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STOCK PURCHASE AND SALE AGREEMENT
Dated as of October 6, 1997
among
Alternative Resources Corporation,
Compagnie Generale d'Informatique,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
and
International Business Machines Corporation
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TABLE OF CONTENTS
ARTICLE I ............................................................ PAGE 2
DEFINITIONS .......................................................... PAGE 2
SECTION 1.01. CERTAIN DEFINITIONS.................................... PAGE 2
SECTION 1.02. ADDITIONAL DEFINITIONS................................. PAGE 6
SECTION 1.03. TERMS GENERALLY........................................ PAGE 7
ARTICLE II ........................................................... PAGE 7
PURCHASE AND SALE; CLOSING ........................................... PAGE 7
SECTION 2.01. PURCHASE AND SALE OF THE SHARES........................ PAGE 7
SECTION 2.02. PAYMENT OF THE PURCHASE PRICE.......................... PAGE 8
SECTION 2.03. CLOSING................................................ PAGE 8
SECTION 2.04. CLOSING DELIVERIES..................................... PAGE 8
SECTION 2.05. Purchase Price Adjustment ............................. PAGE 9
ARTICLE III .......................................................... PAGE 10
REPRESENTATIONS, AND WARRANTIES AND COVENANTS ........................ PAGE 10
OFCONCERNING THE SELLING SHAREHOLDERS ................................ PAGE 10
SECTION 3.01. TITLE TO THE SHARES.................................... PAGE 10
SECTION 3.02. AUTHORITY OF SHAREHOLDER............................... PAGE 10
SECTION 3.03. NO BANKRUPTCY, ETC..................................... PAGE 11
SECTION 3.04. SHAREHOLDER AGREEMENTS................................. PAGE 11
SECTION 3.05. Independent Review .................................... PAGE 11
SECTION 3.06. Representations Concerning CGI Corp.................... PAGE 11
ARTICLE IV ........................................................... PAGE 13
REPRESENTATIONS, AND WARRANTIES AND COVENANTS ....................... PAGE 13
OF CONCERNING THE COMPANY ............................................ PAGE 13
SECTION 4.01. ORGANIZATION AND STANDING OF THE COMPANY............... PAGE 13
SECTION 4.02. GOOD STANDING ......................................... PAGE 14
SECTION 4.03. AUTHORITY.............................................. PAGE 14
SECTION 4.04. CAPITAL STOCK OF THE COMPANY .......................... PAGE 14
SECTION 4.05. EQUITY INTERESTS ...................................... PAGE 15
SECTION 4.06. FINANCIAL STATEMENTS ................................. PAGE 15
SECTION 4.07. TAXES.................................................. PAGE 15
SECTION 4.08. ASSETS OTHER THAN REAL PROPERTY........................ PAGE 16
SECTION 4.09. REAL PROPERTY.......................................... PAGE 16
SECTION 4.10. CONTRACTS ............................................. PAGE 16
SECTION 4.11. LITIGATION; DECREES.................................... PAGE 17
SECTION 4.12. OPERATION OF THE BUSINESS; ABSENCE OF CHANGES
OR EVENTS.............................................. PAGE 17
SECTION 4.13. COMPLIANCE WITH APPLICABLE LAWS........................ PAGE 18
SECTION 4.14. CERTAIN EMPLOYEE MATTERS............................... PAGE 18
SECTION 4.15. INSURANCE ............................................. PAGE 19
SECTION 4.16. BENEFIT PLANS.......................................... PAGE 19
SECTION 4.17. NTS LICENSES........................................... PAGE 20
SECTION 4.18. DISCLOSURE............................................. PAGE 20
i
SECTION 4.19. BROKERS................................................ PAGE 20
SECTION 4.20. Consulting Practice Methodologies...................... PAGE 20
ARTICLE V ............................................................ PAGE 21
REPRESENTATIONS AND WARRANTIES OF BUYER .............................. PAGE 21
SECTION 5.01. ORGANIZATION........................................... PAGE 21
SECTION 5.02. AUTHORITY.............................................. PAGE 21
SECTION 5.03. GOOD STANDING.......................................... PAGE 21
SECTION 5.04. GOVERNMENTAL CONSENTS - BUYER ......................... PAGE 21
SECTION 5.05. BROKER ................................................ PAGE 21
SECTION 5.06. SUFFICIENT FUNDS....................................... PAGE 21
SECTION 5.07. PURCHASE FOR INVESTMENT................................ PAGE 22
SECTION 5.08. ACCESS TO INFORMATION.................................. PAGE 22
ARTICLE VI ........................................................... PAGE 22
CERTAIN COVENANTS .................................................... PAGE 22
SECTION 6.01. CONDUCT OF BUSINESS OF COMPANY........................ PAGE 22
SECTION 6.02. ACCESS TO INFORMATION................................. PAGE 23
SECTION 6.03. REQUISITE CONSENTS.................................... PAGE 23
SECTION 6.04. REASONABLE EFFORTS.................................... PAGE 24
SECTION 6.05. RESTRICTIVE COVENANTS................................. PAGE 24
SECTION 6.06. Certain Costs ........................................ PAGE 24
SECTION 6.07. Revised NTS Agreement ................................ PAGE 24
ARTICLE VII .......................................................... PAGE 25
CONDITIONS TO BUYER .................................................. PAGE 25
SECTION 7.01. REPRESENTATIONS AND WARRANTIES......................... PAGE 25
SECTION 7.02. CONSENTS, ETC.; BURDENSOME CONDITIONS.................. PAGE 25
SECTION 7.03. GOVERNMENTAL RULES..................................... PAGE 25
SECTION 7.04. INJUNCTIONS, ETC....................................... PAGE 25
SECTION 7.05. RESIGNATION OF DIRECTORS............................... PAGE 26
SECTION 7.06. CLOSING DOCUMENTS...................................... PAGE 26
ARTICLE VIII ......................................................... PAGE 27
CONDITIONS TO THE SELLING ............................................ PAGE 27
SHAREHOLDERS ......................................................... PAGE 27
SECTION 8.01. REPRESENTATIONS AND WARRANTIES......................... PAGE 27
SECTION 8.02. CONSENTS, ETC.; BURDENSOME CONDITIONS.................. PAGE 27
SECTION 8.03. GOVERNMENTAL RULES..................................... PAGE 27
SECTION 8.04. INJUNCTIONS, ETC....................................... PAGE 28
SECTION 8.05. CLOSING DOCUMENTS...................................... PAGE 28
ARTICLE IX ........................................................... PAGE 28
INDEMNIFICATION ...................................................... PAGE 28
SECTION 9.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES............. PAGE 29
SECTION 9.02. INDEMNIFICATION........................................ PAGE 29
SECTION 9.03. THIRD-PARTY CLAIMS..................................... PAGE 31
SECTION 9.04. LIMITATIONS ON INDEMNITIES FROM SELLING SHAREHOLDERS... PAGE 32
SECTION 9.05. Appointment of IBM as Representative................... PAGE 32
SECTION 9.06. EXCLUSION OF CERTAIN DAMAGES........................... PAGE 33
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ARTICLE X ............................................................ PAGE 33
GUARANTEE ............................................................ PAGE 33
SECTION 10.01. GUARANTEE BY GUARANTOR................................ PAGE 33
ARTICLE XI ........................................................... PAGE 33
MISCELLANEOUS ........................................................ PAGE 33
SECTION 11.01. ENTIRE AGREEMENT...................................... PAGE 33
SECTION 11.02. PRESS RELEASES, PUBLIC ANNOUNCEMENTS AND PUBLICITY.... PAGE 34
SECTION 11.03. HSR FILING ........................................... PAGE 34
SECTION 11.04. CONFIDENTIAL INFORMATION.............................. PAGE 34
SECTION 11.05. TERMINATION OF AGREEMENT ............................. PAGE 34
SECTION 11.06. COUNTERPARTS.......................................... PAGE 35
SECTION 11.07. DESCRIPTIVE HEADINGS ................................. PAGE 35
SECTION 11.08. NOTICES............................................... PAGE 35
SECTION 11.09. CHOICE OF LAW......................................... PAGE 37
SECTION 11.10. ASSIGNMENT............................................ PAGE 37
SECTION 11.11. NO THIRD-PARTY BENEFICIARIES.......................... PAGE 38
SECTION 11.12. WAIVER AND AMENDMENT.................................. PAGE 38
SECTION 11.13. EXPENSES.............................................. PAGE 38
SECTION 11.14. WAIVER OF JURY TRIAL.................................. PAGE 38
SECTION 11.15. SEVERABILITY; COMPLIANCE WITH LAWS.................... PAGE 38
SECTION 11.16. JURISDICTION; CONSENT TO SERVICE OF PROCESS; REMEDIES. PAGE 39
SECTION 11.17. CONSTRUCTION; REPRESENTATION.......................... PAGE 40
iii
THIS STOCK PURCHASE AND SALE AGREEMENT (THIS
"AGREEMENT") DATED AS OF OCTOBER 6, 1997, IS MADE AND ENTERED
INTO AMONG Compagnie Generale Informatique, a French company
("CGI"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇") and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Sheridan") (CGI, ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
being referred to collectively herein as the "Selling
Shareholders"), International Business Machines Corporation, a
New York corporation ("IBM" or "Guarantor") and Alternative
Resources Corporation, a Delaware corporation ("BUYER").
WHEREAS, the Selling Shareholders desire to sell, and BUYER desires
to purchase, that number of shares of Common Stock presently owned by the
Selling Shareholders reflected on Exhibit A opposite the name of each Selling
Shareholder, representing all issued and outstanding shares of CGI Systems,
Inc. a Delaware corporation ("the Company") (collectively referred to as the
"SHARES") upon the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, BUYER desires to purchase from Selling Shareholders the
Shares of the Company upon the terms and conditions set forth in this
Agreement;
WHEREAS, Guarantor, as the indirect owner of CGI, desires to induce
BUYER to enter into the Agreement by guaranteeing performance of each and
every obligation of CGI set forth in this Agreement pursuant to the terms of
this Agreement;
WHEREAS, BUYER would not enter into this Agreement and consummate
the transactions contemplated hereby without the guaranty by Guarantor and
Guarantor's agreement to provide the guarantee contemplated hereby;
Accordingly, in consideration of the foregoing premises and the
respective representations, warranties, covenants and agreements set forth
herein, each party agreeing to be legally bound hereby, the Company, the
Selling Shareholders and BUYER agree as follows:
ARTICLE I
Page 2
DEFINITIONS
SECTION 1.01. Certain Definitions. As used in this Agreement, the
following terms shall have the meanings specified below:
"AFFILIATE" shall mean, as to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified. The term
"AFFILIATE", when used with regard to a Selling Shareholder or any other
natural person, shall also include members of such person's immediate family.
"BENEFIT PLANS" shall mean all "employee pension benefit plans" (as
defined in Section 3(2) of ERISA), "employee welfare benefit plans" (as
defined in Section 3(1) of ERISA), bonus, deferred compensation plans or
arrangements, and other employee fringe benefit plans (all the foregoing
being maintained, or contributed to, by the Company or by CGI Corporation, or
by any predecessor corporation of either the Company or CGI Corporation, for
the benefit of any officers or employees of the Company or CGI Corporation,
respectively), vacation policies, severance policies and any other
arrangements for the benefit of employees (or Persons who may be deemed to be
employees pursuant to any Governmental Rule).
"BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted in accordance with the Articles of Incorporation.
"BURDENSOME CONDITION" shall mean any action taken, or credibly
threatened, by or before any Governmental Authority or other Person to
challenge the legality of the transactions contemplated by this Agreement or
that would otherwise deprive a party of a material benefit of any such
transaction, including (i) the pendency of a governmental investigation
(formal or informal), (ii) the institution of any litigation, or the threat
thereof, (iii) an order by a Governmental Authority of competent jurisdiction
preventing consummation of the transactions contemplated by this Agreement or
placing any material conditions or limitations upon such consummation or (iv)
the issuance of any subpoena, civil investigative demand or other request for
documents or information relating to such transaction that is unreasonably
burdensome in the reasonable judgment of the applicable Person.
"BUSINESS DAY" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks
are open for business in New York, New York.
"CGI CORP." shall mean CGI Corporation, a Delaware corporation.
Page 3
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time (and any successor statute), and the rules and regulations
thereunder.
"COMMON STOCK" shall mean the shares of Common Stock, no par value,
of the Company.
"CONFIDENTIALITY AGREEMENT" shall mean the Agreement for the
Exchange of Confidential Information and Supplement, as amended, entered into
between the Company, and BUYER dated as of August 11, 1997.
"DISCONTINUED BUSINESSES" shall mean the businesses of the Company
associated with HR Access, PacBase, the NYPD Contract and Education and
Training, each as more specifically described in, and to be transferred to
IBM prior to Closing pursuant to, agreements substantially in the form of
those attached as Exhibits B, C, D, and E respectively
"CONTRACT" of any Person shall mean any written agreement, lease,
license, commitment or obligation to which such Person is a party or by which
any property of such Person is bound.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974.
"ESCROW AGENT" shall mean the ▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"ESCROW AGREEMENT" shall mean the Escrow Agreement to be dated as
of the Closing Date among ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and Buyer and the Escrow
Agent, in the form annexed hereto as Exhibit F.
"GOVERNMENTAL ACTIONS" shall mean any authorizations, consents,
approvals, waivers, exceptions, variances, franchises, permissions, permits,
and licenses of, and filings and declarations with, Governmental Authorities.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court, governmental or administrative agency or commission or other
governmental agency, authority, instrumentality or regulatory body.
"GOVERNMENTAL RULE" shall mean any statute, law, treaty, rule,
code, ordinance, regulation or order of any Governmental Authority or any
judgment, decree, injunction, writ, order or like action of any Federal,
state, local or foreign court, arbitrator or other judicial tribunal of
competent jurisdiction.
Page 4
"HSR ACT" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Act of 1976,
as amended.
"INDEBTEDNESS" of any Person shall mean, without
duplication, (a) all obligations of such Person for borrowed money
or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements
relating to property or assets purchased by such Person, (e) all
obligations of such Person issued or assumed as the deferred
purchase price of property or services, and (f) all obligations of
such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required
to be classified and accounted for as capital leases on a balance
sheet of such Person under generally accepted accounting
principles. The Indebtedness of any Person shall include the
Indebtedness of any entity which is a Subsidiary of such Person.
"LIEN" shall mean, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge, restriction or security
interest in or on such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such
securities, other than in the case of (a), (b) or (c), Permitted Liens.
Any reference to any event, condition, matter, change or effect
being "MATERIAL" with respect to the Company means an event, condition,
matter, change or effect which impacts or, insofar as reasonably can be
foreseen, in the future is likely to impact the condition (financial or
otherwise), properties, assets, liabilities, capitalization, licenses or
franchises, businesses, or operations of the Company, of a magnitude ( with
respect to any such event, condition, matter, change or effect or any related
set or series of similar such events, conditions, matters, changes or
effects) of at least two hundred fifty thousand dollars ($250,000.00) in
the aggregate.
"LITIGATION" shall mean any suit, action or proceeding.
"NET BOOK VALUE" shall be the value of the total assets of the
Company less the total liabilities of the Company as determined using US GAAP
accounting rules.
"PERMITTED LIENS" shall mean:
Page 5
(i) mechanics', carriers', workmen's, repairmen's or other like Liens
arising from or incurred in the ordinary course of business and securing
obligations which are not due or which are being contested in good faith
by the Company (provided that the Company has set up adequate reserves
therefor);
(ii) Liens for Taxes which are not due and payable or which may
thereafter be paid without penalty or which are being contested in good faith
by the Company (provided that the Company has set up adequate reserves for
the payment of Taxes;
(iii) imperfections of title or encumbrances, if any, which
imperfections of title or encumbrances do not materially impair the value of
such assets or the use of the assets to which they relate in the business of
the Company as presently conducted;
(iv) easements, covenants, rights-of-way and other encumbrances or
restrictions of record;
(v) zoning, building and other similar restrictions which are not
violated in any material respect by any improvements of the Company or by the
use thereof for the conduct of the Company's business;
(vi) unrecorded easements, covenants, rights-of-way or other
encumbrances or restrictions, and other Liens which are not material in
character or amount, none of which unrecorded items or other Liens materially
impairs the use of the property to which they relate in the business of the
Company as presently conducted; and
(vii) the Lien upon Sheridan's Shares in favor of the Company to
secure a loan made by the Company to Sheridan in the principal amount of
approximately forty thousand dollars ($40,000.00).
"PERSON" shall mean any individual, firm, corporation,
partnership, trust, joint venture, Governmental Authority or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
"POST-CLOSING TAX PERIOD" shall mean any Taxable period (or portion
thereof) that is not a Pre-Closing Tax Period.
"PRE-CLOSING TAX PERIOD" shall mean any Taxable periods ending on
or before the Closing Date and the portion ending on the Closing Date of any
Taxable period that begins before (but does not end on) the Closing Date.
Page 6
"PRO RATA PORTION" with respect to each Selling Shareholder shall
mean the percent of the total number of Shares represented by the Shares to
be sold by such Selling Shareholder.
"SUBSIDIARY" of any Person shall mean a corporation, company or
other entity (i) more than 50% of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are, or (ii) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture or
unincorporated association), but more than 50% of whose ownership interest
representing the right to make decisions for such other entity is, now or
hereafter owned or controlled, directly or indirectly, by such Person,
provided that such corporation, company or other entity shall be deemed to be
a Subsidiary only so long as such ownership or control exists.
"TAX" or "TAXES" (including, with correlative meaning, "TAXABLE")
shall mean all Federal, state, local and foreign taxes, assessments, levies,
impositions, withholdings and other governmental charges (including taxes
based upon or measured by gross receipts, income, profits, sales, use or
occupation, and value added, ad valorem, transfer, franchise, withholding,
payroll, social security, employment, excise and property taxes), together
with all interest, penalties and additions imposed with respect to such
amounts and any obligations under any agreements or arrangements with any
other Person with respect to such amounts.
"TAX RETURNS" shall mean all Tax returns, reports and forms
(including withholding tax returns) for a Taxable period required to be filed
by applicable Federal, state, local or foreign Tax laws or Governmental
Authority.
"TO THE KNOWLEDGE OF THE COMPANY" shall mean the actual knowledge
of ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, each manager of the
Company reporting directly to ▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇.
▇'▇▇▇▇ and ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
SECTION 1.02. ADDITIONAL DEFINITIONS.
Defined Term Section Defined in
------------ ------------------
"Accountants" 2.05
"Agreement" Recitals
"Antitrust Division" 10.03
"Balance Sheet" 4.05
"Benefit Plans" 4.14
"Closing" 2.03
Page 7
"Closing Date" 2.03
"Company" Parties
"Employee Welfare Benefit Plan" 4.16
"Financial Statements" 4.05
"FTC" 10.03
"IBM" Parties
"Indemnifying Party" 8.02(a)
"Losses" 8.02(a)
"Purchase Price" 2.01
"Selling Shareholders" Parties
"Shares" Recital
"Straddle Period" 8.02(d)(ii)
"Third Party Claim" 8.03
SECTION 1.03. TERMS GENERALLY. The definitions in Sections 1.01
and 1.02 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation." All references herein to Articles, Sections,
paragraphs, Exhibits and Schedules shall be deemed references to Articles,
paragraphs and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with United States generally accepted accounting
principles, as in effect from time to time.
ARTICLE II
PURCHASE AND SALE; CLOSING
SECTION 2.01. PURCHASE AND SALE OF THE SHARES. Subject to the
terms and conditions set forth below, on the Closing Date, (a) ▇▇▇▇▇▇▇▇▇▇
shall sell to BUYER, and BUYER shall purchase from ▇▇▇▇▇▇▇▇▇▇ seventy two
thousand six hundred fifty four (72,654) shares of the Company for seven
million four hundred fifty seven thousand six hundred fifty eight dollars and
forty three cents ($7,457,658.43); (b) Sheridan shall sell to the BUYER, and
BUYER shall purchase from Sheridan sixteen thousand twenty (16,020) shares of
the Company for one million six hundred forty four thousand three hundred
ninety two dollars and forty four cents $ (1,644,392.44), less the remaining
principal balance remaining due as of the Closing Date under the loan made by
the Company to Sheridan which is secured by a Lien in favor of the Company
upon Sheridan's Shares; and (c) CGI or an Affiliate of CGI shall sell to
BUYER and BUYER shall purchase from CGI ,or an Affiliate of CGI, all issued
and outstanding shares of CGI Corp, which owns six hundred ninety thousand
seven hundred two (690,702) shares of the Company, for seventy million eight
hundred ninety seven thousand nine hundred forty nine dollars and thirteen
cents ($
Page 8
70,897,949.13), less any liabilities outstanding on the balance sheet of CGI
Corp. as of the Closing Date; with the sum of the amounts in Sections
2.01(a) , 2.01(b) and 2.01(c) equaling the aggregate purchase price for all
issued and outstanding shares of the Company (the "PURCHASE PRICE").
SECTION 2.02. PAYMENT OF THE PURCHASE PRICE. On the Closing Date,
Buyer shall pay
(a) to CGI the amount set forth in Section 2.01(c) above by wire
transfer of immediately available funds to the account designated by CGI at
least two Business Days prior to the Closing Date;
(b) to each of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ one-half (1/2) of the
respective amounts set forth in Section 2.01(a) and 2.01(b), respectively,
by wire transfer of immediately available funds to accounts designated by
▇▇▇▇▇▇▇▇▇▇ and Sheridan, respectively, at least two Business Days prior to
the Closing Date; and
(c) one-half (1/2) of the respective amounts set forth in Section
2.01(a) and 2.01(b) to the Escrow Agent to be held by the Escrow Agent
pursuant to the terms and conditions of the Escrow Agreement.
SECTION 2.03. CLOSING. The Closing with respect to the purchase
and sale of the Shares (the "CLOSING") shall be held at the offices of
Guarantor, at Armonk, New York on the accounting month end of the Company
immediately following the expiration or early termination of the waiting
period under HSR. The date on which the Closing shall occur is herein
referred to as the "CLOSING DATE."
SECTION 2.04. CLOSING DELIVERIES. At the Closing Date:
(a) BUYER shall pay the Purchase Price in accordance with
Section 2.02; and
(b) the Selling Shareholders shall deliver to BUYER:
(i) certificates representing the Shares, duly endorsed
for transfer to BUYER or with appropriate stock powers duly executed for
transfer to BUYER attached;
(ii) spousal waivers signed by each of the spouses,
respectively, of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇.
SECTION 2.05. PURCHASE PRICE ADJUSTMENT.
Page 9
(a) As soon as practicable following the date hereof, the Company
shall engage ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and Company to conduct an audit of the balance
sheet of the Company as of the Closing Date (the "Closing Balance Sheet").
The Closing Balance Sheet shall be prepared in accordance with U.S. generally
accepted accounting principles which shall be applied consistent with those
used in the preparation of the Company's audited balance sheet as of December
31, 1996 to the extent that such principles are in conformity with U.S.
generally accepted accounting principles.
(b) In connection with the preparation by the Company and the audit
by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and Company of the Closing Balance Sheet, BUYER shall
engage KPMG and the Selling Shareholders shall engage Price Waterhouse, at
their own respective expense, to review the work papers of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
and Company and conduct such other activities as they deem appropriate.
(c) Promptly following the delivery of the audited Closing Balance
Sheet, which is anticipated to be available on or about fifteen (15) days
following the Closing Date, KPMG, Price Waterhouse and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and
Company (KPMG, Price Waterhouse and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and Company being
collectively referred to as the "Accountants" for purposes of this Section
2.05) shall meet to determine the Net Book Value of the Company as of the
Closing Date upon which any Purchase Price Adjustment required by this
Section 2.05 shall be based (the "Agreed Net Book Value"). In making such
determination, the Accountants shall take into consideration such matters as
they deem appropriate consistent with U.S. generally accepted accounting
principles.
(d) Without limiting the generality of the foregoing, it is
expressly agreed that one-half of the cost of the audit by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
and Company and all the costs of counsel for the Selling Shareholders
contemplated by this Section 2.05 shall be recorded as a pre-Closing
liability of the Company, it being agreed that one-half of the cost of said
audit shall be treated as a liability of the Company arising after the
Closing regardless of how it might otherwise have been treated on the audited
Closing Balance Sheet. The amount certified by at least two of the
Accountants to be the Agreed Net Book Value shall be used as the basis for
the adjustment payment provided for in Sections 2.05 (e) and (f), below.
(e) BUYER shall pay each of the Selling Shareholders its
or his Pro Rata Portion of the amount by which the Agreed Net Book
Value exceeds fourteen million, three hundred thousand dollars
($14,300,000). The Selling Shareholders, severally and not
jointly, shall pay to BUYER its or his Pro Rata Portion of the
amount by which the Agreed Net Book Value is less than fourteen
million, three hundred thousand dollars ($14,300,000).
(f) Any payments required by this Section 2.05 shall be made by
wire transfer of immediately available funds to the account(s) designated by
the
Page 10
party entitled to such payments within three (3) business days of the
determination of the Agreed Net Book Value.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
CONCERNING THE SELLING SHAREHOLDERS
Each Selling Shareholder represents, warrants and covenants to BUYER,
individually as to itself or himself and its or his respective properties, as
of the date hereof and as of the Closing, as follows:
SECTION 3.01. TITLE TO THE SHARES. Each of ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
and CGI Corporation is the beneficial and record owner of the respective
number of shares set forth in Exhibit A with respect to such Person and has
good title to such shares, free and clear of all Liens. The Shares constitute
all of the issued and outstanding shares of Common Stock and there are no
shares of stock of any other class authorized or issued.
SECTION 3.02. AUTHORITY OF SHAREHOLDER. (a) Such Selling
Shareholder has the power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated herein to be
consummated by such Selling Shareholder. This Agreement has been duly
executed and delivered by such Selling Shareholder and this Agreement is a
legal, valid and binding obligation of such Selling Shareholder enforceable
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally or general principles of equity.
No approval by or filing with any Governmental Authority, or any other
regulatory or self-regulatory body, is required in connection with the
execution and delivery by such Selling Shareholder of this Agreement or the
consummation by such Selling Shareholder of the transactions contemplated
hereby, except under the HSR Act.
(b) Such Selling Shareholder has all requisite power and authority
to sell, transfer and deliver to BUYER the Shares to be sold by such Selling
Shareholder pursuant to this Agreement.
SECTION 3.03. NO BANKRUPTCY, ETC. There has not been filed any
petition or application, or any proceedings commenced which have not been
discharged, by or against such Selling Shareholder with respect to any assets
under any law, domestic or foreign, relating to bankruptcy, reorganization,
compromise, arrangements, insolvency, readjustment of debt or creditors
rights, and no assignment has been made by such Selling Shareholder for the
benefit of creditors.
Page 11
SECTION 3.04. SHAREHOLDER AGREEMENTS. There are no voting trust
agreements or any other Contracts between such Selling Shareholder or CGI Corp.
and any other Person or, to the knowledge of the Company, between or among the
Company and any other Person:
(a) restricting or otherwise relating to voting or dividend rights
with respect to the Shares owned by such Selling Shareholder or CGI Corp.; or
(b) granting any Person any right in respect of such Shares; or
(c) granting any Person any right to acquire any additional shares of
Common Stock or stock of any other class of the Company.
Section 3.05. INDEPENDENT REVIEW. Each of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
hereby represent and warrant to each of BUYER, IBM and IBM Affiliates, that he
has reviewed the terms and conditions of this Agreement, and that he has been
advised to engage, and has in fact engaged, independent counsel, and has had
the terms and conditions of this Agreement reviewed by such independent counsel
and received advice regarding this Agreement and the transactions contemplated
hereby from such independent counsel prior to his execution of this Agreement.
Section 3.06. REPRESENTATIONS BY CGI CONCERNING CGI CORP. CGI
hereby represents and warrants to BUYER, as of the date hereof and as of the
Closing Date, as follows:
(a) CGI is the sole beneficial and record owner of all issued and
outstanding shares of CGI Corp., and there are no other capital shares of CGI
Corp. issued, or reserved for issuance, or authorized or outstanding. CGI's
shares of CGI Corp. are duly authorized, validly issued, fully paid and
nonassessable and are not subject to any preemptive or subscription rights;
;
(b) CGI Corp. has no assets other than its ownership of 690,702
shares of the Company;
(c) CGI Corp has no liabilities other than the liabilities on its
balance sheet as of the Closing Date used to calculate the proceeds to CGI
described in Section 2.01(c);
(d) CGI Corp. is the beneficial and record owner of 690,702 shares of
the Company, and has good title to such Shares, free and clear of all Liens;
(e) CGI Corp. is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. CGI Corp. has the
Page 12
corporate power and authority to own, lease or otherwise hold its properties
and assets and to carry on its business as presently conducted. CGI Corp. has
delivered to BUYER true and complete copies of the Articles of Incorporation,
as amended to date, and the By-laws, as in effect on the date hereof, of CGI
Corp.;
(f) CGI Corp. is in good standing and is qualified to do business in
every jurisdiction where the nature of its operations or ownership of assets
requires that it be so qualified, except where the failure to be in good
standing or so qualified would not have a material adverse effect on CGI Corp.
CGI Corp. is in good standing in each such jurisdiction;
(g) There are no outstanding warrants, options, rights, securities,
agreements, subscriptions or other commitments pursuant to which CGI Corp. is
or may become obligated to issue, deliver or sell any additional shares of
capital stock of CGI Corp. or to issue, grant, extend or enter into any such
warrant, option, right, security, agreement, subscription or other commitment.
(h) CGI Corp. does not directly or indirectly own any capital stock
of, or other equity interests in, any other corporation, partnership, limited
liability company or other entity, and CGI Corp. is not a member of or
participant in any partnership, limited liability company or joint venture and
is not obligated to become such a member or participant;
(i)
(i) to the knowlege of CGI Corp., CGI Corp. has filed or caused
to be filed in a timely manner (within any applicable extension periods) all
Tax Returns required to be filed by CGI Corp. by the Code or by applicable
state or local Tax laws;
(ii) all Taxes of CGI Corp. shown as due on such Tax Returns
have been duly and timely paid or accrued; and
(iii) no Tax Liens have been filed and no claims are being
asserted in a writing received by CGI Corp. with respect to any Taxes.
(k) to the knowledge of the Company, there are no outstanding
agreements or waivers extending the statutory period of limitation applicable
to any Tax Returns required to be filed by or on behalf of CGI Corp. and CGI
Corp. has not requested any extension of time within which to file any Tax
Return, which Tax Return has not yet been filed;
(l) there is no material Litigation pending or, to the knowledge of
the Company, threatened against CGI Corp. in writing. There is no outstanding
judgment, order or decree of any Governmental Authority or arbitrator appli
cable to CGI Corp.or its properties, assets or businesses having, or which,
insofar as
Page 13
can be reasonably foreseen, in the future is likely to have, a material
adverse effect on CGI Corp.or its businesses as heretofore conducted by CGI
Corp.;
(m) CGI Corp. and its properties, assets, operations and business,
have been operated and are in compliance in all material respects with all
applicable statutes, laws, ordinances, administrative orders, rules and
regulations of any Governmental Authority, except where the failure to so
comply would not have a material adverse effect on the business, financial
condition or results of CGI Corp.; and
(n) CGI Corp. has never had any employees or conducted any
operations.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY
The Selling Shareholders, severally and not jointly, represent, and
warrant to BUYER, as of the date hereof and as of the Closing, as follows:
SECTION 4.01. ORGANIZATION AND STANDING OF THE COMPANY. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company has the
corporate power and authority to own, lease or otherwise hold its properties
and assets and to carry on its business as presently conducted. The Company
has delivered to BUYER true and complete copies of the Articles of
Incorporation, as amended to date, and the By-laws, as in effect on the date
hereof, of the Company.
SECTION 4.02. GOOD STANDING. The Company is in good standing and
is qualified to do business in every jurisdiction where the nature of its
operations or ownership of assets requires that it be so qualified, except
where the failure to be in good standing or so qualified would not have a
material adverse effect on the Company.
SECTION 4.03. AUTHORITY.(a) The Company has the corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company
and the Selling Shareholders.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against it in accordance with its terms except as such enforcement
Page 14
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally or general principles
of equity.
(c) No approval by or filing with any Governmental Authority or
any other regulatory or self-regulatory body is required in connection with
the execution and delivery by the Company of this Agreement or the
consummation by the Company of the transactions contemplated hereby, except
under the HSR Act.
SECTION 4.04. CAPITAL STOCK OF THE COMPANY. (a) The authorized
capital stock of the Company consists of:
(i) 2,000,000 shares of Class A Common Stock, of which 779,376
shares of Class A Common Stock are issued and outstanding; and
(ii) there are no other capital shares of the Company issued, or
reserved for issuance, or authorized or outstanding. The outstanding shares of
Common Stock, are duly authorized, validly issued, fully paid and nonassessable
and are not subject to any preemptive or subscription rights;
(b) Exhibit A contains a true and complete list of the record holders
of shares of Common Stock as of the date hereof; and
(c) There are no outstanding warrants, options, rights, securities,
agreements, subscriptions or other commitments pursuant to which the Company
is or may become obligated to issue, deliver or sell any additional shares of
capital stock of the Company or to issue, grant, extend or enter into any
such warrant, option, right, security, agreement, subscription or other
commitment.
SECTION 4.05. EQUITY INTERESTS. The Company does not directly or
indirectly own any capital stock of, or other equity interests in, any other
corporation, partnership, limited liability company or other entity, and the
Company is not a member of or participant in any partnership, limited liability
company or joint venture and is not obligated to become such a member or
participant.
SECTION 4.06. FINANCIAL STATEMENTS. The Company has delivered to
BUYER:
(a) the unaudited balance sheet of the Company as of June 30,
1997 (the "JUNE BALANCE SHEET"), and the related unaudited statements of
Page 15
operations of the Company for the six-month period ended at the date of the
Balance Sheet, and
(b) the audited balance sheet of the Company as of December
31, 1996, and the related audited statements of operations, shareholders'
equity and cash flows for the year then ended (the financial statements
described in (a) and (b) are collectively referred to as the "FINANCIAL
STATEMENTS"). Except as specified on Schedule 4.06(b),the Financial
Statements are in accordance with the books and records of the Company, have
been prepared in conformity with French generally accepted-accounting
principles consistently applied (except as described in the notes included
therein) and fairly present the financial condition and results of operation
of the Company in all material respects as of the dates and for the periods
thereof.
SECTION 4.07. TAXES.:
(a) to the knowlege of the Company, the Company has filed or
caused to be filed in a timely manner (within any applicable extension periods)
all Tax Returns required to be filed by the Company by the Code or by
applicable state or local Tax laws,
(b) all Taxes of the Company shown as due on such Tax Returns
have been duly and timely paid or accrued, and
(c) no Tax Liens have been filed and no claims are being
asserted in a writing received by the Company with respect to any Taxes.
(d) to the knowledge of the Company, there are no outstanding
agreements or waivers extending the statutory period of limitation applicable
to any Tax Returns required to be filed by or on behalf of the Company and
the Company has not requested any extension of time within which to file any
Tax Return, which Tax Return has not yet been filed.
SECTION 4.08. ASSETS OTHER THAN REAL PROPERTY. The Company has
good title to all tangible assets reflected on the Balance Sheet or acquired
after the date thereof, except those since sold or otherwise disposed of in
the ordinary course of business and the terms of this Agreement, in each case
free and clear of all Liens. This Section does not relate to real property or
interests in real property; such items are covered under Section 4.09.
SECTION 4.09. REAL PROPERTY. The Company does not own any real
property. Schedule 4.09 sets forth a complete list of all real property and
interests in real property leased by the Company.
Page 16
SECTION 4.10. CONTRACTS. Except as set forth on Schedule 4.10, the
Company is not a party to or bound by any:
(a) Contract not entered into in the ordinary course of business
which involves payments by the Company of two hundred fifty thousand dollars
($250,000.00) or more in any calendar year;
(b) employee collective bargaining agreement or other contract with
any labor union;
(c) covenant not to compete;
(d) Contract with:
(i) any shareholder of the Company,
(ii) any Affiliate of the Company or of any shareholder of the
Company, or
(iii) any officer, director or employee of the Company or of any
Affiliate of the Company;
(e) material Contract relating to patents, trademarks, trade names,
service marks, or copyrights;
(f) joint venture, partnership or other equity-based strategic
alliance agreement; or
(g)(i) any Contract providing for performance by the Company on a
fixed fee basis (a "Fixed Price Contract") which is either not terminable at
will or involves services expected to have a cost of performance following
Closing in excess of one hundred thousand dollars ($100,000.00).
(h) any Contract other than a Fixed Price Contract to which the
Company is a party or by or to which it or any of its properties or assets is
bound or subject which is not terminable by the Company or its Subsidiary for a
cost of less than Twenty Five thousand dollars ($25,000.00); or
Each Contract of the Company set forth in Schedule 4.10 hereto is in
full force and effect and is a legal, valid and binding agreement of the
Company and, to the knowledge of the Company, of each other party thereto,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally or general principles of
equity. The Company is not in default in any material respect under any
material Contract;
Page 17
and, to the knowledge of the Company, no other party to any of the material
Contracts is in default in any material respect thereunder.
SECTION 4.11. LITIGATION; DECREES. Except as disclosed in
Schedule 4.11, there is no material Litigation pending or, to the knowledge
of the Company, threatened against the Company in writing. There is no
outstanding judgment, order or decree of any Governmental Authority or
arbitrator appli cable to the Company or its properties, assets or businesses
having, or which, insofar as can be reasonably foreseen, in the future is
likely to have, a material adverse effect on the Company or its businesses as
heretofore conducted by the Company.
SECTION 4.12. OPERATION OF THE BUSINESS; ABSENCE OF CHANGES OR
EVENTS. (a) Except as indicated on Schedule 4.12(a), since the date of the
Balance Sheet, the business of the Company has been conducted in the ordinary
course and there has not been any material adverse change with respect to the
Company.
(b) Except as indicated on Schedule 4.12(b), since the date of the
Balance Sheet, the Company has not:
(i) declared or paid or made, or agreed to declare or pay or
make, any dividends or other distributions in cash or property to the
shareholders of the Company;
(ii) purchased or redeemed any securities issued by the Company
or issued any equity securities, warrants, options or convertible, exchangeable
or redeemable securities;
(iii) made any material expenditures or investments other than
in the ordinary course of business, or acquired any entity or entered into
any joint venture, or entered into any contract to do any of the foregoing;
(iv) except for the disposition of the Discontinued
Businesses, sold, licensed, assigned or otherwise transferred any material
assets, or entered into any contract to do any of the foregoing other than in
the ordinary course of business, or to be acquired by another entity;
(v) other than in the ordinary course of business, increased
the compensation of any officer, director or employee, entered into any
employment agreement with any Person or modified any employment agreement
with any Person;
(vi) adopted any amendment to its Articles of Incorporation or
By-laws;
Page 18
(vii) adopted any collective bargaining agreement or employee
benefit plan;
(viii) permitted any of its assets to become subject to any
Lien;
(ix) canceled any material Indebtedness owed to the Company or
waived any material claims of any kind; or
(x) failed to pay all payroll or other Taxes when due or
failed to pay all other material obligations of the Company, nor shall the
Company do any of the foregoing prior to Closing, except as approved in
writing by BUYER.
SECTION 4.13. COMPLIANCE WITH APPLICABLE LAWS. The Company and its
properties, assets, operations and business, have been operated and are in
compliance in all material respects with all applicable statutes, laws,
ordinances, administrative orders, rules and regulations of any Governmental
Authority, except where the failure to so comply would not have a material
adverse effect on the business, financial condition or results of the Company.
SECTION 4.14. CERTAIN EMPLOYEE MATTERS. The Company is in
compliance in all material respects with all applicable laws respecting
employment and employment practices, occupational safety and health
standards, terms and conditions of employment and wages and hours, and are
not engaged in any unfair labor practice. All Persons who are deemed to be
"employees" pursuant to any Governmental Rule, have been treated as employees
by the Company. The Company has not engaged in any pattern or practice with
respect to any group of employees or subcontractors which would violate in
any material respect any applicable laws respecting employment and employment
practices.
SECTION 4.15. INSURANCE. Schedule 4.15 sets forth a complete and
accurate list and summary description, including annual premiums and
deductibles, of all material policies of fire, liability, product liability,
workmen's compensation, health and other forms of insurance presently in
effect with respect to the Company's business, true and correct copies of
which have been delivered to, or made available for review by, BUYER. All
such policies are valid, outstanding and enforceable policies and provide
insurance coverage for the properties, assets and operations of the Company,
of the kinds, in the amounts and against the risks required to comply with
applicable law.
SECTION 4.16 BENEFIT PLANS. (a) The Company has made available to
BUYER true, complete and correct copies of :
Page 19
(i) each Benefit Plan (or, in the case of any unwritten Benefit
Plan, a brief description thereof); and
(ii) each trust agreement and group annuity contract relating to
any Benefit Plan.
(b) The Company is in compliance in all material respects with the
provisions of ERISA, the Code and all regulations under the Code, ERISA and
any other Governmental Rules. The Company does not maintain any Benefit Plan
which is subject to the provisions of Title IV of ERISA. No "reportable
event" (as defined in Section 4043 of ERISA and the regulations thereunder)
has occurred with respect to any Benefit Plan that is subject to the
provisions of Title IV of ERISA and which is maintained for employees of the
Company. There are no unfunded vested liabilities under any such Benefit
Plan.
(c) No employee of the Company will be entitled to any additional
benefits or any acceleration of the time of payment or vesting of any
benefits under any Benefit Plan as a result of the transactions contemplated
by this Agreement.
(d) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports and Summary Plan Descriptions) have
been filed or distributed as required by applicable Governmental Rule with
respect to each such Benefit Plan. The requirements of Part 6 of Subtitle B
of Title I of ERISA and of Code Sec.4980B have been substantially satisfied
with respect to each such Benefit Plan which is an employee welfare benefit
plan as defined in Section 3(1) of ERISA (an "Employee Welfare Benefit Plan").
(e) All contributions for any period ending on or before the
Closing Date which are not yet due have been paid to each such Employee
Welfare Benefit Plan or accrued in accordance with the past custom and
practice of the Company. All premiums or other payments which are due for all
periods ending on or before the Closing Date have been paid with respect to
each such Benefit Plan which is an Employee Welfare Benefit Plan.
(f) The Company has made available to BUYER correct copies of the
plan documents and Summary Plan Descriptions, the most recent determination
letter received from the Internal Revenue Service, the most recent Form 5500
Annual Report, and all related trust agreements, insurance contracts, and
other funding agreements which implement each such Benefit Plan.
(g) The Company does not maintain or contribute to any Employee
Welfare Benefit Plan providing medical, health, or life insurance or other
welfare-type benefits for current or future retired or terminated employees,
their spouses, or their dependents (other than in accordance with Code Sec.
4980B).
Page 20
SECTION 4.17 NTS LICENSES. The Company has not received any
notice or other communication, whether written or, to the knowledge of the
Company, oral, to the effect that the number of NTS licenses will be
increased or that the nature and scope or the value of the NTS license to
the Company will be materially impaired.
SECTION 4.18 DISCLOSURE. No representation or warranty made by
the Selling Shareholders in this Agreement, or Schedules, exhibits or
attachments hereto, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact necessary to
make the statement or facts contained herein or therein not misleading in
light of the circumstances under which they were furnished.
SECTION 4.19. BROKERS. The Company, the Selling Shareholders and
CGI Corp. have not engaged any broker or finder in connection with the
transactions contemplated by this Agreement.
SECTION 4.20. CONSULTING PRACTICE METHODOLOGIES. To the knowledge
of the Company:
(a) the Company is the owner of the consulting practice
methodologies created by employees of the Company and listed on Schedule 4.20
(the "Consulting Practice Methodologies") as they exist as of the date hereof
and as of the Closing Date; and
(b) there is no material Litigation pending or, to the knowledge of
the Company, threatened against the Company in writing alleging that the
Company's use of the Consulting Practice Methodologies infringe upon the
intellectual property rights of any other Person.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
BUYER represents and warrants to the Company and the Selling
Shareholders, as of the date hereof and as of the Closing, as follows:
SECTION 5.01. ORGANIZATION. BUYER is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the power and authority to own, lease or otherwise hold its properties
and assets and to carry on its business as presently conducted.
SECTION 5.02. AUTHORITY. BUYER has the corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
BUYER and constitutes a valid and binding obligation of BUYER enforceable
Page 21
against it in accordance with its terms. No other corporate proceedings on
the part of BUYER are necessary to authorize BUYER'S execution and
performance of this Agreement and the transactions contemplated hereby.
SECTION 5.03. GOOD STANDING. BUYER is in good standing and is
qualified to do business in every jurisdiction where the nature of its
operations or ownership of assets requires that it be so qualified, except
where the failure to be so qualified would not have a material adverse effect
on BUYER.
SECTION 5.04. GOVERNMENTAL CONSENTS - BUYER. No approval by or
filing with any Governmental Authority or any other regulatory or
self-regulatory body is required in connection with the execution and
delivery by the Company of this Agreement or the consummation by the Company
of the transactions contemplated hereby, except under the HSR Act.
SECTION 5.05. BROKER'S FEES. BUYER shall be responsible for all
liabilities and claims (including costs and expenses defending against same)
arising in connection with any claim by a finder or broker that it acted on
behalf of BUYER in connection with the transactions contemplated hereby.
SECTION 5.06. SUFFICIENT FUNDS. BUYER represents and warrants that
BUYER has sufficient funds, currently available to BUYER without contingency
or condition, to enable BUYER to pay the Purchase Price to the Selling
Shareholders on the Closing Date pursuant to Section 2.02, above.
SECTION 5.07. PURCHASE FOR INVESTMENT. BUYER is acquiring the
Shares for its own account for investment purposes, and not with a view
toward any resale or distribution thereof.
SECTION 5.08. ACCESS TO INFORMATION. BUYER acknowledges and agrees
that it has been furnished with the information about the Company in the
data room, and allowed access to the Company and its records, sufficient to
enable BUYER to perform its due diligence investigation of the transactions
contemplated by this Agreement to its satisfaction, and that BUYER has
completed such due diligence to its satisfaction.
ARTICLE VI
CERTAIN COVENANTS
SECTION 6.01. CONDUCT OF BUSINESS OF COMPANY. (a) Except as
contemplated by this Agreement, or as set forth in Schedule 6.01 or with the
prior consent of BUYER, during the period from the date of this Agreement to
the Closing Date, the Selling Shareholders will use reasonable efforts to
cause the Company:
Page 22
(i) to conduct the business of the Company in the ordinary
course, except in connection with the transactions contemplated hereby;
(ii) to preserve intact the present organization of the Company
and preserve its relationships with its material customers, suppliers and
others having significant business dealings with it, in each case in the
ordinary course of business.
(b) Without limiting the generality of the foregoing, and except as
otherwise provided in this Agreement, the Selling Shareholders will not permit
the Company, prior to the Closing Date, without the prior consent of BUYER, to:
(i) incur any Indebtedness or issue any long-term debt
securities or assume, guarantee or endorse the obligations of any other Person,
to the extent that such would be an Indebtedness, except for Indebtedness
incurred in the ordinary course of business;
(ii) except in the ordinary course of business
(1) acquire or dispose of, any material property or assets,
or
(2) mortgage or encumber any material property or assets;
(iii) enter into any commitments that would be material, other
than those made in the ordinary course of business;
(iv) other than with respect to the Discontinued Businesses,
engage in any transactions with, or enter into any Contracts with, any
Selling Shareholders or any of their respective Affiliates;
(v) enter into, adopt, amend or terminate any material
agreement relating to the compensation or severance of any employee of the
Company other than in the ordinary course of business, except to the extent
required by law or an existing agreement; or
(vi) agree to take any of the foregoing actions.
SECTION 6.02. ACCESS TO INFORMATION. From the date of this
Agreement to the Closing, the Company will, for the sole purpose of enabling
BUYER to develop a transition plan in connection with BUYER's succession to
the business of the Company:
Page 23
(a) give BUYER and its authorized representatives reasonable access
to the documents in the data room and to the books, records, offices and other
facilities and properties of the Company;
(b) permit BUYER to make reasonable inspections of the books, records
and facilities of the Company;
(c) cause its officers to furnish BUYER with such financial and
operating data and other information with respect to the Company as BUYER may
from time to time reasonably request; and
(d) permit BUYER to confer with employees of the Company with
knowledge of such financial and operating data;
provided, however, that any such access shall be conducted at a reasonable time
and in such manner as not to interfere with the operation of the Company. All
such information and access shall be subject to the terms and conditions of the
Confidentiality Agreement between BUYER and the Company.
SECTION 6.03. REQUISITE CONSENTS. Prior to the Closing Date and
thereafter, BUYER and the Selling Shareholders shall fully cooperate with
each other to cause the Company to obtain all Requisite Consents (i.e., all
consents required from third parties under any commitments which are required
for the transfer, directly or indirectly, thereof); provided, however, that
the Selling Shareholders shall not be obligated to pay or otherwise make
available any form of consideration to obtain any such Required Consents.
SECTION 6.04. REASONABLE EFFORTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable efforts to take, or cause to be taken, all reasonable actions, and
to do, or cause to be done, all reasonable things necessary, proper or
advisable under applicable Governmental Rules to consummate and make effective
the transactions contemplated hereby, including, without limitation, making all
required filings and applications and complying with or responding to any
requests by Governmental Authorities; provided, that no party shall be required
to comply with any Burdensome Condition.
SECTION 6.05. RESTRICTIVE COVENANTS. Neither ▇▇▇▇▇▇▇▇▇▇ nor
▇▇▇▇▇▇▇▇ shall work for another one of the eight (8) primary vendors under
IBM's NTS program as of the date hereof for a period of 18 months following the
Closing Date.
SECTION 6.06. CERTAIN COSTS. Effective as of the Closing Date,
(a) CGI hereby agrees:
Page 24
(i) with respect to the HR Access business, to immediately pay all
past expenses of the Company previously charged by the Company to CGI and to
reimburse the Company for all such future costs and expenses actually
incurred by the Company using the same markup for such costs used by the
Company prior to the date hereof, until such time as CGI terminates the HR
Access services being provided by the Companyand the Company has ceased to
incur such costs to provide HR Access services to CGI;
(ii) to continue to provide the Company access to the financial
systems and information to the same extent that the Company had such access
prior to the date hereof for a period of at least six (6) months; and
(iii) to discontinue all intercompany charges to the Company, other
than arm's-length accounts receivable owed by the Company to CGI, if any, and
reasonable computer charges for CGI processing the Company's financial
systems and information; and
(b) the IBM Intercompany Agreement under which the Company is
required to pay IBM a two (2) percent royalty on non IBM services will be
terminated.
SECTION 6.07 REVISED NTS AGREEMENT. IBM and the Company shall
execute a revised NTS Agreement which shall substantially reflect the terms and
conditions specified in Exhibit G, attached hereto.
ARTICLE VII
CONDITIONS TO BUYER'S OBLIGATIONS
The obligation of BUYER to consummate the transactions contemplated
herein is subject to the satisfaction (or waiver by BUYER) of the conditions
set forth below in this Article.
SECTION 7.01. REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Selling Shareholders made in this Agreement shall be
true and correct in all material respects as of the date of this Agreement
and as of the Closing Date with the same effect as if made at and as of the
Closing Date, except to the extent such representations and warranties
relate to an earlier specified date. The Selling Shareholders shall have
performed in all material respects their respective covenants and agreements
contained in this Agreement required to be performed by them at or prior to
the Closing.
SECTION 7.02. CONSENTS, ETC.; BURDENSOME CONDITIONS. (a) The
waiting period under the HSR Act shall have expired or been terminated.
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(b) No Burdensome Condition shall exist with respect to BUYER or the
Company in connection with the transactions contemplated hereby.
(c) No Litigation challenging the transactions contemplated by this
Agreement shall be pending or threatened against any party.
SECTION 7.03. GOVERNMENTAL RULES. (a) No Governmental Rule shall
have been instituted, issued or proposed to restrain, enjoin or prevent the
transactions contemplated hereby or to invalidate, suspend or require
modification of any material provision of this Agreement.
(b) No change shall have occurred since the date of this Agreement
in any Governmental Rule that, in BUYER'S good faith opinion, would make it
illegal for BUYER to consummate the transactions contemplated hereby or
subject BUYER to any fine, penalty or other liability under or pursuant to
any Governmental Rule in connection with any such transaction.
SECTION 7.04. INJUNCTIONS, ETC. No injunction, order or decree of
any Governmental Authority shall be in effect as of the Closing, and no
lawsuit, claim, proceeding or investigation shall be pending or threatened by
or before any Governmental Authority as of the Closing, which would restrain,
prohibit or make unlawful the sale of the Shares to BUYER.
SECTION 7.05. RESIGNATION OF DIRECTORS. All directors of the
Company shall have tendered their resignations, which resignations shall be
effective as of the Closing Date.
SECTION 7.06. CLOSING DOCUMENTS. The Selling Shareholders shall
have delivered to BUYER the following documents:
(a) a certificate of each of the Selling Shareholders, dated as of
the Closing Date, to the effect that the representations and warranties in
Article III are true and correct in all material respects with respect to such
Selling Shareholder, and, to the knowledge of such Person, that the
representations and warranties in Article IV are true and correct in all
material respects, and that all actions required to be taken by such Person to
authorize the sale of the Shares owned by such Selling Shareholder to BUYER
have been duly taken.
(b) a certificate of the chief operating officer, secretary or
assistant secretary of the Company, dated as of the Closing Date, as to the
continued existence of the Company certifying the attached copy of the By-laws
of the Company, ;
(c) a certificate of the Secretary of State of the State of
Delaware, dated a recent date, to the effect that the Company is in good
standing in the State of Delaware;
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(e) a copy of the Articles of Incorporation of the Company as filed
with the Secretary of State of the State of Delaware certified as of a recent
date; and
(f) such books as are in the Company's possession and control
containing all of the original stock records and corporate records of the
Company, including records of proceedings of the Board of Directors and
stockholders of the Company, and all predecessor companies, and canceled stock
certificates;
(g) a certificate of the chief operating officer, secretary or
assistant secretary of CGI Corp., dated as of the Closing Date, as to the
continued existence of CGI Corp., certifying the attached copy of the By-laws
of CGI Corp.;
(h) a certificate of the Secretary of State of the State of Delaware,
dated a recent date, to the effect that CGI Corp. is in good standing in the
State of Delaware;
(i) a copy of the Articles of Incorporation of CGI Corp. as filed
with the Secretary of State of the State of Delaware certified as of a recent
date; and
(j) such books as are in CGI Corp.'s possession and control
containing all of the original stock records and corporate records of CGI
Corp., including records of proceedings of the Board of Directors and
stockholders of CGI Corp., and all predecessor companies, and canceled stock
certificates.
ARTICLE VIII
Conditions to the Selling
Shareholders' Obligations
The obligations of the Selling Shareholders to consummate the
transactions contemplated herein shall be subject to the satisfaction (or
waiver by the Selling Shareholders) of the conditions set forth below in this
Article.
SECTION 8.01. REPRESENTATIONS AND WARRANTIES. The representations,
warranties and covenants of BUYER made in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date with the same effect as if made at and as of the Closing Date.
SECTION 8.02. CONSENTS, ETC.; BURDENSOME CONDITIONS. (a) The
waiting period under the HSR Act shall have expired or been terminated.
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(b) No Burdensome Condition shall exist with respect to any Selling
Shareholder , the BUYER or the Company in connection with the transactions
contemplated hereby.
(c) No Litigation challenging the transactions contemplated by this
Agreement shall be pending or threatened against any party.
SECTION 8.03. GOVERNMENTAL RULES. (a) No Governmental Rule shall
have been instituted, issued or proposed to restrain, enjoin or prevent the
transactions contemplated hereby or to invalidate, suspend or require
modification of any material provision of this Agreement.
(b) No change shall have occurred since the date of this Agreement
in any Governmental Rule that, in any Selling Shareholder's good faith opinion,
would make it illegal for any such Selling Shareholder to consummate the
transactions contemplated hereby or subject such Selling Shareholder to any
fine, penalty or other liability under or pursuant to any Governmental Rule in
connection with any such transaction.
SECTION 8.04. INJUNCTIONS, ETC. No injunction, order or decree of
any Governmental Authority shall be in effect as of the Closing, and no
lawsuit, claim, proceeding or investigation shall be pending or threatened by
or before any Governmental Authority as of the Closing, which would restrain,
prohibit or make unlawful the sale of the Shares by any Selling Shareholder.
SECTION 8.05. CLOSING DOCUMENTS. BUYER shall have delivered to each
of the Selling Shareholders the following documents:
(a) a certificate of an authorized signatory of BUYER, dated the
Closing Date, to the effect that the conditions specified in Sections 7.01 and
7.02 have been satisfied as to BUYER ;
(b) an incumbency certificate dated the Closing Date for the
authorized signatories of BUYER executing this Agreement and any documents
delivered in connection with this Agreement at the Closing;
(c) a certificate of the secretary of BUYER, dated as of the Closing
Date, to the effect that the representations and warranties in Article V are
true and correct in all material respects, and that all actions required to be
taken by BUYER to authorize the purchase of the Shares by BUYER from each of
the Selling Shareholders have been duly taken;
(d) a certificate of the secretary or assistant secretary of BUYER,
dated as of the Closing Date, as to the continued existence of BUYER certifying
the attached copy of the By-laws of BUYER, the authorization of the execution,
delivery and performance of this Agreement and the resolutions adopted by the
Page 28
Board of Directors of BUYER authorizing the actions to be taken by the Company
under this Agreement;
(e) a certificate of the Secretary of State of the State of Delaware,
dated a recent date, to the effect that BUYER is in good standing in the State
of Delaware; and
(f) a copy of the Articles of Incorporation of BUYER as filed with
the Secretary of State of the State of Delaware certified as of a recent date.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
covenants, agreements, representations and warranties of the parties (a)
contained in Article III shall survive indefinitely; (b) pursuant to Section
9.02(d), below, shall survive for six months after the expiration of the
applicable statue of limitations ; and (c) contained elsewhere herein shall
survive the Closing and shall remain in full force and effect for a period of
eighteen (18) months after the Closing Date, but in each case, all such
covenants, agreements, representations and warranties shall be subject to all
limitations and other provisions contained in this Agreement. After the
Closing, the Indemnities set forth in this Article IX shall be the sole and
exclusive remedy of each party for damages for breach of any covenant,
agreement, representation or warranty contained in this Agreement.
SECTION 9.02. INDEMNIFICATION. (a) "LOSSES" of any Person shall
mean any and all demands, claims, suits, actions, causes of action,
proceedings, assessments, losses, damages, liabilities, costs and expenses
incurred by such Person, including interest, penalties and reasonable
attorneys' fees and any increased insurance premiums resulting from claims
relating to indemnified matters. As used in this Section 9.02, an Affiliate of
BUYER shall mean any direct or indirect Subsidiary of BUYER and any officer,
director or employee of BUYER or any such Subsidiary. As used in this
Agreement, an "INDEMNIFYING PARTY" shall mean, with respect to any Loss, the
Person or Persons that have agreed to indemnify and hold harmless the other
party or parties and its or their Affiliates with respect to such Loss
pursuant to Section 9.02(b), (c), (d) or (e), as provided below. The liability
of the Indemnifying Parties shall be several and not joint, as hereinafter
provided. As used in this Agreement, an "INDEMNITEE" shall mean the Person or
Persons that the Indemnifying Party has agreed to indemnify and hold harmless
with respect to any Loss pursuant to Section 9.02(b), (c) or (d), as provided
below.
Page 29
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless BUYER and its Affiliates from and against any and
all Losses (as heretofore defined) asserted against, imposed upon, or incurred
by such Indemnitee and which arise out of or in connection with:
(i) any inaccuracy in, or any breach of, any representation or
warranty of such Selling Shareholder contained in Article III of this
Agreement; PROVIDED, HOWEVER, that each Selling Shareholder shall be liable
only to the extent of his Pro Rata Portion to indemnify and hold harmless BUYER
and its Affiliates from and against any and all Losses asserted against,
imposed upon, or incurred by BUYER and its Affiliates in connection with a
breach of the representation made in the second sentence of Section 3.01,
above;
(ii) the failure by such Selling Shareholder to perform any
covenant or agreement in this Agreement; or
(iii) any asset, liability, obligation, operation or
circumstance arising out of or relating to or comprising the Discontinued
Businesses.
(c) Each Selling Shareholder agrees, severally and not jointly and
to the extent of his Pro Rata Portion, to indemnify and hold harmless BUYER and
its Affiliates from and against any and all Losses asserted against, imposed
upon, or incurred by such Indemnitee and which arise out of or in connection
with:
(i) any inaccuracy in, or any breach of, any representation or
warranty concerning the Company contained in Article IV of this Agreement; or
(ii) the failure by the Company to perform any covenant or
agreement in this Agreement;
(d) Each Selling Shareholder, severally and not jointly, and to the
extent of his Pro Rata Portion, agrees to indemnify and hold harmless BUYER and
its Affiliates from and against any and all Losses asserted against, imposed
upon or incurred by BUYER or its Affiliates resulting from or arising out of
liability for Taxes of the Company attributable to any Pre-Closing Tax Period,
computed and discharged as follows:
(i) In the case of any Taxable period that includes (but does
not end on) the Closing Date (a "STRADDLE PERIOD"), the Taxes of the Company
for the Pre-Closing Tax Period shall be computed as if the Pre-Closing Tax
Period ended as of the close of business on the Closing Date, and the amount of
Taxes of the Company for the Post-Closing Tax Period shall be the excess, if
any, of (x) the Taxes of the Company for the Straddle Period over (y) the Taxes
of the Company for the Pre-Closing Tax Period.
Page 30
(ii) The indemnity obligation of the Selling Shareholders
described above with respect to Taxes attributable to any Pre-Closing Tax
Period shall be discharged by payment to BUYER of the excess of such Taxes for
such Pre-Closing Tax Period over the amount of such Taxes of the Company paid
on or prior to the Closing Date by or on behalf of the Company. Such payment
shall be made before the later of (A) five Business Days prior to the date the
relevant Tax is due (including by way of payment of estimated Taxes) and
(B) five Business Days after BUYER notifies the Selling Shareholders that such
Tax is due.
(e) Buyer agrees to indemnify and hold harmless the Company, the
Selling Shareholders and the Affiliates of each of them from and against any
and all Losses (as heretofore defined) asserted against, imposed upon, or
incurred by such Indemnitee and which arise out of or in connection with:
(i) any inaccuracy in, or any breach of, any representation or
warranty of Buyer contained in Article V of this Agreement; or
(ii) the failure by Buyer to perform any covenant or agreement
in this Agreement;
(f) For the purposes of the indemnity provided in this
Section 9.02, any Losses hereunder shall be determined on the basis of the net
effect after giving effect to any cash payments, setoffs or recoupment or any
payments in each case actually received, realized or retained by the Indemnitee
as a result of any event giving rise to a claim for such indemnification,
including but not limited to any amounts that the Indemnitee recovers under
insurance policies or agreements with respect to any such Loss. Each Indemnitee
will take all reasonable actions to secure payment from such insurance policies
before putting forward a claim for any Loss to the Indemnifying Party.
SECTION 9.03. THIRD-PARTY CLAIMS. (a) If a claim by a third party
(a "THIRD PARTY CLAIM") is made against BUYER arising out of a matter for which
BUYER is entitled to be indemnified pursuant to Section 9.02, BUYER shall
promptly notify each Selling Shareholder in writing of such claim and the
Selling Shareholders will undertake the cost of defending against such claim.
(b) In addition to the rights provided in Section 9.03(a) the
Selling Shareholders shall be entitled to participate in the defense of a Third
Party Claim, or undertake the defense of a Third Party Claim, individually or
jointly, at their own expense. Such Shareholders shall have 30 days after
receipt of the above-mentioned notice to undertake to conduct and control,
through counsel of their own choosing, and at their sole risk and expense, the
good faith settlement or defense of such claim, and BUYER shall cooperate fully
with such Selling
Page 31
Shareholders in connection therewith; provided that (i) BUYER shall be
entitled to participate in such settlement or defense through counsel chosen
by it, provided that, the fees and expenses of such counsel shall be borne by
BUYER, and (ii) the Selling Shareholders shall have within the aforementioned
30-day period notified BUYER in writing of their election to undertake such
defense or settlement. The Selling Shareholders shall obtain the written
consent of BUYER prior to ceasing to defend, settling or otherwise disposing
of such Third Party Claim if, as a result thereof, BUYER would become subject
to injunctive, declaratory or other equitable relief or the business of BUYER
would be materially adversely affected.
(c) So long as the Selling Shareholders are reasonably contesting
any such Third Party Claim in good faith, BUYER shall cooperate with the
Selling Shareholders in the defense of such Third Party Claim by providing
records and information which are relevant to such Third Party Claim. BUYER
shall not settle or compromise any Third Party Claim without the prior written
consent of the Selling Shareholders unless BUYER agrees in writing to forego
all claims for indemnification from the Selling Shareholders with respect to
such Third Party Claim. However, if the Selling Shareholders, within 30 days
after notice of any such claim, fail to defend such Third Party Claim, BUYER
will have the right to undertake the defense, compromise or settlement of such
claim on behalf of and for the account and risk of the Selling Shareholders.
(d) Notwithstanding the foregoing, if a Third Party Claim shall
relate to Taxes for a Straddle Period, the Selling Shareholders shall control
all proceedings taken in connection with such Third Party Claim.
SECTION 9.04. LIMITATIONS ON INDEMNITIES FROM SELLING SHAREHOLDERS.
Notwithstanding any other provision of this Article IX, the indemnity
obligations of the Selling Shareholders shall be subject to the following
limitations:
(a) the Selling Shareholders shall not be liable for any individual
breach of any of the representations, warranties, covenants or agreements by
the Selling Shareholders or the Company contained in this Agreement where the
Losses resulting therefrom are less than twenty thousand dollars
($20,000.00), and no such individual breach shall be aggregated for purposes of
Section 8.04(b), below;
(b) the Selling Shareholders shall not be liable for any breach of
any representation, warranty, covenant or agreement by the Selling Shareholders
or the Company contained in this Agreement unless the aggregate amount of
Losses with respect to all such breaches by the Selling Shareholders or the
Company exceeds one million dollars ($1,000,000.00) and then only to the extent
of such excess up to a maximum aggregate liability of twenty million
($20,000,000.00); PROVIDED, HOWEVER, that each Selling Shareholder shall be
Page 32
liable to Buyer up to a maximum aggregate liability of the total respective
amounts actually received by each such Selling Shareholder from Buyer pursuant
to Section 2.02, above, for such Selling Shareholder's breach of his or its
representations set forth in Section 3.01 ("Title to Shares"), and for such
Selling Shareholder's indemnification obligations pursuant to Section 9.02(d),
above.
(c) no Selling Shareholder shall be liable to contribute to
indemnification for Losses an aggregate amount in excess of the Pro Rata
Portion allocable to such Selling Shareholder; and
(d) No Indemnifying Party shall be liable to indemnify any
Indemnified Party for any Loss arising out of any breach of warranty or
misrepresentation by such Indemnifying Party if such Indemnified Party had
actual knowledge that such warranty or representation was not true and correct
as of the date hereof or as of the Closing Date.
SECTION 9.05. APPOINTMENT OF IBM AS REPRESENTATIVE. Each Selling
Shareholder hereby unconditionally and irrevocably (a) authorizes and appoints
IBM as its attorney in fact and representative to represent such Selling
Shareholders and act on its behalf with respect to all claims by BUYER for
indemnification (i) for breach of the representations and warranties in Article
IV; and (ii) pursuant to Section 9.02(d) above; (b) waives and releases any
claims it or he may have against IBM for any actions or decisions taken by IBM
in its capacity as representative of the Selling Shareholders; and (c) agrees
to be bound by any such action or decision taken by IBM in its capacity as
representative of the Selling Shareholders and agrees to indemnify BUYER in
accordance with the provisions of this Article IX in a manner consistent with
any such decisions or actions by IBM.
SECTION 9.06. EXCLUSION OF CERTAIN DAMAGES. NEITHER BUYER NOR ANY
OF THE COMPANY, THE SELLING SHAREHOLDERS OR THE GUARANTOR SHALL BE RESPONSIBLE
FOR ANY INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES WHATSOEVER,
INCLUDING LOSS OF PROFITS OR GOODWILL, IN CONNECTION WITH ANY ASPECT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
ARTICLE X
GUARANTEE
SECTION 10.01. GUARANTEE BY GUARANTOR. Guarantor hereby guarantees
to BUYER the payment of any and all monetary obligations of CGI under this
Agreement, including the indemnification obligations set forth in Article IX,
and agrees to cause CGI to perform each of its other obligations to BUYER
pursuant to this Agreement. Guarantor hereby agrees to indemnify
Page 33
BUYER against any Losses incurred by reason of any failure of CGI Corporation
to pay or perform such obligations. The obligations of Guarantor shall be
subject to valid defenses that CGI may have against BUYER and all other
rights of CGI Corporation under this Agreement or at law or equity. Guarantor
hereby waives presentment for payment, notice of nonpayment, demand, protest,
notice of protest and notice of dishonor or default to any party including
the Guarantor.
No failure or delay on the part of BUYER to exercise any right, power or
privilege with respect to this guarantee shall operate as a waiver thereof; and
no single or partial exercise of any right, power, or privilege with respect to
this guarantee shall preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. ENTIRE AGREEMENT. This Agreement (including the
Exhibits and Schedules hereto), and the Confidentiality Agreement contain the
entire agreement of the parties hereto with respect to the subject matter
hereof, and supersede any prior written or oral agreements (including any
outline of terms, which shall terminate upon the execution hereof) between them
concerning the subject matter hereof. There are no representations, agree
ments, arrangements or understandings, oral or written, between the parties
hereto relating to the subject matter hereof which are not fully expressed
herein or therein. Each Schedule and Exhibit attached to this Agreement or
delivered pursuant to this Agreement is incorporated herein by reference and
constitutes a part of this Agreement.
SECTION 11.02. PRESS RELEASES, PUBLIC ANNOUNCEMENTS AND PUBLICITY.
Except as may otherwise be agreed to by the parties, all press releases,
announcements and other forms of publicity regarding the purchase of the Shares
by BUYER and the other transactions contemplated by this Agreement shall be
coordinated and approved by BUYER, the Selling Shareholders and the Company.
SECTION 11.03. HSR FILING. (a) Within ten Business Days after the
execution hereof, the Company, each of the Selling Shareholders and BUYER shall
each file, with the Federal Trade Commission (the "FTC") and the Antitrust
Division of the United States Department of Justice (the "ANTITRUST DIVISION")
a premerger notification in accordance with the HSR Act with respect to the
sale of the Shares by the Selling Shareholders to BUYER pursuant to this
Agreement. BUYER, each of the Selling Shareholders and the Company agree to
request early termination of the waiting period under the HSR Act. BUYER, each
of the Selling Shareholders and the Company agree to furnish, and to
Page 34
cause its Affiliates to furnish, promptly to the FTC and the Antitrust
Division any additional information reasonably requested by either of them
pursuant to the HSR Act in connection with such filings and shall diligently
take, or cooperate in the taking of, all steps that are necessary or
reasonably desirable and proper to expedite the termination of the waiting
period under the HSR Act; PROVIDED, HOWEVER, that neither BUYER nor the
Company shall be required to comply with any Burdensome Condition.
SECTION 11.04. CONFIDENTIAL INFORMATION. Each of BUYER, the Selling
Shareholders and the Company agrees that the terms of this Agreement, and the
exchange of any confidential information between the parties to this Agreement
shall be subject to the terms of the Confidentiality Agreement.
SECTION 11.05. TERMINATION OF AGREEMENT. (a) This Agreement and
the obligations to consummate the transactions contemplated hereby may be
terminated upon written notice to the other parties hereto at any time before
the Closing Date as follows:
(i) by BUYER, on the one hand, and by the Selling Shareholders,
on the other hand, if the Closing shall not have occurred on or prior to
December 31, 1997;
(ii) by BUYER, at any time prior to the Closing, if there has
been a material breach of any of the representations or warranties of the
Company or any Selling Shareholder;
(iii) by the Selling Shareholders, at any time prior to Closing,
if there has been a material breach of any of the representations, warranties
or covenants of BUYER; or
(iv) by either the BUYER or the Selling Shareholders if, in its
or their reasonable opinion, a Burdensome Condition exists with reference to
BUYER or the Selling Shareholders, respectively; PROVIDED, HOWEVER, that prior
to such termination such party shall have exercised reasonable efforts to
negotiate with the relevant Governmental Authority for removal of the
Burdensome Condition;
in which case this Agreement and all obligations of the parties
hereunder, except obligations under Section 11.02, 11.04, and 11.13, shall
terminate, unless the parties otherwise mutually agree.
(b) Notwithstanding the provisions of this Section, termination of
this Agreement shall not relieve any party of its liability for breach of any
of the provisions of this Agreement or its obligations under Section 11.13.
Page 35
SECTION 11.06. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which shall taken together constitute but one and the same instrument, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 11.07. DESCRIPTIVE HEADINGS. The Article and Section
headings and the Table of Contents used herein are for convenience of reference
only and shall not affect the meanings, interpretation or construction of any
provision of this Agreement.
SECTION 11.08. NOTICES. Notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service or sent by mail, as follows:
(a) if to BUYER,
Alternative Resources Corporation
▇▇▇ ▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention of: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) if to the Company:
CGI Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with a copy to:
International Business Machines Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇
(c) if to CGI:
International Business Machines Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ A. Dayton
with a copy to:
International Business Machines Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(d) if to ▇▇▇▇▇▇▇▇▇▇:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Pepper, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(e) if to Sheridan:
▇▇. ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇▇▇
▇▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Pepper, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier
service, or
Page 37
on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered or mailed (properly addressed) to such
party as provided in this Section or in accordance with the latest written
direction from such party given in accordance with this Section. Any address
or addressee specified above may be changed by written notice to the other
parties in accordance with this Section.
SECTION 11.09. CHOICE OF LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed entirely within such State, without
regard to the conflicts of law principles of such State.
SECTION 11.10. ASSIGNMENT. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by any party to this Agreement without the prior written consent of
the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
SECTION 11.11. NO THIRD-PARTY BENEFICIARIES. Except as provided in
Article VIII, this Agreement is for the sole benefit of the parties hereto and
nothing herein expressed or implied shall give or be construed to give to any
Person, other than the parties and the Indemnities, any legal or equitable
rights hereunder.
SECTION 11.12. WAIVER AND AMENDMENT. (a) No waiver of any provision
of this Agreement or consent to any departure therefrom shall in any event be
effective unless the same shall be expressly permitted hereby, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on any party in any case shall
entitle any party to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing,
expressly identified as a waiver, amendment or modification hereof, entered
into by BUYER and the Selling Shareholders. To be effective, any consent,
approval, notice, waiver or demand required or permitted under this Agreement
must refer specifically to this Agreement and the provisions to which it
relates, describe with particularity any right or obligation consented to,
approved, waived or purported to be violated, and be signed by an authorized
signatory of the party making or giving such consent, approval, notice, waiver
or demand.
SECTION 11.13. EXPENSES. Each party to this Agreement shall pay any
and all fees and expenses incurred by it in connection with the
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negotiation, preparation, execution and the performance prior to the Closing
of this Agreement, except that the Company will pay the reasonable legal fees
submitted by Pepper, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ for their work on behalf of the
Selling Shareholders.
SECTION 11.14. WAIVER OF JURY TRIAL. Each party hereto hereby
waives, to the fullest extent permitted by applicable law, any right it may
have to a trial by jury in respect of any litigation directly or indirectly
arising out of, under or in connection with this Agreement. Each party hereto
(a) certifies that no representative, agent or attorney of the other party has
represented, expressly or otherwise, that the other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in this
Section.
SECTION 11.15. SEVERABILITY; COMPLIANCE WITH LAWS. In the event any
one or more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby. The parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 11.16. JURISDICTION; CONSENT TO SERVICE OF PROCESS;
REMEDIES. (a) Each party hereby irrevocably and unconditionally submits, for
itself and its properties, to the exclusive jurisdiction of any New York State
court sitting in the County of New York or Westchester, any Federal court of
the United States of America sitting in the Southern District of New York, and
any appellate court from any such court, in any suit, action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, by removal or otherwise, in such Federal court. Each
party agrees that a final judgment in any such suit, action or proceeding shall
be conclusive and may be enforced in any other jurisdiction by suit on the
judgment or in any other manner provided by law.
(b) Each party hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby in any New York State court sitting in the County of New
York or Westchester, or any Federal court sitting in the Southern District of
New York. Each party hereby irrevocably waives, to the fullest extent
permitted by law, the
Page 39
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court and further waives the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party.
(c) No party to this Agreement may move to (i) transfer any such
suit, action or proceeding from such New York State court or Federal court to
another jurisdiction, (ii) consolidate any such suit, action or proceeding
brought in such New York State court or Federal court with a suit, action or
proceeding in another jurisdiction or (iii) dismiss any such suit, action or
proceeding brought in such New York State court or Federal court for the
purpose of bringing the same in another jurisdiction.
(d) Each party to this Agreement irrevocably consents to service of
process by personal delivery or by registered or certified mail, return receipt
requested, in the manner otherwise provided for notices in Section 10.08.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
SECTION 11.17. CONSTRUCTION; REPRESENTATION. This Agreement has
been negotiated by the parties and their respective counsel and will be fairly
interpreted in accordance with its terms and without any strict construction in
favor of or against any party. Each Selling Shareholder acknowledges that he
has reviewed the terms and conditions of this Agreement with counsel, is
capable of evaluating the merits and risks of entering into this Agreement and
the transactions contemplated hereby and has the capacity to protect his own
interests.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, this Agreement has been executed as of the day
and year first above written.
Alternative Resources Corporation
By:
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Name:
Title:
INTERNATIONAL BUSINESS MACHINES CORPORATION
By:
---------------------------------------------
Name:
Title:
Compagnie Generale d'Informatique
By:
---------------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
By:
---------------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:
---------------------------------------------
Name:
Title: