<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
-----------------------
Date of report (Date of earliest event reported): April 15, 2000
HEADHUNTER.NET, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C> <C>
Georgia 000-27003 58-2403177
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
</TABLE>
HeadHunter.NET, Inc.
333 Research Court, Suite 200
Norcross, Georgia 30092
(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code: (770) 349-2400
N/A
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS.
Agreement and Plan of Merger
On April 15, 2000, HeadHunter.NET, Inc. (the "Corporation") entered
into an Agreement and Plan of Merger (the "Merger Agreement") under which Career
Mosaic Inc., a Delaware corporation ("Career Mosaic"), shall merge (the
"Merger") with and into Resume Acquisition Corporation, a wholly owned
subsidiary of the Corporation. In the Merger, each share of common stock of
Career Mosaic will be converted into 750 shares of the Corporation's common
stock. An aggregate of 7,500,000 shares of the Corporation's common stock will
be issued in the Merger, which represents approximately 40% of the Corporation's
fully diluted shares after the Merger. The Merger is subject to certain closing
conditions, including regulatory approvals, approval by the Corporation's
shareholders and attainment of certain revenue goals for the quarter ended June
30, 2000. A copy of the Merger Agreement is attached as Exhibit 99.1 to this
Current Report on Form 8-K.
In connection with the Merger, the Corporation has adopted a
Shareholder Protection Rights Agreement, the terms of which are more fully
described below.
In accordance with the Merger Agreement, ITC Holding Company, Inc., a
significant shareholder of the Corporation, and Robert M. Montgomery, Jr.,
President and Chief Executive Officer and a director of the Corporation, signed
a Support Agreement dated April 15, 2000 under which ITC and Mr. Montgomery have
agreed to vote all shares held of record by them on the record date declared to
determine the shareholders entitled to vote on the Merger in favor of the
Merger. Collectively, ITC and Mr. Montgomery hold approximately 5.4 million
shares, or 49.4%, of the outstanding common stock of the Corporation as of the
filing date hereof. The Support Agreement may only be terminated after the
earlier of the effective date of the Merger or the termination of the Merger
Agreement. A copy of the Support Agreement is attached as Exhibit 99.2 to this
Current Report on Form 8-K.
Shareholder Protection Rights Agreement
On April 15, 2000, the Board of Directors of the Corporation declared a
dividend of one preferred stock purchase right (a "Right") for each outstanding
share of common stock (the "Common Shares"), of the Corporation. The dividend is
payable on April 27, 2000 (the "Record Date") to the shareholders of record on
that date. Each Right entitles the registered holder to purchase from the
Corporation one one-thousandth of a share of Junior Participating Preferred
Stock, par value $0.01 per share (the "Preferred Shares"), of the Corporation,
at a price of $200 per one one-thousandth of a Preferred Share (the "Exercise
Price"), subject to adjustment. The description and terms of the Rights are set
forth in the Shareholder Protection Rights Agreement, as the same may be amended
from time to time (the "Rights Agreement"), dated as of April 15, 2000 between
the Corporation and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent").
Separation Time
Until the date on which certain events take place (the "Separation
Time"), the Rights will be evidenced by, with respect to any Common Share
certificate outstanding on the Record Date, such Common Share and a Summary of
Rights mailed to each holder of record on the Record Date. The term "Separation
Time" means the close of business on the earlier of (a) the tenth business day
(or such earlier or later date as may be determined by the Board of Directors of
the
-2-
<PAGE> 3
Corporation) following a public announcement by the Corporation that a person or
group of affiliated or associated persons has acquired beneficial ownership of
15% or more of the outstanding Common Shares (collectively, an "Acquiring
Person") (the "Flip-in Date") or (b) the tenth business day (or such later date
as may be determined by the Board of Directors of the Corporation) after the
date on which any person or group of affiliated or associated persons commences
a tender or exchange offer the consummation of which would result in the
beneficial ownership by such Person of 15% or more of such outstanding Common
Shares. However, an Acquiring Person does not include (a) any person who is the
beneficial owner of 15% or more of the outstanding Common Shares on April 15,
2000 (the date of adoption of the Rights Agreement) or who acquires 15% or more
of the outstanding Common Shares in the Merger, unless such person shall
thereafter acquire beneficial ownership of additional Common Shares, (b) a
person who acquires beneficial ownership of 15% or more of the outstanding
Common Shares without any intention to affect control of the Company and who
thereafter promptly divests sufficient shares so that such person ceases to be
the beneficial owner of 15% or more of the outstanding Common Shares, or (c) a
person who is or becomes a beneficial owner of 15% or more of the outstanding
Common Shares as a result of an option granted by the Company in connection with
an agreement to acquire or merge with the Company prior to a Flip-In Date.
Transfer of Rights and Certificates
The Rights Agreement provides that, until the Separation Time, the
Rights will be transferred with and only with the Common Shares. Until the
Separation Time (or the earlier termination or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Separation Time (or the earlier termination or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
Separation Time, separate certificates evidencing the Rights (the "Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Separation Time, and such separate Right
Certificates alone will evidence the Rights.
Exercise Period
The Rights are not exercisable until the Separation Time. After the
Separation Time and prior to the Expiration Time, each Right (unless previously
terminated) will entitle the holder to purchase, for the Exercise Price, one
one-thousandth of a share of the Preferred Shares having the rights described
below. The Rights will expire on the Expiration Time, unless the Expiration Time
is extended, or the Rights are earlier terminated by the Corporation. The term
"Expiration Time" is defined in the Rights Agreement and generally means April
15, 2010, unless the Rights are sooner exchanged or terminated.
Adjustments
The Exercise Price payable, and the number of outstanding Rights and
the number of one one-thousandth interests in Preferred Shares issuable upon
exercise of each Right, are subject to adjustment in the event of a stock split
of the Common Shares or a stock dividend on the Common Shares payable in Common
Shares or subdivisions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Separation Time.
-3-
<PAGE> 4
If prior to the Separation Time, the Corporation distributes securities
or assets in exchange for Common Shares (other than regular cash dividends or a
dividend paid solely in Common Shares) whether by dividend, reclassification or
otherwise, the Corporation shall make such adjustments, if any, in the Exercise
Price, number of Rights and otherwise as the Board of Directors deems
appropriate.
Exercise of Rights for Common Stock
At a Flip-in Date, Rights owned by the Acquiring Person or any
affiliate or associate thereof or any transferee thereof will automatically
become void and, subject to the Exchange Option summarized below, each other
Right will automatically become a right to buy, for the Exercise Price, that
number of Common Shares having a market value of twice the Exercise Price.
Instead of issuing Common Shares upon exercise of a Right following a Flip-in
Date, the Corporation may substitute cash, property, a reduction in the Exercise
Price, Preferred Shares or other securities (or any combination of the above)
having a value equal to the Common Shares which would otherwise be issuable.
After a Flip-in Date occurs, the Corporation may not consolidate or merge with,
or sell 50% or more of its assets or earning power to, any person, if the
Corporation's Board of Directors is controlled by the Acquiring Person, unless
proper provision is made so that each Right would thereafter become a right to
buy, for the Exercise Price, that number of shares of common stock of such other
person having a market value of twice the Exercise Price.
Optional Exchange of Rights
At any time after a Flip-in Date occurs and prior to the time a person
or group of persons become the beneficial owner of more than 50% of the
outstanding Common Shares, the Board of Directors of the Corporation may elect
to exchange all of the outstanding Rights (other than Rights owned by such
person or group which have become void), for shares of Common Shares at an
exchange ratio (subject to adjustment) of one Common Share per Right (the
"Exchange Option").
Termination of Rights
At any time prior to a Flip-in Date, the Board of Directors of the
Corporation may terminate the Rights. Immediately upon any termination of the
Rights, the right to exercise the Rights will terminate.
Amendments
The Corporation and the Rights Agent may amend the Rights Agreement in
any respect prior to the occurrence of a Flip-in Date. Thereafter, the
Corporation and the Rights Agent may amend the Rights Agreement (i) in any
respect which shall not materially adversely affect the interests of holders of
Rights generally, (ii) to cure an ambiguity or (iii) to correct or supplement
any provision which may be inconsistent with any other provision or otherwise
defective.
Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends.
Documents and Effect of This Summary
-4-
<PAGE> 5
A copy of the Rights Agreement is attached as Exhibit 99.3 to this
Current Report on Form 8-K. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) None.
(b) None.
(c) The following exhibits are filed as part of this Current
Report on Form 8-K:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
99.1 Agreement and Plan of Merger dated April 15, 2000 among the
Corporation, Resume Acquisition Corporation, ITC Holding
Company, Inc., Omnicom Group Inc., Bernard Hodes Group Inc.
and Career Mosaic Inc.
99.2 Support Agreement dated April 15, 2000 among the Corporation,
ITC Holding Company, Inc., Robert M. Montgomery, Jr. and
Bernard Hodes Group Inc.
99.3 Shareholder Protection Rights Agreement dated as of April 15,
2000, between the Corporation and American Stock Transfer &
Trust Company, as Rights Agent.
99.4 Press Release dated April 17, 2000.
99.5 Press Release, dated April 17, 2000.
</TABLE>
-5-
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEADHUNTER.NET, INC.
By: /s/ Mark W. Partin
---------------------------------
Name: Mark W. Partin
-------------------------------
Title: Chief Financial Officer
------------------------------
Dated: April 18, 2000
-6-
<PAGE> 1
EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
OMNICOM GROUP INC.,
BERNARD HODES GROUP INC.,
CAREER MOSAIC INC.,
HEADHUNTER.NET, INC.,
RESUME ACQUISITION CORPORATION
AND
ITC HOLDING COMPANY, INC.
DATED AS OF APRIL 15, 2000
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made
and entered into as of April 15, 2000, by and among OMNICOM GROUP INC.
("Omnicom"), BERNARD HODES GROUP INC. ("BHA"), CAREER MOSAIC INC., a wholly
owned subsidiary of BHA ("Career Mosaic"), HEADHUNTER.NET, INC.
("HeadHunter.NET"), RESUME ACQUISITION CORPORATION, a wholly owned subsidiary of
HeadHunter.NET ("Merger Sub"), and ITC HOLDING COMPANY, INC., a shareholder of
HeadHunter.NET ("ITC") solely for the purposes of the covenants contained in
Sections 5.3, 5.5, 5.11 and 5.12 hereof.
PREAMBLE
The respective boards of directors of BHA, Career Mosaic,
HeadHunter.NET and Merger Sub are of the opinion that the transactions described
herein are in the best interests of the parties to this Agreement and their
respective shareholders. This Agreement provides for the combination of
HeadHunter.NET and the Career Mosaic Business (as defined in Section 13.1
hereof) pursuant to the formation of Merger Sub as a wholly owned subsidiary of
HeadHunter.NET, and the merger of Career Mosaic with and into Merger Sub. At the
effective time of such merger, the outstanding shares of the capital stock of
Career Mosaic shall be converted into the right to receive shares of
HeadHunter.NET common stock as set forth herein. As a result, the stockholders
of Career Mosaic shall become shareholders of HeadHunter.NET, and Merger Sub
shall continue to conduct business as a wholly owned subsidiary of
HeadHunter.NET. The transactions described in this Agreement are subject to the
approval of the shareholders of HeadHunter.NET, expiration of the required
waiting period under the HSR Act and the satisfaction of certain other
conditions described in this Agreement. It is the intention of the parties
hereto that the Merger (as defined below) for federal income taxes shall qualify
as a "reorganization" within the meaning of Section 368(a)(2)(D) of the Internal
Revenue Code.
Certain terms used in this Agreement are defined in Section
13.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Career Mosaic shall be merged with and into
Merger Sub in accordance with the provisions of Section 251 of the DGCL, and
with the effect provided in the DGCL (the "Merger"). Merger Sub shall be the
Surviving Corporation resulting from the Merger and shall
<PAGE> 3
be a wholly owned subsidiary of HeadHunter.NET. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective Boards of Directors of BHA, Career Mosaic, HeadHunter.NET, Merger
Sub and ITC, and by HeadHunter.NET, as sole shareholder of Merger Sub, and BHA
and the other stockholders of Career Mosaic, as stockholders of Career Mosaic.
1.2 TIME AND PLACE OF CLOSING. The closing of the
transactions contemplated hereby (the "Closing") will take place at 9:00 A.M. on
the date that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the parties,
acting through their authorized officers, may mutually agree. The Closing shall
be held at such location as may be mutually agreed upon by the parties.
1.3 EFFECTIVE TIME. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Certificate of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Delaware (the "Effective Time"). Subject
to the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by each party, the parties shall use their commercially reasonable best
efforts to cause the Effective Time to occur on the first business day following
the latest to occur of (i) the effective date (including expiration of any
applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger or (ii)
the date on which the shareholders of HeadHunter.NET approve this Agreement, or
such later date within 30 days thereof as may be specified by the parties.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Certificate of Incorporation of Merger
Sub in effect immediately prior to the Effective Time shall be the Certificate
of Incorporation of the Surviving Corporation until duly amended or repealed.
2.2 BYLAWS. The Bylaws of Merger Sub in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation until duly amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Merger Sub
in office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the directors of the
Surviving Corporation from and after the Effective Time in accordance with the
Bylaws of the Surviving Corporation. The officers of Merger Sub in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation.
-2-
<PAGE> 4
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of
this Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of the parties hereto or the shareholders thereof, the shares
of the constituent corporations shall be converted as follows:
(a) Each share of Merger Sub common stock issued and
outstanding immediately prior to the Effective Time shall continue to be
outstanding.
(b) Each share of Career Mosaic common stock issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for the right to
receive 750 shares of HeadHunter.NET common stock (as adjusted, if
applicable, pursuant to Section 3.2, the "Exchange Ratio").
(c) Each share of HeadHunter.NET common stock issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding.
3.2 ANTI-DILUTION PROVISIONS. In the event HeadHunter.NET
changes the number of shares of its common stock issued and outstanding prior to
the Effective Time as a result of a stock split, stock dividend,
reclassification, combination, share exchange, recapitalization, issuance or
exercise of rights or common stock under the Rights Plan or other similar event
and the record date therefor (in the case of a stock dividend) or the effective
date thereof (in the case of a stock split, reclassification, combination, share
exchange, recapitalization or other similar event for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 FRACTIONAL SHARES. Notwithstanding any other
provision of this Agreement, each holder of shares of Career Mosaic common stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of HeadHunter.NET common stock shall receive, in
lieu thereof, cash (without interest) in an amount equal to such fractional part
of a share of HeadHunter.NET common stock multiplied by the average market value
for shares of HeadHunter.NET common stock for the ten (10) trading days
immediately prior to the Effective Time. The market value for HeadHunter.NET
common stock shall be the last sale price each day of such common stock on the
Nasdaq National Market (as reported by Bloomberg's Financial Service). No such
holder will be entitled to dividends, voting rights or any other rights as a
shareholder in respect of any fractional shares.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. After the Effective Time, each
stockholder of Career Mosaic shall deliver to HeadHunter.NET the certificate(s)
which represented shares of Career Mosaic common stock outstanding immediately
prior to the Effective Time and shall
-3-
<PAGE> 5
promptly upon surrender thereof receive in exchange therefor the consideration
provided in Section 3.1. Such certificate(s) shall be duly endorsed as
HeadHunter.NET may reasonably require. In the event of a transfer of ownership
of shares of Career Mosaic common stock represented by certificates that are not
registered in the transfer records of Career Mosaic, the consideration provided
in Section 3.1 may be issued to a transferee if the certificate(s) representing
such shares are delivered to HeadHunter.NET, accompanied by all documents
required to evidence such transfer and by evidence satisfactory to
HeadHunter.NET that any applicable stock transfer taxes have been paid. If any
certificate shall have been lost, stolen, mislaid or destroyed, upon receipt of
(i) an affidavit of that fact from the holder claiming such certificate to be
lost, mislaid, stolen or destroyed and (ii) any other documents necessary to
evidence and effect the bona fide exchange thereof, HeadHunter.NET shall cause
to be issued to such holder the consideration into which the shares represented
by such lost, stolen, mislaid or destroyed certificate shall have been
converted. To the extent required by Section 3.4, each holder of shares of
Career Mosaic common stock issued and outstanding at the Effective Time also
shall receive, upon surrender of the certificate, cash in lieu of any fractional
share of HeadHunter.NET common stock to which such holder may be otherwise
entitled (without interest). HeadHunter.NET shall not be obligated to deliver
the consideration to which any former holder of Career Mosaic common stock is
entitled as a result of the Merger until such holder surrenders such holder's
certificate for exchange as provided in this Section 4.1(a). Any other provision
of this Agreement notwithstanding, neither HeadHunter.NET, nor the Surviving
Corporation shall be liable to a holder of Career Mosaic common stock for any
amounts paid or property delivered in good faith to a public official pursuant
to any applicable abandoned property, escheat or similar Law.
4.2 RIGHTS OF FORMER CAREER MOSAIC SHAREHOLDERS. At the
Effective Time, the stock transfer books of Career Mosaic shall be closed as to
holders of Career Mosaic common stock immediately prior to the Effective Time
and no transfer of Career Mosaic common stock by any such holder shall
thereafter be made or recognized. Until surrendered for exchange in accordance
with the provisions of Section 4.1, each certificate theretofore representing
shares of Career Mosaic common stock shall from and after the Effective Time
represent for all purposes only the right to receive the consideration provided
in Section 3.1 in exchange therefor. To the extent permitted by Law, former
stockholders of record of Career Mosaic shall be entitled to vote after the
Effective Time at any meeting of HeadHunter.NET shareholders the number of whole
shares of HeadHunter.NET common stock into which their respective shares of
Career Mosaic common stock are converted, regardless of whether such holders
have exchanged their certificates for certificates representing HeadHunter.NET
common stock in accordance with the provisions of this Agreement.
ARTICLE 5
OTHER AGREEMENTS
5.1 DIRECTORS OF HEADHUNTER.NET. At the Effective Time,
(i) the written resignations of J. Douglas Cox, Donald W. Weber and Michael G.
Misikoff, dated as of the date of this Agreement, shall become effective, (ii)
the Board of Directors of HeadHunter.NET shall set the size of the Board of
Directors of HeadHunter.NET at seven (7) members with three
-4-
<PAGE> 6
members to serve as Class I directors, two members to serve as Class II members
and two members to serve as Class III directors and (iii) the Board of Directors
shall fill the vacancies on the Board of Directors by appointing or electing (A)
one individual designated by BHA (who shall have been approved by
HeadHunter.NET, such approval not to be unreasonably withheld or delayed) to
serve as a Class I director, (B) one individual designated by BHA, who may be
any officer or director of BHA or Omnicom or any other person if such person is
approved by HeadHunter.NET (such approval not to be unreasonably withheld or
delayed), to serve as a Class II director and (C) one individual designated by
BHA, who may be any officer or director of BHA or Omnicom or any other person if
such person is approved by HeadHunter.NET (such approval not to be unreasonably
withheld or delayed), to serve as a Class III director, with Robert M.
Montgomery, Jr. and Burton B. Goldstein, Jr. each continuing to serve as a Class
I director, Kimberley E. Thompson continuing to serve as a Class II director and
William H. Scott, III continuing to serve as a Class III director.
5.2 SHAREHOLDER PROTECTION RIGHTS AGREEMENT.
Simultaneously with the execution of this Agreement, HeadHunter.NET has adopted
and approved a Shareholder Protection Rights Agreement in the form as Exhibit
5.2 attached hereto (the "Rights Plan"). Prior to the Effective Time,
HeadHunter.NET agrees not to amend or terminate the Rights Plan or waive any
material provision thereof or redeem the rights issued thereunder without the
prior written consent of BHA.
5.3 SHAREHOLDERS' AGREEMENT. At the Effective Time,
HeadHunter.NET, Omnicom, Resume and ITC shall enter into a Shareholders'
Agreement in substantially the form as Exhibit 5.3 attached hereto.
5.4 ADMINISTRATIVE SERVICES AGREEMENT. At the Effective
Time, Resume and HeadHunter.NET shall enter into an Administrative Services
Agreement in substantially the form as Exhibit 5.4 attached hereto (the
"Services Agreement);
5.5 REGISTRATION RIGHTS AGREEMENT. At the Effective Time,
BHA, ITC and HeadHunter.NET shall enter into a Registration Rights Agreement in
substantially the form as Exhibit 5.5 attached hereto.
5.6 CREDIT AGREEMENT. At the Effective Time, Omnicom
Finance, Inc. shall enter into a Credit Agreement (the "Credit Agreement") with
HeadHunter.NET in substantially the form as Exhibit 5.6 attached hereto.
5.7 AGENCY AGREEMENT. At the Effective Time, BHA and
HeadHunter.NET shall enter into a Agency Agreement (the "Agency Agreement") in
substantially the form as Exhibit 5.7 attached hereto.
5.8 ACCESS TO INFORMATION; AUDIT COOPERATION. From the
date of this Agreement until the Effective Time, Omnicom, BHA and Career Mosaic
shall afford HeadHunter.NET and its officers, employees, accountants,
consultants, legal counsel and other representatives full and complete access
during normal business hours to the properties, books, records, contracts,
facilities, premises and equipment comprising or relating to the Transferred
-5-
<PAGE> 7
Assets, the Transferred Liabilities and the Career Mosaic Business. From the
date of this Agreement until the Effective Time, HeadHunter.NET and Merger Sub
shall afford BHA and its officers, employees, accountants, consultants, legal
counsel and other representatives full and complete access during normal
business hours to the properties, books, records, contracts, facilities,
premises and equipment of HeadHunter.NET. Omnicom, BHA and Career Mosaic shall
cooperate with and assist HeadHunter.NET and its officers, employees,
accountants, consultants, legal counsel and other representatives in preparing,
in accordance with the SEC requirements in connection with the Merger: (i)
audited financial statements of the Career Mosaic Business for the last three
(3) fiscal years; (ii) unaudited financial statements for any interim periods
since the end of the last fiscal year; and (iii) any other report, proxy
statement or other document, all as related to the Career Mosaic Business or the
Transferred Assets.
5.9 NON-COMPETITION AGREEMENT. At the Effective Time,
HeadHunter.NET and BHA shall enter into a Non-Competition Agreement
substantially in the form of Exhibit 5.9 attached hereto.
5.10 INDEMNITY AGREEMENTS. At the Effective Time,
HeadHunter.NET shall enter into an Indemnity Agreement, in substantially the
form as Exhibit 5.10 attached hereto, with each of the director nominees and
directors named in Section 5.1 of this Agreement.
5.11 BHA AND ITC INDEMNITY AGREEMENT. At the Effective
Time, HeadHunter.NET shall enter into an Indemnity Agreement, in substantially
the form as Exhibit 5.11 attached hereto, with each of BHA and ITC.
5.12 SUPPORT AGREEMENT. Simultaneously with the execution
and delivery of this Agreement, BHA, ITC and Robert M. Montgomery, Jr. have
executed and delivered a Support Agreement in the form of Exhibit 5.12 attached
hereto.
5.13 AMENDED AND RESTATED BYLAWS. At the Effective Time,
HeadHunter.NET shall have amended its Bylaws in the form of Exhibit 5.13
attached hereto (the "Amended Bylaws").
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF HEADHUNTER.NET AND MERGER
SUB
HeadHunter.NET and Merger Sub, jointly and severally, hereby
represent and warrant to BHA and Career Mosaic as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Each of
HeadHunter.NET and Merger Sub is a corporation duly organized, validly existing
and in good standing under the Laws of the State of Georgia and Delaware,
respectively, and has the corporate power and authority to carry on its business
as now conducted and to own, lease and operate its Assets. Each of
HeadHunter.NET and Merger Sub is duly qualified or licensed to transact business
as a foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so
-6-
<PAGE> 8
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a HeadHunter.NET Material Adverse Effect. The minute books and
other organizational documents for each of HeadHunter.NET and Merger Sub have
been made available to Omnicom, BHA and Career Mosaic for their review and,
except as disclosed in Section 6.1 of the HeadHunter.NET Disclosure Memorandum,
are true and complete in all material respects as in effect as of the date of
this Agreement and accurately reflect in all material respects all amendments to
such organizational documents and all proceedings of the Board of Directors and
shareholders thereof.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Each of HeadHunter.NET and Merger Sub has
the corporate power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of each of HeadHunter.NET and Merger Sub, subject, in the
case of performance only, to any required approval of this Agreement by the
holders of HeadHunter.NET common stock. The Board of Directors of HeadHunter.NET
has taken all action necessary to render the limitations on business
combinations contained in Sections 14-2-1111 and 14-2-1132 of the GBCC (or any
similar provision) inapplicable to the Merger. This Agreement represents a
legal, valid and binding obligation of each of HeadHunter.NET and Merger Sub,
enforceable against each of them in accordance with its terms, except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium or similar
Laws affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought.
(b) Neither the execution and delivery of this
Agreement by HeadHunter.NET or Merger Sub, nor the consummation by
HeadHunter.NET or Merger Sub of the transactions contemplated hereby, nor
compliance by HeadHunter.NET or Merger Sub with any of the provisions hereof,
will (i) conflict with or result in a breach of any provision of the Articles of
Incorporation of HeadHunter.NET, the Certificate of Incorporation of Merger Sub
or the Bylaws of HeadHunter.NET or Merger Sub, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of HeadHunter.NET under, any Contract or Permit of
HeadHunter.NET, where such Default or Lien, or any failure to obtain such
Consent, is reasonably likely to have, individually or in the aggregate, a
HeadHunter.NET Material Adverse Effect, or, (iii) subject to receipt of the
requisite Consents referred to in Section 11.1(b), constitute or result in a
Default under, or require any Consent pursuant to, any Law or Order applicable
to HeadHunter.NET or any of its material Assets, or to Merger Sub.
(c) Other than in connection or compliance with
applicable Laws, and rules of the NASD and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty
-7-
<PAGE> 9
Corporation with respect to any employee benefit plans, or under the HSR Act,
and other than Consents, filings or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
HeadHunter.NET Material Adverse Effect, no notice to, filing with, or Consent
of, any public body or authority is necessary for the consummation by
HeadHunter.NET or Merger Sub of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK.
(a) The authorized capital stock of
HeadHunter.NET consists of (i) 45,500,000 shares of HeadHunter.NET common stock,
of which 10,912,700 shares are issued and outstanding as of the date of this
Agreement, (ii) 7,500,000 shares of Class A Preferred Stock, none of which are
issued and outstanding, and (iii) 5,000,000 shares of Class B Serial Preferred
Stock, 500,000 shares of which will be designated as Junior Participating
Preferred Stock in connection with the adoption of the Rights Plan, none of
which are issued and outstanding. All of the issued and outstanding shares of
capital stock of HeadHunter.NET are, and all of the shares of common stock of
HeadHunter.NET to be issued in connection with the Merger, when issued in
accordance with the terms of this Agreement, will be, duly and validly issued
and outstanding, fully paid and nonassessable. None of the outstanding shares of
capital stock of HeadHunter.NET has been, and none of the shares of
HeadHunter.NET common stock to be issued in connection with the Merger will be,
issued in violation of any preemptive rights of the current or past shareholders
of HeadHunter.NET. The authorized capital stock of Merger Sub consists of 1,000
shares of common stock, of which 1,000 shares are issued and outstanding as of
the date of this Agreement, all of which are owned of record and beneficially by
HeadHunter.NET.
(b) Except as set forth in Section 6.3(a),
pursuant to the Rights Plan or as disclosed in Section 6.3(b) of the
HeadHunter.NET Disclosure Memorandum, there are no shares of capital stock or
other equity securities of HeadHunter.NET outstanding and no outstanding Equity
Rights relating to the capital stock of HeadHunter.NET. All outstanding stock
options listed on Section 6.3(b) of the HeadHunter.NET Disclosure Memorandum
will, in accordance with their terms or by action of the HeadHunter.NET Board of
Directors, vest fully upon the Effective Time of the Merger, except for the
stock options held by Robert M. Montgomery, Jr. to purchase up to 310,000 shares
of HeadHunter.NET common stock, which shall vest in accordance with their
respective original terms.
6.4 HEADHUNTER.NET SUBSIDIARIES. HeadHunter.NET has
disclosed in Section 6.4 of the HeadHunter.NET Disclosure Memorandum all of its
subsidiaries (identifying the Law under which such entity is organized, each
jurisdiction in which it is qualified and/or licensed to transact business, and
the amount and nature of the ownership interest therein). Except as disclosed in
Section 6.4 of the HeadHunter.NET Disclosure Memorandum, HeadHunter.NET, or one
of its wholly owned subsidiaries, owns all of the issued and outstanding shares
of capital stock (or other equity interests) of each of HeadHunter.NET's
subsidiaries. No capital stock (or other equity interest) of any HeadHunter.NET
subsidiary is or may become required to be issued by reason of any Equity
Rights, and there are no Contracts by which any HeadHunter.NET subsidiary is
bound to issue additional shares of its capital stock (or other equity
interests) or Equity Rights or by which any HeadHunter.NET subsidiary is or may
be bound to transfer any shares of capital stock (or
-8-
<PAGE> 10
other equity interests). All of the outstanding shares of capital stock (or
other equity interests) of each HeadHunter.NET subsidiary are fully paid and
nonassessable and are owned free and clear of any Lien. Except as disclosed in
Section 6.4 of the HeadHunter.NET Disclosure Memorandum, each HeadHunter.NET
subsidiary is duly organized, validly existing, and (as to corporations) in good
standing under the Laws of the jurisdiction in which it is incorporated or
organized, and has the corporate power and authority necessary for it to own,
lease, and operate its Assets and to carry on its business as now conducted.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) HeadHunter.NET has timely filed and made
available to Omnicom, BHA and Career Mosaic all SEC Documents required to be
filed by HeadHunter.NET since August 19, 1999, the effective date of the
registration statement on Form S-1 filed with the SEC by HeadHunter.NET in
connection with its initial public offering (the "HeadHunter.NET SEC Reports").
The HeadHunter.NET SEC Reports (i) at the time filed, complied in all material
respects with the applicable requirements of the Securities Laws and other
applicable Laws and (ii) did not, at the time they were filed (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such HeadHunter.NET SEC Reports or
necessary in order to make the statements in such HeadHunter.NET SEC Reports, in
light of the circumstances under which they were made, not misleading.
(b) Each of the HeadHunter.NET Financial
Statements (including, in each case, any related notes) contained in the
HeadHunter.NET SEC Reports, as amended, including any HeadHunter.NET SEC Reports
filed after the date of this Agreement until the Effective Time, complied or
will comply as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto; was or will be prepared
in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim statements, as permitted by Form 10-Q of
the SEC); and fairly presented or will present in all material respects the
consolidated financial position of HeadHunter.NET and its subsidiaries as at the
respective dates and the consolidated results of operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
were or will be subject to normal and recurring year-end adjustments which were
not or are not expected to be material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. Neither
HeadHunter.NET nor any of its subsidiaries has any Liabilities that are
reasonably likely to have, individually or in the aggregate, a HeadHunter.NET
Material Adverse Effect, except Liabilities which are accrued or reserved
against in the consolidated balance sheets of HeadHunter.NET included in the
HeadHunter.NET Financial Statements or reflected in the notes thereto, or which
have arisen in the ordinary course of business since the latest date covered by
the HeadHunter.NET Financial Statements.
-9-
<PAGE> 11
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December
31, 1999, except as disclosed in the HeadHunter.NET Financial Statements filed
with the SEC prior to the date hereof or as disclosed in Section 6.7 of the
HeadHunter.NET Disclosure Memorandum, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, a HeadHunter.NET Material Adverse Effect, and (ii) neither
HeadHunter.NET nor Merger Sub has taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of their respective covenants contained herein.
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or
on behalf of HeadHunter.NET have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1999, except to the extent that all such failures to file,
taken together, are not reasonably likely to have a HeadHunter.NET Material
Adverse Effect, and all Tax Returns filed are complete and accurate to the
Knowledge of HeadHunter.NET. All Taxes shown on filed Tax Returns have been
paid. There is no audit examination, deficiency or Litigation with respect to
any Taxes, except as reserved against in the HeadHunter.NET Financial Statements
or as disclosed in Section 6.8 of the HeadHunter.NET Disclosure Memorandum.
There are no Liens with respect to Taxes upon any of HeadHunter.NET's Assets,
except for Liens for taxes not yet due and payable and any Liens which are not
reasonably likely to have a HeadHunter.NET Material Adverse Effect.
(b) HeadHunter.NET has not executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due that is currently in effect.
(c) The provision for any Taxes due or to become
due for HeadHunter.NET for the period or periods through and including the date
of the HeadHunter.NET Financial Statements that has been made and is reflected
on such HeadHunter.NET Financial Statements is adequate in accordance with GAAP
to cover all such Taxes.
(d) Deferred Taxes of HeadHunter.NET have been
provided adequately for in accordance with GAAP.
(e) HeadHunter.NET is not a party to any Tax
allocation or sharing agreement and HeadHunter.NET has not been a member of an
affiliated group filing a consolidated federal income Tax Return (other than a
group the common parent of which was HeadHunter.NET) and does not have any
Liability for Taxes of any Person (other than HeadHunter.NET and its
subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law) as a transferee or successor or by
Contract or otherwise.
-10-
<PAGE> 12
(f) HeadHunter.NET is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state and local Tax Laws.
(g) Except as disclosed in Section 6.8 of the
HeadHunter.NET Disclosure Memorandum, HeadHunter.NET has not made any payments,
is not obligated to make any payments, and is not a party to any Contract that
could obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Internal Revenue Code.
(h) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of HeadHunter.NET that occurred
during or after any Taxable Period in which HeadHunter.NET incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1999.
(i) HeadHunter.NET has no and has not had in any
foreign country a permanent establishment, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
6.9 ASSETS.
(a) Except as disclosed in Section 6.9 of the
HeadHunter.NET Disclosure Memorandum or as disclosed or reserved against in the
HeadHunter.NET Financial Statements filed with the SEC prior to the date hereof,
HeadHunter.NET and its subsidiaries have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except for any such Liens
or other defects of title which are not reasonably likely to have a
HeadHunter.NET Material Adverse Effect. All tangible properties used in the
businesses of HeadHunter.NET and its subsidiaries are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with past practices.
(b) All Assets which are material to
HeadHunter.NET's business on a consolidated basis held under leases or subleases
by HeadHunter.NET or its subsidiaries are held under valid Contracts enforceable
in accordance with their respective terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
(c) The Assets of HeadHunter.NET and its
subsidiaries include all Assets required to operate the business of
HeadHunter.NET as presently conducted.
6.10 INTELLECTUAL PROPERTY. HeadHunter.NET or its
subsidiaries own or have a valid license to use all of the Intellectual Property
material to the conduct of HeadHunter.NET's business. HeadHunter.NET or any
subsidiary thereof is the owner of or has a license to any
-11-
<PAGE> 13
Intellectual Property sold or licensed to a third party by HeadHunter.NET or any
subsidiary thereof in connection with HeadHunter.NET's business operations, and
HeadHunter.NET has the right to convey by sale or license any Intellectual
Property so conveyed. HeadHunter.NET is not in Default under any of its
Intellectual Property licenses, except for Defaults which are not reasonably
likely to have, individually or in the aggregate, a HeadHunter.NET Material
Adverse Effect. No proceedings have been instituted, or are pending or, to the
Knowledge of HeadHunter.NET, threatened, which challenge the rights of
HeadHunter.NET with respect to Intellectual Property used, sold or licensed by
HeadHunter.NET in the course of its business, nor has any person claimed or
alleged any rights to such Intellectual Property. The conduct of the business of
HeadHunter.NET does not infringe any Intellectual Property of any other person.
HeadHunter.NET is not aware of any third party infringement of any of the
Intellectual Property used in the course of its business. Except as disclosed in
Section 6.10 of the HeadHunter.NET Disclosure Memorandum, HeadHunter.NET is not
obligated to pay any recurring royalties to any Person with respect to any such
Intellectual Property. Except as disclosed in Section 6.10 of the HeadHunter.NET
Disclosure Memorandum, every officer, director, or employee of HeadHunter.NET is
a party to a Contract which requires such officer, director or employee to
assign any interest in any Intellectual Property to HeadHunter.NET and to keep
confidential any trade secrets, proprietary data, customer information or other
business information of HeadHunter.NET, and no such officer, director or
employee is party to any Contract with any Person other than HeadHunter.NET
which requires such officer, director or employee to assign any interest in any
Intellectual Property to any Person other than HeadHunter.NET or to keep
confidential any trade secrets, proprietary data, customer information or other
business information of any Person other than HeadHunter.NET. Except as
disclosed in Section 6.10 of the HeadHunter.NET Disclosure Memorandum, no
officer, director or employee of HeadHunter.NET is party to any Contract which
restricts or prohibits such officer, director or employee from engaging in
activities competitive with any Person, including HeadHunter.NET.
6.11 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of HeadHunter.NET,
HeadHunter.NET, its Participation Facilities and its Operating Properties are,
and have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
HeadHunter.NET Material Adverse Effect.
(b) There is no Litigation pending or, to the
knowledge of HeadHunter.NET, threatened before any court, governmental agency,
or authority or other forum in which HeadHunter.NET or any of its Operating
Properties or Participation Facilities (or HeadHunter.NET in respect of such
Operating Property or Participation Facility) has been or, with respect to
threatened Litigation, may be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release, discharge, spillage, or disposal into the environment of any
Hazardous Material, whether or not occurring at, on, under, adjacent to, or
affecting (or potentially affecting) a site owned, leased, or operated by
HeadHunter.NET or any of its Operating Properties or Participation Facilities,
except for such Litigation pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a HeadHunter.NET Material Adverse
Effect.
-12-
<PAGE> 14
(c) During the period of (i) HeadHunter.NET's
ownership or operation of any of its current properties, (ii) HeadHunter.NET's
participation in the management of any Participation Facility, or (iii)
HeadHunter.NET's holding of a security interest in a Operating Property, there
have been no releases, discharges, spillages or disposals of Hazardous Material
in, on, under, adjacent to or affecting such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a HeadHunter.NET
Material Adverse Effect. Prior to the period of (i) HeadHunter.NET's ownership
or operation of any of its respective current properties, (ii) HeadHunter.NET's
participation in the management of any Participation Facility, or (iii)
HeadHunter.NET's holding of a security interest in Operating Property, to the
Knowledge of HeadHunter.NET, there were no releases, discharges, spillages, or
disposals of Hazardous Material in, on, under, or affecting any such property,
Participation Facility or Operating Property, except such as are not reasonably
likely to have, individually or in the aggregate, a HeadHunter.NET Material
Adverse Effect.
6.12 COMPLIANCE WITH LAWS. HeadHunter.NET has in effect
all Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
HeadHunter.NET Material Adverse Effect, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a HeadHunter.NET Material Adverse Effect.
Except as disclosed in Section 6.12 of the HeadHunter.NET Disclosure Memorandum,
HeadHunter.NET:
(a) is not in Default under any of the provisions of its
Articles of Incorporation or Bylaws;
(b) is not in Default under any Laws, Orders or Permits
applicable to its business or employees conducting its business, except
for Defaults which are not reasonably likely to have, individually or
in the aggregate, a HeadHunter.NET Material Adverse Effect; or
(c) has not received any notification or communication
from any agency or department of federal, state or local government or
any Regulatory Authority or the staff thereof (i) asserting that
HeadHunter.NET is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces,
where such noncompliance is reasonably likely to have, individually or
in the aggregate, a HeadHunter.NET Material Adverse Effect, (ii)
threatening to revoke any Permits, the revocation of which is
reasonably likely to have, individually or in the aggregate, a
HeadHunter.NET Material Adverse Effect, or (iii) requiring
HeadHunter.NET to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which materially restricts the conduct of its business or in any manner
relates to its capital adequacy, its credit or reserve policies, its
management or the payment of dividends.
-13-
<PAGE> 15
Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to
Omnicom, BHA and Career Mosaic.
6.13 LABOR RELATIONS. HeadHunter.NET is not the subject of
any Litigation asserting that it or any of its subsidiaries has committed an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment, nor is HeadHunter.NET
party to any collective bargaining agreement, nor is there any strike or other
labor dispute involving HeadHunter.NET, pending or, to the Knowledge of
HeadHunter.NET, threatened, or to the Knowledge of HeadHunter.NET, is there any
activity involving HeadHunter.NET's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
6.14 EMPLOYEE BENEFIT PLANS.
(a) HeadHunter.NET has disclosed in Section 6.14
of the HeadHunter.NET Disclosure Memorandum, and has delivered or made available
to Omnicom, BHA and Career Mosaic prior to the execution of this Agreement
copies in each case of, all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay, vacation,
bonus, or other incentive plan, all other written employee programs,
arrangements or agreements, all medical, vision, dental or other health plans,
all life insurance plans, and all other employee benefit plans or fringe benefit
plans, including "employee benefit plans" as that term is defined in Section
3(3) of ERISA, currently adopted, maintained by, sponsored in whole or in part
by, or contributed to by HeadHunter.NET or ERISA Affiliate thereof for the
benefit of employees, retirees, dependents, spouses, directors, independent
contractors or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
are eligible to participate (collectively, the "HeadHunter.NET Benefit Plans").
Any of the HeadHunter.NET Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to herein
as a "HeadHunter.NET ERISA Plan." Each HeadHunter.NET ERISA Plan which is also a
"defined benefit plan" (as defined in Section 414(j) of the Internal Revenue
Code) is referred to herein as an "HeadHunter.NET Pension Plan." No
HeadHunter.NET Pension Plan is or has been a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(b) All HeadHunter.NET Benefit Plans are in
compliance in all material respects with the applicable terms of ERISA, the
Internal Revenue Code and any other applicable Laws. Each HeadHunter.NET ERISA
Plan which is intended to be qualified under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the Internal
Revenue Service, and HeadHunter.NET is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. To the
Knowledge of HeadHunter.NET, HeadHunter.NET has not engaged in a transaction
with respect to any HeadHunter.NET Benefit Plan that, assuming the taxable
period of such transaction expired as of the date hereof, would subject
HeadHunter.NET to a Tax imposed by either Section 4975 of the Internal Revenue
Code or Section 502(i) of ERISA.
-14-
<PAGE> 16
(c) No HeadHunter.NET Pension Plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, and the fair market value of the assets of any such plan exceeds the
plan's "benefit liabilities," as that term is defined in Section 4001(a)(16) of
ERISA. Since the date of the most recent actuarial valuation, there has been (i)
no material change in the financial position of any HeadHunter.NET Pension Plan,
(ii) no change in the actuarial assumptions with respect to any HeadHunter.NET
Pension Plan, and (iii) no increase in benefits under any HeadHunter.NET Pension
Plan as a result of plan amendments or changes in applicable Law which is
reasonably likely to have, individually or in the aggregate, a HeadHunter.NET
Material Adverse Effect or materially adversely affect the funding status of any
such plan. Neither any HeadHunter.NET Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by HeadHunter.NET, or the single-employer plan of any entity which is
considered one employer with HeadHunter.NET under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code or Section 302 of ERISA (an "ERISA
Affiliate") has an "accumulated funding deficiency" (whether or not waived)
within the meaning of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, which is reasonably likely to have a HeadHunter.NET Material Adverse
Effect. HeadHunter.NET has not provided, and is not required to provide,
security to a HeadHunter.NET Pension Plan or to any single-employer plan of an
ERISA Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.
(d) No Liability under Subtitle C or D of Title
IV of ERISA has been or is expected to be incurred by HeadHunter.NET with
respect to any ongoing, frozen or terminated single-employer plan or the
single-employer plan of any ERISA Affiliate, which Liability is reasonably
likely to have a HeadHunter.NET Material Adverse Effect. HeadHunter.NET has not
incurred any withdrawal Liability with respect to a multiemployer plan under
Subtitle B of Title IV of ERISA (regardless of whether based on contributions of
an ERISA Affiliate), which Liability is reasonably likely to have a
HeadHunter.NET Material Adverse Effect. No notice of a "reportable event,"
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
HeadHunter.NET Pension Plan or by any ERISA Affiliate within the 12-month period
ending on the date hereof.
(e) Except as disclosed in Section 6.14 of the
HeadHunter.NET Disclosure Memorandum, HeadHunter.NET has no Liability for
retiree health and life benefits under any of the HeadHunter.NET Benefit Plans
and there are no restrictions on the rights of HeadHunter.NET to amend or
terminate any such retiree health or benefit Plan without incurring any
Liability thereunder, which Liability is reasonably likely to have a
HeadHunter.NET Material Adverse Effect.
(f) Except as disclosed in Section 6.14 of the
HeadHunter.NET Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director or any employee of
HeadHunter.NET from HeadHunter.NET under any HeadHunter.NET Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any HeadHunter.NET
Benefit Plan, or (iii) result in any acceleration of the time of payment or
-15-
<PAGE> 17
vesting of any such benefit, where such payment, increase, or acceleration is
reasonably likely to have, individually or in the aggregate, a HeadHunter.NET
Material Adverse Effect.
(g) The actuarial present values of all accrued
deferred compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of HeadHunter.NET and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been adequately reflected on the HeadHunter.NET Financial Statements to the
extent required by and in accordance with GAAP.
6.15 MATERIAL CONTRACTS. Except as disclosed in Section
6.15 of the HeadHunter.NET Disclosure Memorandum or otherwise reflected in the
HeadHunter.NET Financial Statements, neither HeadHunter.NET nor any of its
Assets, businesses or operations, is a party to, or is bound or affected by, or
receives benefits under any Contract or amendment thereto that would constitute
a "material contract" as defined in Item 601(b)(10) of Regulation S-K under the
1933 Act, which is not filed as an exhibit to HeadHunter.NET's registration
statement on Form S-1 which was declared effective on August 19, 1999 or to the
most recent Annual Report on Form 10-K filed by HeadHunter.NET (collectively,
all Contracts which constitute "material contracts" for HeadHunter.NET under
Item 601(b)(10) of Regulation S-K under the 1933 Act, the "HeadHunter.NET
Contracts"). With respect to each HeadHunter.NET Contract and except as
disclosed in Section 6.15 of the HeadHunter.NET Disclosure Memorandum: (i) the
Contract is in full force and effect; (ii) HeadHunter.NET is not in Default
thereunder, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a HeadHunter.NET Material Adverse Effect;
(iii) HeadHunter.NET has not repudiated or waived any material provision of any
such Contract; (iv) no other party to any such Contract is, to the Knowledge of
HeadHunter.NET, in material Default in any respect, and (v) no other party to
such Contract has, to the Knowledge of HeadHunter.NET, repudiated or waived any
material provision thereunder.
6.16 LEGAL PROCEEDINGS. There is no Litigation instituted,
pending or, to the Knowledge of HeadHunter.NET, threatened against
HeadHunter.NET, or against any director, employee or employee benefit plan of
HeadHunter.NET, or against any Asset, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a HeadHunter.NET
Material Adverse Effect, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against
HeadHunter.NET, that are reasonably likely to have, individually or in the
aggregate, a HeadHunter.NET Material Adverse Effect. Section 6.16 of the
HeadHunter.NET Disclosure Memorandum contains a summary of all Litigation as of
the date of this Agreement to which HeadHunter.NET is a party and which names
HeadHunter.NET as a defendant or cross-defendant or for which HeadHunter.NET has
any potential Liability.
6.17 REPORTS. Since the date of HeadHunter.NET's
organization HeadHunter.NET has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with Regulatory Authorities (except for failures to file
reports or statements which are not reasonably likely to have,
-16-
<PAGE> 18
individually or in the aggregate, a HeadHunter.NET Material Adverse Effect). As
of their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not, in all material respects, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
6.18 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by HeadHunter.NET or Merger Sub for inclusion in the
Registration Statement to be filed by HeadHunter.NET with the SEC, will, when
the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein not misleading. None of the information supplied or
to be supplied by HeadHunter.NET or Merger Sub for inclusion in the Proxy
Statement to be mailed to HeadHunter.NET's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by HeadHunter.NET
with the SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time such documents
are filed, and with respect to the Proxy Statement, when first mailed to the
shareholders of HeadHunter.NET or at the time of the Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement or any amendment thereof or supplement thereto, at the time of
the Shareholders' Meeting, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that HeadHunter.NET and Merger Sub are
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby, including the Registration Statement and the
Proxy Statement, will comply as to form in all material respects with the
provisions of applicable Law.
6.19 REGULATORY MATTERS. Neither HeadHunter.NET nor Merger
Sub has taken or agreed to take any action and neither has Knowledge of any fact
or circumstance that is reasonably likely to materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 11.1(b) or
result in the imposition of a condition or restriction of the type referred to
in the last sentence of such Section.
6.20 PRIVACY; WEB SITE. HeadHunter.NET has complied with
the terms of the privacy policy stated on its web site. No web site owned by
HeadHunter.NET contains content or links to other web sites which contain
content that is illegal, obscene or defamatory. No personally identifiable data
with respect to users of HeadHunter.NET's web sites have been provided to third
parties without the consent of such users.
6.21 OPINION OF FINANCIAL ADVISOR. HeadHunter.NET has
received the opinion of First Union Securities, Inc., dated the date of this
Agreement, to the effect that, as of such date, the consideration to be received
by HeadHunter.NET in the Merger is fair from a
-17-
<PAGE> 19
financial point of view to HeadHunter.NET, a signed copy of which has been or
promptly will be delivered to BHA.
6.22 BROKERS, ETC. No broker, investment banker, financial
advisor or other Person, other than First Union Securities, Inc., the fees,
commissions and expenses of which will be paid by HeadHunter.NET, is entitled to
any broker's, finder's, financial advisor's or other similar fee or commission,
or the reimbursement of expenses, in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
HeadHunter.NET or any of its subsidiaries. HeadHunter.NET has furnished to BHA
true and complete copies of all agreements under which any such fees,
commissions or expenses are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees, commissions or
expenses are payable.
6.23 VOTING REQUIREMENTS . The affirmative vote of the
holders of a majority of the voting power of all outstanding shares of
HeadHunter.NET common stock at the Shareholders' Meeting to adopt this Agreement
is the only vote of the holders of any class or series of HeadHunter.NET's
capital stock necessary to approve and adopt this Agreement and the transactions
contemplated hereby or thereby.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF OMNICOM, BHA AND CAREER
MOSAIC
Omnicom, BHA and Career Mosaic, jointly and severally, hereby
represent and warrant to HeadHunter.NET and Merger Sub (i) as of the date of
this Agreement with respect to Sections 7.1, 7.2, 7.3, 7.4, 7.9(c), 7.9(d),
7.10, 7.13, 7.18, 7.19, 7.20, 7.21 and 7.22 and (ii) as of the date that Arthur
Andersen LLP delivers Career Mosaic Financial Statements to HeadHunter.NET as
contemplated in Section 11.3(e) of this Agreement (the "Delivery Date") with
respect to Sections 7.5, 7.6, 7.7, 7.8, 7.9(a), 7.9(b), 7.11, 7.12, 7.14, 7.15,
7.16, and 7.17, as follows:
7.1 ORGANIZATION, STANDING, AND POWER. Each of Omnicom,
BHA and Career Mosaic is a corporation duly organized, validly existing, and in
good standing under the Laws of the States of New York, Delaware and Delaware,
respectively. Each of Omnicom, BHA and Career Mosaic has the corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its Assets. Career Mosaic is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or
Liabilities, including the Transferred Assets and Transferred Liabilities, or
the nature or conduct of its business, including the Career Mosaic Business,
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have individually or in the aggregate, an Career Mosaic Business Material
Adverse Effect. The minute books and other organizational documents for Omnicom
and BHA (with respect to the Transferred Assets or Career Mosaic Business) and
Career Mosaic have been made available to HeadHunter.NET for its review and,
except as disclosed in Section 7.1 of the Career Mosaic Disclosure Memorandum,
-18-
<PAGE> 20
are true and complete in all material respects as in effect as of the date of
this Agreement and accurately reflect in all material respects all amendments to
such organizational documents and all proceedings of the Board of Directors and
shareholders thereof.
7.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Each of Omnicom, BHA and Career Mosaic has
the corporate power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Omnicom, BHA and Career Mosaic. This Agreement represents
a legal, valid, and binding obligation of each of Omnicom, BHA and Career
Mosaic, enforceable against each in accordance with its terms, except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium or similar
Laws affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought.
(b) Neither the execution and delivery of this
Agreement by Omnicom, BHA or Career Mosaic, nor the consummation by any of them
of the transactions contemplated hereby, nor compliance by them with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of their respective Certificates of Incorporation or Bylaws, or (ii) constitute
or result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset used in, or necessary for, the operation
of the Career Mosaic Business (including the Transferred Assets) under, any
Contract or Permit of any of them, or (iii) subject to receipt of the requisite
Consents referred to in Section 11.1(b), constitute or result in a Default
under, or require any Consent pursuant to, any Law or Order applicable to
Omnicom, BHA or Career Mosaic, the Career Mosaic Business or any of the Assets
used in, or necessary for, the operation of the Career Mosaic Business
(including the Transferred Assets).
(c) Other than in connection or compliance with
applicable Laws, rules of the NASD, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, an Career Mosaic Business Material
Adverse Effect, no notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation of the Merger and the other
transactions contemplated in this Agreement.
7.3 CAPITAL STOCK.
(a) The authorized capital stock of Career
Mosaic consists of 10,000 shares of common stock, of which (i) 100 shares are
issued and outstanding as of the date
-19-
<PAGE> 21
of this Agreement and (ii) 10,000 shares will be issued and outstanding
immediately prior to the Effective Time. All of the issued and outstanding
shares of capital stock of Career Mosaic are duly and validly issued and
outstanding, fully paid and nonassessable. None of the outstanding shares of
Career Mosaic capital stock has been issued in violation of any preemptive
rights of the current or past shareholders of Career Mosaic.
(b) Except as set forth in Section 7.3(a), or as
disclosed in Section 7.3 of the Career Mosaic Disclosure Memorandum, there are
no shares of capital stock or other equity securities of Career Mosaic
outstanding and no outstanding Equity Rights relating to the capital stock of
Career Mosaic.
7.4 SUBSIDIARIES. Career Mosaic has no subsidiaries.
There are no Contracts relating to the rights of BHA to vote or to dispose of
any shares of the capital stock of Career Mosaic. All of the shares of
outstanding capital stock of Career Mosaic are fully paid and nonassessable and
are owned by BHA and the other stockholders free and clear of any Lien.
7.5 FINANCIAL STATEMENTS. The Career Mosaic Financial
Statements (including, in each case, any related notes) are or will be prepared
in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements),
and fairly present or will present in all material respects the financial
position of Career Mosaic (or the Career Mosaic Business) as at the respective
dates and the results of operations and cash flows for the periods indicated,
except that unaudited interim financial statements will be subject to normal and
recurring year-end adjustments which are not expected to be material in amount
or effect.
7.6 ABSENCE OF UNDISCLOSED LIABILITIES. Neither Career
Mosaic nor the Career Mosaic Business has any Liabilities that are reasonably
likely to have, individually or in the aggregate, an Career Mosaic Business
Material Adverse Effect, except Liabilities which are accrued or reserved
against in the balance sheets of Career Mosaic or the Career Mosaic Business
included in the Career Mosaic Financial Statements or reflected in the notes
thereto, or which have arisen in the ordinary course of business since the
latest date covered by the Career Mosaic Financial Statements.
7.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December
31, 1999, except as disclosed in the Career Mosaic Financial Statements or as
disclosed in Section 7.7 of the Career Mosaic Disclosure Memorandum, (i) there
have been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, an Career Mosaic Business
Material Adverse Effect, and (ii) neither Omnicom, BHA nor Career Mosaic has
taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this Agreement,
would represent or result in a material breach or violation of any of their
respective covenants contained herein.
7.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or
on behalf of Career Mosaic, or with respect to the Career Mosaic Business, or
for which Career Mosaic could be held
-20-
<PAGE> 22
primarily liable, have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1999, except to the extent that all such failures to file, taken
together, are not reasonably likely to have an Career Mosaic Business Material
Adverse Effect, and all such Tax Returns filed are complete and accurate to the
Knowledge of Omnicom, BHA and Career Mosaic. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency or Litigation
with respect to any Taxes, except as reserved against in the Career Mosaic
Financial Statements or as disclosed in Section 7.8 of the Career Mosaic
Disclosure Memorandum. There are no Liens with respect to Taxes upon any of
Career Mosaic's Assets (including the Transferred Assets), except for Liens for
taxes not yet due and payable and any Liens which are not reasonably likely to
have an Career Mosaic Business Material Adverse Effect.
(b) Except as set forth in Section 7.8(b) of the
Career Mosaic Disclosure Memorandum, Career Mosaic has not, and neither Omnicom
nor BHA with respect to the Career Mosaic Business or any Transferred Assets
has, executed an extension or waiver of any statute of limitations on the
assessment or collection of any Tax due or for which Career Mosaic would be
liable that is currently in effect.
(c) The provision for any Taxes due or to become
due for Career Mosaic or with respect to the Career Mosaic Business for the
period or periods through and including the date of the Career Mosaic Financial
Statements that has been made and is reflected on such Career Mosaic Financial
Statements is adequate in accordance with GAAP to cover all such Taxes.
(d) Deferred Taxes of Career Mosaic, and
deferred Taxes related to the Career Mosaic Business or Transferred Assets, have
been provided adequately for in accordance with GAAP.
(e) Career Mosaic is not a party to any Tax
allocation or sharing agreement and Career Mosaic has not been a member of an
affiliated group filing a consolidated federal income Tax Return and does not
have any Liability for Taxes of any Person (in each case, other than as a member
of Omnicom' consolidated group) under Treasury Regulation Section 1.1502-6 (or
any similar provision of state, local or foreign Law) as a transferee or
successor or by Contract or otherwise.
(f) Career Mosaic is in compliance with, and its
records contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
Tax withholding requirements under federal, state and local Tax Laws.
(g) Except as disclosed in Section 7.8 of the
Career Mosaic Disclosure Memorandum, Career Mosaic has not made any payments, is
not obligated to make any payments, and is not a party to any Contract that
could obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Internal Revenue Code.
-21-
<PAGE> 23
(h) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of Career Mosaic that occurred
during or after any Taxable Period in which Career Mosaic incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1999.
(i) Career Mosaic has no and has not had in any
foreign country a permanent establishment, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
7.9 ASSETS.
(a) Except as disclosed in Section 7.9 of the
Career Mosaic Disclosure Memorandum or as disclosed or reserved against in the
Career Mosaic Financial Statements, Career Mosaic has good and marketable title,
free and clear of all Liens, to all of its Assets, including all of the
Transferred Assets, except for any such Liens or other defects of title which
are not reasonably likely to have an Career Mosaic Business Material Adverse
Effect. All tangible properties used in the Career Mosaic Businesses are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with past practices.
(b) All Assets (including Transferred Assets)
which are material to the Career Mosaic Business held under leases or subleases
by Career Mosaic are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect.
(c) Except for the Assets related to the
provision of services under the Administrative Services Agreement which are not
primarily used in the conduct of the Career Mosaic Business, the Assets of
Career Mosaic include all Assets required to operate the Career Mosaic Business
as presently conducted. Neither Omnicom nor BHA has retained any Asset which is
necessary for, or is used in, the operation of the Career Mosaic Business.
Except for Assets related to the provision of services under the Administrative
Services Agreement which are not primarily used in the conduct of the Career
Mosaic Business, the Transferred Assets constituted all of the Assets which were
necessary for, or which were used primarily in, the operation of the Career
Mosaic Business in all material respects as it was conducted at the time that
BHA contributed the Transferred Assets to Career Mosaic.
7.10 INTELLECTUAL PROPERTY. Career Mosaic owns or has a
valid license to use all of the Intellectual Property (i) material to the
conduct of the Career Mosaic Business or (ii) included in the Transferred
Assets. Career Mosaic is the owner of or has a license to any Intellectual
Property sold or licensed to a third party by Career Mosaic in connection with
the Career Mosaic Business, and Career Mosaic has the right to convey by sale or
license any Intellectual Property so conveyed. Career Mosaic is not in Default
under any of its Intellectual
-22-
<PAGE> 24
Property licenses, except for Defaults which are not reasonably likely to have,
individually or in the aggregate, an Career Mosaic Business Material Adverse
Effect. No proceedings have been instituted, or are pending or, to the Knowledge
of Omnicom, BHA and Career Mosaic, threatened, which challenge the rights of BHA
or Career Mosaic with respect to Intellectual Property used, sold or licensed in
the course of the Career Mosaic Business, nor has any person claimed or alleged
any rights to such Intellectual Property. The conduct of the Career Mosaic
Business does not infringe any Intellectual Property of any other person.
Neither Omnicom, BHA nor Career Mosaic is aware of any third party infringement
of any of the Intellectual Property used in, or necessary for, the operation of
the Career Mosaic Business. Except as disclosed in Section 7.10 of the Career
Mosaic Disclosure Memorandum, Career Mosaic is not obligated to pay any
recurring royalties to any Person with respect to any such Intellectual
Property. Except as disclosed in Section 7.10 of the Career Mosaic Disclosure
Memorandum, every officer, director, or employee of Career Mosaic and every
employee of BHA materially related to the operation of the Career Mosaic
Business is a party to a Contract which requires such officer, director or
employee to assign to BHA or Career Mosaic any interest in any Intellectual
Property, which is included in the Transferred Assets or which is used in or
necessary for the operation of the Career Mosaic Business, and to keep
confidential any trade secrets, proprietary data, customer information or other
business information of Career Mosaic or which relates to the Career Mosaic
Business or Transferred Assets (such Contracts collectively, the "IP Assignment
Contracts"). All IP Assignment Contracts have been assigned to Career Mosaic. No
officer, director or employee of Career Mosaic and no employee of Omnicom or BHA
related to the operation of the Career Mosaic Business is party to any Contract
with any Person other than Career Mosaic which requires such officer, director
or employee to (i) assign to any Person other than Career Mosaic any interest in
any Intellectual Property which is used in or necessary for the operation of the
Career Mosaic Business or included in the Transferred Assets, or (ii) keep
confidential any trade secrets, proprietary data, customer information or other
business information of any Person other than Career Mosaic. Except as disclosed
in Section 7.10 of the Career Mosaic Disclosure Memorandum, no officer, director
or employee of Career Mosaic or any employee of Omnicom or BHA related to the
operation of the Career Mosaic Business is party to any Contract which restricts
or prohibits such officer, director or employee from engaging in activities
competitive with any Person.
7.11 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Omnicom, BHA and Career
Mosaic, Career Mosaic, its Participation Facilities and its Operating Properties
are, and have been, in compliance with all Environmental Laws, except for
violations which are not reasonably likely to have, individually or in the
aggregate, an Career Mosaic Business Material Adverse Effect.
(b) There is no Litigation pending or threatened
before any court, governmental agency, or authority or other forum in which
Career Mosaic or any of its Operating Properties or Participation Facilities (or
Career Mosaic in respect of such Operating Property or Participation Facility)
has been or, with respect to threatened Litigation, may be named as a defendant
(i) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release, discharge, spillage, or
disposal into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or
-23-
<PAGE> 25
potentially affecting) a site owned, leased, or operated by Omnicom, BHA, Career
Mosaic or any of their respective Operating Properties or Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, an Career Mosaic
Business Material Adverse Effect.
(c) During the period of (i) Career Mosaic's
ownership or operation of any of its current properties, (ii) Career Mosaic's
participation in the management of any Participation Facility, or (iii) Career
Mosaic's holding of a security interest in a Operating Property, there have been
no releases, discharges, spillages or disposals of Hazardous Material in, on,
under, adjacent to or affecting such properties, except such as are not
reasonably likely to have, individually or in the aggregate, an Career Mosaic
Business Material Adverse Effect. Prior to the period of (i) Career Mosaic's
ownership or operation of any of its respective current properties, (ii) Career
Mosaic's participation in the management of any Participation Facility, or (iii)
Career Mosaic's holding of a security interest in Operating Property, to the
Knowledge of Omnicom, BHA and Career Mosaic, there were no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, or affecting any
such property, Participation Facility or Operating Property, except such as are
not reasonably likely to have, individually or in the aggregate, an Career
Mosaic Material Adverse Effect.
7.12 COMPLIANCE WITH LAWS. Career Mosaic has in effect all
Permits necessary for it to own, lease or operate its material Assets (including
the Transferred Assets) and to carry on the Career Mosaic Business as now
conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, an Career Mosaic Business
Material Adverse Effect, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, an Career Mosaic Business Material Adverse
Effect. Except as disclosed in Section 7.12 of the Career Mosaic Disclosure
Memorandum, neither Career Mosaic, nor Omnicom or BHA with respect to the
Transferred Assets or Career Mosaic Business:
(a) is in Default under any of the provisions of their
respective Certificates of Incorporation and Bylaws;
(b) is in Default under any Laws, Orders or Permits
applicable to the Career Mosaic Business or employees conducting the
Career Mosaic Business, except for Defaults which are not reasonably
likely to have, individually or in the aggregate, an Career Mosaic
Business Material Adverse Effect; or
(c) has received any notification or communication from
any agency or department of federal, state or local government or any
Regulatory Authority or the staff thereof (i) asserting that Career
Mosaic is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, an Career Mosaic Business Material Adverse Effect, (ii)
threatening to revoke any Permits, the revocation of which is
reasonably likely to have, individually or in the aggregate, an Career
Mosaic Business Material Adverse Effect, or (iii) requiring Career
Mosaic to enter into or consent to the issuance of a cease and desist
order, formal agreement, directive,
-24-
<PAGE> 26
commitment or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which materially restricts the
conduct of the Career Mosaic Business or in any manner relates to its
capital adequacy, its credit or reserve policies, its management or the
payment of dividends.
Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to
HeadHunter.NET.
7.13 LABOR RELATIONS. Neither Career Mosaic nor the Career
Mosaic Business is the subject of any Litigation asserting that an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state law) has been committed or seeking to compel the bargaining with any labor
organization as to wages or conditions of employment. Neither Career Mosaic nor
Omnicom or BHA with respect to the employees associated with the Career Mosaic
Business are party to any collective bargaining agreement. There is no strike or
other labor dispute involving Career Mosaic or the Career Mosaic Business,
pending or, to the Knowledge of Omnicom, BHA and Career Mosaic, threatened, or
to the Knowledge of Omnicom, BHA and Career Mosaic, is there any activity
involving employees of Career Mosaic or employees of BHA primarily associated
with the Career Mosaic Business seeking to certify a collective bargaining unit
or engaging in any other organization activity.
7.14 EMPLOYEE BENEFIT PLANS.
(a) Career Mosaic has disclosed in Section 7.14
of the Career Mosaic Disclosure Memorandum, and has delivered or made available
to HeadHunter.NET prior to the execution of this Agreement copies in each case
of, all pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus, or other
incentive plan, all other written employee programs, arrangements, or agreements
all medical, vision, dental or other health plans, all life insurance plans, and
all other employee benefit plans or fringe benefit plans, including "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
Career Mosaic, Omnicom and BHA (with respect to employees associated with the
Career Mosaic Business) or ERISA Affiliate thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors or other beneficiaries are eligible to
participate (collectively, the "Career Mosaic Benefit Plans"). Any of the Career
Mosaic Benefit Plans which is an "employee pension benefit plan," as that term
is defined in Section 3(2) of ERISA, is referred to herein as a "Career Mosaic
ERISA Plan." Each Career Mosaic ERISA Plan which is also a "defined benefit
plan" (as defined in Section 414(j) of the Internal Revenue Code) is referred to
herein as an "Career Mosaic Pension Plan." No Career Mosaic Pension Plan is or
has been a multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All Career Mosaic Benefit Plans are in
compliance in all material respects with the applicable terms of ERISA, the
Internal Revenue Code and any other applicable Laws. Each Career Mosaic ERISA
Plan which is intended to be qualified under
-25-
<PAGE> 27
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service, and neither Omnicom, BHA
nor Career Mosaic is aware of any circumstances likely to result in revocation
of any such favorable determination letter. To the Knowledge of BHA and Career
Mosaic, Career Mosaic has not engaged in a transaction with respect to any
Career Mosaic Benefit Plan that, assuming the taxable period of such transaction
expired as of the date hereof, would subject Career Mosaic to a Tax imposed by
either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.
(c) No Career Mosaic Pension Plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, and the fair market value of the assets of any such plan exceeds the
plan's "benefit liabilities," as that term is defined in Section 4001(a)(16) of
ERISA. Since the date of the most recent actuarial valuation, there has been (i)
no material change in the financial position of any Career Mosaic Pension Plan,
(ii) no change in the actuarial assumptions with respect to any Career Mosaic
Pension Plan, and (iii) no increase in benefits under any Career Mosaic Pension
Plan as a result of plan amendments or changes in applicable Law which is
reasonably likely to have, individually or in the aggregate, an Career Mosaic
Material Adverse Effect or materially adversely affect the funding status of any
such plan. Neither any Career Mosaic Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by Career Mosaic, or the single-employer plan of any entity which is
considered one employer with Career Mosaic under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code or Section 302 of ERISA (an "ERISA
Affiliate") has an "accumulated funding deficiency" (whether or not waived)
within the meaning of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, which is reasonably likely to have an Career Mosaic Business Material
Adverse Effect. Career Mosaic has not provided, and is not required to provide,
security to an Career Mosaic Pension Plan or to any single-employer plan of an
ERISA Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.
(d) No Liability under Subtitle C or D of Title
IV of ERISA has been or is expected to be incurred by Career Mosaic with respect
to any ongoing, frozen or terminated single-employer plan or the single-employer
plan of any ERISA Affiliate, which Liability is reasonably likely to have an
Career Mosaic Business Material Adverse Effect. Career Mosaic has not incurred
any withdrawal Liability with respect to a multiemployer plan under Subtitle B
of Title IV of ERISA (regardless of whether based on contributions of an ERISA
Affiliate), which Liability is reasonably likely to have an Career Mosaic
Business Material Adverse Effect. No notice of a "reportable event," within the
meaning of Section 4043 of ERISA for which the 30-day reporting requirement has
not been waived, has been required to be filed for any Career Mosaic Pension
Plan or by any ERISA Affiliate within the 12-month period ending on the date
hereof.
(e) Except as disclosed in Section 7.14 of the
Career Mosaic Disclosure Memorandum, Career Mosaic has no Liability for retiree
health and life benefits under any of the Career Mosaic Benefit Plans and there
are no restrictions on the rights of Career Mosaic to amend or terminate any
such retiree health or benefit Plan without incurring any Liability thereunder,
which Liability is reasonably likely to have an Career Mosaic Business Material
Adverse Effect.
-26-
<PAGE> 28
(f) Except as disclosed in Section 7.14 of the
Career Mosaic Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director or any employee of Career
Mosaic from Career Mosaic under any Career Mosaic Benefit Plan or otherwise,
(ii) increase any benefits otherwise payable under any Career Mosaic Benefit
Plan, or (iii) result in any acceleration of the time of payment or vesting of
any such benefit, where such payment, increase, or acceleration is reasonably
likely to have, individually or in the aggregate, an Career Mosaic Business
Material Adverse Effect.
(g) The actuarial present values of all accrued
deferred compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of Career Mosaic and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been adequately reflected on the Career Mosaic Financial Statements to the
extent required by and in accordance with GAAP.
7.15 MATERIAL CONTRACTS. Except as disclosed in Section
7.15 of the Career Mosaic Disclosure Memorandum or otherwise reflected in the
Career Mosaic Financial Statements, neither Career Mosaic nor any of its Assets
or the Career Mosaic Business, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination, consulting
or retirement Contract, (ii) any Contract relating to the borrowing of money by
Career Mosaic or the guarantee by Career Mosaic of any such obligation, (iii)
any Contract which prohibits or restricts (A) the engagement of the Career
Mosaic Business or (B) competition with any other Person, (iv) any Contract
between Omnicom, BHA or any Affiliate thereof on one hand, and Career Mosaic on
the other, (v) any Contract involving Intellectual Property used in the
operation of the Career Mosaic Business or included in the Transferred Assets
(other than Contracts entered into in the ordinary course of the Career Mosaic
Business, (vi) any Contract relating to the purchase or sale of any goods or
services, other than Contracts entered into in the ordinary course of the Career
Mosaic Business and involving payments under any individual Contract not in
excess of $100,000, (vii) any other Contract that would be required to be filed
as an exhibit to a Form 10-K as of the date of this Agreement if Career Mosaic
were required to file a Form 10-K on such date (collectively, the "Career Mosaic
Contracts"). The Career Mosaic Contracts constitute all of the material
Contracts necessary for, or used in connection with, the operation of the Career
Mosaic Business as presently conducted. With respect to each Career Mosaic
Contract and except as disclosed in Section 7.15 of the Career Mosaic Disclosure
Memorandum: (i) the Contract is in full force and effect; (ii) Career Mosaic is
not in Default thereunder, other than Defaults which are not reasonably likely
to have, individually or in the aggregate, an Career Mosaic Business Material
Adverse Effect; (iii) Career Mosaic has not repudiated or waived any material
provision of any such Contract; (iv) no other party to any such Contract is, to
the Knowledge of Omnicom, BHA and Career Mosaic, in Default in any respect,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, an Career Mosaic Business Material Adverse Effect, and (v) no
other party to such Contract has, to the Knowledge of Omnicom, BHA and Career
Mosaic, repudiated or
-27-
<PAGE> 29
waived any material provision thereunder. All Career Mosaic Contracts which were
included in the Transferred Assets have been assigned to Career Mosaic and all
Consents required in connection therewith have been obtained.
7.16 LEGAL PROCEEDINGS. There is no Litigation instituted,
pending or, to the Knowledge of Omnicom, BHA and Career Mosaic, threatened
against Career Mosaic, the Career Mosaic Business, or against any director,
employee or employee benefit plan of Career Mosaic, or against any Asset
(including the Transferred Assets), interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, an Career Mosaic
Business Material Adverse Effect, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
Career Mosaic or the Career Mosaic Business, that are reasonably likely to have,
individually or in the aggregate, an Career Mosaic Business Material Adverse
Effect. Section 7.16 of the Career Mosaic Disclosure Memorandum contains a
summary of all Litigation as of the date of this Agreement to which (i) Career
Mosaic is a party and which names Career Mosaic as a defendant or
cross-defendant or for which Career Mosaic has any potential Liability, or (ii)
the Transferred Assets or the Career Mosaic Business is the subject.
7.17 REPORTS. Since the date of Career Mosaic's
organization, Career Mosaic has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with Regulatory Authorities (except for failures to file
reports or statements which are not reasonably likely to have, individually or
in the aggregate, an Career Mosaic Business Material Adverse Effect). As of
their respective dates, each of such reports and documents complied in all
material respects with all applicable Laws. As of its respective date, each such
report and document did not, in all material respects, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
7.18 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by Omnicom, BHA or Career Mosaic for inclusion in the
Registration Statement to be filed by HeadHunter.NET with the SEC, will, when
the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein no misleading. None of the information supplied or
to be supplied by Omnicom, BHA or Career Mosaic for inclusion in the Proxy
Statement to be mailed to HeadHunter.NET's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed with the SEC or any
other Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with respect
to the Proxy Statement, when first mailed to the shareholders of HeadHunter.NET
or at the time of the Shareholders' Meeting, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Shareholders' Meeting. All documents that
Omnicom, BHA
-28-
<PAGE> 30
or Career Mosaic are responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
7.19 REGULATORY MATTERS. Neither Omnicom, BHA nor Career
Mosaic has taken or agreed to take any action and has any Knowledge of any fact
or circumstance that is reasonably likely to materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 11.1(b) or
result in the imposition of a condition or restriction of the type referred to
in the last sentence of such Section.
7.20 OWNERSHIP OF HEADHUNTER.NET COMMON STOCK. As of the
date of this Agreement, neither Omnicom nor any of its majority owned
subsidiaries (including BHA) owns, and at the Effective Time neither Omnicom nor
any of its majority owned subsidiaries will own, of record or beneficially, any
shares of HeadHunter.NET common stock nor does Omnicom or any of such
subsidiaries (including BHA) have any Equity Rights with respect to
HeadHunter.NET capital stock, except for the shares of HeadHunter.NET common
stock to be received in the Merger and no more than 100,000 shares owned
pursuant to independently trusteed employee plans of Omnicom and its majority
owned subsidiaries.
7.21 PRIVACY; WEB SITE. Each of Omnicom, BHA and Career
Mosaic have complied with the terms of the privacy policy stated on the web site
used in the operation of the Career Mosaic Business at all times during which
Omnicom, BHA and Career Mosaic have operated the Career Mosaic Business. No web
site used in the operation of the Career Mosaic Business contains content or
links to other web sites which contain content that is illegal, obscene or
defamatory. No personally identifiable data with respect to users of the Career
Mosaic Business' web sites have been provided to third parties without the
consent of such user.
7.22 BROKERS, ETC. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisors or other similar fee or commission, or the reimbursement of expenses,
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Omnicom, BHA or Career Mosaic.
ARTICLE 8
CONDUCT OF BUSINESS PENDING CONSUMMATION
8.1 COVENANTS OF HEADHUNTER.NET. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of BHA shall have been obtained
(which consent shall not be unreasonably withheld or delayed), and except as
otherwise expressly contemplated herein, HeadHunter.NET shall and shall cause
each of its subsidiaries to (a) operate its business in all material respects
only in the ordinary course thereof, (b) use commercially reasonable best
efforts to preserve intact its business as conducted on the date hereof in all
material respects and its material Assets and maintain its material rights and
franchises, and (c) take no action which would (i) materially adversely affect
the ability of any party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the
-29-
<PAGE> 31
last sentences of Section 11.1(b) or 11.1(c), or (ii) materially adversely
affect the ability of any party to perform its covenants and agreements under
this Agreement.
8.2 NEGATIVE COVENANTS OF HEADHUNTER.NET. From the date
of this Agreement until the earlier of the Effective Time or the termination of
this Agreement, except as otherwise provided in this Agreement, unless the prior
written consent of BHA shall have been obtained (which consent shall not be
unreasonably withheld or delayed), HeadHunter.NET covenants that it will not do
or agree or commit to do, or permit any of its subsidiaries to do or agree or
commit to do, any of the following:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of HeadHunter.NET or its subsidiaries, except in
connection with the adoption of the Rights Plan or as otherwise
required by this Agreement, or
(b) incur any additional debt obligation or other
obligation for borrowed money in excess of an aggregate of $2,000,000,
except in the ordinary course of the business of HeadHunter.NET
consistent with past practices or as contemplated in the Credit
Agreement, or impose, or suffer the imposition, on any Asset of
HeadHunter.NET and its subsidiaries of any Lien or permit any such Lien
to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities convertible
into any shares, of the capital stock of HeadHunter.NET or its
subsidiaries or declare or pay any dividend or make any other
distribution in respect of HeadHunter.NET's capital stock; or
(d) except for (1) this Agreement, (2) pursuant to the
exercise of stock options and warrants outstanding as of the date hereof
and listed in Section 6.3 of the HeadHunter.NET Disclosure Schedule
(which, except as set forth in Section 6.3(b), all shall fully vest upon
the Effective Time of the Merger) or in respect of up to 400,000 shares
of HeadHunter.NET common stock pursuant to stock options awarded after
the date of this Agreement in the ordinary course of business consistent
with past practice to employees who are not directors or officers of
HeadHunter.NET (which shall vest in accordance with the terms approved by
the HeadHunter.NET Board of Directors, which shall not accelerate as a
result of the Effective Time), (3) as disclosed in Section 8.2(d) of the
HeadHunter.NET Disclosure Memorandum and (4) pursuant to the Rights Plan
in accordance with its terms, issue, sell, pledge, encumber, authorize
the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of HeadHunter.NET common stock or any
other capital stock of any subsidiary, or any stock appreciation rights,
or any option, warrant, or other Equity Right; or
(e) adjust, split, combine or reclassify any capital
stock of HeadHunter.NET or its subsidiaries or issue or authorize the
issuance of any other securities in respect of or in substitution for
shares of HeadHunter.NET common stock, or sell, lease, mortgage or
otherwise dispose of or otherwise encumber (x) any shares of capital
stock of
-30-
<PAGE> 32
HeadHunter.NET or its subsidiaries or (y) any material Asset other than
in the ordinary course of business for reasonable and adequate
consideration; or
(f) grant any increase in compensation or benefits to the
employees, officers or directors of HeadHunter.NET, except in accordance
with the ordinary course of business consistent with past practice,
subsection (d) above or as required by Law; pay any severance or
termination pay or any bonus other than pursuant to written policies or
written Contracts in effect on the date of this Agreement; enter into or
amend any severance agreements with officers of HeadHunter.NET; grant
any increase in fees or other increases in compensation or other
benefits to directors of HeadHunter.NET; or enter into any other
Contract or arrangement with any director or officer of HeadHunter.NET
or any other Person who, to the Knowledge of HeadHunter.NET, is a
relative of a director or officer of HeadHunter.NET; or
(g) enter into or amend any employment Contract between
HeadHunter.NET and any Person (unless such amendment is required by Law)
that HeadHunter.NET does not have the unconditional right to terminate
without Liability (other than Liability for services already rendered),
at any time on or after the Effective Time, except as otherwise
contemplated in this Agreement; or
(h) adopt any new employee benefit plan of HeadHunter.NET
or terminate or withdraw from, or make any material change in or to,
any existing employee benefit plans of HeadHunter.NET, other than as
otherwise contemplated in Section 9.10 of this Agreement, the
acceleration of the vesting of all options outstanding prior to the
Effective Time (except as otherwise provided in Section 6.3(b) of this
Agreement), or any such change that is required by Law or that, in the
opinion of counsel, is necessary or advisable to maintain the
tax-qualified status of any such plan, or make any distributions from
such employee benefit plans, except as required by Law or the terms of
such plans; or
(i) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(j) commence any Litigation other than in accordance with
past practice, or settle any Litigation involving any Liability of
HeadHunter.NET for material money damages or restrictions upon the
operations of HeadHunter.NET; or
(k) except in the ordinary course of business, as
otherwise contemplated by this Agreement or for advertising, marketing
or co-branding agreements under which HeadHunter.NET's aggregate
annual payment obligations do not exceed $2,000,000, enter into,
modify, amend or terminate any material Contract or waive, release,
compromise or assign any material rights or claims; or
(l) take any action that would cause the representations
and warranties of HeadHunter.NET and Merger Sub set forth in Article 6
to no longer be true and correct in all material respects; or
-31-
<PAGE> 33
(m) authorize, commit or agree to take any of the
foregoing actions.
8.3 OMNICOM, BHA AND CAREER MOSAIC COVENANTS. From the
date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent of the
HeadHunter.NET shall have been obtained (which consent shall not be
unreasonably withheld or delayed), and except as otherwise expressly
contemplated herein, Omnicom, BHA and Career Mosaic shall (x) operate the
Career Mosaic Business in all material respects only in the ordinary course
thereof, (y) use commercially reasonable best efforts to preserve intact the
Career Mosaic Business in all material respects and the material Assets
(including the Transferred Assets) used in, or necessary for, the operation of
the Career Mosaic Business, and maintain the Career Mosaic Business' material
rights and franchises, and (z) take no action which would (i) materially
adversely affect the ability of any party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentences of Section 11.1(b) or
11.1(c) or (ii) materially adversely affect the ability of any party to perform
its covenants and agreements under this Agreement. Omnicom, BHA and Career
Mosaic each further covenants and agrees that it will not do or agree or commit
to do any of the following without the prior written consent of HeadHunter.NET
(which consent shall not be unreasonably withheld or delayed):
(a) amend the Certificate of Incorporation or Bylaws of
Career Mosaic, or
(b) incur any additional debt obligation or other
obligation for borrowed money in excess of an aggregate of $100,000
with respect to Career Mosaic or the Career Mosaic Business, except in
the ordinary course of the Career Mosaic Business consistent with past
practices or as otherwise contemplated by this Agreement, or impose,
or suffer the imposition, on any Asset (including any Transferred
Asset) of Career Mosaic or any Asset used in, or necessary for, the
operation of the Career Mosaic Business, of any Lien or permit any
such Lien to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange,
directly or indirectly, any shares, or any securities convertible into
any shares, of the capital stock of Career Mosaic, or declare or pay any
dividend or make any other distribution in respect of the capital stock
of Career Mosaic; or
(d) except for this Agreement or as disclosed in Section
8.3(d) of the Career Mosaic Disclosure Memorandum, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional shares of capital stock of
Career Mosaic, or any stock appreciation rights, or any option, warrant,
conversion, or other right to acquire any such stock, or any security
convertible into any such stock; or
(e) adjust, split, combine or reclassify any shares of
capital stock of Career Mosaic or issue or authorize the issuance of any
other securities in respect of or in substitution for shares of such
capital stock or sell, lease, mortgage or otherwise dispose of or
otherwise encumber any shares of capital stock of Career Mosaic, or any
Asset
-32-
<PAGE> 34
(including Transferred Assets) used in, or necessary for, the operation
of the Career Mosaic Business as presently conducted, other than in
the ordinary course of the Career Mosaic Business for reasonable and
adequate consideration; or
(f) grant any increase in compensation or benefits to the
employees or officers of Career Mosaic or individuals who are employees
of the Career Mosaic Business, except in accordance with the ordinary
course of business consistent with past practice or as required by Law;
pay any severance or termination pay or any bonus other than pursuant to
written policies or written Contracts in effect on the date of this
Agreement or the provisions of any applicable program or plan adopted
prior to the date of this Agreement; enter into or amend any severance
agreements with officers of Career Mosaic; grant any increase in fees or
other increases in compensation or other benefits to directors of Career
Mosaic; or enter into any other Contract or arrangement with any
director or officer of Career Mosaic or any Person who, to the Knowledge
of Omnicom and BHA, is a relative of a director or officer of
HeadHunter.NET; or
(g) enter into or amend any employment Contract between
Career Mosaic and any Person (unless such amendment is required by Law)
that Career Mosaic does not have the unconditional right to terminate
without Liability (other than Liability for services already rendered or
severance pay in the ordinary course of business consistent with past
practice), at any time on or after the Effective Time; or
(h) adopt any new employee benefit plan of Career Mosaic
or which covers employees who are associated with the Career Mosaic
Business, or terminate or withdraw from, or make any material change
in or to, any existing employee benefit plans of Career Mosaic other
than any such change that is required by Law or that, in the opinion
of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan, or make any distributions from such employee
benefit plans except as required by Law or the terms of such plans; or
(i) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in applicable Tax Laws or regulatory
accounting requirements or GAAP; or
(j) commence any Litigation other than in accordance with
past practice, settle any Litigation involving any Liability of Career
Mosaic for material money damages or restrictions upon the operations of
any Career Mosaic; or
(k) except in the ordinary course of the Career Mosaic
Business, enter into, modify, amend or terminate any material Contract,
or waive, release, compromise or assign any material rights or claims;
or
(l) purchase or otherwise acquire beneficial ownership of
any shares of HeadHunter.NET common stock or any Equity Rights with
respect to HeadHunter.NET capital stock; or
-33-
<PAGE> 35
(m) sell, dispose or otherwise transfer any shares of
Career Mosaic common stock; or
(n) take any action that would cause the representations
and warranties of Omnicom, BHA and Career Mosaic set forth in
Article 7 to no longer be true and correct in all material
respects; or
(o) authorize, commit or agree to take any of the
foregoing actions.
8.4 ADVERSE CHANGES IN CONDITION. Each party agrees to
give written notice promptly to the other parties upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to it
or any of its subsidiaries which (i) is reasonably likely to have, individually
or in the aggregate, a HeadHunter.NET Material Adverse Effect or an Career
Mosaic Business Material Adverse Effect, as the case may be, or (ii) would
cause or constitute a material breach of any of its representations, warranties
or covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
8.5 REPORTS. Each party and its subsidiaries shall file
all reports required to be filed by it with Regulatory Authorities between the
date of this Agreement and the Effective Time and shall deliver to the other
parties copies of all such reports promptly after the same are filed. If
financial statements are contained in any such reports filed with the SEC, such
financial statements will fairly present, in all material respects, the
consolidated financial position of the entity filing such statements as of the
dates indicated and the consolidated results of operations, changes in
shareholders' equity and cash flows for the periods then ended in accordance
with GAAP (subject in the case of interim financial statements to normal
recurring year-end adjustments that are not material). As of their respective
dates, such reports filed with the SEC will comply in all material respects
with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.
8.6 NO SOLICITATION BY HEADHUNTER.NET.
(a) Except as expressly permitted by this Section 8.6,
neither the Board of Directors of HeadHunter.NET nor any committee thereof
shall authorize or cause HeadHunter.NET to enter into any letter of intent,
agreement in principal, acquisition agreement or other similar agreement (each,
an "Acquisition Agreement") related to any Takeover Proposal, unless such
Acquisition Agreement would not prevent consummation of the transactions
contemplated by this Agreement and, if the transactions contemplated by such
Acquisition Agreement were consummated, holders of the HeadHunter.NET common
stock issuable in the Merger are treated in the same manner as all other
holders of HeadHunter.NET common stock.
(b) HeadHunter.NET shall promptly advise BHA orally and
in writing of any request for information or of any Takeover Proposal, the
material terms and conditions of such request or Takeover Proposal and the
identity of the person making such request or Takeover
-34-
<PAGE> 36
Proposal. HeadHunter.NET will keep BHA informed of the status and material
details (including amendments or proposed amendments) of any such request or
Takeover Proposal. BHA shall maintain the confidentiality of any such
information regarding a Takeover Proposal provided to BHA by HeadHunter.NET or
its Affiliates.
(c) Nothing contained in this Section 8.6 shall prohibit
HeadHunter.NET from (i) taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the 1934 Act or from making any
disclosure to HeadHunter.NET's shareholders (including with respect to the
delivery by HeadHunter.NET to BHA of a Notice of Takeover Proposal) if, in the
good faith judgment of the Board of Directors of HeadHunter.NET, after
consultation with, and in conformity with the advice of, outside counsel,
failure so to disclose would be inconsistent with its fiduciary obligations
under applicable law or (ii) after having consulted with and considered the
advice of outside counsel, reasonably determining in good faith that the making
of a recommendation to its shareholders for approval of the matters submitted
for approval or the failure to withdraw or modify such recommendation would
constitute a breach of the fiduciary duties of the members of the Board of
Directors of HeadHunter.NET to its shareholders under applicable law.
ARTICLE 9
ADDITIONAL AGREEMENTS
9.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER
APPROVAL. As soon as reasonably practicable after execution of this Agreement
(and in no event later than 60 days following receipt of Career Mosaic
Financial Statements which comply in all material respects with the
requirements of the applicable Securities Laws for inclusion in the
Registration Statement), HeadHunter.NET, BHA and Career Mosaic jointly shall
prepare and file the Registration Statement with the SEC and each shall use its
commercially reasonable best efforts to (i) cause the Registration Statement to
become effective under the 1933 Act, (ii) take any action required to be taken
under applicable state securities Laws in connection with the issuance of the
shares of HeadHunter.NET common stock upon consummation of the Merger and (iii)
register for resale by BHA in the Registration Statement a number of shares of
HeadHunter.NET common stock which will reduce BHA's ownership of HeadHunter.NET
common stock to less than 20% of all shares outstanding on the filing date of
the Registration Statement; provided that (1) the Registration Statement only
shall remain effective for a period of one year after the date that the
Registration Statement is declared effective by the SEC, provided, that, BHA
shall not sell any Resale Shares under the Registration Statement if
HeadHunter.NET furnishes BHA with written notice that facts and circumstances
which are not publicly available exist which require HeadHunter.NET to prohibit
sales under the Registration Statement for an aggregate period of up to 90 days
in any twelve month period and (2) any Person who purchases an amount of the
Resale Shares which equals at least 1% of the total shares of HeadHunter.NET
common stock outstanding on the date such Person purchases such Resale Shares,
BHA shall cause, as a condition to such sale, such Person to enter into a
written agreement in form and substance reasonably satisfactory to
HeadHunter.NET whereby such Person agrees to execute promptly upon request a
customary lock-up agreement in connection with any public offering conducted by
HeadHunter.NET within one year after the Effective Time. In addition,
HeadHunter.NET, to
-35-
<PAGE> 37
the extent permitted under applicable Securities Laws, shall have the right, in
its sole discretion, to file post-effective amendments to the Registration
Statement to, among other things, convert the Registration Statement into a
registration statement on Form S-3, or such other appropriate form.
HeadHunter.NET shall call a Shareholders' Meeting, to be held as soon as
reasonably practicable after the Registration Statement is declared effective
by the SEC, for the purpose of voting upon approval of the issuance of the
consideration in the Merger and such other matters as it deems appropriate. In
connection with the Shareholders' Meeting, (i) HeadHunter.NET shall prepare and
file with the SEC a Proxy Statement and mail such Proxy Statement to its
shareholders and (ii) the parties shall furnish to each other all information
concerning them that HeadHunter.NET may reasonably request in connection with
such Proxy Statement. The parties shall make all necessary filings with respect
to the Merger under the Securities Laws.
9.2 LISTING. HeadHunter.NET shall use its best efforts to
list, simultaneous with the Effective Time, on the Nasdaq National Market the
shares of HeadHunter.NET common stock issued to the holders of Career Mosaic
common stock pursuant to the Merger; and HeadHunter.NET shall give all notices
and make all filings with the NASD required in connection with the transactions
contemplated herein.
9.3 APPLICATIONS; ANTITRUST NOTIFICATION. The parties
shall promptly prepare and file applications with all Regulatory Authorities
having jurisdiction over the transactions contemplated by this Agreement
seeking the requisite Consents necessary to consummate the transactions
contemplated by this Agreement. To the extent required by the HSR Act, each of
the parties will promptly file with the United States Federal Trade Commission
and the United States Department of Justice the notification and report form
required for the transactions contemplated hereby and any supplemental or
additional information which may reasonably be requested in connection
therewith pursuant to the HSR Act and will comply in all material respects with
the requirements of the HSR Act. The parties shall deliver to each other copies
of all filings, correspondence and orders to and from all Regulatory
Authorities in connection with the transactions contemplated hereby.
9.4 FILINGS WITH STATE OFFICES. Upon the terms and
subject to the conditions of this Agreement, Merger Sub shall execute and file
the Certificate of Merger with the Secretary of State of the State of Delaware
in connection with the Closing.
9.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the
terms and conditions of this Agreement, each party agrees to use, and to cause
its subsidiaries to use, its commercially reasonable best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper, or advisable under applicable Laws to consummate and make
effective, as soon as reasonably practicable after the date of this Agreement,
the transactions contemplated by this Agreement, including using its
commercially reasonable best efforts to lift or rescind any Order adversely
affecting its ability to consummate the transactions contemplated herein and to
cause to be satisfied the conditions referred to in Article 11; provided, that
nothing herein shall preclude either party from exercising its rights under
this Agreement. Each party shall use, and shall cause each of its subsidiaries
to use, its commercially reasonable best efforts to obtain all Consents
necessary or desirable for the consummation of the transactions contemplated by
this Agreement. Any withdrawal or modification of its
-36-
<PAGE> 38
recommendation about approval of the Merger by the HeadHunter.NET Board of
Directors pursuant to Section 8.6(c) hereof shall not be deemed to violate or
breach this Section 9.5.
9.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each party
shall keep the other parties reasonably apprised of all material developments
relevant to its business and to consummation of the Merger and shall permit the
other party to make or cause to be made such investigation of the business and
properties of it and its subsidiaries and of their respective financial and
legal conditions as the other party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a party shall affect the representations and warranties of the
other party.
(b) Each party shall, and shall cause its
advisers and agents to, maintain the confidentiality of all confidential
information furnished to it by the other party concerning its businesses,
operations and financial positions. If this Agreement is terminated prior to
the Effective Time, each party shall promptly return or certify the destruction
of all documents and copies thereof, and all work papers containing
confidential information received from the other party.
(c) Each party agrees to give the other party
notice as soon as practicable after any determination by it of any fact or
occurrence relating to the other party which it has discovered through the
course of its investigation and which represents, or is reasonably likely to
represent, a material breach of any representation, warranty, covenant or
agreement of any other party.
9.7 PRESS RELEASES. Prior to the Effective Time, Omnicom,
BHA, Career Mosaic and HeadHunter.NET shall consult with each other as to the
form and substance of any press release or other public disclosure related to
this Agreement or any other transaction contemplated hereby; provided, that
nothing in this Section 9.7 shall be deemed to prohibit any party from making
any disclosure which it determines in good faith to be necessary or advisable
in order to satisfy such party's disclosure obligations imposed by Law.
9.8 TAX TREATMENT. Each of the parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no
action, including merging Merger Sub with or into HeadHunter.NET, which would
cause the Merger not to qualify as a "reorganization" within the meaning of
Section 368(a)(2)(D) of the Internal Revenue Code for federal income tax
purposes.
9.9 INDEMNIFICATION, EXCULPATION AND INSURANCE.
(a) HeadHunter.NET agrees that any
indemnification or other agreements of Career Mosaic as in effect on the date
hereof and as disclosed on Section 9.9(a) of the Career Mosaic Disclosure
Memorandum, which are for the benefit of individuals who are not listed in
Section 5.1 of this Agreement, shall be assumed by the Surviving Corporation
and
-37-
<PAGE> 39
HeadHunter.NET in the Merger, without further action, as of the Effective Time
and shall survive the Merger and shall continue in full force and effect in
accordance with their terms.
(b) In the event that the Surviving Corporation
or any of its successors or assigns (i) consolidates with or merges into any
other Person and is not the continuing or surviving Person of such
consolidation or merger or (ii) transfers or conveys all or substantially all
of its properties and Assets to any Person, then, and in each such case,
HeadHunter.NET shall cause proper provision to be made so that the successors
and assigns of the Surviving Corporation assume the obligations set forth in
Section 9.9(a).
(c) For six years after the Effective Time,
HeadHunter.NET shall cause all director nominees named in Section 5.1 hereof to
be covered under all director and officer liability insurance coverage
available to its directors and officers at the Effective Time.
(d) The provisions of this Section 9.9 are
intended to be for the benefit of, and will be enforceable by, each indemnified
party, his or her heirs and his or her representatives and are in addition to,
and not in substitution for, any other rights to indemnification or
contribution that any such Person may have by contract or otherwise.
9.10 FEES AND EXPENSES. Except as provided in this Section
9.10, all fees and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated hereby and thereby shall be paid by
the party incurring such fees or expenses, whether or not the Merger is
consummated. Without limiting the generality or effect of the foregoing,
HeadHunter.NET and Omnicom equally shall bear and pay the costs and expenses
incurred in connection with the filing and printing of the Registration
Statement and Proxy Statement, the mailing of the Proxy Statement and the
filing fees for the premerger notification and report forms under the HSR Act.
9.11 CERTAIN EMPLOYEE MATTERS. Following the Merger,
HeadHunter.NET will cause the Surviving Corporation to (i) honor all
obligations under employment and severance Contracts of Career Mosaic, the
existence of which have been disclosed to HeadHunter.NET in Schedule 7.15 of
the Career Mosaic Disclosure Memorandum and otherwise do not constitute a
violation of this Agreement, in accordance with the terms thereof without
offset or deduction (other than withholding Taxes required by Law to be
withheld) and (ii) not take any action during the period from the Closing Date
to the first anniversary of the Closing Date (the "First Anniversary Date")
which results in the employees of Career Mosaic immediately prior to the
Effective Time set forth on Schedule 9.11 of the Career Mosaic Disclosure
Memorandum (the "Closing Date Employees") receiving compensation and benefits
that, in the aggregate, are less favorable than the compensation and benefits
to which other similarly situated employees of HeadHunter.NET or its
subsidiaries are entitled, provided, however, that nothing herein will prohibit
HeadHunter.NET from (a) taking any action required by Law or (b) substituting,
in accordance with applicable Law and the terms of any applicable benefit plan,
a benefit plan applicable to similarly situated Closing Date Employees. To the
extent that any benefit plan of HeadHunter.NET or any of its subsidiaries
becomes applicable to any Closing Date Employees, HeadHunter.NET will grant, or
cause to be granted, to such
-38-
<PAGE> 40
Closing Date Employees credit for their service with BHA, Career Mosaic or
their respective Affiliates for the purpose of determining eligibility to
participate and nonforfeitability of benefits under such benefit plan and for
purposes of benefit accrual under vacation and severance pay plans. With
respect to any welfare benefit plan of HeadHunter.NET or its subsidiaries made
available to Closing Date Employees, HeadHunter.NET will waive or cause its
subsidiaries to waive any waiting periods, pre-existing condition exclusions
and actively-at-work requirements to the extent such provisions were
inapplicable to any Closing Date Employee immediately before such plan was made
available and provide that any expenses incurred on or before the date such
plan was made available by any such individual or such individual's covered
dependents will be taken into account for purposes of satisfying applicable
deductible, coinsurance and maximum out-of-pocket provisions.
ARTICLE 10
INDEMNIFICATION
10.1 AGREEMENT OF OMNICOM TO INDEMNIFY. Subject to the
terms and conditions of this Article 10, Omnicom and BHA, jointly and
severally, agree to indemnify, defend and hold harmless HeadHunter.NET and
Merger Sub, and each of their respective Affiliates, officers, directors,
employees, agents and representatives (collectively, the "HeadHunter.NET
Indemnitees") from, against, for and in respect of any and all Losses asserted
against, or paid, suffered or incurred by, a HeadHunter.NET Indemnitee and
resulting from, based upon, or arising out of:
(a) the material breach of any representation or warranty
of Omnicom, BHA or Career Mosaic contained in or made pursuant to this
Agreement or in the certificates referenced in Sections 11.3 (c) and (f)
in connection herewith, regardless of whether HeadHunter.NET had
Knowledge of such inaccuracy, untruth, incompleteness or breach prior to
the Effective Time; and
(b) a material breach of any covenant of Omnicom, BHA or
Career Mosaic made in this Agreement; and
(c) any Loss arising out of any Tax Liability incurred by
the Surviving Corporation or HeadHunter.NET as the result of the failure
of the contribution by BHA of the Transferred Assets to Career Mosaic to
qualify for tax-free treatment under Section 351 of the Internal Revenue
Code, or any other Tax Liability for which the Surviving Corporation is
liable as the result of Career Mosaic being a member of the Omnicom
affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which is HeadHunter.NET) under
Treasury Regulation Section 1.1502-6.
10.2 AGREEMENT OF HEADHUNTER.NET TO INDEMNIFY. Subject to
the terms and conditions of this Article 10, HeadHunter.NET agrees to
indemnify, defend and hold harmless BHA, and each of their respective
Affiliates, officers, directors, employees, agents and representatives
(collectively, the "BHA Indemnitees") from, against, for and in respect
of any
-39-
<PAGE> 41
and all Losses asserted against, or paid, suffered or incurred by, a BHA
Indemnitee and resulting from, based upon, or arising out of:
(a) the material breach of any representation or warranty
of HeadHunter.NET or Merger Sub contained in or made pursuant to this
Agreement or in the certificates referenced in Sections 11.2(c) and (e)
in connection herewith, regardless of whether Omnicom, BHA or Career
Mosaic had Knowledge of such inaccuracy, untruth, incompleteness or
breach prior to the Effective Time; and
(b) a material breach of any covenant of HeadHunter.NET
or Merger Sub made in this Agreement.
10.3 PROCEDURES FOR INDEMNIFICATION.
(a) An indemnification claim shall be made by a
HeadHunter.NET Indemnitee or BHA Indemnitee (hereinafter an "Indemnitee"), as
the case may be, by delivery of a written notice to the indemnifying party
specifying the basis on which indemnification is sought and the amount of
asserted Losses and, in the case of a Third Party Claim, containing (by
attachment or otherwise) information in reasonable detail as such Indemnitee
shall have concerning such Third Party Claim.
(b) If the indemnification claim involves a
Third Party Claim, the procedures set forth in Section 10.3 shall be observed
by the Indemnitee and the indemnifying party.
(c) If the indemnification claim involves a
matter other than a Third Party Claim, the indemnifying party shall have 30
days to object to such indemnification claim by delivery of a written notice of
such objection to such Indemnitee specifying in reasonable detail the basis for
such objection. Failure to timely so object shall constitute a final and
binding acceptance of the indemnification claim by the indemnifying party and
the indemnification claim shall be paid in accordance with subsection (d)
hereof.
(d) Upon determination of the amount of an
indemnification claim, whether by agreement between the indemnifying party and
the Indemnitee or by any final adjudication, the indemnifying party shall pay
the amount of such indemnification claim within twenty (20) days of the date
such amount is determined.
10.4 THIRD PARTY CLAIMS. The obligations and liabilities
of the parties hereunder with respect to a Third Party Claim shall be subject
to the following terms and conditions:
(a) The Indemnitee shall give the indemnifying party
written notice of a Third Party Claim promptly after receipt by the
Indemnitee of notice thereof, and the indemnifying party may undertake
the defense, compromise and settlement thereof by representatives of its
own choosing reasonably acceptable to the Indemnitee. The failure of the
Indemnitee to notify the indemnifying party of such claim shall not
relieve the
-40-
<PAGE> 42
indemnifying party of any liability that it may have with respect to such claim
except to the extent the indemnifying party demonstrates that the defense of
such claim is prejudiced by such failure. The assumption of the defense,
compromise and settlement of any such Third Party Claim by the indemnifying
party shall be an acknowledgment of the obligation of the indemnifying party to
indemnify the Indemnitee with respect to such claim hereunder. If the
Indemnitee desires to participate in, but not control, any such defense,
compromise and settlement, it may do so at its sole cost and expense. If,
however, the indemnifying party fails or refuses to undertake the defense of
such Third Party Claim within twenty (20) days after written notice of such
claim has been given to the indemnifying party by the Indemnitee, the
Indemnitee shall have the right to undertake the defense, compromise and
settlement of such claim with counsel of its own choosing. In the circumstances
described in the preceding sentence, the Indemnitee shall, promptly upon its
assumption of the defense of such claim, make an indemnification claim which
shall be deemed an indemnification claim that is not a Third Party Claim for
the purposes of the procedures set forth herein.
(b) If, in the reasonable opinion of the Indemnitee, any
Third Party Claim or the litigation or resolution thereof involves an
issue or matter which could have a material adverse effect on the
business, operations, assets, properties or prospects of the Indemnitee
(including, without limitation, the administration of the tax returns
and responsibilities under the tax laws of the Indemnitee), the
Indemnitee shall have the right to control the defense, compromise and
settlement of such Third Party Claim undertaken by the indemnifying
party, and the costs and expenses of the Indemnitee in connection
therewith shall be included as part of the indemnification obligations
of the indemnifying party hereunder. If the Indemnitee shall elect to
exercise such right, the indemnifying party shall have the right to
participate in, but not control, the defense, compromise and settlement
of such Third Party Claim at its sole cost and expense.
(c) No settlement of a Third Party Claim involving the
asserted liability of the indemnifying party under this Article shall be
made without the prior written consent by or on behalf of the
indemnifying party, which consent shall not be unreasonably withheld or
delayed. Consent shall be presumed in the case of settlements of $20,000
or less where the indemnifying party has not responded within ten (10)
business days of notice of a proposed settlement. If the indemnifying
party assumes the defense of such a Third Party Claim, (a) no compromise
or settlement thereof may be effected by the indemnifying party without
the Indemnitee's consent unless (i) there is no finding or admission of
any violation of law or any violation of the rights of any person and no
effect on any other claim that may be made against the Indemnitee, (ii)
the sole relief provided is monetary damages that are paid in full by
the indemnifying party, and (iii) the compromise or settlement includes,
as an unconditional term thereof, the giving by the claimant or the
plaintiff to the Indemnitee of a release, in form and substance
satisfactory to the Indemnitee, from all liability in respect of such
Third Party Claim, and (b) the Indemnitee shall have no liability with
respect to any compromise or settlement thereof effected without its
consent.
(d) In connection with the defense, compromise or
settlement of any Third Party Claim, the parties to this Agreement shall
execute such powers of attorney as may
-41-
<PAGE> 43
reasonably be necessary or appropriate to permit participation of
counsel selected by any party hereto and, as may reasonably be related
to any such claim or action, shall provide access to the counsel,
accountants and other representatives of each party during normal
business hours to all properties, personnel, books, tax records,
contracts, commitments and all other business records of such other
party and will furnish to such other party copies of all such documents
as may reasonably be requested (certified, if requested).
10.5 EXCLUSIVE REMEDY. The rights of the Indemnitees to
indemnification under this Article 10 are the exclusive rights and remedies
against any other party hereto for any claim based on an inaccuracy, untruth,
incompleteness or breach of any representation or warranty of any indemnifying
party contained herein or in any certificate, schedule or exhibit furnished by
such party in connection herewith, or based upon the failure of an indemnifying
party to perform any covenant, agreement or undertaking required by the terms
hereof to be performed by such indemnifying party.
10.6 SURVIVAL. Except as otherwise provided below, all
representations, warranties and covenants contained in this Agreement or in any
certificate delivered pursuant to this Agreement shall survive the Closing
until April 1, 2001, notwithstanding any investigation conducted with respect
thereto or any knowledge acquired as to the accuracy or inaccuracy of any such
representation or warranty; provided, however that (i) any representation,
warranty, covenant or agreement made or to be performed by the indemnifying
party contained in this Agreement related to any Taxes, employee benefit plans
or environmental issues shall survive until the ninetieth (90th) day after the
date upon which the liability to which any such claim may relate is barred by
all applicable statutes of limitation and (ii) any representation or warranty
contained in Sections 6.1, 6.2, 6.3, 7.1, 7.2 and 7.3 shall survive
indefinitely. Any claim for indemnification under Sections 10.1(a), 10.1(b),
11.1(a) or 11.1(b) with respect to any of such matters which is not asserted by
a notice given as herein provided specifically identifying the particular
breach underlying such claim and the facts and the Loss relating thereto,
within such specified periods of survival, may not be pursued and is hereby
irrevocably waived.
10.7 LIMITATIONS AS TO AMOUNT. No indemnifying party shall
have any liability with respect to the matters described in Sections 10.1(a) or
10.2(a) until the total of all Losses with respect thereto exceeds $1,000,000,
at which time the Indemnitee shall be entitled to indemnification for the full
amount of all Losses (including the first $1,000,000). Notwithstanding any
other provision of this Agreement to the contrary, the indemnification
obligations of Omnicom and BHA, collectively, on the one hand, and of
HeadHunter.NET and Merger Sub, collectively, on the other hand, shall not
exceed $35 million. The limitations set forth in this Section 10.7 shall not
apply to (i) an intentional misrepresentation, (ii) an intentional breach of
warranty, (iii) fraud of any indemnifying party, (iv) an indemnification claim
based on Section 10.1(c) or (v) an indemnification claim based on a breach of
the representations and warranties set forth in Sections 6.8, 6.11, 6.14, 7.8,
7.11 and 7.14. The indemnifying party shall be liable for all Losses with
respect to any indemnification claim based on subparagraphs (i)-(v) above and
any amount recovered under such subparagraphs shall not be counted against the
$35 million limit for purposes of any other indemnification claims.
-42-
<PAGE> 44
10.8 TAX EFFECT AND INSURANCE. The liability of the
indemnifying party with respect to any indemnification claim shall be reduced
by the tax benefit if and when actually realized and any insurance proceeds
(net of collection costs) received by the Indemnitee as a result of any Losses
upon which such indemnification claim is based, and shall include any tax
detriment if and when actually suffered by the Indemnitee as a result of such
Losses or the receipt of payment therefor. The amount of any such tax benefit
or detriment shall be determined by taking into account the effect, if any and
to the extent determinable, of timing differences resulting from the
acceleration or deferral of items of gain or loss resulting from such Losses
and shall otherwise be determined so that payment by the indemnifying party of
the indemnification claim, as adjusted to give effect to any such tax benefit
or detriment, will make the Indemnitee as economically whole as is reasonably
practical with respect to the Losses upon which the indemnification claim is
based.
ARTICLE 11
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
11.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
respective obligations of each party to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both parties
pursuant to Section 13.5:
(A) SHAREHOLDER APPROVAL. The shareholders of
HeadHunter.NET shall have approved the issuance of HeadHunter.NET common
stock under this Agreement as and to the extent required by Law, by the
provisions of any governing instruments, and by the rules of the NASD.
(B) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
listed on Exhibit 11.1(b) shall be in full force and effect and all
waiting periods required by Law shall have expired. No such Consent
obtained from any Regulatory Authority shall be conditioned or
restricted in a manner which in the reasonable judgment of the Board of
Directors of any party would so materially adversely impact the economic
or business benefits of the transactions contemplated by this Agreement
that, had such condition or requirement been known, such party would
not, in its reasonable judgment, have entered into this Agreement.
(C) CONSENTS AND APPROVALS. Each party shall have
obtained any and all Consents and no such Consent shall be conditioned
or restricted in a manner which in the reasonable judgment of the Board
of Directors of either party would so materially adversely impact the
economic or business benefits of the transactions contemplated by this
Agreement that, had such condition or requirement been known, such party
would not, in its reasonable judgment, have entered into this Agreement.
(D) LEGAL PROCEEDINGS. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) or taken any other action
-43-
<PAGE> 45
which prohibits, restricts or makes illegal consummation of the
transactions contemplated by this Agreement.
(E) LISTING. All shares of HeadHunter.NET common stock to
be issued to the holders of Career Mosaic common stock in the Merger
shall have been approved for listing on the Nasdaq National Market.
11.2 CONDITIONS TO OBLIGATIONS OF OMNICOM, BHA AND CAREER
MOSAIC. The obligations of Omnicom, BHA and Career Mosaic to perform this
Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by them pursuant to Section 13.5:
(A) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of HeadHunter.NET and Merger Sub set forth in Article 6
which are qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material
respects, as of the date of this Agreement and as of the Closing Date,
as if made at and as of such time (except to the extent expressly made
as of an earlier date, in which case as of such date).
(B) PERFORMANCE OF COVENANTS. Each and all of the
covenants of HeadHunter.NET and Merger Sub to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Closing Date shall have been duly performed and
complied with in all material respects.
(C) CERTIFICATES. HeadHunter.NET shall have delivered to
Omnicom, BHA and Career Mosaic a certificate dated as of the Closing
Date and signed on HeadHunter.NET's behalf by an executive officer to
the effect that the conditions set forth in Sections 11.2(a) and (b)
have been satisfied.
(D) DOCUMENTS. HeadHunter.NET, Merger Sub and ITC shall
have executed and delivered all documents set forth in Article 5 of this
Agreement (to the extent that each is a party thereto).
(E) SECOND QUARTER REVENUES. HeadHunter.NET shall have
either publicly announced or delivered to BHA a certificate executed by
its Chief Financial Officer certifying that HeadHunter.NET had net
revenues (revenues reduced by agency commissions) for the quarter ended
June 30, 2000 of at least $7.05 million, determined in accordance with
GAAP.
11.3 CONDITIONS TO OBLIGATIONS OF HEADHUNTER.NET AND
MERGER SUB. The obligations of HeadHunter.NET and Merger Sub to perform this
Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by HeadHunter.NET pursuant to Section 13.5:
(A) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Omnicom, BHA and Career Mosaic set forth in Article 7
of this Agreement which are
-44-
<PAGE> 46
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of (1)
the date of this Agreement or the Delivery Date (as specified in the
initial paragraph of Article 7), and (2) the Closing Date, as if made at
and as of such time (except to the extent expressly made as an earlier
date, in which case as of such date).
(B) PERFORMANCE OF COVENANTS. Each and all of the
covenants of Omnicom, BHA and Career Mosaic to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Closing Date shall have been duly performed and
complied with in all material respects.
(C) CERTIFICATES. Omnicom shall have delivered to
HeadHunter.NET a certificate dated as of the Closing Date and signed on
its behalf by an executive officer, to the effect that the conditions
set forth in Sections 11.3(a) and 11.3(b) have been satisfied.
(D) DOCUMENTS. Omnicom, BHA and Career Mosaic shall have
executed and delivered all documents set forth in Article 5 of this
Agreement (to the extent that each is a party thereto).
(E) CAREER MOSAIC FINANCIAL STATEMENTS. Arthur Andersen
LLP shall have delivered to HeadHunter.NET the Career Mosaic Financial
Statements (not including the unaudited interim financial statements for
any period since the end of the most recent year), in form and substance
reasonably satisfactory to HeadHunter.NET.
(F) SECOND QUARTER NET REVENUES. Career Mosaic shall have
delivered to HeadHunter.NET a certificate executed by its Chief
Financial Officer certifying that Career Mosaic had net revenues
(revenues reduced by agency commissions) for the quarter ended June 30,
2000 of at least $4.7 million, determined in accordance with GAAP.
ARTICLE 12
TERMINATION
12.1 TERMINATION. Notwithstanding any other provision of
this Agreement, and notwithstanding the approval of this Agreement by the
shareholders of HeadHunter.NET, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual consent of HeadHunter.NET and BHA; or
(b) By any party (provided that the terminating party
(and each of its Affiliates which is a party hereto) is not then in
material breach of any representation, warranty or covenant contained in
this Agreement) in the event of a material breach by any other party
(which is not an Affiliate of the terminating party) of any
representation or warranty contained in this Agreement which cannot be
or has not been cured within 30 days after the giving of written notice
to the breaching party of such breach; or
-45-
<PAGE> 47
(c) By any party (provided that the terminating party
(and each of its Affiliates which is a party hereto) is not then in
material breach of any representation, warranty or covenant contained in
this Agreement) in the event of a material breach by any other party
(which is not an Affiliate of the terminating party) of any covenant
contained in this Agreement which cannot be or has not been cured within
30 days after the giving of written notice to the breaching party of
such breach; or
(d) By any party (provided that the terminating party
(and each of its Affiliates which is a party hereto) is not then in
material breach of any representation, warranty or covenant contained in
this Agreement) in the event (i) any Consent of any Regulatory Authority
listed on Exhibit 11.1(b) shall have been denied by final nonappealable
action of such authority or if any action taken by such authority is not
appealed within the time limit for appeal, or (ii) the shareholders of
HeadHunter.NET fail to vote their approval of the matters relating to
this Agreement and the transactions contemplated hereby at the
Shareholders' Meeting where such matters were presented to such
shareholders for their approval; or
(e) By any party in the event that the Merger shall not
have been consummated by the date 120 days after the initial filing date
of the Registration Statement, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by
any breach of this Agreement by the terminating party (and each of its
Affiliates which is a party hereto); or
(f) By HeadHunter.NET, in the event that BHA has not
provided the Career Mosaic Financial Statements by June 30, 2000; or
(g) By BHA, in the event that HeadHunter.NET has not
filed the Registration Statement within 60 days of HeadHunter.NET's
receipt of the Career Mosaic Financial Statements; provided that (1) the
Career Mosaic Financial Statements on the date of delivery materially
comply with the requirements of Securities Laws applicable to financial
statements to be included in the Registration Statement and (2) BHA has
not breached its covenants contained in Sections 9.1 and 9.5 and such
breach was a material factor in HeadHunter.NET's inability to file the
Registration Statement within such 60-day period; or
(h) By BHA, in the event that the Board of Directors of
HeadHunter.NET shall have (i) taken any action prohibited by Section 8.6
of this Agreement or (ii) failed to reaffirm its approval of the Merger
and the transactions contemplated by this Agreement (to the exclusion of
any other specific Takeover Proposal, which would prevent consummation
of the Merger), or shall have resolved not to reaffirm the Merger.
12.2 EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement pursuant to Section 12.1, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 12.2, Article 13, Section 9.6(b) and Section 9.11 shall survive
any such termination and abandonment, and (ii) a termination pursuant to
-46-
<PAGE> 48
Sections 12.1(b) or 12.1(c) shall not relieve the breaching party from
Liability for an uncured willful breach of a representation, warranty, covenant,
or agreement giving rise to such termination.
ARTICLE 13
MISCELLANEOUS
13.1 DEFINITIONS.
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"AFFILIATE" of a Person shall mean any other Person directly,
or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated herein
by reference.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses and rights of such Person of every kind, nature,
character and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"CAREER MOSAIC BUSINESS" shall mean the business transferred
by BHA to Career Mosaic pursuant to the Contribution Agreement as
conducted prior to the effective date of the Contribution Agreement by
BHA, and as now conducted by Career Mosaic.
"CAREER MOSAIC BUSINESS MATERIAL ADVERSE EFFECT" shall mean
an event, change or occurrence which, individually or together with any
other event, change or occurrence has a material adverse impact on (i)
the financial position, business or results of operations of the Career
Mosaic Business or (ii) the ability of Omnicom, BHA or Career Mosaic to
perform their respective obligations under this Agreement or to
consummate the Merger or the other transactions contemplated by this
Agreement, which shall not include actions and omissions of Omnicom, BHA
or Career Mosaic taken with the prior written Consent of HeadHunter.NET
in contemplation of the transactions contemplated hereby.
"CAREER MOSAIC DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Career Mosaic Disclosure Memorandum" delivered
prior to the date of this Agreement to HeadHunter.NET describing in
reasonable detail the matters contained
-47-
<PAGE> 49
therein and, with respect to each disclosure made therein, specifically
referencing each Section of this Agreement under which such disclosure
is being made. Information disclosed with respect to one Section shall
not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
"CAREER MOSAIC FINANCIAL STATEMENTS" shall mean the audited
financial statements prepared by Arthur Andersen LLP with respect to the
Career Mosaic Business for the three most recent fiscal years and the
unaudited financial statements prepared with respect to the Career
Mosaic Business for any interim periods since the end of the most recent
fiscal year.
"CLOSING DATE" shall mean the date on which the Closing
occurs.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person.
"DEFAULT" shall mean (i) any breach or violation of, default
under, contravention of or conflict with any Contract, Law, Order or
Permit, (ii) any occurrence of any event that with the passage of time
or the giving of notice or both would constitute a breach or violation
of, default under, contravention of or conflict with any Contract, Law,
Order or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise to a
right of any Person to exercise any remedy or obtain any relief under,
terminate or revoke, suspend, cancel or modify or change the current
terms of, or renegotiate, or to accelerate the maturity or performance
of, or to increase or impose any Liability under, any Contract, Law,
Order or Permit.
"DGCL" shall mean the Delaware General Corporation Law, as
amended.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to
pollution or protection of human health or the environment (including
ambient air, surface water, ground water, land surface or subsurface
strata) and which are administered, interpreted or enforced by the
United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42
U.S.C. ss.ss. 9601, et seq. ("CERCLA"), the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss.ss. 6901, et seq. ("RCRA"), and
other Laws relating to emissions, discharges, releases or threatened
releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of any Hazardous Material.
"EQUITY RIGHTS" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to, scrip,
understandings, warrants or other binding obligations
-48-
<PAGE> 50
of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code, as
amended.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products or oil (and specifically shall include asbestos
requiring abatement, removal or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HEADHUNTER.NET DISCLOSURE MEMORANDUM" shall mean the written
information entitled "HeadHunter.NET Disclosure Memorandum" delivered
prior to the date of this Agreement to Omnicom, BHA and Career Mosaic
describing in reasonable detail the matters contained therein and, with
respect to each disclosure made therein, specifically referencing each
Section of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section shall not be deemed to
be disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"HEADHUNTER.NET FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules) of
HeadHunter.NET as of December 31, 1998 and as of December 31, 1999, and
the related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) for each of
the three fiscal years ended December 31, as filed by HeadHunter.NET in
SEC Documents filed prior to the date hereof, and (ii) the consolidated
balance sheets of HeadHunter.NET (including related notes and schedules)
and related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) included in
SEC Documents filed with respect to periods ended subsequent to December
31, 1999.
"HEADHUNTER.NET MATERIAL ADVERSE EFFECT" shall mean an event,
change or occurrence which, individually or together with any other
event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of HeadHunter.NET
and its subsidiaries, taken as a whole, or (ii) the ability of
HeadHunter.NET to perform its obligations under this Agreement or to
consummate the Merger or the other transactions contemplated by this
Agreement, which shall not include actions and omissions of
HeadHunter.NET (or any of its subsidiaries) taken with the prior written
Consent of BHA in contemplation of the transactions contemplated hereby.
-49-
<PAGE> 51
"HSR ACT" shall mean Section 7A of the Clayton Act, as added
by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, domain names, data, web
site content, user data and other intellectual property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
those facts that are actually known, without independent investigation
or verification, by the chairman, president, chief financial officer,
chief accounting officer, chief operating officer, general counsel, any
assistant or deputy general counsel or any senior, executive or other
vice president of such Person.
"LAW" shall mean any code, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (ii) Liens which do
not materially impair the use of or title to the Assets subject to such
Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a party, its business, its Assets
(including Contracts related to it), or the transactions contemplated by
this Agreement.
"LOSSES" shall mean any and all demands, claims, actions or
causes of action, assessments, losses, diminution in value, damages
(including special and consequential damages, if asserted in a Third
Party claim only), liabilities, costs, and expenses, including
-50-
<PAGE> 52
interest, penalties, cost of investigation and defense, and reasonable
attorneys' and other professional fees and expenses.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System
of the National Association of Securities Dealers Automated Quotations
System.
"OPERATING PROPERTY" shall mean any property owned, leased or
operated by the party in question or by any of its subsidiaries or in
which such party or subsidiary holds a security interest or other
interest (including an interest in a fiduciary capacity), and, where
required by the context, includes the owner or operator of such
property, but only with respect to such property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the party in question or any of its subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or property.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets or business.
"PERSON" shall mean a natural person or any legal, commercial
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in concert,
or any person acting in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by
HeadHunter.NET to solicit the approval of its shareholders of the
transactions contemplated by this Agreement, which shall include the
prospectus of HeadHunter.NET relating to the issuance of the
HeadHunter.NET common stock to the holders of Career Mosaic common
stock.
"REGISTRATION STATEMENT" shall mean the Registration
Statement on Form S-4, or other appropriate form, including any
pre-effective or post-effective amendments or supplements thereto, filed
with the SEC by HeadHunter.NET under the 1933 Act with respect to the
shares of HeadHunter.NET common stock to be issued to the holders of
Career Mosaic common stock in the Merger.
-51-
<PAGE> 53
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC,
the NASD, the Federal Trade Commission, the United States Department of
Justice and all other federal, state, county, local or other
governmental or regulatory agencies, authorities (including
self-regulatory authorities), instrumentalities, commissions, boards or
bodies having jurisdiction over the parties and their respective
subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant or other representative
engaged by a Person.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules and other documents filed,
or required to be filed, by a party or any of its subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and
the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SHAREHOLDERS' MEETING" shall mean the meeting of the
shareholders of HeadHunter.NET to be held pursuant hereto, including any
adjournment or adjournments thereof.
"SURVIVING CORPORATION" shall mean Merger Sub as the
surviving corporation resulting from the Merger.
"TAKEOVER PROPOSAL" shall mean any inquiry, proposal or offer
from any Person (other than Omnicom of an Affiliate thereof) relating to
any direct or indirect (i) sale, lease, exchange, transfer or other
disposition (including a contribution to a joint venture) of at least
30% of the Assets of HeadHunter.NET and its subsidiaries, taken as a
whole, or (ii) a merger, reorganization, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution, tender
offer, exchange offer or other similar transaction the result of which
is that HeadHunter.NET's shareholders immediately prior to such
transaction in the aggregate cease to own at least 50% of the voting
securities of the ultimate parent entity resulting from such
transaction.
"TAX RETURN" shall mean any report, return, information
return or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a party or its
subsidiaries.
"TAX" or "TAXES" shall mean any federal, state, county, local
or foreign taxes, charges, fees, levies, imposts, duties or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, payroll, franchise, stamp, occupation, windfall
profits, federal highway use, customs duties, capital stock, paid-up
capital, profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property, ad valorem,
value added, alternative or add-on minimum, estimated or other tax or of
any kind whatsoever, imposed or required to be withheld by the United
-52-
<PAGE> 54
States or any state, county, local or foreign government or subdivision
or agency thereof, including any interest, penalties and additions
imposed thereon or with respect thereto.
"THIRD PARTY CLAIM" shall mean any Litigation
(including, without limitation, a binding arbitration or an audit by any
taxing authority) that is instituted against an Indemnitee by a Person
other than an indemnifying party and which, if prosecuted successfully,
would result in a Loss for which such Indemnitee is entitled to
indemnification hereunder.
"TRANSFERRED ASSETS" shall mean the Assets related
to, used in or necessary for, the conduct of the Career Mosaic Business
which were transferred by BHA to Career Mosaic under that certain
Contribution and Assumption Agreement dated as of the date of this
Agreement and effective as of January 1, 2000, between BHA and Career
Mosaic (the "Contribution Agreement").
"TRANSFERRED LIABILITIES" shall mean the Liabilities
related to or used in the Career Mosaic Business which were assumed by
Career Mosaic under the Contribution Agreement.
(b) Any singular term in this Agreement shall be
deemed to include the plural, and any plural term the singular. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation."
13.2 BROKERS AND FINDERS. Except for First Union
Securities, Inc., the investment bankers for HeadHunter.NET and Merger Sub, the
fees and expenses of which shall be paid by HeadHunter.NET, each of the parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions or finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon his or its representing or being retained by or allegedly
representing or being retained by a party, such party agrees to indemnify and
hold the other parties harmless of and from any Liability in respect of any
such claim.
13.3 ENTIRE AGREEMENT. Except as otherwise expressly
provided herein, this Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereto, written or oral. Nothing
in this Agreement expressed or implied, is intended to confer upon any Person,
other than the parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement.
13.4 AMENDMENTS. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each of the parties
upon the approval of each of the parties, whether before or after shareholder
approval of this Agreement has been obtained.
-53-
<PAGE> 55
13.5 WAIVERS.
(a) Prior to or at the Effective Time, Omnicom,
BHA or Career Mosaic, each acting through its respective Board of Directors,
chief executive officer or other authorized officer, shall have the right to
waive any Default in the performance of any term of this Agreement by
HeadHunter.NET or Merger Sub, to waive or extend the time for the compliance or
fulfillment by HeadHunter.NET or Merger Sub of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to
the obligations of Omnicom, BHA or Career Mosaic under this Agreement, except
any condition which, if not satisfied, would result in the violation of any
Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Omnicom, BHA or Career Mosaic, as the case may be.
(b) Prior to or at the Effective Time,
HeadHunter.NET or Merger Sub, each acting through its respective Board of
Directors, chief executive officer or other authorized officer, shall have the
right to waive any Default in the performance of any term of this Agreement by
Omnicom, BHA or Career Mosaic, to waive or extend the time for the compliance
or fulfillment by Omnicom, BHA or Career Mosaic of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of HeadHunter.NET or Merger Sub under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of HeadHunter.NET or Merger Sub.
(c) The failure of any party at any time or
times to require performance of any provision hereof shall in no manner affect
the right of such party at a later time to enforce the same or any other
provision of this Agreement. No waiver of any condition or of the breach of any
term contained in this Agreement in one or more instances shall be deemed to be
or construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
13.6 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other party. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective successors and
assigns.
13.7 NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered by hand, by facsimile transmission, by registered or certified mail,
postage pre-paid, or by courier or overnight carrier, to the persons at the
addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
-54-
<PAGE> 56
<TABLE>
<S> <C>
HeadHunter.NET or Merger Sub HeadHunter.NET, Inc.
333 Research Court, Suite 200
Norcross, Georgia 30092
Telecopy Number: (770) 349-2401
Attention: Chief Executive Officer
Copy to Counsel: Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telecopy Number: (404) 881-7777
Attention: J. Vaughan Curtis, Esq.
Omnicom, BHA or Career Mosaic: Omnicom Group Inc.
437 Madison Avenue
New York, New York 10022
Telecopy Number: (212) 817-6551
Attention: Randall J. Weisenburger
Copy to Counsel: Jones Day Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
Telecopy Number: (212) 755-7306
Attention: Thomas Bark, Esq.
ITC: ITC Holding Company, Inc.
3300 20th Avenue
P.O. Box 20
Valley, Alabama 36854
Telecopy Number: (___) ___-____
Attention: Chief Executive Officer
Copy to Counsel: Kimberley E. Thompson, Esq.
4717 Dolphin Lane
Alexandria, Virginia 22309
Telecopy Number: (703) 619-9720
</TABLE>
13.8 GOVERNING LAW; JURISDICTION.
(a) This Agreement shall be governed by and construed in
accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws principles thereof.
(b) The parties agree that any litigation arising out of
this Agreement may be brought only in any federal court located in the State of
Delaware or in Delaware state court (collectively, the "Permitted Courts"). In
furtherance thereof, each of the parties hereto (i)
-55-
<PAGE> 57
consents to submit itself to the personal jurisdiction of any Permitted Court
in the event any dispute arises out of this Agreement or any of the transaction
contemplated hereby, (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request or leave from any such
court, and (iii) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any
court other than a Permitted Court. Notwithstanding the foregoing, nothing in
this Agreement shall be construed as prohibiting a party from seeking to
enforce a judgment obtained in a Permitted Court in a court in any other
jurisdiction.
13.9 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
13.10 CAPTIONS; ARTICLES AND SECTIONS. The captions
contained in this Agreement are for reference purposes only and are not part of
this Agreement. Unless otherwise indicated, all references to particular
Articles or Sections shall mean and refer to the referenced Articles and
Sections of this Agreement.
13.11 INTERPRETATIONS. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any
party, whether under any rule of construction or otherwise. No party to this
Agreement shall be considered the draftsman. The parties acknowledge and agree
that this Agreement has been reviewed, negotiated, and accepted by all parties
and their attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the purposes and
intentions of all parties hereto.
13.12 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
13.13 SPECIFIC PERFORMANCE. The parties hereto agree that
(i) irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and (ii) the
parties will be entitled to an injunction to prevent material breaches of this
Agreement and to specific performance of the terms hereof, in addition to any
other remedy to which they may be entitled at law or in equity.
-56-
<PAGE> 58
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement as of the day and year first above written.
OMNICOM GROUP INC.
By: /s/ Randall J. Weisenburger
-----------------------------------------------
Name: Randall J. Weisenburger
---------------------------------------------
Title: Executive Vice President and CFOfficer
--------------------------------------------
BERNARD HODES GROUP INC.
By: /s/ Randall J. Weisenburger
-----------------------------------------------
Name: Randall J. Weisenburger
---------------------------------------------
Title: Duly Authorized
--------------------------------------------
CAREER MOSAIC INC.
By: /s/ Randall J. Weisenburger
-----------------------------------------------
Name: Randall J. Weisenburger
---------------------------------------------
Title: Duly Authorized
--------------------------------------------
HEADHUNTER.NET, INC.
By: /s/ Robert M. Montgomery, Jr.
-----------------------------------------------
Name: Robert M. Montgomery, Jr.
---------------------------------------------
Title: President and Chief Executive Officer
--------------------------------------------
RESUME ACQUISITION CORPORATION
By: /s/ Robert M. Montgomery, Jr.
-----------------------------------------------
Name: Robert M. Montgomery, Jr.
---------------------------------------------
Title: President
--------------------------------------------
ITC HOLDING COMPANY, INC.
By: /s/ Kimberley E. Thompson
-----------------------------------------------
Name: Kimberley E. Thompson
---------------------------------------------
Title: Sr. Vice President
--------------------------------------------
-57-
<PAGE> 59
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Preamble......................................................................................................1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER..................................................................1
1.1 Merger............................................................................................1
1.2 Time and Place of Closing.........................................................................2
1.3 Effective Time....................................................................................2
ARTICLE 2 - TERMS OF MERGER...................................................................................2
2.1 Charter...........................................................................................2
2.2 Bylaws............................................................................................2
2.3 Directors and Officers............................................................................2
ARTICLE 3 - MANNER OF CONVERTING SHARES.......................................................................3
3.1 Conversion of Shares..............................................................................3
3.2 Anti-Dilution Provisions..........................................................................3
3.3 Fractional Shares.................................................................................3
ARTICLE 4 - EXCHANGE OF SHARES................................................................................4
4.1 Exchange Procedures...............................................................................4
4.2 Rights of Former Career Mosaic Shareholders.......................................................4
ARTICLE 5 - OTHER AGREEMENTS..................................................................................5
5.1 Directors of HeadHunter.NET.......................................................................5
5.2 Shareholder Protection Rights Agreement...........................................................5
5.3 Shareholders' Agreement...........................................................................5
5.4 Administrative Services Agreement.................................................................5
5.5 Registration Rights Agreement.....................................................................5
5.6 Credit Agreement..................................................................................5
5.7 Agency Agreement..................................................................................6
5.8 Access to Information; Audit Cooperation..........................................................6
5.9 Non-Competition Agreement.........................................................................6
5.10 Indemnity Agreements..............................................................................6
5.11 BHA and ITC Indemnity Agreement...................................................................6
5.12 Support Agreement.................................................................................6
5.13 Amended and Restated Bylaws.......................................................................6
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF HEADHUNTER.NET AND MERGER SUB...................................7
6.1 Organization, Standing, and Power.................................................................7
6.2 Authority; No Breach By Agreement.................................................................7
6.3 Capital Stock.....................................................................................8
6.4 HeadHunter.NET Subsidiaries.......................................................................9
6.5 SEC Filings; Financial Statements.................................................................9
6.6 Absence of Undisclosed Liabilities................................................................10
6.7 Absence of Certain Changes or Events..............................................................10
6.8 Tax Matters.......................................................................................10
6.9 Assets............................................................................................11
</TABLE>
-i-
<PAGE> 60
<TABLE>
<S> <C>
6.10 Intellectual Property.............................................................................12
6.11 Environmental Matters.............................................................................13
6.12 Compliance with Laws..............................................................................13
6.13 Labor Relations...................................................................................14
6.14 Employee Benefit Plans............................................................................14
6.15 Material Contracts................................................................................16
6.16 Legal Proceedings.................................................................................17
6.17 Reports...........................................................................................17
6.18 Statements True and Correct.......................................................................17
6.19 Regulatory Matters................................................................................18
6.20 Privacy; Web Site.................................................................................18
6.21 Opinion of Financial Advisor......................................................................18
6.22 Brokers, Etc......................................................................................18
6.23 Voting Requirements...............................................................................18
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF OMNICOM, BHA AND CAREER MOSAIC..................................19
7.1 Organization, Standing, and Power.................................................................19
7.2 Authority; No Breach By Agreement.................................................................19
7.3 Capital Stock.....................................................................................20
7.4 Subsidiaries......................................................................................20
7.5 Financial Statements..............................................................................21
7.6 Absence of Undisclosed Liabilities................................................................21
7.7 Absence of Certain Changes or Events..............................................................21
7.8 Tax Matters.......................................................................................21
7.9 Assets............................................................................................22
7.10 Intellectual Property.............................................................................23
7.11 Environmental Matters.............................................................................24
7.12 Compliance with Laws..............................................................................25
7.13 Labor Relations...................................................................................25
7.14 Employee Benefit Plans............................................................................26
7.15 Material Contracts................................................................................28
7.16 Legal Proceedings.................................................................................28
7.17 Reports...........................................................................................29
7.18 Statements True and Correct.......................................................................29
7.19 Regulatory Matters................................................................................29
7.20 Ownership of HeadHunter.NET Common Stock..........................................................30
7.21 Privacy; Web Site.................................................................................30
7.22 Brokers, Etc......................................................................................30
ARTICLE 8 - CONDUCT OF BUSINESS PENDING CONSUMMATION..........................................................30
8.1 Covenants of HeadHunter.NET.......................................................................30
8.2 Negative Covenants of HeadHunter.NET..............................................................30
8.3 Omnicom, BHA and Career Mosaic Covenants..........................................................33
8.4 Adverse Changes in Condition......................................................................35
8.5 Reports...........................................................................................35
8.6 No Solicitation by HeadHunter.NET.................................................................35
</TABLE>
-ii-
<PAGE> 61
<TABLE>
<S> <C>
ARTICLE 9 - ADDITIONAL AGREEMENTS............................................................................36
9.1 Registration Statement; Proxy Statement; Shareholder Approval....................................36
9.2 Listing..........................................................................................37
9.3 Applications; Antitrust Notification.............................................................37
9.4 Filings with State Offices.......................................................................37
9.5 Agreement as to Efforts to Consummate............................................................37
9.6 Investigation and Confidentiality................................................................38
9.7 Press Releases...................................................................................38
9.8 Tax Treatment....................................................................................38
9.9 Indemnification, Exculpation and Insurance.......................................................39
9.10 Fees and Expenses................................................................................39
9.11 Certain Employee Matters.........................................................................39
ARTICLE 10 - Indemnification..................................................................................40
10.1 Agreement of Omnicom to Indemnify................................................................40
10.2 Agreement of HeadHunter.NET to Indemnify.........................................................41
10.3 Procedures for Indemnification...................................................................41
10.4 Third Party Claims...............................................................................42
10.5 Exclusive Remedy.................................................................................43
10.6 Survival.........................................................................................43
10.7 Limitations as to Amount.........................................................................43
10.8 Tax Effect and Insurance.........................................................................44
ARTICLE 11 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE................................................44
11.1 Conditions to Obligations of Each Party..........................................................44
11.2 Conditions to Obligations of Omnicom, BHA and Career Mosaic......................................45
11.3 Conditions to Obligations of HeadHunter.NET......................................................46
ARTICLE 12 - TERMINATION......................................................................................47
12.1 Termination......................................................................................47
12.2 Effect of Termination............................................................................48
ARTICLE 13 - MISCELLANEOUS....................................................................................48
13.1 Definitions......................................................................................48
13.2 Brokers and Finders..............................................................................54
13.3 Entire Agreement.................................................................................55
13.4 Amendments.......................................................................................55
13.5 Waivers..........................................................................................55
13.6 Assignment.......................................................................................56
13.7 Notices..........................................................................................56
13.8 Governing Law; Jurisdiction......................................................................57
13.9 Counterparts.....................................................................................57
13.10 Captions; Articles and Sections..................................................................57
13.11 Interpretations..................................................................................57
13.12 Severability.....................................................................................58
13.13 Specific Performance.............................................................................58
</TABLE>
-iii-
<PAGE> 62
LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<S> <C>
5.2 Shareholder Protection Rights Agreement
5.3 Shareholders' Agreement
5.4 Administrative Services Agreement
5.5 Registration Rights Agreement
5.6 Credit Agreement
5.7 Agency Agreement
5.9 Non-Competition Agreement
5.10 Indemnity Agreement (Directors)
5.11 Indemnity Agreement (ITC and BHA)
5.12 Support Agreement
5.13 Amended and Restated Bylaws
11.1(b) Regulatory Consents
</TABLE>
-iv-
<PAGE> 1
EXHIBIT 99.2
SUPPORT AGREEMENT
SUPPORT AGREEMENT, dated as of April 15, 2000 (this "Agreement"), among
BERNARD HODES GROUP INC., a Delaware corporation ("BHA"), HEADHUNTER.NET, INC.,
a Georgia corporation (the "Company"), ITC HOLDING COMPANY, INC., a Delaware
corporation ("ITC"), and ROBERT M. MONTGOMERY, JR., an individual ("Montgomery"
and collectively with ITC, the "Supporting Shareholders").
A. BHA, the Company and ITC have entered into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), which provides,
among other things, that Asset Sub will merge (the "Merger") with and into
Merger Sub.
B. The Merger is conditioned on the approval of the holders of a
majority of the common stock, par value $0.01 per share, of the Company (the
"Company Common Shares").
C. As of the date hereof, ITC and Montgomery are the record owners of,
and have the exclusive right to vote, 5,083,333 and 305,000 Company Common
Shares, respectively.
D. The Supporting Shareholders have agreed to enter into this Agreement
governing the voting of the Company Common Shares now or hereafter held of
record by the Supporting Shareholders on the record date announced by the
Company to determine the shareholders entitled to vote on the approval of the
issuance of the Company's securities in the Merger (other than any shares
disposed of in accordance with Section 2), including, without limitation, any
Company Common Shares that the Supporting Shareholders may acquire pursuant to a
stock dividend, stock split, recapitalization, combination or other transaction
or upon the exercise of any options or warrants to acquire Company Common Shares
described on Schedule I hereto or otherwise (as the same may be adjusted in the
manner described above) (the "Shares").
E. As a condition and inducement to BHA's and the Company's willingness
to enter into the Merger Agreement, BHA and the Company have requested that the
Supporting Shareholders agree, and the Supporting Shareholders have agreed, to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and covenants contained herein, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
1. Voting of Shares. As long as this Agreement has not terminated in
accordance with Section 7(a), the Supporting Shareholders will cause the Shares
to be voted at any meeting of the shareholders of the Company (and at any and
all postponements and adjournments thereof), however called, and in any action
by written consent of the shareholders of the Company (i) to approve the
issuance of the Company Common Shares in the Merger, and any other matter that
could reasonably be expected to facilitate the Merger and (ii) against any
Adverse Proposal. For purposes of this Agreement, "Adverse Proposal" means (i)
any Takeover Proposal, (ii) any proposal by any Person to change the composition
of a majority of the Board of Directors of the Company, except as expressly
provided in the Merger Agreement or (iii) any action, proposal or
-i-
<PAGE> 2
agreement that could result in a breach in any material respect of any covenant,
representation or warranty or any other obligation of the Company under the
Merger Agreement, which could result in any of the conditions set forth in
Section 11.1 or Section 11.2 of the Merger Agreement not being fulfilled prior
to the date that is 120 days after the initial filing date of the Registration
Statement in connection with the Merger, or which could otherwise materially
frustrate, prevent or delay the consummation of the transactions contemplated by
the Merger Agreement.
2. Limitations On Disposition or Encumbrance of Shares. Each of the
Supporting Shareholders hereby agrees that it will not, and will not offer or
agree to, sell, transfer, tender, assign, hypothecate or otherwise dispose of,
directly or indirectly ("Transfer"), the Shares, or create or permit to exist
any security interest, lien, claim, pledge, option, right of first refusal,
agreement, limitation on its voting rights, charge or other encumbrance of any
nature whatsoever with respect to the Shares (other than those which exist as of
the date hereof) unless (i) in connection with any Transfer of Shares effected
pursuant to a privately negotiated transaction or series of transactions, the
Supporting Shareholders have obtained the agreement of such transferee(s) to be
bound by the terms of this Agreement in a manner reasonably acceptable to BHA or
(ii) such Transfer is made pursuant to the volume limitations and other
requirements set forth in Rule 144 promulgated under the Securities Act.
3. Reliance by BHA. The Supporting Shareholders understand and
acknowledge that BHA is entering into the Merger Agreement in reliance upon the
Supporting Shareholders' execution and delivery of this Agreement and the
Supporting Shareholders' representations, warranties and covenants contained
herein.
4. Non-Interference. The Supporting Shareholders will not, except as
permitted by this Agreement, (i) grant any proxies or powers of attorney with
respect to any of the Shares, (ii) deposit any of the Shares into a voting trust
or enter into a voting agreement with respect to the Shares, or (iii) take any
action that would make any representation or warranty contained herein untrue or
incorrect or have the effect of preventing the Supporting Shareholders from
performing their respective obligations under this Agreement.
5. Representations and Warranties of the Supporting Shareholders. Each
of the Supporting Shareholders hereby represents and warrants to BHA and the
Company:
(a) Authority. It has all necessary power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by
it have been duly and validly authorized by all necessary action on its
part. This Agreement has been duly and validly executed and delivered
by it and constitutes a legal, valid and binding obligation of it,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership or similar laws affecting the enforcement
of creditors' rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding may
be brought.
-ii-
<PAGE> 3
(b) No Conflict. The execution and delivery of this Agreement
by each Supporting Shareholder does not, and the performance of this
Agreement by it will not, (i) require any Consent or Permit of, or
filing with or notification to (other than pursuant to the Securities
Laws), any Regulatory Authority, (ii) conflict with any Law, Order or
agreement applicable to it or by which it or any of its property or
asset is bound, or (iii) result in the creation of a Lien on any of the
Shares pursuant to any note, bond, mortgage, indenture, Contract,
lease, license, Permit, franchise or other instrument or obligation to
which it is a party or by which the Shares are bound.
(c) Title to the Shares. The Shares and other securities set
forth on Schedule I hereto are all the securities of the Company owned,
either of record or beneficially, by the Supporting Shareholders.
Except for any restrictions arising under this Agreement, the
Supporting Shareholders own all the Shares free and clear of all Liens,
options, rights of first refusal, agreements, limitations on their
voting rights, charges and other encumbrances of any nature whatsoever
which would prohibit the voting agreement contained herein, and the
Supporting Shareholders have not appointed or granted any proxy, which
appointment or grant is still effective, with respect to the Shares.
6. Representations and Warranties of BHA and the Company. Each of BHA
and the Company, severally and not jointly, hereby represents and warrants to
the Supporting Shareholders with respect to itself only as follows:
(a) Authority. It has all necessary power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by
it have been duly and validly authorized by all necessary action on its
part. This Agreement has been duly and validly executed and delivered
by it and constitutes a legal, valid and binding obligation of it,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership or similar laws affecting the enforcement
of creditors' rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding may
be brought.
(b) No Conflict . The execution and delivery of this Agreement
by it does not, and the performance of this Agreement by it will not,
(i) require any Consent, Permit of, or filing with or notification to
(other than pursuant to the Securities Laws), any Regulatory Authority,
(ii) conflict with or violate its constituent documents, (iii) conflict
with or violate any Law, Order or agreement applicable to it or by
which it or any of its property or assets is bound, or (iii) result in
the creation of a Lien on any of its property pursuant to any note,
bond, mortgage, indenture, Contract, lease, license, Permit, franchise
or other instrument or obligation to which it is a party or by which
its properties are bound.
7. Miscellaneous.
-iii-
<PAGE> 4
(a) Termination. This Agreement will terminate and will have
no further force or effect as of the Termination Date. For the purposes
of this Agreement, "Termination Date" means the earliest of (i) the
termination of the Merger Agreement in accordance with Section 12.1 or
(ii) the Effective Time. Notwithstanding the foregoing, the
representations and warranties of the parties in this Agreement shall
survive until the six month anniversary of the Termination Date.
(b) Expenses. Except as otherwise provided herein or in the
Merger Agreement, all costs and expenses incurred in connection with
the transactions contemplated by this Agreement will be paid by the
party incurring such expenses.
(c) Enforcement. The parties hereto agree that (i) irreparable
damage would occur in the event any of the provisions of this Agreement
were not performed in accordance with the terms hereof and (ii) the
parties will be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to specific performance of the terms
hereof, in addition to any other remedy to which they may be entitled
at law or in equity. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in
equity will be cumulative and not alternative, and the exercise of any
thereof by any party will not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
(d) Entire Agreement. This Agreement, together with the Merger
Agreement and the other agreements contemplated thereunder, constitutes
the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings,
both written and oral, between the parties with respect to the subject
matter hereof.
(e) Assignment. This Agreement may not be assigned, by
operation of law or otherwise, without the prior written consent of the
parties, and any such assignment or delegation that is not consented to
will be null and void.
(f) Obligations of Successors; Parties in Interest. This
Agreement will be binding upon, inure solely to the benefit of, and be
enforceable by, the successors and permitted assigns of the parties
hereto. Nothing in this Agreement, express or implied, is intended to
or will confer upon any other Person any rights, benefits or remedies
of any nature whatsoever under or by reason of this Agreement.
(g) Amendment; Waiver. This Agreement may not be amended or
changed except by an instrument in writing signed by the parties
hereto. Any party hereto may (i) extend the time for the performance of
any obligation or other act of any other party hereto, (ii) waive any
inaccuracy in the representations and warranties contained herein or in
any document delivered pursuant hereto, and (iii) waive compliance with
any agreement or condition contained herein. Any such extension or
waiver will be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
-iv-
<PAGE> 5
(h) Severability. The validity or unenforceability of any
provision of this Agreement will not affect the validity or
enforceability of any other provision of this Agreement, which will
remain in full force and effect. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced,
the parties hereto will negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely
as possible to the fullest extent permitted by applicable law in a
mutually acceptable manner in order that the terms of this Agreement
remain as originally contemplated to the fullest extent possible.
(i) Notices. All notices, requests, claims, demands and other
communications hereunder will be in writing and may be given (and will
be deemed to have been duly given only upon actual receipt) by delivery
in person, by fax, by overnight courier service or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address
for a party as may be specified in a notice given in accordance with
this Section 7(i)):
(1) If to BHA:
Bernard Hodes Group Inc.
555 Madison Avenue
New York, New York 10022
Attention: Chief Executive Officer
Fax No.: (212) 486-4049
with a copy to:
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
Attention: Thomas W. Bark, Esq.
Fax No.: (212) 755-7306
(2) If to ITC:
ITC Holding Company, Inc.
3300 20th Avenue
P.O. Box 20
Valley, Alabama 36854
Attention: Chief Executive Officer
Fax No.: (706) 643-5067
with a copy to:
Kimberly E. Thompson, Esq.
4717 Dolphin Lane
Alexandria, Virginia 22309
Fax No: (703) 619-9720
-v-
<PAGE> 6
(3) If to the Company:
HeadHunter.NET, Inc.
333 Research Court, Suite 200
Norcross, Georgia 30092
Attention: Chief Executive Officer
Fax No.: (770) 349-2401
with a copy to:
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attention: J. Vaughan Curtis, Esq.
Fax No: (404) 881-7777
(4) If to Montgomery:
Robert M. Montgomery, Jr.
c/o HeadHunter.NET, Inc.
333 Research Court, Suite 200
Norcross, Georgia 30092
Fax No.: (770) 349-2401
with a copy to:
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attention: J. Vaughan Curtis, Esq.
Fax No.: (404) 881-7777
(j) Governing Law; Consent to Jurisdiction. This Agreement
will be governed by and construed in accordance with the laws of the
State of Georgia (regardless of the laws that might otherwise govern
under applicable Georgia principles of conflicts of law) as to all
matters, including, but not limited to, matters of validity,
construction, effect, performance and remedies. Each of BHA, ITC,
Montgomery and the Company (i) irrevocably submits to the jurisdiction
of any state or federal court sitting in the State of Delaware in any
action or proceeding arising out of or related to this Agreement, (ii)
agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court,
and (iii) agrees that it will not bring any action relating to this
Agreement in any court other than a federal or state court sitting in
the State of Delaware. Each of BHA, ITC, Montgomery and the Company
irrevocably consents to the service of process which may be served in
any such action or proceeding
-vi-
<PAGE> 7
by certified mail, return receipt requested, by delivering a copy of
such process to such Person at the address specified herein or by any
other method permitted by law.
(k) Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and will not
affect in any way the meaning or interpretation of this Agreement.
(l) Counterparts. This Agreement may be executed in two or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed will be deemed to be an
original, but all of which taken together will be one and the same
agreement.
(m) Defined Terms. Capitalized terms used herein that are not
otherwise defined herein have the meanings set forth in the Merger
Agreement.
[Remainder of page intentionally left blank]
-vii-
<PAGE> 8
IN WITNESS WHEREOF, BHA, ITC, Montgomery and the Company have duly
executed this Agreement as of the date first written above.
BERNARD HODES GROUP INC.
By: /s/ Randall J. Weisenburger
-----------------------------
Name: Randall J. Weisenburger
Title: Duly Authorized
ITC HOLDING COMPANY, INC.
By: /s/ Kimberley E. Thompson
-----------------------------
Name: Kimberley E. Thompson
Title: Senior Vice President
ROBERT M. MONTGOMERY, JR.
/s/ Robert M. Montgomery, Jr.
-----------------------------
Until the Termination Date, the undersigned
acknowledges and agrees not to register the
transfer of the Shares other than in
accordance with Section 2 of this Agreement.
HEADHUNTER.NET, INC.
By: /s/ Robert M. Montgomery, Jr.
----------------------------------
Name: Robert M. Montgomery, Jr.
Title: President and Chief Executive
Officer
-viii-
<PAGE> 9
SCHEDULE I
SHARES BENEFICIALLY OWNED
1. ITC Service Company, a wholly owned subsidiary of ITC Holding
Company, Inc. ("ITC") holds a warrant to purchase up to 416,667 Company Common
Shares.
2. Three directors of the Company, who are also current or former
officers of ITC, have assigned to ITC the benefits of the stock options granted
to each of them to purchase up to 10,000 Company Common Shares.
3. Mr. Montgomery holds options to purchase up to 310,000 Company
Common Shares.
-ix-
<PAGE> 1
EXHIBIT 99.3
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
THIS SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to
time, this "Agreement"), is made and entered into as of April 15, 2000, between
HEADHUNTER.NET, INC., a Georgia corporation (the "Company"), and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent", which term shall
include any successor Rights Agent hereunder).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
April 27, 2000 (the "Record Time") and (b) as provided in Section 2.4,
authorized the issuance of one Right in respect of each share of Common Stock
issued after the Record Time and prior to the Separation Time (as hereinafter
defined) and, to the extent provided in Section 5.3, each share of Common Stock
issued after the Separation Time;
WHEREAS, subject to Sections 3.1, 5.1 and 5.10, each Right entitles the
holder thereof, after the Separation Time, to purchase securities of the Company
(or, in certain cases, of certain other entities) pursuant to the terms and
subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
<PAGE> 2
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
15% or more of the outstanding shares of Common Stock; provided, however, that
the term "Acquiring Person" shall not include any Person (i) who (x) is the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock on the
date of this Agreement, or (y) shall become the Beneficial Owner of 15% or more
of the outstanding shares of Common Stock solely as a result of an acquisition
by the Company of shares of Common Stock, or (z) shall become the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock on or after the
date of this Agreement pursuant to the Agreement and Plan of Merger, dated April
15, 2000, by and among the Company, Resume Acquisition Corporation, Omnicom
Group Inc., Bernard Hodes Group Inc., Career Mosaic Inc. and ITC Holding
Company, Inc. until such time hereafter or thereafter as such Person shall
become the Beneficial Owner (other than by means of a stock dividend, stock
split or other similar event) of any additional shares of Common Stock, except
for additional shares of Common Stock obtained by ITC Holding Company, Inc.
("ITC") upon the exercise of options granted to directors who are ITC
representatives, (ii) who is the Beneficial owner of 15%, or more of the
outstanding shares of Common Stock but who acquired Beneficial Ownership of
shares of Common Stock without any plan or intention to seek or affect control
of the Company, if such Person promptly enters into an irrevocable commitment
promptly to divest, and thereafter promptly divests (without exercising or
retaining any power, including voting power, with respect to such shares),
sufficient shares of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock) so that such Person ceases to be the
Beneficial owner of 15% or more of the outstanding shares of Common Stock or
(iii) who Beneficially Owns shares of Common Stock consisting solely of one or
more of (A) shares of Common Stock Beneficially Owned pursuant to the grant or
exercise of an option granted to such Person by the Company in connection with
an agreement to merge with, or acquire, the Company entered into prior to a
Flip-In Date, (B) shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock), Beneficially Owned by such
Person or its Affiliates or Associates at the time of grant of such option or
(C) shares of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) acquired by Affiliates or Associates of such
Person after the time of such grant which, in the aggregate, amount to less than
1% of the outstanding shares of Common Stock. In addition, the Company, any
wholly owned Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly owned Subsidiary of the Company
shall not be an Acquiring Person. Notwithstanding any other provision hereof, in
no event will ITC or Omnicom Group Inc. ("OMC") (OMC and ITC, together with
their successors or assigns (but only such successors or assigns which control,
are controlled by or are under common control with OMC or ITC, as the case may
be), an "Authorized Holder"), individually or together with any other Person in
which Authorized Holder has, directly or indirectly, an ownership interest (such
other Persons, "Related Companies"), or any Affiliate, Associate, director,
officer, employer, partner, member or other related Person of Authorized Holder
or a Related Company (collectively, a "Related Person" and, together with
Authorized Holder and Related Companies, "OMC Group" or "ITC Group", as the case
may be), be deemed to be an "Acquiring Person" for purposes hereof, nor shall a
Flip-in Date, a Separation Time, a Stock Acquisition Date or any other event
hereunder occur as a result of either OMC Group's or ITC Group's Beneficial
Ownership of Common Stock (any such event, an "OMC Triggering Event" or an "ITC
Triggering Event", as the case may be) unless and until OMC or ITC shall have
received written notice from the Company that the Company's Board of Directors
has determined in good faith that the OMC Group or the ITC Group constitutes an
Acquiring Person hereunder and, within 30 calendar days after receipt of notice
of such determination from the Company, the OMC Group or the ITC Group, as the
case may be, shall not have divested itself of Common Stock, or taken such other
action as the Board of Directors of the Company determines in good faith, after
consultation with counsel, is sufficient, so that either an OMC Trigger Event or
an ITC Trigger Event is no longer continuing; provided, however, that if either
the OMC Group or the ITC Group shall become the Beneficial Owner of 50% or more
of the Common Stock, then an ITC Triggering Event or an OMC Triggering Event
shall occur in accordance with the terms of this Agreement (disregarding
-2-
<PAGE> 3
the sentence of which this clause is a part) and the foregoing provisions
regarding notice and opportunity to cure shall not apply.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as such
Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Securities Exchange Act, as such Rules are in effect on the date of this
Agreement as well as any securities as to which such Person or any of such
Person's Affiliates or Associates has the right to become Beneficial Owner
(whether such right is exercisable immediately or only after the passage of time
or the occurrence of conditions) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner", or to have
"Beneficial Ownership" of, or to "Beneficially Own", any security (i) solely
because such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates until such
tendered security is accepted for payment or exchange or (ii) solely because
such Person or any of such Person's Affiliates or Associates has or shares the
power to vote or direct the voting of such security pursuant to a revocable
proxy given in response to a public proxy or consent solicitation made to more
than ten holders of shares of a class of stock of the Company registered under
Section 12 of the Securities Exchange Act of 1934 and pursuant to, and in
accordance with, the applicable rules and regulations under the Securities
Exchange Act of 1934, except if such power (or the arrangements relating
thereto) is then reportable under Item 6 of Schedule 13D under the Securities
Exchange Act of 1934 (or any similar provision of a comparable or successor
report). Notwithstanding the foregoing, no officer or director of the Company
shall be deemed to Beneficially Own any securities of any other Person by virtue
of any actions such officer or director takes in such capacity. For purposes of
this Agreement, in determining the percentage of the outstanding shares of
Common Stock with respect to which a Person is the Beneficial Owner, all shares
as to which such Person is deemed the Beneficial Owner shall be deemed
outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Atlanta, Georgia are generally authorized
or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m. Atlanta,
Georgia time on such date (or, if such date is not a Business Day, 5:00 p.m.
Atlanta, Georgia time on the next succeeding Business Day).
"Common Stock" shall mean the shares of Common Stock, par value $0.01
per share, of the Company.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Exercise Price
shall equal $200.
-3-
<PAGE> 4
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Termination Time, (iii) April 15, 2010 and (iv) upon the merger of the
Company into another corporation pursuant to an agreement entered into prior to
a Flip-In Date.
"Flip-In Date" shall mean the tenth business day after any Stock
Acquisition Date or such earlier or later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Flip-In
Date that would otherwise have occurred.
"Flip-Over Entity" for purposes of Section 3.2, shall mean (i) in the
case of a Flip-Over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-Over Transaction or Event and (ii) in
the case of a Flip-Over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the assets or
earning power being transferred in such Flip-Over Transaction or Event, provided
in all cases if such Person is a subsidiary of a corporation, the parent
corporation shall be the Flip-Over Entity.
"Flip-Over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other persons similarly responsible for direction of the business and
affairs) of the Flip-Over Entity.
"Flip-Over Transaction or Event" shall mean a transaction or series of
transactions after a Flip-In Date in which, directly or indirectly, (i) the
Company shall consolidate or merge or participate in a share exchange with any
other Person if, at the time of the consolidation, merger or share exchange or
at the time the Company enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring Person Controls the Board
of Directors of the Company and either (A) any term of or arrangement concerning
the treatment of shares of capital stock in such consolidation, merger or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of the Common Stock or (B) the Person
with whom the transaction or series of transactions occurs is the Acquiring
Person or an Affiliate or Associate of the Acquiring Person or (ii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer) assets (A) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (B) generating more than
50% of the operating income or cash flow, of the Company and its Subsidiaries
(taken as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons which are Affiliates
or Associates or otherwise acting in concert, if, at the time of the entry by
the Company (or any such Subsidiary) into an agreement with respect to such sale
or transfer of assets, the Acquiring Person Controls the Board of Directors of
the Company. An Acquiring Person shall be deemed to "Control" the Company's
Board of Directors when, following a Flip-In Date, the persons who were
directors of the Company before the Flip-In Date shall cease to constitute a
majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.4 hereof shall have caused the closing prices used to determine the Market
Price on any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting
-4-
<PAGE> 5
system with respect to securities listed or admitted to trading on the New York
Stock Exchange, Inc. or, if the securities are not listed or admitted to trading
on the New York Stock Exchange, Inc., as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the securities are listed or admitted to
trading or, if the securities are not listed or admitted to trading on any
national securities exchange, as reported by The Nasdaq Stock Market, Inc.'s
Nasdaq National Market or such other system then in use, or, if on any such date
the securities are not listed or admitted to trading on any national securities
exchange or quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
securities selected by the Board of Directors of the Company; provided, however,
that if on any such date the securities are not listed or admitted to trading on
a national securities exchange or traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith by the
Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of this Agreement), corporation or
other entity.
"Preferred Stock" shall mean the Junior Participating Preferred Stock,
par value $.01 per share, of the Company created by the Articles of Amendment to
the Amended and Restated Articles of Incorporation in substantially the form set
forth in Exhibit B hereto appropriately completed.
"Separation Time" shall mean the close of business on the earlier of
(i) the tenth business day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Separation
Time that would otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-In Date; provided, that
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
canceled, terminated or otherwise withdrawn prior to the Separation Time without
the purchase of any shares of Common Stock pursuant thereto, such offer shall be
deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has become
such.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity interest is Beneficially Owned, directly or indirectly,
by such Person.
"Termination Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Trading Day," when used with respect to any securities, shall mean a
day on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a Business Day.
-5-
<PAGE> 6
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
"Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement, dated as
of April 15, 2000 (as such may be amended from time to time, the
"Rights Agreement"), between HeadHunter.NET, Inc. (the "Company") and
American Stock Transfer & Trust Company, as Rights Agent, the terms of
which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights may be terminated, may become exercisable for securities or
assets of the Company or of another entity, may be exchanged for shares
of Common Stock or other securities or assets of the Company, may
expire, may become void (if they are "Beneficially Owned" by an
"Acquiring Person" or an Affiliate or Associate thereof, as such terms
are defined in the Rights Agreement, or by any transferee of any of the
foregoing) or may be evidenced by separate certificates and may no
longer be evidenced by this certificate. The Company will mail or
arrange for the mailing of a copy of the Rights Agreement to the holder
of this certificate without charge promptly after the receipt of a
written request therefor."
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to
Sections 3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each
Right will entitle the holder thereof, after the Separation Time and prior to
the Expiration Time, to purchase, for the Exercise Price, one one-thousandth
(1/1000th) of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate for the associated share of
Common Stock (together, in the case of certificates issued prior to the Record
Time, with the letter or notice mailed to the record holder thereof pursuant to
Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter or notice) of,
such associated share.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1 and 5.10,
after the Separation Time and prior to the Expiration Time, the Rights (i) may
be exercised and (ii) may be transferred independent of shares of Common Stock.
Promptly following the Separation Time, the Rights Agent will mail to each
holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have
-6-
<PAGE> 7
become void pursuant to Section 3.1(b)), at such holder's address as shown by
the records of the Company (the Company hereby agreeing to furnish copies of
such records to the Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit A hereto appropriately
completed, representing the number of Rights held by such holder at the
Separation Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national securities
exchange or quotation system on which the Rights may from time to time be listed
or traded, or to conform to usage, and (y) a disclosure statement describing the
Rights.
(d) Subject to Sections 3.1, 5.1 and 5.10, Rights may be exercised
on any Business Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise" substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for shares or depository receipts (or both) in a name other than
that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
Sections 3.1, 5.1 and 5.10, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent stock certificates evidencing such number of
shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 not to issue certificates
representing fractional shares, requisition from the depository selected by the
Company depository receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 and (ii) after receipt of such
certificates, depository receipts and/or cash, deliver the same to or upon the
order of the registered holder of such Rights Certificate, registered (in the
case of certificates or depository receipts) in such name or names as may be
designated by such holder.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon exercise
of Rights; and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
-7-
<PAGE> 8
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the
event the Company shall at any time after the Record Time and prior to the
Separation Time (i) declare or pay a dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one share of
Common Stock immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof and (y) each Right held prior to such
adjustment will become that number of Rights equal to the Expansion Factor, and
the adjusted number of Rights will be deemed to be distributed among the shares
of Common Stock with respect to which the original Rights were associated (if
they remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share. To the
extent provided in Section 5.3, Rights shall be issued by the Company in respect
of shares of Common Stock that are issued or sold by the Company after the
Separation Time.
(b) In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue or distribute any securities or
assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or recapitalization (including
any such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received such a
certificate.
Rights certificates shall represent the securities purchasable under
the terms of this Agreement, including any adjustment or change in the
securities purchasable upon exercise of the Rights, even though such
certificates may continue to express the securities purchasable at the time of
issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person in whose name
any certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
-8-
<PAGE> 9
such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Separation Time, the Company will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by
the Company to the Rights Agent for countersignature, and, subject to Section
3.1(b), the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose unless manually countersigned
by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After
the Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) and (d), the Company will
execute and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
-9-
<PAGE> 10
(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section 3.1(b),
been exchanged under Section 3.1(c) or been terminated under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a)
If any mutilated Rights Certificate is surrendered to the Rights Agent prior to
the Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the
Company shall execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.8, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence
an original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and, subject to Section 3.1(b), shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly canceled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly canceled by the Rights Agent.
No Rights Certificates shall be countersigned in lieu of or in exchange for any
Rights Certificates canceled as provided in this Section 2.10, except as
expressly permitted by this Agreement. The Rights Agent shall return all
canceled Rights Certificates to the Company.
-10-
<PAGE> 11
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the associated
share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Stock certificate) for registration
of transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration Time a
Flip-In Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Section 5.10), that number
of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with respect to
the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be void and not transferable or exercisable.
-11-
<PAGE> 12
(c) The Board of Directors of the Company may, at its option, at
any time after a Flip-In Date and prior to the time that an Acquiring Person
becomes the Beneficial owner of more than 50% of the outstanding shares of
Common stock, elect to exchange all (but not less than all) the then outstanding
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 3.1(b)) for shares of Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted in order to protect
the interests of holders of Rights generally in the event that after the
Separation Time an event of a type analogous to any of the events described in
Section 2.4(a) or (b) shall have occurred with respect to the Common Stock (such
exchange ratio, as adjusted from time to time, being hereinafter referred to as
the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio. Promptly after the action of the Board of Directors electing
to exchange the Rights, the Company shall give notice thereof (specifying the
steps to be taken to receive shares of Common Stock in exchange for Rights) to
the Rights Agent and the holders of the Rights (other than Rights that have
become void pursuant to Section 3.1(b)) outstanding immediately prior thereto by
mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of any applicable taxes and other governmental charges payable by the holder was
made; provided, however, that if the date of such surrender and payment is a
date upon which the stock transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
Certificate shall be dated, the next succeeding Business Day on which the stock
transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-thousandth (1/1000th) of a share of
Preferred Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock or Preferred Stock of
the Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Company shall either (i) call a
meeting of shareholders seeking approval to cause sufficient additional shares
to be authorized (provided that if such approval is not obtained the Company
will take the action specified in clause (ii) of this sentence) or (ii) take
such action as shall be necessary to ensure and provide, to the extent permitted
by applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-In Date times the Exchange Ratio in effect on the
Flip-In Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
-12-
<PAGE> 13
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall
not enter into any agreement with respect to, consummate or permit to occur any
Flip-Over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-Over Entity, for the benefit of the holders
of the Rights, providing that, upon consummation or occurrence of the Flip-Over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-Over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-Over Stock of the Flip-Over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-Over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-Over Stock) and (ii) the Flip-Over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-Over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-Over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
terminated pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-Over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements, agreements
or instruments that would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent to
act as agent for the Company in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent, its directors,
officers, employees and agents for, and to hold each of them harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent or such indemnified party,
for anything done or omitted to be done by the Rights Agent in connection with
the acceptance and administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability. The indemnity provided in this Section
4.1(a) shall survive the expiration of the Rights and the termination of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights Agent. (a)
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement
-13-
<PAGE> 14
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 4.4
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel will
be full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such advice
or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of any provision of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any certificate
for securities purchasable upon exercise of Rights or Rights Certificate (except
its countersignature thereof); nor
-14-
<PAGE> 15
will it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor will it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment
required under any provision of this Agreement or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate contemplated by Section 2.4
describing any such adjustment); nor will it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any securities purchasable upon exercise of Rights or any Rights or as to
whether any securities purchasable upon exercise of Rights will, when issued, be
duly and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person, or for any delay in acting while awaiting
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on or after which such action shall be taken or such omission shall
be effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided the Rights Agent was not grossly negligent in
the selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or obligations
shall be read into this Agreement against the Rights Agent.
-15-
<PAGE> 16
(k) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits).
(l) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(m) The Company agrees that it will provide prompt written notice
to the Rights Agent of any transaction or event of which the Company becomes
aware that has resulted in or that is reasonably likely to result in the
occurrence of a Flip-In Date, a Flip-Over Transaction or Event, the Separation
Time or a Stock Acquisition Date.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of Georgia or any other State of the United
States, in good standing, which is authorized under such laws to exercise the
powers of the Rights Agent contemplated by this Agreement and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an affiliate of a corporation described in the
immediately preceding clause (a). After appointment, the successor Rights Agent
will be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 Termination. (a) The Board of Directors of the Company may, at
its option, at any time prior to the close of business on the Flip-In Date,
elect to terminate the Rights without any payment to any holder thereof.
-16-
<PAGE> 17
(b) Immediately upon the action of the Board of Directors of the
Company electing to terminate the Rights (or, if the resolution of the Board of
Directors electing to terminate the Rights states that the termination will not
be effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter be null and void.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged, as
provided in Section 3.1 hereof.
5.3 Issuance of New Rights Certificate. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of Common Stock or to
options, in each case issued or granted prior to, and outstanding at, the
Separation Time, the Company shall issue to the holders of such shares of Common
Stock, Rights Certificates representing the appropriate number of Rights in
connection with the issuance or sale of such shares of Common Stock; provided,
however, in each case, (i) no such Rights Certificate shall be issued, if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or to the Person to whom such Rights Certificates would be issued, (ii)
no such Rights Certificates shall be issued if, and to the extent that,
appropriate adjustment shall have otherwise been made in lieu of the issuance
thereof, and (iii) the Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or Associate of an Acquiring
Person or any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights (i) prior to the close of business on the Flip-In Date, in
any respect and (ii) after the close of business on the Flip-In Date, to make
any changes that the Company may deem necessary or desirable and which shall not
materially adversely affect the interests of the holders of Rights generally or
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be inconsistent with any other provisions herein or
otherwise defective. The Rights Agent will duly execute and deliver any
supplement or amendment hereto requested by the Company upon receipt of a
certificate from the Company that such supplement or amendment satisfies the
terms of the preceding sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement shall be effective without
the consent of the Rights Agent.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise of Rights, the Company
shall, in lieu thereof, in the sole discretion of the Board of Directors, either
(a) evidence such fractional shares by depository receipts issued pursuant to an
appropriate agreement between the Company and a depository selected by it,
providing that each holder of a depository receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled as a
beneficial owner of such fractional share, or (b) sell such shares on behalf of
the holders of Right and pay to the registered holder of such Rights the
appropriate fraction of price per share received upon such sale.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Section 3.1(b)), rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without the
consent of the Rights
-17-
<PAGE> 18
Agent or of the holder of any other Rights, may, on such holder's own behalf and
for such holder's own benefit and the benefit of other holders of Rights,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder's right to
exercise such holder Rights in the manner provided in such holder's Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as such,
of any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose
after the Separation Time and prior to the Expiration Time (i) to effect or
permit occurrence of any Flip-Over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such Flip-Over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows
HeadHunter.NET, Inc.
333 Research Court, Suite 200
Norcross, Georgia 30092
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be
given or made by the Company or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street
46th Floor
New York, New York 10005
Attn: Jennifer Donovan
Notices or demands authorized or required by this Agreement to be given
or made by the Company or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon
-18-
<PAGE> 19
the registry books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice.
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 3.1 or to comply with federal or state securities laws, the Company may
suspend the exercisability of the Rights for ninety (90) days and any additional
period that may be reasonable in order to take such action or comply with such
laws. In the event of any such suspension, the Company shall issue as promptly
as practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the Company
or any other Person the securities of which are purchasable upon exercise of
Rights fails to fulfill any of its obligations pursuant to this Agreement, then
the Company or such Person will reimburse the holder of any Rights for the costs
and expenses (including legal fees) incurred by such holder in actions to
enforce such holder's rights pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, etc. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board of Directors of
the Company to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF GEORGIA AND
FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
-19-
<PAGE> 20
ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND
PERFORMED ENTIRELY WITHIN SUCH STATE.
5.17 Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
[Signatures on next page]
-20-
<PAGE> 21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
HEADHUNTER.NET, INC.
By: /s/ Robert M. Montgomery, Jr.
--------------------------------------------
Title: President and Chief Executive Officer
--------------------------------------------
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Herbert J. Lemmer
--------------------------------------------
Title: Vice President
--------------------------------------------
-21-
<PAGE> 22
EXHIBIT A
(Form of Rights Certificate)
Certificate No. W-
Rights
THE RIGHTS ARE SUBJECT TO TERMINATION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR
ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
HEADHUNTER.NET, INC.
This certifies that _______________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Protection Rights Agreement, dated as of April 15,
2000 (as amended from time to time, the "Rights Agreement"), between
HeadHunter.NET, Inc., a Georgia corporation (the "Company"), and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent," which term shall
include any successor Rights Agent under the Rights Agreement), to purchase from
the Company at any time after the Separation Time (as such term is defined in
the Rights Agreement) and prior to the close of business on April 15, 2010 , one
one-thousandth (1/1,000) of a fully paid share of Junior Participating Preferred
Stock, par value $0.01 per share (the "Preferred Stock"), of the Company
(subject to adjustment as provided in the Rights Agreement) at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed at the principal
office of the Rights Agent. The Exercise Price shall initially be $200 per Right
and shall be subject to adjustment in certain events as provided in the Rights
Agreement.
In certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to purchase securities of an
entity other than the Company or securities or assets of the Company other than
Preferred Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced by this
Certificate may be (a) terminated by the Company under certain circumstances, at
its option, or (b) exchanged by the Company under certain circumstances, at its
option, for one share of Common Stock or one one-thousandth (1/1,000) of a share
of Preferred Stock per Right (or, in certain cases, other securities or assets
of the Company), subject in each case to adjustment in certain events as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of any securities
which may at any time be issuable on the exercise hereof, nor shall
<PAGE> 23
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal.
Date:
------------------
ATTEST: HEADHUNTER.NET, INC.
By:
- ---------------------------------- ----------------------------------
Secretary
Countersigned:
American Stock Transfer & Trust
Company, as Rights Agent
By:
-------------------------------
Authorized Officer
-2-
<PAGE> 24
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED _________________ hereby sells, assigns and transfers unto
-----------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ____________________, ______.
Signature Guaranteed: -----------------------------------
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
----------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
<PAGE> 25
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise the Rights Certificate.)
TO: HEADHUNTER.NET, INC.
The undersigned hereby irrevocably elects to exercise _________________ whole
Rights represented by the attached Rights Certificate to purchase the shares of
Participating Preferred Stock issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
-------------------------------------
Address:
-----------------------------
Social Security or other Taxpayer
Identification Number:
---------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
-------------------------------------
Address:
-----------------------------
Social Security or other Taxpayer
Identification Number:
---------------
Dated: ____________________, ______.
Signature Guaranteed: -----------------------------------
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
----------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
- i -
<PAGE> 1
EXHIBIT 99.4
MONDAY APRIL 17, 7:02 AM EASTERN TIME
HEADHUNTER.NET TO MERGE WITH
CAREERMOSAIC
MERGER SOLIDIFIES HEADHUNTER'S NO. 2 POSITION IN ON-LINE RECRUITING MARKET
ATLANTA--(BUSINESS WIRE)--April 17, 2000--Headhunter.net, Inc. (NASDAQ/NM:HHNT -
news) today announced that IT signed a definitive agreement to merge with
CareerMosaic, a leading on-line national recruiting service. The combination of
Headhunter.net and CareerMosaic will create the second largest on-line
recruiting service based on revenues, traffic, users, customers and job
listings. CareerMosaic is a subsidiary of Omnicom Group Inc.
(NYSE:OMC - news).
Under the terms of the agreement, Headhunter.net will issue approximately 7.5
million shares for Career Mosaic's assets, representing approximately 40% of
Headhunter.net's fully diluted shares after the merger. The merger is subject to
certain conditions, including regulatory approvals and approval by
Headhunter.net's shareholders. The merger is expected to close in the third
quarter.
Robert M. Montgomery, President and Chief Executive Officer of Headhunter.net,
stated, "The merger with CareerMosaic will create strong value for job seekers
and employers by creating a major destination employment hub on the Internet
with over 250,000 job postings, 450,000 resumes, and over 7.0 million visitors
per month. We are very excited to join forces with Omnicom. Their experience in
growing Internet businesses and vast global reach are strong additions to our
team."
John Wren, Chief Executive Officer and President of Omnicom Group Inc.,
commented, "The merger will create a clear leader in the on-line recruiting
market. Another subsidiary of Omnicom, Bernard Hodes Group, launched
CareerMosaic in 1994 and has been very successful in establishing a major
presence in the on-line market. The combined strengths of Headhunter.net and
CareerMosaic will accelerate opportunities to expand market share in this fast
growing area and build economic value. Our investment in Headhunter.net becomes
an important strategic addition to our growing portfolio of digital companies in
our Communicade division."
Bernard Hodes, President of Bernard Hodes Group, the largest recruitment
advertising agency in the U.S., will join Headhunter.net's Board of Directors
upon closing of the transaction. Mr. Hodes said, "We are excited about the
combination of CareerMosaic and Headhunter.net to increase our share of the
rapidly growing on-line market for jobs. We expect to be a major customer of the
combined operation in providing our customers with the clear value leader in the
on-line recruiting market."
<PAGE> 2
Mr. Montgomery continued, "The combination will significantly expand our growth
potential by broadening our markets beyond Headhunter.net's focus on small
businesses, the middle market and recruiters. CareerMosaic's customer base
includes a strong presence in the Fortune 1000, agency, college and
international markets. In addition, our users will benefit from the additional
content of our combined sites since less than 10% of our users overlap based on
recent industry data.
"Our number one goal will be maximizing customer value through the combined
operations. We plan to quickly integrate the two companies and build a single
identity going forward. We believe our company will benefit from economies of
scale in operations, marketing and advertising to enhance future performance.
"We will have a single brand with a sales team focused on the combined entity
and product offerings. Following the combination, we will have one of the
largest direct sales forces in the industry with offices expanding into 15 major
markets. We believe the leverage in sales, marketing and advertising will be
important in accelerating our growth in the on-line recruiting market,"
concluded Mr. Montgomery.
About Headhunter.net
Headhunter.net (www.headhunter.net) is a leading national on-line recruiting
service that specializes in empowering candidates and corporations to manage the
job search process. Headhunter.net has more than 3 million users each month. The
site has more than 130,000 job listings posted and over 350,000 resumes. More
than 8,000 companies and recruiters post open positions in over 120 job
categories.
About Omnicom Group Inc.
Omnicom Group Inc. (NYSE:OMC - news; www.omnicomgroup.com), the leading
marketing communications company in the world, consists of advertising agency
networks BBDO Worldwide, DDB Worldwide and TBWA Worldwide. The group also
includes Goodby, Silverstein & Partners; Diversified Agency Services (DAS),
which operates a number of leading, independently branded companies in marketing
services and specialty communications; Omnicom Media Group, which includes two
leading international media buying and planning agencies, OMD and PhD; and
Communicade, which manages significant investments in leading internet and
digital media development companies.
Some of the preceding statements in this press release constitute
"forward-looking statements" within the meaning of the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and the Company
intends that such forward-looking statements be subject to the safe harbors
created thereby. Examples of words indicating forward-looking statements include
"believes," "expects" and "will." These forward-looking statements reflect the
Company's current views with respect to future events and financial performance,
but are subject to many uncertainties and factors relating to the Company's
operations and business environment which may cause the
-2-
<PAGE> 3
actual results of the Company to be materially different from any future results
expressed or implied by such forward-looking statements. Please see
Headhunter.net's Form 10-K, as amended, for a list of such uncertainties and
factors. The Company undertakes no obligation to update or revise any
forward-looking statement whether as a result of new information, future events,
or otherwise.
CONTACT:
Headhunter.net
Mark Partin, 770/349-2410
[email protected]
or
Corporate Communications
J. Gil Fuqua Jr., 615/254-3376
[email protected]
-3-
<PAGE> 1
EXHIBIT 99.5
MONDAY APRIL 17, 5:00 PM EASTERN TIME
HEADHUNTER.NET ADOPTS RIGHTS PLAN
ATLANTA--(BUSINESS WIRE)--April 17, 2000--Headhunter.net (NASDAQ/NM:HHNT - news)
today announced that it had adoptEd a shareholder protection rights agreement on
April 15, 2000, designed to enhance the ability of all shareholders to realize
the long-term value of their investment in the Company. The rights agreement was
adopted in connection with the merger agreement announced between Headhunter.net
and CareerMosaic.
The rights agreement provides that one preferred stock purchase right will be
distributed as a dividend on each outstanding share of common stock of the
Company held of record as of the close of business on April 27, 2000.
Robert M. Montgomery, president and chief executive officer of Headhunter.net,
stated, "The rights agreement does not prevent a takeover, but it is designed to
protect shareholders' interests by encouraging anyone seeking control of the
Company to negotiate with the Board of Directors." A spokesman also noted that
such plans have been adopted by a significant number of public corporations in
recent years. The action came after consulting with legal and other advisors.
The rights will be exercisable only if a person or group acquires beneficial
ownership of 15% or more of the Headhunter .net common stock, or announces a
tender upon consummation of which, such person or group would beneficially own
15% or more of the common shares. If the rights are triggered, then each right
not owned by the person or group entitles its holder to purchase shares of
common stock at the right's then current exercise price (or in certain
circumstances as determined by the company, a combination of cash, property,
common shares or other securities), having a value of twice the right's exercise
price of $200.
In addition, if Headhunter.net is involved in a merger or business combination
transaction with another person in which Headhunter.net is not the surviving
corporation, each right that has not previously been exercised will entitle its
holder to purchase, at the right's then-current exercise price, common shares of
such other person having a value of twice the right's exercise price.
Headhunter.net may terminate the rights at any time until the close of business
on the tenth business day following an announcement by the Company that a person
or group has become the beneficial owner of 15% or more of the Headhunter.net
common stock. However, Headhunter.net has agreed in the merger agreement with
CareerMosaic not to amend or terminate the rights agreement prior to completion
of the merger.
Details of the rights agreement are outlined in a letter that will be mailed to
all shareholders of record at the close of business on April 27, 2000.
<PAGE> 2
Headhunter.net (www.headhunter.net) is a leading national on-line recruiting
service that specializes in empowering candidates and corporations to manage the
job search process. Headhunter.net has more than 3 million users each month. The
site has more than 130,000 job listings posted and over 350,000 resumes. More
than 8,000 companies and recruiters post open positions in over 120 job
categories.
Some of the preceding statements in this press release constitute
"forward-looking statements" within the meaning of the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and the Company
intends that such forward-looking statements be subject to the safe harbors
created thereby. Examples of words indicating forward-looking statements include
"believes," "expects" and "will." These forward-looking statements reflect the
Company's current views with respect to future events and financial performance,
but are subject t many uncertainties and factors relating to the Company's
operations and business environment which may cause the actual results of the
Company to be materially different from any future results expressed or implied
by such forward-looking statements. Please see Headhunter.net's Form 10-K, as
amended, for a list of such uncertainties and factors. The Company undertakes no
obligation to update or revise any forward-looking statement whether as a result
of new information, future events, or otherwise.
CONTACT:
Headhunter.net
Mark Partin, 770/349-2410
[email protected]
-2-
