes,
statutes,
ordinances,
orders,
judgments,
arbitration
awards,
decrees,
administrative
or
judicial
promulgations,
injunctions,
determinations,
approvals,
rules,
regulations,
permits,
certificates,
licenses
and
authorizations
of,
and
agreements
with,
all
Governmental
Authorities with jurisdiction
having the force of law and binding
on or
affecting
the Person
referred
to in the
context in which such word is
used, including all Environmental Laws.
"LIABILITY" means any debt,
liability,
loss, commitment or obligation
of any kind,
character or nature
whatsoever,
secured or
unsecured,
accrued,
fixed, absolute, contingent or otherwise, and whether due or to
become due.
"LICENSE AGREEMENT" means any agreement (including, without
limitation,
any
outstanding
decrees,
orders,
judgments,
settlement
agreements
or
stipulations)
pursuant
to
which
a
Person
is
granted
any
rights
in
any
Intellectual
Property,
including any right to distribute,
promote,
market or
sell any Intellectual Property.
"LICENSED
INTELLECTUAL
PROPERTY" means Intellectual Property in which
any
Seller
Entity
is
granted
any
rights
pursuant
to an
Inbound
License
Agreement.
-5-
"LIENS"
means
all
mortgages,
hypothecs,
liens,
pledges,
security
interests,
charges, claims,
restrictions,
leases, possessory rights, options,
rights of first refusal, covenants,
easements, title and survey matters and any
other encumbrance of any kind or character.
"LEASED
REAL
PROPERTY"
means any and all real
property in which any
Seller Entity has any leasehold interest.
"MATERIAL
ADVERSE
EFFECT"
means with respect to a Party other than a
Seller
Entity,
any event,
change or effect that has occurred that (when taken
together with all other events, changes or effects that have
occurred) is likely
to prevent or materially
delay the
performance of a Party under this Agreement
or the transactions contemplated hereby.
"MEDICAL LEAVE" means,
in respect of any Business
Personnel of Canada
Sub,
any
leave
of
absence
from
active
employment
for
medical
reasons,
statutorily authorized or otherwise, including sick leave, short
term disability
leave,
long term
disability
leave and workplace
safety and insurance
leave,
worker's compensation leave or health and safety leave.
"NET WORKING CAPITAL" means the following Assets and Liabilities of
the
Business
transferred to the Purchaser Entities pursuant to SECTIONS 2.1 and
2.3
below,
determined as of the Closing Date in accordance with GAAP (except
to the
extent item (c)(iii) below and the reserve calculation
methodology set forth on
SCHEDULE 1.1(A) deviates from GAAP, if at all) and the
requirements of SCHEDULE
1.1(A) and SECTION 3.2:
(a) the accounts receivable,
less a reserve for uncollectible accounts
calculated in accordance with the methodology set forth on SCHEDULE
1.1(A);
(b) PLUS the other current assets (but in no event shall the Quebec
Tax
Receivable be included in other current assets);
(c) LESS the sum of:
(i) the accounts payable;
(ii) the accrued payroll expenses; and
(iii) the other accrued expenses.
"NYBCL" means the New York Business
Corporation
Law as in effect from
time to time.
"ORDINARY COURSE" means the ordinary course of the Business,
consistent
with past practice in nature, scope and magnitude;
provided,
the definition of
"Ordinary Course" excludes any and all actions requiring any
approval or consent
of the Seller
Board,
any committee of the Seller Board,
the
shareholders
of
Seller,
or the
board of
directors
(or any
committee
thereof),
manager(s),
shareholders,
members or partners of any
Affiliate of Seller
(including,
for
avoidance of doubt, any of the Seller Subs).
-6-
"ORGANIZATIONAL DOCUMENTS" means (a) with respect to a corporation,
the
corporation's
articles or certificate of incorporation and by-laws; or (b) with
respect to a limited liability company, the limited liability
company's articles
or certificate of
organization or formation and operating
agreement;
(c) with
respect to a partnership,
the
partnership's
certificate
of
partnership
and
partnership
agreement;
(d) with respect to a trust, the trust's certificate or
declaration of trust and other
governing
instruments;
(e) with respect to any
other form of entity, the documents that are reasonably similar to
the documents
described in the preceding
clauses (a) through (d); and (f) all
amendments and
supplements to any of the foregoing.
"OTHER CANADIAN LEASES" means any and all leases under which Canada
Sub
leases real
property
other than the Lease
dated
September
27, 2002
between
Ivanhoe Cambridge Inc., 9084-4069 Quebec Inc. and Canada Sub
relating to at 1500
University Avenue, Montreal, Quebec.
"OUTBOUND LICENSE
AGREEMENT" means any License
Agreement
pursuant to
which any Seller Entity grants any rights in any Owned Intellectual
Property to
any other Person.
"OWNED INTELLECTUAL
PROPERTY" means Intellectual Property owned by any
Seller Entity.
"OWNED
TECHNICAL
IDENTIFIER"
means a Technical
Identifier owned by,
allocated
to (in
the
case
of
ranges
of
internet
protocol
addresses
and
individual
internet
protocol
addresses),
or issued to (in the case of secure
socket layer
certificates
and Software code signing
certificates)
any Seller
Entity.
"OWNED
SOFTWARE"
means
Software
included in the Owned
Intellectual
Property.
"PATENTS"
means
all
patents,
industrial
designs
and
invention
disclosures,
including any continuations,
divisionals,
continuations-in-part,
renewals,
reissues and applications for any of the foregoing,
and the right to
sue for past infringement thereof.
"PENSION PLANS" means those Canada Plans that provide pension
benefits
for the benefit of current or former Business Personnel of Canada
Sub, and their
respective beneficiaries.
"PERMITS"
means
all
notifications,
licenses,
permits
(including
environmental,
construction and operation
permits),
governmental
franchises,
registrations,
certificates,
approvals,
exemptions,
classifications,
registrations and other similar documents,
rights and authorizations
issued by
any Governmental
Authority,
including Environmental Permits, but not including
any Patents, Copyrights and Trademarks.
"PERMITTED
LIENS"
means:
(a)
liens
imposed
by
Law
for
Taxes,
assessments or charges or claims by
Governmental
Authorities
that are not yet
due or are being
properly
contested,
which contest
tolls
collection of such
taxes and the lien thereof and provided that reasonably
acceptable reserves are
being
maintained;
(b) carriers',
warehousemen's,
mechanics',
materialmen's,
repairmen's, landlords' and other like liens imposed by Law or
contract, arising
in the Ordinary
Course and securing
obligations
that are not due and payable;
(c) solely with respect to personal
property,
pledges and deposits made in the
Ordinary Course in compliance with workers' compensation,
unemployment insurance
and other social
security Laws or
regulations;
and (d) solely with respect to
personal property,
deposits to secure the performance of bids, trade contracts,
leases,
statutory obligations,
surety, indemnity and appeal bonds, performance
-7-
and
return-of-money and fiduciary bonds and other obligations of a like
nature,
in each case in the Ordinary Course.
"PERSON" means an individual, a sole proprietorship,
a partnership,
a
corporation,
an association,
an institution,
a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated
organization,
or
a Governmental Authority or any other legal entity.
"POTENTIAL
ACQUIRER"
means the
person
making an
inquiry,
offer or
proposal with respect to an Alternative Transaction or a Total
Company Sale.
"PROPOSED TOTAL COMPANY SALE" means, collectively, (a) the
transactions
to be consummated under this Agreement,
and (b) the transactions that Seller is
separately and
contemporaneously
negotiating for the sale of Seller's business
units other than Seller's Commercial Services Business Unit.
"PURCHASER ENTITIES" means, collectively, Purchaser, Sponsor, TEFIS
and
AGCC.
"QUEBEC SALES TAX ACT" means an Act Respecting the Quebec Sales
Tax.
"QUEBEC TAX
RECEIVABLE"
means the
refundable
tax credit
payable by
Revenu Quebec to Canada Sub with respect to the
E-Commerce
tax credit
program
for tax years 2005 and 2006.
"RELEASE"
shall have the
meaning
assigned
thereto
in
CERCLA,
the
Resource
Conservation
and Recovery
Act,
the Federal
Clear Water Act, or any
other Environmental Law defining such term.
"REMEDIAL ACTION" means all actions required by Governmental
Authority
pursuant to Environmental Law or otherwise taken as necessary to
comply with any
Environmental
Law to (i) clean up, remove,
treat or in any other way remediate
any
Hazardous
Substances;
(ii) prevent the Release or
threatened
Release of
Hazardous
Substances
so that they do not
migrate or
endanger
or threaten to
endanger
public health or welfare or the
environment;
(iii) perform
studies,
investigations
or monitoring in respect of any such matter; or (iv) comply with
any Environmental Law.
"REPRESENTATIVES"
means with respect to any Person,
its stockholders,
employees,
officers,
directors,
investment bankers,
accountants,
attorneys,
agents, representatives or Affiliates.
"SECURITIES
ACT" means the United
States
Securities
Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"SELLER BOARD" means the board of directors of Seller.
"SELLER
ENTITIES" means,
interchangeably
and collectively as context
requires, Seller, each of the Seller Subs, and each of the Excluded
Subs.
"SELLER MATERIAL ADVERSE EFFECT" means a material adverse effect on
the
business,
financial
condition or results of
operations of the Business or the
-8-
ability for any Seller Party to consummate the transactions
contemplated by this
Agreement,
except in each case for any such effects resulting from, arising
out
of, or relating to (a) the taking of any action or
incurring
of any expense in
connection with this Agreement or the transactions
contemplated hereby, (b) any
change
in or
interpretations
of GAAP,
(c) any
change in
interest
rates or
general economic
conditions in the industries or markets in which Seller or any
of its subsidiaries
operates or affecting United States or foreign economies in
general
or the
United
States or
foreign
financial,
banking
or
securities
markets, (d) any action taken by Purchaser or any of its
Affiliates,
or (e) any
natural
disaster or act of God. Seller Material Adverse Effect does not
include
any changes, events,
conditions, or effects relating solely to Purchaser or its
subsidiaries'
or
Affiliates'
financial
condition,
results of
operations or
business.
"SELLER'S
KNOWLEDGE"
(and any
similar
phrase)
shall
mean the best
knowledge,
after reasonable
inquiry, of the Persons named in and acting in the
capacities described on SCHEDULE 1.1(B) or any of his or her direct
reports.
"SOFTWARE"
means
all
(a)
computer
programs,
including
software
implementations of algorithms, models and methodologies,
whether in source code
or object code form; (b) libraries, functions,
subroutines,
development tools,
interfaces,
displays
and other work
product
or tools
used to design,
plan,
organize,
develop, implement or operate any computer program; (c) databases
and
compilations,
including
data and
collections
of data,
in any form or format
whatsoever,
and (d) documentation,
including user manuals, training materials,
design documents and flowcharts relating to any of the foregoing.
"SOLVENT" means,
when used with respect to any person or entity,
that
at the time of
determination
it is then able and expects to be able to pay its
debts as they mature and it has capital
sufficient
to carry on its business as
conducted as proposed to be conducted.
"SOURCE CODE" means the source code for (a) Owned
Software
and/or (b)
Software included in the Licensed Intellectual Property.
"SUBSIDIARY"
has
the
meaning
given
to that
term
in Rule
1-02 of
Regulation SX under the Securities Act.
"SUPERIOR ALTERNATIVE
TRANSACTION" means an Alternative Transaction on
terms that the Seller Board determines,
in good faith, based upon consultations
with its outside legal counsel and its financial
advisor,
that if consummated,
is more favorable to Seller's shareholders than the transactions
contemplated by
this Agreement.
"TAX" or
"TAXES"
means
any or all
federal,
state,
county,
local,
foreign and other taxes,
governmental
assessments,
levies,
charges, fees and
duties of any kind whatsoever,
including income taxes, profit taxes,
franchise
taxes,
capital taxes, use taxes, gross receipts taxes, sales taxes, value
added
taxes, goods and services taxes, occupation taxes, real property
taxes, transfer
taxes, excise taxes,
personal property taxes, ad valorem taxes, payroll related
taxes,
employment taxes, social security taxes, license fees, import and
export
duties,
and any estimated
withholding,
or minimum taxes with respect thereto,
together with any related penalties, fines, additions to tax or
interest.
-9-
"TECHNICAL
IDENTIFIERS" means (a) internet domain names; (b) ranges of
internet
protocol
addresses
and, to the extent not
included in such
ranges,
individual
internet
protocol
addresses,
but not including any such addresses
within the three blocks reserved by the Internet
Assigned Numbers Authority for
private
internets (i.e.,
10.0.0.0/8,
172.16.0.0/12 and
192.168.0.0/15);
(c)
secure socket layer certificates;
(d) Software code signing
certificates;
and
(e) telephone numbers and telephone directory listings.
"THIRD PARTY SOFTWARE" means Software not owned by any Seller
Entity.
"TOTAL
COMPANY SALE" means a merger or
consolidation
in which Seller
would not be the surviving entity, a purchase of all of the
outstanding
capital
stock of Seller,
or an
acquisition
of all or
substantially
all of
Seller's
assets
(including,
for
avoidance
of doubt,
the
assets
of all of
Seller's
business units, and not merely Seller's Commercial Services
Business Unit).
"TRADEMARKS"
means all trademarks,
service marks,
trade names, trade
dress, designs,
logos, emblems,
signs or insignia,
slogans, and other similar
designations of source or origin,
together with all goodwill
symbolized by any
of the foregoing,
registrations and applications for any of the foregoing,
and
the right to sue for past infringement thereof.
"TRADE SECRETS" means any and all forms and types of technology,
trade
secrets and other confidential information,
know-how,
customer lists, prospect
lists, business plans, inventions,
proprietary processes, formulae, algorithms,
models and methodologies.
"US PLANS" means, interchangeably and collectively as context
requires,
all Plans that are neither a Canada Plan or an India Plan.
"WARN ACT" means the Worker
Adjustment and Retraining
Act, Public Law
100-379.
"WIRE" means a wire
transfer,
in Dollars,
of
immediately
available
funds sent in accordance with instructions provided by the
recipient of the wire
transfer.
1.2
ADDITIONAL DEFINED TERMS
In addition to the terms
defined in Section 1.1, each of the following
terms is defined in the Section set forth opposite such term:
TERM
SECTION
----
-------
AGCC.................................................Preamble
91-180 Account.................................7.8(e)(iii)(C)
Agreement............................................Preamble
Assets.................................................2.1(b)
Assumed Contracts..................................2.1(b)(iv)
Assumed Liabilities.......................................2.3
Assumption Agreement................................4.2(a)(v)
Auditor............................................3.2(c)(ii)
Base Balance Sheet................................2.1(b)(xii)
Base Balance Sheet Date...........................2.1(b)(xii)
Benefit Cutoff Time.................................7.7(b)(i)
-10-
Bill of Sale........................................4.2(a)(i)
Bring-Down Statements.................................7.12(c)
Business.............................................Recitals
Claim Notice..............................................9.3
Claims Period..........................................9.5(a)
Client Contract...................................5.13(a)(iv)
Closing...................................................4.1
Closing Date..............................................4.1
COBRA..............................................7.7(b)(vi)
Completed Obligations....................................5.22
Escrow Agent........................................4.2(b)(i)
Excess Amount.......................................3.2(f)(i)
Excluded Assets...........................................2.2
Excluded Liabilities......................................2.4
Final Net Working Capital..............................3.2(d)
Final Statement........................................3.2(d)
Financial Statements...................................5.4(b)
GBS..................................................Preamble
GBS India Shares...................................2.1(a)(ii)
Guarantees...............................................5.16
Healthcare Sub.......................................Preamble
HSR Act................................................8.1(d)
India Sub Shares..................................2.1(a)(iii)
Insurance.................................................2.6
IP Transfer Documents.............................4.2(a)(iii)
License Agreement................................4.2(a)(viii)
Material Contracts....................................5.13(a)
Non-Compete.......................................4.2(a)(vii)
Over 180 Account...............................7.8(e)(iii)(C)
Parties..............................................Preamble
Plan Sponsor..........................................5.15(a)
Plans.................................................5.15(a)
Proposed Net Working Capital...........................3.2(a)
Proposed Statement.....................................3.2(a)
Purchase Price............................................3.1
Purchaser............................................Preamble
Purchaser Compliance Certificate.......................4.3(h)
Purchaser Indemnitees.....................................9.1
Records.............................................7.8(b)(i)
Response Period........................................9.4(a)
Retained Records....................................7.8(b)(i)
Seller...............................................Preamble
Seller Board Approval..................................5.2(b)
Seller Compliance Certificate.......................4.2(a)(x)
Seller Indemnitees........................................9.2
Seller India Shares...............................2.1(a)(iii)
-11-
Seller Parties.......................................Preamble
Seller Sub..........................................2.1(b)(i)
September 30 Statements...............................7.12(b)
Shortfall Amount...................................3.2(f)(ii)
Sponsor..............................................Preamble
Statement Dispute Notice...............................3.2(b)
Statement Disputed Matters.............................3.2(b)
Stock Power........................................4.2(a)(ii)
Shareholder Approval...................................8.1(g)
Subsidiary Shares..................................2.1(a)(iv)
TEFIS................................................Preamble
Termination Fee.......................................10.3(a)
Third Party Action.....................................9.4(a)
Third Party Action Notice..............................9.4(a)
Threshold..............................................9.6(a)
Transfer...............................................2.1(a)
Transfer Documents.................................4.2(a)(iv)
Transferred Intellectual Property..................2.1(b)(vi)
Transferred Personnel..................................7.7(a)
Transferred Tangible Personal Property............2.1(b)(iii)
Transition Services Agreement......................4.2(a)(vi)
Withheld Amount........................................4.2(b)
Withholding Certificate................................4.2(b)
1.3
CONSTRUCTION AND INTERPRETATION
Unless the context of this Agreement
otherwise clearly
requires,
(a)
references to the plural
include the singular,
and
references to the singular
include the plural, (b) references to any gender include the other
genders,
(c)
the words "include," "includes" and "including" do not limit the
preceding terms
or words and shall be deemed to be followed by the words
"without
limitation",
(d) the terms
"hereof",
"herein",
"hereunder",
"hereto" and similar terms in
this
Agreement
refer to this
Agreement
as a whole and not to any
particular
provision of this Agreement, (e) the terms "day" and "days," if not
capitalized,
mean and refer to calendar
day(s) and (f) the terms "year" and "years" mean and
refer to calendar year(s).
Unless otherwise set forth herein, each reference in
this
Agreement
to
any
document,
instrument
or
agreement
(including
this
Agreement)
(A) includes and
incorporates
all schedules and other
attachments
thereto,
(B)
includes
all
documents,
instruments
or
agreements
issued or
executed in
replacement
thereof,
and (C) means such
document,
instrument or
agreement,
or
replacement
or
predecessor
thereto,
as amended,
modified or
supplemented from time to time in accordance with its terms and in
effect at any
given time. All Article, Section and Schedule references herein are
to Articles,
Sections and
Schedules
of this
Agreement,
unless
otherwise
specified.
All
accounting terms not
specifically
defined in this Agreement shall be construed
in
accordance
with GAAP.
All
references
in this
Agreement to Seller shall,
notwithstanding
the
absence
of
explicit
references,
be deemed to
include,
respectively,
the Seller Subs to the extent necessary to give effect to Article
II.
-12-
--------------------------------------------------------------------------------
ARTICLE II.
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
--------------------------------------------------------------------------------
2.1
PURCHASE AND SALE OF ASSETS.
(a) TRANSFER.
Except as otherwise
expressly set forth in SECTION 2.2,
on the terms and subject to the conditions
hereof, at the Closing,
Seller will
sell,
transfer,
convey,
assign and deliver
("TRANSFER")
to
Purchaser,
and
Purchaser
will
purchase and acquire
from
Seller,
all the Assets (as defined
below); PROVIDED, HOWEVER, that:
(i)
Healthcare Sub shall sell, transfer,
convey,
assign
and
deliver
to
Purchaser,
and
Purchaser
shall
purchase from
Healthcare Sub, all of the Assets held
by Healthcare Sub;
(ii)
GBS shall sell, transfer,
convey, assign and deliver
to Purchaser,
and Purchaser shall purchase from GBS,
all of the shares of capital
stock of India Sub held
by GBS (the "GBS INDIA SHARES");
(iii)
Seller
shall
sell,
transfer,
convey,
assign
and
deliver
to TEFIS,
and
TEFIS
shall
purchase
from
Seller,
all of the shares of capital
stock of India
Sub held by Seller (the
"SELLER
INDIA
SHARES" and,
together
with the GBS India
Shares,
the "INDIA SUB
SHARES"); and
(iv)
Seller
shall
sell,
transfer,
convey,
assign
and
deliver to AGCC, and AGCC shall purchase from Seller,
all of the
shares of
capital
stock of
Canada
Sub
(together with the India Sub Shares,
the "SUBSIDIARY
SHARES").
(b) SCOPE OF ASSETS.
The "Assets"
consist of all the
properties
and
rights of the Seller Entities, whether tangible or intangible,
used or held for
use in the Business, including the following:
(i)
All ownership
interests in
Subsidiaries
of Seller,
other than the Excluded Subs,
that are engaged in or
relate to the Business,
including
Canada Sub, India
Sub and GBTSA,
Inc. (each, a "SELLER SUB"),
and all
goodwill
associated with the portion of the Business
conducted by each such Seller Sub;
(ii)
Each
and
every
Seller
Entity's
interests
in the
Facilities and the Facility Leases;
(iii)
All tangible
personal
property
(collectively,
the
"TRANSFERRED
TANGIBLE PERSONAL PROPERTY"),
owned by
any
Seller
Entity
and
used or held for use in the
Business,
wherever
located,
including
those items
listed on SCHEDULE 2.1(B)(III);
(iv)
All
Contracts
relating to the Business to which any
Seller
Entity
is a party,
including
all
Material
Contracts,
but not
including
any of the
Contracts
listed
on
SCHEDULE
2.2(G)
and not
including
any
Inactive
Contracts
(collectively,
the
"ASSUMED
CONTRACTS"), and all rights of every Seller Entity in
each Assumed Contract;
-13-
(v)
All accounts, notes and other receivables relating to
the Business of any and all Seller Entities as of the
Closing
and all rights to bill and
receive
payment
for
services
performed
or
products
sold
by
the
Business but unbilled or unpaid as of the Closing;
(vi)
All Owned
Intellectual
Property used in or relating
to the
Business and all rights of any and all Seller
Entities
therein
(the
"TRANSFERRED
INTELLECTUAL
PROPERTY");
(vii)
All transferable
Permits issued to any Seller Entity
by any
Governmental
Authority
that
relate
to the
Business;
(viii)
All prepaid
expenses,
advances to third parties and
deposits
with
third
parties
of any and all Seller
Entities as of the Closing
relating to the
Business
other
than
payments
made in
support
of
Seller's
general
overhead
(such
as,
for
example,
advance
payments
for
software
licenses
used
to
support
Seller's
general
ledger
or
email
or
telephone);
PROVIDED,
for avoidance of doubt, that such payments
made in support of Seller's
general
overhead
shall
not be
included
in the
calculation
of Net Working
Capital;
(ix)
All Records,
including all Organizational Documents,
corporate
records
and
minute
books of the
Seller
Subs;
(x)
All
rights
and
interests
of any
and
all
Seller
Entities
as of
the
Closing
in
and
to
indemnity
claims,
judgments,
rights
of
recovery,
rights of
set-off and causes of action of the Business
against
third parties in each case; all
insurance,
warranty
and condemnation
proceeds received after the Closing
Date with
respect
to damage,
nonconformance
of or
loss
to the
Assets
occurring
on or
prior
to the
Closing Date; all rights to proceeds under
insurance
policies in respect of any such
damage or loss;
and
all
rights
to
enforce
restrictive
covenants
(including
non-competition,
non-solicitation,
non-hire and confidentiality provisions) contained in
any
Contract
with any
current
or former
Business
Personnel,
even if such
Contract
is not an Assumed
Contract;
(xi)
All advertising, marketing and promotional materials,
and
all
other
printed,
written
or
electronic
materials prepared for use in the Business;
(xii)
All
such
other
assets,
properties,
interests
in
properties
and
rights
owned by any and all
Seller
Entities as of the
Closing
that relate to, are used
in,
or
are
necessary
to
the
operation
of
the
Business, including those which are: (a) reflected in
the June 30, 2006 balance sheet contained in SCHEDULE
5.4(C)
(the
"BASE
BALANCE
SHEET")
(or
not
so
reflected
as a result of being
fully
amortized
or
depreciated
as of June 30,
2006 (the "BASE
BALANCE
-14-
SHEET
DATE")) or on the books and records of any and
all Seller
Entities
relating to the
Business,
but
excluding
any
such
other
assets,
properties,
interests
and rights which have been
disposed of by
any and all Seller
Entities in the
Ordinary
Course
after
the
Base
Balance
Sheet
Date in
accordance
herewith; (b) acquired by any and all Seller Entities
after the Base Balance Sheet Date and relating to the
Business in accordance herewith; or (c) located as of
the Closing on the Leased Real
Property and relating
to the Business;
(xiii)
All
Canada
Plans
and the
rights of each and every
Seller Entity therein; and
(xiv)
All
India
Plans
and the
rights
of each and every
Seller Entity therein.
For the sake of clarity,
the Parties
acknowledge that the Assets held
by Canada
Sub,
India
Sub and
GBTSA,
Inc.
are being
acquired
through
the
acquisition of the Subsidiary
Shares as described in SECTIONS
2.1(A)(III)
and
2.1(A)(IV).
For the
avoidance of doubt , the Parties
agree that the Assets do
not
include
the
capital
stock of or any of the assets or rights of
Seller's
Subsidiary, Chimes, Inc.
2.2
EXCLUDED ASSETS.
Notwithstanding
anything
contained in this Agreement to the contrary,
the
following
assets,
properties,
interests
in
properties
and rights (the
"EXCLUDED
ASSETS") will not be included in the Assets,
but will be retained by
Seller:
(a) All Retained Records;
(b) All
guarantees,
warranties,
indemnities
and rights,
claims and
causes of action against any Person in favor of any and all Seller
Entities that
would
entitle
any and all
Seller
Entities
to
recompense
in respect of any
Excluded
Liability,
except
to
the
extent
such
guarantees,
warranties,
indemnities,
rights,
claims and causes of action
would
entitle
Purchaser to
recompense,
whether in whole or in part, for any Assumed Liability or any other
liability arising out of the conduct of the Business after the
Closing;
(c) All US
Plans
and the
rights
of each
and
every
Seller
Entity
therein;
(d) Subject to SECTION 2.6,
all rights of any and all Seller
Entities
under any past or current insurance policy or contract, and all
prepaid expenses
in respect of insurance;
(e) All cash, marketable securities and other cash equivalents;
(f) Each and every
Seller
Entity's
interest in Leased Real
Property
other than the Facilities;
(g) The Contracts listed on SCHEDULE 2.2(G);
(h) The Quebec Tax Receivable;
-15-
(i) All ownership interests in the Excluded Subs
(j) The assets listed on SCHEDULE 2.2(J);
(k) the Inactive Contracts; and
(l) all other rights of the Seller Parties under this Agreement and
the
other
Acquisition
Agreements,
including,
without
limitation
all
rights to
receive
the
Purchase
Price (as
defined
herein)
and all other
monies to be
received by them hereunder and thereunder.
2.3
ASSUMED LIABILITIES.
At the Closing,
Purchaser
shall, by delivery to Seller and Healthcare
Sub of the Assumption
Agreement,
assume and agree to perform, pay or discharge
when due,
to the extent not
theretofore
performed,
paid or
discharged,
the
following
specific
Liabilities
of Seller and
Healthcare
Sub,
and only such
Liabilities (collectively, the "ASSUMED LIABILITIES"):
(a)
post-Closing
Liabilities of Seller and/or
Healthcare Sub, as the
case may be, under the Assumed
Contracts;
PROVIDED,
HOWEVER,
that
Purchaser
shall not assume any
contingent
liabilities
arising out of (i) the failure of
Seller or Healthcare Sub to comply with the terms of any Assumed
Contract during
the period ending prior to the Closing, or (ii) indemnity
obligations under any
Assumed Contract arising out of events occurring prior to the
Closing; and
(b) the Liabilities of Seller and Healthcare Sub specifically
included
in the
calculation
of the Final Net
Working
Capital,
as provided in SECTION
3.2(A).
For the sake of clarity,
the Parties
acknowledge
that, except to the
extent set forth in Section 11.14
(Obligation of Sponsor),
(i) AGCC, TEFIS and
Sponsor are not assuming
any
Liabilities
of the Seller
Entities and (ii) the
Liabilities of Canada Sub, India Sub and GBTSA,
Inc. are not being
transferred
to Purchaser and shall remain
Liabilities
of Canada Sub,
India Sub and GBTSA,
Inc., respectively, upon the transfer of the stock of those
entities as provided
in this Agreement.
2.4
EXCLUDED LIABILITIES.
Notwithstanding
anything
herein to the contrary,
Purchaser
does not
hereby and shall not assume or in any way undertake to pay,
perform,
satisfy or
discharge
any other
Liability
of Seller or any
Affiliate
of Seller
whether
existing on, before or after the Closing Date, all of which
Liabilities shall be
retained by Seller
(collectively,
the "EXCLUDED
LIABILITIES"),
including the
following:
(a) all Taxes of any and all
Seller
Entities
or which
relate to the
Excluded Assets;
(b) all Taxes which relate to the Business or the Assets and which
have
accrued on or before the Closing Date;
-16-
(c) any and all Liabilities
relating to, arising out of or incurred in
performance,
or lack of
performance,
by any Seller
Entity before the Closing
under any Contract, Permit, and/or Guarantee;
(d) any and all
Liabilities
(other
than the
Liabilities
assumed by
Purchaser pursuant to SECTIONS 2.3(A) and (B)) with respect to the
employment by
any
Seller
Entity
of
its
respective
Employees,
or its
engagement
of its
professional work force as independent contractors, and salaries,
payroll taxes,
withholding
taxes,
workers'
compensation and unemployment
compensation,
and
contributions
or
payments
to be made in
respect of
service
during
periods
through the termination of employment and thereafter
under any employee pension
benefit
plan (as defined in Section
3(2) of ERISA) or other
employee
benefit
plan maintained for any Business Personnel, and any and all
liabilities that may
arise by virtue of the transaction contemplated herein being deemed
an actual or
constructive
termination
of any
Employee
or
change
of
control
under
any
agreement
between
Seller,
GBS or Healthcare Sub and any Employee,
including,
without
limitation,
the agreements set forth on Schedule 2.4(d),or
applicable
Law;
(e) any and all
Liabilities
with respect to the products and services
produced or provided by any Seller
Entity prior to the Closing Date arising out
of injury,
death or damage,
including any such liabilities for failure to warn
or
breach
of
express
or
implied
warranties,
including
warranties
of
merchantability
or fitness for any purpose or use, or the obligation to perform
warranty or
follow-up
services
relative to services
performed
or
solutions
provided by any Seller Entity prior to the Closing Date;
(f) any and all
Liabilities
of any
Seller
Entity in
respect of (i)
lawsuits,
claims,
administrative or other
proceedings,
governmental or other
investigations pending or threatened by or against any Seller
Entity arising out
of events occurring at or prior to the Closing;
and (ii) any litigation matters
or claims described on SCHEDULE 5.12, SCHEDULE 5.14(B) or SCHEDULE
5.15(A);
(g) any other Liability of any Seller Entity, except those
specifically
assumed
pursuant
to SECTION
2.3,
regardless
of when a claim
thereto may be
asserted (whether known or unknown, accrued, absolute, contingent
or otherwise);
(h) any and all Liabilities of any of the Excluded Subs; and
(i) any other
Liability that is otherwise
attributable
to or arising
out of the
ownership or
operation
of any Assets or the Business
prior to the
Closing.
Except
as and to the
extent
otherwise
expressly
provided
in
this
Agreement,
Purchaser
has not agreed to pay, will not be required to assume and
will not have any obligation with respect to any liability or
obligation, direct
or indirect,
absolute or contingent,
of any Seller Entity or any other Person,
regardless of when asserted.
2.5
NON-ASSIGNABLE CONTRACTS.
(a)
Notwithstanding
anything
to
the
contrary
contained
in
this
Agreement, to the extent that the grant, sale, assignment,
transfer or delivery
-17-
to Purchaser, of any Contract that would be an Assumed Contract, or
any claim or
right or any benefit arising thereunder or resulting therefrom
would require any
Approval of a
Governmental
Authority or other third Person and such
Approvals
shall not have been obtained
prior to the Closing,
and Purchaser has waived in
writing the
applicable
condition
precedent in ARTICLE VIII
pursuant to which
Seller is obligated to obtain such Approvals
prior to the Closing,
the Closing
shall proceed, without the grant, sale, assignment, transfer or
delivery of such
Contract,
and this Agreement
shall not constitute a grant,
sale,
assignment,
transfer or delivery of such Contract or an attempt thereof.
(b)
If
the
Closing
proceeds
without
the
grant,
sale,
transfer,
assignment or delivery of any Contract that would be an Assumed
Contract,
then
following the Closing,
the Parties shall use commercially
reasonable
efforts,
and cooperate with each other, to obtain
promptly all such
Approvals.
Pending
such Approval, Seller shall use commercially reasonable efforts,
and the Parties
shall cooperate with each other in any mutually agreeable,
reasonable and lawful
arrangements designed to provide to Purchaser all of the benefits
of use of such
Contract
and to Seller the
benefits
that Seller
would have
obtained had the
Contract been conveyed to Purchaser at the Closing.
(c) To the
extent
that
Purchaser
is
provided
all of the
material
benefits
pursuant to this SECTION 2.5 of any Contract,
Purchaser shall perform
for the
benefit
of the
other
Persons
that are
parties
thereto
all of the
obligations of Seller
thereunder and any related
liabilities that, but for the
lack of an Approval
to assign
such
liabilities
to such
Purchaser,
would be
Assumed Liabilities.
(d) Once Approval for the grant, sale, assignment, transfer or
delivery
of any such Contract not granted,
sold,
assigned,
transferred or delivered at
the Closing is obtained,
such
Contract
shall be deemed to have been
granted,
assigned,
transferred
and
delivered
to Purchaser
at no
additional
cost to
Purchaser.
To the extent that any such Contract
cannot be
transferred
or the
material
benefits of any such
Contract
cannot be
provided to the
applicable
Purchaser following the Closing pursuant to this SECTION 2.5, then
Purchaser and
Seller shall enter into such arrangements (including subleasing,
sublicensing or
subcontracting)
to provide to the Parties the
material
economic
(taking into
account Tax costs and benefits) and
operational
equivalent,
of obtaining such
Approval.
Seller shall hold in trust for, and pay to
Purchaser
promptly
upon
receipt
thereof,
all income,
proceeds and other monies received by any Seller
Entity
(other than any Seller Sub) in
connection
with its use of any Contract
(net of any Taxes and any other
costs
imposed
upon
such
Seller
Entity)
in
connection with the arrangements under this SECTION 2.5.
2.6
INSURANCE.
With
respect to any loss or damage
relating
to the Assets
occurring
prior to the
Closing
Date and for which any and all Seller
Entities
would be
entitled
to
assert,
or cause any other
Person to assert,
a claim
under any
policy of
insurance
maintained
by, for the benefit of or insuring any and all
Seller Entities in respect of the Business or the Assets
("INSURANCE"),
at the
request
of
Purchaser,
each and
every
Seller
Entity
will use
commercially
reasonable efforts to assert for Purchaser's
benefit,
or if for any reason any
Seller
Entity is not able so to assert,
to assign
its
rights
and
otherwise
assist and permit
Purchaser to assert,
one or more claims under such Insurance
covering such loss or damage.
-18-
2.7
AFFILIATES.
To the extent that Assets or Assumed
Liabilities are held by or reside
in any Affiliate of Seller that is not a Seller Sub, Seller will
cause each such
Affiliate to transfer such Assets and Assumed
Liabilities
and
Purchaser
will
purchase and/or assume such Assets and Assumed Liabilities.
--------------------------------------------------------------------------------
ARTICLE III.
PURCHASE PRICE
--------------------------------------------------------------------------------
3.1
PURCHASE PRICE.
The
aggregate
amount to be paid for the
Assets
will be
Fifty-Seven
Million Dollars ($57,000,000.00),
subject to adjustment pursuant to SECTION 3.2
(the "PURCHASE PRICE").
In addition to the foregoing payment,
as consideration
for the grant, sale, assignment,
transfer and delivery of the Assets, Purchaser
shall assume and discharge the Assumed Liabilities.
3.2
PURCHASE PRICE ADJUSTMENT.
(a) On or before the sixtieth
(60th) day
following
the Closing Date,
Purchaser
shall
prepare and
deliver to Seller a statement
of the Net Working
Capital of the Business as of the Closing Date prepared in
accordance
with this
Agreement and GAAP (the "PROPOSED
STATEMENT").
The Net Working
Capital of the
Business,
calculated
based on the
Proposed
Statement,
is herein
called the
"PROPOSED NET WORKING CAPITAL."
(b) If
Seller
determines
that
there
are
any
inaccuracies
in the
Proposed
Statement,
Seller
shall
deliver to
Purchaser
a written
notice (a
"STATEMENT
DISPUTE
NOTICE")
setting
forth
such
alleged
inaccuracies
(the
"STATEMENT DISPUTED MATTERS") no later than 5:00 p.m., New York
City time on the
thirtieth (30th) day after receipt of the Proposed Statement from
Purchaser.
If
Seller does not deliver a Statement Dispute Notice to Purchaser by
such date and
time, Seller shall be deemed to have accepted the Proposed
Statement as prepared
by Purchaser.
(c)
Purchaser
and Seller shall
endeavor in good faith to resolve the
Statement Disputed Matters by mutual agreement.
If, within thirty (30) Business
Days after Seller delivers a Statement Dispute Notice to Purchaser:
(i)
Purchaser
and
Seller
are able to reach a
mutually
satisfactory
resolution
of the
Statement
Disputed
Matters, then the Proposed Statement shall be revised
to
reflect
such
resolution,
and
such
Proposed
Statement will be final,
binding and conclusive (but
only with respect to those Statement Disputed Matters
as to which
Purchaser and Seller have reached such a
mutually satisfactory resolution); or
(ii)
Purchaser
and
Seller are unable to reach a mutually
satisfactory
resolution
of the
Statement
Disputed
Matters, then (A) Purchaser and Seller shall promptly
submit any remaining
Statement
Disputed
Matters to
RSM McGladrey,
independent
public
accountants (the
"AUDITOR");
(B) Purchaser and Seller shall supply to
the Auditor only such
supporting
documentation
and
information as the Auditor may request; (C) the scope
-19-
of the Auditor's
responsibility
shall be limited to
resolving only the Statement
Disputed
Matters;
(D)
the Auditor will
deliver to
Purchaser
and Seller a
written
determination (such determination to include
a work sheet setting forth all material
calculations
used
in
arriving
at such
determination
and to be
based
solely
on
the
information
provided
to the
Auditor by
Purchaser
and
Seller) of the
Statement
Disputed
Matters
within thirty (30) days of receipt
thereof;
and (E) all
determinations
of the Auditor
shall be final and non-appealable.
(d) The Proposed
Statement,
as prepared by Purchaser
and accepted by
Seller
pursuant
to SECTION
3.2(A),
as agreed
upon by
Purchaser
and Seller
pursuant to SECTION
3.2(C)(I),
or as
determined
by the
Auditor
pursuant to
SECTION 3.2(C)(II),
as the case may be, is herein called the "FINAL STATEMENT,"
and the Net
Working
Capital
of the
Business
calculated
based on the
Final
Statement is herein called the "FINAL NET WORKING CAPITAL."
(e) All costs and expenses of the Auditor shall be borne one-half
(1/2)
by Purchaser and one-half (1/2) by Seller.
(f) If the Final Net Working Capital is:
(i)
GREATER than the Benchmark
Net Working
Capital (the
amount
of
such
excess,
the
"EXCESS
AMOUNT"),
Purchaser shall pay to Seller,
by Wire,
within five
(5)
Business
Days
after the
determination
of the
Final Statement, such Excess Amount; or
(ii)
LESS than the
Benchmark
Net
Working
Capital
(the
amount of such
shortfall,
the "SHORTFALL
AMOUNT"),
Seller shall pay to Purchaser,
by Wire,
within five
(5)
Business
Days
after the
determination
of the
Final Statement, such Shortfall Amount.
3.3
ALLOCATION OF PURCHASE PRICE.
The
Purchase
Price shall be
allocated
in the manner
determined
by
Seller and Purchaser
pursuant to SECTION 7.11.
After the Closing,
the Parties
shall make
consistent
use of such
allocation
for all Tax purposes and in all
filings with, and declarations
and reports to, all Governmental
Authorities in
respect
thereof.
In any Action
relating to the
determination
of any Tax, no
Party shall
contest such
allocation,
represent
that such
allocation
is not
correct, or take any reporting position inconsistent with such
allocation.
3.4
CURRENCY CONVERSIONS.
If it is necessary in connection with any calculation
relating to this
Agreement or the
transactions
contemplated
hereby to convert any component of
such
calculation to Dollars from another
currency,
such
conversion
shall be
performed using the applicable noon buying rate published by the
Federal Reserve
Bank of New York on the date as of which the calculation is made.
-20-
--------------------------------------------------------------------------------
ARTICLE IV.
CLOSING
--------------------------------------------------------------------------------
4.1
THE CLOSING.
The closing of the
transactions
contemplated
by this
Agreement (the
"CLOSING") shall take place at the offices of Venable LLP in
Baltimore, Maryland
as soon as
reasonably
practicable,
but in any
event no later
than the fifth
(5th) Business Day following the day upon which all of the
conditions to Closing
have been satisfied or waived (other than those
conditions which by their terms
cannot be satisfied
until the Closing) or such other date and/or location as is
mutually agreed upon in writing by the Parties (the "CLOSING
DATE").
4.2
SELLER'S CLOSING DELIVERIES.
(a) Subject to SECTION
2.5, at the
Closing,
Seller will
execute (as
applicable)
and deliver (or cause to be delivered) to Purchaser the
following,
at the expense of Seller and in proper form for
recording
and/or
registration
(as the case may be) in all relevant jurisdictions when
appropriate:
(i)
bills of sale and
general
assignments,
each in the
form
attached as EXHIBIT A (each,
a "BILL OF SALE")
from:
(A) Seller to Purchaser, and
(B) Healthcare Sub to Purchaser;
(ii)
stock transfer
powers,
each in the form attached as
EXHIBIT B, or, with
respect to the India Sub Shares,
share transfer
deeds/forms in the prescribed
format
(each, a "STOCK
POWER"),
in each case together with
all
applicable
stock
certificates,
to effect
the
transfer of:
(A) the GBS India Shares from GBS to Purchaser;
(B) the Seller India Shares from Seller to TEFIS; and
(C) all of the
capital
stock
of
Canada
Sub
from
Seller to AGCC;
(iii)
all
documents
as may
be
reasonably
requested
by
Purchaser to evidence and
effectuate
the conveyance
of the
Transferred
Intellectual
Property,
each in
form and substance satisfactory to Purchaser and duly
stamped where required in accordance
with applicable
Law (the "IP TRANSFER DOCUMENTS");
(iv)
such other instruments or deeds of transfer conveying
and
transferring
to
Purchaser
title to any of the
Assets as
contemplated
herein or by any Schedule as
provided in this Agreement (together with the Bill of
Sale,
the
Stock
Powers,
and
the
IP
Transfer
Documents, the "TRANSFER DOCUMENTS");
-21-
(v)
an
assumption
agreement
in the
form
attached
as
Exhibit C (the "ASSUMPTION AGREEMENT");
(vi)
a transition
services agreement in the form attached
hereto
as
Exhibit
D
(the
"TRANSITION
SERVICES
AGREEMENT");
(vii)
a
non-competition
agreement
in the
form
attached
hereto as Exhibit E (the "Non-Compete");
(viii)
a license
agreement
in the form of EXHIBIT F hereto
(the "LICENSE AGREEMENT");
(ix)
a
Certificate
of
Non-United
States Real
Property
Interest in the form attached hereto as EXHIBIT G;
(x)
a certificate
of the President of Seller dated as of
the Closing
Date to the effect
that the
statements
set
forth in
SECTIONS
8.1(A)
and (B) are true and
correct (the "SELLER COMPLIANCE CERTIFICATE"); and
(xi)
all
other
documents
and
papers
required
to
be
delivered by SECTION 8.1 as conditions to the Closing
and such other
documents
and papers with respect to
the corporate and other
proceedings
contemplated by
this
Agreement
and
the
Acquisition
Agreements
(including such documentation as has been theretofore
received
by Seller
relating to
Approvals
of third
Persons
that Seller is required to obtain
hereunder
as
a
condition
of
Closing)
as
Purchaser
shall
reasonably request.
(b) Seller,
which is a non-resident of Canada, shall have delivered to
Purchaser a certificate pursuant to Section 116 of the ITA and any
corresponding
provision of an applicable provincial Law (each a "WITHHOLDING
CERTIFICATE") or,
if
any
such
certificate
is
not
delivered
at the
Closing,
Seller
hereby
acknowledges and agrees that such amount of the allocation of the
Purchase Price
attributable to the shares of Canada Sub as may be required to be
withheld under
applicable Law (the "WITHHELD AMOUNT") will be withheld by
Purchaser as required
by Law and:
(i)
at
the
Closing,
deposited
in
escrow
with
an
independent
escrow agent
mutually
satisfactory
to
Purchaser and Seller (the "ESCROW AGENT") at Seller's
expense pursuant to an escrow agreement among Seller,
Purchaser
and the Escrow Agent in form and substance
reasonably satisfactory to the parties thereto, and
(ii)
if
no
Withholding
Certificate
is
delivered
to
Purchaser
prior to the date Purchaser is required by
Law to remit the
Withheld
Amount to the
applicable
Governmental
Authority
(subject
to
any
written
extension
of
time to make
such
remittance
by the
applicable
Governmental
Authority),
Purchaser
and
Seller
shall
cause the Escrow
Agent to release the
Withheld
Amount from escrow to Purchaser,
whereupon
Purchaser
shall
remit
the
Withheld
Amount to the
applicable Governmental Authority.
-22-
4.3
PURCHASER'S CLOSING DELIVERIES.
At the Closing,
Purchaser will execute (as
applicable) and deliver to
Seller the following, at the expense of Purchaser:
(a) the Purchase Price by Wire;
(b) each of the
Transfer
Documents
that
Purchaser
is
required
to
countersign;
(c) the Assumption Agreement;
(d) the Transition Services Agreement;
(e) the Non-Compete;
(f) the License Agreement;
(g) the Solvency Certificate (as hereinafter defined)
(h) a certificate of the President of Purchaser dated as of the
Closing
Date to the effect that the statements set forth in Sections
8.2(a) and (b) are
true and correct (the "PURCHASER COMPLIANCE CERTIFICATE"); and
(i) all other
documents and papers required to be delivered by SECTION
8.2 as
conditions
to the
Closing
and such other
documents
and papers
with
respect to the corporate and other
proceedings
contemplated
by this Agreement
and the Acquisition Agreements as Seller shall reasonably request.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller, acknowledging that Purchaser is relying thereon, represents
and
warrants
to
Purchaser,
on the date
hereof
and as of the
Closing
Date,
as
follows:
5.1
CORPORATE ORGANIZATION; GOOD STANDING.
(a) Seller is a corporation
duly
organized,
validly
existing and in
good
standing
under the laws of the State of New York,
and has all
requisite
corporate
power and authority to own, lease or otherwise hold the Assets and
to
carry on the Business as presently conducted.
(b)
SCHEDULE
5.1(B)
sets
forth
a true
and
complete
list
of all
Subsidiaries
of Seller that are used in the Business or hold any of the Assets,
indicating
for
each
(A) the
type of
entity,
and
(B) the
jurisdiction
of
organization.
Each
Subsidiary
listed on
SCHEDULE
5.1(B) is duly
organized,
validly
existing and in good
standing as an entity of the type
specified
for
such
Subsidiary
on
SCHEDULE
5.1(B)
under
the laws of the
jurisdiction
of
organization specified for such Subsidiary on SCHEDULE 5.1(B).
(c)
SCHEDULE
5.1(C)
sets
forth
a true
and
complete
list of each
jurisdiction
in
which
each
Seller
Party
and
Seller
Sub is
qualified
or
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registered
to transact
business as a foreign or alien
corporation.
Except as
described on SCHEDULE 5.1(C), each Seller Party and Seller Sub is
duly qualified
or registered to transact business and is in good standing as a
foreign or alien
corporation
in each
jurisdiction
in which the failure to be so
qualified
or
registered
could
reasonably
be
expected
to have a Seller
Material
Adverse
Effect.
(d) The corporate
records and minutes books of the Seller Subs contain
complete
and accurate
minutes of all meetings of, and all written
resolutions
adopted by, the directors and shareholders of each Seller Sub.
5.2
AUTHORIZATION AND EFFECT OF AGREEMENT.
(a) Each Seller
Entity has all
requisite
corporate
(or other entity
type, if applicable)
power and authority to execute and deliver the Acquisition
Agreements
to which it is a party,
to perform its
obligations
hereunder
and
thereunder and to consummate the transactions
contemplated
hereby and thereby.
The execution, delivery and performance by each Seller Entity of
the Acquisition
Agreements
to which it is a party,
and the
consummation
by each such
Seller
Entity of the transactions
contemplated hereby and thereby,
have been duly and
validly
authorized
by all
necessary
corporate or limited
liability
company
action on the part of such Seller Entity
(other than the requisite
approval of
the transactions contemplated hereby by the shareholders of Seller
in accordance
with Seller's Organizational
Documents and the NYBCL). This Agreement has been,
and each of the
Acquisition
Agreements,
when
executed and
delivered by each
Seller
Entity
that is a party
hereto and
thereto,
will have been,
duly and
validly
executed and
delivered by such Seller Entity and each
constitutes
or
will
constitute
a
valid
and
binding
obligation
of
such
Seller
Entity,
enforceable
against such Seller Entity in accordance with its terms,
except as
the same may be limited by applicable
bankruptcy,
insolvency,
reorganization,
moratorium or similar Laws relating to creditors rights
generally,
and subject
to general principles of equity.
(b) The Seller
Board,
by
resolutions
duly adopted at a meeting duly
called and held (the "SELLER
BOARD
APPROVAL"),
has (i)
determined
that this
Agreement and the transactions contemplated hereby are advisable
and in the best
interests of the Seller and its
shareholders,
(ii)
approved the
transactions
contemplated by this Agreement,
including the Transfer,
and (iii)
recommended
that the shareholders of the Company adopt this Agreement and the
Transfer.
5.3
NO CONFLICT.
(a) The execution,
delivery and
performance of this Agreement by each
Seller Entity that is a party hereto does not, and the execution
and delivery by
each Seller Entity of the other
Acquisition
Agreements to which it is a party,
and the consummation by each such Seller Entity of the transactions
contemplated
hereby and thereby,
will not,
conflict
with,
result in any
violation of, or
constitute a default
(with or without
notice or lapse of time, or both) under,
give
rise
to a right
of
termination,
cancellation
or
acceleration
of any
obligation
or to the loss of any
material
benefit
under,
or
result
in the
creation of any Lien upon the Business or any of the Assets under
any
provision
of (A) the
Organizational
Documents of any Seller Entity,
(B) any Contract or
Permit
(whether
or not
such
Contract
or
Permit
relates
primarily
to the
Business), or (C) any order, writ, judgment,
injunction or decree applicable to
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any
Seller
Entity or any of their
respective
properties
other than any such
conflicts,
violations,
defaults,
rights
of
termination,
cancellation
or
acceleration, losses or Liens which are described on SCHEDULE
5.3(A).
(b) No
Approval
of any
Governmental
Authority
or other
Person
is
required in
connection
with the
execution,
delivery and
performance
by any
Seller
Entity
of the
Acquisition
Agreements
to which it is a party,
or the
consummation
by each
Seller
Entity of the
transactions
contemplated
by any
Acquisition
Agreement
to which it is a party,
except for:
(A) the
requisite
approval of the transactions
contemplated
hereby by the shareholders of Seller
in accordance
with
Seller's
Organizational
Documents and the NYBCL;
(B) the
filing
of a
premerger
notification
report
under
the HSR
Act;
and (C) the
Approvals listed on SCHEDULE 5.3(B).
(c) No Person other than the Purchaser
Entities has any option,
right
of first refusal, right of first offer or similar right to purchase
or otherwise
acquire the Assets or the Business, and neither Seller nor any of
its Affiliates
has entered into any letter of intent,
commitment or agreement (whether oral or
written)
regarding
any
such
purchase
or
acquisition
other
than
with the
Purchaser Entities.
(d)
Except
for
the
rights
of
the
applicable
Purchaser
Entities
hereunder,
there are no
outstanding
options,
warrants,
conversion
or other
rights or Contracts of any kind for the
subscription
or
acquisition of any of
the Subsidiary Shares or any other ownership interest in any Seller
Sub. None of
the
Subsidiary
Shares or other
ownership
interests
in the
Seller
Subs are
subject
to any
Contract
restricting
or
otherwise
relating
to the
voting,
dividend rights or disposition thereof.
5.4
FINANCIAL STATEMENTS AND RELATED FINANCIAL MATTERS.
(a) Seller
has filed all forms,
reports,
schedules,
statements
and
other documents required to be filed by Seller with the United
States Securities
and Exchange Commission (the "SEC") since January 1, 2003 under the
Exchange Act
or the Securities
Act and has made
available to Purchaser such forms,
reports
and documents in the form filed with the SEC. All such required
forms,
reports
and
documents
(including
those that
Seller may file
subsequent
to the date
hereof) are
referred to herein as the
"SELLER SEC
REPORTS."
At the time when
filed (or if amended or
superseded
by a
subsequent
filing
prior to the date
hereof then on the date of such
filing),
the Seller SEC Reports (i) as amended
to
date
complied
in
all
material
respects
with
the
requirements
of the
Securities Act or the Exchange Act, as the case may be, the
Sarbanes-Oxley
Act
of 2002 and the rules and
regulations of the SEC thereunder
applicable to such
Seller
SEC
Reports
and (ii) did not at the time they were filed
contain
any
untrue statement of a material fact or omit to state a material
fact or disclose
any matter or proceeding
required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under
which they were
made, not misleading.
(b) Each of the consolidated financial statements
(including,
in each
case, any related notes thereto)
contained in the Seller SEC Reports as amended
to date (the
"FINANCIAL
STATEMENTS"),
including
each Seller SEC Report filed
after
the
date
hereof
until
the
Closing,
(i) was
prepared
from,
are in
accordance with and accurately reflect in all material respects,
Seller's books
and
records
as of the times
and for the
period
referred
to
therein,
(ii)
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complied in all material
respects with the published
rules and
regulations of
the SEC with respect thereto, (iii) was prepared in accordance with
GAAP applied
on a
consistent
basis
throughout
the
periods
involved
(except
as
may be
indicated in the notes
thereto or, in the case of unaudited
interim
financial
statements, as may be permitted by the SEC on Form 10-Q under the
Exchange Act),
(iv) fairly
presented the consolidated
financial
position of Seller as at the
respective dates thereof and the consolidated results of Seller's
operations and
cash flows for the
footnotes
and were or are
subject to normal and
recurring
year-end
adjustments
and (v) was prepared from and in accordance with Seller's
books and records.
(c)
Each
of the
unaudited
balance
sheets
for the
Business
as of
December 31,
2005,
March,
31, 2006 and June 30, 2006,
each of which has been
attached
as
SCHEDULE
5.4(C),
and each
Summary
of Income and
Expenses
for
Staffing and Solutions,
respectively, for the year ended December 31, 2005, and
the year to date periods
ended March 31, 2006 and June 30, 2006,
respectively,
each of which have been
attached as SCHEDULE
5.4(C)
hereto,
and each balance
sheet and each
Summary
of Income
and
Expenses
for
Staffing
and
Solutions
included in the
Bring-Down
Statements (i) was prepared from, are in accordance
with,
and accurately
reflect in all material
respects,
the Seller
Entities'
books and records as of the times and for the period
referred to therein,
(ii)
was to the extent of the detail included in each such financial
report, prepared
in accordance with GAAP (other than notes to financial
statements which are not
included) applied on a consistent basis throughout the periods
involved,
(iii)
fairly present the financial position and results of operations for
the Business
as of the times and for the periods
referred to therein , and (iv) was prepared
from and in accordance with the books and records of the Business.
(d) No Seller
Entity has any
liability or
obligation
of any nature,
whether
primary
or
secondary,
direct
or
indirect,
or
absolute,
accrued,
contingent or otherwise, arising out of or relating to the
Business, or the use,
manufacture, sale, lease, ownership or operation of any assets or
property used,
manufactured,
sold, owned,
leased or operated in connection with the Business,
in each case as conducted at any time on or prior to the Closing,
except for (i)
liabilities
or
obligations
reflected or reserved
against in the Base Balance
Sheet or to be
reflected
or
reserved
against
in the Final
Statement,
(ii)
liabilities or obligations
which have arisen after the Base Balance Sheet Date,
in the Ordinary
Course (other than those that will not be reflected or reserved
against in the Final Statement and that result from or arise out of
or which are
in the nature of any breach of contract, breach of warranty, tort,
infringement,
or violation of law, all of which are Excluded
Liabilities
hereunder)
none of
which are material, and (iii) Excluded Liabilities.
(e) All
accounts
receivable
included in the Assets
represent
sales
actually made in the Ordinary Course,
and, to Seller's
Knowledge,
are current
and collectible, net of any reserves shown on the Final Statement.
(f) No inventory is maintained in connection with the Business.
(g) SCHEDULE
5.4(G) sets forth a complete
and
accurate
list of each
bank or other
depository in which Seller Subs maintain any bank account,
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